CRISOSTOMO vs SECURITIES AND EXHANGE COMMISSION...................
150
Table of Contents
DOCTRINE OF PRIMARY JURISDICTION ........................................................... 3
SAN MIGUEL PROPERTIES, INC. vs. BF HOMES, INC.................................... 3
A. JURISDICTION OF THE SUPREME COURT .................................................. 17
LACSON HERMANAS, INC., vs. HEIRS OF CENON IGNACIO ...................... 17
HEIRS OF BERTULDO HINOG vs. HON. ACHILLES MELICOR,..................... 20
FRANCISCO I. CHAVEZ vs. HON. ALBERTO G. ROMULO, IN HIS CAPACITY AS
EXECUTIVE SECRETARY ............................................................................. 25
GOVERNMENT OF THE UNITED STATES OF AMERICA vs PURGANAN ...... 33
COMMISSION ON ELECTIONS vs QUIJANO-PADILLA ................................ 47
BUKLOD NG KAWANING EIIB vs ZAMORA ................................................ 55
FORTICH vs CORONA ................................................................................. 60
BAVIERA VS PAGLINAWAN........................................................................ 63
VICENTE DACANAY vs YRASTORZA ........................................................... 68
ERNESTO MORALES vs COURT OF APPEALS.............................................. 70
FELIXBERTO CUBERO ET AL vs LAGUNA WEST MULTI-PURPOSE
COOPERATIVE ........................................................................................... 75
DAR vs CUENCA ......................................................................................... 78
ST. MARTIN FUNERAL HOMES vs NLRC..................................................... 85
HEIRS OF BERTULDO HINOG vs MELICOR ................................................. 91
CRISTOBAL CRUZ vs CRISTOBAL ................................................................ 97
HEIRS OF DICMAN VS CARINO ................................................................ 104
SAFEGUARD SECURITY AGENCY VS TANGCO .......................................... 113
NATIONAL POWER CORPORATION vs DELA CRUZ .................................. 129
SPOUSES YU vs NGO YET TE .................................................................... 137
B. JURISDICTION OF THE COURT OF APPEALS ............................................ 143
VALDEZ vs CHINA BANKING CORPORATION ........................................... 143
POLANCO vs CRUZ................................................................................... 147
ENEMECIO vs OFFICE OF THE OMBUDSMAN.......................................... 155
GONZALES vs ROSAS ............................................................................... 160
WILLY TAN vs PEOPLE OF THEPHILIPPINES ............................................. 164
ROBIN M. CANO vs CHIEF OF PHIL. NATIONAL POLICE ........................... 167
ALCARAZEN vs UNIVET AGRICULTURAL PRODUCTS, INC. ....................... 169
LINGNER & FISHER GMBH vs IAC ............................................................ 176
WIDOWS & ORPHANS ASSOCIATION INC vs CA ...................................... 179
C. JURISDICTION OF THE REGIONAL TRIAL COURT ..................................... 184
DURISOL PHILIPPINES, INC vs CA............................................................. 184
RUSSEL ET. AL vs VESTIL ET AL. ............................................................... 188
DEVORAH E. BARDILLON vs BRGY. MASILI OF CALAMBA ....................... 191
INIEGO vs PURGANAN ET AL ................................................................... 195
MENDOZA vs TEH .................................................................................... 199
SPOUSES ROMEO PAJARES vs REMARKABLE LAUNDRY.......................... 201
SOCIAL SECURITY SYSTEM vs ATLANTIC GULF ........................................ 208
JACOBUS BERNARD HULST vs PR BUILDERS INC ..................................... 212
UNIVERSITY OF THE PHILIPPINES vs PHILAB INDUSTRIES ....................... 220
BARANGAY SAN ROQUE vs HEIRS OF PASTOR ........................................ 227
POLOMOLOK WATER DISTRICT vs POLOMOLOK GEN. CONSUMERS ..... 230
HEIRS OF GENEROSO SEBE vs HEIRS OF VERONICO SEVILLA .................. 233
SAN PEDRO vs ASDALA ............................................................................ 237
SPS. JORGE J. HUGUETE ET AL vs SPS. TEOFEDO AMARILLO................... 240
ORTIGAS & COMPANY LIMITED PARTNERSHIP vs JUDGE HERRERA ....... 243
MAKATI DEVT CORPORATION vs TANJUATCO ........................................ 245
CUIZON vs RAMOLETE ............................................................................. 247
BOLISAY vs ALCID .................................................................................... 250
PACIOLES, JR vs CHUATOCO-CHING ........................................................ 254
COCA vs PANGILINAN.............................................................................. 260
CUNANAN vs AMPARO ........................................................................... 264
VDA. DE MAFIALAC vs OCAMPO (*VDA. DE MAÑALAC) ......................... 267
QUISMONDO vs COURT OF APPEALS...................................................... 269
**REITERATED** DEPT. OF AGRARIAN REFORM vs ROBERTO CUENCA
............................................................................................................. 272
SUMULONG vs COURT OF APPEALS ........................................................ 279
RUBY SHELTER BUILDERS vs FORMARAN ............................................... 286
LAND BANK OF THE PHILIPPINES vs JOSE MARIE M. RUFINO ................. 296
LAND BANK OF THE PHILIPPINES vs J. L. JOCSON AND SONS ................. 302
ONGSUCO VS MALONES ......................................................................... 306
SANDOVAL VS CAÑEBA AND ESTATE DEVELOPERS ................................ 313
FAJARDO vs BAUTISTA ............................................................................ 315
LUPANGCO vs COURT OF APPEALS ......................................................... 319
BERNARDO vs CALTEX ............................................................................. 324
HALAGUEÑA, ET AL vs PHILIPPINE AIRLINES ........................................... 328
PICO vs SALCEDO..................................................................................... 334
ENGR. APOLINARIO DUEÑAS vs ALICE GUCE .......................................... 337
EQUITABLE PCI BANK, INC vs APURILLO ................................................. 342
NAZARENO, ET AL vs CITY OF DUMAGUETE ........................................... 348
DOCTRINE OF PRIMARY JURISDICTION
SMPI completed the payments for the 130 Italia II lots in December 1995. 6 In
G.R. No. 169343, August 05, 2015 compliance with Section 37 of all the three Deeds of Absolute Sale, BF Homes
delivered the Transfer Certificates of Title (TCTs) to SMPI but only for 110 of the 130
SAN MIGUEL PROPERTIES, INC. vs. BF HOMES, INC. Italia II lots purchased by SMPI.

SMPI, thru counsel, sent BF Homes a letter on May 20, 1996 demanding the delivery
DECISION
of the remaining 20 TCTs, specifically:chanRoblesvirtualLawlibrary

LEONARDO-DE CASTRO, J.: TCT No. Area

1. (S-41285) 123526-A 538 sq. m.
Assailed in this Petition for Review on Certiorari under Rule 45 of the Revised Rules
2. (S-41261) 123522-A 329 sq. m.
of Court filed by San Miguel Properties, Inc. (SMPI) are: 1) the Decision1 dated January
31, 2005 of the Court of Appeals in CA-G.R. SP No. 83631, which affirmed with 3. (S-41279) 123520-A 384 sq. m.
modification the Decision dated January 27, 2004 of the Office of the President (OP), 4. (S-41277) 123518-A 380 sq. m.
in O.P. Case No. 03-E-203, and remanded the case to the Housing and Land Use 5. (S-41275) 123516-A 364 sq. m.
Regulatory Board (HLURB) for further proceedings; and 2) the Resolution 2 dated 6. (S-41271) 123512-A 364 sq. m.
August 9, 2005 of the appellate court in the same case, which denied the Motion for 7. (S-41273) 123514-A 364 sq. m.
Reconsideration of SMPI. 8. (S-41269) 123510-A 364 sq. m.
9. (S-41267)123508-A 364 sq. m.
The antecedents of the case are as follows:chanRoblesvirtualLawlibrary
10. (S-41265) 123506-A 429 sq. m.
11. (S-41263) 123505-A 329 sq. m.
BF Homes, Inc. (BF Homes) is the owner of several parcels of land located in the
northern portion of BF Homes Parañaque Subdivision, particularly identified as Italia 12. (S-41261) 19477-A 329 sq. m.
II lots. 13.(S-41258)19476-A 280 sq. m.
14. (S-41257) 23504-A 308 sq. m.
BF Homes, represented by Florencio B. Orendain (Orendain), as rehabilitation 15.(S-41256)23503-A 280 sq. m.
receiver appointed by the Securities and Exchange Commission (SEC); and SMPI, 16. (S-41255) 23502-A 308 sq. m.
represented by Federico C. Gonzales, President, entered into three successive Deeds 17. (S-41254)23501-A 280 sq. m.
of Absolute Sale whereby the former sold to the latter a total of 130 Italia II lots with
8. (S-41253) 123500-A 308 sq. m.
a combined area of 44,345 square meters for the aggregate consideration of
19. (S-41557)28372-A 502 sq. m.
P106,247,701.00, broken down as follows:chanRoblesvirtualLawlibrary
20. (S-41279) 123520-A 665 sq. m.
Deed of Absolute Date of No. of Total Area Consideration
Despite receipt of the afore-mentioned letter, BF Homes failed or refused to heed
Sale Execution Lots (square
meters) the demand of SMPI. Consequently, SMPI filed a Complaint8 for specific performance
with damages before the HLURB on August 24, 2000 to compel BF Homes to deliver
First Deed3 In 1992 76 22,816 P52,134,560.00 the remaining 20 TCTs to SMPI. The case was docketed as HLURB Case No. REM-
Second Deed4 In 1993 13 5,964 P14,990,514.00 082400-11183.
Third Deed5 April 1993 41 15,565 P39,122,627.00
In its Answer (With Counterclaim),9 BF Homes alleged that the Deeds of Absolute Sale
(Third Sale)
executed in 1992 to 1993 were entered into by Orendain in his personal capacity and
Total 130 44,345 P106,247,701.00 without authority, as his appointment as rehabilitation receiver was revoked by the
SEC in an Order dated May 17, 1989. In support of its counterclaims, BF Homes
averred that the consideration paid by SMPI for the 130 Italia II lots was grossly
inadequate and disadvantageous to BF Homes; and that the Deeds of Absolute Sale
were undated and not notarized. Hence, BF Homes prayed that the HLURB render
judgment: 1) dismissing the complaint of SMPI; 2) declaring the sale of the 130 Italia
II lots null and void; 3) ordering SMPI to reconvey to BF Homes the titles for the [110]
Italia II lots; and 4) ordering SMPI to pay BF Homes exemplary damages, attorney's
fees, and cost of suit.
SMPI, in its Reply (Answer with Counterclaim dated October 16, 2000), 10 countered
that the validity of the three Deeds of Absolute Sale was already upheld by the SEC
in its Omnibus Order dated November 7, 1994, and the motion for reconsideration
of BF Homes of said Omnibus Order was denied by the SEC in its subsequent Order
dated August 22, 1995. Both Orders were deemed final, executory, and unappealable
by the SEC in another Omnibus Order dated July 31, 1996. As a result, the Deeds of
Absolute Sale were binding on BF Homes. SMPI further maintained that Orendain
was authorized to sign the Deeds of Absolute Sale for and in behalf of FBO Networks
Management, Inc. - the receiver which the SEC appointed to replace Orendain, upon
the latter's motion to convert his involvement in the receivership from an individual
to a corporate capacity. SMPI additionally asserted that absent substantiation, the
allegation of BF Homes of inadequate consideration for the sale of the Italia II lots
was self-serving; and that despite being undated and not notarized, the Deeds of
Absolute Sale were valid since they contained the essential elements of a contract.
And even assuming that the Deeds of Absolute Sale may be rescinded, SMPI argued
that BF Homes did not offer and was not prepared to return the consideration paid
by SMPI, plus interest.
BF Homes filed a Rejoinder (To Complainant's Reply) 11 contending that the SEC
Omnibus Order dated July 31, 1996 has not yet become final as BF Homes assailed
the said Order in a Petition for Certioraribefore the SEC. In its Decision dated May 8,
1997, the SEC neither confirmed the authority of Orendain nor cleared Orendain/FBO
Networks Management, Inc. from any liability for his/its unauthorized acts, but
clarified that the final report of the rehabilitation receiver was not yet approved and
was merely admitted as part of the records. BF Homes also stated that although the
SEC Order dated September 12, 2000 already terminated the rehabilitation
proceedings because of the improvement in the solvency status of BF Homes, BF
Homes filed a Motion for Clarification and/or Partial Reconsideration of said SEC
Order and sought a resolution of the issues relating to the receiver's irregular acts,
including the sale of the Italia II lots to SMPI. BiF Homes insisted that the transactions
entered into by Orendain were anomalous as the latter sold the 130 Italia II lots to
SMPI at a price that was inadequate and disadvantageous to BF Homes.
Housing and Land Use Arbiter Rowena C. Balasolla (Arbiter Balasolla) issued an Order
dated January 22, 200112 directing the parties to submit their respective position
papers and supporting evidence, as well as their draft decisions. Thereafter, the case
was deemed submitted for resolution.
In her Decision13 dated January 25, 2002, Arbiter Balasolla suspended the
proceedings in HLURB Case No. REM-082400-11183 for the following
reasons:cralawlawlibrary
What clearly is the issue to be resolved is whether or not [BF Homes] is obligated to
deliver the title of the remaining twenty (20) lots to [SMPI] notwithstanding that the
latter had fully paid the same.
Were this is a simple case of non-delivery of title of the lot or unit to the buyer upon
full payment, sans the attendant problems, the answer would readily be in the
affirmative. But this is not so in the instant case. This is a case of non-delivery of titles
of a sale of 20 lots between two developers, and the lots sold are from an existing
subdivision, which was under rehabilitation and made by a receiver which authority
had been continuously questioned by the controlling stockholders of a corporation
under rehabilitation.
In the light thereof, it becomes imperative to discuss the antecedent facts that would
help in arriving at a judicious resolution of the instant complaint.
Sometime in September 1984, respondent [BF Homes] filed with the SEC a petition
for rehabilitation and for declaration of suspension of payments. In February 1988,
the SEC appointed Florencio Orendain as [BF Homes'] rehabilitation receiver. In May
1989, the SEC revoked the appointment of Mr. Orendain and appointed FBO
Networks Management, Inc. (FBO) as receiver of the [BF Homes].
It was during the time 1992-1993 that [SMPI] bought from [BF Homes] the 130
parcels of land located in the northern portion of BF Homes, Paranaque City.
In June 1994, Mr. Orendain, on behalf of FBO, submitted to the SEC the Closing
Report on [BF Homes] I of the receivership program covering the period from March
1988 to January 1994. [BF Homes] protested and questioned the said report by filing
the corresponding pleadings with the SEC praying that the receivership of FBO
represented by Mr. Orendain be suspended due to violations of trust and breach of
fiduciary obligation and sought the nullification of the transaction entered into by
Mr. Orendain. In November 1994, FBO was relieved of its duties and responsibilities
as rehabilitation receiver and a Committee of Receivers was appointed in lieu
thereof, to undertake and continue the rehabilitation program of [BF Homes].
In July 1996, the SEC issued an Omnibus Order in regard to rehabilitation case.
Subsequently, however, [BF Homes] filed a petition for review for which the SEC
rendered a decision in May 1997. In the said decision, the SEC held that the admission
of the Receiver's Closing Report is merely for the purpose of receiving and noting Absolute Sale and confirmed the authority of the receiver to sell the 130 Italia II lots
them for inclusion in the records of the case and not an admittance (sic) and to SMPI, and said Orders already became final after BF Homes failed to appeal the
acceptance of the merits and veracity of the contents thereof. same before the Court of Appeals, as provided for in Section 3, 16 Republic Act No.
5434, the law in force at that time; 2) Orendain and/or FBO Networks Management,
In September 2000, the SEC issued another Order terminating the rehabilitation Inc. were immune from suit pursuant to Section 9, Rule 9 17 of the Interim Rules of
proceedings without, however, deciding on the merits and veracity of the contents Procedure Governing Intra-corporate Controversies and Section 17, Rule 418 of the
of the Receiver's Closing Report. Hence, [BF Homes] filed in October 2000 a Motion Interim Rules of Procedure on Corporate Rehabilitation; 3) BF Homes was estopped
for Clarification and/or Partial Reconsideration of the said Order which remains from refusing to deliver the remaining 20 titles since it had already received the
pending with the SEC until the present. consideration and benefits from the sale of the Italia II lots to SMPI and delivered 110
out of 130 TCTs to SMPI; 4) the principle of suspending a case due to a prejudicial
Apparently, it is in the context of the foregoing issues that [BF Homes] refused to question only applies to criminal cases; 5) BF Homes was mandated, under pain of
deliver the remaining twenty (20) titles of the lots sold to [SMPI] as the former criminal sanction under Section 25,19 in relation to Section 3920 of Presidential Decree
claimed, among others, that Mr. Orendain did not have the authority to sell the 130 No. 957,21 also known as "The Subdivision and Condominium Buyer's Protection
parcels of land in the first place. Decree," to deliver the TCTs of the remaining 20 Italia II lots, which had already been
fully paid for by SMPI; 6) assuming that Orendain exceeded his authority as receiver
As the peculiar background of this case would tell, it is inevitable that the resolution of BF Homes in selling the 130 Italia II lots to SMPI, then Orendain could be held liable
of the issues raised in the instant complaint would be largely influenced by the for damages but the titles to said lots acquired by SMPI by reason of the sale would
outcome of the cases pending in other tribunals which are directly and ineluctably be unaffected, absent any action for reconveyance instituted by BF Homes; and 7)
related to the issues brought before this Board. the issue regarding Orendain's authority to undertake the sale of the Italia II lots to
SMPI was rendered moot and academic by the issuance of SEC Order dated
This Board is cognizant of the fact that respondent had questioned the action of its September 12, 2000, terminating the receivership of BF Homes.
rehabilitation receiver before the SEC, raising several issues against him, including
but not limited, to his authority to sell the subject lots to the complainant the After a further exchange of pleadings by the parties, the HLURB Board of
resolution of which is still pending the said body. Commissioners22 rendered its Decision23 dated March 28, 2003, ruling
thus:cralawlawlibrary
Thus, while this Board may have jurisdiction over the instant complaint, the issue on
whether or not Mr. Orendain has overstepped his authority which is pending We find no evidence to support the argument that the SEC had upheld with finality
resolution by the SEC, is to our mind a condition sine qua non, the final resolution of on the sales transaction entered into by Orendain with [SMPI]. On the contrary the
which by said body is a logical antecedent to the issue involved in the instant order of the SEC stated that the closing report of the receiver is being accepted for
complaint and which only the SEC has exclusive jurisdiction to decide. inclusion of the records and not an admittance (sic) or acceptance of the merits and
veracity of the contents thereof. The issue of whether Orendain had authority to sell
Under the circumstances, we are inclined to suspend the proceedings before the the lots is still unresolved.
Board until the SEC shall have resolved with finality on the issue of the authority of
Mr. Orendain/FBO Networks Management to enter into such transactions on behalf While this board may have the competence to rule on the validity of the sales
of [BF Homes]. transaction entered into by Orendain ostensibly in behalf of BF Homes, we decline to
rule on the said issue in deference to the SEC or its successor-in-interest, which has
WHEREFORE, PREMISES CONSIDERED, this Office hereby suspends the proceedings first taken cognizance of the issue, applying the doctrine of primary jurisdiction. Thus,
of the instant complaint until the final resolution of the pending incidents before the in Vidad vs. RTC of Negros Oriental, it was held:chanRoblesvirtualLawlibrary
Securities and Exchange Commission.14chanrobleslaw
While no prejudicial question strictly arises where one is a civil case and the other is
15 an administrative proceeding, in the interest of good order, it behooves the court to
SMPI filed a Petition for Review (Re: Decision dated January 25, 2002) with the
suspend its action on the cases before it pending the final outcome of the
HLURB Board of Commissioners, asseverating that: 1) the SEC, in its Orders dated
administrative proceedings. The doctrine of primary jurisdiction does not warrant a
November 7, 1994 and August 22, 1995, had upheld the validity of the Deeds of
court to arrogate unto itself the authority to resolve a controversy the jurisdiction
over which is initially lodged with an administrative body [of special competence].
Wherefore, the petition for review is denied and the decision of the office below is
affirmed.24
chanrobleslaw
SMPI appealed the foregoing Decision of the HLURB Board of Commissioners before
the OP. The appeal was docketed as O.P. Case No. 03-E-203. The OP, in its
Decision25 dated January 27, 2004, adjudged that the HLURB should have resolved
HLURB Case No. REM-082400-11183:cralawlawlibrary
The basic complaint in this case is one for specific performance under Section 25 of
Presidential Decree (PD) 957 - "The Subdivision and Condominium Buyers'
Protective", infra.
As early as August 1987, the Supreme Court already recognized the authority of the
HLURB, as successor agency of the National Housing Authority (NHA), to regulate,
pursuant to PD 957 in relation to PD 1344, the real estate trade, with exclusive
jurisdiction to hear and decide cases "involving specific performance of contractual
and statutory obligations filed by buyers of subdivision lots . . . against the owner,
developer, dealer, broker or salesman" (Antipolo Realty Corp. vs. National Housing
Authority (153 SCRA). Then came the reiterative rulings in Solid Homes vs.
Pavawal (177 SCRA 72 [1989]), United Housing Corp. vs. Dayrit (181 SCRA 295
[1990]), and Realty Exchange Venture Corp. vs. Sendino, 233 SCRA 665 [1994]. And
as stressed in Realty Exchange, citing C.T. Torres Enterprises, Inc. vs. Hibionada (191
SCRA 268 [1990], the HLURB, in the exercise of its adjudicatory powers and
functions, "must interpret and apply contracts, determine the rights of the parties
under these contracts and award damages whenever appropriate."
Given its clear statutory mandate, the HLURB's decision to await for some other
forum to decide - if ever one is forthcoming - the issue on the authority of Orendain
to dispose of subject lots before it peremptorily resolves the basic complaint is
unwarranted, the issues thereon having been joined and the respective position
papers and the evidence of the parties having been submitted. To us, it behooved
the HLURB to adjudicate, with usual dispatch, the right and obligations of the parties
in line with its appreciation of the obtaining facts and applicable law. To borrow
from Mabuhay Textile Mills Corp. vs. Ongpin(141 SCRA 437), it does not have to rely
on the findings of others to discharge this adjudicatory functions. 26chanrobleslaw
The OP then proceeded to resolve the question of whether or not SMPI was entitled
to the delivery of the 20 TCTs:cralawlawlibrary
There can be no quibbling about the following postulates: 1) The existence of a
perfected deed of absolute sale covering the said lots; 2) SMPI appears to be an
innocent purchaser for value; 3) Full payment and receipt by [BF Homes] of the
stipulated purchase price; 4) Admission by the SEC of FBO's audited Closing Report;
5). Termination of the rehabilitation proceedings, and 6) The obligation of the owner
or developer under Sec. 25 of PD 957 to "deliver the title of the lot or units to the
buyer upon [full] payment of the lot or unit."
Given the foregoing perspective, the question thus formulated should be answered
in the affirmative. [BF Homes'] challenge against the validity of the conveying deed
on the ground of inadequacy of the purchase price cannot be given cogency. As a
matter of law, lesion or inadequacy of cause shall not invalidate a contract, save in
cases specified by law or unless there has been fraud, mistake or undue influence
(Art. 1355, Civil Code). Thus, [BF Homes'] allegation about the inadequacy of price for
the twenty (20) lots, even if true, cannot invalidate the sale in question, absent a
showing that such sale is a case exempted by law from the operation of said article
or that fraud, mistake or undue influence attended the sale (Auyong Hian vs. CTA, 59
SCRA 110).
[BF Homes'] posture regarding the invalidity of the same sales transaction owing to
Orendain's alleged lack of authority to execute the corresponding deed may be
accorded serious consideration were it not for its acceptance and retention of the
purchase price for the covered lots. As aptly argued in this appeal, citing
jurisprudence, estoppel attached to [BF Homes] when it accepted the benefits arising
from the performance of SMPI of its undertaking under the contract of sale. By the
doctrine of estoppel, a party is barred from repudiating or canceling an otherwise
defective or rescissible contract by his receipt of payments due thereunder (Republic
v. Acoje Mining Co., Inc., 7 SCRA 361; Angeles v. Calasanz, 135 SCRA 332); the bar of
estoppel also precludes one who, by his conduct, had induced another to act in a
particular manner, from adopting an inconsistent position that thereby causes
prejudice to another (Cruz vs. CA, 293 SCRA 239).
Significantly, Orendain signed the three deeds of sale adverted to covering 130 lots
in 1992 and 1993, or during FBO's watch as receiver. Yet, [BF Homes] opted to fully
implement the transactions covered by two of these deeds and partially implement
the third by delivering the titles to 110 lots. In net effect, [BF Homes] did recognize
the authority of Orendain to execute those contracts. But if Orendain was indeed
bereft of authority during the time material, as [BF Homes] would have this Office
believe, how explain (sic) its inaction to recover damages against one it veritably
depicts as an impostor?
x x x x
Much has been made about the sale of the 130 lots not having been approved by the
SEC. It bears to stress in this regard that the Closing Report which, doubtless includes
the said sale, had been confirmed and admitted by the SEC Hearing Panel. It may be
that the Commission en banc did not specifically confirm and approve the sale. But
neither did it interpose objection thereto, let alone disapprove the same. Be that as
it may, the presumptive validity and enforceability of such sale must be posited. 27
chanrobleslaw
The OP denied the claims for damages of both parties for insufficiency of evidence
but awarded attorney's fees in the amount of PI00,000.00 to SMPI, which was
compelled to litigate. In the end, the OP decreed:cralawlawlibrary
IN VIEW OF ALL THE FOREGOING, judgment is hereby entered ordering BF Homes,
Inc., to deliver to San Miguel Properties, Inc., the corresponding titles to the lots
subject of the instant case, free from all liens aind encumbrances, except to the
subdivision restrictions referred to in the conveying deed of sale, and to pay the latter
the sum of P100,000.00 as and. by way of attorneys' fees. All other claims and
counterclaims are hereby DISMISSED. The decision of the HLURB dated 28 March
2003 is accordingly REVERSED and SET ASIDE.28chanrobleslaw
BF Homes filed a Motion for Reconsideration but it was denied by the OP in a
Resolution29 dated March 26, 2004.
Aggrieved, BF Homes sought recourse from the Court of Appeals by way of a Petition
for Review30 under Rule 43 of the Revised Rules of Court, which was docketed as CA-
G.R. SP No. 83631. In its Decision31dated January 31, 2005, the Court of Appeals
agreed with the OP that the HLURB had the primary and exclusive jurisdiction to
resolve the complaint for specific performance and damages of SMPI and should not
have suspended the proceedings until the SEC had ruled with finality on the issue of
Orendain's authority to sell the 130 Italia II lots to SMPI:cralawlawlibrary
Presidential Decree No. 957 was issued on 12 July 1976. It was promulgated to cover
questions that relate to subdivisions and condominiums. Its object is to provide for
an appropriate government agency, the HLURB, to which all parties aggrieved in the
enforcement of contractual rights with respect to said category of real estate may
take course.
In the case of JESUS LIM ARRANZA vs. B.F. HOMES, INC., the Supreme Court
said:cralawlawlibrary
Section 3 ofP.D. No. 957 empowered the National Housing Authority (NHA) with the
"exclusive jurisdiction to regulate the real estate trade and business." On 2 April
1978, P.D. No. 1344 was issued to expand the jurisdiction of the NHA to include the
following:chanRoblesvirtualLawlibrary
SECTION 1. In the exercise of its functions to regulate the real estate trade and
business and in addition to its powers provided for in Presidential Decree No. 957,
the National Housing Authority shall have exclusive jurisdiction to hear and decide
cases of the following nature:chanRoblesvirtualLawlibrary
A. Unsound real estate business practices;ChanRoblesVirtualawlibrary
B. Claims involving refund and any other claims filed by subdivision lot or
condominium unit buyer against the project owner, developer, dealer, broker or
salesman; and
C. Cases involving specific performance of contractual and statutory obligations
filed by buyers of subdivision lot or condominium unit asainst the owner, developer,
dealer, broker or salesman. (Emphasis supplied.)
Thereafter, the regulatory and quasi-judicial functions of the NHA were transferred
to the Human Settlements Regulatory Commission (HSRC) by virtue of Executive
Order No. 648 dated 7 February 1981. Section 8 thereof specifies the functions of
the NHA that were transferred to the HSRC including the authority to hear and
decide "cases on unsound real estate business practices; claims involving refund
filed against project owners, developers, dealers, brokers or salesmen and cases of
specific performance." Executive Order No. 90 dated 17 December 1986 renamed
the HSRC as the Housing and Land Use Resulatory Board (HLURB). (Underscoring
supplied.)
Certainly, in the instant case, [SMPI] is a buyer within the contemplation of P.D. 957.
Clearly, the acquisition of the one hundred thirty (130) lots was for a valuable
consideration.
The jurisdiction of the SEC, on the other hand, is defined by P.D. No. 902-A, as
amended, as follows:
Sec. 5. In addition to the regulatory and adjudicative functions of the Securities and
Exchange Commission over corporations, partnerships and other forms of
associations registered with it as expressly granted under existing laws and
decrees, it shall have original and exclusive jurisdiction to hear and decide cases
involving.
(a) Devices or schemes employed by or any acts, of the board of directors, business
associates, its officers or partnership, amounting to fraud and misrepresentation
which may be detrimental to the interest of the public and/or of the stockholder,
partners, members of associations or organizations registered with the
Commission;ChanRoblesVirtualawlibrary

(b) Controversies arising out of intra-corporate or partnership relations, between
and among stockholders, members, or associates; between any or all of them and
the corporation, partnership or association of which they are stockholders,
members or associates, respectively; and between such corporation, partnership or
association and the state insofar as it concerns their individual franchise or right to
exist as such entity; and
(c) Controversies in the election or appointments of directors, trustees, officers or
managers of such corporations, partnerships or associations.
In the ARRANZA case, the Supreme Court said that:
For the SEC to acquire jurisdiction over any controversy under these provisions, two
elements must be considered: (1) the status or relationship of the parties; and (2)
the nature of the Question that is the subject of their controversy.
The first element requires that the controversy must arise "out of intra-corporate
or partnership relations between and among stockholders, members or associates;
between any or all of them and the corporation, partnership or association of which
they are stockholders, members or associates, respectively; and between such
corporation, partnership or association and the State in so far as it concerns their
individual franchises.
In the instant case, [SMPI] is not a stockholder, member or associate of [BF Homes].
It is a lot buyer in the subdivision developed by [BF Homes.]
The second element requires that the dispute among the parties be intrinsically
connected with the regulation or the internal affairs of the corporation, partnership
or association.
In the case at hand, [SMPI's] complaint before the HLURB is for specific performance
to enforce its rights as purchaser of subdivision lots as regards the delivery of twenty
(20) TCTs. Certainly, the issue in this case is not related to the "regulation" of [BF
Homes] or to [BF Homes'] "internal affairs."
As a matter of fact, Section 25 of PD 957 provides:
Section 25. Issuance of Title. The owner or developer shall deliver the title of the lot
or unit to the buyer upon full payment of the lot or unit. No fee, except those
required for the registration of the deed of sale in the Registry of Deeds, shall be
collected for the issuance of such title. In the event a mortgage over the lot or unit
is outstanding at the time of the issuance of the title to the buyer, the owner or
developer shall redeem the mortgage or the corresponding portion thereof within
six months from such issuance in order that the title over any fully paid lot or unit
may be secured and delivered to the buyer in accordance herewith, (underscoring
supplied.)
In the above-mentioned case of Arranza, the Supreme Court also said:
P.D. No. 902-A, as amended, defines the jurisdiction of the SEC; while P.D. No. 957, as
amended, delineates that of the HLURB. These two quasi-judicial agencies exercise
functions that are distinct from each other. The SEC has authority over the operation
of all kinds of corporations, partnerships or associations with the end in view of
protecting the interests of the investing public and creditors. On the other hand, the
HLURB has jurisdiction over matters relating to observance of laws governing
corporations engaged in the specific business of development of subdivisions and
condominiums. The HLURB and the SEC being bestowed with distinct powers and
functions, the exercise of those functions by one shall not abate the performance by
the other of its own functions. As respondent puts it, "there is no contradiction
between P.D. No. 902-A and P.D. No. 957."
Hence, the powers of the HLURB can not be in derogation of the SEC's authority. P.D.
Nos. 902-A and 957 are laws in pari materia. This is because P.D. No. 902-A relates to
all corporations, while P.D. No. 957 pertains to corporations engaged in the particular
business of developing subdivisions and condominiums.
Next, this brings us to the collateral issue of whether or not HLURB properly
suspended the proceeding until SEC shall have resolved with finality the issue of
authority of Mr. Orendain.
Given the foregoing perspective, the collateral issue thus formulated should be
answered in the negative. Furthermore, in several cases decided by the Supreme
Court, the High Court has consistently ruled that the NHA or the HLURB has
jurisdiction over complaints arising from contracts between the subdivision
developer and the lot buyer or those aimed at compelling the subdivision developer
to comply with its contractual and statutory obligations.
Hence, the HLURB should take jurisdiction over respondent's complaint because it
pertains to matters within the HLURB's competence and expertise. The proceedings
before the HLURB should not be suspended. 32chanrobleslaw
The Court of Appeals, however, differed from the OP Decision by ordering the;
remand of the case to the HLURB in recognition of the doctrine of primary
jurisdiction. The dispositive portion of the Decision of the appellate court
reads:cralawlawlibrary
WHEREFORE, the questioned Decision of the Office of the President [is] AFFIRMED
with modification. The case is REMANDED to the Housing and Land Use Regulatory
Board for continuation of proceedings with dispatch.33
SMPI filed a Motion for Partial Reconsideration (Re: Decision dated January 31,
2005)34 insofar as the Court of Appeals remanded the case to the HLURB for further
proceedings. The appellate court denied said Motion in a Resolution 35 dated August
9, 2005.
SMPI now comes before this Court,. through the instant Petition, assailing the
aforementioned Decision and Resolution of the Court of Appeals based on the
following assignment of errors:cralawlawlibrary
I.
THE COURT OF APPEALS' DECISION DATED 31 JANUARY 2005 REMANDING THE CASE
TO THE HLURB IS CONSTITUTIONALLY FLAWED AND A PATENT NULLITY CONSIDERING
THAT:chanRoblesvirtualLawlibrary
1. IT MISERABLY FAILED TO DISCUSS CLEARLY AND DISTINCTLY THE
LEGAL BASIS AND/OR JUSTIFICATION FOR REMANDING THE CASE
TO THE HLURB AS MANDATED BY SECTION 14, ARTICLE VIII, 1987
CONSTITUTION.
2. WORSE, THE COURT OF APPEALS FAILED TO IDENTIFY THE FACTUAL
MATTERS THAT IT CLAIMS NEED STILL BE TRIED OR DETERMINED
BY THE HLURB THAT WOULD HAVE JUSTIFIED THE REMAND OF THE
CASE.
3. IN ANY EVENT, [BF HOMES] AND THE COURT OF APPEALS' CLAIMED
DOCTRINE OF PRIMARY JURISDICTION IS FOREVER BARRED AS IT
COULD NOT BE INVOKED FOR THE FIRST TIME ON APPEAL.
4. EVEN ASSUMING ARGUENDO THAT THE DOCTRINE OF PRIMARY
JURISDICTION IS STILL INVOCABLE, IT IS NONETHELESS
INAPPLICABLE SINCE THE PARTIES HAD DULY AMPLIFIED THEIR
RESPECTIVE CAUSES OF ACTION AND DEFENSES VIA THEIR
SUBMISSION OF PLEADINGS AND POSITION PAPERS BEFORE THE
HLURB, AND UPON WHICH THE OFFICE OF THE PRESIDENT
DECIDED ON THE MERITS.
II.
EVEN THEN, THE COURT OF APPEALS COMMITTED GRAVE, SERIOUS AND REVERSIBLE
ERROR WHEN IT REMANDED THE CASE TO THE HLURB FOR FURTHER "PRESENTATION
OF EVIDENCE" DESPITE THE DECISION ON THE MERITS OF THE OFFICE OF THE
PRESIDENT IN THAT:chanRoblesvirtualLawlibrary
1. THE ISSUE HERE BEING A SIMPLE QUESTION OF LAW ON WHETHER
OR NOT SMPI WAS ENTITLED TO THE DELIVERY OF THE BALANCE
OF 130 FULLY PAID LOTS/TITLES OR EQUIVALENT TO TWENTY (20)
TITLES, THE COURT OF APPEALS SHOULD HAVE AFFIRMED THE
DECISION ON THE MERITS OF THE OFFICE OF THE PRESIDENT.
2. IN FACT, THE RELEVANT FACTS OF THE CASE, E.G. FULL PAYMENT
OF THE PURCHASE PRICE OF THE SUBJECT LOTS IN FAVOR OF [BF
HOMES] AND NON-DELIVERY TO SMPI OF THE TITLES OVER THE
SUBJECT LOTS BY [BF HOMES], WERE UNDISPUTED AND MORE SO
ADMITTED BY THE PARTIES IN THEIR RESPECTIVE HLURB POSITION
PAPERS AND OTHER PLEADINGS FOR WHICH NO TRIABLE
EVIDENTIARY MATTER IS LEFT TO BE RESOLVED BY THE HLURB.
3. INDEED, THE OFFICE OF THE PRESIDENT, PER ITS DECISION DATED
27 JANUARY 2004, CORRECTLY RESOLVED THIS SIMPLE ISSUE, AND
FORTUNATELY IN FAVOR OF SMPI, BASED ON THE PLEADINGS AND
POSITION PAPERS FILED BY THE PARTIES IN ACCORDANCE WITH
SECTION 5, RULE VI, HLURB RULES. THE COURT OF APPEALS OUGHT
TO HAVE SIMILARLY ENFORCED THIS HLURB RULE.
4. FURTHER PROCEEDINGS BEFORE THE HLURB IS DILATORY,
UNNECESSARY, SUPERFLUOUS AND CIRCUITOUS. HIERARCHICALLY
(sic), THE HLURB IS PRECLUDED AND BARRED FROM REOPENING,
MUCH LESS REVERSING THE DECISION OF THE OFFICE OF THE
PRESIDENT.
5. THE COURT OF APPEALS' STANCE IS TANTAMOUNT TO A RE-
OPENING OF THE OFFICE OF THE PRESIDENT'S DECISION, HENCE
WOULD WREAK HAVOC TO THE DOCTRINE OF SUBSTANTIAL RES
JUDICATA.
6. IF AT ALL, THE HLURB NEED ONLY BE DIRECTED TO RESOLVE SMPI'S
PENDING MOTION FOR EXECUTION, AND NOT CONDUCT FURTHER
PROCEEDINGS FOR RECEPTION OF THE PARTIES' EVIDENCE THAT
ARE UNSPECIFIED.
III.
THE COURT OF APPEALS COMMITTED GRAVE, SERIOUS AND REVERSIBLE ERROR
WHEN IT FAILED AND/OR REFUSED TO AFFIRM THE OFFICE OF THE PRESIDENT'S
DECISION DATED 27 JANUARY 2004 IN THAT:chanRoblesvirtualLawlibrary
1. THE SUBJECT SALE TRANSACTIONS, DULY APPROVED AND
CONFIRMED BY THE SEC PER ITS ORDERS DATED 07 NOVEMBER
1994 AND 31 JULY-1996, ARE PRESUMED VALID AND REGULAR
SINCE THESE WERE OFFICIAL ACTS OF SEC-APPOINTED RECEIVER
MR. FLORENCIO B. ORENDAIN.
2. IN FACT, SEC RECEIVER ORENDAIN'S ACTS CANNOT BE IMPUGNED
BY [BF HOMES] SINCE UNDER SECTION 9, RULE 9, INTERIM RULES
OF PROCEDURE GOVERNING INTRA- CORPORATE CONTROVERSIES
AND SECTION 17, RULE 4, INTERIM RULES OF
PROCEDURE ON CORPORATE REHABILITATION, WHICH OPERATES
RETROACTIVELY BEING A PROCEDURAL RULE, RECEIVERS ENJOY
IMMUNITY FROM SUITS ARISING FROM THE EXERCISE OF THEIR
FUNCTIONS AND DUTIES.
3. NONETHELESS, [BF HOMES] IS ESTOPPED FROM REFUSING TO
DELIVER THE REMAINING 20 TCTs SINCE IT HAD PREVIOUSLY
DELIVERED TO SMPI 110 TCTs OUT OF 130 TCTs FOR WHICH [BF
HOMES] HAD DULY .RECEIVED FULL PAYMENT THEREFOR IN THE
TOTAL AMOUNT PHP104,600,402.47.36 CONSEQUENTLY, [BF
HOMES] IS OBLIGED TO DELIVER THE TITLES TO SMPI PURSUANT
TO SECTION 25, P.D. 957.
4. THE MATTER OF THE PURCHASE PRICE IS IRRELEVANT
CONSIDERING THE BIG VOLUME INVOLVED. IN FACT, THE AVERAGE
PURCHASE PRICE OF THE LOTS IN THE AMOUNT OF PHP2,500.00
PER SQ. M. IS VALID AND REASONABLE SINCE THE SALE INVOLVED
A TOTAL OF 130 LOTS AMOUNTING TO PHP 104,600,402.47.
5. EVEN ASSUMING ARGUENDO THAT THERE MAY BE SUBSTANTIAL
DISPARITY BETWEEN THE AVERAGE PURCHASE PRICE OF
PHP2.500/SQ.M. AND THE MARKET VALUE AT PHP3,500/SQ.M. AS
[BF HOMES] CLAIMS, MERE INADEQUACY OF THE PURCHASE PRICE,
STANDING ALONE AND WITHOUT PROOF OF ACTUAL FRAUD,
CANNOT INVALIDATE THE PARTIES' SALES CONTRACT PER ARTICLE
1355, NEW CIVIL CODE.
6. IF AT ALL, [BF HOMES'] REMEDY IS TO FILE THE APPROPRIATE
ACTION FOR RECONVEYANCE WITH THE REGULAR COURT, ABSENT
WHICH, IT IS LEGALLY BOUND TO DELIVER TO SMPI THE SUBJECT
TITLES.
7. ACCORDINGLY, SINCE SMPI WAS CONSTRAINED TO LITIGATE DUE
TO [BF HOMES'] UNJUSTIFIED REFUSAL TO DELIVER THE SUBJECT
TITLES, SMPI IS ENTITLED TO THE PAYMENT OF ATTORNEY'S FEES.37
chanrobleslaw
The Petition is meritorious.
Presidential Decree No. 95738 dated July 12, 1976 conferred exclusive jurisdiction to
regulate the real estate trade and business upon the National Housing Authority
(NHA).39 Presidential Decree No. 134440dated April 2, 1978 expanded the quasi-
judicial powers of NHA by providing as follows:cralawlawlibrary
Section 1. In the exercise of its functions to regulate the real estate trade and business
and in addition to its powers provided for in Presidential Decree No. 957, the National
Housing Authority shall have exclusive jurisdiction to hear and decide cases of the
following nature:chanRoblesvirtualLawlibrary
A. Unsound real estate business
practices;ChanRoblesVirtualawlibrary
B. Claims involving refund and any other claims filed by subdivision lot
or condominium unit buyer against the project owner, developer,
dealer, broker or salesman; and
C. Cases involving specific performance of contractual and statutory
obligations filed by buyers of subdivision lot or condominium unit
against the owner, developer, dealer, broker or salesman."
(Emphases ours.)
chanrobleslaw
Per Executive Order No. 64841 dated February 7, 1981, the powers of the NHA were
transferred to the Human Settlements Regulatory Commission, which, pursuant to
Executive Order No. 90 dated December 17, 1986, was subsequently renamed as
HLURB.42 In Siasoco v. Narvaja,43 the Court highlighted the exclusive jurisdiction of
the HLURB over complaints for specific performance in certain real estate
transactions:cralawlawlibrary
Under the Executive Order creating it, the HLURB has exclusive jurisdiction to "hear
and decide cases of unsound real estate business practices; claims involving refund
filed against project owners, developers, dealers, brokers, or salesmen; and cases of
specific performance." Accordingly, in United Housing Corporation v. Dayrit, we
ruled that it is the HLURB, not the trial court, which has jurisdiction over complaints
for specific performance filed against subdivision developers to compel the latter
to execute deeds of absolute sale and to deliver the certificates of title to
buyers. (Emphases supplied.)chanrobleslaw
The Court reiterated in Bank of the Philippines Islands v. ALS Management and
Development Corporation44 that:cralawlawlibrary
[T]he jurisdiction of the HLURB over cases enumerated in Section 1 of PD No. 1344
is exclusive. Thus, we have ruled that the board has sole jurisdiction in a complaint
of specific performance for the delivery of a certificate of title to a buyer of a
subdivision lot; for claims of refund regardless of whether the sale is perfected or
not; and for determining whether there is a perfected contract of sale. (Emphases
supplied.)
chanrobleslaw
It is clear from the plain language of Section 1 of Presidential Decree No. 1344 and
aforecited jurisprudence that the HLURB had exclusive jurisdiction over the
complaint for specific performance filed by SMPI against BF Homes for the delivery
of the remaining 20 TCTs.
In fact, in the instant case, the HLURB did exercise jurisdiction over and did take
cognizance of the complaint of SMPI. Arbiter Balasolla received pleadings and
evidences from the parties, and after the period for filing position papers and draft
decisions by the parties had lapsed, deemed the case submitted for decision.
However, at this stage, Arbiter Balasolla demurred, and instead of deciding the case,
suspended the proceedings until the SEC ruled on the issue of whether or not
Orendain, the receiver of BF Homes, had authority to execute the Deeds of Absolute
Sale over the 130 Italia II lots in favor of SMPI. On appeal, the HLURB Board of
Commissioners affirmed the suspension of proceedings.
When the case was appealed to the OP by SMPI, and then to the Court of Appeals by
BF Homes, both the OP and the Court of Appeals sustained the jurisdiction of HLURB
over the complaint for specific performance filed by SMPI, the only difference being
that the OP proceeded to resolve the case on the merits based on the evidence on
record while the appellate court remanded the case to the HLURB for further
proceedings.
The OP and the Court of Appeals are correct that the HLURB, in the exercise of its
exclusive jurisdiction, did not have to suspend the proceedings and should have went
ahead to resolve the complaint for specific performance filed by SMPI given its
statutory mandate under Section 1 of Presidential Decree No. 1344 and its technical
competence and expertise over the subject matter. The HLURB was called upon to
determine the contractual obligations of BF Homes and SMPI, as seller and buyer of
subdivision lots, respectively, under the terms and conditions of the Deeds of
Absolute Sale in relation to the provisions of Presidential Decree No. 957. In contrast,
the proceedings before the SEC involved the receivership of BF Homes, an intra-
corporate matter, as pointed out by the Court of Appeals. While the HLURB and SEC
proceedings may be related (i.e., Orendain executed the Deeds of Absolute Sale of
the 130 Italia II lots as receiver of BF Homes), the two cases could proceed
independently of one another. A ruling by the SEC that Orendain did not have or had
exceeded his authority as receiver in executing the Deeds of Absolute Sale is not
absolutely determinative of the fate of the complaint for specific performance of
SMPI before the HLURB. It would not automatically result in the nullification or
rescission of the said Deeds or justify the refusal of BF Homes to deliver the 20 TCTs
to SMPI as there would be other issues which need to be considered, such as the
good faith or bad faith of SMPI as buyer, ratification by BF Homes of the
Deeds, etc., and the HLURB is not obliged to suspend its proceedings until all of these
issues are resolved or decided by other courts/tribunals. HLURB could already make
a preliminary finding on the validity of the Deeds of Absolute Sale executed by
Orendain for the purpose of ascertaining the right of SMPI to the delivery of the 20
TCTs. The HLURB is behooved to settle the controversy brought before it with
dispatch if only to achieve the purpose of Presidential Decree No. 957, to
wit:cralawlawlibrary
The provisions of P.D No. 957 were intended to encompass all questions regarding
subdivisions and condominiums. The intention was to provide for an appropriate
government agency, the HLURB, to which all parties - buyers and sellers of subdivision
and condominium units - may seek remedial recourse. The law recognized, too, that
subdivision and condominium development involves public interest and welfare and
should be brought to a body, like the HLURB, that has technical expertise. In the
exercise of its powers, the HLURB, on the other hand, is empowered to interpret and
apply contracts, and determine the rights of private parties under these contracts.
This ancillary power, generally judicial, is now no longer with the regular courts to
the extent that the pertinent HLURB laws provide. 45
chanrobleslaw
Nonetheless, the Court disagrees with the Court of Appeals and finds no more need
to remand the case to the HLURB.
To recall, the parties were able to file pleadings and submit evidence before Arbiter
Balasolla. The case was already deemed submitted for resolution with Arbiter
Balasolla stopping short only of actually rendering a decision. Taking into account
that the necessary pleadings and evidence of the parties are already on record,
returning the instant case to the HLURB for further proceedings will simply be
circuitous and inconsistent with the summary nature of HLURB proceedings.46 The
Court keeps in mind the shared objective of Rule 1, Section 2 of the 1996 Rules of
Procedure of the HLURB, as amended, and Rule 1, Section 6 of the Revised Rules of
Court to promote a just, speedy, and inexpensive disposition/determination of every
action.47
Pursuant to the doctrine of primary jurisdiction, "the courts cannot or will not
determine a controversy involving a question which is within the jurisdiction of an
administrative tribunal, where the question demands the exercise of sound
administrative discretion requiring the special knowledge, experience, and services
of the administrative tribunal to determine technical and intricate matters of fact,
and a uniformity of ruling is essential to comply with the purposes of the regulatory
statute administered."48However, said doctrine is not an absolute or inflexible rule.
The Court recognized several exceptions in Republic v. Lacap,49viz.:cralawlawlibrary
[T]he doctrine of exhaustion of administrative remedies and the corollary doctrine of
primary jurisdiction, which are based on sound public policy and practical
considerations, are not inflexible rules. There are many accepted exceptions, such as:
(a) where there is estoppel on the part of the party invoking the doctrine; (b) where
the challenged administrative act is patently illegal, amounting to lack of jurisdiction;
(c) where there is unreasonable delay or official inaction that will irretrievably
prejudice the complainant; (d) where the amount involved is relatively small so as to
make the rule impractical and oppressive; (e) where the question involved is purely
legal and will ultimately have to be decided by the courts of justice; (f) where judicial
intervention is urgent; (g) when its application may cause great and irreparable
damage; (h) where the controverted acts violate due process; (i) when the issue of
non-exhaustion of administrative remedies has been rendered moot; (j) when there
is no other plain, speedy and adequate remedy; (k)when strong public interest is
involved; and, (1) in quo warranto proceedings, x x x. (Emphases
supplied.)chanrobleslaw
The contractual relationship between BF Homes as owner and SMPI as buyer of
subdivision lots is governed by Presidential Decree No. 957 and is undeniably imbued
with public interest. Hence, it is crucial that the dispute between them be resolved
as swiftly as possible. In Spouses Chua v. Ang,50 the Court declared that "public
interest and welfare are involved in subdivision and condominium development, as
the terms of Presidential Decree Nos. 957 and 1344 expressly reflect, x x x Shelter is
a basic human need whose fulfillment cannot afford any kind of delay."
Even if the case is no longer remanded, BF Homes cannot claim denial of due process.
"The essence of due process is to be heard, and, as applied to administrative
proceedings, this means a fair and reasonable opportunity to explain one's side, or
an opportunity to seek a reconsideration of the action or ruling complained of.
Administrative due process cannot be fully equated with due process in its strict
judicial sense, for in the former a formal or trial-type hearing is not always necessary,
and technical rules of procedure are not strictly applied."51 In the instant case, SMPI
and BF Homes were afforded the opportunity to present and address each other's
arguments through an exchange of pleadings, as well as to submit their respective
evidence before Arbiter Balasolla. To recall, the case was already submitted for
decision before Arbiter Balasolla, meaning, there is nothing more left for the parties
to submit or do. To remand the case and repeat the entire process once again before
the HLURB Arbiter will not only be impractical, but also unreasonable and oppressive
for SMPI.
Relevant herein are the following pronouncements of the Court in Ching v. Court of
Appeals52:cralawlawlibrary
[T]he Supreme Court may, on certain exceptional instances, resolve the merit:? of a
case on the basis of the records and other evidence before it, most especially when
the resolution of these issues would best serve the ends of justice and promote the
speedy disposition of cases.
Thus, considering the peculiar circumstances attendant in the instant case, this Court
sees the cogency to exercise its plenary power:
"It is a rule of procedure for the Supreme Court to strive to settle the entire
controversy in a single proceeding leaving no root or branch to bear the seeds of
future litigation. No useful purpose will be served if a case or the determination of an
issue in a case is remanded to the trial court only to have its decision raised again to
the Court of Appeals and from there to the Supreme Court (citing Board
of Commissioners vs. Judge Joselito de la Rosa and Judge Capulong, G.R. Nos. 95122-
23).
"We have laid down the rule that the remand of the case or of an issue to the lower
court for further reception of evidence is not necessary where the Court is in position
to resolve the dispute based on the records before it and particularly where the ends
of justice would not be subserved by the remand thereof (Escudem vs. Dulay, 158
SCRA 69). Moreover, the Supreme Court is clothed with ample authority to review
matters, even those not raised on appeal if it finds that their consideration is
necessary in arriving at a just disposition of the case."
On many occasions, the Court, in the public interest and for the expeditious
administration of justice, has resolved actions on the merits instead of remanding
them to the trial court for further proceedings, such as where the ends of justice
would not be subserved by the remand of the case.
chanrobleslaw
Consequently, the Court proceeds to resolve the primary issue in this case: Whether
or not SMPI is entitled to the delivery of the remaining 20 TCTs for the lots it
purchased from BF Homes. loan NHA had extended for the construction of the fifth floor.

The Court answers affirmatively. The Court observes the frequent allusion of petitioner to its predicament brought
about by the abandonment of the project by the first contractor. But such is
Section 25 of Presidential Decree No. 957 explicitly mandates that "[t]he owner or irrelevant in light of Sec. 25 of P.D. 957 as well as of the Contract to Sell of the
developer shall deliver the title of the [subdivision] lot or [condominium] unit to the parties. While we empathize with petitioner in its financial dilemma we cannot
buyer upon full payment of the lot or unit." make innocent parties suffer the consequences of the former's lack of business
acumen. Upon full payment of a unit, petitioner loses all its rights and interests to
Section 3 of all the three Deeds of Absolute Sale also reads:cralawlawlibrary the unit in favor of the buyer, x x x. (Emphases supplied.)chanrobleslaw

3. [BF Homes] likewise covenants to deliver to [SMPI] the properties free and clear of
To justify its refusal to deliver the remaining 20 TCTs to SMPI, BF Homes asserts that
tenants, if any, and shall submit any and all titles, documents and/or papers which
1) the Deeds of Absolute Sale were undated and not notarized; 2) Orendain did not
may be required to effect the transfer of the properties to [SMPI][.] 53chanrobleslaw
have or exceeded his authority as receiver in entering into the contracts of sale of the
Italia II lots with SMPI; and 3) the consideration for the said Italia II lots were grossly
In the case at bench, SMPI submitted adequate proof showing full payment to and inadequate and disadvantageous for BF Homes.
receipt by BF Homes of the purchase price for the 130 Italia II lots as fixed in the
Deeds of Absolute Sale.54 BF Homes expressly admitted receipt of some payments, The Court is not persuaded.
while it remained silent as to the others without presenting controverting evidence.
Article 1358(1) of the Civil Code requires that "[a]cts and contracts which have for
Upon full payment by SMPI of the purchase price for the 130 Italia II lots to BF Homes, their object the creation, transmission, modification or extinguishment of real rights
it became mandatory upon BF Homes to deliver the TCTs for said lots to SMPI. As the over immovable property" must appear in a public document; and sales of real
Court held in G.O.A.L., Inc. v. Court of Appeals55:cralawlawlibrary property or of an interest therein shall be governed by Article 1403(2) and 1405 of
the same Code. Pertinent portions of Articles 1403(2) and 1405 of the Civil Code are
Upon full payment of the agreed price, petitioner is mandated by law to deliver the reproduced below:cralawlawlibrary
title of the lot or unit to the buyer. Both the "Contract to Sell" of petitioner and
private respondents, and Sec. 25 of P.D. 957 state - Art. 1403. The following contracts are unenforceable, unless they are
Sec. III (Contract to Sell). - Title and Ownership of Unit. Upon full payment by the ratified:chanRoblesvirtualLawlibrary
vendees of the full amount of the purchase price stipulated under Sec. Ill hereof, the
assessments and expenses under Sec. IV and otherwise upon compliance by the x x x x
VENDEES of all obligations therein, the VENDOR will convey to the VENDEE all rights
and interests of the former and to the Unit, subject hereof together with the interest (2) Those that do not comply with the Statute of Frauds as set forth in this number.
in the common area and in the Condominium Corporation appurtenant to such unit In the following cases an agreement hereafter made shall be unenforceable by
x x x." action, unless the same, or some note or memorandum, thereof, be in writing, and
subscribed by the party charged, or by his agent; evidence, therefore, of the
Sec. 25, P.D. 957 - Issuance of Title. - The owner or developer shall deliver the title agreement cannot be received without the writing, or a secondary evidence of its
of the lot or unit to the buyer upon full payment of the lot or unit x x x. In the event contents:
a mortgage over the lot or unit is outstanding at the time of the issuance of the title x x x x
to the buyer, the owner or developer shall redeem the mortgage or the
corresponding portion thereof within six months from such issuance in order that the (e) An agreement of the leasing for a longer period than one year, or for the sale of
title over any paid lot or unit may be secured and delivered to the buyer in real property or of an interest therein;ChanRoblesVirtualawlibrary
accordance herewith."
Petitioner also attempts to justify its failure to deliver the certificate of title of private xxxx
respondent Teng by claiming that it used the title as part collateral for the additional
Art. 1405. Contracts infringing the Statute of Frauds, referred to in No. 2 of Article
1403, are ratified by the failure to object to the presentation of oral evidence to prove
the same, or by the acceptance of benefit under them.chanrobleslaw
The contracts of sale of the 130 Italia II lots between BF Homes and SMPI were
actually reduced into writing into the three Deeds of Absolute Sale which were signed
by the representatives of the two corporations. The only defect was that the Deeds
were not notarized and, therefore, were not public documents as required by Article
1358(1) of the Civil Code. Cenido v. Spouses Apacionado56 involved a closely similar
situation and the Court adjudged therein that:cralawlawlibrary
The sale of real property should be in writing and subscribed by the party charged for
it to be enforceable. The "Pagpapatunay" is in writing and subscribed by Bonifacio
Aparato, the vendor; hence, it is enforceable under the Statute of Frauds. Not
having been subscribed and sworn to before a notary public, however, the
"Pagpapatunay" is not a public document, and therefore does not comply with
Article 1358, Paragraph 1 of the Civil Code.
The requirement of a public document in Article 1358 is not for the validity of the
instrument but for its efficacy. Although a conveyance of land is not made in a
public document, it does not affect the validity of such conveyance. Article 1358
does not require the accomplishment of the acts or contracts in a public instrument
in order to validate the act or contract but only to insure its efficacy, so that after the
existence of said contract has been admitted, the party bound may be compelled to
execute the proper document, x x x.
x x x x
The private conveyance of the house and lot is therefore valid between Bonifacio
Aparato and respondent spouses, x x x For greater efficacy of the contract,
convenience of the parties and to bind third persons, respondent spouses have the
right to compel the vendor or his heirs; to execute the necessary document to
properly convey the property.chanrobleslaw
Also instructive is the following discussion of the Court in Swedish Match v. Court of
Appeals,57 on the Statute of Frauds:cralawlawlibrary
The Statute of Frauds embodied in Article 1403, paragraph (2), of the Civil Code
requires certain contracts enumerated therein to be evidenced by some note or
memorandum in order to be enforceable. The term "Statute of Frauds" is descriptive
of statutes which require certain classes of contracts to be in writing. The Statute
does not deprive the parties of the right to contract with respect to the matters
therein involved, but merely regulates the formalities of the contract necessary to
render it enforceable. Evidence of the agreement cannot be received without the
writing or a secondary evidence of its contents.
The Statute, however, simply provides the method by which the contracts
enumerated therein may be proved but does not declare them invalid because they
are not reduced to writing. By law, contracts are obligatory in whatever form they
may have been entered into, provided all the essential requisites for their validity are
present. However, when the law requires that a contract be in some form in order
that it may be valid or enforceable, or that a contract be proved in a certain way,
that requirement is absolute and indispensable. Consequently, the effect of non-
compliance with the requirement of the Statute is simply that no action can be
enforced unless the requirement is complied with. Clearly, the form required is for
evidentiary purposes only. Hence, if the parties permit a contract to be proved,
without any objection, it is then just as binding as if the Statute has been complied
with.
The purpose of the Statute is to prevent fraud and perjury in the enforcement of
obligations depending for their evidence on the unassisted memory of witnesses, by
requiring certain enumerated contracts and transactions to be evidenced by a writing
signed by the party to be charged.
However, for a note or memorandum to satisfy the Statute, it must be complete in
itself and cannot rest partly in writing and partly in parol. The note or memorandum
must contain the names of the parties, the terms and conditions of the contract, and
a description of the property sufficient to render it capable of identification. Such
note or memorandum must contain the essential elements of the contract expressed
with certainty that may be ascertained from the note or memorandum itself, or some
other writing to which it refers or within which it is connected, without resorting to
parol evidence.
x x x x
The Statute of Frauds is applicable only to contracts which are executory and not
to those which have been consummated either totally or partially. If a contract has
been totally or partially performed, the exclusion of parol evidence would promote
fraud or bad faith, for it would enable the defendant to keep the benefits already
derived by him from the transaction in litigation, and at the same time, evade the
obligations, responsibilities or liabilities assumed or contracted by him thereby.
This rule, however, is predicated on the fact of ratification of the contract within
the meaning of Article 1405 of the Civil Code either (1) by failure to object to the
presentation of oral evidence to prove the same, or (2) by the acceptance of
benefits under them. x x x. (Emphases supplied.)chanrobleslaw

Based on the afore-quoted jurisprudence, the Deeds of Absolute Sale are
enforceable. First, the Deeds are already in writing and signed by the parties, and
only lack notarization, a formality which SMPI could compel BF Homes to comply
with. As private documents, the Deeds are still binding between the parties and the
conveyance of the 130 Italia II lots by BF Homes to SMPI by virtue of said Deeds is
valid. And second, the Deeds were already ratified as BF Homes had accepted the
benefits from said contracts when it received full payment from SMPI of the purchase
price for the 130 Italia II lots. The Deeds were also substantially performed
considering that BF Homes had previously delivered to SMPI the TCTs for 110 out of
the 130 lots, only refusing to deliver the TCTs for the remaining 20 lots.
BF Homes cannot insist on the lack of authority of Orendain as receiver to sign the
Deeds of Absolute Sale for the 130 Italia II lots. While it is true the SEC revoked the
appointment of Orendain as rehabilitation receiver of BF Homes in 1989, the SEC
thereafter immediately appointed FBO Networks Management, Inc., in replacement
as receiver. Orendain was the Chairman of FBO Networks Management, Inc. Hence,
when Orendain signed the Deeds of Absolute Sale for the 130 Italia II lots, he did so
as Chairman of FBO Networks Management, Inc., the appointed receiver of BF
Homes.
Under Section 6(d) of Presidential Decree No. 902-A, otherwise known as the SEC
Reorganization Act, the management committee or rehabilitation receiver is
empowered to take custody and control of all existing assets and properties of such
corporations under management; to evaluate the existing assets and liabilities,
earnings and operations of such corporations; to determine the best way to salvage
and protect the interest of investors and creditors; to study, review and evaluate the
feasibility of continuing operations, and restructure and rehabilitate such entities if
determined to be feasible by the SEC.58 The acts of the receiver, being an appointed
officer of the SEC,59 enjoy the presumption of regularity.60
In the instant case, the acts of FBO Networks Management, Inc., as receiver of BF
Homes, undertaken through Orendain, including the sale of the 130 Italia II lots to
SMPI in 1992 and 1993, are so far presumed to have been regularly performed absent
evidence to the contrary. While BF Homes questioned the acts of Orendain/FBO
Networks Management, Inc. as receiver before the SEC, the SEC terminated the
rehabilitation proceedings without definitively ruling on the same and recognized the
transfer of jurisdiction over such subject matter to the Regional Trial Courts (RTC)
with the passage of Republic Act No. 8799, otherwise known as the Securities
Regulation Code. There is no showing herein whether BF Homes pursued before the
RTC any case to nullify or invalidate the alleged unauthorized or irregular acts of
Orendain/FBO Networks Management, Inc. as receiver.
Moreover, even assuming for the sake of argument that Orendain/FBO Networks
Management, Inc. did act without or beyond his/its authority as receiver in entering
into the contracts of sale of the 130 Italia II lots with SMPI, then the said contracts
were merely unenforceable and could be ratified, Article 1403(1) of the Civil Code
provides:cralawlawlibrary
ARTICLE 1403. The following contracts are unenforceable, unless they are
ratified:chanRoblesvirtualLawlibrary
(1) Those entered into in the name of another person by one who has been given no
authority or legal representation, or who has acted beyond his
powers[.]chanrobleslaw
As the OP observed, BF Homes ratified the Deeds of Absolute Sale with SMPI by
accepting full payment from SMPI of the purchase price for the 130 Italia II lots, and
fully implementing the transaction covered by the first two Deeds and partially
implementing the third by delivering the TCTs for 110 of the 130 lots.
Receiving full payment for the 130 Italia II lots from SMPI also estops BF Homes from
denying the authority of Orendain/FBO Networks Management, Inc. to enter into the
Deeds of Absolute Sale. The Court applies by analogy its declarations in Bisaya Land
Transportation, Inc. v. Sanchez,61 which involved the acts of a court-appointed
receiver for an estate:cralawlawlibrary
Furthermore, it is clear that BISTRANCO received material benefits from the contracts
of agency of Sanchez, based upon the monthly statements of income of BISTRANCO,
upon which the commissions of Sanchez were based, x x x.
x x x x
[I]n our considered opinion, the doctrine of estoppel precludes BISTRANCO from
repudiating an obligation voluntarily assumed by it, after having accepted benefits
therefrom.' To countenance such repudiation would be contrary to equity and would
put a premium on fraud or misrepresentation, which this Court will not
sanction.chanrobleslaw
Furthermore, the averment of BF Homes of inadequacy of the purchase price for the
130 Italia II lots deserves scant consideration. Section 3(p), Rule 131 of the Revised
Rules of Court presumes that private transactions have been fair and regular. The
only evidence submitted by BF Homes in support of its claim is the appraisal report
which valued the lots at P3,500.00 and P3,000.00 per square meter. The appraisal
report, however, does not necessarily prove that the purchase price for the lots
agreed upon in the Deeds of Absolute Sale, averaged at P2,500.00 per square meter,
is grossly inadequate and disadvantageous to BF Homes. There are considerations for
which sellers may agree to sell their property for less than the market value, such as
the urgent financial need of the seller, cash or immediate payment, and/or the high
number of properties purchased at the same time. In this case, SMPI explained that
it was granted a lower purchase price because it bought the Italia II lots in volume,
and BF Homes was unable to repudiate said explanation.

Finally, as to the award of attorney's fees, Article 2208 of the Civil Code allows the
recovery of attorney's fees and expenses of litigation, other than judicial costs, even
in the absence of stipulation, "[w]here the defendant acted in gross and evident bad
faith in refusing to satisfy the plaintiffs plainly valid, just and demandable claim."
SMPI obviously had a valid and demandable claim against BF Homes, which
unjustifiably and inexcusably refused to comply with the mandate in Presidential
Decree No. 957 and undertaking in the Deeds of Absolute Sale to deliver the titles to
the subdivision lots upon complete payment for said properties. The sudden refusal
of BF Homes to deliver the last 20 TCTs, after having previously delivered the other
110 TCTs, constitutes bad faith and justifies the award of attorney's fees in favor of
SMPI, which was forced to litigate to enforce its rights. The amount of P100,000.00
awarded by the OP as attorney's fees is just and reasonable under the circumstances.

WHEREFORE, premises considered, the Petition for Review on Certiorari of San

Miguel Properties, Inc. is GRANTED. The Decision dated January 31, 2005 and
Resolution dated August 9, 2005 of the Court of Appeals in CA-G.R. SP No. 83631
ordering the remand of the case to the Housing and Land Use Regulatory Board
is REVERSED and SET ASIDE; and the Decision dated January 27, 2004 of the Office of
the President in O.P. Case No. 03-E-203 is REINSTATED.

SO ORDERED.

A. JURISDICTION OF THE SUPREME COURT
G.R. No. 165973 June 29, 2005
LACSON HERMANAS, INC.,
vs.
HEIRS OF CENON IGNACIO, herein represented by their atty-in-fact, AMALIA
IGNACIO, REGIONAL TRIAL COURT, BRANCH 48, CITY OF SAN FERNANDO, presided
by the HON. JUDGE SERAFIN B. DAVID,Respondents.
DECISION
YNARES-SANTIAGO, J.:
Assailed in this petition for certiorari under Rule 65 of the Revised Rules of Civil
Procedure are the September 9, 20041 and October 15 20042 Orders of the Regional
Trial Court of San Fernando City, Branch 48,3 which denied petitioner’s motion to
dismiss and motion for reconsideration, respectively.
The undisputed facts show that on April 29, 2004, private respondents filed a
complaint4 for recovery of real property against petitioner Lacson Hermanas, Inc.
They alleged that their predecessor-in-interest, Cenon Ignacio (Cenon), purchased
from petitioner a 1,000 square meter portion of a parcel of land covered by Transfer
Certificate of Title (TCT) No. 261974-R for P50,000.00 which was fully paid on
September 24, 1989. Cenon thereafter took possession of the subject area and
fenced the boundaries thereof for the construction of Seventh Day Adventist Chapel.
On January 11, 1996, however, Cenon died.
Sometime in 2002, private respondents demanded the delivery of the lot’s title and
the segregation of the portion sold to Cenon but was informed by petitioner that the
same lot has been sold to Rowena T. Coleman. Hence, the instant case to compel
petitioner to execute the necessary deed of sale and to deliver the owner’s duplicate
copy of title.
Petitioner filed a motion to dismiss5 contending, among others, that the case is
cognizable by the Housing and Land Use Regulatory Board (HLURB) and not the trial
court because it is sued as a subdivision developer and the property involved is a
subdivision lot.
The trial court denied the motion to dismiss holding that it has jurisdiction over the
subject matter. It added that petitioner’s allegation that the lot involved is a
subdivision lot is not a ground to deprive the court of its jurisdiction. 6Petitioner’s
motion for reconsideration was denied.7
Hence, the instant petition.
The petition lacks merit.
At the outset, the instant petition for certiorari should have been filed with the Court
of Appeals and not with this Court pursuant to the doctrine of hierarchy of courts.
Disregard of this rule warrants the outright dismissal of the petition. While the
Court’s original jurisdiction to issue a writ of certiorari is concurrent with the Regional
Trial Courts and the Court of Appeals in certain cases, we emphasized in Liga ng mga
Barangay National v. Atienza, Jr.,8 that such concurrence does not allow an
unrestricted freedom of choice of court forum, thus –
This concurrence of jurisdiction is not, however, to be taken as according to parties
seeking any of the writs an absolute, unrestrained freedom of choice of the court to
which application therefore will be directed. There is after all a hierarchy of courts.
That hierarchy is determinative of the venue of appeals, and also serves as a general
determinant of the appropriate forum for petitions for the extraordinary writs. A
becoming regard of that judicial hierarchy most certainly indicates that petitions for
the issuance of extraordinary writs against first level ("inferior") courts should be filed
with the Regional Trial Court, and those against the latter, with the Court of Appeals.
A direct invocation of the Supreme Court’s original jurisdiction to issue these writs
should be allowed only when there are special and important reasons therefor,
clearly and specifically set out in the petition. It is a policy necessary to prevent
inordinate demands upon the Court’s time and attention which are better devoted
to those matters within its exclusive jurisdiction, and to prevent further over-
crowding of the Court’s docket.9
In the present case, petitioner adduced no special and important reason why direct
recourse to this Court should be allowed. Thus, we reaffirm the judicial policy that
this Court will not entertain a direct invocation of its jurisdiction unless the redress
desired cannot be obtained in the appropriate courts, and exceptional and
compelling circumstances justify the resort to the extraordinary remedy of writ
of certiorari.
Although the invocation of this Court’s jurisdiction is available to petitioner on the
ground that this case raises a pure question of law, specifically, the issue of
jurisdiction,10 the proper recourse is not a petition for certiorari under Rule 65 but an
appeal via a petition for review on certiorari in accordance with Rule 45 of the
Revised Rules of Civil Procedure,11 which should have been filed within 15 days from
notice of the denial of its motion for reconsideration 12 on October 22, 2004. Even if
we treat the instant petition as an appeal under Rule 45, the same will not prosper
having been filed only on November 30, 2004, way beyond the 15 day reglementary
period.
Then too, even if we gloss over these procedural infirmities, the instant petition must
fail for lack of merit.
Section 1 of PD 134413 vests the National Housing Authority (now HLURB) with
exclusive jurisdiction to hear and decide the following cases: (a) unsound real estate
business practice; (b) claims involving refund and any other claims filed
by subdivision lot or condominium unit buyer against the project owner, developer,
dealer, broker, or salesman; and (c) cases involving specific performance of
contractual and statutory obligations filed by buyers of subdivision lot or
condominium unit against the owner, developer, dealer, broker or salesman.
It is a settled rule that jurisdiction over the subject matter is determined by the
allegations in the complaint and is not affected by the pleas or the theories set up by
the defendant in an answer or a motion to dismiss. Otherwise, jurisdiction would
become dependent upon the whims of the defendant.
Here, the allegations in private respondents’ complaint clearly vest jurisdiction in the
trial court. Nothing therein shows that the questioned property is a subdivision lot
and sold by petitioner as a subdivision developer. It simply referred to petitioner as
a corporation and the seller of a lot described as "portion of a parcel of land,
particularly a 1,000 sq. m. area thereof … covered by Transfer Certificate of Title No.
261974-R …"14
Mere assertion by petitioner that it is a subdivision developer and the land involved
is a subdivision lot, will not automatically strip the trial court of its jurisdiction and
authorize the HLURB to take cognizance of the complaint. Indeed, it does not always
follow that each sale made by petitioner is undertaken in its capacity as a subdivision
developer, in the same manner that sales made in such capacity are not at all times
intended for subdivision development.
In Javellana v. Presiding Judge, RTC, Branch 30, Manila,15 the Court sustained the
denial of a motion to dismiss, holding that jurisdiction lies with the regular courts and
not with the HLURB because the averments in the complaint reveal that the
transaction involved an installment sale of a lot and not a sale of a subdivision lot. It
further held that even the allegation – a subdivision lot in a subdivision project, is not
sufficient to vest jurisdiction with the HLURB, thus –
A reading of the complaint does not show that the subject lot was a subdivision lot
which would fall under the jurisdiction of the HLURB. The complaint clearly described
the subject lot as Lot No. 44, Plan 15 with an area of 139.4 sq. meters situated in the
District of Sampaloc covered by Transfer Certificate of Title No. 131305 of the
Registry of Deeds of Manila. We note that such description was used when referring
to the subject lot. What appears from the complaint was the fact that the subject lot
was sold to petitioners in an ordinary sale of a lot on installment basis; that
petitioners allegedly defaulted in the payment of their monthly installments for
which reason respondent seeks to recover possession thereof. Thus, the trial court
has jurisdiction over the case.
…
[T]he use of the phrase "regular subdivision project" does not automatically make
the instant case fall under the jurisdiction of the HLURB. In Sps. Kakilala vs.
Faraon, notwithstanding the allegations of petitioners in their complaint that the
subject lot is "a subdivision lot" in a "subdivision project," we held that such
allegations were not sufficient to vest the HLURB of jurisdiction over the case, thus:
Jurisdiction is determined by the averments of the complaint and not by the defense
contained in the answer. Hence, the jurisdictional issue involved here shall be
determined on the basis of the allegations of petitioner’s complaint before the
HLURB. Petitioners simply alleged therein that the subject lot is "a subdivision lot" in
"a subdivision project." Under Section 2(d) and (e) of PD 957, "subdivision project"
and "subdivision lot" are defined as follows:
d) Subdivision project – "Subdivision project" shall mean a tract or a parcel of land
registered under Act No. 496 which is partitioned primarily for residential purposes
into individual lots with or without improvements thereon, and offered to the public
for sale, in cash or in installment terms. It shall include all residential, commercial,
industrial and recreational areas as well as open spaces and other community and
public areas in the project.
e) Subdivision lot. – "Subdivision lot" shall mean any of the lots, whether residential,
commercial, industrial, or recreational, in a subdivision project.
There is no allegation in the complaint that the lot purchased by petitioners is part of
a tract of land partitioned primarily for residential purposes into individual lots and
offered to the public for sale. There is likewise no allegation that the tract of land
includes recreational areas and open spaces. Nor does the "Contract to Sell", which
forms part of the complaint, describe the subject property as a subdivision lot. What
the contract strongly suggests is that the property is simply a lot offered by
respondents, as vendors, to the petitioners, as vendees, for sale on installment. As
can be clearly gleaned from the same contract, respondents are not acting as
subdivision owners, developers, brokers or salesmen, nor are they engaged in the
real estate business. What is plain is that the parties are acting only as ordinary sellers
and buyers of a specific lot, a portion of a big tract of land co-owned by the heirs of
Mariano Faraon. Neither are there undertakings specified in the contract that
respondents shall develop the land, like providing for the subdivision concrete roads
and sidewalks, street lights, curbs and gutters, underground drainage system,
independent water system, landscaping, developed park, and 24-hour security guard
service. Even the rights and obligations of the sellers and buyers of a subdivision lot
are not provided in the agreement. All these provisions are usually contained in a
standard contract involving a sale of a subdivision lot.16

In the instant case, the parties never mentioned if the contract was embodied in a
written instrument which may shed light on the nature of their transaction. At any
rate, the allegations in private respondents’ complaint which determine the tribunal
that may lawfully take cognizance of the case, clearly show that jurisdiction in the
present controversy is lodged with the trial court and not with the HLURB.

WHEREFORE, the petition is DENIED. The September 9, 2004 and October 15, 2004
Orders of the Regional Trial Court of San Fernando City, Branch 48, which denied
petitioner’s motion to dismiss and motion for reconsideration, respectively,
are AFFIRMED.

SO ORDERED.
G.R. No. 140954. April 12, 2005
HEIRS OF BERTULDO HINOG
vs.
HON. ACHILLES MELICOR, in his capacity as Presiding Judge, RTC, Branch 4,
7th Judicial Region, Tagbiliran City, Bohol, and CUSTODIO BALANE, RUFO BALANE,
HONORIO BALANE, and TOMAS BALANE,Respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a petition for certiorari and prohibition under Rule 65 of the Rules of
Court which assails the Orders dated March 22, 1999, August 13, 1999 and October
15, 1999 of the Regional Trial Court, Branch 4, of Tagbilaran City, Bohol in Civil Case
No. 4923.
The factual background of the case is as follows:
On May 21, 1991, private respondents Custodio, Rufo, Tomas and Honorio, all
surnamed Balane, filed a complaint for "Recovery of Ownership and Possession,
Removal of Construction and Damages" against Bertuldo Hinog (Bertuldo for brevity).
They alleged that: they own a 1,399- square meter parcel of land situated in Malayo
Norte, Cortes, Bohol, designated as Lot No. 1714; sometime in March 1980, they
allowed Bertuldo to use a portion of the said property for a period of ten years and
construct thereon a small house of light materials at a nominal annual rental of
₱100.00 only, considering the close relations of the parties; after the expiration of
the ten-year period, they demanded the return of the occupied portion and removal
of the house constructed thereon but Bertuldo refused and instead claimed
ownership of the entire property.
Accordingly, private respondents sought to oust Bertuldo from the premises of the
subject property and restore upon themselves the ownership and possession
thereof, as well as the payment of moral and exemplary damages, attorney’s fees
and litigation expenses "in amounts justified by the evidence." 2
On July 2, 1991, Bertuldo filed his Answer. He alleged ownership of the disputed
property by virtue of a Deed of Absolute Sale dated July 2, 1980, executed by one
Tomas Pahac with the knowledge and conformity of private respondents. 3
After the pre-trial, trial on the merits ensued. On November 18, 1997, private
respondents rested their case. Thereupon, Bertuldo started his direct examination.
However, on June 24, 1998, Bertuldo died without completing his evidence.
On August 4, 1998, Atty. Sulpicio A. Tinampay withdrew as counsel for Bertuldo as
his services were terminated by petitioner Bertuldo Hinog III. Atty. Veronico G.
Petalcorin then entered his appearance as new counsel for Bertuldo.4
On September 22, 1998, Atty. Petalcorin filed a motion to expunge the complaint
from the record and nullify all court proceedings on the ground that private
respondents failed to specify in the complaint the amount of damages claimed so as
to pay the correct docket fees; and that under Manchester Development Corporation
vs. Court of Appeals,5 non-payment of the correct docket fee is jurisdictional.6
In an amended motion, filed on October 2, 1998, Atty. Petalcorin further alleged that
the private respondents failed to pay the correct docket fee since the main subject
matter of the case cannot be estimated as it is for recovery of ownership, possession
and removal of construction.7
Private respondents opposed the motion to expunge on the following grounds: (a)
said motion was filed more than seven years from the institution of the case; (b) Atty.
Petalcorin has not complied with Section 16, Rule 3 of the Rules of Court which
provides that the death of the original defendant requires a substitution of parties
before a lawyer can have legal personality to represent a litigant and the motion to
expunge does not mention of any specific party whom he is representing; (c)
collectible fees due the court can be charged as lien on the judgment; and (d)
considering the lapse of time, the motion is merely a dilatory scheme employed by
petitioners.8
In their Rejoinder, petitioners manifested that the lapse of time does not vest the
court with jurisdiction over the case due to failure to pay the correct docket fees. As
to the contention that deficiency in payment of docket fees can be made as a lien on
the judgment, petitioners argued that the payment of filing fees cannot be made
dependent on the result of the action taken.9
On January 21, 1999, the trial court, while ordering the complaint to be expunged
from the records and the nullification of all court proceedings taken for failure to pay
the correct docket fees, nonetheless, held:
The Court can acquire jurisdiction over this case only upon the payment of the exact
prescribed docket/filing fees for the main cause of action, plus additional docket fee
for the amount of damages being prayed for in the complaint, which amount should
be specified so that the same can be considered in assessing the amount of the filing
fees. Upon the complete payment of such fees, the Court may take appropriate
action in the light of the ruling in the case of Manchester Development Corporation
vs. Court of Appeals, supra.10
Accordingly, on January 28, 1999, upon payment of deficiency docket fee, private
respondents filed a manifestation with prayer to reinstate the case. 11 Petitioners
opposed the reinstatement12 but on March 22, 1999, the trial court issued the first
assailed Order reinstating the case.13
On May 24, 1999, petitioners, upon prior leave of court, 14 filed their supplemental
pleading, appending therein a Deed of Sale dated November 15, 1982. 15 Following
the submission of private respondents’ opposition thereto,16 the trial court, in its
Order dated July 7, 1999, denied the supplemental pleading on the ground that the
Deed of Absolute Sale is a new matter which was never mentioned in the original
answer dated July 2, 1991, prepared by Bertuldo’s original counsel and which
Bertuldo verified; and that such new document is deemed waived in the light of
Section 1, Rule 917 of the Rules of Court. The trial court also noted that no formal
substitution of the parties was made because of the failure of defendant’s counsel to
give the names and addresses of the legal representatives of Bertuldo, so much so
that the supposed heirs of Bertuldo are not specified in any pleading in the case. 18
On July 14, 1999, petitioners manifested that the trial court having expunged the
complaint and nullified all court proceedings, there is no valid case and the complaint
should not be admitted for failure to pay the correct docket fees; that there should
be no case to be reinstated and no case to proceed as there is no complaint filed. 19
After the submission of private respondents’ opposition 20 and petitioners’
rejoinder,21 the trial court issued the second assailed Order on August 13, 1999,
essentially denying petitioners’ manifestation/rejoinder. The trial court held that the
issues raised in such manifestation/rejoinder are practically the same as those raised
in the amended motion to expunge which had already been passed upon in the Order
dated January 21, 1999. Moreover, the trial court observed that the Order dated
March 22, 1999 which reinstated the case was not objected to by petitioners within
the reglementary period or even thereafter via a motion for reconsideration despite
receipt thereof on March 26, 1999.22
On August 25, 1999, petitioners filed a motion for reconsideration 23 but the same was
denied by the trial court in its third assailed Order dated October 15, 1999. The trial
court held that the Manchester rule was relaxed in Sun Insurance Office, Ltd. vs.
Asuncion.24 Noting that there has been no substitution of parties following the death
of Bertuldo, the trial court directed Atty. Petalcorin to comply with the provisions of
Section 16, Rule 3 of the Rules of Court. The trial court also reiterated that the Order
dated March 22, 1999 reinstating the case was not assailed by petitioners within the
reglementary period, despite receipt thereof on March 26, 1999. 25
On November 19, 1999, Atty. Petalcorin complied with the directive of the trial court
to submit the names and addresses of the heirs of Bertuldo. 26
On November 24, 1999, petitioners filed before us the present petition
for certiorari and prohibition.27 They allege that the public respondent committed
grave abuse of discretion in allowing the case to be reinstated after private
respondents paid the docket fee deficiency since the trial court had earlier expunged
the complaint from the record and nullified all proceedings of the case and such
ruling was not contested by the private respondents. Moreover, they argue that the
public respondent committed grave abuse of discretion in allowing the case to be
filed and denying the manifestation with motion to dismiss, despite the defect in the
complaint which prayed for damages without specifying the amounts, in violation of
SC Circular No. 7, dated March 24, 1988.
In their Comment, private respondents aver that no grave abuse of discretion was
committed by the trial court in reinstating the complaint upon the payment of
deficiency docket fees because petitioners did not object thereto within the
reglementary period. Besides, Atty. Petalcorin possessed no legal personality to
appear as counsel for the heirs of Bertuldo until he complies with Section 16, Rule 3
of the Rules of Court.28
At the outset, we note the procedural error committed by petitioners in directly filing
the instant petition before this Court for it violates the established policy of strict
observance of the judicial hierarchy of courts.
Although the Supreme Court, Court of Appeals and the Regional Trial Courts have
concurrent jurisdiction to issue writs of certiorari, prohibition, mandamus, quo
warranto, habeas corpus and injunction, such concurrence does not give the
petitioner unrestricted freedom of choice of court forum. 29 As we stated in People vs.
Cuaresma:30
This Court's original jurisdiction to issue writs of certiorari is not exclusive. It is shared
by this Court with Regional Trial Courts and with the Court of Appeals. This
concurrence of jurisdiction is not, however, to be taken as according to parties
seeking any of the writs an absolute, unrestrained freedom of choice of the court to
which application therefor will be directed. There is after all a hierarchy of courts.
That hierarchy is determinative of the venue of appeals, and also serves as a general
determinant of the appropriate forum for petitions for the extraordinary writs. A
becoming regard for that judicial hierarchy most certainly indicates that petitions for
the issuance of extraordinary writs against first level ("inferior") courts should be filed
with the Regional Trial Court, and those against the latter, with the Court of Appeals.
A direct invocation of the Supreme Court’s original jurisdiction to issue these writs
should be allowed only when there are special and important reasons therefor,
clearly and specifically set out in the petition. This is [an] established policy. It is a
policy necessary to prevent inordinate demands upon the Court’s time and attention
which are better devoted to those matters within its exclusive jurisdiction, and to
prevent further over-crowding of the Court’s docket.31
The rationale for this rule is two-fold: (a) it would be an imposition upon the precious
time of this Court; and (b) it would cause an inevitable and resultant delay, intended
or otherwise, in the adjudication of cases, which in some instances had to be
remanded or referred to the lower court as the proper forum under the rules of
procedure, or as better equipped to resolve the issues because this Court is not a trier
of facts.32
Thus, this Court will not entertain direct resort to it unless the redress desired cannot
be obtained in the appropriate courts, and exceptional and compelling
circumstances, such as cases of national interest and of serious implications, justify
the availment of the extraordinary remedy of writ of certiorari, calling for the exercise
of its primary jurisdiction. Exceptional and compelling circumstances were held
present in the following cases: (a) Chavez vs. Romulo33 on citizens’ right to bear arms;
(b) Government of the United States of America vs. Purganan 34 on bail in extradition
proceedings; (c) Commission on Elections vs. Quijano-Padilla35 on government
contract involving modernization and computerization of voters’ registration list;
(d) Buklod ng Kawaning EIIB vs. Zamora36 on status and existence of a public office;
and (e) Fortich vs. Corona37 on the so-called "Win-Win Resolution" of the Office of the
President which modified the approval of the conversion to agro-industrial area.
In this case, no special and important reason or exceptional and compelling
circumstance analogous to any of the above cases has been adduced by the
petitioners so as to justify direct recourse to this Court. The present petition should
have been initially filed in the Court of Appeals in strict observance of the doctrine
on the hierarchy of courts. Failure to do so is sufficient cause for the dismissal of the
petition at bar.
In any event, even if the Court disregards such procedural flaw, the petitioners’
contentions on the substantive aspect of the case fail to invite judgment in their
favor.
The unavailability of the writ of certiorari and prohibition in this case is borne out of
the fact that petitioners principally assail the Order dated March 22, 1999 which they
never sought reconsideration of, in due time, despite receipt thereof on March 26,
1999. Instead, petitioners went through the motion of filing a supplemental pleading
and only when the latter was denied, or after more than three months have passed,
did they raise the issue that the complaint should not have been reinstated in the
first place because the trial court had no jurisdiction to do so, having already ruled
that the complaint shall be expunged.
After recognizing the jurisdiction of the trial court by seeking affirmative relief in their
motion to serve supplemental pleading upon private respondents, petitioners are
effectively barred by estoppel from challenging the trial court’s jurisdiction. 38 If a
party invokes the jurisdiction of a court, he cannot thereafter challenge the court’s
jurisdiction in the same case.39 To rule otherwise would amount to speculating on the
fortune of litigation, which is against the policy of the Court.40
Nevertheless, there is a need to correct the erroneous impression of the trial court
as well as the private respondents that petitioners are barred from assailing the
Order dated March 22, 1999 which reinstated the case because it was not objected
to within the reglementary period or even thereafter via a motion for reconsideration
despite receipt thereof on March 26, 1999.
It must be clarified that the said order is but a resolution on an incidental matter
which does not touch on the merits of the case or put an end to the proceedings. 41 It
is an interlocutory order since there leaves something else to be done by the trial
court with respect to the merits of the case.42 As such, it is not subject to a
reglementary period. Reglementary period refers to the period set by the rules for
appeal or further review of a final judgment or order, i.e., one that ends the litigation
in the trial court.
Moreover, the remedy against an interlocutory order is generally not to resort
forthwith to certiorari, but to continue with the case in due course and, when an
unfavorable verdict is handed down, to take an appeal in the manner authorized by
law.43 Only when the court issued such order without or in excess of jurisdiction or
with grave abuse of discretion and when the assailed interlocutory order is patently
erroneous and the remedy of appeal would not afford adequate and expeditious
relief will certiorari be considered an appropriate remedy to assail an interlocutory
order.44Such special circumstances are absolutely wanting in the present case.
Time and again, the Court has held that the Manchester rule has been modified
in Sun Insurance Office, Ltd. (SIOL) vs. Asuncion 45 which defined the following
guidelines involving the payment of docket fees:
1. It is not simply the filing of the complaint or appropriate initiatory pleading, but
the payment of the prescribed docket fee, that vests a trial court with jurisdiction
over the subject-matter or nature of the action. Where the filing of the initiatory
pleading is not accompanied by payment of the docket fee, the court may allow
payment of the fees within a reasonable time but in no case beyond the applicable
prescriptive or reglementary period.
2. The same rule applies to permissive counterclaims, third-party claims and similar
pleadings, which shall not be considered filed until and unless the filing fee prescribed
therefor is paid. The court may also allow payment of said fee within a reasonable It is worth noting that when Bertuldo filed his Answer on July 2, 1991, he did not raise
time but also in no case beyond its applicable prescriptive or reglementary period. the issue of lack of jurisdiction for non-payment of correct docket fees. Instead, he
based his defense on a claim of ownership and participated in the proceedings before
3. Where the trial court acquires jurisdiction over a claim by the filing of the
the trial court. It was only in September 22, 1998 or more than seven years after filing
appropriate pleading and payment of the prescribed filing fee but, subsequently, the
the answer, and under the auspices of a new counsel, that the issue of jurisdiction
judgment awards a claim not specified in the pleading, or if specified the same has
was raised for the first time in the motion to expunge by Bertuldo’s heirs.
been left for determination by the court, the additional filing fee therefor shall
constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court After Bertuldo vigorously participated in all stages of the case before the trial court
or his duly authorized deputy to enforce said lien and assess and collect the additional and even invoked the trial court’s authority in order to ask for affirmative relief,
fee. petitioners, considering that they merely stepped into the shoes of their predecessor,
are effectively barred by estoppel from challenging the trial court’s jurisdiction.
Plainly, while the payment of the prescribed docket fee is a jurisdictional
Although the issue of jurisdiction may be raised at any stage of the proceedings as
requirement, even its non-payment at the time of filing does not automatically cause
the same is conferred by law, it is nonetheless settled that a party may be barred
the dismissal of the case, as long as the fee is paid within the applicable prescriptive
from raising it on ground of laches or estoppel.52
or reglementary period, more so when the party involved demonstrates a willingness
to abide by the rules prescribing such payment.46 Thus, when insufficient filing fees Moreover, no formal substitution of the parties was effected within thirty days from
were initially paid by the plaintiffs and there was no intention to defraud the date of death of Bertuldo, as required by Section 16, Rule 3 53 of the Rules of Court.
government, the Manchester rule does not apply.47 Needless to stress, the purpose behind the rule on substitution is the protection of
the right of every party to due process. It is to ensure that the deceased party would
Under the peculiar circumstances of this case, the reinstatement of the complaint
continue to be properly represented in the suit through the duly appointed legal
was just and proper considering that the cause of action of private respondents,
representative of his estate.54 Non-compliance with the rule on substitution would
being a real action, prescribes in thirty years,48 and private respondents did not really
render the proceedings and judgment of the trial court infirm because the court
intend to evade the payment of the prescribed docket fee but simply contend that
acquires no jurisdiction over the persons of the legal representatives or of the heirs
they could not be faulted for inadequate assessment because the clerk of court made
on whom the trial and the judgment would be binding.55 Thus, proper substitution of
no notice of demand or reassessment.49 They were in good faith and simply relied on
heirs must be effected for the trial court to acquire jurisdiction over their persons
the assessment of the clerk of court.
and to obviate any future claim by any heir that he was not apprised of the litigation
Furthermore, the fact that private respondents prayed for payment of damages "in against Bertuldo or that he did not authorize Atty. Petalcorin to represent him.
amounts justified by the evidence" does not call for the dismissal of the complaint
The list of names and addresses of the heirs was submitted sixteen months after the
for violation of SC Circular No. 7, dated March 24, 1988 which required that all
death of Bertuldo and only when the trial court directed Atty. Petalcorin to comply
complaints must specify the amount of damages sought not only in the body of the
with the provisions of Section 16, Rule 3 of the Rules of Court. Strictly speaking
pleadings but also in the prayer in order to be accepted and admitted for filing. Sun
therefore, before said compliance, Atty. Petalcorin had no standing in the court a
Insurance effectively modified SC Circular No. 7 by providing that filing fees for
quo when he filed his pleadings. Be that as it may, the matter has been duly corrected
damages and awards that cannot be estimated constitute liens on the awards finally
by the Order of the trial court dated October 15, 1999.
granted by the trial court.50
To be sure, certiorari under Rule 6556 is a remedy narrow in scope and inflexible in
Thus, while the docket fees were based only on the real property valuation, the trial
character. It is not a general utility tool in the legal workshop.57 It offers only a limited
court acquired jurisdiction over the action, and judgment awards which were left for
form of review. Its principal function is to keep an inferior tribunal within its
determination by the court or as may be proven during trial would still be subject to
jurisdiction.58 It can be invoked only for an error of jurisdiction, that is, one where the
additional filing fees which shall constitute a lien on the judgment. It would then be
act complained of was issued by the court, officer or a quasi-judicial body without or
the responsibility of the Clerk of Court of the trial court or his duly authorized deputy
in excess of jurisdiction, or with grave abuse of discretion which is tantamount to lack
to enforce said lien and assess and collect the additional fees. 51
or in excess of jurisdiction,59 not to be used for any other purpose,60 such as to cure
errors in proceedings or to correct erroneous conclusions of law or fact. 61 A contrary
rule would lead to confusion, and seriously hamper the administration of justice.

Petitioners utterly failed to show that the trial court gravely abused its discretion in
issuing the assailed resolutions. On the contrary, it acted prudently, in accordance
with law and jurisprudence.

WHEREFORE, the instant petition for certiorari is DISMISSED for lack of merit.
G.R. No. 157036 June 9, 2004 OWNERS MAY NO LONGER BRING THEIR FIREARMS OUTSIDE THEIR RESIDENCES.
THOSE WHO WANT TO USE THEIR GUNS FOR TARGET PRACTICE WILL BE GIVEN
FRANCISCO I. CHAVEZ vs. HON. ALBERTO G. ROMULO, IN HIS SPECIAL AND TEMPORARY PERMITS FROM TIME TO TIME ONLY FOR THAT PURPOSE.
CAPACITY AS EXECUTIVE SECRETARY AND THEY MAY NOT LOAD THEIR GUNS WITH BULLETS UNTIL THEY ARE IN THE
PREMISES OF THE FIRING RANGE.

DECISION WE CANNOT DISREGARD THE PARAMOUNT NEED FOR LAW AND ORDER. JUST AS WE
CANNOT BE HEEDLESS OF OUR PEOPLE’S ASPIRATIONS FOR PEACE."
SANDOVAL-GUTIERREZ, J.:
Acting on President Arroyo’s directive, respondent Ebdane issued the assailed
The right of individuals to bear arms is not absolute, but is subject to regulation. The Guidelines quoted as follows:
maintenance of peace and order1 and the protection of the people against violence
are constitutional duties of the State, and the right to bear arms is to be construed in "TO : All Concerned
connection and in harmony with these constitutional duties.
FROM : Chief, PNP
Before us is a petition for prohibition and injunction seeking to enjoin the
SUBJECT : Guidelines in the Implementation of the Ban on the Carrying of Firearms
implementation of the "Guidelines in the Implementation of the Ban on the Carrying
Outside of Residence.
of Firearms Outside of Residence"2 (Guidelines) issued on January 31, 2003, by
respondent Hermogenes E. Ebdane, Jr., Chief of the Philippine National Police (PNP). DATE : January 31, 2003

The facts are undisputed: 1. Reference: PD 1866 dated June 29, 1983 and its Implementing Rules and
Regulations.
In January 2003, President Gloria Macapagal-Arroyo delivered a speech before the
members of the PNP stressing the need for a nationwide gun ban in all public places 2. General:
to avert the rising crime incidents. She directed the then PNP Chief, respondent
The possession and carrying of firearms outside of residence is a privilege granted by
Ebdane, to suspend the issuance of Permits to Carry Firearms Outside of Residence
(PTCFOR), thus: the State to its citizens for their individual protection against all threats of lawlessness
and security.
"THERE IS ALSO NEED TO FOCUS ON THE HIGH PROFILE CRIMES THAT TEND TO
As a rule, persons who are lawful holders of firearms (regular license, special permit,
DISTURB THE PSYCHOLOGICAL PERIMETERS OF THE COMMUNITY – THE LATEST
certificate of registration or MR) are prohibited from carrying their firearms outside
BEING THE KILLING OF FORMER NPA LEADER ROLLY KINTANAR. I UNDERSTAND WE
of residence. However, the Chief, Philippine National Police may, in meritorious cases
ALREADY HAVE THE IDENTITY OF THE CULPRIT. LET US BRING THEM TO THE BAR OF
JUSTICE. as determined by him and under conditions as he may impose, authorize such person
or persons to carry firearms outside of residence.
THE NPA WILL FIND IT MORE DIFFICULT TO CARRY OUT THEIR PLOTS IF OUR LAW
3. Purposes:
ENFORCEMENT AGENCIES CAN RID THEMSELVES OF RASCALS IN UNIFORM, AND
ALSO IF WE ENFORCE A GUN BAN IN PUBLIC PLACES. This Memorandum prescribes the guidelines in the implementation of the ban on the
carrying of firearms outside of residence as provided for in the Implementing Rules
THUS, I AM DIRECTING THE PNP CHIEF TO SUSPEND INDEFINITELY THE ISSUANCE OF
and Regulations, Presidential Decree No. 1866, dated June 29, 1983 and as directed
PERMIT TO CARRY FIREARMS IN PUBLIC PLACES. THE ISSUANCE OF PERMITS WILL
by PGMA. It also prescribes the conditions, requirements and procedures under
NOW BE LIMITED ONLY TO OWNERSHIP AND POSSESSION OF GUNS AND NOT TO
which exemption from the ban may be granted.
CARRYING THEM IN PUBLIC PLACES. FROM NOW ON, ONLY THE UNIFORMED MEN IN
THE MILITARY AND AUTHORIZED LAW ENFORCEMENT OFFICERS CAN CARRY 4. Specific Instructions on the Ban on the Carrying of Firearms:
FIREARMS IN PUBLIC PLACES, AND ONLY PURSUANT TO EXISTING LAW. CIVILIAN
a. All PTCFOR are hereby revoked. Authorized holders of licensed firearms covered
with valid PTCFOR may re-apply for a new PTCFOR in accordance with the conditions
hereinafter prescribed.
b. All holders of licensed or government firearms are hereby prohibited from carrying
their firearms outside their residence except those covered with mission/letter
orders and duty detail orders issued by competent authority pursuant to Section 5,
IRR, PD 1866, provided, that the said exception shall pertain only to organic and
regular employees.
5. The following persons may be authorized to carry firearms outside of residence.
a. All persons whose application for a new PTCFOR has been approved, provided, that
the persons and security of those so authorized are under actual threat, or by the
nature of their position, occupation and profession are under imminent danger.
b. All organic and regular employees with Mission/Letter Orders granted by their
respective agencies so authorized pursuant to Section 5, IRR, PD 1866, provided, that
such Mission/Letter Orders is valid only for the duration of the official mission which
in no case shall be more than ten (10) days.
c. All guards covered with Duty Detail Orders granted by their respective security
agencies so authorized pursuant to Section 4, IRR, PD 1866, provided, that such DDO
shall in no case exceed 24-hour duration. d. Members of duly recognized Gun Clubs
issued Permit to Transport (PTT) by the PNP for purposes of practice and competition,
provided, that such firearms while in transit must not be loaded with ammunition
and secured in an appropriate box or case detached from the person. e. Authorized
members of the Diplomatic Corps. 6. Requirements for issuance of new PTCFOR: a.
Written request by the applicant addressed to Chief, PNP stating his qualification to
possess firearm and the reasons why he needs to carry firearm outside of residence.
b. Xerox copy of current firearm license duly authenticated by Records Branch, FED;
c. Proof of actual threat, the details of which should be issued by the Chief of
Police/Provincial or City Directors and duly validated by C, RIID; d. Copy of Drug Test
Clearance, duly authenticated by the Drug Testing Center, if photocopied; e. Copy of
DI/ RIID clearance, duly authenticated by ODI/RIID, if photocopied; f. Copy of Neuro-
Psychiatric Clearance duly authenticated by NP Testing Center, if photocopied; g.
Copy of Certificate of Attendance to a Gun Safety Seminar, duly validated by Chief,
Operations Branch, FED; h. NBI Clearance; i. Two (2) ID pictures (2" x 2") taken not
earlier than one (1) year from date of filing of application; and j. Proof of Payment
7. Procedures: a. Applications may be filed directly to the Office of the PTCFOR
Secretariat in Camp Crame. In the provinces, the applications may also be submitted
to the Police Regional Offices (PROs) and Provincial/City Police Offices (P/CPOs) for
initial processing before they are forwarded to the office of the PTCFOR Secretariat.
The processors, after ascertaining that the documentary requirements are in order,
shall issue the Order of Payment (OP) indicating the amount of fees payable by the
applicant, who in turn shall pay the fees to the Land Bank. b. Applications, which are
duly processed and prepared in accordance with existing rules and regulations, shall
be forwarded to the OCPNP for approval. c. Upon approval of the application, OCPNP
will issue PTCFOR valid for one (1) year from date of issue. d. Applications for renewal
of PTCFOR shall be processed in accordance with the provisions of par. 6 above. e.
Application for possession and carrying of firearms by diplomats in the Philippines
shall be processed in accordance with NHQ PNP Memo dated September 25, 2000,
with Subj: Possession and Carrying of Firearms by Diplomats in the Philippines. 8.
Restrictions in the Carrying of Firearms: a. The firearm must not be displayed or
exposed to public view, except those authorized in uniform and in the performance
of their official duties. b. The firearm shall not be brought inside public drinking and
amusement places, and all other commercial or public establishments."
Petitioner Francisco I. Chavez, a licensed gun owner to whom a PTCFOR has been
issued, requested the Department of Interior and Local Government (DILG) to
reconsider the implementation of the assailed Guidelines. However, his request was
denied. Thus, he filed the present petition impleading public respondents Ebdane, as
Chief of PNP; Alberto G. Romulo, as Executive Secretary; and Gerry L. Barias, as Chief
of the PNP-Firearms and Explosives Division. He anchored his petition on the
following grounds:
"I
THE PRESIDENT HAS NO POWER OR AUTHORITY – MUCH LESS BY A MERE SPEECH –
TO ALTER, MODIFY OR AMEND THE LAW ON FIREARMS BY IMPOSING A GUN BAN
AND CANCELING EXISTING PERMITS FOR GUNS TO BE CARRIED OUTSIDE RESIDENCES.
II
OFFICIALLY, THERE IS NO PRESIDENTIAL ISSUANCE ON THE GUN BAN; THE
PRESIDENTIAL SPEECH NEVER INVOKED POLICE POWER TO JUSTIFY THE GUN BAN;
THE PRESIDENT’S VERBAL DECLARATION ON GUN BAN VIOLATED THE PEOPLE’S
RIGHT TO PROTECT LIFE AND THEIR PROPERTY RIGHT TO CARRY FIREARMS.
III
THE PNP CHIEF HAS NO POWER OR AUTHORITY TO ISSUE THE QUESTIONED
GUIDELINES BECAUSE:
1) THERE IS NO LAW, STATUTE OR EXECUTIVE ORDER WHICH GRANTS THE PNP CHIEF
THE AUTHORITY TO PROMULGATE THE PNP GUIDELINES.
2) THE IMPLEMENTING RULES AND REGULATIONS OF PD 1866 CANNOT BE THE
SUBJECT OF ANOTHER SET OF IMPLEMENTING GUIDELINES.
3) THE PRESIDENT’S SPEECH CANNOT BE A BASIS FOR THE PROMULGATION OF
IMPLEMENTNG GUIDELINES ON THE GUN BAN.
IV
ASSUMING ARGUENDO, THAT THE PNP GUIDELINES IMPLEMENT PD 1866, AND THE
AMENDMENTS THERETO, THE PNP CHIEF STILL HAS NO POWER OR AUTHORITY TO
ISSUE THE SAME BECAUSE –
1) PER SEC 6, RA 8294, WHICH AMENDS PD 1866, THE IRR SHALL BE PROMULGATED
JOINTLY BY THE DOJ AND THE DILG.
2) SEC. 8, PD 1866 STATES THAT THE IRR SHALL BE PROMULGATED BY THE CHIEF OF
THE PHILIPPINE CONSTABULARY.
V
THE PNP GUIDELINES VIOLATE THE DUE PROCESS CLAUSE OF THE CONSTITUTION
BECAUSE:
1) THE RIGHT TO OWN AND CARRY A FIREARM IS NECESSARILY INTERTWINED WITH
THE PEOPLE’S INHERENT RIGHT TO LIFE AND TO PROTECT LIFE. THUS, THE PNP
GUIDELINES DEPRIVE PETITIONER OF THIS RIGHT WITHOUT DUE PROCESS OF LAW
FOR:
A) THE PNP GUIDELINES DEPRIVE PETITIONER OF HIS MOST POTENT, IF NOT HIS
ONLY, MEANS TO DEFEND HIMSELF.
B) THE QUESTIONED GUIDELINES STRIPPED PETITIONER OF HIS MEANS OF
PROTECTION AGAINST CRIME DESPITE THE FACT THAT THE STATE COULD NOT
POSSIBLY PROTECT ITS CITIZENS DUE TO THE INADEQUACY AND INEFFICIENCY OF THE
POLICE FORCE.
2) THE OWNESHIP AND CARRYING OF FIREARMS ARE CONSTITUTIONALLY
PROTECTED PROPERTY RIGHTS WHICH CANNOT BE TAKEN AWAY WITHOUT DUE
PROCESS OF LAW AND WITHOUT JUST CAUSE.
VI
ASSUMING ARGUENDO, THAT THE PNP GUIDELINES WERE ISSUED IN THE EXERCISE
OF POLICE POWER, THE SAME IS AN INVALID EXERCISE THEREOF SINCE THE MEANS
USED THEREFOR ARE UNREASONABLE AND UNNCESSARY FOR THE
ACCOMPLISHMENT OF ITS PURPOSE – TO DETER AND PREVENT CRIME –THEREBY
BECOMING UNDULY OPPRESSIVE TO LAW-ABIDING GUN-OWNERS.
VII
THE PNP GUIDELINES ARE UNJUST, OPPRESSIVE AND CONFISCATORY SINCE IT
REVOKED ALL EXISTING PERMITS TO CARRY WITHOUT, HOWEVER, REFUNDING THE
PAYMENT THE PNP RECEIVED FROM THOSE WHO ALREADY PAID THEREFOR.
VIII
THE PNP GUIDELINES VIOLATE THE EQUAL PROTECTION CLAUSE OF THE
CONSTITUTION BECAUSE THEY ARE DIRECTED AT AND OPPRESSIVE ONLY TO LAW-
ABIDING GUN OWNERS WHILE LEAVING OTHER GUN-OWNERS – THE LAWBREAKERS
(KIDNAPPERS, ROBBERS, HOLD-UPPERS, MNLF, MILF, ABU SAYYAF COLLECTIVELY,
AND NPA) – UNTOUCHED.
IX
THE PNP GUIDELINES ARE UNJUST, OPPRESSIVE AND UNFAIR BECAUSE THEY WERE
IMPLEMENTED LONG BEFORE THEY WERE PUBLISHED.
X
THE PNP GUIDELINES ARE EFFECTIVELY AN EX POST FACTO LAW SINCE THEY APPLY
RETROACTIVELY AND PUNISH ALL THOSE WHO WERE ALREADY GRANTED PERMITS
TO CARRY OUTSIDE OF RESIDENCE LONG BEFORE THEIR PROMULGATION."
Petitioner’s submissions may be synthesized into five (5) major issues:
First, whether respondent Ebdane is authorized to issue the assailed Guidelines;
Second, whether the citizens’ right to bear arms is a constitutional right?;
Third, whether the revocation of petitioner’s PTCFOR pursuant to the assailed
Guidelines is a violation of his right to property?;
Fourth, whether the issuance of the assailed Guidelines is a valid exercise of police
power?; and
Fifth, whether the assailed Guidelines constitute an ex post facto law?
The Solicitor General seeks the dismissal of the petition pursuant to the doctrine of
hierarchy of courts. Nonetheless, in refutation of petitioner’s arguments, he
contends that: (1) the PNP Chief is authorized to issue the assailed Guidelines; (2)
petitioner does not have a constitutional right to own and carry firearms; (3) the
assailed Guidelines do not violate the due process clause of the Constitution; and (4)
the assailed Guidelines do not constitute an ex post facto law.
Initially, we must resolve the procedural barrier.
On the alleged breach of the doctrine of hierarchy of courts, suffice it to say that the
doctrine is not an iron-clad dictum. In several instances where this Court was
confronted with cases of national interest and of serious implications, it never
hesitated to set aside the rule and proceed with the judicial determination of the
cases.3 The case at bar is of similar import as it involves the citizens’ right to bear
arms.
I personal, special and hunting licenses. This was followed by Executive Order No.
Authority of the PNP Chief
Relying on the principle of separation of powers, petitioner argues that only Congress
can withhold his right to bear arms. In revoking all existing PTCFOR, President Arroyo
and respondent Ebdane transgressed the settled principle and arrogated upon
themselves a power they do not possess – the legislative power.
We are not persuaded.
It is true that under our constitutional system, the powers of government are
distributed among three coordinate and substantially independent departments: the
legislative, the executive and the judiciary. Each has exclusive cognizance of the
matters within its jurisdiction and is supreme within its own sphere.4
Pertinently, the power to make laws – the legislative power – is vested in
Congress.5 Congress may not escape its duties and responsibilities by delegating that
power to any other body or authority. Any attempt to abdicate the power is
unconstitutional and void, on the principle that "delegata potestas non potest
delegari" – "delegated power may not be delegated."6
The rule which forbids the delegation of legislative power, however, is not absolute
and inflexible. It admits of exceptions. An exception sanctioned by immemorial
practice permits the legislative body to delegate its licensing power to certain
persons, municipal corporations, towns, boards, councils, commissions,
commissioners, auditors, bureaus and directors.7 Such licensing power includes the
power to promulgate necessary rules and regulations.8
The evolution of our laws on firearms shows that since the early days of our Republic,
the legislature’s tendency was always towards the delegation of power. Act No.
1780,9 delegated upon the Governor-General (now the President) the authority (1)
to approve or disapprove applications of any person for a license to deal in firearms
or to possess the same for personal protection, hunting and other lawful purposes;
and (2) to revoke such license any time.10 Further, it authorized him to issue
regulations which he may deem necessary for the proper enforcement of the
Act.11 With the enactment of Act No. 2711, the "Revised Administrative Code of
1917," the laws on firearms were integrated.12 The Act retained the authority of the
Governor General provided in Act No. 1780. Subsequently, the growing complexity in
the Office of the Governor-General resulted in the delegation of his authority to the
Chief of the Constabulary. On January 21, 1919, Acting Governor-General Charles E.
Yeater issued Executive Order No. 813 authorizing and directing the Chief of
Constabulary to act on his behalf in approving and disapproving applications for
6114 designating the Philippine Constabulary (PC) as the government custodian of all
firearms, ammunitions and explosives. Executive Order No. 215,15 issued by
President Diosdado Macapagal on December 3, 1965, granted the Chief of the
Constabulary, not only the authority to approve or disapprove applications for
personal, special and hunting license, but also the authority to revoke the same. With
the foregoing developments, it is accurate to say that the Chief of the Constabulary
had exercised the authority for a long time. In fact, subsequent issuances such as
Sections 2 and 3 of the Implementing Rules and Regulations of Presidential Decree
No. 186616 perpetuate such authority of the Chief of the Constabulary. Section 2
specifically provides that any person or entity desiring to possess any firearm "shall
first secure the necessary permit/license/authority from the Chief of the
Constabulary." With regard to the issuance of PTCFOR, Section 3 imparts: "The Chief
of Constabulary may, in meritorious cases as determined by him and under such
conditions as he may impose, authorize lawful holders of firearms to carry them
outside of residence." These provisions are issued pursuant to the general power
granted by P.D. No. 1866 empowering him to promulgate rules and regulations for
the effective implementation of the decree.17 At this juncture, it bears emphasis that
P.D. No. 1866 is the chief law governing possession of firearms in the Philippines and
that it was issued by President Ferdinand E. Marcos in the exercise of his legislative
power.18 In an attempt to evade the application of the above-mentioned laws and
regulations, petitioner argues that the "Chief of the PNP" is not the same as the "Chief
of the Constabulary," the PC being a mere unit or component of the newly
established PNP. He contends further that Republic Act No. 829419 amended P.D. No.
1866 such that the authority to issue rules and regulations regarding firearms is now
jointly vested in the Department of Justice and the DILG, not the Chief of the
Constabulary.20
Petitioner’s submission is bereft of merit.
By virtue of Republic Act No. 6975,21 the Philippine National Police (PNP) absorbed
the Philippine Constabulary (PC). Consequently, the PNP Chief succeeded the Chief
of the Constabulary and, therefore, assumed the latter’s licensing authority. Section
24 thereof specifies, as one of PNP’s powers, the issuance of licenses for the
possession of firearms and explosives in accordance with law.22 This is in conjunction
with the PNP Chief’s "power to issue detailed implementing policies and instructions"
on such "matters as may be necessary to effectively carry out the functions, powers
and duties" of the PNP.23
Contrary to petitioner’s contention, R.A. No. 8294 does not divest the Chief of the
Constabulary (now the PNP Chief) of his authority to promulgate rules and
regulations for the effective implementation of P.D. No. 1866. For one, R.A. No. 8294
did not repeal entirely P.D. No. 1866. It merely provides for the reduction of penalties
for illegal possession of firearms. Thus, the provision of P.D. No. 1866 granting to the
Chief of the Constabulary the authority to issue rules and regulations regarding
firearms remains effective. Correspondingly, the Implementing Rules and
Regulations dated September 15, 1997 jointly issued by the Department of Justice
and the DILG pursuant to Section 6 of R.A. No. 8294 deal only with the automatic
review, by the Director of the Bureau of Corrections or the Warden of a provincial or
city jail, of the records of convicts for violations of P.D. No. 1866. The Rules seek to
give effect to the beneficent provisions of R.A. No. 8294, thereby ensuring the early
release and reintegration of the convicts into the community.
Clearly, both P.D. No. 1866 and R.A. No. 6975 authorize the PNP Chief to issue the
assailed guidelines.
Corollarily, petitioner disputes President Arroyo’s declaration of a nationwide gun
ban, arguing that "she has no authority to alter, modify, or amend the law on firearms
through a mere speech."
First, it must be emphasized that President Arroyo’s speech was just an expression of
her policy and a directive to her subordinate. It cannot, therefore, be argued that
President Arroyo enacted a law through a mere speech.
Second, at the apex of the entire executive officialdom is the President. Section 17,
Article VII of the Constitution specifies his power as Chief Executive, thus: "The
President shall have control of all the executive departments, bureaus and offices. He
shall ensure that the laws be faithfully executed." As Chief Executive, President
Arroyo holds the steering wheel that controls the course of her government. She lays
down policies in the execution of her plans and programs. Whatever policy she
chooses, she has her subordinates to implement them. In short, she has the power
of control. Whenever a specific function is entrusted by law or regulation to her
subordinate, she may act directly or merely direct the performance of a
duty.24 Thus, when President Arroyo directed respondent Ebdane to suspend the
issuance of PTCFOR, she was just directing a subordinate to perform an assigned
duty. Such act is well within the prerogative of her office.
II
Right to bear arms: Constitutional or Statutory?
Petitioner earnestly contends that his right to bear arms is a constitutionally-
protected right. This, he mainly anchors on various American authorities. We
therefore find it imperative to determine the nature of the right in light of American
jurisprudence.
The bearing of arms is a tradition deeply rooted in the English and American society.
It antedates not only the American Constitution but also the discovery of firearms. 25
A provision commonly invoked by the American people to justify their possession of
firearms is the Second Amendment of the Constitution of the United States of
America, which reads:
"A well regulated militia, being necessary for the security of free state, the right of
the people to keep and bear Arms, shall not be infringed."
An examination of the historical background of the foregoing provision shows that it
pertains to the citizens’ "collective right" to take arms in defense of the State, not to
the citizens’ "individual right" to own and possess arms. The setting under which the
right was contemplated has a profound connection with the keeping and
maintenance of a militia or an armed citizenry. That this is how the right was
construed is evident in early American cases.
The first case involving the interpretation of the Second Amendment that reached
the United States Supreme Court is United States vs. Miller.26 Here, the indictment
charged the defendants with transporting an unregistered "Stevens shotgun"
without the required stamped written order, contrary to the National Firearms Act.
The defendants filed a demurrer challenging the facial validity of the indictment on
the ground that the National Firearms Act offends the inhibition of the Second
Amendment. The District Court sustained the demurrer and quashed the indictment.
On appeal, the Supreme Court interpreted the right to bear arms under the Second
Amendment as referring to the collective right of those comprising the Militia – a
body of citizens enrolled for military discipline. It does not pertain to the individual
right of citizen to bear arm. Miller expresses its holding as follows:
"In the absence of any evidence tending to show that possession or use of a ‘shotgun
having a barrel of less than eighteen inches in length’ at this time has some
reasonable relationship to the preservation or efficiency of a well regulated militia, Counsel does not expressly rely upon the prohibition in the United States
we cannot say that the Second Amendment guarantees the right to keep and bear Constitution against the infringement of the right of the people of the United States
such an instrument. Certainly it is not within judicial notice that this weapon is any to keep and bear arms (U. S. Constitution, amendment 2), which is not included in
part of the ordinary military equipment or that its use could contribute to the the Philippine Bill. But it may be well, in passing, to point out that in no event could
common defense. this constitutional guaranty have any bearing on the case at bar, not only because
it has not been expressly extended to the Philippine Islands, but also because it has
The same doctrine was re-echoed in Cases vs. United States.27 Here, the Circuit Court
been uniformly held that both this and similar provisions in State constitutions
of Appeals held that the Federal Firearms Act, as applied to appellant, does not
apply only to arms used in civilized warfare (see cases cited in 40 Cyc., 853, note
conflict with the Second Amendment. It ruled that:
18); x x x."
"While [appellant’s] weapon may be capable of military use, or while at least
Evidently, possession of firearms by the citizens in the Philippines is the exception,
familiarity with it might be regarded as of value in training a person to use a
not the rule. The right to bear arms is a mere statutory privilege, not a constitutional
comparable weapon of military type and caliber, still there is no evidence that the
right. It is a mere statutory creation. What then are the laws that grant such right to
appellant was or ever had been a member of any military organization or that his
the Filipinos? The first real firearm law is Act No. 1780 enacted by the Philippine
use of the weapon under the circumstances disclosed was in preparation for a
Commission on October 12, 1907. It was passed to regulate the importation,
military career. In fact, the only inference possible is that the appellant at the time
acquisition, possession, use and transfer of firearms. Section 9 thereof provides:
charged in the indictment was in possession of, transporting, and using the firearm
and ammunition purely and simply on a frolic of his own and without any thought "SECTION 9. Any person desiring to possess one or more firearms for personal
or intention of contributing to the efficiency of the well regulated militia which the protection, or for use in hunting or other lawful purposes only, and ammunition
Second amendment was designed to foster as necessary to the security of a free therefor, shall make application for a license to possess such firearm or firearms or
state." ammunition as hereinafter provided. Upon making such application, and before
receiving the license, the applicant shall make a cash deposit in the postal savings
With the foregoing jurisprudence, it is erroneous to assume that the US Constitution
bank in the sum of one hundred pesos for each firearm for which the license is to be
grants upon the American people the right to bear arms. In a more explicit language,
issued, or in lieu thereof he may give a bond in such form as the Governor-General
the United States vs. Cruikshank28 decreed: "The right of the people to keep and bear
may prescribe, payable to the Government of the Philippine Islands, in the sum of
arms is not a right granted by the Constitution. Neither is it in any way dependent
two hundred pesos for each such firearm: PROVIDED, HOWEVER, That persons who
upon that instrument." Likewise, in People vs. Persce,29 the Court of Appeals said:
are actually members of gun clubs, duly formed and organized at the time of the
"Neither is there any constitutional provision securing the right to bear arms which
passage of this Act, who at such time have a license to possess firearms, shall not be
prohibits legislation with reference to such weapons as are specifically before us for
required to make the deposit or give the bond prescribed by this section, and the
consideration. The provision in the Constitution of the United States that the right
bond duly executed by such person in accordance with existing law shall continue to
of the people to keep and bear arms shall not be infringed is not designed to control
be security for the safekeeping of such arms."
legislation by the state."
The foregoing provision was restated in Section 88731 of Act No. 2711 that integrated
With more reason, the right to bear arms cannot be classified as fundamental under
the firearm laws. Thereafter, President Ferdinand E. Marcos issued P.D. No. 1866. It
the 1987 Philippine Constitution. Our Constitution contains no provision similar to
codified the laws on illegal possession, manufacture, dealing in, acquisition of
the Second Amendment, as we aptly observed in the early case of United States vs.
firearms, ammunitions or explosives and imposed stiffer penalties for their violation.
Villareal:30
R.A. No. 8294 amended some of the provisions of P.D. No. 1866 by reducing the
"The only contention of counsel which would appear to necessitate comment is the imposable penalties. Being a mere statutory creation, the right to bear arms cannot
claim that the statute penalizing the carrying of concealed weapons and prohibiting be considered an inalienable or absolute right.
the keeping and the use of firearms without a license, is in violation of the provisions
III
of section 5 of the Philippine Bill of Rights.
Vested Property Right
Section 1, Article III of the Constitution provides that "no person shall be deprived of
life, liberty or property without due process of law." Petitioner invokes this provision,
asserting that the revocation of his PTCFOR pursuant to the assailed Guidelines
deprived him of his "vested property right" without due process of law and in
violation of the equal protection of law.
Petitioner cannot find solace to the above-quoted Constitutional provision.
In evaluating a due process claim, the first and foremost consideration must be
whether life, liberty or property interest exists. 32 The bulk of jurisprudence is that a
license authorizing a person to enjoy a certain privilege is neither a property nor
property right. In Tan vs. The Director of Forestry,33 we ruled that "a license is merely
a permit or privilege to do what otherwise would be unlawful, and is not a contract
between the authority granting it and the person to whom it is granted; neither is it
property or a property right, nor does it create a vested right." In a more emphatic
pronouncement, we held in Oposa vs. Factoran, Jr.34 that:
"Needless to say, all licenses may thus be revoked or rescinded by executive action.
It is not a contract, property or a property right protected by the due process clause
of the Constitution."
Petitioner, in arguing that his PTCFOR is a constitutionally protected property right,
relied heavily on Bell vs. Burson35 wherein the U.S. Supreme Court ruled that "once a
license is issued, continued possession may become essential in the pursuit of
livelihood. Suspension of issued licenses thus involves state action that adjudicates
important interest of the licensees."
Petitioner’s reliance on Bell is misplaced. This case involves a driver’s license, not a
license to bear arms. The catena of American jurisprudence involving license to bear
arms is perfectly in accord with our ruling that a PTCFOR is neither a property nor a
property right. In Erdelyi vs. O’Brien,36 the plaintiff who was denied a license to carry
a firearm brought suit against the defendant who was the Chief of Police of the City
of Manhattan Beach, on the ground that the denial violated her constitutional rights
to due process and equal protection of the laws. The United States Court of Appeals
Ninth Circuit ruled that Erdelyi did not have a property interest in obtaining a license
to carry a firearm, ratiocinating as follows:
"Property interests protected by the Due Process Clause of the Fourteenth
Amendment do not arise whenever a person has only ‘an abstract need or desire for’,
or ‘unilateral expectation of a benefit. x x x Rather, they arise from ‘legitimate claims
of entitlement… defined by existing rules or understanding that stem from an
independent source, such as state law. x x x Concealed weapons are closely regulated
by the State of California. x x x Whether the statute creates a property interest in
concealed weapons licenses depends ‘largely upon the extent to which the statute
contains mandatory language that restricts the discretion of the [issuing authority]
to deny licenses to applicants who claim to meet the minimum eligibility
requirements. x x x Where state law gives the issuing authority broad discretion to
grant or deny license application in a closely regulated field, initial applicants do not
have a property right in such licenses protected by the Fourteenth Amendment. See
Jacobson, supra, 627 F.2d at 180 (gaming license under Nevada law);"
Similar doctrine was announced in Potts vs. City of Philadelphia, 37 Conway vs.
King,38 Nichols vs. County of Sta. Clara,39 and Gross vs. Norton.40 These cases
enunciated that the test whether the statute creates a property right or interest
depends largely on the extent of discretion granted to the issuing authority.
In our jurisdiction, the PNP Chief is granted broad discretion in the issuance of
PTCFOR. This is evident from the tenor of the Implementing Rules and Regulations of
P.D. No. 1866 which state that "the Chief of Constabulary may, in meritorious cases
as determined by him and under such conditions as he may impose, authorize
lawful holders of firearms to carry them outside of residence." Following the
American doctrine, it is indeed logical to say that a PTCFOR does not constitute a
property right protected under our Constitution.
Consequently, a PTCFOR, just like ordinary licenses in other regulated fields, may be
revoked any time. It does not confer an absolute right, but only a personal privilege
to be exercised under existing restrictions, and such as may thereafter be reasonably
imposed.41 A licensee takes his license subject to such conditions as the Legislature
sees fit to impose, and one of the statutory conditions of this license is that it might
be revoked by the selectmen at their pleasure. Such a license is not a contract, and
a revocation of it does not deprive the defendant of any property, immunity, or
privilege within the meaning of these words in the Declaration of Rights. 42 The US
Supreme Court, in Doyle vs. Continental Ins. Co,43 held: "The correlative power to
revoke or recall a permission is a necessary consequence of the main power. A mere
license by the State is always revocable."
The foregoing jurisprudence has been resonating in the Philippines as early as 1908.
Thus, in The Government of the Philippine Islands vs. Amechazurra44 we ruled:
"x x x no private person is bound to keep arms. Whether he does or not is entirely
optional with himself, but if, for his own convenience or pleasure, he desires to
possess arms, he must do so upon such terms as the Government sees fit to impose,
for the right to keep and bear arms is not secured to him by law. The Government
can impose upon him such terms as it pleases. If he is not satisfied with the terms
imposed, he should decline to accept them, but, if for the purpose of securing
possession of the arms he does agree to such conditions, he must fulfill them."
IV
Police Power
At any rate, assuming that petitioner’s PTCFOR constitutes a property right protected
by the Constitution, the same cannot be considered as absolute as to be placed
beyond the reach of the State’s police power. All property in the state is held subject
to its general regulations, necessary to the common good and general welfare.
In a number of cases, we laid down the test to determine the validity of a police
measure, thus:
(1) The interests of the public generally, as distinguished from those of a particular
class, require the exercise of the police power; and
(2) The means employed are reasonably necessary for the accomplishment of the
purpose and not unduly oppressive upon individuals.
Deeper reflection will reveal that the test merely reiterates the essence of the
constitutional guarantees of substantive due process, equal protection, and non-
impairment of property rights.
It is apparent from the assailed Guidelines that the basis for its issuance was the need
for peace and order in the society. Owing to the proliferation of crimes, particularly
those committed by the New People’s Army (NPA), which tends to disturb the peace
of the community, President Arroyo deemed it best to impose a nationwide gun ban.
Undeniably, the motivating factor in the issuance of the assailed Guidelines is the
interest of the public in general.
The only question that can then arise is whether the means employed are
appropriate and reasonably necessary for the accomplishment of the purpose and
are not unduly oppressive. In the instant case, the assailed Guidelines do not entirely
prohibit possession of firearms. What they proscribe is merely the carrying of
firearms outside of residence. However, those who wish to carry their firearms
outside of their residences may re-apply for a new PTCFOR. This we believe is a
reasonable regulation. If the carrying of firearms is regulated, necessarily, crime
incidents will be curtailed. Criminals carry their weapon to hunt for their victims; they
do not wait in the comfort of their homes. With the revocation of all PTCFOR, it would
be difficult for criminals to roam around with their guns. On the other hand, it would
be easier for the PNP to apprehend them.
Notably, laws regulating the acquisition or possession of guns have frequently been
upheld as reasonable exercise of the police power. 45 In State vs. Reams,46 it was held
that the legislature may regulate the right to bear arms in a manner conducive to the
public peace. With the promotion of public peace as its objective and the revocation
of all PTCFOR as the means, we are convinced that the issuance of the assailed
Guidelines constitutes a reasonable exercise of police power. The ruling in United
States vs. Villareal,47 is relevant, thus:
"We think there can be no question as to the reasonableness of a statutory regulation
prohibiting the carrying of concealed weapons as a police measure well calculated to
restrict the too frequent resort to such weapons in moments of anger and
excitement. We do not doubt that the strict enforcement of such a regulation would
tend to increase the security of life and limb, and to suppress crime and lawlessness,
in any community wherein the practice of carrying concealed weapons prevails, and
this without being unduly oppressive upon the individual owners of these weapons.
It follows that its enactment by the legislature is a proper and legitimate exercise of
the police power of the state."
V
Ex post facto law
In Mekin vs. Wolfe,48 an ex post facto law has been defined as one – (a) which makes
an action done before the passing of the law and which was innocent when done
criminal, and punishes such action; or (b) which aggravates a crime or makes it
greater than it was when committed; or (c) which changes the punishment and
inflicts a greater punishment than the law annexed to the crime when it was
committed; or (d) which alters the legal rules of evidence and receives less or
different testimony than the law required at the time of the commission of the
offense in order to convict the defendant.
We see no reason to devote much discussion on the matter. Ex post facto law
prohibits retrospectivity of penal laws.49 The assailed Guidelines cannot be
considered as an ex post facto law because it is prospective in its application.
Contrary to petitioner’s argument, it would not result in the punishment of acts
previously committed.
WHEREFORE, the petition is hereby DISMISSED.
SO ORDERED.
GOVERNMENT OF THE UNITED STATES OF AMERICA vs The second challenged Order, on the other hand, directed the issuance of a
PURGANAN warrant, but at the same time granted bail to Jimenez. The dispositive portion
of the Order reads as follows:

G.R. No. 148571 September 24, 2002 WHEREFORE, in the light of the foregoing, the [Court] finds probable cause
against respondent Mark Jimenez. Accordingly let a Warrant for the arrest of
the respondent be issued. Consequently and taking into consideration
Section 9, Rule 114 of the Revised Rules of Criminal Procedure, this Court fixes
the reasonable amount of bail for respondent’s temporary liberty at ONE
GOVERNMENT OF THE UNITED STATES OF AMERICA,
MILLION PESOS (Php 1,000,000.00), the same to be paid in cash.
Represented by the Philippine Department of Justice, petitioner,
vs. Furthermore respondent is directed to immediately surrender to this Court
HON. GUILLERMO PURGANAN, Presiding Judge Regional Trial Court of his passport and the Bureau of Immigration and Deportation is likewise
Manila and directed to include the name of the respondent in its Hold Departure List." 4
MARC JIMENEZ a.k.a. MARCIO BATACAN CRESPO, respondent
Essentially, the Petition prays for the lifting of the bail Order, the cancellation
Davide Jr., CJ, Bellosillo, Puno, Vitug, Mendoza, Panganiban, Quisumbing, of the bond, and the taking of Jimenez into legal custody.
Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona,
Morales and Callejo, Sr. The Facts

DECISION
PANGANIBAN, J.:
In extradition proceedings, are prospective extraditees entitled to notice and
hearing before warrants for their arrest can be issued? Equally important, are
they entitled to the right to bail and provisional liberty while the extradition
proceedings are pending? In general, the answer to these two novel
questions is "No." The explanation of and the reasons for, as well as the
exceptions to, this rule are laid out in this Decision.
This Petition is really a sequel to GR No. 139465 entitled Secretary of Justice
v. Ralph C. Lantion. 5
Pursuant to the existing RP-US Extradition Treaty, 6 the United States
Government, through diplomatic channels, sent to the Philippine
Government Note Verbale No. 0522 dated June 16, 1999, supplemented by
Note Nos. 0597, 0720 and 0809 and accompanied by duly authenticated
documents requesting the extradition of Mark B. Jimenez, also known as
Mario Batacan Crespo. Upon receipt of the Notes and documents, the
secretary of foreign affairs (SFA) transmitted them to the secretary of justice
(SOJ) for appropriate action, pursuant to Section 5 of Presidential Decree (PD)
No. 1069, also known as the Extradition Law.

The Case
Before us is a Petition for Certiorari under Rule 65 of the Rules of Court,
seeking to void and set aside the Orders dated May 23, 2001 1 and July 3,
2001 2 issued by the Regional Trial Court (RTC) of Manila, Branch 42. 3 The first
assailed Order set for hearing petitioner’s application for the issuance of a
warrant for the arrest of Respondent Mark B. Jimenez.
Upon learning of the request for his extradition, Jimenez sought and was
granted a Temporary Restraining Order (TRO) by the RTC of Manila, Branch
25. 7 The TRO prohibited the Department of Justice (DOJ) from filing with the
RTC a petition for his extradition. The validity of the TRO was, however,
assailed by the SOJ in a Petition before this Court in the said GR No. 139465.
Initially, the Court -- by a vote of 9-6 -- dismissed the Petition. The SOJ was
ordered to furnish private respondent copies of the extradition request and
its supporting papers and to grant the latter a reasonable period within which
to file a comment and supporting evidence. 8
Acting on the Motion for Reconsideration filed by the SOJ, this Court issued
its October 17, 2000 Resolution. 9 By an identical vote of 9-6 -- after three
justices changed their votes -- it reconsidered and reversed its earlier
Decision. It held that private respondent was bereft of the right to notice and
hearing during the evaluation stage of the extradition process. This
Resolution has become final and executory.
Finding no more legal obstacle, the Government of the United States of
America, represented by the Philippine DOJ, filed with the RTC on May 18,
2001, the appropriate Petition for Extradition which was docketed as
Extradition Case No. 01192061. The Petition alleged, inter alia, that Jimenez
was the subject of an arrest warrant issued by the United States District Court
for the Southern District of Florida on April 15, 1999. The warrant had been
issued in connection with the following charges in Indictment No. 99-00281
CR-SEITZ: (1) conspiracy to defraud the United States and to commit certain
offenses in violation of Title 18 US Code Section 371; (2) tax evasion, in
violation of Title 26 US Code Section 7201; (3) wire fraud, in violation of Title
18 US Code Sections 1343 and 2; (4) false statements, in violation of Title 18
US Code Sections 1001 and 2; and (5) illegal campaign contributions, in
violation of Title 2 US Code Sections 441b, 441f and 437g(d) and Title 18 US
Code Section 2. In order to prevent the flight of Jimenez, the Petition prayed
for the issuance of an order for his "immediate arrest" pursuant to Section 6
of PD No. 1069.
Before the RTC could act on the Petition, Respondent Jimenez filed before it
an "Urgent Manifestation/Ex-Parte Motion," 10 which prayed that petitioner’s
application for an arrest warrant be set for hearing.
In its assailed May 23, 2001 Order, the RTC granted the Motion of Jimenez
and set the case for hearing on June 5, 2001. In that hearing, petitioner
manifested its reservations on the procedure adopted by the trial court
allowing the accused in an extradition case to be heard prior to the issuance
of a warrant of arrest.
After the hearing, the court a quo required the parties to submit their
respective memoranda. In his Memorandum, Jimenez sought an alternative
prayer: that in case a warrant should issue, he be allowed to post bail in the
amount of P100,000.
The alternative prayer of Jimenez was also set for hearing on June 15, 2001.
Thereafter, the court below issued its questioned July 3, 2001 Order, directing
the issuance of a warrant for his arrest and fixing bail for his temporary liberty
at one million pesos in cash. 11 After he had surrendered his passport and
posted the required cash bond, Jimenez was granted provisional liberty via
the challenged Order dated July 4, 2001. 12
Hence, this Petition. 13
Issues
Petitioner presents the following issues for the consideration of this Court:
I.
The public respondent acted without or in excess of jurisdiction or with grave
abuse of discretion amounting to lack or excess of jurisdiction in adopting a
procedure of first hearing a potential extraditee before issuing an arrest
warrant under Section 6 of PD No. 1069.
II.
The public respondent acted without or in excess of jurisdiction or with grave
abuse of discretion amounting to lack or excess of jurisdiction in granting the
prayer for bail and in allowing Jimenez to go on provisional liberty because:
‘1. An extradition court has no power to authorize bail, in the absence of any
law that provides for such power.
‘2. Section 13, Article III (right to bail clause) of the 1987 Philippine
Constitution and Section 4, Rule 114 (Bail) of the Rules of Court, as amended,
which [were] relied upon, cannot be used as bases for allowing bail in
extradition proceedings.
‘3. The presumption is against bail in extradition proceedings or proceedings
leading to extradition.
‘4. On the assumption that bail is available in extradition proceedings or
proceedings leading to extradition, bail is not a matter of right but only of
discretion upon clear showing by the applicant of the existence of special
circumstances.
‘5. Assuming that bail is a matter of discretion in extradition proceedings, the
public respondent received no evidence of ‘special circumstances’ which may
justify release on bail.
‘6. The risk that Jimenez will flee is high, and no special circumstance exists
that will engender a well-founded belief that he will not flee.
‘7. The conditions attached to the grant of bail are ineffectual and do not
ensure compliance by the Philippines with its obligations under the RP-US
Extradition Treaty.
‘8. The Court of Appeals Resolution promulgated on May 10, 2001 in the case
entitled ‘Eduardo T. Rodriguez et al. vs. The Hon. Presiding Judge, RTC, Branch
17, Manila,’ CA-G.R. SP No. 64589, relied upon by the public respondent in
granting bail, had been recalled before the issuance of the subject bail
orders.’" 14
In sum, the substantive questions that this Court will address are: (1) whether
Jimenez is entitled to notice and hearing before a warrant for his arrest can
be issued, and (2) whether he is entitled to bail and to provisional liberty while
the extradition proceedings are pending. Preliminarily, we shall take up the
alleged prematurity of the Petition for Certiorari arising from petitioner’s
failure to file a Motion for Reconsideration in the RTC and to seek relief in the
Court of Appeals (CA), instead of in this Court. 15 We shall also preliminarily
discuss five extradition postulates that will guide us in disposing of the
substantive issues.
The Court’s Ruling
The Petition is meritorious.
Preliminary Matters
Alleged Prematurity of Present Petition
Petitioner submits the following justifications for not filing a Motion for
Reconsideration in the Extradition Court: "(1) the issues were fully considered
by such court after requiring the parties to submit their respective
memoranda and position papers on the matter and thus, the filing of a
reconsideration motion would serve no useful purpose; (2) the assailed
orders are a patent nullity, absent factual and legal basis therefor; and (3) the
need for relief is extremely urgent, as the passage of sufficient time would
give Jimenez ample opportunity to escape and avoid extradition; and (4) the
issues raised are purely of law." 16
For resorting directly to this Court instead of the CA, petitioner submits the
following reasons: "(1) even if the petition is lodged with the Court of Appeals
and such appellate court takes cognizance of the issues and decides them,
the parties would still bring the matter to this Honorable Court to have the
issues resolved once and for all [and] to have a binding precedent that all
lower courts ought to follow; (2) the Honorable Court of Appeals had in one
case 17ruled on the issue by disallowing bail but the court below refused to
recognize the decision as a judicial guide and all other courts might likewise
adopt the same attitude of refusal; and (3) there are pending issues on bail
both in the extradition courts and the Court of Appeals, which, unless guided
by the decision that this Honorable Court will render in this case, would
resolve to grant bail in favor of the potential extraditees and would give them
opportunity to flee and thus, cause adverse effect on the ability of the
Philippines to comply with its obligations under existing extradition
treaties." 18
As a general rule, a petition for certiorari before a higher court will not
prosper unless the inferior court has been given, through a motion for
reconsideration, a chance to correct the errors imputed to it. This rule,
though, has certain exceptions: (1) when the issue raised is purely of law, (2)
when public interest is involved, or (3) in case of urgency. 19 As a fourth
exception, the Court has also ruled that the filing of a motion for
reconsideration before availment of the remedy of certiorari is not a sine qua
non, when the questions raised are the same as those that have already been
squarely argued and exhaustively passed upon by the lower court. 20 Aside
from being of this nature, the issues in the present case also involve pure
questions of law that are of public interest. Hence, a motion for
reconsideration may be dispensed with.
Likewise, this Court has allowed a direct invocation of its original jurisdiction
to issue writs of certiorari when there are special and important reasons
therefor. 21 In Fortich v. Corona 22 we stated:
[T]he Supreme Court has the full discretionary power to take cognizance of
the petition filed directly [before] it if compelling reasons, or the nature and
importance of the issues raised, warrant. This has been the judicial policy to
be observed and which has been reiterated in subsequent cases, namely: Uy
vs. Contreras, et. al., Torres vs. Arranz, Bercero vs. De Guzman, and, Advincula
vs. Legaspi, et. al. As we have further stated in Cuaresma:
‘x x x. A direct invocation of the Supreme Court’s original jurisdiction to issue
these writs should be allowed only when there are special and important
reasons therefor, clearly and specifically set out in the petition. This is
established policy. x x x.’
Pursuant to said judicial policy, we resolve to take primary jurisdiction over
the present petition in the interest of speedy justice and to avoid future
litigations so as to promptly put an end to the present controversy which, as
correctly observed by petitioners, has sparked national interest because of
the magnitude of the problem created by the issuance of the assailed
resolution. Moreover, x x x requiring the petitioners to file their petition first
with the Court of Appeals would only result in a waste of time and money.
That the Court has the power to set aside its own rules in the higher interests
of justice is well-entrenched in our jurisprudence. We reiterate what we said
in Piczon vs. Court of Appeals: 23
‘Be it remembered that rules of procedure are but mere tools designed to
facilitate the attainment of justice. Their strict and rigid application, which
would result in technicalities that tend to frustrate rather than promote
substantial justice, must always be avoided. Time and again, this Court has
suspended its own rules and excepted a particular case from their operation
whenever the higher interests of justice so require. In the instant petition, we
forego a lengthy disquisition of the proper procedure that should have been
taken by the parties involved and proceed directly to the merits of the case.’
In a number of other exceptional cases, 24 we held as follows:
This Court has original jurisdiction, concurrent with that of Regional Trial
Courts and the Court of Appeals, over petitions for certiorari, prohibition,
mandamus, quo warranto and habeas corpus, and we entertain direct resort
to us in cases where special and important reasons or exceptional and
compelling circumstances justify the same."
In the interest of justice and to settle once and for all the important issue of
bail in extradition proceedings, we deem it best to take cognizance of the
present case. Such proceedings constitute a matter of first impression over
which there is, as yet, no local jurisprudence to guide lower courts.
Five Postulates of Extradition
The substantive issues raised in this case require an interpretation or
construction of the treaty and the law on extradition. A cardinal rule in the
interpretation of a treaty or a law is to ascertain and give effect to its
intent. 25Since PD 1069 is intended as a guide for the implementation of
extradition treaties to which the Philippines is a signatory, 26 understanding
certain postulates of extradition will aid us in properly deciding the issues
raised here.
1. Extradition Is a Major Instrument for the Suppression of Crime.
First, extradition treaties are entered into for the purpose of suppressing
crime 27 by facilitating the arrest and the custodial transfer 28 of a
fugitive 29 from one state to the other.
With the advent of easier and faster means of international travel, the flight
of affluent criminals from one country to another for the purpose of
committing crime and evading prosecution has become more frequent.
Accordingly, governments are adjusting their methods of dealing with
criminals and crimes that transcend international boundaries.
Today, "a majority of nations in the world community have come to look upon
extradition as the major effective instrument of international co-operation in
the suppression of crime." 30 It is the only regular system that has been
devised to return fugitives to the jurisdiction of a court competent to try them
in accordance with municipal and international law. 31
An important practical effect x x x of the recognition of the principle that
criminals should be restored to a jurisdiction competent to try and punish
them is that the number of criminals seeking refuge abroad will be reduced.
For to the extent that efficient means of detection and the threat of
punishment play a significant role in the deterrence of crime within the
territorial limits of a State, so the existence of effective extradition
arrangements and the consequent certainty of return to the locus delicti
commissi play a corresponding role in the deterrence of flight abroad in order
to escape the consequence of crime. x x x. From an absence of extradition
arrangements flight abroad by the ingenious criminal receives direct
encouragement and thus indirectly does the commission of crime itself." 32
In Secretary v. Lantion 33 we explained:
The Philippines also has a national interest to help in suppressing crimes and
one way to do it is to facilitate the extradition of persons covered by treaties
duly entered [into] by our government. More and more, crimes are becoming
the concern of one world. Laws involving crimes and crime prevention are
undergoing universalization. One manifest purpose of this trend towards
globalization is to deny easy refuge to a criminal whose activities threaten the
peace and progress of civilized countries. It is to the great interest of the
Philippines to be part of this irreversible movement in light of its vulnerability
to crimes, especially transnational crimes."
Indeed, in this era of globalization, easier and faster international travel, and
an expanding ring of international crimes and criminals, we cannot afford to
be an isolationist state. We need to cooperate with other states in order to
improve our chances of suppressing crime in our own country.
2. The Requesting State Will Accord Due Process to the Accused
Second, an extradition treaty presupposes that both parties thereto have
examined, and that both accept and trust, each other’s legal system and
judicial process. 34 More pointedly, our duly authorized representative’s
signature on an extradition treaty signifies our confidence in the capacity and
the willingness of the other state to protect the basic rights of the person
sought to be extradited. 35 That signature signifies our full faith that the
accused will be given, upon extradition to the requesting state, all relevant
and basic rights in the criminal proceedings that will take place therein;
otherwise, the treaty would not have been signed, or would have been
directly attacked for its unconstitutionality.
3. The Proceedings Are Sui Generis
Third, as pointed out in Secretary of Justice v. Lantion, 36 extradition
proceedings are not criminal in nature. In criminal proceedings, the
constitutional rights of the accused are at fore; in extradition which is sui
generis -- in a class by itself -- they are not.
An extradition [proceeding] is sui generis. It is not a criminal proceeding which
will call into operation all the rights of an accused as guaranteed by the Bill of
Rights. To begin with, the process of extradition does not involve the
determination of the guilt or innocence of an accused. His guilt or innocence
will be adjudged in the court of the state where he will be extradited. Hence,
as a rule, constitutional rights that are only relevant to determine the guilt or
innocence of an accused cannot be invoked by an extraditee x x x.
xxxxxxxxx
There are other differences between an extradition proceeding and a criminal
proceeding. An extradition proceeding is summary in nature while criminal
proceedings involve a full-blown trial. In contradistinction to a criminal
proceeding, the rules of evidence in an extradition proceeding allow
admission of evidence under less stringent standards. In terms of the
quantum of evidence to be satisfied, a criminal case requires proof beyond
reasonable doubt for conviction while a fugitive may be ordered extradited
‘upon showing of the existence of a prima facie case.’ Finally, unlike in a
criminal case where judgment becomes executory upon being rendered final,
in an extradition proceeding, our courts may adjudge an individual
extraditable but the President has the final discretion to extradite him. The
United States adheres to a similar practice whereby the Secretary of State
exercises wide discretion in balancing the equities of the case and the
demands of the nation’s foreign relations before making the ultimate
decision to extradite."
Given the foregoing, it is evident that the extradition court is not called upon
to ascertain the guilt or the innocence of the person sought to be
extradited. 37 Such determination during the extradition proceedings will only
result in needless duplication and delay. Extradition is merely a measure of
international judicial assistance through which a person charged with or
convicted of a crime is restored to a jurisdiction with the best claim to try that
person. It is not part of the function of the assisting authorities to enter into
questions that are the prerogative of that jurisdiction. 38The ultimate purpose
of extradition proceedings in court is only to determine whether the
extradition request complies with the Extradition Treaty, and whether the
person sought is extraditable. 39
4. Compliance Shall Be in Good Faith.
Fourth, our executive branch of government voluntarily entered into the
Extradition Treaty, and our legislative branch ratified it. Hence, the Treaty
carries the presumption that its implementation will serve the national
interest.
Fulfilling our obligations under the Extradition Treaty promotes comity 40 with
the requesting state. On the other hand, failure to fulfill our obligations
thereunder paints a bad image of our country before the world community.
Such failure would discourage other states from entering into treaties with
us, particularly an extradition treaty that hinges on reciprocity. 41
Verily, we are bound by pacta sunt servanda to comply in good faith with our
obligations under the Treaty. 42 This principle requires that we deliver the
accused to the requesting country if the conditions precedent to extradition,
as set forth in the Treaty, are satisfied. In other words, "[t]he demanding
government, when it has done all that the treaty and the law require it to do,
is entitled to the delivery of the accused on the issue of the proper warrant,
and the other government is under obligation to make the
surrender." 43 Accordingly, the Philippines must be ready and in a position to
deliver the accused, should it be found proper.
5. There Is an Underlying Risk of Flight
Fifth, persons to be extradited are presumed to be flight risks. This prima facie
presumption finds reinforcement in the experience 44 of the executive branch:
nothing short of confinement can ensure that the accused will not flee the
jurisdiction of the requested state in order to thwart their extradition to the
requesting state.
The present extradition case further validates the premise that persons
sought to be extradited have a propensity to flee. Indeed,
extradition hearings would not even begin, if only the accused were willing to
submit to trial in the requesting country. 45 Prior acts of herein respondent --
(1) leaving the requesting state right before the conclusion of his indictment
proceedings there; and (2) remaining in the requested state despite learning
that the requesting state is seeking his return and that the crimes he is
charged with are bailable -- eloquently speak of his aversion to the processes
in the requesting state, as well as his predisposition to avoid them at all cost.
These circumstances point to an ever-present, underlying high risk of flight.
He has demonstrated that he has the capacity and the will to flee. Having fled
once, what is there to stop him, given sufficient opportunity, from fleeing a
second time?
First Substantive Issue:
Is Respondent Entitled to Notice and Hearing
Before the Issuance of a Warrant of Arrest?
Petitioner contends that the procedure adopted by the RTC --informing the
accused, a fugitive from justice, that an Extradition Petition has been filed
against him, and that petitioner is seeking his arrest -- gives him notice to
escape and to avoid extradition. Moreover, petitioner pleads that such
procedure may set a dangerous precedent, in that those sought to be
extradited -- including terrorists, mass murderers and war criminals -- may
invoke it in future extradition cases.
On the other hand, Respondent Jimenez argues that he should not be
hurriedly and arbitrarily deprived of his constitutional right to liberty without
due process. He further asserts that there is as yet no specific law or rule
setting forth the procedure prior to the issuance of a warrant of arrest, after
the petition for extradition has been filed in court; ergo, the formulation of
that procedure is within the discretion of the presiding judge.
Both parties cite Section 6 of PD 1069 in support of their arguments. It states:
SEC. 6. Issuance of Summons; Temporary Arrest; Hearing, Service of Notices.-
(1) Immediately upon receipt of the petition, the presiding judge of the court
shall, as soon as practicable, summon the accused to appear and to answer
the petition on the day and hour fixed in the order. [H]e may issue a warrant
for the immediate arrest of the accused which may be served any where
within the Philippines if it appears to the presiding judge that the immediate
arrest and temporary detention of the accused will best serve the ends of
justice. Upon receipt of the answer, or should the accused after having
received the summons fail to answer within the time fixed, the presiding
judge shall hear the case or set another date for the hearing thereof.
(2) The order and notice as well as a copy of the warrant of arrest, if issued,
shall be promptly served each upon the accused and the attorney having
charge of the case." (Emphasis ours)
Does this provision sanction RTC Judge Purganan’s act of immediately setting
for hearing the issuance of a warrant of arrest? We rule in the negative.
1. On the Basis of the Extradition Law
It is significant to note that Section 6 of PD 1069, our Extradition Law, uses
the word "immediate" to qualify the arrest of the accused. This qualification
would be rendered nugatory by setting for hearing the issuance of the arrest
warrant. Hearing entails sending notices to the opposing parties, 46 receiving
facts and arguments 47 from them, 48and giving them time to prepare and
present such facts and arguments. Arrest subsequent to a hearing can no
longer be considered "immediate." The law could not have intended the word
as a mere superfluity but, on the whole, as a means of imparting a sense of
urgency and swiftness in the determination of whether a warrant of arrest
should be issued.
By using the phrase "if it appears," the law further conveys that accuracy is
not as important as speed at such early stage. The trial court is not expected
to make an exhaustive determination to ferret out the true and actual
situation, immediately upon the filing of the petition. From the knowledge
and the material then available to it, the court is expected merely to get a
good first impression -- a prima facie finding -- sufficient to make a speedy
initial determination as regards the arrest and detention of the accused.
Attached to the Petition for Extradition, with a Certificate of Authentication
among others, were the following: (1) Annex H, the Affidavit executed on May
26, 1999 by Mr. Michael E. Savage -- trial attorney in the Campaign Financing
Task Force of the Criminal Division of the US Department of Justice; (2)
Annexes H to G, evidentiary Appendices of various exhibits that constituted
evidence of the crimes charged in the Indictment, with Exhibits 1 to 120 (duly
authenticated exhibits that constituted evidence of the crimes charged in the
Indictment); (3) Annex BB, the Exhibit I "Appendix of Witness [excerpts]
Statements Referenced in the Affidavit of Angela Byers" and enclosed
Statements in two volumes; (4) Annex GG, the Exhibit J "Table of Contents for
Supplemental Evidentiary Appendix" with enclosed Exhibits 121 to 132; and
(5) Annex MM, the Exhibit L "Appendix of Witness [excerpts] Statements
Referenced in the Affidavit of Betty Steward" and enclosed Statements in two
volumes. 49
It is evident that respondent judge could have already gotten an impression
from these records adequate for him to make an initial determination of
whether the accused was someone who should immediately be arrested in
order to "best serve the ends of justice." He could have determined whether
such facts and circumstances existed as would lead a reasonably discreet and
prudent person to believe that the extradition request was prima facie
meritorious. In point of fact, he actually concluded from these supporting
documents that "probable cause" did exist. In the second questioned Order,
he stated:
In the instant petition, the documents sent by the US Government in support
of [its] request for extradition of herein respondent are enough to convince
the Court of the existence of probable cause to proceed with the hearing
against the extraditee." 50
We stress that the prima facie existence of probable cause for hearing the
petition and, a priori, for issuing an arrest warrant was already evident from
the Petition itself and its supporting documents. Hence, after having already
determined therefrom that a prima facie finding did exist, respondent judge
gravely abused his discretion when he set the matter for hearing upon motion
of Jimenez. 51
Moreover, the law specifies that the court sets a hearing upon receipt of the
answer or upon failure of the accused to answer after receiving the summons.
In connection with the matter of immediate arrest, however, the word
"hearing" is notably absent from the provision. Evidently, had the holding of requirement to notify and hear the accused before the issuance of warrants
a hearing at that stage been intended, the law could have easily so provided. of arrest.
It also bears emphasizing at this point that extradition proceedings are
In Ho v. People 54 and in all the cases cited therein, never was a judge required
summary 52 in nature. Hence, the silence of the Law and the Treaty leans to
to go to the extent of conducting a hearing just for the purpose of personally
the more reasonable interpretation that there is no intention to punctuate
determining probable cause for the issuance of a warrant of arrest. All we
with a hearing every little step in the entire proceedings.
required was that the "judge must have sufficient supporting documents
It is taken for granted that the contracting parties intend something upon which to make his independent judgment, or at the very least, upon
reasonable and something not inconsistent with generally recognized which to verify the findings of the prosecutor as to the existence of probable
principles of International Law, nor with previous treaty obligations towards cause." 55
third States. If, therefore, the meaning of a treaty is ambiguous, the
In Webb v. De Leon, 56 the Court categorically stated that a judge was not
reasonable meaning is to be preferred to the unreasonable, the more
supposed to conduct a hearing before issuing a warrant of arrest:
reasonable to the less reasonable x x x ." 53
Again, we stress that before issuing warrants of arrest, judges merely
Verily, as argued by petitioner, sending to persons sought to be extradited a
determine personally the probability, not the certainty of guilt of an accused.
notice of the request for their arrest and setting it for hearing at some future
In doing so, judges do not conduct a de novo hearing to determine the
date would give them ample opportunity to prepare and execute an escape.
existence of probable cause. They just personally review the initial
Neither the Treaty nor the Law could have
determination of the prosecutor finding a probable cause to see if it is
intended that consequence, for the very purpose of both would have been supported by substantial evidence."
defeated by the escape of the accused from the requested state.
At most, in cases of clear insufficiency of evidence on record, judges merely
2. On the Basis of the Constitution further examine complainants and their witnesses. 57 In the present case,
validating the act of respondent judge and instituting the practice of hearing
Even Section 2 of Article III of our Constitution, which is invoked by Jimenez,
the accused and his witnesses at this early stage would be discordant with
does not require a notice or a hearing before the issuance of a warrant of
the rationale for the entire system. If the accused were allowed to be heard
arrest. It provides:
and necessarily to present evidence during the prima facie determination for
Sec. 2. The right of the people to be secure in their persons, houses, papers, the issuance of a warrant of arrest,
and effects against unreasonable searches and seizures of whatever nature
what would stop him from presenting his entire plethora of defenses at this
and for any purpose shall be inviolable, and no search warrant or warrant of
stage -- if he so desires -- in his effort to negate a prima facie finding? Such a
arrest shall issue except upon probable cause to be determined personally by
procedure could convert the determination of a prima facie case into a full-
the judge after examination under oath or affirmation of the complainant and
blown trial of the entire proceedings and possibly make trial of the main case
the witnesses he may produce, and particularly describing the place to be
superfluous. This scenario is also anathema to the summary nature of
searched and the persons or things to be seized."
extraditions.
To determine probable cause for the issuance of arrest warrants, the
That the case under consideration is an extradition and not a criminal action
Constitution itself requires only the examination -- under oath or affirmation
is not sufficient to justify the adoption of a set of procedures more protective
-- of complainants and the witnesses they may produce. There is no
of the accused. If a different procedure were called for at all, a more
restrictive one -- not the opposite -- would be justified in view of respondent’s
demonstrated predisposition to flee.
Since this is a matter of first impression, we deem it wise to restate the proper
procedure:
Upon receipt of a petition for extradition and its supporting documents, the
judge must study them and make, as soon as possible, a prima facie finding
whether (a) they are sufficient in form and substance, (b) they show
compliance with the Extradition Treaty and Law, and (c) the person sought is
extraditable. At his discretion, the judge may
require the submission of further documentation or may personally examine
the affiants and witnesses of the petitioner. If, in spite of this study and
examination, no prima facie finding 58 is possible, the petition may be
dismissed at the discretion of the judge.
On the other hand, if the presence of a prima facie case is determined, then
the magistrate must immediately issue a warrant for the arrest of the
extraditee, who is at the same time summoned to answer the petition and to
appear at scheduled summary hearings. Prior to the issuance of the warrant,
the judge must not inform or notify the potential extraditee of the pendency
of the petition, lest the latter be given the opportunity to escape and frustrate
the proceedings. In our opinion, the foregoing procedure will "best serve the
ends of justice" in extradition cases.
Second Substantive Issue:
Is Respondent Entitled to Bail?
Article III, Section 13 of the Constitution, is worded as follows:
Art. III, Sec. 13. All persons, except those charged with offenses punishable
by reclusion perpetua when evidence of guilt is strong, shall, before
conviction, be bailable by sufficient sureties, or be released on recognizance
as may be provided by law. The right to bail shall not be impaired even when
the privilege of the writ of habeas corpus is suspended. Excessive bail shall
not be required."
Respondent Mark B. Jimenez maintains that this constitutional provision
secures the right to bail of all persons, including those sought to be
extradited. Supposedly, the only exceptions are the ones charged with
offenses punishable with reclusion perpetua, when evidence of guilt is strong.
He also alleges the relevance to the present case of Section 4 59 of Rule 114 of
the Rules of Court which, insofar as practicable and consistent with the
summary nature of extradition proceedings, shall also apply according to
Section 9 of PD 1069.
On the other hand, petitioner claims that there is no provision in the
Philippine Constitution granting the right to bail to a person who is the subject
of an extradition request and arrest warrant.
Extradition Different from Ordinary Criminal Proceedings
We agree with petitioner. As suggested by the use of the word "conviction,"
the constitutional provision on bail quoted above, as well as Section 4 of Rule
114 of the Rules of Court, applies only when a person has been arrested and
detained for violation of Philippine criminal laws. It does not apply to
extradition proceedings, because extradition courts do not render judgments
of conviction or acquittal.
Moreover, the constitutional right to bail "flows from the presumption of
innocence in favor of every accused who should not be subjected to the loss
of freedom as thereafter he would be entitled to acquittal, unless his guilt be
proved beyond reasonable doubt." 60 It follows that the constitutional
provision on bail will not apply to a case like extradition, where the
presumption of innocence is not at issue.
The provision in the Constitution stating that the "right to bail shall not be
impaired even when the privilege of the writ of habeas corpus is suspended"
does not detract from the rule that the constitutional right to bail is available
only in criminal proceedings. It must be noted that the suspension of the
privilege of the writ of habeas corpus finds application "only to persons
judicially charged for rebellion or offenses inherent in or directly connected
with invasion." 61 Hence, the second sentence in the constitutional provision
on bail merely emphasizes the right to bail in criminal proceedings for the
aforementioned offenses. It cannot be taken to mean that the right is
available even in extradition proceedings that are not criminal in nature.
That the offenses for which Jimenez is sought to be extradited are bailable in now has thus become hollow. He already had that opportunity in the
the United States is not an argument to grant him one in the present case. To requesting state; yet, instead of taking it, he ran away.
stress, extradition proceedings are separate and distinct from the trial for the
In this light, would it be proper and just for the government to increase the
offenses for which he is charged. He should apply for bail before the courts
risk of violating its treaty obligations in order to accord Respondent Jimenez
trying the criminal cases against him, not before the extradition court.
his personal liberty in the span of time that it takes to resolve the Petition for
No Violation of Due Process Extradition? His supposed immediate deprivation of liberty without the due
process that he had previously shunned pales against the government’s
Respondent Jimenez cites the foreign case Paretti 62 in arguing that,
interest in fulfilling its Extradition Treaty obligations and in cooperating with
constitutionally, "[n]o one shall be deprived of x x x liberty x x x without due
the world community in the suppression of crime. Indeed, "[c]onstitutional
process of law."
liberties do not exist in a vacuum; the due process rights accorded to
Contrary to his contention, his detention prior to the conclusion of the individuals must be carefully balanced against exigent and palpable
extradition proceedings does not amount to a violation of his right to due government interests." 66
process. We iterate the familiar doctrine that the essence of due process is
Too, we cannot allow our country to be a haven for fugitives, cowards and
the opportunity to be heard 63 but, at the same time, point out that the
weaklings who, instead of facing the consequences of their actions, choose
doctrine does not always call for a prior opportunity to be heard. 64 Where the
to run and hide. Hence, it would not be good policy to increase the risk of
circumstances -- such as those present in an extradition case -- call for it, a
violating our treaty obligations if, through overprotection or excessively
subsequent opportunity to be heard is enough. 65 In the present case,
liberal treatment, persons sought to be extradited are able to evade arrest or
respondent will be given full opportunity to be heard subsequently, when the
escape from our custody. In the absence of any provision -- in the
extradition court hears the Petition for Extradition. Hence, there is no
Constitution, the law or the treaty -- expressly guaranteeing the right to bail
violation of his right to due process and fundamental fairness.
in extradition proceedings, adopting the practice of not granting them bail, as
Contrary to the contention of Jimenez, we find no arbitrariness, either, in the a general rule, would be a step towards deterring fugitives from coming to
immediate deprivation of his liberty prior to his being heard. That his arrest the Philippines to hide from or evade their prosecutors.1âwphi1.nêt
and detention will not be arbitrary is sufficiently ensured by (1) the DOJ’s
The denial of bail as a matter of course in extradition cases falls into place
filing in court the Petition with its supporting documents after a
with and gives life to Article 14 67 of the Treaty, since this practice would
determination that the extradition request meets the requirements of the
encourage the accused to voluntarily surrender to the requesting state to cut
law and the relevant treaty; (2) the extradition judge’s independent prima
short their detention here. Likewise, their detention pending the resolution
facie determination that his arrest will best serve the ends of justice before
of extradition proceedings would fall into place with the emphasis of the
the issuance of a warrant for his arrest; and (3) his opportunity, once he is
Extradition Law on the summary nature of extradition cases and the need for
under the court’s custody, to apply for bail as an exception to the no-initial-
their speedy disposition.
bail rule.
Exceptions to the No Bail Rule
It is also worth noting that before the US government requested the
extradition of respondent, proceedings had already been conducted in that The rule, we repeat, is that bail is not a matter of right in extradition cases.
country. But because he left the jurisdiction of the requesting state before However, the judiciary has the constitutional duty to curb grave abuse of
those proceedings could be completed, it was hindered from continuing with discretion 68 and tyranny, as well as the power to promulgate rules to protect
the due processes prescribed under its laws. His invocation of due process and enforce constitutional rights. 69 Furthermore, we believe that the right to
due process is broad enough to include the grant of basic fairness to
extraditees. Indeed, the right to due process extends to the "life, liberty or
property" of every person. It is "dynamic and resilient, adaptable to every
situation calling for its application." 70
Accordingly and to best serve the ends of justice, we believe and so hold that,
after a potential extraditee has been arrested or placed under the custody of
the law, bail may be applied for and granted as an exception, only upon a
clear and convincing showing (1) that, once granted bail, the applicant will
not be a flight risk or a danger to the community; and (2) that there exist
special, humanitarian and compelling circumstances 71 including, as a matter
of reciprocity, those cited by the highest court in the requesting state when
it grants provisional liberty in extradition cases therein.
Since this exception has no express or specific statutory basis, and since it is
derived essentially from general principles of justice and fairness, the
applicant bears the burden of proving the above two-tiered requirement with
clarity, precision and emphatic forcefulness. The Court realizes that
extradition is basically an executive, not a judicial, responsibility arising from
the presidential power to conduct foreign relations. In its barest concept, it
partakes of the nature of police assistance amongst states, which is not
normally a judicial prerogative. Hence, any intrusion by the courts into the
exercise of this power should be characterized by caution, so that the vital
international and bilateral interests of our country will not be unreasonably
impeded or compromised. In short, while this Court is ever protective of "the
sporting idea of fair play," it also recognizes the limits of its own prerogatives
and the need to fulfill international obligations.
Along this line, Jimenez contends that there are special circumstances that
are compelling enough for the Court to grant his request for provisional
release on bail. We have carefully examined these circumstances and shall
now discuss them.
1. Alleged Disenfranchisement
While his extradition was pending, Respondent Jimenez was elected as a
member of the House of Representatives. On that basis, he claims that his
detention will disenfranchise his Manila district of 600,000 residents. We are
not persuaded. In People v. Jalosjos, 72 the Court has already debunked the
disenfranchisement argument when it ruled thus:
When the voters of his district elected the accused-appellant to Congress,
they did so with full awareness of the limitations on his freedom of action.
They did so with the knowledge that he could achieve only such legislative
results which he could accomplish within the confines of prison. To give a
more drastic illustration, if voters elect a person with full knowledge that he
is suffering from a terminal illness, they do so knowing that at any time, he
may no longer serve his full term in office.
In the ultimate analysis, the issue before us boils down to a question of
constitutional equal protection.
The Constitution guarantees: ‘x x x nor shall any person be denied the equal
protection of laws.’ This simply means that all persons similarly situated shall
be treated alike both in rights enjoyed and responsibilities imposed. The
organs of government may not show any undue favoritism or hostility to any
person. Neither partiality nor prejudice shall be displayed.
Does being an elective official result in a substantial distinction that allows
different treatment? Is being a Congressman a substantial differentiation
which removes the accused-appellant as a prisoner from the same class as all
persons validly confined under law?
The performance of legitimate and even essential duties by public officers has
never been an excuse to free a person validly [from] prison. The duties
imposed by the ‘mandate of the people’ are multifarious. The accused-
appellant asserts that the duty to legislate ranks highest in the hierarchy of
government. The accused-appellant is only one of 250 members of the House
of Representatives, not to mention the 24 members of the Senate, charged
with the duties of legislation. Congress continues to function well in the
physical absence of one or a few of its members. Depending on the exigency
of Government that has to be addressed, the President or the Supreme Court
can also be deemed the highest for that particular duty. The importance of a
function depends on the need for its exercise. The duty of a mother to nurse
her infant is most compelling under the law of nature. A doctor with unique
skills has the duty to save the lives of those with a particular affliction. An
elective governor has to serve provincial constituents. A police officer must
maintain peace and order. Never has the call of a particular duty lifted a
prisoner into a different classification from those others who are validly
restrained by law.
A strict scrutiny of classifications is essential lest[,] wittingly or otherwise,
insidious discriminations are made in favor of or against groups or types of
individuals.
The Court cannot validate badges of inequality. The necessities imposed by
public welfare may justify exercise of government authority to regulate even
if thereby certain groups may plausibly assert that their interests are
disregarded.
We, therefore, find that election to the position of Congressman is not a
reasonable classification in criminal law enforcement. The functions and
duties of the office are not substantial distinctions which lift him from the
class of prisoners interrupted in their freedom and restricted in liberty of
movement. Lawful arrest and confinement are germane to the purposes of
the law and apply to all those belonging to the same class." 73
It must be noted that even before private respondent ran for and won a
congressional seat in Manila, it was already of public knowledge that the
United States was requesting his extradition. Hence, his constituents were or
should have been prepared for the consequences of the extradition case
against their representative, including his detention pending the final
resolution of the case. Premises considered and in line with Jalosjos, we are
constrained to rule against his claim that his election to public office is by
itself a compelling reason to grant him bail.
2. Anticipated Delay
Respondent Jimenez further contends that because the extradition
proceedings are lengthy, it would be unfair to confine him during the
pendency of the case. Again we are not convinced. We must emphasize that
extradition cases are summary in nature. They are resorted to merely to
determine whether the extradition petition and its annexes conform to the
Extradition Treaty, not to determine guilt or innocence. Neither is it, as a rule,
intended to address issues relevant to the constitutional rights available to
the accused in a criminal action.
We are not overruling the possibility that petitioner may, in bad faith, unduly
delay the proceedings. This is quite another matter that is not at issue here.
Thus, any further discussion of this point would be merely anticipatory and
academic.
However, if the delay is due to maneuverings of respondent, with all the more
reason would the grant of bail not be justified. Giving premium to delay by
considering it as a special circumstance for the grant of bail would be
tantamount to giving him the power to grant bail to himself. It would also
encourage him to stretch out and unreasonably delay the extradition
proceedings even more. This we cannot allow.
3. Not a Flight Risk?
Jimenez further claims that he is not a flight risk. To support this claim, he
stresses that he learned of the extradition request in June 1999; yet, he has
not fled the country. True, he has not actually fled during the preliminary
stages of the request for his extradition. Yet, this fact cannot be taken to
mean that he will not flee as the process moves forward to its conclusion, as
he hears the footsteps of the requesting government inching closer and
closer. That he has not yet fled from the Philippines cannot be taken to mean
that he will stand his ground and still be within reach of our government if
and when it matters; that is, upon the resolution of the Petition for
Extradition.
In any event, it is settled that bail may be applied for and granted by the trial
court at anytime after the applicant has been taken into custody and prior to
judgment, even after bail has been previously denied. In the present case, the
extradition court may continue hearing evidence on the application for bail,
which may be granted in accordance with the guidelines in this Decision.
Brief Refutation of Dissents
The proposal to remand this case to the extradition court, we believe, is
totally unnecessary; in fact, it is a cop-out. The parties -- in particular,
Respondent Jimenez -- have been given more than sufficient opportunity
both by the trial court and this Court to discuss fully and exhaustively private
respondent’s claim to bail. As already stated, the RTC set for hearing not only
petitioner’s application for an arrest warrant, but also private respondent’s
prayer for temporary liberty. Thereafter required by the RTC were
memoranda on the arrest, then position papers on the application for bail,
both of which were separately filed by the parties.
This Court has meticulously pored over the Petition, the Comment, the Reply,
the lengthy Memoranda and the Position Papers of both parties. Additionally,
it has patiently heard them in Oral Arguments, a procedure not normally
observed in the great majority of cases in this Tribunal. Moreover, after the
Memos had been submitted, the parties -- particularly the potential
extraditee -- have bombarded this Court with additional pleadings -- entitled
"Manifestations" by both parties and "Counter-Manifestation" by private
respondent -- in which the main topic was Mr. Jimenez’s plea for bail.
A remand would mean that this long, tedious process would be repeated in
its entirety. The trial court would again hear factual and evidentiary matters.
Be it noted, however, that, in all his voluminous pleadings and verbal
propositions, private respondent has not asked for a remand. Evidently, even
he realizes that there is absolutely no need to rehear factual matters. Indeed,
the inadequacy lies not in the factual presentation of Mr. Jimenez. Rather, it
lies in his legal arguments. Remanding the case will not solve this utter lack
of persuasion and strength in his legal reasoning.
In short, this Court -- as shown by this Decision and the spirited Concurring,
Separate and Dissenting Opinions written by the learned justices themselves
-- has exhaustively deliberated and carefully passed upon all relevant
questions in this case. Thus, a remand will not serve any useful purpose; it
will only further delay these already very delayed proceedings, 74 which our
Extradition Law requires to be summary in character. What we need now is
prudent and deliberate speed, not unnecessary and convoluted delay. What
is needed is a firm decision on the merits, not a circuitous cop-out.
Then, there is also the suggestion that this Court is allegedly "disregarding
basic freedoms when a case is one of extradition." We believe that this charge
is not only baseless, but also unfair. Suffice it to say that, in its length and
breath, this Decision has taken special cognizance of the rights to due process
and fundamental fairness of potential extraditees.
Summation
As we draw to a close, it is now time to summarize and stress these ten points:
1. The ultimate purpose of extradition proceedings is to determine whether
the request expressed in the petition, supported by its annexes and the
evidence that may be adduced during the hearing of the petition, complies
with the Extradition Treaty and Law; and whether the person sought is
extraditable. The proceedings are intended merely to assist the requesting
state in bringing the accused -- or the fugitive who has illegally escaped -- back
to its territory, so that the criminal process may proceed therein.
2. By entering into an extradition treaty, the Philippines is deemed to have
reposed its trust in the reliability or soundness of the legal and judicial system
of its treaty partner, as well as in the ability and the willingness of the latter
to grant basic rights to the accused in the pending criminal case therein.
3. By nature then, extradition proceedings are not equivalent to a criminal
case in which guilt or innocence is determined. Consequently, an extradition
case is not one in which the constitutional rights of the accused are
necessarily available. It is more akin, if at all, to a court’s request to police
authorities for the arrest of the accused who is at large or has escaped
detention or jumped bail. Having once escaped the jurisdiction of the
requesting state, the reasonable prima facie presumption is that the person
would escape again if given the opportunity.
4. Immediately upon receipt of the petition for extradition and its supporting
documents, the judge shall make a prima facie finding whether the petition
is sufficient in form and substance, whether it complies with the Extradition
Treaty and Law, and whether the person sought is extraditable. The
magistrate has discretion to require the petitioner to submit further
documentation, or to personally examine the affiants or witnesses. If
convinced that a prima facie case exists, the judge immediately issues a
warrant for the arrest of the potential extraditee and summons him or her to
answer and to appear at scheduled hearings on the petition.
5. After being taken into custody, potential extraditees may apply for bail.
Since the applicants have a history of absconding, they have the burden of
showing that (a) there is no flight risk and no danger to the community; and
(b) there exist special, humanitarian or compelling circumstances. The
grounds used by the highest court in the requesting state for the grant of bail
therein may be considered, under the principle of reciprocity as a special
circumstance. In extradition cases, bail is not a matter of right; it is subject to Regional Trial Court of Manila is directed to conduct the extradition
judicial discretion in the context of the peculiar facts of each case. proceedings before it, with all deliberate speed pursuant to the spirit and the
letter of our Extradition Treaty with the United States as well as our
6. Potential extraditees are entitled to the rights to due process and to
Extradition Law. No costs.
fundamental fairness. Due process does not always call for a prior
opportunity to be heard. A subsequent opportunity is sufficient due to the SO ORDERED.
flight risk involved. Indeed, available during the hearings on the petition and
the answer is the full chance to be heard and to enjoy fundamental fairness
that is compatible with the summary nature of extradition.

7. This Court will always remain a protector of human rights, a bastion of

liberty, a bulwark of democracy and the conscience of society. But it is also
well aware of the limitations of its authority and of the need for respect for
the prerogatives of the other co-equal and co-independent organs of
government.

8. We realize that extradition is essentially an executive, not a judicial,

responsibility arising out of the presidential power to conduct foreign
relations and to implement treaties. Thus, the Executive Department of
government has broad discretion in its duty and power of implementation.

9. On the other hand, courts merely perform oversight functions and exercise
review authority to prevent or excise grave abuse and tyranny. They should
not allow contortions, delays and "over-due process" every little step of the
way, lest these summary extradition proceedings become not only inutile but
also sources of international embarrassment due to our inability to comply in
good faith with a treaty partner’s simple request to return a fugitive. Worse,
our country should not be converted into a dubious haven where fugitives
and escapees can unreasonably delay, mummify, mock, frustrate, checkmate
and defeat the quest for bilateral justice and international cooperation.

10. At bottom, extradition proceedings should be conducted with all

deliberate speed to determine compliance with the Extradition Treaty and
Law; and, while safeguarding basic individual rights, to avoid the legalistic
contortions, delays and technicalities that may negate that purpose.

WHEREFORE, the Petition is GRANTED. The assailed RTC Order dated May 23,
2001 is hereby declared NULL and VOID, while the challenged Order dated
July 3, 2001 is SET ASIDE insofar as it granted bail to Respondent Mark
Jimenez. The bail bond posted by private respondent is CANCELLED. The
COMMISSION ON ELECTIONS vs QUIJANO-PADILLA
[G. R. No. 151992. September 18, 2002]
COMMISSION ON ELECTIONS, COMELEC CHAIRMAN ALFREDO L. BENIPAYO,
COMELEC COMMISSIONERS RESURRECCION Z. BORRA and FLORENTINO A.
TUASON, JR., petitioners, vs. JUDGE MA. LUISA QUIJANO-PADILLA,
REGIONAL TRIAL COURT OF QUEZON CITY, BRANCH 215 and PHOTOKINA
MARKETING CORP., respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
The contracting prerogative of public officers is circumscribed with a heavy
burden of responsibility. They must exercise utmost caution and observe the
law in order to protect the public from unjust and inequitable government
contracts.
The case at bar provides us with another occasion to stress that with respect
to government contracts, statutes take precedence over the public officers
freedom to contract. Here, the primordial question to be resolved is -- may a
successful bidder compel a government agency to formalize a contract with
it notwithstanding that its bid exceeds the amount appropriated by Congress
for the project?
Before us is a petition for certiorari under Rule 65 of the 1997 Rules of Civil
Procedure, as amended, alleging that respondent Judge Ma. Luisa Quijano-
Padilla of the Regional Trial Court, Branch 215, Quezon City, committed grave
abuse of discretion in issuing the (a) Resolution[1] dated December 19, 2001
granting private respondents application for a writ of preliminary prohibitory
injunction in Special Civil Action No. Q-01-45405[2]; and (b)
Resolution[3] dated February 7, 2002 denying petitioners Omnibus Motion to
dismiss the petition and their motion for reconsideration of the same
Resolution and granting private respondent's application for a writ of
preliminary mandatory injunction.
The facts are undisputed.
In 1996, the Philippine Congress passed Republic Act No. 8189, otherwise
known as the "Voter's Registration Act of 1996," providing for the
modernization and computerization of the voters' registration list and the
appropriate of funds therefor "in order to establish a clean, complete,
permanent and updated list of voters."[4]
Pursuant thereto, the Commission on Elections (COMELEC) promulgated
Resolution No. 00-0315[5] approving in principle the Voter's Registration and
Identification System Project (VRIS) Project for brevity). The VRIS Project
envisions a computerized database system for the May 2004 Elections. The
idea is to have a national registration of voters whereby each registrant's
fingerprints will be digitally entered into the system and upon completion of
registration, compared and matched with other entries to eliminate double
entries. A tamper-proof and counterfeit-resistant voter's identification card
will then be issues to each registrant as a visual record of the registration.
On September 9, 1999, the COMELEC issued invitations to pre-qualify and bid
for the supply and installations of information technology equipment and
ancillary services for its VRIS Project.[6] Private respondent Photokina
Marketing Corporation (PHOTOKINA) pre-qualified and was allowed to
participate as one of the bidders. After the public bidding was conducted,
PHOTOKINA's bid in the amount of P6.588 Billion Pesos garnered the highest
total weighted score and was declared the winning bidder. Thus, on
September 28, 2000, the COMELEC issued Resolution No. 3252[7] approving
the Notice of Award to PHOTOKINA, which, in turn, immediately accepted the
same. The parties then proceeded to formalize the contract, with
Commissioner Mehol K. Sadain and Atty. Rodrigo D. Sta. Ana, acting as
negotiators for the COMELEC and PHOTOKINA, respectively.
However, under Republic Act No. 8760[8] the budget appropriated by
Congress for the COMELECs modernization project was only One (1) Billion
Pesos and that the actual available funds under the Certificate of Availability
of Funds (CAF) issued by the Chief Accountant of the COMELEC was only P1.2
Billion Pesos.
In December 2000, then COMELEC Chairman Harriet O. Demetriou issued a
memorandum to the COMELEC en banc expressing her objections to the
contract. Commissioner Sadain, for his part, submitted a draft of the
contract[9] providing a price that would not exceed the certified available
appropriation but covering only Phase I of the VRIS Project, i.e., issuance of
registration cards for 1,000,000 voters in certain areas only.[10] Under the
draft, the subsequent completion of the whole project shall be agreed upon
in accordance with the Bid Documents and the annual funds available for
it. [11]
On February 2, 2001, the term of former Chairman Demetriou and those of
Commissioners Julio F. Desamito and Teresita Dy-Liacco Flores
expired. Appointed as their successors were Alfredo L. Benipayo as Chairman
and Resurreccion Z. Borra and Florentino A. Tuason, Jr. as Commissioners.
Meanwhile, PHOTOKINA, as the winning bidder, wrote several letters to the
COMELEC requesting the formal execution of the contract, but to no avail.[12]
Then Chairman Benipayo, through various press releases and public
statements, announced that the VRIS Project has been scrapped, dropped,
junked, or set aside. He further announced his plan to re-engineer the entire
modernization program of the COMELEC, emphasizing his intention to
replace the VRIS Project with his own version, the Triple E Vision.[13]
On October 2, 2001, Senator Edgardo J. Angara directed the creation of a
technical working group to assist the COMELEC in evaluating all programs for
the modernization of the COMELEC which will also consider the PHOTOKINA
contract as an alternative program and various competing programs for the
purpose.
Unsatisfied with the adverse turn of events, PHOTOKINA filed with the
Regional Trial Court, Branch 215, Quezon City a petition for mandamus,
prohibition and damages (with prayer for temporary restraining order,
preliminary prohibitory injunction and preliminary mandatory injunction)
against the COMELEC and all its Commissioners,[14] docketed as Special Civil
Action No. Q- 01- 45405. PHOTOKINA alleged three causes of
action: first, the deliberate refusal of the COMELEC and its Commissioners to
formalize the contract rendered nugatory the perfected contract between
them; second, in announcing that the VRIS Project has been junked and that
he has plans to re-engineer the COMELECs entire modernization
program, Chairman Benipayo committed grave abuse of
discretion; and third, the COMELECs failure to perform its duty under
the contract has caused PHOTOKINA to incur damages since it has spent
substantial time and resources in the preparation of the bid and the draft
contract.
In support of its application for writs of preliminary prohibitory and
mandatory injunction, PHOTOKINA adopted the evidence it adduced during
the hearing of its application for the issuance of a temporary restraining
order.
On December 19, 2001, respondent Judge Ma. Luisa Quijano-Padilla issued
the first assailed Resolution granting PHOTOKINAs application for a writ of
preliminary prohibitory injunction, thus:
"WHEREFORE, premises considered, the Court resolves to: (1) grant the
application for the issuance of a writ of preliminary prohibitory injunction;
and (2) deny the application for the issuance of a writ of preliminary
mandatory injunction.
Accordingly, let a writ of preliminary prohibitory injunction issue enjoining
respondents, their agents, successors and assigns from replacing the VRIS
Project upon petitioners posting of a bond in the amount of P20,000,000.00,
which bond shall answer for whatever damages which may be sustained by
reason of the issuance of the said writ, if it turns out that the plaintiffs are not
entitled thereto.
SO ORDERED"[15]
Both parties filed their respective motions for reconsideration. PHOTOKINA
reiterated its plea for a writ of preliminary mandatory injunction.[16] For their
part, the COMELEC and its Commissioners, through the Solicitor General,
prayed that the writ of preliminary prohibitory injunction be set aside and
that the petition for mandamus, prohibition and damages be dismissed.[17]
On February 8, 2002, respondent judge issued the second assailed Resolution
denying the COMELECs Omnibus Motion and, this time, granting
PHOTOKINAs application for a writ of preliminary mandatory injunction, thus:
"WHEREFORE, premises considered, this Court resolves to: (1) deny
Respondents Omnibus Motion for the dismissal of this case and for the
reconsideration of this Courts Resolution granting the writ of preliminary
prohibitory injunction; (2) grant Petitioners Motion dated January 2, 2002
insofar as it prays for the issuance of a writ of preliminary mandatory Commissioners who filed the instant Petition acted without authority from
injunction; (3)Grant the prayer for the reduction of the preliminary the COMELEC en banc to take such action.
prohibitory injunction bond from P20,000,000.00 to
PHOTOKINA filed a Comment with Motion to Dismiss,[21] the present petition,
P10,000,000.00; (4) Clarify its Resolution dated December 19, 2001 to the
on two procedural grounds. First, the petition violates the doctrine of
extent that the writ of preliminary prohibitory injunction will also enjoin
hierarchy of courts. And second, the OSG has no authority and/or standing to
Respondents, their agents, successors and assigns from disregarding the
file the petition considering that the petitioners have not been authorized by
contract for the VRIS Project between Petitioner and Respondent
the COMELEC en banc to take such action. Without the concurrence of at
COMELEC; (5) deny Petitioners motion to declare Respondents in default.
least a majority of the members of the COMELEC, neither petitioners nor the
"Accordingly, let a writ of preliminary mandatory injunction issue directing all OSG could file the petition in behalf of the COMELEC.
respondent Commissioners to immediately resume negotiations to formalize
In refutation of petitioners arguments, PHOTOKINA contends
the execution of the contract with Petitioner for the VRIS Project upon
that mandamus is an appropriate remedy since what is involved in Special
petitioners posting of a bond, separate from the above bond for the writ of
Civil Action No. Q-01-45405 is the performance of a ministerial
preliminary prohibitory injunction, in the amount of P20,000,000.00, which
duty. Citing Isada vs. Bocar,[22] PHOTOKINA maintains that mandamus may
bond shall answer for whatever damages that may be sustained by reason of
be availed of by private parties to compel public officers to act on a contract
the issuance of the said writ, if it turns out that Petitioner is not entitled
entered into pursuant to law. In its Supplemental Comment,[23] PHOTOKINA
thereto.
invites the Courts attention to Metropolitan Manila Development Authority
"SO ORDERED."[18] vs. Jancom Environmental Corporation[24]whereby the winning bidder was
afforded every right to seek enforcement of its perfected contract with the
Hence, the instant petition for certiorari filed by the Office of the Solicitor
government.
General (OSG) in behalf of then COMELEC Chairman Alfredo L. Benipayo and
Commissioners Resurreccion Z. Borra and Florentino A. Tuason, Jr.. The petition is impressed with merit.

Petitioners contend that: (1) a petition for mandamus and prohibition does Initially, we must resolve the procedural roadblocks.
not lie to enforce contractual obligations, hence, PHOTOKINAs proper
PHOTOKINA alleges that the OSG has no standing to file the present petition
recourse before the Regional Trial Court should have been an action for
since its legal position is contrary to that espoused by the majority of the
specific performance; (2) respondent judge, by issuing the injunctive writs,
COMELEC Commissioners. This is a leap to a non-sequitur conclusion. The
already assumed that the VRIS Project was lawfully awarded by the COMELEC
OSG is an independent office. Its hands are not shackled to the cause of its
to PHOTOKINA, and that there is a valid perfected contract between them,
client agency. In the discharge of its task, the primordial concern of the OSG
thus, manifesting her prejudgment; and (3) injunctive writs should not be
is to see to it that the best interest of the government is upheld.[25] This is
issued when an action for damages can adequately compensate for the
regardless of the fact that what it perceived as the best interest of the
injuries. Petitioners pray that the two assailed Resolutions be nullified and
government runs counter to its client agencys position.[26] Endowed with a
Special Civil Action No. Q-01-45405 be dismissed outright.[19]
broad perspective that spans the legal interest of virtually the entire
On February 21, 2002, the majority of the COMELEC Commissioners -- government officialdom, the OSG may transcend the parochial concerns of a
Luzviminda G. Tancangco, Rufino S.B. Javier, Ralph C. Lantion and Mehol K. particular client agency and instead, promote and protect the public
Sadain filed with this Court a Manifestation[20] that the Chairman and the two weal.[27] Our ruling in Orbos vs. Civil Service Commission,[28] is relevant, thus:
"x x x It is incumbent upon him (Solicitor General) to present to the court
what he considers would legally uphold the best interest of the government
although it may run counter to a clients position. x x x.
"In the present case, it appears that after the Solicitor General studied the
issues he found merit in the cause of the petitioner based on the applicable
law and jurisprudence. Thus, it is his duty to represent the petitioner as he
did by filing this petition. He cannot be disqualified from appearing for the
petitioner even if in so doing his representation runs against the interests
of the CSC.
"This is not the first time that the Office of the Solicitor General has taken a
position adverse to his clients like the CSC, the National Labor Relations
Commission, among others, and even the People of the Philippines. x x
x (Emphasis supplied)
Hence, while petitioners stand is contrary to that of the majority of the
Commissioners, still, the OSG may represent the COMELEC as long as in its
assessment, such would be for the best interest of the government. For,
indeed, in the final analysis, the client of the OSG is not the agency but no less
than the Republic of the Philippines in whom the plenum of sovereignty
resides.[29]
Moreover, it must be emphasized that petitioners are also public officials
entitled to be represented by the OSG. Under Executive Order No. 292[30] and
Presidential Decree No. 478,[31] the OSG is the lawyer of the government, its
agencies and instrumentalities, and its officials or agents. Surely, this
mandate includes the three petitioners[32] who have been impleaded as
public respondents in Special Civil Action No. Q-01-45405.
Anent the alleged breach of the doctrine of hierarchy of courts, suffice it to
say that it is not an iron-clad dictum. On several instances where this Court
was confronted with cases of national interest and of serious implications, it
never hesitated to set aside the rule and proceed with the judicial
determination of the case.[33] The case at bar is of similar import. It is in the
interest of the State that questions relating to government contracts be
settled without delay. This is more so when the contract, as in this case,
involves the disbursement of public funds and the modernization of our
countrys election process, a project that has long been overdue.
We now resolve the following substantive issues:
1) Is a petition for mandamus the appropriate remedy to enforce contractual
obligations? and 2) May a successful bidder compel a government agency to
formalize a contract with it notwithstanding that its bid exceeds the amount
appropriated by Congress for the project?
I
No rule of law is better settled than that mandamus does not lie to enforce
the performance of contractual obligations.[34] As early as 1924, Justice
Street, in Quiogue vs. Romualdez,[35] already set forth the justification of this
rule, thus:
Upon the facts above stated we are of the opinion that the writ
of mandamus is not the appropriate, or even an admissible remedy. It is
manifest that whatever rights the petitioner may have, upon the facts stated,
are derived from her contract with the city; and no rule of law is better
settled than that mandamus never lies to enforce the performance of
private contracts. x x x The petitioners remedy, if any she has, is by an
original action in the Court of First Instance to compel the city to pay the
agreed price or to pay damages for the breach of contract.
"x x x. As said in Lowe vs. Phelps (14 Bush, 642):
It must, therefore, appear upon every application for a mandamus that it is
the legal duty of the respondent to do that which it is sought to compel him
to do, and that he has upon proper application refused to perform that duty.'
(Citing numerous authorities).
"It was not intended to aid a plaintiff in the enforcement of a mere contract
right, or to take the place of the other remedies provided by law for the
adjudication of disputed claims. Looking at the case from the standpoint of
appellant, it involves nothing more than an ordinary breach of contract. If, as
contended, the appellant had a valid contract with the school board, it
also had an adequate remedy at law to recover damages for its breach; and
to permit the writ of mandamus to be used for the purpose of enforcing a
mere contract right would be a wide departure from the settled practice in
respect to the character of cases in which relief by mandamus may be
obtained.
"In Parrott vs. City of Bridgeport (44 Conn., 180), the writ was refused where
the petitioner sought to compel a city to construct a public street in a certain
manner agreeably to the terms of a special agreement between the
petitioner and the city. In the course of the opinion the court said:
"* * * The duty, therefore, if any, which rests upon the city in this regard, is
one which it owes to the petitioner as an individual, not to the public, and the
special contract is the foundation upon which it rests. But the writ
of mandamus has never been considered as an appropriate remedy for the
enforcement of contract rights of a private and personal nature and
obligations which rest wholly upon contract and which involve no questions
of public trusts or official duty. Indeed, strictly speaking, it never lies where
the party aggrieved has adequate remedy at law, and its aid is only to be
invoked to prevent an absolute failure of justice in cases where ordinary
legal processes furnish no relief. (Emphasis supplied)
The passage of time has not eroded the wisdom of the
foregoing rule. Its invocation by this Court
[36]
in Province of Pangasinan vs. Reparation Commission, Aprueba vs. Ganzo
n,[37] City of Manila vs. Posadas,[38] Jacinto vs. Director of Lands,[39] National
Marketing Corporation vs. Cloribel,[40] Astudillo vs. The Board of Directors of
Peoples Homesite and Housing Corporation,[41] and Sharp International
Marketing vs. Court of Appeals,[42] virtually reinforces the rule. The present
case is our latest addition to the above catena of jurisprudence. We carefully
read the pleadings filed in Special Civil Action No. Q-01-45405 and we are
convinced that what PHOTOKINA sought to enforce therein are its rights
under the accepted bid proposal. Its petition alleged that notwithstanding
the COMELECs issuance of a Notice of Award and its (PHOTOKINAs)
subsequent acceptance thereof, the COMELEC still refused to formalize the
contract. As a relief, PHOTOKINA prayed that after trial, petitioners be
directed to review and finalize the formal contract and to implement the VRIS
Project.[43] Petitioners, on their part, specifically denied the existence of a
perfected contract and asserted that even if there was one, the same is null
and void for lack of proper appropriation. Petitioners labeled the contract
as illegal and against public policy.
Akin to our rulings cited above, we hold that mandamus is not the proper
recourse to enforce the COMELEC's alleged contractual obligations with
PHOTOKINA. It has other adequate remedy in law. Moreover, worth stressing
is the judicial caution that mandamus applies as a remedy only
where petitioner's right is founded clearly in law
[44]
and not when itis doubtful. In varying language, the principle echoed and
reechoed is that legal rights may be enforced by mandamus only if those
rights are well-defined, clear and certain.[45] Here, the alleged contract, relied
upon by PHOTOKINA as source of its rights which it seeks to be protected, is
being disputed, not only on the ground that it was not perfected but also
because it is illegal and against public policy.
Of course, there are cases in which the writ of mandamus has been used to
compel public officers to perform certain acts, but it will be generally
observed that in such cases, the contracts have been completely performed
by the petitioner, and nothing remained to be done except for the
government to make compensation. These exceptional cases are cited
in Isada vs. Bocar[46] where the act of the respondent public officer has the
effect of setting aside contracts already in the process of consummation. In
contrast with Isada, the alleged contract here has not yet been fully
performed by PHOTOKINA; and though it avers readiness to perform,
petitioners raised serious questions as to its validity.Their posture is tenable.
II
To spare PHOTOKINA the drudgery of a fruitless pursuit, we deem it
appropriate to lay down the principles governing government contracts and
to apply them to the instant case. Meanwhile, as PHOTOKINA will later on
deduce from the discussion, the contract subject of this controversy is one
that can be slain in sight for being patently void and unenforceable.
Enshrined in the 1987 Philippine Constitution is the mandate that "no money
shall be paid out of the Treasury except in pursuance of an appropriation
made by law."[47] Thus, in the execution of government contracts, the precise
import of this constitutional restriction is to require the various agencies to
limit their expenditures within the appropriations made by law for each fiscal
year.
Complementary to the foregoing constitutional injunction are pertinent
provisions of law and administrative issuances that are designed to effectuate
the above mandate in a detailed manner.[48] Sections 46 and 47, Chapter 8,
Subtitle B, Title I, Book V of Executive Order No. 292, otherwise known as
"Administrative Code of 1987," provide:
"SEC. 46. Appropriation Before Entering into Contract. - (1) No contract
involving the expenditure of public funds shall be entered into unless there is
an appropriation therefor, the unexpended balance of which, free of other
obligations, is sufficient to cover the proposed expenditure; and x x x
"SEC. 47. Certificate Showing Appropriation to Meet Contract. - Except in the
case of a contract for personal service, for supplies for current consumption
or to be carried in stock not exceeding the estimated consumption for three
(3) months, or banking transactions of government-owned or controlled
banks, no contract involving the expenditure of public funds by any
government agency shall be entered into or authorized unless the proper
accounting official of the agency concerned shall have certified to the
officer entering into the obligation that funds have been duly appropriated
for the purpose and that the amount necessary to cover the proposed
contract for the current calendar year is available for expenditure on
account thereof, subject to verification by the auditor concerned. The
certificate signed by the proper accounting official and the auditor who
verified it, shall be attached to and become an integral part of the proposed
contract, and the sum so certified shall not thereafter be available for
expenditure for any other purpose until the obligation of the government
agency concerned under the contract is fully extinguished.
It is quite evident from the tenor of the language of the law
that the existence of appropriations and the availability of funds are
indispensable pre-requisites to or conditions sine qua non for the execution
of government contracts. The obvious intent is to impose such conditions as
a priori requisites to the validity of the proposed contract.[49] Using
this asour premise, we cannot accede to PHOTOKINA's contention that there
is already a perfected contract. While we held in Metropolitan Manila
Development Authority vs. Jancom Environmental Corporation[50] that "the
effect of an unqualified acceptance of the offer or proposal of the bidder is to
perfect a contract, upon notice of the award to the bidder," however, such
statement would be inconsequential in a government where the acceptance
referred to is yet to meet certain conditions. To hold otherwise is to allow a
public officer to execute a binding contract that would obligate the
government in an amount in excess of the appropriations for the purpose for
which the contract was attempted to be made.[51] This is a dangerous
precedent.
In the case at bar, there seems to be an oversight of the legal requirements
as early as the bidding stage. The first step of a Bids and Awards Committee
(BAC) is to determine whether the bids comply with the requirements. The
BAC shall rate a bid "passed" only if it complies with all the requirements and
the submitted price does not exceed the approved budget for the
contract."[52]
Extant on the record is the fact that the VRIS Project was awarded to
PHOTOKINA on account of its bid in the amount of P6.588 Billion
Pesos. However, under Republic Act No. 8760,[53] the only fund appropriated
for the project was P1 Billion Pesos and under the Certification of Available
Funds[54] (CAF) only P1.2 Billion Pesos was available. Clearly, the amount
appropriated is insufficient to cover the cost of the entire VRIS Project. There
is no way that the COMELEC could enter into a contract with PHOTOKINA
whose accepted bid was way beyond the amount appropriated by law for the
project. This being the case, the BAC should have rejected the bid for being
excessive[55] or should havewithdrawn the Notice of Award on the ground
that in the eyes of the law, the same is null and void.[56]
The objections of then Chairman Demetriou to the implementation of the
VRIS Project, ardently carried on by her successor Chairman Benipayo, are
therefore in order.
Even the draft contract submitted by Commissioner Sadain, that provides for
a contract price in the amount of P1.2 Billion Pesos is unacceptable. Indeed,
we share the observation of former Chairman Demetriou that it circumvents
the statutory requirements on government contracts. While the contract
price under the draft contract[57] is only P1.2 Billion and, thus, within the
certified available funds, the same covers only Phase I of the VRIS Project, i.e.,
the issuance of identification cards for only 1,000,000 voters in specified
areas.[58] In effect, the implementation of the
VRIS Project will be "segmented" or "chopped" into several phases. Not only
is such arrangement disallowed by our budgetary laws and practices, it is also
disadvantageous to the COMELEC because of the uncertainty that will loom
over its modernization project for an indefinite period of time. Should
Congress fail to appropriate the amount necessary for the completion of the
entire project, what good will the accomplished Phase I serve? As expected,
the project failed "to sell" with the Department of Budget and Management.
Thus, Secretary Benjamin Diokno, per his letter of December 1, 2000,
declined the COMELEC's request for the issuance of the Notice of Cash
Availability (NCA) and a multi-year obligational authority to assume payment
of the total VRIS Project for lack of legal basis.[59] Corollarily, under Section 33
of R.A. No. 8760, no agency shall enter into a multi-year contract without a
multi-year obligational authority, thus:
"SECTION 33. Contracting Multi-Year Projects. - In the implementation of
multi-year projects, no agency shall enter into a multi-year contract without
a multi-year Obligational Authority issued by the Department of Budget and
Management for the purpose. Notwithstanding the issuance of the multi-
year Obligational Authority, the obligation to be incurred in any given
calendar year, shall in no case exceed the amount programmed for
implementation during said calendar year."
Petitioners are justified in refusing to formalize the contract with
PHOTOKINA. Prudence dictated them not to enter into a contract not backed
up by sufficient appropriation and available funds. Definitely, to act
otherwise would be a futile exercise for the contract would inevitably suffer
the vice of nullity. In Osmea vs. Commission on Audit,[60] this Court held:
"The Auditing Code of the Philippines (P.D. 1445) further provides that no
contract involving the expenditure of public funds shall be entered into unless
there is an appropriation therefor and the proper accounting official of the
agency concerned shall have certified to the officer entering into the
obligation that funds have been duly appropriated for the purpose and the
amount necessary to cover the proposed contract for the current fiscal year is
available for expenditure on account thereof. Any contract entered into
contrary to the foregoing requirements shall be VOID.
"Clearly then, the contract entered into by the former Mayor Duterte was
void from the very beginning since the agreed cost for the project
(P8,368,920.00) was way beyond the appropriated amount (P5,419,180.00)
as certified by the City Treasurer. Hence, the contract was properly declared
void and unenforceable in COA's 2nd Indorsement, dated September 4,
1986. The COA declared and we agree, that:
'The prohibition contained in Sec. 85 of PD 1445 (Government Auditing Code)
is explicit and mandatory. Fund availability is, as it has always been, an
indispensable prerequisite to the execution of any government contract
involving the expenditure of public funds by all government agencies at all
levels. Such contracts are not to be considered as final or binding unless such
a certification as to funds availability is issued (Letter of Instruction No. 767,
s. 1978). Antecedent of advance appropriation is thus essential to
government liability on contracts (Zobel vs. City of Manila, 47 Phil. 169). This
contract being violative of the legal requirements aforequoted, the same
contravenes Sec. 85 of PD 1445 and is null and void by virtue of Sec.87.'"
Verily, the contract, as expressly declared by law, is inexistent and void ab
initio.[61] his is to say that the proposed contract is without force and effect
from the very beginning or from its incipiency, as if it had never been entered
into, and hence, cannot be validated either by lapse of time or ratification.[62]
Of course, we are not saying that the party who contracts with the
government has no other recourse in law. The law itself affords him the
remedy. Section 48 of E.O. No. 292 explicitly provides that any contract
entered into contrary to the above-mentioned requirements shall be void,
and the officers entering into the contract shall be liable to the Government
or other contracting party for any consequent damage to the same as if the
transaction had been wholly between private parties." So when the
contracting officer transcends his lawful and legitimate powers by acting in
excess of or beyond the limits of his contracting authority, the Government is
not bound under the contract. It would be as if the contract in such case were
a private one, whereupon, he binds only himself, and thus, assumes personal
liability thereunder.[63] Otherwise stated, the proposed contract is
unenforceable as to the Government.
While this is not the proceeding to determine where the culpability lies,
however, the constitutional mandate cited above constrains us to remind all
public officers that public office is a public trust and all public officers must at
all times be accountable to the people. The authority of public officers to
enter into government contracts is circumscribed with a heavy burden of
responsibility. In the exercise of their contracting prerogative, they should be
the first judges of the legality, propriety and wisdom of the contract they
entered into. They must exercise a high degree of caution so that the
Government may not be the victim of ill-advised or improvident action.[64]

In fine, we rule that PHOTOKINA, though the winning bidder, cannot compel
the COMELEC to formalize the contract. Since PHOTOKINAs bid is beyond the
amount appropriated by Congress for the VRIS Project, the proposed contract
is not binding upon the COMELEC and is considered void; and that in issuing
the questioned preliminary writs of mandatory and prohibitory injunction
and in not dismissing Special Civil Action No. Q-01-45405, respondent judge
acted with grave abuse of discretion. Petitioners cannot be compelled by a
writ of mandamus to discharge a duty that involves the exercise of judgment
and discretion, especially where disbursement of public funds is concerned.

WHEREFORE, the petition is GRANTED. The Resolutions dated December 19,

2001 and February 7, 2002 issued by respondent Judge Padilla are SET
ASIDE. Special Civil Action No. Q-01-45405 is hereby ordered DISMISSED.

SO ORDERED.
BUKLOD NG KAWANING EIIB vs ZAMORA (d) Supervise, monitor and coordinate all the intelligence and investigation
operations of the operating Bureaus and Offices under the Ministry;

(e) Investigate, hear and file, upon clearance by the Minister, anti-graft and
G.R. Nos. 142801-802 July 10, 2001
corruption cases against personnel of the Ministry and its constituents units;
BUKLOD NG KAWANING EIIB, CESAR POSADA, REMEDIOS G. PRINCESA, BENJAMIN
(f) Perform such other appropriate functions as may be assigned by the Minister or
KHO, BENIGNO MANGA, LULU MENDOZA, petitioners,
his deputies."5
vs.
HON. EXECUTIVE SECRETARY RONALDO B. ZAMORA, HON. SECRETARY JOSE In a desire to achieve harmony of efforts and to prevent possible conflicts among
PARDO, DEPARTMENT OF FINANCE, HON. SECRETARY BENJAMIN DIOKNO, agencies in the course of their anti-smuggling operations, President Aquino issued
DEPARTMENT OF BUDGET AND MANAGEMENT, HON. SECRETARY ARTEMIO Memorandum Order No. 225 on March 17, 1989, providing, among others, that the
TUQUERO, DEPARTMENT OF JUSTICE, respondents. EIIB "shall be the agency of primary responsibility for anti-smuggling operations in all
land areas and inland waters and waterways outside the areas of sole jurisdiction of
SANDOVAL-GUTIERREZ, J.:
the Bureau of Customs."6
In this petition for certiorari, prohibition and mandamus, petitioners Buklod Ng
Eleven years after, or on January 7, 2000, President Joseph Estrada issued Executive
Kawaning EIIB, Cesar Posada, Remedios Princesa, Benjamin Kho, Benigno Manga and
Order No. 191 entitled "Deactivation of the Economic Intelligence and Investigation
Lulu Mendoza, for themselves and in behalf of others with whom they share a
Bureau."7 Motivated by the fact that "the designated functions of the EIIB are also
common or general interest, seek the nullification of Executive Order No.
being performed by the other existing agencies of the government" and that "there
1911 and Executive Order No. 2232 on the ground that they were issued by the Office
is a need to constantly monitor the overlapping of functions" among these agencies,
of the President with grave abuse of discretion and in violation of their constitutional
former President Estrada ordered the deactivation of EIIB and the transfer of its
right to security of tenure.
functions to the Bureau of Customs and the National Bureau of Investigation.
The facts are undisputed:
Meanwhile, President Estrada issued Executive Order No. 1968 creating the
On June 30, 1987, former President Corazon C. Aquino, issued Executive Order No. Presidential Anti-Smuggling Task Force "Aduana."9
1273 establishing the Economic Intelligence and Investigation Bureau (EIIB) as part of
Then the day feared by the EIIB employees came. On March 29, 2000, President
the structural organization of the Ministry of Finance. 4 The EIIB was designated to
Estrada issued Executive Order No. 22310 providing that all EIIB personnel occupying
perform the following functions:
positions specified therein shall be deemed separated from the service effective April
"(a) Receive, gather and evaluate intelligence reports and information and evidence 30, 2000, pursuant to a bona fide reorganization resulting to abolition, redundancy,
on the nature, modes and extent of illegal activities affecting the national economy, merger, division, or consolidation of positions.11
such as, but not limited to, economic sabotage, smuggling, tax evasion, and dollar-
Agonizing over the loss of their employment, petitioners now come before this Court
salting, investigate the same and aid in the prosecution of cases;
invoking our power of judicial review of Executive Order Nos. 191 and 223. They
(b) Coordinate with external agencies in monitoring the financial and economic anchor their petition on the following arguments:
activities of persons or entities, whether domestic or foreign, which may adversely
"A
affect national financial interest with the goal of regulating, controlling or preventing
said activities; Executive Order Nos. 191 and 223 should be annulled as they are unconstitutional
for being violative of Section 2(3), Article IX-B of the Philippine Constitution and/or
(c) Provide all intelligence units of operating Bureaus or Offices under the Ministry
for having been issued with grave abuse of discretion amounting to lack or excess
with the general framework and guidelines in the conduct of intelligence and
of jurisdiction.
investigating works;
B.
The abolition of the EIIB is a hoax. Similarly, if Executive Order Nos. 191 and 223 are
considered to effect a reorganization of the EIIB, such reorganization was made in
bad faith.
C.
The President has no authority to abolish the EIIB."
Petitioners contend that the issuance of the afore-mentioned executive orders
is: (a) a violation of their right to security of tenure; (b) tainted with bad faith as they
were not actually intended to make the bureaucracy more efficient but to give way
to Task Force "Aduana," the functions of which are essentially and substantially the
same as that of EIIB; and (c) a usurpation of the power of Congress to decide whether
or not to abolish the EIIB.
Arguing in behalf of respondents, the Solicitor General maintains that: (a) the
President enjoys the totality of the executive power provided under Sections 1 and
7, Article VII of the Constitution, thus, he has the authority to issue Executive Order
Nos. 191 and 223; (b) the said executive orders were issued in the interest of national
economy, to avoid duplicity of work and to streamline the functions of the
bureaucracy; and (c) the EIIB was not "abolished," it was only "deactivated."
The petition is bereft of merit.
Despite the presence of some procedural flaws in the instant petition, such as,
petitioners' disregard of the hierarchy of courts and the non-exhaustion of
administrative remedies, we deem it necessary to address the issues. It is in the
interest of the State that questions relating to the status and existence of a public
office be settled without delay. We are not without precedent. In Dario v.
Mison,12 we liberally decreed:
"The Court disregards the questions raised as to procedure, failure to exhaust
administrative remedies, the standing of certain parties to sue, for two
reasons, `[b]ecause of the demands of public interest, including the need for
stability in the public service,' and because of the serious implications of these cases
on the administration of the Philippine civil service and the rights of public servants."
At first glance, it seems that the resolution of this case hinges on the question - Does
the "deactivation" of EIIB constitute "abolition" of an office? However, after coming
to terms with the prevailing law and jurisprudence, we are certain that the ultimate
queries should be – a) Does the President have the authority to reorganize the
executive department? and, b) How should the reorganization be carried out?
Surely, there exists a distinction between the words "deactivate" and "abolish." To
"deactivate" means to render inactive or ineffective or to break up by discharging or
reassigning personnel,13 while to "abolish" means to do away with, to annul,
abrogate or destroy completely.14 In essence, abolition denotes an intention to do
away with the office wholly and permanently.15 Thus, while in abolition, the office
ceases to exist, the same is not true in deactivation where the office continues to
exist, albeit remaining dormant or inoperative. Be that as it may, deactivation and
abolition are both reorganization measures.
The Solicitor General only invokes the above distinctions on the mistaken assumption
that the President has no power to abolish an office.
The general rule has always been that the power to abolish a public office is lodged
with the legislature.16 This proceeds from the legal precept that the power to create
includes the power to destroy. A public office is either created by the Constitution,
by statute, or by authority of law.17 Thus, except where the office was created by the
Constitution itself, it may be abolished by the same legislature that brought it into
existence.18
The exception, however, is that as far as bureaus, agencies or offices in the executive
department are concerned, the President's power of control may justify him to
inactivate the functions of a particular office,19 or certain laws may grant him the
broad authority to carry out reorganization measures. 20 The case in point is Larin v.
Executive Secretary.21 In this case, it was argued that there is no law which empowers
the President to reorganize the BIR. In decreeing otherwise, this Court sustained the
following legal basis, thus:
"Initially, it is argued that there is no law yet which empowers the President to issue
E.O. No. 132 or to reorganize the BIR.
We do not agree.
xxx xxx
Section 48 of R.A. 7645 provides that:
'Sec. 48. Scaling Down and Phase Out of Activities of Agencies Within the Executive
Branch. – The heads of departments, bureaus and offices and agencies are hereby
directed to identify their respective activities which are no longer essential in the
delivery of public services and which may be scaled down, phased out or
abolished, subject to civil service rules and regulations. X x x. Actual scaling down,
phasing out or abolition of the activities shall be effected pursuant to Circulars or
Orders issued for the purpose by the Office of the President.'
Said provision clearly mentions the acts of "scaling down, phasing out and
abolition" of offices only and does not cover the creation of offices or transfer of
functions. Nevertheless, the act of creating and decentralizing is included in the
subsequent provision of Section 62 which provides that:
'Sec. 62. Unauthorized organizational charges. - Unless otherwise created by law or
directed by the President of the Philippines, no organizational unit or changes in key
positions in any department or agency shall be authorized in their respective
organization structures and be funded from appropriations by this Act.' (italics ours)
The foregoing provision evidently shows that the President is authorized to effect
organizational changes including the creation of offices in the department or
agency concerned.
xxx xxx
Another legal basis of E.O. No. 132 is Section 20, Book III of E.O. No. 292 which states:
'Sec. 20. Residual Powers. – Unless Congress provides otherwise, the President shall
exercise such other powers and functions vested in the President which are provided
for under the laws and which are not specifically enumerated above or which are not
delegated by the President in accordance with law.' (italic ours)
This provision speaks of such other powers vested in the President under the law.
What law then gives him the power to reorganize? It is Presidential Decree No. 1772
which amended Presidential Decree No. 1416. These decrees expressly grant the
President of the Philippines the continuing authority to reorganize the national
government, which includes the power to group, consolidate bureaus and agencies,
to abolish offices, to transfer functions, to create and classify functions, services
and activities and to standardize salaries and materials. The validity of these two
decrees are unquestionable. The 1987 Constitution clearly provides that "all laws,
decrees, executive orders, proclamations, letters of instructions and other executive
issuances not inconsistent with this Constitution shall remain operative until
amended, repealed or revoked. So far, there is yet no law amending or repealing said
decrees." (Emphasis supplied)
Now, let us take a look at the assailed executive order.
In the whereas clause of E.O. No. 191, former President Estrada anchored his
authority to deactivate EIIB on Section 77 of Republic Act 8745 (FY 1999 General
Appropriations Act), a provision similar to Section 62 of R.A. 7645 quoted
in Larin, thus;
"Sec. 77. Organized Changes. Unless otherwise provided by law or directed by the
President of the Philippines, no changes in key positions or organizational units in
any department or agency shall be authorized in their respective organizational
structures and funded from appropriations provided by this Act."
We adhere to the precedent or ruling in Larin that this provision recognizes the
authority of the President to effect organizational changes in the department or
agency under the executive structure. Such a ruling further finds support in Section
78 of Republic Act No. 8760.22 Under this law, the heads of departments, bureaus,
offices and agencies and other entities in the Executive Branch are directed (a) to
conduct a comprehensive review of their respective mandates, missions, objectives,
functions, programs, projects, activities and systems and procedures; (b)identify
activities which are no longer essential in the delivery of public services and which
may be scaled down, phased-out or abolished; and (c) adopt measures that will result
in the streamlined organization and improved overall performance of their respective
agencies.23 Section 78 ends up with the mandate that the actual streamlining and
productivity improvement in agency organization and operation shall be effected
pursuant to Circulars or Orders issued for the purpose by the Office of the
President.24 The law has spoken clearly. We are left only with the duty to sustain.
But of course, the list of legal basis authorizing the President to reorganize any
department or agency in the executive branch does not have to end here. We must
not lose sight of the very source of the power – that which constitutes an express
grant of power. Under Section 31, Book III of Executive Order No. 292 (otherwise
known as the Administrative Code of 1987), "the President, subject to the policy in
the Executive Office and in order to achieve simplicity, economy and efficiency,
shall have the continuing authority to reorganize the administrative structure of
the Office of the President." For this purpose, he may transfer the functions of other
Departments or Agencies to the Office of the President. In Canonizado v.
Aguirre,25 we ruled that reorganization "involves the reduction of personnel,
consolidation of offices, or abolition thereof by reason of economy or redundancy
of functions." It takes place when there is an alteration of the existing structure of
government offices or units therein, including the lines of control, authority and
responsibility between them. The EIIB is a bureau attached to the Department of
Finance.26 It falls under the Office of the President. Hence, it is subject to the
President's continuing authority to reorganize.
It having been duly established that the President has the authority to carry out
reorganization in any branch or agency of the executive department, what is then left
for us to resolve is whether or not the reorganization is valid. In this jurisdiction,
reorganizations have been regarded as valid provided they are pursued in good faith.
Reorganization is carried out in 'good faith' if it is for the purpose of economy or to
make bureaucracy more efficient.27 Pertinently, Republic Act No. 665628 provides for
the circumstances which may be considered as evidence of bad faith in the removal
of civil service employees made as a result of reorganization, to wit: (a) where there
is a significant increase in the number of positions in the new staffing pattern of the
department or agency concerned; (b) where an office is abolished and another
performing substantially the same functions is created; (c) where incumbents are
replaced by those less qualified in terms of status of appointment, performance and
merit; (d) where there is a classification of offices in the department or agency
concerned and the reclassified offices perform substantially the same functions as
the original offices, and (e) where the removal violates the order of separation.29
Petitioners claim that the deactivation of EIIB was done in bad faith because four days
after its deactivation, President Estrada created the Task Force Aduana.
We are not convinced.
An examination of the pertinent Executive Orders30 shows that the deactivation of
EIIB and the creation of Task Force Aduana were done in good faith. It was not for
the purpose of removing the EIIB employees, but to achieve the ultimate purpose of
E.O. No. 191, which is economy. While Task Force Aduana was created to take the
place of EIIB, its creation does not entail expense to the government.
Firstly, there is no employment of new personnel to man the Task Force. E.O. No.
196 provides that the technical, administrative and special staffs of EIIB are to be
composed of people who are already in the public service, they being employees of
other existing agencies. Their tenure with the Task Force would only be temporary,
i.e., only when the agency where they belong is called upon to assist the Task Force.
Since their employment with the Task force is only by way of detail or
assignment, they retain their employment with the existing agencies. And should
the need for them cease, they would be sent back to the agency concerned.
Secondly, the thrust of E.O. No. 196 is to have a small group of military men under
the direct control and supervision of the President as base of the government's anti-
smuggling campaign. Such a smaller base has the necessary powers 1) to enlist the
assistance of any department, bureau, or office and to use their respective personnel,
facilities and resources; and 2) "to select and recruit personnel from within the PSG
and ISAFP for assignment to the Task Force." Obviously, the idea is to encourage the
utilization of personnel, facilities and resources of the already existing
departments, agencies, bureaus, etc., instead of maintaining an independent office
with a whole set of personnel and facilities. The EIIB had proven itself burdensome
for the government because it maintained separate offices in every region in the
Philippines.
And thirdly, it is evident from the yearly budget appropriation of the government that
the creation of the Task Force Aduana was especially intended to lessen EIIB's
expenses. Tracing from the yearly General Appropriations Act, it appears that the
allotted amount for the EIIB's general administration, support, and operations for the
year 1995, was P128,031,000;31 for 1996, P182,156,000;32 for
1998, P219,889,000;33 and, for 1999, P238,743,000.34 Theseamounts were far above
the P50,000,00035 allocation to the Task Force Aduana for the year 2000.
While basically, the functions of the EIIB have devolved upon the Task Force Aduana,
we find the latter to have additional new powers. The Task Force Aduana, being
composed of elements from the Presidential Security Group (PSG) and Intelligence
Service Armed Forces of the Philippines (ISAFP), 36 has the essential power to effect
searches, seizures and arrests. The EIIB did not have this power. The Task Force
Aduana has the power to enlist the assistance of any department, bureau, office, or
instrumentality of the government, including government-owned or controlled
corporations; and to use their personnel, facilities and resources. Again, the EIIB did
not have this power. And, the Task Force Aduana has the additional authority to
conduct investigation of cases involving ill-gotten wealth. This was not expressly
granted to the EIIB.1âwphi1.nêt
Consequently, it cannot be said that there is a feigned reorganization. In Blaquera v.
Civil Sevice Commission, 37 we ruled that a reorganization in good faith is one designed
to trim the fat off the bureaucracy and institute economy and greater efficiency in its
operation.
Lastly, we hold that petitioners' right to security of tenure is not violated. Nothing is
better settled in our law than that the abolition of an office within the competence
of a legitimate body if done in good faith suffers from no infirmity. Valid abolition of
offices is neither removal nor separation of the incumbents. 38 In the instructive
words laid down by this Court in Dario v. Mison,39 through Justice Abraham F.
Sarmiento:
Reorganizations in this jurisdiction have been regarded as valid provided they are
pursued in good faith. As a general rule, a reorganization is carried out in "good faith"
if it is for the purpose of economy or to make bureaucracy more efficient. In that
event, no dismissal (in case of dismissal) or separation actually occurs because the
position itself ceases to exist. And in that case, security of tenure would not be a
Chinese wall. Be that as it may, if the 'abolition,' which is nothing else but a
separation or removal, is done for political reasons or purposely to defeat security of
tenure, otherwise not in good faith, no valid 'abolition' takes and whatever 'abolition'
is done, is void ab initio. There is an invalid 'abolition' as where there is merely a
change of nomenclature of positions, or where claims of economy are belied by the
existence of ample funds.

Indeed, there is no such thing as an absolute right to hold office. Except constitutional
offices which provide for special immunity as regards salary and tenure, no one can
be said to have any vested right in an office or its salary.40

While we cast a commiserating look upon the plight of all the EIIB employees whose
lives perhaps are now torn with uncertainties, we cannot ignore the unfortunate
reality that our government is also battling the impact of a plummeting economy.
Unless the government is given the chance to recuperate by instituting economy and
efficiency in its system, the EIIB will not be the last agency to suffer the impact. We
cannot frustrate valid measures which are designed to rebuild the executive
department.

WHEREFORE, the petition is hereby DENIED. No costs.

SO ORDERED.
FORTICH vs CORONA
G.R. No. 131457 August 19, 1999
HON. CARLOS O. FORTICH, PROVINCIAL GOVERNOR OF BUKIDNON, HON.
REY B. BAULA, MUNICIPAL MAYOR OF SUMILAO, BUKIDNON, NQSR
MANAGEMENT AND DEVELOPMENT CORPORATION, petitioners,
vs.
HON. RENATO C. CORONA, DEPUTY EXECUTIVE SECRETARY, HON. ERNESTO
D. GARILAO, SECRETARY OF THE DEPARTMENT OF AGRARIAN
REFORM, respondents.
RESOLUTION
YNARES-SANTIAGO, J.:
This resolves the pending incidents before us, namely, respondents' and
intervenors' separate motions for reconsideration of our Resolution dated
November 17, 1998, as well as their motions to refer this case to this Court En
banc.
Respondents and intervenors jointly argue, in fine, that our Resolution dated
November 17, 1998, wherein we voted two-two on the separate motions for
reconsideration of our earlier Decision or April 24, 1998, as a result of which
the Decision was deemed affirmed, did not effectively resolve the said
motions for reconsideration inasmuch as the matter should have been
referred to the Court sitting en banc, pursuant to Article VIII, Section 4(3) of
the Constitution. Respondents and intervenors also assail our Resolution
dated January 27, 1999, wherein we noted without action the intervenors'
"Motion For Reconsideration With Motion To Refer The Matter To The
Court En Banc" filed on December 3, 1998, on the following considerations,
to wit:
the movants have no legal personality to further seek redress before the
Court after their motion for leave to intervene in this case was denied in the
April 24, 1998 Decision. Their subsequent motion for reconsideration of the
said decision, with a prayer to resolve the motion to the Court En Banc, was
also denied in the November 17, 1998 Resolution of the Court. Besides, their
aforesaid motion of December 3, 1998 is in the nature of a second motion for
reconsideration which is a forbidden motion (Section 2, Rule 52 in relation to
Section 4, Rule 56 of the 1997 Rules of Civil Procedure). The impropriety of
movants' December 3, 1998 motion becomes all the more glaring considering
that all the respondents in this case did not anymore join them (movants) ill
seeking a reconsideration of the November 17, 1998 Resolution.1
Subsequently, respondents, through the Office of the Solicitor General, filed
their "Motion For Reconsideration Of The Resolution Dated November 17,
1998 And For Referral Of The Case To This Honorable Court En Banc (With
Urgent Prayer For Issuance Of A Restraining Order)" on December 3, 1998,
accompanied by a "Manifestation and Motion"2 and a copy of the Registered
Mail Bill3 evidencing filing of the said motion for reconsideration to this Court
by registered mail.1âwphi1.nêt
In their respective motions for reconsideration, both respondents and
intervenors pray that this case be referred to this Court en banc. They
contend that inasmuch as their earlier motions for reconsideration (of the
Decision dated April 24, 1998) were resolved by a vote of two-two, the
required number to carry a decision, i.e., three, was not met. Consequently,
the case should be referred to and be decided by this Court en banc, relying
on the following constitutional provision:
Cases or matters heard by a division shall be decided or resolved with the
concurrence of a majority of the Members who actually took part in the
deliberations on the issues in the case and voted thereon, and in no case
without the concurrence of at least three of such Members. When the
required number is not obtained, the case shall be decided en banc: Provided,
that no doctrine or principle of law laid down by the Court in a decision
rendered en banc or in division may be modified or reversed except by the
Court sitting en banc.4
A careful reading of the above constitutional provision, however, reveals the
intention of the framers to draw a distinction between cases, on the one
hand, and matters, on the other hand, such that cases are "decided"
while matters, which include motions, are "resolved". Otherwise put, the
word "decided" must refer to "cases"; while the word "resolved" must refer
to "matters", applying the rule of reddendo singula singulis. This is true not
only in the interpretation of the above-quoted Article VIII, Section 4(3), but
also of the other provisions of the Constitution where these words appear.5
With the aforesaid rule of construction in mind, it is clear that only cases are
referred to the Court en banc for decision whenever the required number of
votes is not obtained. Conversely, the rule does not apply where, as in this
case, the required three votes is not obtained in the resolution of a motion
for reconsideration. Hence, the second sentence of the aforequoted
provision speaks only of "case" and not "matter". The reason is simple. The
above-quoted Article VIII, Section 4(3) pertains to the disposition of cases by
a division. If there is a tie in the voting, there is no decision. The only way to
dispose of the case then is to refer it to the Court en banc. On the other hand,
if a case has already been decided by the division and the losing party files a
motion for reconsideration, the failure of the division to resolve the motion
because of a tie in the voting does not leave the case undecided. There is still
the decision which must stand in view of the failure of the members of the
division to muster the necessary vote for its reconsideration. Quite plainly, if
the voting results in a tie, the motion for reconsideration is lost. The assailed
decision is not reconsidered and must therefore be deemed affirmed. Such
was the ruling of this Court in the Resolution of November 17, 1998.
It is the movants' further contention in support of their plea for the referral
of this case to the Court en banc that the issues submitted in their separate
motions are of first impression. In the opinion penned by Mr. Justice Antonio
M. Martinez during the resolution of the motions for reconsideration on
November 17, 1998, the following was expressed:
Regrettably, the issues presented before us by the movants are matters of no
extraordinary import to merit the attention of the Court En Banc. Specifically,
the issue of whether or not the power of the local government units to
reclassify lands is subject to the approval of the DAR is no longer novel, this
having been decided by this Court in the case of Province of Camarines Sur, et
al. vs. Court of Appeals wherein we held that local government units need not
obtain the approval of the DAR to convert or reclassify lands from agricultural
to non-agricultural use. The dispositive portion of the Decision in the
aforecited case states:
WHEREFORE, the petition is GRANTED and the questioned decision of the
Court of Appeals is set aside insofar as it (a) nullifies the trial court's order
allowing the Province of Camarines Sur to take possession of private
respondent's property (b) orders the trial court to suspended the exportation
proceedings; and (c) requires the Province of Camarines Sur to obtain the
approval of the Department of Agrarian Reform to convert or reclassify
private respondents' property from agricultural to non-agricultural use.
xxx xxx x x x(Emphasis supplied)
Moreover, the Decision sought to be reconsidered was arrived at by a
unanimous vote of all five (5) members of the Second Division of this Court,
Stated otherwise, this Second Division is of the opinion that the matters
raised by movants are nothing new and do not deserve the consideration of
the Court en banc. Thus, the participation of the full Court in the resolution
of movants' motions for reconsideration would be inappropriate.6
The contention, therefore, that our Resolution of November 17, 1998 did not
dispose of the earlier motions for reconsideration of the Decision dated April
24, 1998 is flawed. Consequently, the present motions for reconsideration
necessarily partake of the nature of a second motion for reconsideration
which, according to the clear and unambiguous language of Rule 56, Section
4, in relation to Rule 52, Section 2, of the 1997 Rules of Civil Procedure, is
prohibited.
True, there are exceptional cases when this Court may entertain a second
motion for reconsideration, such as where there are extraordinarily
persuasive reasons. Even then, we have ruled that such second motions for
reconsideration must be filed with express leave of court first obtained.7 In
this case, not only did movants fail to ask for prior leave of court, but more
importantly, they have been unable to show that there are exceptional
reasons for us to give due course to their second motions for reconsideration.
Stripped of the arguments for referral of this incident to the Court en banc,
the motions subject of this resolution are nothing more but rehashes of the
motions for reconsideration which have been denied in the Resolution of
November 17, 1998. To be sure, the allegations contained therein have
already been raised before and passed upon by this Court in the said
Resolution.
The crux of the controversy is the validity of the "Win-Win" Resolution dated
November 7, 1997. We maintain that the same is void and of no legal effect
considering that the March 29, 1996 decision of the Office of the President
had already become final and executory even prior to the filing of the motion
for reconsideration which became the basis of the said "Win-Win" Resolution. Reform, intervenors cannot as yet be deemed vested with sufficient interest
This ruling, quite understandably, sparked a litany of protestations on the in the controversy as to be qualified to intervene in this case. Likewise, the
part of respondents and intervenors including entreaties for a liberal issuance of the CLOA's to them does not grant them the requisite standing in
interpretation of the rules. The sentiment was that notwithstanding its view of the nullity of the "Win-Win" Resolution. No legal rights can emanate
importance and far-reaching effects, the case was disposed of on a from a resolution that is null and void.
technicality. The situation, however, is not as simple as what the movants
WHEREFORE, based on the foregoing, the following incidents, namely:
purport it to be. While it may be true that on its face the nullification of the
intervenors' "Motion For Reconsideration With Motion To Refer The Matter
"Win-Win" Resolution was grounded on a procedural rule pertaining to the
To The Court En Banc," dated December 3, 1998; respondents' "Motion For
reglementary period to appeal or move for reconsideration, the underlying
Reconsideration Of The Resolution Dated November 17, 1998 And For
consideration therefor was the protection of the substantive rights of
Referral Of The Case To This Honorable Court En Banc (With Urgent Prayer
petitioners. The succinct words of Mr. Justice Artemio V. Panganiban are
For Issuance Of A Restraining Order)," dated December 2, 1998; and
quoted in the November 17, 1998 opinion of Mr. Justice Martinez, viz.: "Just
intervenors' "Urgent Omnibus Motion For The Supreme Court Sitting En
as a losing party has the right to file an appeal within the prescribed period,
Banc To Annul The Second Division's Resolution Dated 27 January 1999 And
the winning party also has the correlative right to enjoy the finality of the
Immediately Resolve The 28 May 1998 Motion For Reconsideration Filed By
resolution of his/her case."8
The Intervenors," dated March 2, 1999; are all DENIED with FINALITY. No
In other words, the finality of the March 29, 1996 OP Decision accordingly further motion, pleading, or paper will be entertained in this case.
vested appurtenant rights to the land in dispute on petitioners as well as on
SO ORDERED.
the people of Bukidnon and other parts of the country who stand to be
benefited by the development of the property. The issue in this case,
therefore, is not a question of technicality but of substance and merit.9

Before finally disposing of these pending matters, we feel it necessary to rule

once and for all on the legal standing of intervenors in this case. In their
present motions, intervenors insist that they are real parties in interest
inasmuch as they have already been issued certificates of land ownership
award, or CLOAs, and that while they are seasonal farmworkers at the
plantation, they have been identified by the DAR as qualified beneficiaries of
the property. These arguments are, however, nothing new as in fact they
have already been raised in intervenors' earlier motion for reconsideration of
our April 24, 1998 Decision. Again as expressed in the opinion of Mr. Justice
Martinez, intervenors, who are admittedly not regular but seasonal
farmworkers, have no legal or actual and substantive interest over the subject
land inasmuch as they have no right to own the land. Rather, their right is
limited only to a just share of the fruits of the land.10 Moreover, the "Win-
Win" Resolution itself states that the qualified beneficiaries have yet to be
carefully and meticulously determined by the Department of Agrarian
Reform.11 Absent any definitive finding of the Department of Agrarian
BAVIERA VS PAGLINAWAN
G.R. No. 168380 February 8, 2007
MANUEL V. BAVIERA, Petitioner,
vs.
ESPERANZA PAGLINAWAN, in her capacity as Department of Justice State
Prosecutor; LEAH C. TANODRA-ARMAMENTO, In her capacity as Assistant
Chief State Prosecutor and Chairwoman of Task Force on Business Scam;
JOVENCITO R. ZUNO, in his capacity as Department of Justice Chief State
Prosecutor; STANDARD CHARTERED BANK, PAUL SIMON MORRIS, AJAY
KANWAL, SRIDHAR RAMAN, MARIVEL GONZALES, CHONA REYES, MARIA
ELLEN VICTOR, and ZENAIDA IGLESIAS, Respondents.
x-----------------------------x
G.R. No. 170602 February 8, 2007
MANUEL V. BAVIERA, Petitioner,
vs.
STANDARD CHARTERED BANK, BRYAN K. SANDERSON, THE RIGHT
HONORABLE LORD STEWARTBY, EVAN MERVYN DAVIES, MICHAEL
BERNARD DENOMA, CHRISTOPHER AVEDIS KELJIK, RICHARD HENRY
MEDDINGS, KAI NARGOLWALA, PETER ALEXANDER SANDS, RONNIE CHI
CHUNG CHAN, SIR CK CHOW, BARRY CLARE, HO KWON PING, RUDOLPH
HAROLD PETER ARKHAM, DAVID GEORGE MOIR, HIGH EDWARD NORTON,
SIR RALPH HARRY ROBINS, ANTHONY WILLIAM PAUL STENHAM (Standard
Chartered Bank Chairman, Deputy Chairman, and Members of the Board),
SHERAZAM MAZARI (Group Regional Head for Consumer Banking), PAUL
SIMON MORRIS, AJAY KANWAL, SRIDHAR RAMAN, MARIVEL GONZALES,
CHONA REYES, ELLEN VICTOR, RAMONA H. BERNAD, DOMINGO
CARBONELL, JR., and ZENAIDA IGLESIAS (Standard Chartered Bank-
Philippines Branch Heads/Officers), Respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
Before us are two consolidated Petitions for Review on Certiorari assailing the
Decisions of the Court of Appeals in CA-G.R. SP No. 873281 and in CA-G.R. SP
No. 85078.2
The common factual antecedents of these cases as shown by the records are:
Manuel Baviera, petitioner in these cases, was the former head of the HR
Service Delivery and Industrial Relations of Standard Chartered Bank-
Philippines (SCB), one of herein respondents. SCB is a foreign banking
corporation duly licensed to engage in banking, trust, and other fiduciary
business in the Philippines. Pursuant to Resolution No. 1142 dated December
3, 1992 of the Monetary Board of the Bangko Sentral ng Pilipinas (BSP), the
conduct of SCB’s business in this jurisdiction is subject to the following
conditions:
1. At the end of a one-year period from the date the SCB starts its trust
functions, at least 25% of its trust accounts must be for the account of non-
residents of the Philippines and that actual foreign exchange had been
remitted into the Philippines to fund such accounts or that the establishment
of such accounts had reduced the indebtedness of residents (individuals or
corporations or government agencies) of the Philippines to non-residents. At
the end of the second year, the above ratio shall be 50%, which ratio must be
observed continuously thereafter;
2. The trust operations of SCB shall be subject to all existing laws, rules and
regulations applicable to trust services, particularly the creation of a Trust
Committee; and
3. The bank shall inform the appropriate supervising and examining
department of the BSP at the start of its operations.
Apparently, SCB did not comply with the above conditions. Instead, as early
as 1996, it acted as a stock broker, soliciting from local residents foreign
securities called "GLOBAL THIRD PARTY MUTUAL FUNDS" (GTPMF),
denominated in US dollars. These securities were not registered with the
Securities and Exchange Commission (SEC). These were then remitted
outwardly to SCB-Hong Kong and SCB-Singapore.
SCB’s counsel, Romulo Mabanta Buenaventura Sayoc and Delos Angeles Law
Office, advised the bank to proceed with the selling of the foreign securities
although unregistered with the SEC, under the guise of a "custodianship
agreement;" and should it be questioned, it shall invoke Section 723 of the
General Banking Act (Republic Act No.337).4 In sum, SCB was able to sell
GTPMF securities worth around ₱6 billion to some 645 investors.
However, SCB’s operations did not remain unchallenged. On July 18, 1997,
the Investment Capital Association of the Philippines (ICAP) filed with the SEC
a complaint alleging that SCB violated the Revised Securities Act,5particularly
the provision prohibiting the selling of securities without prior registration
with the SEC; and that its actions are potentially damaging to the local mutual
fund industry.
In its answer, SCB denied offering and selling securities, contending that it has
been performing a "purely informational function" without solicitations for
any of its investment outlets abroad; that it has a trust license and the
services it renders under the "Custodianship Agreement" for offshore
investments are authorized by Section 726 of the General Banking Act; that
its clients were the ones who took the initiative to invest in securities; and it
has been acting merely as an agent or "passive order taker" for them.
On September 2, 1997, the SEC issued a Cease and Desist Order against SCB,
holding that its services violated Sections 4(a)7 and 198 of the Revised
Securities Act.
Meantime, the SEC indorsed ICAP’s complaint and its supporting documents
to the BSP.
On October 31, 1997, the SEC informed the Secretary of Finance that it
withdrew GTPMF securities from the market and that it will not sell the same
without the necessary clearances from the regulatory authorities.
Meanwhile, on August 17, 1998, the BSP directed SCB not to include
investments in global mutual funds issued abroad in its trust investments
portfolio without prior registration with the SEC.
On August 31, 1998, SCB sent a letter to the BSP confirming that it will
withdraw third-party fund products which could be directly purchased by
investors.
However, notwithstanding its commitment and the BSP directive, SCB
continued to offer and sell GTPMF securities in this country. This prompted
petitioner to enter into an Investment Trust Agreement with SCB wherein he
purchased US$8,000.00 worth of securities upon the bank’s promise of 40%
return on his investment and a guarantee that his money is safe. After six (6)
months, however, petitioner learned that the value of his investment went
down to US$7,000.00. He tried to withdraw his investment but was
persuaded by Antonette de los Reyes of SCB to hold on to it for another six
(6) months in view of the possibility that the market would pick up.
Meanwhile, on November 27, 2000, the BSP found that SCB failed to comply
with its directive of August 17, 1998. Consequently, it was fined in the amount
of ₱30,000.00.
The trend in the securities market, however, was bearish and the worth of
petitioner’s investment went down further to only US$3,000.00.
On October 26, 2001, petitioner learned from Marivel Gonzales, head of the
SCB Legal and Compliance Department, that the latter had been prohibited
by the BSP to sell GPTMF securities. Petitioner then filed with the BSP a letter-
complaint demanding compensation for his lost investment. But SCB denied
his demand on the ground that his investment is "regular."
On July 15, 2003, petitioner filed with the Department of Justice (DOJ),
represented herein by its prosecutors, public respondents, a complaint
charging the above-named officers and members of the SCB Board of
Directors and other SCB officials, private respondents, with
syndicated estafa, docketed as I.S. No. 2003-1059.
For their part, private respondents filed the following as counter-charges
against petitioner: (1) blackmail and extortion, docketed as I.S. No. 2003-
1059-A; and blackmail and perjury, docketed as I.S. No. 2003-1278.
On September 29, 2003, petitioner also filed a complaint for perjury against
private respondents Paul Simon Morris and Marivel Gonzales, docketed as I.S.
No. 2003-1278-A.
On December 4, 2003, the SEC issued a Cease and Desist Order against SCB
restraining it from further offering, soliciting, or otherwise selling its
securities to the public until these have been registered with the SEC.
Subsequently, the SEC and SCB reached an amicable settlement.1awphi1.net
On January 20, 2004, the SEC lifted its Cease and Desist Order and approved
the ₱7 million settlement offered by SCB. Thereupon, SCB made a
commitment not to offer or sell securities without prior compliance with the
requirements of the SEC.
On February 7, 2004, petitioner filed with the DOJ a complaint for violation
of Section 8.19 of the Securities Regulation Code against private respondents,
docketed as I.S. No. 2004-229.
On February 23, 2004, the DOJ rendered its Joint Resolution10 dismissing
petitioner’s complaint for syndicated estafa in I.S. No. 2003-1059; private
respondents’ complaint for blackmail and extortion in I.S. No. 2003-1059-A;
private respondents’ complaint for blackmail and perjury in I.S. No. 2003-
1278; and petitioner’s complaint for perjury against private respondents
Morris and Gonzales in I.S. No. 2003-1278-A.
Meanwhile, in a Resolution11 dated April 4, 2004, the DOJ dismissed
petitioner’s complaint in I.S. No. 2004-229 (violation of Securities Regulation
Code), holding that it should have been filed with the SEC.
Petitioner’s motions to dismiss his complaints were denied by the DOJ. Thus,
he filed with the Court of Appeals a petition for certiorari, docketed as CA-
G.R. SP No. 85078. He alleged that the DOJ acted with grave abuse of
discretion amounting to lack or excess of jurisdiction in dismissing his
complaint for syndicated estafa.
He also filed with the Court of Appeals a separate petition for certiorari
assailing the DOJ Resolution dismissing I.S. No. 2004-229 for violation of the
Securities Regulation Code. This petition was docketed as CA-G.R. SP No.
87328. Petitioner claimed that the DOJ acted with grave abuse of discretion
tantamount to lack or excess of jurisdiction in holding that the complaint
should have been filed with the SEC.
On January 7, 2005, the Court of Appeals promulgated its Decision dismissing
the petition.1avvphi1.net It sustained the ruling of the DOJ that the case
should have been filed initially with the SEC.
Petitioner filed a motion for reconsideration but it was denied in a Resolution
dated May 27, 2005.
Meanwhile, on February 21, 2005, the Court of Appeals rendered its Decision
in CA-G.R. SP No. 85078 (involving petitioner’s charges and respondents’
counter charges) dismissing the petition on the ground that the purpose of a
petition for certiorari is not to evaluate and weigh the parties’ evidence but
to determine whether the assailed Resolution of the DOJ was issued with
grave abuse of discretion tantamount to lack of jurisdiction. Again, petitioner
moved for a reconsideration but it was denied in a Resolution of November
22, 2005.
Hence, the instant petitions for review on certiorari.
For our resolution is the fundamental issue of whether the Court of Appeals
erred in concluding that the DOJ did not commit grave abuse of discretion in
dismissing petitioner’s complaint in I.S. 2004-229 for violation of Securities
Regulation Code and his complaint in I.S. No. 2003-1059 for
syndicated estafa.
G.R. No 168380
Re: I.S. No. 2004-229
For violation of the Securities Regulation Code
Section 53.1 of the Securities Regulation Code provides:
SEC. 53. Investigations, Injunctions and Prosecution of Offenses.–
53. 1. The Commission may, in its discretion, make such investigation as it
deems necessary to determine whether any person has violated or is about
to violate any provision of this Code, any rule, regulation or order thereunder,
or any rule of an Exchange, registered securities association, clearing agency,
other self-regulatory organization, and may require or permit any person to
file with it a statement in writing, under oath or otherwise, as the Commission
shall determine, as to all facts and circumstances concerning the matter to be
investigated. The Commission may publish information concerning any such
violations and to investigate any fact, condition, practice or matter which it
may deem necessary or proper to aid in the enforcement of the provisions of
this Code, in the prescribing of rules and regulations thereunder, or in
securing information to serve as a basis for recommending further legislation
concerning the matters to which this Code relates: Provided, however, That
any person requested or subpoenaed to produce documents or testify in any
investigation shall simultaneously be notified in writing of the purpose of such
investigation: Provided, further, That all criminal complaints for violations of
this Code and the implementing rules and regulations enforced or
administered by the Commission shall be referred to the Department of
Justice for preliminary investigation and prosecution before the proper
court: Provided, furthermore, That in instances where the law allows
independent civil or criminal proceedings of violations arising from the act,
the Commission shall take appropriate action to implement the
same: Provided, finally; That the investigation, prosecution, and trial of such
cases shall be given priority.
The Court of Appeals held that under the above provision, a criminal
complaint for violation of any law or rule administered by the SEC must first
be filed with the latter. If the Commission finds that there is probable cause,
then it should refer the case to the DOJ. Since petitioner failed to comply with
the foregoing procedural requirement, the DOJ did not gravely abuse its
discretion in dismissing his complaint in I.S. No. 2004-229.
A criminal charge for violation of the Securities Regulation Code is a
specialized dispute. Hence, it must first be referred to an administrative
agency of special competence, i.e., the SEC. Under the doctrine of primary
jurisdiction, courts will not determine a controversy involving a question
within the jurisdiction of the administrative tribunal, where the question
demands the exercise of sound administrative discretion requiring the
specialized knowledge and expertise of said administrative tribunal to
determine technical and intricate matters of fact.12 The Securities Regulation
Code is a special law. Its enforcement is particularly vested in the SEC. Hence,
all complaints for any violation of the Code and its implementing rules and
regulations should be filed with the SEC. Where the complaint is criminal in
nature, the SEC shall indorse the complaint to the DOJ for preliminary
investigation and prosecution as provided in Section 53.1 earlier quoted.
We thus agree with the Court of Appeals that petitioner committed a fatal
procedural lapse when he filed his criminal complaint directly with the DOJ.
Verily, no grave abuse of discretion can be ascribed to the DOJ in dismissing
petitioner’s complaint.
G.R. No. 170602
Re: I.S. No. 2003-1059 for
Syndicated Estafa
Section 5, Rule 110 of the 2000 Rules of Criminal Procedure, as amended,
provides that all criminal actions, commenced by either a complaint or an
information, shall be prosecuted under the direction and control of a public
prosecutor. This mandate is founded on the theory that a crime is a breach of
the security and peace of the people at large, an outrage against the very
sovereignty of the State. It follows that a representative of the State shall
direct and control the prosecution of the offense.13 This representative of the
State is the public prosecutor, whom this Court described in the old case
of Suarez v. Platon,14 as:
[T]he representative not of an ordinary party to a controversy, but of a
sovereignty whose obligation to govern impartially is as compelling as its
obligation to govern at all; and whose interest, therefore, in a criminal
prosecution is not that it shall win a case, but that justice shall be done. As
such, he is in a peculiar and very definite sense a servant of the law, the
twofold aim of which is that guilt shall not escape or innocence suffers.
Concomitant with his authority and power to control the prosecution of
criminal offenses, the public prosecutor is vested with the discretionary
power to determine whether a prima facie case exists or not.15 This is done
through a preliminary investigation designed to secure the respondent from
hasty, malicious and oppressive prosecution. A preliminary investigation is
essentially an inquiry to determine whether (a) a crime has been committed;
and (b) whether there is probable cause that the accused is guilty
thereof.16 In Pontejos v. Office of the Ombudsman,17probable cause is defined
as such facts and circumstances that would engender a well-founded belief
that a crime has been committed and that the respondent is probably guilty
thereof and should be held for trial. It is the public prosecutor who
determines during the preliminary investigation whether probable cause
exists. Thus, the decision whether or not to dismiss the criminal complaint
against the accused depends on the sound discretion of the prosecutor.
Given this latitude and authority granted by law to the investigating
prosecutor, the rule in this jurisdiction is that courts will not interfere with
the conduct of preliminary investigations or reinvestigations or in the
determination of what constitutes sufficient probable cause for the filing of
the corresponding information against an offender.18 Courts are not
empowered to substitute their own judgment for that of the executive
branch.19 Differently stated, as the matter of whether to prosecute or not is
purely discretionary on his part, courts cannot compel a public prosecutor to
file the corresponding information, upon a complaint, where he finds the
evidence before him insufficient to warrant the filing of an action in court. In
sum, the prosecutor’s findings on the existence of probable cause are not
subject to review by the courts, unless these are patently shown to have
been made with grave abuse of discretion.20
Grave abuse of discretion is such capricious and whimsical exercise of
judgment on the part of the public officer concerned which is equivalent to
an excess or lack of jurisdiction. The abuse of discretion must be as patent
and gross as to amount to an evasion of a positive duty or a virtual refusal to
perform a duty enjoined by law, or to act at all in contemplation of law, as
where the power is exercised in an arbitrary and despotic manner by reason
of passion or hostility.21
complainant’s evidence is ample and sufficient to show prima facie guilt of a
crime. Yet, on the other hand, he is likewise duty-bound to protect innocent
persons from groundless, false, or malicious prosecution.22
Hence, we hold that the Court of Appeals was correct in dismissing the
petition for review against private respondents and in concluding that the
DOJ did not act with grave abuse of discretion tantamount to lack or excess
of jurisdiction.
On petitioner’s complaint for violation of the Securities Regulation Code,
suffice it to state that, as aptly declared by the Court of Appeals, he should
have filed it with the SEC, not the DOJ. Again, there is no indication here that
in dismissing petitioner’s complaint, the DOJ acted capriciously or arbitrarily.
WHEREFORE, we DENY the petitions and AFFIRM the assailed Decisions of
the Court of Appeals in CA-G.R. SP No. 87328 and in CA-G.R. SP No. 85078.
Costs against petitioner.
SO ORDERED.

In determining whether the DOJ committed grave abuse of discretion, it is

expedient to know if the findings of factof herein public prosecutors were
reached in an arbitrary or despotic manner.

The Court of Appeals held that petitioner’s evidence is insufficient to establish

probable cause for syndicated estafa. There is no showing from the record
that private respondents herein did induce petitioner by false
representations to invest in the GTPMF securities. Nor did they act as a
syndicate to misappropriate his money for their own benefit. Rather, they
invested it in accordance with his written instructions. That he lost his
investment is not their fault since it was highly speculative.

Records show that public respondents examined petitioner’s evidence with

care, well aware of their duty to prevent material damage to his
constitutional right to liberty and fair play. In Suarez previously cited, this
Court made it clear that a public prosecutor’s duty is two-fold. On one hand,
he is bound by his oath of office to prosecute persons where the
VICENTE DACANAY vs YRASTORZA
G.R. No. 150664 September 3, 2009
VICENTE DACANAY, in his capacity as administrator of the Testate Estate of
TERESO D. FERNANDEZ,Petitioner,
vs.
HON. RAPHAEL YRASTORZA, SR., in his official capacity as Presiding Judge,
Regional Trial Court of Cebu, Branch 14, LUISSA ANNABELLA TORRANO
SAMACO, assisted by her husband RAUL SAMACO, ROBERTA I. KERSAW,
assisted by her husband BRYAN KERSAW and JOHNSON
MERCADER, Respondents.
RESOLUTION
CORONA, J.:
On July 14, 1992, petitioner Vicente Dacanay, as administrator of the testate
estate of Tereso D. Fernandez, filed in the Regional Trial Court (RTC) of Cebu
City a case for recovery of real property against respondent spouses Luissa
and Raul Samaco and Roberta and Bryan Kersaw.1 On December 22, 1992,
respondent spouses Samaco filed their answer with counterclaim.2
On May 12, 1993, petitioner amended his complaint to implead respondent
Johnson Mercader.3 On August 3, 1993, respondent Mercader filed his
answer with counterclaim.4 Respondent spouses Kersaw were declared in
default5 as they did not file an answer despite service of summons by
publication.6
On May 15, 1994, petitioner filed his second amended complaint7 which the
court granted. On March 30, 1994, respondent spouses Samaco filed their
answer with counterclaim,8 while respondent Mercader filed his on May 30,
1994.9
On December 12, 1995, the RTC dismissed10 petitioner’s complaint for lack of
merit. Petitioner was likewise ordered to pay ₱70,000 to respondent spouses
Samaco and respondent Mercader by way of attorney’s fees,11litigation
expenses12 and moral damages.13
Not satisfied, petitioner appealed to the Court of Appeals (CA).14 On October
27, 1999, the CA15 affirmed the RTCin toto.
Petitioner then filed in the Supreme Court a motion for extension of time to
file a petition for review on certiorari. His motion was denied in a minute
resolution16 because of procedural lapses17 on his part. Petitioner’s motion
for reconsideration met the same fate.18
Consequently, the CA19 and the Supreme Court20 entered judgment on their
rulings. Thus, the RTC decision dismissing petitioner’s complaint and holding
him personally liable for ₱70,000 to respondent spouses Samaco and
respondent Mercader became final and executory.
On July 12, 2001, respondent Mercader filed a motion for execution21 of the
RTC decision. Petitioner opposed22 the motion, contending that he should not
be made personally liable for the amount awarded by the RTC. The RTC
judgment should be considered as a claim against the estate of Tereso
Fernandez. Thus, the writ of execution should be referred to the court where
the estate of Tereso Fernandez was being settled.1avvphi1
On August 30, 2001, the RTC granted respondent Mercader’s motion for
execution.23 According to the RTC, there was no impediment to the execution
of its decision because it had already become final and executory. Moreover,
considering that the decision sought to be executed "(did) not involve money
claims,"24 the writ of execution could not be directed against the estate of
Tereso Fernandez.
Petitioner’s motion for reconsideration25 went unheeded.26
Refusing to give up, petitioner filed this petition for certiorari27 in this Court.
He reiterates his position that he should not be made personally liable to pay
the ₱70,000 awarded by the RTC in favor of respondent spouses Samaco and
respondent Mercader.
At the outset, we note that petitioner filed his petition for certiorari directly
in this Court. This is a violation of the doctrine of hierarchy of courts. He
should have filed his petition in the CA before seeking relief from this
Court.28Thus, this petition can be dismissed outright for being procedurally
infirm.
Moreover, the petition lacks merit.
The RTC decision sought to be executed has long attained finality. Hence,
petitioner can no longer question it.

Once a judgment attains finality, it becomes immutable and unalterable. A

final and executory judgment may no longer be modified in any respect, even
if the modification is meant to correct what is perceived to be an erroneous
conclusion of fact or law and regardless of whether the modification is
attempted to be made by the court rendering it or by the highest court of the
land.29 This is the doctrine of finality of judgment. It is grounded on
fundamental considerations of public policy and sound practice that, at the
risk of occasional errors, the judgments or orders of courts must become final
at some definite time fixed by law.30 Otherwise, there will be no end to
litigations, thus negating the main role of courts of justice to assist in the
enforcement of the rule of law and the maintenance of peace and order by
settling justiciable controversies with finality.31

The book of entries of judgment of the CA states that its decision in CA-G.R.
CV No. 52731 on October 27, 1999 (which affirmed the RTC decision
dismissing petitioner’s complaint and awarding ₱70,000 to respondent
spouses Samaco and respondent Mercader) became final on June 22,
2000.32 On the other hand, the book of entries of judgment of the Supreme
Court states that its resolution in G.R. No. 143713 on August 9, 2000 (which
denied petitioner’s motion for extension of time to file petition for review on
certiorari) became final on February 14, 2001.33Thus, respondent Mercader
properly moved for the execution of the RTC decision on July 12, 2001. For
the same reason, there was no legal impediment to the RTC’s issuance of a
writ of execution of its final and executory decision on August 30, 2001.

WHEREFORE, the petition is hereby DISMISSED.

Costs against petitioner.

SO ORDERED.
ERNESTO MORALES vs COURT OF APPEALS
G.R. No. 126623 December 12, 1997
ERNESTO MORALES y DELA CRUZ, petitioner,
vs.
COURT OF APPEALS, HON. ALFREDO J. GUSTILO, as Presiding Judge of RTC,
Pasay City, Branch 116 and PEOPLE OF THE PHILIPPINES, respondents.
DAVIDE, JR., J.:
The key issue in this case is whether, in light of R.A. No. 7659 1 as interpreted
in People v. Simon, 2 and R.A. No. 7691, 3 Regional Trial Courts have
jurisdiction over violations of R.A. No. 6425, otherwise known as the
Dangerous Drugs Act of 1972, as amended, when the imposable penalty is
not more than six (6) years.
The petitioner was charged with the violation of Section 15 in relation to
Section 20 of R.A. No. 6425, as amended by R.A. No. 7659, in an information
filed before the Regional Trial Court (RTC) of Pasay City on 13 March 1996.
The accusatory portion of the said information reads as follows:
That on or about the 11th day of March 1996, in Pasay, Metro Manila,
Philippines, and within the jurisdiction of this Honorable Court, the above-
named accused, Ernesto Morales y De la Cruz, without authority of law, did
then and there wilfully, unlawfully and feloniously sell and deliver to another
0.4587 grams of Metamphetamine Hydrochloride (shabu), a regulated drug.
CONTRARY TO LAW. 4
The case was docketed as Criminal Case No. 96-8443 and raffled to Branch
116 of the said court.
Upon his arraignment, the petitioner entered a plea of not
guilty. 5 Subsequently, on 30 April 1996, the petitioner filed a Motion to
Dismiss6 on the ground that the RTC had no jurisdiction to try the case
considering that pursuant to Section 20 of R.A. No. 7659 as construed in
People v. Simon, 7 the penalty imposable for the offense charged should not
exceed prision correccional or six (6) years and under R.A. No. 7691 it is the
Metropolitan Trial Court which has jurisdiction over the case.
In its Order 8 of 9 May 1996, the RTC denied the motion. It held:
It is true that under the aforementioned provision, cases punishable with
penalties of not more than six (6) years are within the exclusive jurisdiction
of the Metropolitan Trial Courts. However, the exceptions are "cases falling
within the exclusive original jurisdiction of the Regional Trial Court. . ." Under
Section 39 of Republic Act No. 6425, the Dangerous Drugs Act of 1972, the
Court of First Instance now the Regional Trial Court and the Juvenile and
Domestic Relations Court, which no longer exist, "shall have concurrent
original jurisdiction over all cases involving offenses punishable under this
Act." It is therefore clear that this case, which is a violation of Republic Act
No. 6425, although punishable by a penalty of less than six (6) years, falls
within the jurisdiction of the Regional Trial Court.
His motion for the reconsideration 9 of the order having been denied, 10 the
petitioner filed with respondent Court of Appeals a petition for certiorari
under Rule 65 of the Rules of Court. 11 The case was docketed as CA-G.R. SP
No. 40670.
In its Comment 12 in CA-G.R. SP No. 40670, the Office of the Solicitor General
(OSG) agreed with the petitioner that the RTC had no jurisdiction to try the
criminal case. It, however, asserted that the Court of Appeals had no
jurisdiction over the special civil action for certiorari, as the same involved
only the question of jurisdiction of an inferior court, hence, cognizable by the
Supreme Court alone pursuant to Section 9 of Batas Pambansa Bilang 129, in
connection with Section 5(2)(c), Article VIII of the 1987 Constitution and
Section 17 of Republic Act No. 5440. The OSG then recommended that the
case be elevated to the Supreme Court for disposition, or that the Court of
Appeals grant the petition and set aside the challenged order of the RTC
should it rule that it had jurisdiction over petition.
In its Resolution 13 of 8 August 1996, the Court of Appeals dismissed the
petition for certiorari for lack of jurisdiction over the action. Explaining its
ruling, it declared:
In his Comment to the petition, the Solicitor General, inter alia, contended
that this Court has no jurisdiction over the petition for it properly falls within
the exclusive jurisdiction of the Supreme Court.
We fully agree.
Section 5, Article VIII of the Constitution provides:
Sec. 5. The Supreme Court shall have the following powers; . . .
(2) Review, revise, reverse, modify, or affirm on appeal or certiorari as the law
or the Rules of Court may provide, final judgments and orders of lower courts
in: . . .
(c) All cases in which the jurisdiction of any lower court is in issue. . . .
Section 17 of R.A. 5446 otherwise known as the Judiciary Act of 1948 says
that the Supreme Court has exclusive jurisdiction to review, revise, reverse,
modify or affirm on certiorari final judgments and decrees of inferior courts
in all cases in which the jurisdiction of any inferior court is on issue. It is
hereby stressed that the issue in the petition at bench is purely a question of
jurisdiction which is resolvable on the basis of the records.
After the denial 14 on 13 September 1996 of his motion for
reconsideration, 15 the petitioner came to this Court via this petition for
review wider Rule 45 of the Rules of Court raising the following issues:
I. WHETHER OR NOT THE COURT OF APPEALS HAS JURISDICTION TO
ENTERTAIN A PETITION FOR CERTIORARI UNDER RULE 65 OF THE RULES OF
COURT WHERE THE ISSUE IS THE JURISDICTION OF RESPONDENT RTC JUDGE
TO TRY THE ALLEGED VIOLATION OF R.A. 6425; AND.
II. WHETHER OR NOT RESPONDENT RTC JUDGE/COURT HAS JURISDICTION TO
TRY ALLEGED VIOLATION OF SECTION 15, IN RELATION TO SECTION 20, ART.
III OF R.A. 6425, AS AMENDED, INVOLVING ONLY 0.4587 GRAMS OF SHABU.
As to the first, the petitioner insists that respondent Court of Appeals has
concurrent original jurisdiction with this Court over petitions
for certiorari under Rule 65 of the Rules of Court involving decisions or orders
of Regional Trial Courts pursuant to Section 9(1) 16 of B.P. Blg. 129 in relation
to Section 5(1) 17 of Article VIII of the Constitution. He cites De Jesus v. Court
of Appeals 18 wherein this Court held that the original jurisdiction of the Court
of Appeals under Section 9 of B.P. Blg. 129 is concurrent with that of the
Supreme Court, and with that of Regional Trial Courts for writs enforceable
within their respective regions. The petitioner further maintains that Section
5(2)(c) of Article VIII of the Constitution and Section 17 of the Judiciary Act of
1948, as amended by R.A. No. 5440, relied upon by the Court Appeals are not
applicable inasmuch as they relate to the appellate jurisdiction of this Court
and not to an original action under Rule 65 of the Rules of Court.
As regards the second issue, the petitioner asserts that the RTC below has no
jurisdiction over the offense charged considering that only 0.4587 grams of
methamphetamine hydrochloride (shabu) is involved. In light of Section 20 of
R.A. No. 7659, 19 as interpreted in People v. Simon 20 and further explained
in People v. Santos 21 and Ordoñez v. Vinarao, 22 the imposable penalty
therefor would not exceed prision correccional, whose maximum period is six
(6) years. Hence, under R.A. No. 7691 exclusive original jurisdiction therein is
vested in Metropolitan Trial Courts, Municipal Trial Courts, and Municipal
Circuit Trial Courts.
In its Comment on the petition, the OSG submits that all violations of R.A. No.
6425, as further amended by R.A. No. 7659, which are punishable by
imprisonment not exceeding six years now fall under the jurisdiction of the
Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial
Courts. Since on the basis of the quantity of the regulated drug involved in
this case the penalty imposable does not exceed prision correccional, it is the
Metropolitan Trial Court of Pasay City which has jurisdiction over the case. It
disagreed with the opinion of the RTC that violations of R.A. No. 6425, as
amended, still fall within the jurisdiction of the RTC because the latter's
jurisdiction thereon mandated by Section 39 of R.A. No. 6425 has been
preserved by the exception provided for in the opening sentence of Section
32 of B.P. Blg. 129, as amended by Section 2 of R.A. No. 7691. It submits that
Section 39 of R.A. No. 6425 was repealed by Section 6 of R.A. No. 7691, which
provides:
Sec. 6. All laws, decrees, and orders inconsistent with the provisions of this
Act shall be considered amended or modified accordingly.
In support of its submission, it cites this Court's resolution in Gulhoran
v. Escaño, Jr. 23
The OSG further contends that respondent Court of Appeals was correct in for certiorari where a lower court has acted without or in excess of
dismissing the petition for certiorari for lack of jurisdiction in view of Section jurisdiction or with grave abuse of discretion in denying a motion to dismiss
9(3) of B.P. Blg. 129; Sec. 5(2)(c) of Article VIII of the Constitution; and Section or to quash. 25 The petitioner believed that the RTC below did so; hence, the
17 of the Judiciary Act of 1948, as amended by R.A. No. 5440. Nevertheless, special civil action for certiorari before the Court of Appeals appeared to be
it prays that this petition "be given due course and that Criminal Case No. 96- the proper remedy.
8443 be remanded to the proper metropolitan trial court for further
The next most logical step then is for us to simply set aside the challenged
proceedings."
resolutions and to direct the Court of Appeals to resolve on the merits the
We resolved to give due course to this petition. petition in CA-G.R. SP No. 40670. But, that would further delay the case.
Considering the special importance of the lone legal issue raised, which can
The Court of Appeals erred in holding that it had no jurisdiction over
be resolved on the basis of the pleadings heretofore filed, and the fact that
petitioner's special civil action for certiorariunder Rule 65 of the Rules of
this Court has concurrent jurisdiction over petitioner's special action in CA-
Court.
G.R. SP No. 40670, we deem it more practical and in the greater interest of
Under Section 9(1) of B.P. Blg. 129, the Court of Appeals has concurrent justice not to remand the case to the Court of Appeals but, instead, to take
original jurisdiction with the Supreme Court pursuant to Section 5(1) of direct cognizance thereof and resolve it once and for all. 26
Article VIII of the Constitution and Section 17(1) of the Judiciary Act of 1948,
We now address the second issue.
and with the Regional Trial Court pursuant to Section 21(7) of B.P. Blg. 129 to
issue writs of certiorari, mandamus, prohibition, habeas corpus, and quo Applying by analogy the ruling in People v. Simon, 27 People v. De
warranto. 24 These are original actions, not modes of appeals. Lara, 28 People v. Santos, 29 and Ordoñez v. Vinarao, 30 the imposable penalty
in this case which involves 0.4587grams of shabu should not exceed prision
Since what the petitioner filed in CA-G.R. SP No. 40670 was a special civil
correccional. We say by analogy because these cases involved marijuana, not
action for certiorari under Rule 65, the original jurisdiction of the Court of
methamphetamine hydrochloride (shabu). In Section 20 of R.A. No. 6425, as
Appeals thereon is beyond doubt.
amended by Section 17 of R.A. No. 7659, the maximum quantities of
This error of the Court of Appeals was due to its misapplication of Section marijuana and methamphetamine hydrochloride for purposes of imposing
5(2)(c) of Article VIII of the Constitution and of that portion of Section 17 of the maximum penalties are not the same. For the latter, if the quantity
the Judiciary Act of 1948 vesting upon the Supreme Court exclusive involved is 200 grams or more, the penalty of reclusion perpetua to death and
jurisdiction to review, revise, reverse, modify, or affirm on certiorari as the a fine ranging from P500,000 to P10 million shall be imposed. Accordingly, if
law or rules of court may provide, final judgments and decrees of inferior the quantity involved is below 200 grams, the imposable penalties should be
courts in all cases in which the jurisdiction of any inferior court is in issue. It as follows:
forgot that this constitutional and statutory provisions pertain to
a) reclusion temporal — if the quantity involved is
the appellate — not original — jurisdiction of the Supreme Court, as correctly
from 134 to 199 grams;
maintained by the petitioner. An appellate jurisdiction refers to a process
which is but a continuation of the original suit, not a commencement of a new b) prision mayor — if the quantity involved is
action, such as that of a special civil action for certiorari. The general rule is from 66 to 133 grams;
that a denial of a motion to dismiss or to quash in criminal cases is
c) prision correccional — if the quantity involved is 65
interlocutory and cannot be the subject of an appeal or of a special civil action
grams or below.
for certiorari. Nevertheless, this Court has allowed a special civil action
Clearly, the penalty which may be imposed for the offense charged in Criminal
Case No. 96-8443 would at most be only prision correccional whose duration
is from six (6) months and one (1) day to six (6) years. Does it follow then that,
as the petitioner insists, the RTC has no jurisdiction thereon in view of the
amendment of Section 32 of B.P. Blg. 129 by R.A. No. 7691, which vested
upon Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit
Trial Courts' exclusive original jurisdiction over all offenses punishable with
imprisonment not exceeding six (6) years irrespective of the amount of fine
and regardless of other imposable accessory or other penalties? This section
32 as thus amended now reads:
Sec. 32. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and
Municipal Circuit Trial Courts in Criminal Cases. — Except in cases falling
within the exclusive original jurisdiction of Regional Trial Court and of the
Sandiganbayan, the Metropolitan Trial Courts, Municipal Trial Courts, and
Municipal Circuit Trial Courts shall exercise:
(2) Exclusive original jurisdiction over all offenses punishable with
imprisonment not exceeding six (6) years irrespective of the amount of fine,
and regardless of other imposable accessory or other penalties, including the
civil liability arising from such offender or predicated thereon, irrespective of
kind, nature, value or amount thereof: Provided, however, That in offenses
involving damage to property through criminal negligence, they shall have
exclusive original jurisdiction thereof.
The exception in the opening sentence is of special significance which we
cannot disregard. By virtue thereof, the exclusive original jurisdiction of the
Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial
Courts in criminal cases does not cover those cases which by provision of law
fall within the exclusive original jurisdiction of Regional Trial Courts and of the
Sandiganbayan regardless of the prescribed penalty. Otherwise put, even if
such cases are punishable by imprisonment not exceeding six years
(i.e., prision correccional, arresto mayor, or arresto menor), jurisdiction,
thereon is retained by the Regional Trial Courts or the Sandiganbayan, as the
case may be.
The aforementioned exception refers not only to Section 20 of B.P. Blg. 129
providing for the jurisdiction of Regional Trial Courts in criminal cases,31 but
also to other laws which specifically lodge in Regional Trial Courts exclusive
jurisdiction over specific criminal cases, e.g., (a) Article 360 of the Revised
Penal Code, as amended by R.A. Nos. 1289 and 4363 on written defamation
or libel; (b) Decree on intellectual Property (P.D. No. 49, as amended), which
vests upon Courts of First Instance exclusive jurisdiction over the cases
therein mentioned regardless of the imposable penalty; and (c) more
appropriately for the case at bar, Section 39 of R.A. No. 6425, as amended by
P.D. No. 44, which vests on Courts of First Instance, Circuit Criminal Courts,
and the Juvenile and Domestic Relations Courts concurrent exclusive original
jurisdiction over all cases involving violations of said Act.
Jurisdiction is, of course, conferred by the Constitution or by Congress.
Outside the cases enumerated in Section 5(2) of Article VIII of the
Constitution, Congress has the plenary power to define, prescribe and
apportion the jurisdiction of various courts. 32 Accordingly, Congress may, by
law, provide that a certain class of cases should be exclusively heard and
determined by one court. Such would be a special law and must be construed
as an exception to the general law on jurisdiction of courts, namely, the
Judiciary Act of 1948 as amended, or the Judiciary Reorganization Act of 1980.
In short, the special law prevails over the general law.
R.A. No. 7691 can by no means be considered another special law on
jurisdiction but merely an amendatory law intended to amend specific
sections of the Judiciary Reorganization Act of 1980. Hence, it does not have
the effect of repealing or modifying Article 360 of the Revised Penal Code;
Section 57 of the Decree on Intellectual Property; and Section 39 of R.A. No.
6425, as amended by P.D. No. 44. In a manner of speaking, R.A. No. 7691 was
absorbed by the mother law, the Judiciary Reorganization Act of 1980.
That Congress indeed did not intend to repeal these special laws vesting
exclusive jurisdiction in the Regional Trial Courts over certain cases is clearly
evident from the exception provided for in the opening sentence of Section
32 of B.P. Blg. 129, as amended by R.A. No. 7691. These special laws are not,
therefore, covered by the repealing clause (Section 6) of R.A. No. 7691.
Neither can it be successfully argued that Section 39 of R.A. No. 6425, as
amended by P.D. No. 44, is no longer operative because Section 44 of B.P.
Blg. 129 abolished the Courts of First Instance, Circuit Criminal Courts, and
Juvenile and Domestic Relations Courts. While, indeed, Section 44 provides
that these courts were to be "deemed automatically abolished" upon the
declaration by the President that the reorganization provided in B.P. Blg. 129
had been completed, this Court should not lose sight of the fact that the
Regional Trial Courts merely replaced the Courts of First Instance as clearly
borne out by the last two sentences of Section 44, to wit:
Upon such declaration, the said courts shall be deemed automatically
abolished and the incumbents thereof shall cease to hold office. The cases
pending in the old Courts shall be transferred to the appropriate Courts
constituted pursuant to this Act, together with the pertinent functions,
records, equipment, property and necessary personnel.
In short, there was a change in name only — from Courts of First Instance
to Regional Trial Courts. The Interim Rules and Guidelines Relative to the
Implementation of B.P. Blg. 129 promulgated by this Court on 11 January
1983 also provides that the reference to the courts of first instance in the
Rules of Court shall be deemed changed to the regional trial courts.
Consequently, it is not accurate to state that the "abolition" of the Courts of
First Instance carried with it the abolition of their exclusive original
jurisdiction in drug cases vested by Section 39 of R.A. No. 6425, as amended
by P. D. No. 44. If that were so, then so must it be with respect to Article 360
of the Revised Penal Code and Section 57 of the Decree on Intellectual
Property. On the contrary, in the resolution of 19 June 1996 in Caro v. Court
of Appeals 33 and in the resolution of 26 February 1997 in Villalon
v. Baldado, 34 this Court expressly ruled that Regional Trial Courts have the
exclusive original jurisdiction over libel cases pursuant to Article 360 of the
Revised Penal Code. In Administrative Order No. 104-96 this Court mandates
that:
LIBEL CASES SHALL BE TRIED BY THE REGIONAL TRIAL COURTS HAVING
JURISDICTION OVER THEM TO THE EXCLUSION OF THE METROPOLITAN TRIAL
COURTS, MUNICIPAL TRIAL COURTS IN CITIES, MUNICIPAL TRIAL COURTS
AND MUNICIPAL CIRCUIT TRIAL COURT.
It likewise provides that jurisdiction over cases involving violations of
intellectual property rights are "confined exclusively to the Regional Trial
Courts."
The same Administrative Order recognizes that violations of RA. No. 6426, as
amended, regardless of the quantity involved, are to be tried and decided by
the Regional Trial Courts therein designated as special courts. As to the latter,
this Court in its Resolution of 15 April 1997 in A.M. No. 96-11-421-
RTC, 35 resolved as follows:
. . . to AMEND Administrative Order No. 104-96, dated October 21, 1996, with
respect only to the violation of the Dangerous Drugs Act of 1972, as amended,
if the imposable penalty is reclusion perpetua to death. Thus, if the imposable
penalty is below reclusion perpetua the drug related cases will be raffled
among the regular courts as ordinary criminal cases.
Thereafter, in Circular No. 31-97 dated 15 May 1997, the Court Administrator
directed Judges of "special courts for Kidnapping, Robbery, Carnapping,
Dangerous Drugs and other Heinous Crimes" to comply with the aforesaid
amendment to Administrative Order No. 104-96. To avoid any further
confusion or misunderstanding, we hereby declare that the term "regular
courts" found in the above amendment refers exclusively to the Regional Trial
Courts and was not intended to include Metropolitan Trial Courts, Municipal
Trial Courts and Municipal Circuit Trial Courts.
In view of the foregoing, the Court hereby abandons the resolution
in Gulhoran v. Escaño 36 where, through the Second Division, we ruled, in
effect, that Section 39 of R.A. No. 6425, as amended, was repealed by virtue
of the repealing clause of R.A. No. 7691.
The RTC then did not commit any error in denying petitioner's motion to
dismiss Civil Case No. 96-8443.
WHEREFORE, the petition is GRANTED, but only insofar as the issue of
jurisdiction of respondent Court of Appeals in CA-G.R. SP No. 40670 is
concerned. The Resolutions of 8 August and 13 September 1996 of the Court
of Appeals are SET ASIDE, while the challenged orders in Criminal Case No.
96-8443 of the Regional Trial Court of Pasay City, Branch 116, are AFFIRMED.
The trial court is hereby DIRECTED to proceed with the trial of Criminal Case
No. 96-8443 with all reasonable dispatch.
No pronouncements as to costs.
SO ORDERED.
FELIXBERTO CUBERO ET AL vs LAGUNA WEST MULTI-PURPOSE
COOPERATIVE
G.R. No. 166833 December 5, 2006
FELIXBERTO CUBERO, NERISSA C. NATIVIDAD, JUDY U. LIM, MANUEL R.
LAHOZ, SOTERO DIOLA and BELLE CORPORATION, petitioners,
vs.
LAGUNA WEST MULTI-PURPOSE COOPERATIVE, INC., and ATTY. ABRAHAM
BERMUDEZ, in his capacity as Registrar of Deeds, Tanauan City,
Batangas, respondents.
DECISION
CARPIO MORALES, J.:
The present petition raises the issue of jurisdiction over the subject matter.
Individual petitioners Felixberto Cubero, Nerrisa1 C. Natividad, Judy U. Lim,
Manuel R. Lahoz and Sotero Diola are the registered owners of various parcels
of land covered by twelve (12) Transfer Certificates of Title (TCTs).2 The
properties cover a total land area of about 78,178 square meters located in
Barangay Suplang, Tanauan, Batangas.
In August 2003, each of the individual petitioners entered into a Joint Venture
Development Agreement with co-petitioner Belle Corporation to develop the
properties as part of an agricultural farm lot subdivision project known as
"Plantation Hills at Tagaytay Greenlands Phase I" (the Project) for eventual
sale to the public.3
With the development of the Project in full swing in mid-2004, respondent
Laguna West Multi-Purpose Cooperative, Inc. (Laguna West Cooperative)
filed 9 ex-parte petitions4 with the Regional Trial Court (RTC) of Tanauan City,
for inscription of an adverse claim, the annotation of which the Registrar of
Deeds allegedly failed to carry over to the TCTs of individual petitioners under
the Property Registration Decree5.
In its petitions before the RTC, respondent Laguna West Cooperative claimed
that as early as April 1996 it entered into separate Joint Venture Agreements
(JVAs) with the herein individual petitioners' predecessors-in-interest
Zacarias P. Narvaez, Filizardo6 N. Contreras, Eladio Contreras, Anacleto P.
Narvaez, Victor P. Ortilla, Rafael Maranan, Felipe Maranan, Elino B.
Mangubat, Joaquin N. Olaes and Salvador Alberto;7 and that it registered the
JVAs in August 2000 on the previous owners' titles by way of an Adverse Claim
under Entry No. 199352 and/or 168016.
Laguna West Cooperative added that the petitions were filed to rectify the
omission or error and to protect its vested, subsisting and valid rights under
the JVAs.
Accompanying the petitions were Notices of Lis Pendens8 addressed to the
Register of Deeds, Tanauan, Batangas.9
Getting wind of the petitions filed by Laguna West Cooperative, petitioners
also filed a Complaint10 with the RTC of Tanauan, for "Annulment of Joint
Venture Agreements with prayer for the issuance of a TRO and/or writs of
Preliminary Injunction and Preliminary Mandatory Injunction and for
Damages" against herein respondents Laguna West Cooperative and Atty.
Abraham Bermudez11 in the latter's capacity as Registrar of Deeds of
Tanauan.
In their Complaint, petitioners asserted that the April 1996 JVAs between
Laguna West Cooperative and individual petitioners' predecessors-in-interest
are void ab initio since they were executed within the 10-year prohibitory
period under Republic Act No. 6657 (Comprehensive Agrarian Reform Law of
1988),12 the titles covering the properties having emanated from
emancipation patents granted in November 1988 pursuant to Presidential
Decree No. 27.
Petitioners alleged too in their complaint that the JVAs fall under
management contracts prohibited under Republic Act No. 6657.
Invoking Article 140913 of the Civil Code, petitioners urged the RTC to declare
the JVAs inexistent and void for being contrary to law and public policy.
By Order of September 15, 2004, the RTC dismissed petitioners' complaint,
finding
. . . that [as] the JVAs cover or involve land grants under the Presidential
Decree No. 27 and allied agrarian reform laws, the Department of Agrarian
Reform, through its adjudication board (DARAB), has primary jurisdiction to
determine the validity or invalidity thereof.14
For lack of merit, the RTC denied petitioners' motion for reconsideration,
hence, the present petition for review on certiorari which raises a pure
question of law.
The petition fails.
It is axiomatic that what determines the nature of an action, as well as which
court has jurisdiction over it, are the allegations in the complaint and the
character of the relief sought.15 In the determination of jurisdiction, the
status or relationship of the parties, as well as the nature of the question that
is the subject of their controversy, is also considered.16
The Department of Agrarian Reform (DAR) is vested with primary jurisdiction
to determine and adjudicate agrarian reform matters, with exclusive original
jurisdiction over all matters involving the implementation of agrarian reform
except those falling under the exclusive jurisdiction of the Department of
Agriculture and the Department of Environment and Natural
Resources.17 Original jurisdiction means jurisdiction to take cognizance of a
cause at its inception, try it and pass judgment upon the law and facts, while
exclusive jurisdiction precludes the idea of co-existence and refers to
jurisdiction possessed to the exclusion of others.18
The DARAB has been created to assume the adjudicative powers and
functions of the DAR.19 Thus, the DARAB has been vested with jurisdiction to
try and decide all agrarian disputes, cases, controversies, and matters or
incidents involving the implementation of the Comprehensive Agrarian
Reform Program (CARP).20 Its jurisdiction encompasses cases involving the
"rights and obligations of persons, whether natural or juridical, engaged in
the management, cultivation and use of all agricultural lands" covered by
Republic Act No. 6657 and other agrarian laws.21
The RTC amplified its dismissal of petitioners' complaint in this wise:
There is no question that the instant case does not involve agrarian dispute
and that the parties have no tenurial relationship. The Court dismissed the
complaint not because the subject of the questioned JVAs is an agricultural
land as erroneously assumed by the plaintiffs. The complaint was dismissed
because it involves controversy or issue in the implementation of R.A. 6657 –
that is – whether or not the agricultural land beneficiaries has reneged its (sic)
obligation by entering in the joint venture agreements and whether the terms
thereof are violative of Sections 27 and 73 of the said Act including the
restrictions annotated on the emancipation patents
22
certificates[.] (Underscoring supplied)
The finding of the RTC that petitioners' complaint does not involve an
agrarian dispute is a narrow and restrictive view of the nature of an agrarian
dispute. In the recent case of Islanders CARP-Farmers Beneficiaries Multi-
Purpose Cooperative Development, Inc. v. Lapanday Agricultural and
Development Corp.,23 this Court elucidated on the scope of an agrarian
dispute, viz:
The Department of Agrarian Reform Adjudication Board (DARAB) has
jurisdiction to determine and adjudicate all agrarian disputes involving the
implementation of the Comprehensive Agrarian Reform Law (CARL). Included
in the definition of agrarian disputes are those arising from other tenurial
arrangements beyond the traditional landowner-tenant or lessor-lessee
relationship. Expressly, these arrangements are recognized by Republic Act
No. 6657 as essential parts of agrarian reform. Thus, the DARAB has
jurisdiction over disputes arising from the instant Joint Production Agreement
entered into by the present parties.24 (Emphasis and underscoring supplied).
In that case, the petitioner filed with the RTC a complaint for declaration of
nullity of a Joint Production Agreement. Upon motion, the case was dismissed
for lack of jurisdiction. The Court of Appeals affirmed the dismissal. The
petitioner elevated the matter to this Court, contending that there being no
tenancy or leasehold relationship between the parties, the case does not
constitute an agrarian dispute cognizable by the DARAB.
In denying the petition in Islanders, this Court held that while the relationship
between the parties was not one of tenancy or agricultural leasehold, the
controversy nonetheless fell within the sphere of agrarian disputes, citing,
among other authorities, Department of Agrarian Reform v. Cuenca,25 which
held:

All controversies on the implementation of the Comprehensive Agrarian

Reform Program (CARP) fall under the jurisdiction of the Department of
Agrarian Reform (DAR), even though they raise questions that are also legal
or constitutional in nature. All doubts should be resolved in favor of the DAR,
since the law has granted it special and original authority to hear and
adjudicate agrarian matters.26

The JVAs subject of the petition for annulment of petitioners precisely involve
the development and utilization of the subject agricultural lands. As
successors-in-interest of the beneficiaries of the agricultural lands, individual
petitioners seek to nullify the JVAs. Since the controversy involves the rights
and obligations of persons engaged in the management, cultivation and use
of an agricultural land covered by CARP, the case falls squarely within the
jurisdictional ambit of the DAR.27

It bears emphasis that a resolution of the instant case principally entails a

determination of the alleged commission of prohibited acts under Sections
27 and 7328 of Republic Act No. 6645. In cases where allegations of violation
or circumvention of land reform laws have been raised, this Court has
declined to address them, it stating that petitioners must first plead their case
with the DARAB.29 There is no reason why this Court should now hold
otherwise.

WHEREFORE, the petition is hereby DENIED.

SO ORDERED.
DAR vs CUENCA
G.R. No. 154112 September 23, 2004
DEPARTMENT OF AGRARIAN REFORM, petitioner,
vs.
ROBERTO J. CUENCA and Hon. ALFONSO B. COMBONG JR., in His Capacity
as the Presiding Judge of the Regional Trial Court, Branch 63, La Carlota
City, respondents.
DECISION
PANGANIBAN, J.:
All controversies on the implementation of the Comprehensive Agrarian
Reform Program (CARP) fall under the jurisdiction of the Department of
Agrarian Reform (DAR), even though they raise questions that are also legal
or constitutional in nature. All doubts should be resolved in favor of the DAR,
since the law has granted it special and original authority to hear and
adjudicate agrarian matters.
The Case
Before us is a Petition for Review1 under Rule 45 of the Rules of Court,
assailing the March 15, 2002 Decision2 and the June 18, 2002 Resolution3 of
the Court of Appeals in CA-GR SP No. 58536. In the challenged Decision, the
CA disposed as follows:
"As previously stated, the principal issue raised in the court below involves a
pure question of law. Thus, it being clear that the court a quo has jurisdiction
over the nature and subject matter of the case below, it did not commit grave
abuse of discretion when it issued the assailed order denying petitioner’s
motion to dismiss and granting private respondent’s application for the
issuance of a writ of preliminary injunction.
"WHEREFORE, premises considered, the petition is denied due course and is
accordingly DISMISSED."4
The assailed Resolution, on the other hand, denied petitioner’s Motion for
Reconsideration.
The Facts
The CA narrated the facts as follows:
"Private respondent Roberto J. Cuenca is the registered owner of a parcel of
land designated as Lot No. 816-A and covered by TCT No. 1084, containing an
area of 81.6117 hectares, situated in Brgy. Haguimit, La Carlota City and
devoted principally to the planting of sugar cane.
"On 21 September 1999, Noe Fortunado, Municipal Agrarian Reform Officer
(MARO) of La Carlota City issued and sent a NOTICE OF COVERAGE to private
respondent Cuenca placing the above-described landholding under the
compulsory coverage of R.A. 6657, otherwise known as the Comprehensive
Agrarian Reform Program (CARP). The NOTICE OF COVERAGE also stated that
the Land Bank of the Philippines (LBP) will determine the value of the subject
land pursuant to Executive Order No. 405 dated 14 June 1990.
"On 29 September 1999, private respondent Cuenca filed with the Regional
Trial Court, Branch 63, La Carlota City, a complaint against Noe Fortunado and
Land Bank of the Philippines for ‘Annulment of Notice of Coverage and
Declaration of Unconstitutionality of E.O. No. 405, Series of 1990, With
Preliminary Injunction and Restraining Order.’ The case was docketed as Civil
Case No. 713.
"In his complaint, Cuenca alleged, inter alia, that the implementation of CARP
in his landholding is no longer with authority of law considering that, if at all,
the implementation should have commenced and should have been
completed between June 1988 to June 1992, as provided in the
Comprehensive Agrarian Reform Law (CARL); that the placing of the subject
landholding under CARP is without the imprimatur of the Presidential
Agrarian Reform Council (PARC) and the Provincial Agrarian Reform
Coordinating Committee (PARCOM) as required by R.A. 7905; that Executive
Order No. 405 dated 14 June 1990 amends, modifies and/or repeals CARL
and, therefore, it is unconstitutional considering that on 14 June 1990, then
President Corazon Aquino no longer had law-making powers; that the NOTICE
OF COVERAGE is a gross violation of PD 399 dated 28 February 1974.
"Private respondent Cuenca prayed that the Notice of Coverage be declared
null and void ab initio and Executive Order No. 405 dated 14 June 1990 be
declared unconstitutional.
"On 05 October 1999, MARO Noe Fortunado filed a motion to dismiss the
complaint on the ground that the court a quo has no jurisdiction over the
nature and subject matter of the action, pursuant to R.A. 6657.
"On 12 January 2000, the respondent Judge issued a Temporary Restraining
Order directing MARO and LBP to cease and desist from implementing the
Notice of Coverage. In the same order, the respondent Judge set the hearing
on the application for the issuance of a writ of preliminary injunction on
January 17 and 18, 2000.
"On 14 January 2000, MARO Fortunado filed a Motion for Reconsideration of
the order granting the TRO contending inter alia that the DAR, through the
MARO, in the course of implementing the Notice of Coverage under CARP
cannot be enjoined through a Temporary Restraining Order in the light of
Sections 55 and 68 of R.A. 6657.
"In an order dated 16 February 2000, the respondent Judge denied MARO
Noe Fortunado’s motion to dismiss and issued a Writ of Preliminary
Injunction directing Fortunado and all persons acting in his behalf to cease
and desist from implementing the Notice of Coverage, and the LBP from
proceeding with the determination of the value of the subject land.
"The Department of Agrarian Reform (DAR) [thereafter filed before the CA] a
petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure,
assailing the writ of preliminary injunction issued by respondent Judge on the
ground of grave abuse of discretion amounting to lack of jurisdiction.
"It is the submission of the petitioner that the assailed order is ‘in direct
defiance… of Republic Act 6657, particularly Section 55 and 68’ thereof, which
read:
‘SECTION 55. NO RESTRAINING ORDERS OR PRELIMINARY INJUNCTIONS – No
court in the Philippines shall have jurisdiction to issue any restraining order
or writ of preliminary injunction against the PARC or any of its duly authorized
or designated agencies in any case, dispute or controversy arising from,
necessary to, or in connection with the application, implementation, or
enforcement or interpretation of this Act and other pertinent laws on
agrarian reform.’
‘SECTION 68 – IMMUNITY OF GOVERNMENT AGENCIES FROM COURT’S
INTERFERENCE – No injunction, Restraining Order, prohibition or mandamus
shall be issued by the lower court against the Department of Agrarian Reform
(DAR), the Department of Agriculture (DA), the Department of Environment
and Natural Resources (DENR), and the Department of Justice (DOJ) in the
implementation of their program.’
"Petitioner contends that by virtue of the above provisions, all lower courts,
such as the court presided over by respondent Judge, ‘are barred if not
prohibited by law to issue orders of injunctions against the Department of
Agrarian Reform in the full implementation of the Notice of Coverage which
is the initial step of acquiring lands under R.A. 6657.’
"Petitioner also contends that the nature and subject matter of the case
below is purely agrarian in character over which the court a quo has no
jurisdiction and that therefore, it had no authority to issue the assailed
injunction order."5
Ruling of the Court of Appeals
Stressing that the issue was not simply the improper issuance of the Notice
of Coverage, but was mainly the constitutionality of Executive Order No. 405,
the CA ruled that the Regional Trial Court (RTC) had jurisdiction over the case.
Consonant with that authority, the court a quo also had the power to issue
writs and processes to enforce or protect the rights of the parties.
The appellate court likewise held that petitioner’s reliance on Sections 55 and
68 of RA 6657 had been misplaced, because the case was not about a purely
agrarian matter. It opined that the prohibition in certain statutes against such
writs pertained only to injunctions against administrative acts, to
controversies involving facts, or to the exercise of discretion in technical
cases. But on issues involving pure questions of law, courts were not
prevented from exercising their power to restrain or prohibit administrative
acts.
Hence, this Petition.6
Issues
In its Memorandum, petitioner raises the following issues:
"1. The Honorable Court of Appeals committed serious error by not taking
into cognizance that the issues raised in the complaint filed by the private
respondent, which seeks to exclude his land from the coverage of the CARP,
is an agrarian reform matter and within the jurisdiction of the DAR, not with
the trial court.
"2. The Honorable Court of Appeals, with due respect, gravely abused its
discretion by sustaining the writ of injunction issued by the trial court, which
is a violation of Sections 55 and 68 of Republic Act No. 6657."7
The Court’s Ruling
The Petition has merit.
First Issue:
Jurisdiction
In its bare essentials, petitioner’s argument is that private respondent, in his
Complaint for Annulment of the Notice of Coverage, is asking for the
exclusion of his landholding from the coverage of the Comprehensive
Agrarian Reform Program (CARP). According to the DAR, the issue involves
the implementation of agrarian reform, a matter over which the DAR has
original and exclusive jurisdiction, pursuant to Section 50 of the
Comprehensive Agrarian Reform Law (RA 6657).
On the other hand, private respondent maintains that his Complaint assails
mainly the constitutionality of EO 405. He contends that since the Complaint
raises a purely legal issue, it thus falls within the jurisdiction of the RTC. We
do not agree.
Conflicts involving jurisdiction over agrarian disputes are as tortuous as the
history of Philippine agrarian reform laws. The changing jurisdictional
landscape is matched only by the tumultuous struggle for, and resistance to,
the breaking up and distribution of large landholdings.
Two Basic Rules
Two basic rules have guided this Court in determining jurisdiction in these
cases. First, jurisdiction is conferred by law.8 And second, the nature of the
action and the issue of jurisdiction are shaped by the material averments of
the complaint and the character of the relief sought.9 The defenses resorted
to in the answer or motion to dismiss are disregarded; otherwise, the
question of jurisdiction would depend entirely upon the whim of the
defendant.10
Grant of Jurisdiction
Ever since agrarian reform legislations began, litigants have invariably sought
the aid of the courts. Courts of Agrarian Relations (CARs) were organized
under RA 126711 "[f]or the enforcement of all laws and regulations governing
the relation of capital and labor on all agricultural lands under any system of
cultivation." The jurisdiction of these courts was spelled out in Section 7 of
the said law as follows:
"Sec. 7. Jurisdiction of the Court. - The Court shall have original and exclusive
jurisdiction over the entire Philippines, to consider, investigate, decide, and
settle all questions, matters, controversies or disputes involving all those
relationships established by law which determine the varying rights of
persons in the cultivation and use of agricultural land where one of the parties
works the land, and shall have concurrent jurisdiction with the Court of First
Instance over employer and farm employee or labor under Republic Act
Numbered six hundred two and over landlord and tenant involving violations
of the Usury Law (Act No. 2655, as amended) and of inflicting the penalties
provided therefor."
All the powers and prerogatives inherent in or belonging to the then Courts
of First Instance12 (now the RTCs) were granted to the CARs. The latter were
further vested by the Agricultural Land Reform Code (RA 3844) with original
and exclusive jurisdiction over the following matters:
"(1) All cases or actions involving matters, controversies, disputes, or money
claims arising from agrarian relations: x x x
"(2) All cases or actions involving violations of Chapters I and II of this Code
and Republic Act Number eight hundred and nine; and
"(3) Expropriations to be instituted by the Land Authority: x x x."13
Presidential Decree (PD) No. 946 thereafter reorganized the CARs,
streamlined their operations, and expanded their jurisdiction as follows:
"Sec. 12. Jurisdiction over Subject Matter. - The Courts of Agrarian Relations
shall have original and exclusive jurisdiction over:
a) Cases involving the rights and obligations of persons in the cultivation and
use of agricultural land except those cognizable by the National Labor
Relations Commission; x x x ;
b) Questions involving rights granted and obligations imposed by laws,
Presidential Decrees, Orders, Instructions, Rules and Regulations issued and
promulgated in relation to the agrarian reform program; Provided, however,
That matters involving the administrative implementation of the transfer of
the land to the tenant-farmer under Presidential Decree No. 27 and
amendatory and related decrees, orders, instructions, rules and regulations,
shall be exclusively cognizable by the Secretary of Agrarian Reform, namely:
(1) classification and identification of landholdings;
(2) x x x;
(3) parcellary mapping;
(4) x x x;
xxx xxx xxx
m) Cases involving expropriation of all kinds of land in furtherance of the
agrarian reform program;
xxx xxx xxx
p) Ejectment proceedings instituted by the Department of Agrarian Reform
and the Land Bank involving lands under their administration and disposition,
except urban properties belonging to the Land Bank;
q) Cases involving violations of the penal provisions of Republic Act
Numbered eleven hundred and ninety-nine, as amended, Republic Act
Numbered thirty eight hundred and forty-four, as amended, Presidential
Decrees and laws relating to agrarian reform; Provided, however, That
violations of the said penal provisions committed by any Judge shall be tried
by the courts of general jurisdiction; and
r) Violations of Presidential Decrees Nos. 815 and 816.
The CARs were abolished, however, pursuant to Section 4414 of Batas
Pambansa Blg. 12915 (approved August 14, 1981), which had fully been
implemented on February 14, 1983. Jurisdiction over cases theretofore given
to the CAR’s was vested in the RTCs.16
Then came Executive Order No. 229.17 Under Section 17 thereof, the DAR
shall exercise "quasi-judicial powers to determine and adjudicate agrarian
reform matters, and shall have exclusive jurisdiction over all matters involving
implementation of agrarian reform, except those falling under the exclusive
original jurisdiction of the DENR and the Department of Agriculture [DA]." The
DAR shall also have the "powers to punish for contempt and to issue
subpoena, subpoena duces tecum and writs to enforce its orders or
decisions."
In Quismundo v. CA,18 this provision was deemed to have repealed Section 12
(a) and (b) of Presidential Decree No. 946, which vested the then Courts of
Agrarian Relations with "original exclusive jurisdiction over cases and
questions involving rights granted and obligations imposed by presidential
issuances promulgated in relation to the agrarian reform program."
Under Section 4 of Executive Order No. 129-A, the DAR was also made
"responsible for implementing the Comprehensive Agrarian Reform
Program." In accordance with Section 5 of the same EO, it possessed the
following powers and functions:
"(b) Implement all agrarian laws, and for this purpose, punish for contempt
and issue subpoena, subpoena duces tecum, writs of execution of its
decisions, and other legal processes to ensure successful and expeditious
program implementation; the decisions of the Department may in proper
cases, be appealed to the Regional Trial Courts but shall be immediately
executory notwithstanding such appeal;
xxx xxx xxx
"(h) Provide free legal services to agrarian reform beneficiaries and resolve
agrarian conflicts and land-tenure related problems as may be provided for
by law;
xxx xxx xxx
"(l) Have exclusive authority to approve or disapprove conversion of
agricultural lands for residential, commercial, industrial, and other land uses
as may be provided x x x."
The above grant of jurisdiction to the DAR covers these areas:
(a) adjudication of all matters involving implementation of agrarian reform;
(b) resolution of agrarian conflicts and land tenure related problems; and
(c) approval or disapproval of the conversion, restructuring or readjustment
of agricultural lands into residential, commercial, industrial, and other non-
agricultural uses.
The foregoing provision was as broad as those "theretofore vested in the
Regional Trial Court by Presidential Decree No. 946," as the Court ruled in
Vda. de Tangub v. CA,19 which we quote:
"x x x. The intention evidently was to transfer original jurisdiction to the
Department of Agrarian Reform, a proposition stressed by the rules
formulated and promulgated by the Department for the implementation of
the executive orders just quoted. The rules included the creation of the
Agrarian Reform Adjudication Board designed to exercise the adjudicatory
functions of the Department, and the allocation to it of —
‘x x x [O]riginal and exclusive jurisdiction over the subject matter vested upon
it by law, and all cases, disputes, controversies and matters or incidents
involving the implementation of the Comprehensive Agrarian Reform
Program under Executive Order No. 229, Executive Order No. 129-A, Republic
Act No. 3844, as amended by Republic Act No. 6289, Presidential Decree No.
27 and other agrarian laws and their implementing rules and regulations.’
"The implementing rules also declare that ‘(s)pecifically, such jurisdiction
shall extend over but not be limited to x x x (that theretofore vested in the
Regional Trial Courts, i.e.) (c)ases involving the rights and obligations of
persons engaged in the cultivation and use of agricultural land covered by the
Comprehensive Agrarian Reform Program (CARP) and other agrarian laws x x
x."20
In the same case, the Court also held that the jurisdictional competence of
the DAR had further been clarified by RA 6657 thus:
"x x x. The Act [RA 6657] makes references to and explicitly recognizes the
effectivity and applicability of Presidential Decree No. 229. More particularly,
the Act echoes the provisions of Section 17 of Presidential Decree No. 229,
supra, investing the Department of Agrarian Reform with original jurisdiction,
generally, over all cases involving agrarian laws, although, as shall shortly be
pointed out, it restores to the Regional Trial Court, limited jurisdiction over
two groups of cases. Section 50 reads as follows:
‘SEC. 50. Quasi-Judicial Powers of the DAR. — The DAR is hereby vested with
primary jurisdiction to determine and adjudicate agrarian reform matters and
shall have exclusive original jurisdiction over all matters involving the
implementation of agrarian reform, except those falling under the exclusive
jurisdiction of the Department of Agriculture [DA] and the Department of
Environment and Natural Resources [DENR].
xxx xxx xxx
‘It shall have the power to summon witnesses, administer oaths, take
testimony, require submission of reports, compel the production of books
and documents and answers to interrogatories and issue subpoena and
subpoena duces tecum and to enforce its writs through sheriffs or other duly
deputized officers. It shall likewise have the power to punish direct and
indirect contempt in the same manner and subject to the same penalties as
provided in the Rules of Court.’"21
Nonetheless, we have held that the RTCs have not been completely divested
of jurisdiction over agrarian reform matters. Section 56 of RA 6657 confers
special jurisdiction on "Special Agrarian Courts," which are actually RTCs
designated as such by the Supreme Court.22 Under Section 57 of the same
law, these Special Agrarian Courts have original and exclusive jurisdiction
over the following matters:
"1) ‘all petitions for the determination of just compensation to land-owners,’
and
"2) ‘the prosecution of all criminal offenses under x x x [the] Act.’"
The above delineation of jurisdiction remains in place to this date.
Administrative Circular No. 29-200223 of this Court stresses the distinction
between the quasi-judicial powers of the DAR under Sections 50 and 55 of RA
6657 and the jurisdiction of the Special Agrarian Courts referred to by
Sections 56 and 57 of the same law.
Allegations of the Complaint
A careful perusal of respondent’s Complaint24 shows that the principal
averments and reliefs prayed for refer -- not to the "pure question of law"
spawned by the alleged unconstitutionality of EO 405 -- but to the annulment
of the DAR’s Notice of Coverage. Clearly, the main thrust of the allegations is
the propriety of the Notice of Coverage, as may be gleaned from the following
averments, among others:
"6. This implementation of CARP in the landholding of the [respondent] is
contrary to law and, therefore, violates [respondent’s] constitutional right
not to be deprived of his property without due process of law. The coverage
of [respondent’s] landholding under CARP is NO longer with authority of law.
If at all, the implementation of CARP in the landholding of [respondent]
should have commenced and [been] completed between June 1988 to June
1992 as provided for in CARL, to wit: x x x;
"7. Moreover, the placing of [respondent’s] landholding under CARP as of 21
September 1999 is without the imprimatur of the Presidential Agrarian
Reform Council (PARC) and the Provincial Agrarian Reform Coordinating
Committee (PARCOM) as mandated and required by law pursuant to R.A.
7905 x x x;
xxx xxx xxx
"9. Under the provisions of CARL, it is the PARC and/or the DAR, and not x x x
Land Bank, which is authorized to preliminarily determine the value of the
lands as compensation therefor, thus – x x x;
xxx xxx xxx
"12. That the aforementioned NOTICE OF COVERAGE with intendment and
purpose of acquiring [respondent’s] aforementioned land is a gross violation
of law (PD 399 dated 28 February 1974 which is still effective up to now)
inasmuch as [respondent’s] land is traversed by and a road frontage as
admitted by the DAR’s technician and defendant FORTUNADO (MARO) x x x;"
"13. That as reflected in said Pre-Ocular Inspection Report, copy of which is
hereto attached as annex ‘D’ forming part hereof, [respondent’s] land is
above eighteen percent (18%) slope and therefore, automatically exempted
and excluded from the operation of Rep. Act 6657, x x x.25 (Italics supplied)
In contrast, the 14-page Complaint touches on the alleged unconstitutionality
of EO 405 by merely making these two allegations:
"10. Executive Order No. 405 dated 14 June 1990 (issued by the then
President Corazon Aquino) is unconstitutional for it plainly amends, modifies
and/or repeals CARL. On 14 June 1990, then President Corazon Aquino had
no longer law-making powers as the Philippine Congress was by then already
organized, existing and operational pursuant to the 1987 Constitution. A copy
of the said Executive Order is hereto attached as Annex ‘B’ forming part
hereof.
"11. Our constitutional system of separation of powers renders the said
Executive Order No. 405 unconstitutional and all valuations made, and to be
made, by the defendant Land Bank pursuant thereto are null and void and
without force and effect. Indispensably and ineludibly, all related rules,
regulations, orders and other issuances issued or promulgated pursuant to
said Executive Order No. 405 are also null and void ab initio and without force
and effect."26
We stress that the main subject matter raised by private respondent before
the trial court was not the issue of compensation (the subject matter of EO
40527). Note that no amount had yet been determined nor proposed by the
DAR. Hence, there was no occasion to invoke the court’s function of
determining just compensation.28
To be sure, the issuance of the Notice of Coverage29 constitutes the first
necessary step towards the acquisition of private land under the CARP. Plainly
then, the propriety of the Notice relates to the implementation of the CARP,
which is under the quasi-judicial jurisdiction of the DAR. Thus, the DAR could
not be ousted from its authority by the simple expediency of appending an
allegedly constitutional or legal dimension to an issue that is clearly agrarian.
In view of the foregoing, there is no need to address the other points pleaded
by respondent in relation to the jurisdictional issue. We need only to point
that in case of doubt, the jurisprudential trend is for courts to refrain from
resolving a controversy involving matters that demand the special
competence of administrative agencies, "even if the question[s] involved
[are] also judicial in character,"30 as in this case.

Second Issue:

Preliminary Injunction

Having declared the RTCs to be without jurisdiction over the instant case, it
follows that the RTC of La Carlota City (Branch 63) was devoid of authority to
issue the assailed Writ of Preliminary Injunction. That Writ must perforce be
stricken down as a nullity. Such nullity is particularly true in the light of the
express prohibitory provisions of the CARP and this Court’s Administrative
Circular Nos. 29-2002 and 38-2002. These Circulars enjoin all trial judges to
strictly observe Section 68 of RA 6657, which reads:

"Section 68. Immunity of Government Agencies from Undue Interference. –

No injunction, restraining order, prohibition or mandamus shall be issued by
the lower courts against the Department of Agrarian Reform (DAR), the
Department of Agriculture (DA), the Department of Environment and Natural
Resources (DENR) and the Department of Justice (DOJ) in their
implementation of the program."

WHEREFORE, the Petition is hereby GRANTED, and the challenged Decision

and Resolution REVERSED AND SET ASIDE. Accordingly, the February 16,
2000 Order of the Regional Trial Court of La Carlota City (Branch 63)
is ANNULLED and a new one entered, DISMISSING the Complaint in Civil Case
713. The Writ of Preliminary Injunction issued therein is also
expressly VOIDED. No costs.

SO ORDERED.
ST. MARTIN FUNERAL HOMES vs NLRC
G.R. No. 130866 September 16, 1998
ST. MARTIN FUNERAL HOME, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and BIENVENIDO
ARICAYOS, respondents.
REGALADO, J.:
The present petition for certiorari stemmed from a complaint for illegal
dismissal filed by herein private respondent before the National Labor
Relations Commission (NLRC), Regional Arbitration Branch No. III, in San
Fernando, Pampanga. Private respondent alleges that he started working as
Operations Manager of petitioner St. Martin Funeral Home on February 6,
1995. However, there was no contract of employment executed between him
and petitioner nor was his name included in the semi-monthly payroll. On
January 22, 1996, he was dismissed from his employment for allegedly
misappropriating P38,000.00 which was intended for payment by petitioner
of its value added tax (VAT) to the Bureau of Internal Revenue (BIR). 1
Petitioner on the other hand claims that private respondent was not its
employee but only the uncle of Amelita Malabed, the owner of petitioner St.
Martin's Funeral Home. Sometime in 1995, private respondent, who was
formerly working as an overseas contract worker, asked for financial
assistance from the mother of Amelita. Since then, as an indication of
gratitude, private respondent voluntarily helped the mother of Amelita in
overseeing the business.
In January 1996, the mother of Amelita passed away, so the latter then took
over the management of the business. She then discovered that there were
arrears in the payment of taxes and other government fees, although the
records purported to show that the same were already paid. Amelita then
made some changes in the business operation and private respondent and
his wife were no longer allowed to participate in the management thereof.
As a consequence, the latter filed a complaint charging that petitioner had
illegally terminated his employment.2
Based on the position papers of the parties, the labor arbiter rendered a
decision in favor of petitioner on October 25, 1996 declaring that no
employer-employee relationship existed between the parties and, therefore,
his office had no jurisdiction over the case. 3
Not satisfied with the said decision, private respondent appealed to the NLRC
contending that the labor arbiter erred (1) in not giving credence to the
evidence submitted by him; (2) in holding that he worked as a "volunteer"
and not as an employee of St. Martin Funeral Home from February 6, 1995 to
January 23, 1996, or a period of about one year; and (3) in ruling that there
was no employer-employee relationship between him and petitioner.4
On June 13, 1997, the NLRC rendered a resolution setting aside the
questioned decision and remanding the case to the labor arbiter for
immediate appropriate proceedings.5 Petitioner then filed a motion for
reconsideration which was denied by the NLRC in its resolution dated August
18, 1997 for lack of merit,6 hence the present petition alleging that the NLRC
committed grave abuse of discretion.7
Before proceeding further into the merits of the case at bar, the Court feels
that it is now exigent and opportune to reexamine the functional validity and
systemic practicability of the mode of judicial review it has long adopted and
still follows with respect to decisions of the NLRC. The increasing number of
labor disputes that find their way to this Court and the legislative changes
introduced over the years into the provisions of Presidential Decree (P.D.) No.
442 (The Labor Code of the Philippines and Batas Pambansa Blg. (B.P. No.)
129 (The Judiciary Reorganization Act of 1980) now stridently call for and
warrant a reassessment of that procedural aspect.
We prefatorily delve into the legal history of the NLRC. It was first established
in the Department of Labor by P.D. No. 21 on October 14, 1972, and its
decisions were expressly declared to be appealable to the Secretary of Labor
and, ultimately, to the President of the Philippines.
On May 1, 1974, P.D. No. 442 enacted the Labor Code of the Philippines, the
same to take effect six months after its promulgation. 8 Created and
regulated therein is the present NLRC which was attached to the Department
of Labor and Employment for program and policy coordination only.9 Initially,
Article 302 (now, Article 223) thereof also granted an aggrieved party the
remedy of appeal from the decision of the NLRC to the Secretary of Labor,
but P.D. No. 1391 subsequently amended said provision and abolished such
appeals. No appellate review has since then been provided for.
Thus, to repeat, under the present state of the law, there is no provision for
appeals from the decision of the NLRC. 10 The present Section 223, as last
amended by Section 12 of R.A. No. 6715, instead merely provides that the
Commission shall decide all cases within twenty days from receipt of the
answer of the appellee, and that such decision shall be final and executory
after ten calendar days from receipt thereof by the parties.
When the issue was raised in an early case on the argument that this Court
has no jurisdiction to review the decisions of the NLRC, and formerly of the
Secretary of Labor, since there is no legal provision for appellate review
thereof, the Court nevertheless rejected that thesis. It held that there is an
underlying power of the courts to scrutinize the acts of such agencies on
questions of law and jurisdiction even though no right of review is given by
statute; that the purpose of judicial review is to keep the administrative
agency within its jurisdiction and protect the substantial rights of the parties;
and that it is that part of the checks and balances which restricts the
separation of powers and forestalls arbitrary and unjust adjudications. 11
Pursuant to such ruling, and as sanctioned by subsequent decisions of this
Court, the remedy of the aggrieved party is to timely file a motion for
reconsideration as a precondition for any further or subsequent
remedy, 12 and then seasonably avail of the special civil action
of certiorari under Rule 65, 13 for which said Rule has now fixed the
reglementary period of sixty days from notice of the decision. Curiously,
although the 10-day period for finality of the decision of the NLRC may
already have lapsed as contemplated in Section 223 of the Labor Code, it has
been held that this Court may still take cognizance of the petition
for certiorari on jurisdictional and due process considerations if filed within
the reglementary period under Rule 65. 14
Turning now to the matter of judicial review of NLRC decisions, B.P. No. 129
originally provided as follows:
Sec. 9. Jurisdiction. — The Intermediate Appellate Court shall exercise:
(1) Original jurisdiction to issue writs of mandamus,
prohibition, certiorari, habeas corpus, and quo warranto, and auxiliary writs
or processes, whether or not in aid of its appellate jurisdiction;
(2) Exclusive original jurisdiction over actions for annulment of judgments of
Regional Trial Courts; and
(3) Exclusive appellate jurisdiction over all final judgments, decisions,
resolutions, orders, or awards of Regional Trial Courts and quasi-judicial
agencies, instrumentalities, boards, or commissions, except those falling
within the appellate jurisdiction of the Supreme Court in accordance with the
Constitution, the provisions of this Act, and of subparagraph (1) of the third
paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the
Judiciary Act of 1948.
The Intermediate Appellate Court shall have the power to try cases and
conduct hearings, receive evidence and perform any and all acts necessary to
resolve factual issues raised in cases falling within its original and appellate
jurisdiction, including the power to grant and conduct new trials or further
proceedings.
These provisions shall not apply to decisions and interlocutory orders issued
under the Labor Code of the Philippines and by the Central Board of
Assessment Appeals. 15
Subsequently, and as it presently reads, this provision was amended by R.A.
No. 7902 effective March 18, 1995, to wit:
Sec. 9. Jurisdiction. — The Court of Appeals shall exercise:
(1) Original jurisdiction to issue writs of mandamus,
prohibition, certiorari, habeas corpus, and quo warranto, and auxiliary writs
or processes, whether or not in aid of its appellate jurisdiction;
(2) Exclusive original jurisdiction over actions for annulment of judgments of
Regional Trial Courts; and
(3) Exclusive appellate jurisdiction over all final judgments, decisions,
resolutions, orders or awards of Regional Trial Courts and quasi-judicial
agencies, instrumentalities, boards or commissions, including the Securities
and Exchange Commission, the Social Security Commission, the Employees
Compensation Commission and the Civil Service Commission, except those
falling within the appellate jurisdiction of the Supreme Court in accordance
with the Constitution, the Labor Code of the Philippines under Presidential
Decree No. 442, as amended, the provisions of this Act, and of subparagraph
(1) of the third paragraph and subparagraph (4) of the fourth paragraph of
Section 17 of the Judiciary Act of 1948.
The Court of Appeals shall have the power to try cases and conduct hearings,
receive evidence and perform any and all acts necessary to resolve factual
issues raised in cases falling within its original and appellate jurisdiction,
including the power to grant and conduct new trials or further proceedings.
Trials or hearings in the Court of Appeals must be continuous and must be
completed within, three (3) months, unless extended by the Chief Justice.
It will readily be observed that, aside from the change in the name of the
lower appellate court, 16 the following amendments of the original provisions
of Section 9 of B.P. No. 129 were effected by R.A. No. 7902, viz.:
1. The last paragraph which excluded its application to the Labor Code of the
Philippines and the Central Board of Assessment Appeals was deleted and
replaced by a new paragraph granting the Court of Appeals limited powers to
conduct trials and hearings in cases within its jurisdiction.
2. The reference to the Labor Code in that last paragraph was transposed to
paragraph (3) of the section, such that the original exclusionary clause therein
now provides "except those falling within the appellate jurisdiction of the
Supreme Court in accordance with the Constitution, the Labor Code of the
Philippines under Presidential Decree No. 442, as amended, the provisions of
this Act, and of subparagraph (1) of the third paragraph and subparagraph (4)
of the fourth paragraph of Section 17 of the Judiciary Act of 1948." (Emphasis
supplied).
3. Contrarily, however, specifically added to and included among the quasi-
judicial agencies over which the Court of Appeals shall have exclusive
appellate jurisdiction are the Securities and Exchange Commission, the Social
Security Commission, the Employees Compensation Commission and the Civil
Service Commission.
This, then, brings us to a somewhat perplexing impassè, both in point of
purpose and terminology. As earlier explained, our mode of judicial review
over decisions of the NLRC has for some time now been understood to be by
a petition for certiorari under Rule 65 of the Rules of Court. This is, of course,
a special original action limited to the resolution of jurisdictional issues, that
is, lack or excess of jurisdiction and, in almost all cases that have been brought
to us, grave abuse of discretion amounting to lack of jurisdiction.
It will, however, be noted that paragraph (3), Section 9 of B.P. No. 129 now
grants exclusive appellate jurisdiction to the Court of Appeals over all final
adjudications of the Regional Trial Courts and the quasi-judicial agencies
generally or specifically referred to therein except, among others, "those
falling within the appellate jurisdiction of the Supreme Court in accordance
with . . . the Labor Code of the Philippines under Presidential Decree No. 442,
as amended, . . . ." This would necessarily contradict what has been ruled and
said all along that appeal does not lie from decisions of the NLRC. 17 Yet, under
such excepting clause literally construed, the appeal from the NLRC cannot
be brought to the Court of Appeals, but to this Court by necessary implication.
The same exceptive clause further confuses the situation by declaring that
the Court of Appeals has no appellate jurisdiction over decisions falling within
the appellate jurisdiction of the Supreme Court in accordance with the
Constitution, the provisions of B.P. No. 129, and those specified cases in
Section 17 of the Judiciary Act of 1948. These cases can, of course, be properly
excluded from the exclusive appellate jurisdiction of the Court of Appeals.
However, because of the aforementioned amendment by transposition, also
supposedly excluded are cases falling within the appellate jurisdiction of the
Supreme Court in accordance with the Labor Code. This is illogical and
impracticable, and Congress could not have intended that procedural gaffe,
since there are no cases in the Labor Code the decisions, resolutions, orders
or awards wherein are within the appellate jurisdiction of the Supreme Court
or of any other court for that matter.
A review of the legislative records on the antecedents of R.A. No. 7902
persuades us that there may have been an oversight in the course of the
deliberations on the said Act or an imprecision in the terminology used
therein. In fine, Congress did intend to provide for judicial review of the
adjudications of the NLRC in labor cases by the Supreme Court, but there was
an inaccuracy in the term used for the intended mode of review. This
conclusion which we have reluctantly but prudently arrived at has been
drawn from the considerations extant in the records of Congress, more
particularly on Senate Bill No. 1495 and the Reference Committee Report on
S. No. 1495/H. No. 10452. 18
In sponsoring Senate Bill No. 1495, Senator Raul S. Roco delivered his
sponsorship speech 19 from which we reproduce the following excerpts:
The Judiciary Reorganization Act, Mr. President, Batas Pambansa Blg. 129,
reorganized the Court of Appeals and at the same time expanded its
jurisdiction and powers. Among others, its appellate jurisdiction was
expanded to cover not only final judgment of Regional Trial Courts, but also
all final judgment(s), decisions, resolutions, orders or awards of quasi-judicial
agencies, instrumentalities, boards and commissions, except those falling
within the appellate jurisdiction of the Supreme Court in accordance with the
Constitution, the provisions of BP Blg. 129 and of subparagraph 1 of the third
paragraph and subparagraph 4 of Section 17 of the Judiciary Act of 1948.
Mr. President, the purpose of the law is to ease the workload of the Supreme
Court by the transfer of some of its burden of review of factual issues to the
Court of Appeals. However, whatever benefits that can be derived from the
expansion of the appellate jurisdiction of the Court of Appeals was cut short
by the last paragraph of Section 9 of Batas Pambansa Blg. 129 which excludes
from its coverage the "decisions and interlocutory orders issued under the
Labor Code of the Philippines and by the Central Board of Assessment Appeals.
Among the highest number of cases that are brought up to the Supreme
Court are labor cases. Hence, Senate Bill No. 1495 seeks to eliminate the
exceptions enumerated in Section 9 and, additionally, extends the coverage
of appellate review of the Court of Appeals in the decision(s) of the Securities
and Exchange Commission, the Social Security Commission, and the
Employees Compensation Commission to reduce the number of cases
elevated to the Supreme Court. (Emphases and corrections ours)
xxx xxx xxx
Senate Bill No. 1495 authored by our distinguished Colleague from Laguna
provides the ideal situation of drastically reducing the workload of the
Supreme Court without depriving the litigants of the privilege of review by an
appellate tribunal.
In closing, allow me to quote the observations of former Chief Justice
Teehankee in 1986 in the Annual Report of the Supreme Court:
. . . Amendatory legislation is suggested so as to relieve the Supreme Court of
the burden of reviewing these cases which present no important issues
involved beyond the particular fact and the parties involved, so that the
Supreme Court may wholly devote its time to cases of public interest in the
discharge of its mandated task as the guardian of the Constitution and the
guarantor of the people's basic rights and additional task expressly vested on
it now "to determine whether or not there has been a grave abuse of
discretion amounting to lack of jurisdiction on the part of any branch or
instrumentality of the Government.
We used to have 500,000 cases pending all over the land, Mr. President. It
has been cut down to 300,000 cases some five years ago. I understand we are
now back to 400,000 cases. Unless we distribute the work of the appellate
courts, we shall continue to mount and add to the number of cases pending.
In view of the foregoing, Mr. President, and by virtue of all the reasons we
have submitted, the Committee on Justice and Human Rights requests the
support and collegial approval of our Chamber.
xxx xxx xxx
Surprisingly, however, in a subsequent session, the following Committee
Amendment was introduced by the said sponsor and the following
proceedings transpired: 20
Senator Roco. On page 2, line 5, after the line "Supreme Court in accordance
with the Constitution," add the phrase "THE LABOR CODE OF THE PHILIPPINES
UNDER P.D. 442, AS AMENDED." So that it becomes clear, Mr. President, that
issues arising from the Labor Code will still be appealable to the Supreme
Court.
The President. Is there any objection? (Silence) Hearing none, the
amendment is approved.
Senator Roco. On the same page, we move that lines 25 to 30 be deleted. This
was also discussed with our Colleagues in the House of Representatives and
as we understand it, as approved in the House, this was also deleted, Mr.
President.
The President. Is there any objection? (Silence) Hearing none, the
amendment is approved.
Senator Roco. There are no further Committee amendments, Mr. President.
Senator Romulo. Mr. President, I move that we close the period of Committee
amendments.
The President. Is there any objection? (Silence) Hearing none, the
amendment is approved. (Emphasis supplied).
xxx xxx xxx
Thereafter, since there were no individual amendments, Senate Bill No. 1495
was passed on second reading and being a certified bill, its unanimous
approval on third reading followed. 21 The Conference Committee Report on
Senate Bill No. 1495 and House Bill No. 10452, having theretofore been
approved by the House of Representatives, the same was likewise approved
by the Senate on February 20, 1995, 22 inclusive of the dubious formulation
on appeals to the Supreme Court earlier discussed.
The Court is, therefore, of the considered opinion that ever since appeals
from the NLRC to the Supreme Court were eliminated, the legislative
intendment was that the special civil action of certiorari was and still is the
proper vehicle for judicial review of decisions of the NLRC. The use of the
word "appeal" in relation thereto and in the instances we have noted could
have been a lapsus plumae because appeals by certiorari and the original
action for certiorari are both modes of judicial review addressed to the
appellate courts. The important distinction between them, however, and
with which the Court is particularly concerned here is that the special civil
action of certiorari is within the concurrent original jurisdiction of this Court
and the Court of Appeals; 23 whereas to indulge in the assumption that
appeals by certiorari to the Supreme Court are allowed would not subserve,
but would subvert, the intention of Congress as expressed in the sponsorship
speech on Senate Bill No. 1495.
Incidentally, it was noted by the sponsor therein that some quarters were of
the opinion that recourse from the NLRC to the Court of Appeals as an initial
step in the process of judicial review would be circuitous and would prolong
the proceedings. On the contrary, as he commendably and realistically
emphasized, that procedure would be advantageous to the aggrieved party
on this reasoning:
On the other hand, Mr. President, to allow these cases to be appealed to the
Court of Appeals would give litigants the advantage to have all the evidence
on record be reexamined and reweighed after which the findings of facts and
conclusions of said bodies are correspondingly affirmed, modified or
reversed.
Under such guarantee, the Supreme Court can then apply strictly the axiom
that factual findings of the Court of Appeals are final and may not be reversed
on appeal to the Supreme Court. A perusal of the records will reveal appeals
which are factual in nature and may, therefore, be dismissed outright by
minute resolutions. 24
While we do not wish to intrude into the Congressional sphere on the matter
of the wisdom of a law, on this score we add the further observations that
there is a growing number of labor cases being elevated to this Court which,
not being a trier of fact, has at times been constrained to remand the case to
the NLRC for resolution of unclear or ambiguous factual findings; that the
Court of Appeals is procedurally equipped for that purpose, aside from the
increased number of its component divisions; and that there is undeniably an
imperative need for expeditious action on labor cases as a major aspect of
constitutional protection to labor.
Therefore, all references in the amended Section 9 of B.P. No. 129 to
supposed appeals from the NLRC to the Supreme Court are interpreted and
hereby declared to mean and refer to petitions for certiorari under Rule 65.
Consequently, all such petitions should hence forth be initially filed in the
Court of Appeals in strict observance of the doctrine on the hierarchy of
courts as the appropriate forum for the relief desired.
Apropos to this directive that resort to the higher courts should be made in
accordance with their hierarchical order, this pronouncement in Santiago vs.
Vasquez, et al. 25 should be taken into account:
One final observation. We discern in the proceedings in this case a propensity
on the part of petitioner, and, for that matter, the same may be said of a
number of litigants who initiate recourses before us, to disregard the
hierarchy of courts in our judicial system by seeking relief directly from this
Court despite the fact that the same is available in the lower courts in the
exercise of their original or concurrent jurisdiction, or is even mandated by
law to be sought therein. This practice must be stopped, not only because of
the imposition upon the precious time of this Court but also because of the
inevitable and resultant delay, intended or otherwise, in the adjudication of
the case which often has to be remanded or referred to the lower court as
the proper forum under the rules of procedure, or as better equipped to
resolve the issues since this Court is not a trier of facts. We, therefore,
reiterate the judicial policy that this Court will not entertain direct resort to it
unless the redress desired cannot be obtained in the appropriate courts or
where exceptional and compelling circumstances justify availment of a
remedy within and calling for the exercise of our primary jurisdiction.

WHEREFORE, under the foregoing premises, the instant petition

for certiorari is hereby REMANDED, and all pertinent records thereof ordered
to be FORWARDED, to the Court of Appeals for appropriate action and
disposition consistent with the views and ruling herein set forth, without
pronouncement as to costs.

SO ORDERED.
HEIRS OF BERTULDO HINOG vs MELICOR
G.R. No. 140954. April 12, 2005
HEIRS OF BERTULDO1 HINOG: Bertuldo Hinog II, Bertuldo Hinog III, Bertuldo
Hinog, Jr., Jocelyn Hinog, Bertoldo Hinog IV, Bertoldo Hinog V, Edgardo
Hinog, Milagros H. Pabatao, Lilian H. King, Victoria H. Engracia, Terisita C.
Hinog, Paz H. Besana, Roberto C. Hinog, Vicente C. Hinog, Roel C. Hinog,
Marilyn C. Hinog, Bebot C. Hinog, lordes C. Hinog, Pablo Chiong, Arlene
Lanasang (All respresented by Bertuldo Hinog III), Petitioners,
vs.
HON. ACHILLES MELICOR, in his capacity as Presiding Judge, RTC, Branch 4,
7th Judicial Region, Tagbiliran City, Bohol, and CUSTODIO BALANE, RUFO
BALANE, HONORIO BALANE, and TOMAS BALANE,Respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a petition for certiorari and prohibition under Rule 65 of the Rules
of Court which assails the Orders dated March 22, 1999, August 13, 1999 and
October 15, 1999 of the Regional Trial Court, Branch 4, of Tagbilaran City,
Bohol in Civil Case No. 4923.
The factual background of the case is as follows:
On May 21, 1991, private respondents Custodio, Rufo, Tomas and Honorio,
all surnamed Balane, filed a complaint for "Recovery of Ownership and
Possession, Removal of Construction and Damages" against Bertuldo Hinog
(Bertuldo for brevity). They alleged that: they own a 1,399- square meter
parcel of land situated in Malayo Norte, Cortes, Bohol, designated as Lot No.
1714; sometime in March 1980, they allowed Bertuldo to use a portion of the
said property for a period of ten years and construct thereon a small house
of light materials at a nominal annual rental of ₱100.00 only, considering the
close relations of the parties; after the expiration of the ten-year period, they
demanded the return of the occupied portion and removal of the house
constructed thereon but Bertuldo refused and instead claimed ownership of
the entire property.
Accordingly, private respondents sought to oust Bertuldo from the premises
of the subject property and restore upon themselves the ownership and
possession thereof, as well as the payment of moral and exemplary damages,
attorney’s fees and litigation expenses "in amounts justified by the
evidence." 2
On July 2, 1991, Bertuldo filed his Answer. He alleged ownership of the
disputed property by virtue of a Deed of Absolute Sale dated July 2, 1980,
executed by one Tomas Pahac with the knowledge and conformity of private
respondents.3
After the pre-trial, trial on the merits ensued. On November 18, 1997, private
respondents rested their case. Thereupon, Bertuldo started his direct
examination. However, on June 24, 1998, Bertuldo died without completing
his evidence.
On August 4, 1998, Atty. Sulpicio A. Tinampay withdrew as counsel for
Bertuldo as his services were terminated by petitioner Bertuldo Hinog III.
Atty. Veronico G. Petalcorin then entered his appearance as new counsel for
Bertuldo.4
On September 22, 1998, Atty. Petalcorin filed a motion to expunge the
complaint from the record and nullify all court proceedings on the ground
that private respondents failed to specify in the complaint the amount of
damages claimed so as to pay the correct docket fees; and that
under Manchester Development Corporation vs. Court of Appeals,5 non-
payment of the correct docket fee is jurisdictional.6
In an amended motion, filed on October 2, 1998, Atty. Petalcorin further
alleged that the private respondents failed to pay the correct docket fee since
the main subject matter of the case cannot be estimated as it is for recovery
of ownership, possession and removal of construction.7
Private respondents opposed the motion to expunge on the following
grounds: (a) said motion was filed more than seven years from the institution
of the case; (b) Atty. Petalcorin has not complied with Section 16, Rule 3 of
the Rules of Court which provides that the death of the original defendant
requires a substitution of parties before a lawyer can have legal personality
to represent a litigant and the motion to expunge does not mention of any
specific party whom he is representing; (c) collectible fees due the court can
be charged as lien on the judgment; and (d) considering the lapse of time, the
motion is merely a dilatory scheme employed by petitioners.8
In their Rejoinder, petitioners manifested that the lapse of time does not vest
the court with jurisdiction over the case due to failure to pay the correct
docket fees. As to the contention that deficiency in payment of docket fees
can be made as a lien on the judgment, petitioners argued that the payment
of filing fees cannot be made dependent on the result of the action taken.9
On January 21, 1999, the trial court, while ordering the complaint to be
expunged from the records and the nullification of all court proceedings
taken for failure to pay the correct docket fees, nonetheless, held:
The Court can acquire jurisdiction over this case only upon the payment of
the exact prescribed docket/filing fees for the main cause of action, plus
additional docket fee for the amount of damages being prayed for in the
complaint, which amount should be specified so that the same can be
considered in assessing the amount of the filing fees. Upon the complete
payment of such fees, the Court may take appropriate action in the light of
the ruling in the case of Manchester Development Corporation vs. Court of
Appeals, supra.10
Accordingly, on January 28, 1999, upon payment of deficiency docket fee,
private respondents filed a manifestation with prayer to reinstate the
case.11 Petitioners opposed the reinstatement12 but on March 22, 1999, the
trial court issued the first assailed Order reinstating the case.13
On May 24, 1999, petitioners, upon prior leave of court,14 filed their
supplemental pleading, appending therein a Deed of Sale dated November
15, 1982.15 Following the submission of private respondents’ opposition
thereto,16 the trial court, in its Order dated July 7, 1999, denied the
supplemental pleading on the ground that the Deed of Absolute Sale is a new
matter which was never mentioned in the original answer dated July 2, 1991,
prepared by Bertuldo’s original counsel and which Bertuldo verified; and that
such new document is deemed waived in the light of Section 1, Rule 917 of the
Rules of Court. The trial court also noted that no formal substitution of the
parties was made because of the failure of defendant’s counsel to give the
names and addresses of the legal representatives of Bertuldo, so much so
that the supposed heirs of Bertuldo are not specified in any pleading in the
case. 18
On July 14, 1999, petitioners manifested that the trial court having expunged
the complaint and nullified all court proceedings, there is no valid case and
the complaint should not be admitted for failure to pay the correct docket
fees; that there should be no case to be reinstated and no case to proceed as
there is no complaint filed.19
After the submission of private respondents’ opposition20 and petitioners’
rejoinder,21 the trial court issued the second assailed Order on August 13,
1999, essentially denying petitioners’ manifestation/rejoinder. The trial court
held that the issues raised in such manifestation/rejoinder are practically the
same as those raised in the amended motion to expunge which had already
been passed upon in the Order dated January 21, 1999. Moreover, the trial
court observed that the Order dated March 22, 1999 which reinstated the
case was not objected to by petitioners within the reglementary period or
even thereafter via a motion for reconsideration despite receipt thereof on
March 26, 1999.22
On August 25, 1999, petitioners filed a motion for reconsideration23 but the
same was denied by the trial court in its third assailed Order dated October
15, 1999. The trial court held that the Manchester rule was relaxed in Sun
Insurance Office, Ltd. vs. Asuncion.24 Noting that there has been no
substitution of parties following the death of Bertuldo, the trial court directed
Atty. Petalcorin to comply with the provisions of Section 16, Rule 3 of the
Rules of Court. The trial court also reiterated that the Order dated March 22,
1999 reinstating the case was not assailed by petitioners within the
reglementary period, despite receipt thereof on March 26, 1999.25
On November 19, 1999, Atty. Petalcorin complied with the directive of the
trial court to submit the names and addresses of the heirs of Bertuldo.26
On November 24, 1999, petitioners filed before us the present petition
for certiorari and prohibition.27 They allege that the public respondent
committed grave abuse of discretion in allowing the case to be reinstated
after private respondents paid the docket fee deficiency since the trial court
had earlier expunged the complaint from the record and nullified all
proceedings of the case and such ruling was not contested by the private
respondents. Moreover, they argue that the public respondent committed
grave abuse of discretion in allowing the case to be filed and denying the
manifestation with motion to dismiss, despite the defect in the complaint
which prayed for damages without specifying the amounts, in violation of SC
Circular No. 7, dated March 24, 1988.
In their Comment, private respondents aver that no grave abuse of discretion
was committed by the trial court in reinstating the complaint upon the
payment of deficiency docket fees because petitioners did not object thereto
within the reglementary period. Besides, Atty. Petalcorin possessed no legal
personality to appear as counsel for the heirs of Bertuldo until he complies
with Section 16, Rule 3 of the Rules of Court.28
At the outset, we note the procedural error committed by petitioners in
directly filing the instant petition before this Court for it violates the
established policy of strict observance of the judicial hierarchy of courts.
Although the Supreme Court, Court of Appeals and the Regional Trial Courts
have concurrent jurisdiction to issue writs of certiorari,
prohibition, mandamus, quo warranto, habeas corpus and injunction, such
concurrence does not give the petitioner unrestricted freedom of choice of
court forum.29 As we stated in People vs. Cuaresma:30
This Court's original jurisdiction to issue writs of certiorari is not exclusive. It
is shared by this Court with Regional Trial Courts and with the Court of
Appeals. This concurrence of jurisdiction is not, however, to be taken as
according to parties seeking any of the writs an absolute, unrestrained
freedom of choice of the court to which application therefor will be directed.
There is after all a hierarchy of courts. That hierarchy is determinative of the
venue of appeals, and also serves as a general determinant of the appropriate
forum for petitions for the extraordinary writs. A becoming regard for that
judicial hierarchy most certainly indicates that petitions for the issuance of
extraordinary writs against first level ("inferior") courts should be filed with
the Regional Trial Court, and those against the latter, with the Court of
Appeals. A direct invocation of the Supreme Court’s original jurisdiction to
issue these writs should be allowed only when there are special and
important reasons therefor, clearly and specifically set out in the petition.
This is [an] established policy. It is a policy necessary to prevent inordinate
demands upon the Court’s time and attention which are better devoted to
those matters within its exclusive jurisdiction, and to prevent further over-
crowding of the Court’s docket.31
The rationale for this rule is two-fold: (a) it would be an imposition upon the
precious time of this Court; and (b) it would cause an inevitable and resultant
delay, intended or otherwise, in the adjudication of cases, which in some
instances had to be remanded or referred to the lower court as the proper
forum under the rules of procedure, or as better equipped to resolve the
issues because this Court is not a trier of facts.32
Thus, this Court will not entertain direct resort to it unless the redress desired
cannot be obtained in the appropriate courts, and exceptional and
compelling circumstances, such as cases of national interest and of serious
implications, justify the availment of the extraordinary remedy of writ
of certiorari, calling for the exercise of its primary jurisdiction. Exceptional
and compelling circumstances were held present in the following cases:
(a) Chavez vs. Romulo33 on citizens’ right to bear arms; (b) Government of the
United States of America vs. Purganan34 on bail in extradition proceedings;
(c) Commission on Elections vs. Quijano-Padilla35 on government contract
involving modernization and computerization of voters’ registration list;
(d) Buklod ng Kawaning EIIB vs. Zamora36 on status and existence of a public
office; and (e) Fortich vs. Corona37 on the so-called "Win-Win Resolution" of
the Office of the President which modified the approval of the conversion to
agro-industrial area.
In this case, no special and important reason or exceptional and compelling
circumstance analogous to any of the above cases has been adduced by the
petitioners so as to justify direct recourse to this Court. The present petition
should have been initially filed in the Court of Appeals in strict observance of
the doctrine on the hierarchy of courts. Failure to do so is sufficient cause for
the dismissal of the petition at bar.
In any event, even if the Court disregards such procedural flaw, the
petitioners’ contentions on the substantive aspect of the case fail to invite
judgment in their favor.
The unavailability of the writ of certiorari and prohibition in this case is borne
out of the fact that petitioners principally assail the Order dated March 22,
1999 which they never sought reconsideration of, in due time, despite receipt
thereof on March 26, 1999. Instead, petitioners went through the motion of
filing a supplemental pleading and only when the latter was denied, or after
more than three months have passed, did they raise the issue that the
complaint should not have been reinstated in the first place because the trial
court had no jurisdiction to do so, having already ruled that the complaint
shall be expunged.
After recognizing the jurisdiction of the trial court by seeking affirmative relief
in their motion to serve supplemental pleading upon private respondents,
petitioners are effectively barred by estoppel from challenging the trial
court’s jurisdiction.38 If a party invokes the jurisdiction of a court, he cannot
thereafter challenge the court’s jurisdiction in the same case.39 To rule
otherwise would amount to speculating on the fortune of litigation, which is
against the policy of the Court.40
Nevertheless, there is a need to correct the erroneous impression of the trial
court as well as the private respondents that petitioners are barred from
assailing the Order dated March 22, 1999 which reinstated the case because
it was not objected to within the reglementary period or even thereafter via
a motion for reconsideration despite receipt thereof on March 26, 1999.
It must be clarified that the said order is but a resolution on an incidental
matter which does not touch on the merits of the case or put an end to the
proceedings.41 It is an interlocutory order since there leaves something else
to be done by the trial court with respect to the merits of the case.42 As such,
it is not subject to a reglementary period. Reglementary period refers to the
period set by the rules for appeal or further review of a final judgment or
order, i.e., one that ends the litigation in the trial court.
Moreover, the remedy against an interlocutory order is generally not to
resort forthwith to certiorari, but to continue with the case in due course and,
when an unfavorable verdict is handed down, to take an appeal in the manner
authorized by law.43 Only when the court issued such order without or in
excess of jurisdiction or with grave abuse of discretion and when the assailed
interlocutory order is patently erroneous and the remedy of appeal would
not afford adequate and expeditious relief will certiorari be considered an
appropriate remedy to assail an interlocutory order.44Such special
circumstances are absolutely wanting in the present case.
Time and again, the Court has held that the Manchester rule has been
modified in Sun Insurance Office, Ltd. (SIOL) vs. Asuncion45 which defined the
following guidelines involving the payment of docket fees:
1. It is not simply the filing of the complaint or appropriate initiatory pleading,
but the payment of the prescribed docket fee, that vests a trial court with
jurisdiction over the subject-matter or nature of the action. Where the filing
of the initiatory pleading is not accompanied by payment of the docket fee,
the court may allow payment of the fees within a reasonable time but in no
case beyond the applicable prescriptive or reglementary period.
2. The same rule applies to permissive counterclaims, third-party claims and
similar pleadings, which shall not be considered filed until and unless the filing
fee prescribed therefor is paid. The court may also allow payment of said fee
within a reasonable time but also in no case beyond its applicable prescriptive
or reglementary period.
3. Where the trial court acquires jurisdiction over a claim by the filing of the
appropriate pleading and payment of the prescribed filing fee but,
subsequently, the judgment awards a claim not specified in the pleading, or
if specified the same has been left for determination by the court, the
additional filing fee therefor shall constitute a lien on the judgment. It shall
be the responsibility of the Clerk of Court or his duly authorized deputy to
enforce said lien and assess and collect the additional fee.
Plainly, while the payment of the prescribed docket fee is a jurisdictional
requirement, even its non-payment at the time of filing does not
automatically cause the dismissal of the case, as long as the fee is paid within
the applicable prescriptive or reglementary period, more so when the party
involved demonstrates a willingness to abide by the rules prescribing such
payment.46 Thus, when insufficient filing fees were initially paid by the
plaintiffs and there was no intention to defraud the government,
the Manchester rule does not apply.47
Under the peculiar circumstances of this case, the reinstatement of the
complaint was just and proper considering that the cause of action of private
respondents, being a real action, prescribes in thirty years,48 and private
respondents did not really intend to evade the payment of the prescribed
docket fee but simply contend that they could not be faulted for inadequate
assessment because the clerk of court made no notice of demand or Moreover, no formal substitution of the parties was effected within thirty
reassessment.49 They were in good faith and simply relied on the assessment days from date of death of Bertuldo, as required by Section 16, Rule 353 of the
of the clerk of court. Rules of Court. Needless to stress, the purpose behind the rule on
substitution is the protection of the right of every party to due process. It is
Furthermore, the fact that private respondents prayed for payment of
to ensure that the deceased party would continue to be properly represented
damages "in amounts justified by the evidence" does not call for the dismissal
in the suit through the duly appointed legal representative of his
of the complaint for violation of SC Circular No. 7, dated March 24, 1988
estate.54 Non-compliance with the rule on substitution would render the
which required that all complaints must specify the amount of damages
proceedings and judgment of the trial court infirm because the court acquires
sought not only in the body of the pleadings but also in the prayer in order to
no jurisdiction over the persons of the legal representatives or of the heirs on
be accepted and admitted for filing. Sun Insurance effectively modified SC
whom the trial and the judgment would be binding.55 Thus, proper
Circular No. 7 by providing that filing fees for damages and awards that
substitution of heirs must be effected for the trial court to acquire jurisdiction
cannot be estimated constitute liens on the awards finally granted by the trial
over their persons and to obviate any future claim by any heir that he was not
court.50
apprised of the litigation against Bertuldo or that he did not authorize Atty.
Thus, while the docket fees were based only on the real property valuation, Petalcorin to represent him.
the trial court acquired jurisdiction over the action, and judgment awards
The list of names and addresses of the heirs was submitted sixteen months
which were left for determination by the court or as may be proven during
after the death of Bertuldo and only when the trial court directed Atty.
trial would still be subject to additional filing fees which shall constitute a lien
Petalcorin to comply with the provisions of Section 16, Rule 3 of the Rules of
on the judgment. It would then be the responsibility of the Clerk of Court of
Court. Strictly speaking therefore, before said compliance, Atty. Petalcorin
the trial court or his duly authorized deputy to enforce said lien and assess
had no standing in the court a quo when he filed his pleadings. Be that as it
and collect the additional fees.51
may, the matter has been duly corrected by the Order of the trial court dated
It is worth noting that when Bertuldo filed his Answer on July 2, 1991, he did October 15, 1999.
not raise the issue of lack of jurisdiction for non-payment of correct docket
To be sure, certiorari under Rule 6556 is a remedy narrow in scope and
fees. Instead, he based his defense on a claim of ownership and participated
inflexible in character. It is not a general utility tool in the legal workshop.57 It
in the proceedings before the trial court. It was only in September 22, 1998
offers only a limited form of review. Its principal function is to keep an inferior
or more than seven years after filing the answer, and under the auspices of a
tribunal within its jurisdiction.58 It can be invoked only for an error of
new counsel, that the issue of jurisdiction was raised for the first time in the
jurisdiction, that is, one where the act complained of was issued by the court,
motion to expunge by Bertuldo’s heirs.
officer or a quasi-judicial body without or in excess of jurisdiction, or with
After Bertuldo vigorously participated in all stages of the case before the trial grave abuse of discretion which is tantamount to lack or in excess of
court and even invoked the trial court’s authority in order to ask for jurisdiction,59 not to be used for any other purpose,60 such as to cure errors in
affirmative relief, petitioners, considering that they merely stepped into the proceedings or to correct erroneous conclusions of law or fact.61 A contrary
shoes of their predecessor, are effectively barred by estoppel from rule would lead to confusion, and seriously hamper the administration of
challenging the trial court’s jurisdiction. Although the issue of jurisdiction may justice.
be raised at any stage of the proceedings as the same is conferred by law, it
Petitioners utterly failed to show that the trial court gravely abused its
is nonetheless settled that a party may be barred from raising it on ground of
discretion in issuing the assailed resolutions. On the contrary, it acted
laches or estoppel.52
prudently, in accordance with law and jurisprudence.
WHEREFORE, the instant petition for certiorari is DISMISSED for lack of merit.

No costs.

SO ORDERED.
CRISTOBAL CRUZ vs CRISTOBAL
G.R. No. 140422 August 7, 2006
MERCEDES CRISTOBAL CRUZ, ANSELMO A. CRISTOBAL and ELISA CRISTOBAL
SIKAT, Petitioners,
vs.
EUFROSINA CRISTOBAL, FLORENCIO CRISTOBAL, JOSE CRISTOBAL, HEIRS OF
NORBERTO CRISTOBAL and THE COURT OF APPEALS, Respondents.
DECISION
CHICO-NAZARIO, J.:
This Petition assails the Decision 1 of the Court of Appeals dated 22 July 1999
in CA-G.R. CV No. 56402, affirming in toto the Decision of the Regional Trial
Court (RTC) of Pasig City, Branch 156, in Civil Case No. 65035 entitled,
"Mercedes Cristobal, Anselmo A. Cristobal and Elisa Cristobal Sikat vs.
Eufrosina Cristobal, Florencio Cristobal, Jose Cristobal, Heirs of Norberto
Cristobal and The Register of Deeds, San Juan, M.M."
Facts of the case are as follows:
Petitioners (Mercedes Cristobal, Anselmo Cristobal, the heirs of the deceased
Socorro Cristobal, and Elisa Cristobal-Sikat) claim that they are the legitimate
children of Buenaventura Cristobal during his first marriage to Ignacia
Cristobal. On the other hand, private respondents (Norberto, Florencio,
Eufrosina and Jose, all surnamed Cristobal) are also the children of
Buenaventura Cristobal resulting from his second marriage to Donata
Enriquez.
On 18 June 1926, Buenaventura Cristobal purchased a parcel of land with an
area of 535 square meters located at 194 P. Parada St., Sta. Lucia, San Juan,
Metro Manila, covered by Transfer Certificate of Title (TCT) No. 10878-2 (the
subject property).
Sometime in the year 1930, Buenaventura Cristobal died intestate.
More than six decades later, petitioners learned that private respondents had
executed an extrajudicial partition of the subject property and transferred its
title to their names.
Petitioners filed a petition in their barangay to attempt to settle the case
between them and private respondents, but no settlement was reached.
Thus, a Complaint 2 for Annulment of Title and Damages was filed before the
RTC by petitioners against private respondents to recover their alleged pro-
indiviso shares in the subject property. In their prayer, they sought the
annulment of the Deed of Partition executed by respondents on 24 February
1948; the cancellation of TCTs No. 165132, No. 165133, No. 165134 and No.
165135 issued in the individual names of private respondents; re-partitioning
of the subject property in accordance with the law of succession and the
payment of P1,000,000.00 as actual or compensatory damages; P300,000.00
as moral damages; P50,000.00 as attorney’s fees and P100,000.00 as
exemplary damages.
To prove their filiation with the deceased Buenaventura Cristobal, the
baptismal certificates of Elisa, 3 Anselmo, 4and the late Socorro 5 were
presented. In the case of Mercedes who was born on 31 January 1909, she
produced a certification 6 issued by the Office of the Local Civil Registrar of
San Juan, Metro Manila, attesting to the fact that records of birth for the
years 1901, 1909, 1932 to 1939, 1940, 1943, and 1948 were all destroyed due
to ordinary wear and tear.
The testimonies of the parties as summarized by the trial court are as follows:
Witness [petitioner Elisa] further testified that her mother died when she was
only one year and seven months old. She lived with the sister of her father
because the latter married his second wife, Donata Enriquez. Her brother
Anselmo and sister Socorro lived with their father and the latter’s family in
the subject property at P. Parada St., San Juan, Metro Manila.
She claimed that when their father died on February 12, 1930, his brother
Anselmo stayed with her and her auntie while Socorro stayed with their
eldest sister, Mercedes, who was then married.
Meanwhile, when her stepmother Donata Enriquez died, the children from
the second marriage lived with them and her aunt Martina Cristobal.
Witness testified that she is now residing at No. 194 P. Parada St., Sta. Lucia,
San Juan, Metro Manila, the property subject of the present litigation. She
has been living in the said property since 1948. She claimed that there are
other houses in the area particularly those which belong to her half brothers
and sisters which were now converted into factories.
She claimed that out of the five hundred thirty-five (535) square meters she
occupies only thirty-six (36) square meters of the subject lot.
She testified that the [private respondents] divided the property among
themselves without giving the [petitioners] their share. She said that she was
offered by [private respondent] Eufrosina to choose between a portion of the
land in question or money because one of the children of defendant Jose
Cristobal wanted to construct an apartment on the lot. She said that she will
have to ask the opinion of her other brothers and sisters.
Thereafter witness testified that she made an inquiry regarding the land and
she found out that the property belonging to their father Buenaventura
Cristobal had been transferred to the defendants as evidenced by transfer
certificates of title issued under the names of Florencio Cristobal (Exhibit "E"),
Norberto Cristobal (Exhibit "F"), Eufrosina Cristobal (Exhibit "G") and Jose
Cristobal (Exhibit "H").
She declared that she felt bad when she learned that the title to the property
belonging to her father had been transferred to her half brothers and sisters
with the exclusion of herself and the other children from the first marriage.
She filed a petition in the barangay to settle the issue among themselves,
however, no settlement was reached therein. This prompted the [petitioners]
to file the present case.
On cross-examination, [petitioner] Elisa Cristobal Sikat admitted that she was
aware that the subject property was owned by her father Buenaventura
Cristobal even before the latter died. She likewise stated that the [private
respondents] are the ones paying the real estate tax due on the lot.
Ester Santos testified for the [petitioners]. In her "Sinumpaang Salaysay" she
claimed that she was a neighbor of Mercedes, Anselmo, Socorro, Elisa,
Norberto, Florencio, Eufrosina and Jose Cristobal in San Juan, Metro Manila.
She said that she knows that Mercedes, Anselmo, Socorro and Elisa are the
children of Buenaventura Cristobal from the latter’s first marriage and the
Norberto, Florencio, Eufrosina, and Jose are the children of Buenaventura
Cristobal from the latter’s second marriage.
The said witness testified that Buenaventura Cristobal and his first family
lived right across where she stayed.
Witness corroborated the testimony of Elisa Cristobal Sikat regarding that the
fact that Martina Cristobal is the sister of Buenaventura Cristobal. The said
sister of Buenaventura Cristobal allegedly took care of Elisa. Anselmo and
Socorro were taken care of by Buenaventura Cristobal and the latter’s second
wife, Donata Enriquez, at P. Parada St., San Juan, Metro Manila.
When Buenaventura Cristobal died Anselmo was taken care of by Martina
Cristobal together with Elisa. Socorro on the other hand lived with Mercedes
who was then married.
Witness testified that she and Elisa were classmates from Grade I until they
finished high school at the Philippine School of Commerce in Manila.
When the second wife of Buenaventura Cristobal died, Martina Cristobal took
care of Norberto, Florencio, Eufrosina and Jose Cristobal.
Witness said that the brothers and sisters from the first and second marriages
lived together with their aunt Martina Cristobal for a long time.
When Elisa got married, she and her husband built their house on the lot
located at 194 P. Parada St., San Juan, Metro Manila. Until at present, Elisa
and her family lives in the said vicinity.
Witness Ester Santos declared that the children from the second marriage
namely Norberto, Eufrosina, Florencio and Jose built their houses and factory
at 194 P. Parada St., San Juan, Metro Manila.
She said that the children from the first and second marriages of
Buenaventura Cristobal had a harmonious relationship until sometime in
1994 when [petitioners] and Elisa Cristobal’s grandchildren were called
"squatters" by the [private respondents] and their grandchildren for residing
in the subject parcel of land.
On cross-examination, witness Ester Santos said she cannot recall the name
of the first wife of Buenaventura Cristobal and that she only knew them to be
married although she is not aware of the date when they were married.
[Petitioners] presented Jose Cristobal to bolster the claim that they are
brothers and sisters of the [private respondents].
He claimed that the only time when he became aware that [petitioners] are
his brothers and sisters was when he lived with their aunt Martina.
He said that the reason why they were giving a portion of the lot in question
to Elisa Cristobal Sikat was because the [private respondents] want her to
have a piece of property of her own and is not an admission that she is their
sister.
[Private respondents] on the other hand presented Eufrosina Cristobal as
their first witness. She testified that her parents, Buenaventura Cristobal and
Donata Enriquez were married on March 24, 1919 at San Felipe Neri,
Mandaluyong, Metro Manila. Out of the said union, Norberto, Florentino,
Eufrosina and Jose Cristobal were born.
The witness professed that on June 18, 1926, her parents were able to buy a
certain property containing five hundred thirty-five (535) square meters.
Said witness claimed that her brother Norberto died on September 20, 1980
leaving his wife Marcelina and children Buenaflor and Norberto, Jr.
The witness presented marked as Exhibit "33" for Norberto, Exhibit "34" for
Florencio, Exhibit "35" for Eufrosina and Exhibit "36’ for Jose the birth
certificates of her brothers and sisters.
On February 24, 1948, Eufrosina admitted having executed an Extrajudicial
Partition (Exhibit "D-4") with her brothers and sisters of the property left by
their parents.
She declared that since her father died in 1930, Elisa, Mercedes, and Anselmo
never asserted their alleged right over the property subject of the present
litigation.
She claimed that the [private respondents] have been paying all the taxes due
on the parcel of land and that title to the property has been subdivided under
their respective names.
On cross-examination, she said that when their parents passed away they
were taken care of by their aunt Martina who was the sister of her father. She
testified that she addressed Elisa Cristobal as "Kaka" and that since the time
they were kids, she had known that the [petitioners] are their brothers and
sisters. 7
After trial on the merits, the trial court rendered a judgment 8 on 11 July 1997,
dismissing the case, ruling that petitioners failed to prove their filiation with
the deceased Buenaventura Cristobal as the baptismal and birth certificates
presented have scant evidentiary value and that petitioners’ inaction for a
long period of time amounts to laches.
Not satisfied, petitioners sought recourse in the Court of Appeals which, in its
Decision 9 dated 22 July 1999, ruled that they were able to prove their filiation
with the deceased Buenaventura Cristobal thru "other means allowed by the
Rules of Court and special laws," but affirmed the ruling of the trial court
barring their right to recover their share of the subject property because of
laches.
Hence, this Petition anchored on the sole ground that:
RESPONDENT COURT GRIEVOUSLY ERRED IN APPLYING THE PRINCIPLE OF
LACHES TO THE CASE AT BAR RESULTING AS IT DOES TO GROSS INJUSTICE
AND INEQUITY WHICH ARE EXACTLY THE VERY EVILS SOUGHT TO BE
PREVENTED BY SUCH PRINCIPLE 10
The petition is impressed with merit. We agree with petitioners that the Court
of Appeals committed reversible error in upholding the claim of private
respondents that they acquired ownership of the entire subject property and
that the claim of petitioners to the subject property was barred by laches.
Before anything else, it must be noted that the title of the original complaint
filed by petitioners before the RTC was denominated as "Annulment of Title
and Damages"; nevertheless, the complaint prayed for the following:
1. Declaring the Extrajudicial Partition executed by the defendants
NORBERTO CRISTOBAL, FLORENCIO CRISTOBAL, EUFROCINA CRISTOBAL and
JOSE CRISTOBAL on February 24, 1948 as null and void for being fraudulent
contrary to law on succession.
2. Canceling the following Transfer Certificates of Titles issued by the Register
of Deeds for the Province of Rizal to wit:
(a) TCT No. 165132 issued in the name of FLORENCIO CRISTOBAL married to
MAURA RUBIO;
(b) TCT No. 165133 issued in the name of NORBERTO CRISTOBAL, married to
PAULINA IBANEZ;
(c) TCT No. 165134 issued in the name of EUFROCINA CRISTOBAL married to
FORTUNATO DELA GUERRA; and
(d) TCT No. 165135 issued in the name of JOSE CRISTOBAL married to
ADELAIDA IBANEZ and/or TCT No. 3993- ( if TCT No. 165035 was cancelled
and in lieu thereof to ISABELITA/MA. VICTORIA, EMMA, MA. CRISTINA,
JOSELITO and NELIA, all surnamed CRISTOBAL and children of JOSE
CRISTOBAL, one of the defendants.)
3. Re-partitioning the subject property left by deceased BUENAVENTURA
CRISTOBAL according to the law on succession applicable at the time of his
death.
4. Awarding ONE-HALF of the subject property to herein plaintiffs as their
lawful portions in the inheritance.
5. Ordering the defendants to pay to the plaintiffs the following sums of
money, to wit:
a. P1,000,000.00 as actual or compensatory damages
b. P300,000.00 as moral damages
c. P50,000.00 as attorney’s fees
d. P100,000.0 as exemplary damages 11
While the title of the complaint alone implies that the action involves
property rights to a piece of land, the afore-quoted prayer in the complaint
reveals that, more than property rights, the action involves hereditary or
successional rights of petitioners to their deceased father’s estate solely,
composed of the subject property.
Thus, even if the original complaint filed by petitioners before the RTC is
denominated as "Annulment of Title and Damages," we find it practicable to
rule on the division of the subject property based on the rules of succession
as prayed for in the complaint, considering that the averments in the
complaint, not the title are controlling. 12
To arrive at the final resolution of the instant Petition and the lone
assignment of error therein, the following need to be resolved first: (1)
whether or not petitioners were able to prove their filiation with the
deceased Buenaventura Cristobal; (2) whether or not the petitioners are
bound by the Deed of Partition of the subject property executed by the
private respondents; (3) whether or not petitioners’ right to question the
Deed of Partition had prescribed; and (4) whether or not petitioners’ right to
recover their share of the subject property is barred by laches.
Undeniably, the foregoing issues can be resolved only after certain facts have
been established. Although it is settled that in the exercise of the Supreme
Court’s power of review, the findings of facts of the Court of Appeals are
conclusive and binding on the Supreme Court, there are recognized
exceptions to this rule, namely: (1) when the findings are grounded entirely
on speculation, surmises or conjectures; (2) when the inference made is
manifestly mistaken, absurd or impossible; (3) when there is grave abuse of
discretion; (4) when the judgment is based on misapprehension of facts; (5)
when the findings of facts are conflicting; (6) when in making the findings the
Court of Appeals went beyond the issues of the case, or its findings are
contrary to the admissions of both the appellee and the appellant; (7) when
the findings are contrary to the trial court; (8) when the findings are
conclusions without citation of specific evidence on which they are based; (9)
when the facts set forth in the petition as well as in the petitioner’s main and
reply briefs are not disputed by the respondent; (10) when the findings of
facts are premised on the supposed absence of evidence and contradicted by
the evidence on record; and (11) when the Court of Appeals manifestly
overlooked certain relevant facts not disputed by the parties, which if
properly considered, would justify a different conclusion. 13 Since exceptions
(4) and (11) are present in the case at bar, this Court shall make its own
determination of the facts relevant for the resolution of the case.
The initial fact that needs to be established is the filiation of petitioners with
the deceased Buenaventura Cristobal.
Article 172 of the Family Code provides:
Art. 172. The filiation of legitimate children is established by any of the
following:
(1) The record of birth appearing in the civil register or a final judgment; or
(2) An admission of legitimate filiation in a public document or a private
handwritten instrument and signed by the parent concerned.
In the absence of the foregoing evidence, the legitimate filiation shall be
proved by:
(1) the open and continuous possession of the status of a legitimate child; or
(2) Any other means allowed by the Rules of Court and special laws.
"Any other means allowed by the Rules of Court and Special Laws," may
consist of the child’s baptismal certificate, a judicial admission, a family bible
in which the child’s name has been entered, common reputation respecting
the child’s pedigree, admission by silence, the testimony of witnesses, and
other kinds of proof of admission under Rule 130 of the Rules of Court. 14
In the present case, the baptismal certificates of Elisa, 15 Anselmo, 16 and the
late Socorro 17 were presented. Baptismal certificate is one of the acceptable
documentary evidence to prove filiation in accordance with the Rules of Court
and jurisprudence. In the case of Mercedes, who was born on 31 January
1909, she produced a certification 18 issued by the Office of the Local Civil
Registrar of San Juan, Metro Manila, attesting to the fact that records of birth
for the years 1901, 1909, 1932 to 1939, 1940, 1943, and 1948 were all
destroyed due to ordinary wear and tear.
Petitioners likewise presented Ester Santos as witness who testified that
petitioners enjoyed that common reputation in the community where they
reside as being the children of Buevaventura Cristobal with his first wife.
Testimonies of witnesses were also presented to prove filiation by continuous
possession of the status as a legitimate child. 19
In contrast, it bears to point out that private respondents were unable to
present any proof to refute the petitioners’ claim and evidences of filiation to
Buenaventura Cristobal.
The foregoing evidence thus suffice to convince this Court that petitioners
are, indeed, children of the late Buenaventura Cristobal during the first
marriage.
As to the validity of the Deed of Partition of the subject property executed by
the private respondents among themselves to the exclusion of petitioners,
the applicable rule is Section 1, Rule 74 of the Rules of Court, which states:
The fact of the extrajudicial settlement or administration shall be published
in a newspaper of general circulation in the manner provided in the next
succeeding section; but no extrajudicial settlement shall be binding upon any
person who has not participated therein or had no notice
thereof. (Underscoring supplied)
Under the said provision, without the participation of all persons involved in
the proceedings, the extrajudicial settlement is not binding on said
persons. 20 In the case at bar, since the estate of the deceased Buenaventura
Cristobal is composed solely of the subject property, the partition thereof by
the private respondents already amounts to an extrajudicial settlement of
Buenaventura Cristobal’s estate. The partition of the subject property by the
private respondents shall not bind the petitioners since petitioners were
excluded therefrom. Petitioners were not aware of the Deed of Partition
executed by private respondents among themselves in 1948. Petitioner Elisa
became aware of the transfer and registration of the subject property in the
names of private respondents only in 1994 when she was offered by private
respondent Eufrocina to choose between a portion of the subject property or
money, as one of the children of private respondent Jose wanted to construct
an apartment on the subject property. 21 This led petitioner Elisa to inquire as
to the status of the subject property. She learned afterwards that the title to
the subject property had been transferred to the names of private
respondents, her half brothers and sisters, to the exclusion of herself and her
siblings from the first marriage of Buenaventura Cristobal. The Deed of
Partition excluded four of the eight heirs of Buenaventura Cristobal who were
also entitled to their respective shares in the subject property. Since
petitioners were not able to participate in the execution of the Deed of
Partition, which constitutes as an extrajudicial settlement of the estate of the
late Buenaventura Cristobal by private respondents, such settlement is not
binding on them. 22 As the extrajudicial settlement executed by the private
respondents in February 1948 did not affect the right of petitioners to also
inherit from the estate of their deceased father, it was incorrect for the trial
and appellate court to hold that petitioners’ right to challenge the said
settlement had prescribed. Respondents defense of prescription against an
action for partition is a vain proposition. Pursuant to Article 494 of the Civil
Code, "no co-owner shall be obliged to remain in the co-ownership. Such co-
owner may demand at anytime the partition of the thing owned in common,
insofar as his share is concerned." In Budlong v. Bondoc, 23 this Court has
interpreted said provision of law to mean that the action for partition is
imprescriptible. It cannot be barred by prescription. For Article 494 of the Civil
Code explicitly declares: "No prescription shall lie in favor of a co-owner or
co-heirs as long as he expressly or impliedly recognizes the co-ownership." 24
Considering that the Deed of Partition of the subject property does not affect
the right of petitioners to inherit from their deceased father, this Court shall
then proceed to divide the subject property between petitioners and private
respondents, as the rule on succession prescribes.
It appears that the 535 square meters subject property was a conjugal
property of Buenaventura Cristobal and Donata Enriquez, the second wife, as
the property was purchased in 1926, during the time of their
marriage. 25Upon the deaths of Buenaventura in 1930 and Donata in 1936,
both deaths occurring before the enactment of the New Civil Code in 1950,
all the four children of the first marriage and the four children of the second
marriage shall share equally in the subject property in accordance with the
Old Civil Code. Absent any allegation showing that Buenaventura Cristobal
left any will and testament, the subject property shall be divided into eight
equal parts pursuant to Articles 921 26 and 931 27 of the Old Civil Code on
intestate succession, each receiving 66.875 square meters thereof.
At the time of death of Buenaventura Cristobal in 1930, Donata was only
entitled to the usufruct of the land pursuant to Article 834 of the Old Civil
Code, which provides:
ART. 834. A widower or widow who, on the death of his or her spouse, is not
divorced, or should be so by the fault of the deceased, shall be entitled to a
portion in usufruct equal to that corresponding by way of legitime to each of
the legitimate children or descendants who has not received any betterment.
If only one legitimate child or descendant survives, the widow or widower
shall have the usufruct of the third availment for betterment, such child or
descendant to have the naked ownership until, on the death of the surviving
spouse, the whole title is merged in him.
Donata’s right to usufruct of the subject property terminated upon her death
in 1936.
Accordingly, the pro-indiviso shares of Buenaventura Cristobal’s eight
children and their heirs, by right of representation, upon his death in 1930,
are as follows:
(1) Mercedes Cristobal- 66.875 square meters
(2) Amselmo Crostobal- 66.875 square meters
(3) Socorrro Crostobal- 66.875 square meters
(4) Elisa Crostobal-Sikat- 66.875 square meters
(5) Norberto Cristobal-66.875 square meters
(6) Florencio Cristobal-66.875 square meters
(7) Eufrocina Cristobal-66.875 square meters
(8) Jose Cristobal - 66.875 square meters
The Court will now determine whether petitioners’ right to their shares in the
subject property can be barred by laches.
Respondents’ defense of laches is less than convincing. Laches is the
negligence or omission to assert a right within a reasonable time, warranting
a presumption that the party entitled to assert it has abandoned it or declined
to assert it. It does not involve mere lapse or passage of time, but is principally
an impediment to the assertion or enforcement of a right, which has become
under the circumstances inequitable or unfair to permit. 28
In our view, the doctrine of laches does not apply in the instant case. Note
that upon petitioner Elisa’s knowledge in 1994 that the title to the subject
property had been transferred to the private respondents to the exclusion of
herself and her siblings from the first marriage of Buenaventura Cristobal,
petitioners filed in 1995 a petition with their barangay to settle the case
among themselves and private respondents, but since no settlement was
had, they lodged a complaint before the RTC on 27 March 1995, to annul
private respondents’ title over the land. There is no evidence showing failure
or neglect on their part, for an unreasonable and unexplained length of time,
to do that which, by exercising due diligence, could or should have been done
earlier. The doctrine of stale demands would apply only where for the reason
of the lapse of time, it would be inequitable to allow a party to enforce his
legal rights.
Moreover, absence any strong or compelling reason, this Court is not
disposed to apply the doctrine of laches to prejudice or defeat the rights of
an owner. 29 Laches is a creation of equity and its application is controlled by
equitable considerations. Laches cannot be used to defeat justice or
perpetuate an injustice. Neither should its application be used to prevent the
rightful owners of a property from recovering what has been fraudulently
registered in the name of another. 30
award is given in view of the peculiar circumstances cited and the special
reasons extant in the present case; 33
WHEREFORE, in view of the foregoing, this Court rules as follows:
(1) The Petition is GRANTED, and the assailed Decision of the Court of Appeals
is hereby REVERSED and SET ASIDE;
(2) Petitioners are RECOGNIZED and DECLARED as children of the late
Buenaventura Cristobal from his first marriage to Ignacia Cristobal;
(3) The Deed of Partition executed by private respondents is DECLARED not
binding upon petitioners who were not notified or did not participate in the
execution thereof;
(4) The subject property, covered by TCTs No. 165132, No. 165133, 165134,
and No. 165135, in the name of private respondents consisting of 535 square
meters is ORDERED to be partitioned and distributed in accordance with this
Decision and appropriate certificates of title be issued in favor of each of the
recognized heirs of the late Cristobal Buenaventura, and
(5) Petitioners are AWARDED the amount of ONE HUNDRED THOUSAND
(P100,000.00) PESOS as damages, to be paid by private respondents.
Costs against private respondents.
SO ORDERED.

Considering that (1) petitioners were unlawfully deprived of their legal

participation in the partition of the subject property; (2) this case has dragged
on for more than a decade, and (3) undoubtedly, petitioners sustained injury
but the exact amount of which, unfortunately, was not proved, we find it
reasonable to grant in petitioners’ favor nominal damages. Nominal damages
is adjudicated in order that a right of the plaintiff, which has been violated
and invaded by defendant, may be vindicated and recognized, and not for the
purpose of indemnifying the plaintiff for any loss suffered. 31 Where these are
allowed, they are not treated as an equivalent of a wrong but simply in
recognition of the existence of a technical injury. The amount to be awarded
as such damages should at least be commensurate to the injury sustained by
the petitioners considering the concept and purpose of said damages. 32 Such
HEIRS OF DICMAN VS CARINO
G.R. No. 146459 June 8, 2006
HEIRS OF DICMAN, namely: ERNESTO DICMAN, PAUL DICMAN, FLORENCE
DICMAN FELICIANO TORRES, EMILY TORRES, TOMASITO TORRES and HEIRS
OF CRISTINA ALAWAS and BABING COSIL, * Petitioners,
vs.
JOSE CARIÑO and COURT OF APPEALS, Respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
This refers to the petition for review on certiorari under Rule 45 of the Rules
of Court questioning the Decision1dated June 30, 2000 of the Court of Appeals
(CA) in C.A.-G.R. CV No. 33731, which affirmed in toto the Decision dated
November 28, 1990 of the Regional Trial Court (RTC), Branch 7 (Baguio City),
La Trinidad, Benguet; and the CA Resolution dated December 15, 2000 which
denied the petitioners’ motion for reconsideration.
The petition originated from an action for recovery of possession of the
eastern half of a parcel of land situated in Residence Section "J", Camp Seven,
Baguio City, consisting of 101,006 square meters, more or less, and identified
as Lot 46, Ts-39, Plan SWO-37115.2
The antecedent facts are clear:
The subject land, at the turn of the 20th century, had been part of the land
claim of Mateo Cariño. Within this site, a sawmill and other buildings had
been constructed by H.C. Heald in connection with his lumber business. On
March 14, 1916, H.C. Heald sold the buildings to Sioco Cariño, son of Mateo
Cariño and grandfather of private respondent Jose Cariño. Sioco Cariño then
took possession of the buildings and the land on which the buildings were
situated.
Ting-el Dicman,3 predecessor-in-interest of the petitioners, namely, Ernesto
Dicman, Paul Dicman, Florence Dicman, Babing Cosil, Feliciano Torres,
Cristina Alawas, Emily Torres and Tomasito Torres, and resident of Atab, a
sitio within the City of Baguio but located at some distance from the land in
controversy, had been employed by Sioco Cariño as his cattle herder. On the
advice of his lawyers, and because there were already many parcels of land
recorded in his name,4 Sioco Cariño caused the survey of the land in
controversy in the name of Ting-el Dicman.
On October 22, 1928, Ting-el Dicman executed a public instrument entitled
"Deed of Conveyance of Part Rights and Interests in Agricultural Land" with
Sioco Cariño. The deed reads:
DEED OF CONVEYANCE OF PART RIGHTS AND
INTERESTS IN AGRICULTURAL LAND.
KNOW ALL PERSONS BY THESE PRESENTS:
That I, Ting-el Diac-man, of legal age, widower, and resident of the sitio
known as "Atab", near Camp Seven, City of Baguio, Philippine Islands, DO
HEREBY STATE, viz: —
That I am the applicant for a free-patent of a parcel of land (public), having a
surface of over ten (10) hectares, surveyed by the District Land Office of
Baguio for me, and located in the place known as Camp Seven, Baguio;
That to-date I have not as yet received the plan for said survey;
That Mr. Sioco Cariño has advanced all expenses for said survey for me and
in my name, and also all other expenses for the improvement of said land, to
date;
That for and in consideration of said advance expenses, to me made and
delivered by said Mr. Sioco Cariño, I hereby pledge and promise to convey,
deliver and transfer unto said Sioco Cariño, of legal age, married to Guilata
Acop, and resident of Baguio, P.I., his heirs and assigns, one half (1/2) of my
title, rights, and interest to and in the aforesaid parcel of land; same to be
delivered, conveyed and transferred in a final form, according to law, to him,
his heirs and assigns, by me, my heirs, and assigns, as soon as title for the
same is issued to me by proper authorities.
That this conveyance, transfer, or assignment, notwithstanding its temporary
nature, shall have legal force and effect; once it is approved by the approving
authorities all the final papers and documents, this instrument shall be
considered superseded.
After I have received my title to said parcel of land I bind myself, my heirs and
assigns, to execute the final papers and forward same for approval of the
competent authorities at Mr. Sioco Cariño’s expense.
WITNESS MY HAND in the City of Baguio, P.I., this, the 22nd day of October,
1928, A.D.
his right thumbmark5
TING-EL DIAC-MAN
After the execution of the foregoing deed, Sioco Cariño, who had been in
possession of the land in controversy since 1916, continued to stay thereon.
On January 10, 1938, Sioco Cariño executed, as seller, a public instrument
entitled "Deed of Absolute Sale" covering the subject land and its
improvements with his son, Guzman Cariño, as buyer. The contract states in
part:
x x x for and in consideration of the sum of ONE PESO (P 1.00) Philippine
Currency and other valuable considerations which I had received from my
son, Guzman A. Cariño x x x have ceded, transferred and conveyed as by these
presents do hereby cede, convey and transfer unto the [sic] said Guzman A.
Cariño, his heirs, executors, administrators and assigns, all my rights, title,
interests in and participation to that parcel of land (public) covered by an
application for free patent with a surface area of Ten (10) hectares, surveyed
by the District Land Office of Baguio in the name of Pingel Dicman, and who
ceded, conveyed and transferred one half of his title, rights and interests to
me under an instrument executed by the said owner in the city of Baguio,
Philippines, on the 22nd day of October, 1928 A.D. and duly ratified before
Notary Public x x x together with all improvements therein, consisting of
oranges, mangoes, and other fruit trees and a building of strong materials
(half finished) x x x, which building was purchased by me from H.C. Heald on
March 14, 1916, free from all liens and encumbrances, with full rights and
authority to the said Guzman A. Cariño to perfect his claim with any
government agency the proper issuance of such patent or title as may be
permitted to him under existing laws.
x x x x6
In a letter dated January 15, 1938, Sioco Cariño asked his son, Guzman Cariño,
who had been doing business in Damortis, Sto. Tomas, La Union, to take
possession of the subject land and building.7 Guzman Cariño moved to Baguio
as requested and occupied the property. Evidence was adduced in the RTC to
the effect that Guzman Cariño took possession of the property publicly,
peacefully, and in the concept of owner: the directory of Baguio Telephones
published in October 1940 lists the residence of Guzman A. Cariño at Camp 7,
Baguio City, along with his telephone number; pictures were taken of him and
his family, including the private respondent who was then an infant, depicting
the property in the background; U.S. Army authorities obtained permission
from Guzman Cariño to use a part of the land in question after the war; he
introduced various improvements on the property over the years and
exercised acts of ownership over them; he permitted the use of portions of
the land to Governor Eulogio Rodriguez, Jr. and the Boy Scouts of Rizal
Province; he leased out portions of the land to Bayani Pictures, Inc.; and his
neighbors confirmed the possession and occupation over the property of
Guzman Cariño and, after him, his son, herein private respondent Jose Cariño.
These findings of fact were either confirmed or uncontroverted by the CA.8
On July 27, 1954, Guzman Cariño had the entire Lot 46 resurveyed so as to
indicate the half portion that belonged to him and the other half that
belonged to the petitioners. The resurvey evenly divided the lot into Lot 76-
A and 76-B, and purportedly indicated that Lot 76-A, consisting of 50,953
square meters, belonged to the petitioners, while Lot 76-B, also consisting of
50,953 square meters, formerly pertained to Sioco Cariño and, later, to
Guzman Cariño. Additionally, the resurvey indicated the house where private
respondent Jose Cariño resided and, before him, where his predecessors-in-
interest, Sioco and Guzman Cariño, also resided.
On May 23, 1955, Guzman Cariño filed a Free Patent Application over the land
in question. The application was given due course, but Guzman later
withdrew it when he decided to file his opposition to the petition later filed
by the heirs of Ting-el Dicman. This petition, entitled "Petition of the Heirs of
Dicman to Reopen Civil Reservation Case No. 1, G.L.R.O. 211," was filed by
Felipe Dicman, Bobing Dicman and Cating Dicman, in their capacity as
compulsory heirs of Ting-el Dicman on April 24, 1959 with the Court of First
Instance of Baguio. The petition sought to establish ownership over Lot 76-A
and Lot 76-B which, taken together, covered an area of 10.1006 hectares.
Guzman Cariño opposed the petition insofar as he insisted ownership over After the dismissal of the case, Guzman Cariño was left undisturbed in his
Lot 76-B, the land in controversy. The Estate of Sioco Cariño likewise filed an possession of the subject property until his death on August 19, 1982. His
opposition. remains are buried on the land in question, next to the large house purchased
in 1916 by his father, Sioco Cariño (the grandfather of private respondent),
On March 6, 1963, the trial court rendered a partial judgment and confirmed
from H.C. Heald. Guzman’s widow and son, private respondent Jose Sioco C.
that the title over Lot 76-A belonged to the heirs of Ting-el Dicman, there
Cariño, continued possession of the subject property.10
having been no adverse claim. But as to Lot 76-B, the trial court found it
necessary to hold further hearing in order to decide on the adverse claims of On April 20, 1983, petitioners, suing as compulsory heirs of Ting-el Dicman,
the parties. revived the foregoing case by filing a complaint for recovery of possession
with damages involving the subject property with the RTC, docketed as Civil
Meanwhile, on January 8, 1960, while the foregoing petition was pending in
Case No. 59-R. As earlier stated, petitioners, then complainants, originally
the trial court, President Carlos P. Garcia issued Proclamation No. 628
sought to recover possession of the eastern half of the parcel of land situated
"excluding from the operation of the Baguio Townsite Reservation certain
in Residence Section "J", Camp Seven, Baguio City, consisting of 101,006
parcels of public land known as ‘Igorot Claims’ situated in the City of Baguio
square meters, more or less, and identified as Lot 46, Ts-39, Plan SWO-37115.
and declaring the same open to disposition under the provisions of Chapter
VII of the Public Land Act." The Proclamation further provided that the "Igorot Petitioners, then plaintiffs, averred in their complaint:
Claims" enumerated therein shall be "subject to the condition that except in
10. That however, this Honorable Court was not able to decide the [ ] petition
favor of the government or any of its branches, units, or institutions, lands
for reopening as far as the remaining eastern half portion of the above-
acquired by virtue of this proclamation shall not be encumbered or alienated
described property is concerned due to the fact that the said petition was
within a period of fifteen years from and after the date of issuance of patent."
dismissed for alleged lack of jurisdiction; x x x
One such claim pertained to the "Heirs of Dicman," to wit:
11. That because of the above-mentioned dismissal, the conflict between
Name Lot No. Survey Plan Residence Section Area (Sq.m.)
herein plaintiffs and defendant over the half eastern portion of the above-
Heirs of 46 Swo-37115 "J" 101,006 described property which was one of the issues supposed to be decided in
the said judicial reopening case remains undecided;
Dicman
12. That after the dismissal of the abovementioned petition and before the
Before the trial court could dispose of the case, the Supreme Court
dispute between herein plaintiffs and defendant over the eastern half portion
promulgated Republic v. Marcos9 which held that Courts of First Instance of
of the above-described property, defendant unlawfully and illegally continue
Baguio have no jurisdiction to reopen judicial proceedings on the basis of
to occupy portion [sic] of the above-described property to the clear damage
Republic Act No. 931. As a consequence, on July 28, 1978, the trial court
and prejudice of herein plaintiffs;
dismissed the petition to reopen Civil Reservation Case No. 1, G.L.R.O. 211
insofar as Lot 76-B was concerned, and the certificate of title issued pursuant 13. That the defendant has no valid claim of ownership and possession over
to the partial decision involving Lot 76-A was invalidated. The trial court any of the portions of the above-described property;
stated that the remedy for those who were issued titles was to file a petition
14. That plaintiffs and their predecessors-in-interest have been religiously
for revalidation under Presidential Decree No. 1271, as amended by
paying the realty taxes covering the above-described property x x x11
Presidential Decrees No. 1311 and 2034.
Private respondent Jose Cariño filed his answer and prayed for dismissal. He
alleged that his predecessors-in-interest had acquired the land by onerous
title through the "Deed of Absolute Sale" dated January 10, 1938 executed by
his grandfather, Sioco Cariño, as seller, and his father, Guzman Cariño, as
buyer; that the property was earlier acquired by Sioco Cariño by virtue of the
"Deed of Conveyance of Part Rights and Interests in Agricultural Land" dated
October 22, 1928 executed between Sioco Cariño and Ting-el Dicman; and
that he has been in possession of the subject property for 55 years peacefully,
in good faith, and in concept of owner and therefore perfected title over the
same through acquisitive prescription.
On June 13, 1983, the administratrix of the Estate of Sioco Cariño filed a
motion to intervene with the RTC. On July 1, 1983, the RTC granted said
motion. On July 11, 1983, the Estate of Sioco Cariño filed its Complaint-in-
Intervention, praying for quieting of title among the adverse claimants.
The RTC, through an ocular inspection on February 15, 1984, found that the
larger building still stands on the land in controversy and, together with the
surrounding area, constituted the residence and was in the possession of
private respondent and his family.
On November 28, 1990, the RTC rendered its decision in favor of private
respondent, the dispositive portion of which states:
IN VIEW OF THE FOREGOING, judgment is hereby rendered as follows:
1. Plaintiffs’ complaint is hereby DISMISSED;
2. Plaintiffs’-Intervenors complaint-in-intervention is hereby dismissed;
3. Defendant is hereby declared the lawful possessor and as the party who
has the better right over the land subject matter [sic] of this action and as
such he may apply for the confirmation of his title thereto in accordance with
law (R.A. No. 894012 )[.] Defendant’s counterclaim is dismissed;
4. Costs is [sic] adjudged against the plaintiff and plaintiff-intervenor.
SO ORDERED.
To support its ruling, the RTC found that the tax declarations and their
revisions submitted as evidence by the petitioners made no reference to the
land in question;13 that no tax declaration over the land declared in the name
of the Estate of Sioco Cariño had been submitted as evidence, and that the
intervenor-estate presented tax declarations over the building only; that it
was Guzman Cariño alone who declared for taxation purposes both the land
and the improvements thereon in his name;14 that there is no evidence to the
effect that petitioners ever filed any action to challenge the validity of the
"Deed of Conveyance of Part Rights and Interests in Agricultural Land" dated
October 22, 1928; that even assuming that this instrument may be invalid for
whatever reason, the fact remains that Sioco Cariño and his successors-in-
interest had been in possession of the subject property publicly, adversely,
continuously and in concept of owner for at least 55 years before the filing of
the action;15 that Sioco’s successor, Guzman Cariño, had been in open and
continuous possession of the property in good faith and in the concept of
owner from 1938 until his death in 1982 and, hence, the Estate of Sioco
Cariño has lost all rights to recover possession from Guzman Cariño or his
heirs and assigns; and that although the Estate of Sioco Cariño attempted to
assail the genuineness and due execution of the "Deed of Absolute Sale"
dated January 10, 1938 executed by Sioco Cariño in favor of his son, Guzman
Cariño, the challenge failed since no evidence had been adduced to support
the allegation of forgery.16
On January 23, 1991, petitioners seasonably filed their notice of appeal. The
RTC, however, denied the motion for reconsideration and motion to admit
appeal filed by the Estate of Sioco Cariño on July 3, 1991 for being filed out of
time.
Petitioners raised the following issues before the Court of Appeals:
1. THE HONORABLE TRIAL COURT SERIOUSLY ERRED IN NOT CONSIDERING
THE DOCUMENTARY EVIDENCE OF THE PLAINTIFFS-APPELLANTS AND THE
STRAIGHTFORWARD DECLARATIONS OF THEIR WITNESS.
2. THE HONORABLE TRIAL COURT ERRED IN CONSIDERING THE DEED OF
CONVEYANCE [OF] PART RIGHTS AND INTERESTS IN AGRICULTURAL LAND
EXECUTED BY DICMAN IN FAVOR OF SIOCO CARIÑO DESPITE ITS NULLITY.
3. THE HONORABLE TRIAL COURT ERRED IN DECLARING DEFENDANT-
APPELLEE TO HAVE A BETTER RIGHT TO THE PROPERTY IN DISPUTE.
4. THE HONORABLE TRIAL COURT ERRED IN DISMISSING THE COMPLAINT
AND NOT GRANTING THE RELIEFS PRAYED FOR THEREIN.
On June 30, 2000, the CA dismissed the petition and affirmed in toto the
ruling of the RTC. On December 15, 2000, the CA issued a Resolution denying
petitioners’ motion for reconsideration.
The CA based its ruling on the following reasons: that the petitioners raised
for the first time on appeal the issue on whether the "Deed of Conveyance of
Part Rights and Interests in Agricultural Land" is void ab initio under Sections
145 and 146 of the Administrative Code of Mindanao and Sulu17 (which was
made applicable later to the Mountain Province and Nueva Viscaya by Act
2798, as amended by Act 2913, and then to all other cultural minorities found
within the national territory by virtue of Section 120 of the Public Land Act18 )
and, hence, cannot be considered by the reviewing court;19 that, even if this
issue were considered, the records fail to show that Ting-el Dicman, though
an Igorot, is a non-Christian and, hence, the foregoing laws are not
applicable;20 that there was sufficient proof of consideration for the said
deed;21 and that even if the deed were a mere contract to sell and not an
absolute sale, under Borromeo v. Franco22 the obligation on the part of the
purchaser to perfect the title papers within a certain time is not a condition
subsequent nor essential to the obligation to sell, but rather the same is an
incidental undertaking the failure to comply therewith not being a bar to the
sale agreed upon.23
On February 12, 2001, petitioners, through newly retained counsel, filed their
petition for review on certiorari under Rule 45.
Petitioners raise the following grounds for the petition:
A.
THE COURT OF APPEALS ERRED IN RULING THAT THE PROVISIONS OF ACT NO.
2798 ARE NOT APPLICABLE TO THE "DEED OF CONVEYANCE" EXECUTED BY
PING-EL DICMAN ON THE GROUNDS THAT THERE IS NO PROOF THAT HE WAS
A NON-CHRISTIAN AND THAT BAGUIO CITY IS NOT COVERED BY THE SAID
ACT.
B.
THE COURT OF APPEALS ERRED IN THE APPLICATION OF THE RULING IN
BORROMEO V. FRANCO (5 PHIL 49 [1905]) THAT AN AGREEMENT ON THE
PART OF THE PARTY TO A CONTRACT TO PERFECT THE TITLE PAPERS TO A
CERTAIN PROPERTY WITHIN A CERTAIN TIME IS NOT A CONDITION
SUBSEQUENT OR ESSENTIAL OF THE OBLIGATION TO SELL [sic].
C.
THE COURT OF APPEALS ERRED IN RULING THAT THE PROPERTY SUBJECT OF
LITIGATION AND OVER WHICH RESPONDENT’S IMPROVEMENTS ARE BUILT
BELONGS TO RESPONDENT NOTWITHSTANDING UNCONTROVERTED
EVIDENCE THAT PETITIONERS’ PREDECESSOR-IN-INTEREST PING-EL DICMAN
HAD APPLIED FOR FREE PATENT OVER THE SUBJECT AREA AND HAD BEEN
ISSUED PLAN SWO-37115 IN HIS NAME BY THE BUREAU OF LANDS IN 1954
AND HAD BEEN IN ACTUAL, OPEN, PEACEFUL, ADVERSE AND CONTINUOUS
POSSESSION OF THE PROPERTY SINCE THE EARLY 1900s UNTIL HIS DEATH
WHEN HIS GRANCHILDREN AND SUCCESSORS-IN-INTEREST, THE
PETITIONERS, TOOK OVER AND CONTINUED THE POSSESSION OF THEIR
GRANDFATHER, PING-EL DICMAN.
On March 2, 2001, petitioners filed their Manifestation and Motion to
Substitute Babing Cosil and Cristina Alawas With Their Respective Heirs
stating, among others, that Julio F. Dicman, son of petitioner Ernesto Dicman,
had been appointed by the petitioners to sign the petition for and in their
behalf, but due to distance and time constraints between Makati City and
Baguio, he was not able to submit the same in time for the deadline for the
petition on February 12, 2001. Petitioners attached the Special Power of
Attorney seeking to formalize the appointment of Julio F. Dicman as their
attorney-in-fact and to ratify his execution of the verification and certification
of non-forum shopping for and on behalf of the petitioners.
On March 15, 2001, private respondent filed with this Court a Motion for
Leave of Court to File Motion to Dismiss and/or Deny Due Course, arguing
that the petition failed to comply with the requirements for verification and
certification of non-forum shopping. The affiant of the petition, according to
private respondent, is not a principal party in the case; rather, he is merely
the son of Ernesto Dicman, one of the petitioners. The verification and
certification reads:
VERIFICATION AND CERTIFICATION
I, JULIO F. DICMAN, of legal age, Filipino, with residence address at Camp 7,
Montecillo Road, Baguio City, after being first duly sworn in accordance with
law, do hereby depose and state:
1. I am one of the petitioners in the above-entitled case;
x x x (emphasis supplied)
To private respondent, since Ernesto Dicman, one of the petitioners, appears
to be alive, he excludes his son as the successor-in-interest of Ting-el Dicman.
The verification, therefore, is false in view of the statement under oath that
Julio F. Dicman is a petitioner when in fact he is not, and should be cause for
the dismissal of the case and indirect contempt of court, without prejudice to
administrative and criminal action.
On May 2, 2001, in their Manifestation and Motion for Leave to File the
Attached Reply and Reply, petitioners argued that while it may be true that
the verification and certification to the petition were signed by Julio F.
Dicman, the son of one of the petitioners, they subsequently confirmed his
authority to sign on behalf of all the petitioners through the Special Power of
Attorney submitted to the Court in a Manifestation and Motion to Substitute
Babing Cosil and Cristina Alawas With Their Respective Heirs filed on March
2, 2001. Petitioners invoked substantial compliance and prayed that the
Court overlook the procedural lapse in the interest of substantial justice. The
parties thereafter submitted their respective memoranda.
The petition must be dismissed on the following grounds:
1. Section 5, Rule 7 of the 1997 Rules of Civil Procedure, which requires the
pleader to submit a certificate of non-forum shopping to be executed by the
plaintiff or principal party, is mandatory, and non-compliance therewith is a
sufficient ground for the dismissal of the petition.24 The forum shopping
certification must be signed by the party himself as he has personal
knowledge of the facts therein stated.25 Obviously, it is the plaintiff or
principal party who is in the best position to know whether he actually filed
or caused the filing of a petition in the case.26 Where there are two or more
plaintiffs or petitioners, all of them must sign the verification and non-forum
certification, and the signature of only one of them is insufficient,27 unless the
one who signs the verification and certification has been authorized to
execute the same by, and on behalf of, the co-plaintiff or co-petitioner.28 But
it must be stressed that the requirement the principal party himself should
sign the certification applies only to a natural person and not to a juridical
person which can only act through its officer or duly authorized agent.29
However, the Court has also held that the rules on forum shopping were
designed to promote and facilitate the orderly administration of justice and
thus should not be interpreted with such absolute literalness as to subvert its
own ultimate and legitimate objective. The rule of substantial compliance
may be availed of with respect to the contents of the certification. This is
because the requirement of strict compliance with the provisions regarding
the certification of non-forum shopping merely underscores its mandatory
nature in that the certification cannot be altogether dispensed with or its
requirements completely disregarded.30 Thus, under justifiable
circumstances, the Court has relaxed the rule requiring the submission of
such certification considering that although it is obligatory, it is not
jurisdictional.31lawphil.net
But a perusal of the relevant decisions handed down by this Court
consistently shows that substantial compliance may be invoked and the
procedural lapse overlooked provided that, where the petitioner is a natural
person as in the case at bar, the authorized signatory must also be a principal
party or co-petitioner.32 Petitioners, as natural persons, cannot therefore
appoint a non-party to sign for them, especially since only the petitioners
occupy the best position to know whether they actually filed or caused the
filing of a petition in this case and who personally know the facts stated in the
petition. On this point alone the petition should be dismissed.
2. It is a settled rule that in the exercise of the Supreme Court’s power of
review, the Court is not a trier of facts and does not normally undertake the
re-examination of the evidence presented by the contending parties during
the trial of the case considering that the findings of facts of the CA are
conclusive and binding on the Court. While jurisprudence has recognized
several exceptions in which factual issues may be resolved by this Court,
namely: (1) when the findings are grounded entirely on speculation, surmises
or conjectures; (2) when the inference made is manifestly mistaken, absurd
or impossible; (3) when there is grave abuse of discretion; (4) when the
judgment is based on a misapprehension of facts; (5) when the findings of
facts are conflicting; (6) when in making its findings the CA went beyond the
issues of the case, or its findings are contrary to the admissions of both the
appellant and the appellee; (7) when the findings are contrary to the trial
court; (8) when the findings are conclusions without citation of specific
evidence on which they are based; (9) when the facts set forth in the petition
as well as in the petitioner’s main and reply briefs are not disputed by the
respondent; (10) when the findings of fact are premised on the supposed
absence of evidence and contradicted by the evidence on record; and (11)
when the CA manifestly overlooked certain relevant facts not disputed by the
parties, which, if properly considered, could justify a different
conclusion,33 none of these exceptions has been shown to apply in the
present case and, hence, this Court may not review the findings of fact made
by the lower courts.
3. Petitioners argue on appeal that the "Deed of Conveyance of Part Rights
and Interests in Agricultural Land" dated October 22, 1928 executed between
Sioco Cariño and Ting-el Dicman is void ab initio for lack of approval of
competent authorities as required under Section 145 in relation to Section
146 of the Administrative Code of Mindanao and Sulu, the application of
which was later extended to the Mountain Province and Nueva Viscaya and,
thereafter, throughout the entire national territory;34 that the sale was
without valid consideration; and that the said deed is not an absolute sale but
merely a contract to sell subject to the suspensive condition that the papers
evidencing the title must first be perfected. These arguments were lumped
under the following issue in their appeal to the CA:
2. THE HONORABLE TRIAL COURT ERRED IN CONSIDERING THE DEED OF
CONVEYANCE [OF] PART RIGHTS AND INTERESTS IN AGRICULTURAL LAND
EXECUTED BY DICMAN IN FAVOR OF SIOCO CARIÑO DESPITE ITS NULLITY.
The foregoing issue and the incidents thereunder were never raised by the
petitioners during the proceedings before the RTC. Suffice it to say that issues
raised for the first time on appeal and not raised timely in the proceedings in
the lower court are barred by estoppel.35 Matters, theories or arguments not
brought out in the original proceedings cannot be considered on review or
appeal where they are raised for the first time. To consider the alleged facts
and arguments raised belatedly would amount to trampling on the basic
principles of fair play, justice and due process.36
4. Even if this Court should declare the sale null and void or the agreement
merely a contract to sell subject to a suspensive condition that has yet to
occur, private respondent nonetheless acquired ownership over the land in
question through acquisitive prescription.37
The records show that as early as 1938, the land in controversy had been in
the possession of Guzman Cariño, predecessor-in-interest of private
respondent, continuously, publicly, peacefully, in concept of owner, and in
good faith with just title, to the exclusion of the petitioners and their
predecessors-in-interest, well beyond the period required under law to
acquire title by acquisitive prescription which, in this case, is 10 years.38 The
findings of fact of the lower courts, and which this Court has no reason to
disturb, inescapably point to this conclusion: immediately after the "Deed of
Absolute Sale," a public instrument dated January 10, 1938, had been
executed by Sioco Cariño in favor of his son, Guzman Cariño (the father of
private respondent), the latter immediately occupied the property; the 1940
directory of Baguio Telephones lists his residence at Camp 7, Baguio City
along with his telephone number; his permitting the use of portions of the
property to various third parties; his introduction of improvements over the
land in controversy; the testimonial accounts of his neighbors; and that it was
Guzman Cariño alone who declared for tax purposes both the land and the
improvements thereon in his name, while the tax declarations of the other
claimants made no reference to the subject property.39 Although arguably
Sioco Cariño may not have been the owner of the subject property when he
executed the "Deed of Absolute Sale" in 1938 in favor of his son, the
requirement of just title is nonetheless satisfied, which means that the mode
of transferring ownership should ordinarily have been valid and true, had the
grantor been the owner.40 By the time the successors-in-interest of Ting-el
Dicman sought to establish ownership over the land in controversy by filing
their "Petition of the Heirs of Dicman to Reopen Civil Reservation Case No. 1,
G.L.R.O. 211" on April 24, 1959 with the trial court, and which Guzman timely
opposed, more than 20 years had already elapsed. Thus, the 10-year period
for acquisitive prescription is deemed satisfied well before Guzman’s
possession can be said to be civilly interrupted by the filing of the foregoing
petition to reopen.41 After the dismissal of that case on July 28, 1978, Guzman
Cariño was left undisturbed in his possession of the subject property until his 2. b. Delay in asserting the complainant’s rights, the complainant having had
death on August 19, 1982. His remains are buried on the land in question. knowledge or notice, of the defendant’s conduct and having been afforded
Thereafter, Guzman’s widow and son, herein private respondent, continued an opportunity to institute a suit;
possession of the subject property in the same manner. When petitioners,
3. c. Lack of knowledge or notice on the part of the defendant that the
heirs of Ting-el Dicman, tried to revive the case on April 20, 1983, they had,
complainant would assert the right on which he bases his suit; and
far before that time, lost all rights to recover possession or ownership.
d. Injury or prejudice to the defendant in the event relief is accorded to the
5. Prescinding from the issue on prescription, the petitioners and their
complainant, or the suit is not held to be barred.50
predecessors-in-interest are nonetheless guilty of laches.
As correctly held by the RTC, there is no evidence to the effect that Ting-el
Laches has been defined as such neglect or omission to assert a right, taken
Dicman or his successors-in-interest ever filed any action to question the
in conjunction with the lapse of time and other circumstances causing
validity of the "Deed of Conveyance of Part Rights and Interests in Agricultural
prejudice to an adverse party, as will operate as a bar in equity.42 It is a delay
Land" after its execution on October 22, 192851 despite having every
in the assertion of a right which works disadvantage to another43 because of
opportunity to do so. Nor was any action to recover possession of the
the inequity founded on some change in the condition or relations of the
property from Guzman Cariño instituted anytime prior to April 24, 1959, a
property or parties.44 It is based on public policy which, for the peace of
time when the period for acquisitive prescription, reckoned from Guzman’s
society,45ordains that relief will be denied to a stale demand which otherwise
occupation of the property in 1938, had already transpired in his favor. No
could be a valid claim.46 It is different from and applies independently of
evidence likewise appears on the record that Sioco Cariño or his Estate ever
prescription. While prescription is concerned with the fact of delay, laches is
filed any action to contest the validity of the "Deed of Absolute Sale" dated
concerned with the effect of delay. Prescription is a matter of time; laches is
January 10, 1938.52 Though counsel for the Estate of Sioco Cariño tried to
principally a question of inequity of permitting a claim to be enforced, this
assail the deed as a forgery in the trial court, the attempt failed and no appeal
inequity being founded on some change in the condition of the property or
was lodged therefrom. It will be difficult for this Court to assume that the
the relation of the parties. Prescription is statutory; laches is not. Laches
petitioners and their predecessors were all the while ignorant of the adverse
applies in equity, whereas prescription applies at law. Prescription is based
possession of private respondent and his predecessors given the publicity of
on a fixed time, laches is not.47 Laches means the failure or neglect for an
their conduct and the nature of their acts. Private respondent and his
unreasonable and unexplained length of time, to do that which, by exercising
predecessors-in-interest were made to feel secure in the belief that no action
due diligence, could or should have been done earlier; it is negligence or
would be filed against them by such passivity. There is no justifiable reason
omission to assert a right within a reasonable time, warranting the
for petitioners’ delay in asserting their rights—the facts in their entirety show
presumption that the party entitled to assert it either has abandoned or
that they have slept on them. For over 30 years reckoned from the "Deed of
declined to assert it.48 It has been held that even a registered owner of
Conveyance of Part Rights and Interests in Agricultural Land" dated October
property under the Torrens Title system may be barred from recovering
22, 1928, or 20 years reckoned from the "Deed of Absolute Sale" dated
possession of property by virtue of laches.49
January 10, 1938, they neglected to take positive steps to assert their
Given the foregoing findings of fact, all the four (4) elements of laches, as dominical claim over the property. With the exception of forgery, all other
prescribed by the decisions of this Court, are present in the case, to wit: issues concerning the validity of the two instruments abovementioned, as
well as the averment that the former was in the nature of a contract to sell,
1. a. Conduct on the part of the defendant, or of one under whom he claims,
were issues raised only for the first time on appeal and cannot therefore be
giving rise to the situation of which complaint is made and for which the
taken up at this late a stage. The features of this case are not new. The Court
complaint seeks a remedy;
has on several occasions held in particular that despite the judicial pursuit of the loftiest ends ordained by the Constitution this Court finds that
pronouncement that the sale of real property by illiterate ethnic minorities is the law is clear and leaves no room for doubt, it shall decide according to the
null and void for lack of approval of competent authorities, the right to principles of right and justice as all people conceive them to be, and with due
recover possession has nonetheless been barred through the operation of the appreciation of the rights of all persons concerned.
equitable doctrine of laches.53
WHEREFORE, the instant petition is DENIED and the assailed Decision and
6. Petitioners argue that Proclamation No. 628 issued by then President Resolution of the Court of Appeals are AFFIRMED.
Carlos P. Garcia on January 8, 1960 had the effect of "segregating" and
No pronouncement as to costs.
"reserving" certain Igorot claims identified therein, including one purportedly
belonging to the "Heirs of Dicman," and prohibiting any encumbrance or SO ORDERED.
alienation of these claims for a period of 15 years from acquisition of patent.
But by the time the Proclamation had been issued, all rights over the property
in question had already been vested in private respondent. The executive
issuance can only go so far as to classify public land, but it cannot be
construed as to prejudice vested rights. Moreover, property rights may not
be altered or deprived by executive fiat alone without contravening the due
process guarantees54 of the Constitution and may amount to unlawful taking
of private property to be redistributed for public use without just
compensation.55

The recognition, respect, and protection of the rights of indigenous peoples

to preserve and develop their cultures, traditions, and institutions are vital
concerns of the State and constitute important public policies which bear
upon this case. To give life and meaning unto these policies the legislature
saw it fit to enact Republic Act No. 8371, otherwise known as The Indigenous
Peoples Rights Act of 1997, as a culminating measure to affirm the views and
opinions of indigenous peoples and ethnic minorities

on matters that affect their life and culture.56 The provisions of that law unify
an otherwise fragmented account of constitutional, jurisprudential and
statutory doctrine which enjoins the organs of government to be vigilant for
the protection of indigenous cultural communities as a marginalized
sector,57 to protect their ancestral domain and ancestral lands and ensure
their economic, social, and cultural well-being,58 and to guard their patrimony
from those inclined to prey upon their ignorance or ductility.59 As the final
arbiter of disputes and the last bulwark of the Rule of Law this Court has
always been mindful of the highest edicts of social justice especially where
doubts arise in the interpretation and application of the law. But when in the
SAFEGUARD SECURITY AGENCY VS TANGCO
G.R. No. 165732 December 14, 2006
SAFEGUARD SECURITY AGENCY, INC., and ADMER PAJARILLO, petitioners,
vs.
LAURO TANGCO, VAL TANGCO, VERN LARRY TANGCO, VAN LAURO
TANGCO, VON LARRIE TANGCO, VIEN LARI TANGCO and VIVIEN LAURIZ
TANGCO, respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a petition for review on certiorari filed by Safeguard Security
Agency, Inc. (Safeguard) and Admer Pajarillo (Pajarillo) assailing the
Decision1 dated July 16, 2004 and the Resolution2 dated October 20, 2004
issued by the Court of Appeals (CA) in CA-G.R. CV No. 77462.
On November 3, 1997, at about 2:50 p.m., Evangeline Tangco (Evangeline)
went to Ecology Bank, Katipunan Branch, Quezon City, to renew her time
deposit per advise of the bank's cashier as she would sign a specimen card.
Evangeline, a duly licensed firearm holder with corresponding permit to carry
the same outside her residence, approached security guard Pajarillo, who was
stationed outside the bank, and pulled out her firearm from her bag to
deposit the same for safekeeping. Suddenly, Pajarillo shot Evangeline with his
service shotgun hitting her in the abdomen instantly causing her death.
Lauro Tangco, Evangeline's husband, together with his six minor children
(respondents) filed with the Regional Trial Court (RTC) of Quezon City, a
criminal case of Homicide against Pajarillo, docketed as Criminal Case No. 0-
97-73806 and assigned to Branch 78. Respondents reserved their right to file
a separate civil action in the said criminal case. The RTC of Quezon City
subsequently convicted Pajarillo of Homicide in its Decision dated January 19,
2000.3 On appeal to the CA, the RTC decision was affirmed with modification
as to the penalty in a Decision4 dated July 31, 2000. Entry of Judgment was
made on August 25, 2001.
Meanwhile, on January 14, 1998, respondents filed with RTC, Branch 273,
Marikina City, a complaint5 for damages against Pajarillo for negligently
shooting Evangeline and against Safeguard for failing to observe the diligence
of a good father of a family to prevent the damage committed by its security
guard. Respondents prayed for actual, moral and exemplary damages and
attorney's fees.
In their Answer,6 petitioners denied the material allegations in the complaint
and alleged that Safeguard exercised the diligence of a good father of a family
in the selection and supervision of Pajarillo; that Evangeline's death was not
due to Pajarillo's negligence as the latter acted only in self-defense.
Petitioners set up a compulsory counterclaim for moral damages and
attorney's fees.
Trial thereafter ensued. On January 10, 2003, the RTC rendered its
Decision,7 the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs, the heirs
of Evangeline Tangco, and against defendants Admer Pajarillo and Safeguard
Security Agency, Inc. ordering said defendants to pay the plaintiffs, jointly and
severally, the following:
1. ONE HUNDRED FIFTY SEVEN THOUSAND FOUR HUNDRED THIRTY PESOS
(P157,430.00), as actual damages
2. FIFTY THOUSAND PESOS (P50,000.00) as death indemnity;
3. ONE MILLION PESOS (P1,000,000.00), as moral damages;
4. THREE HUNDRED THOUSAND PESOS (P300,000.00), as exemplary
damages;
5. THIRTY THOUSAND PESOS (P30,000.00), as attorney's fees; and
6. costs of suit.
For lack of merit, defendants' counterclaim is hereby DISMISSED.
SO ORDERED. 8
The RTC found respondents to be entitled to damages. It rejected Pajarillo's
claim that he merely acted in self-defense. It gave no credence to Pajarillo's
bare claim that Evangeline was seen roaming around the area prior to the
shooting incident since Pajarillo had not made such report to the head office
and the police authorities. The RTC further ruled that being the guard on duty,
the situation demanded that he should have exercised proper prudence and
necessary care by asking Evangeline for him to ascertain the matter instead
of shooting her instantly; that Pajarillo had already been convicted of
Homicide in Criminal Case No. 0-97-73806; and that he also failed to proffer
proof negating liability in the instant case.
The RTC also found Safeguard as employer of Pajarillo to be jointly and
severally liable with Pajarillo. It ruled that while it may be conceded that
Safeguard had perhaps exercised care in the selection of its employees,
particularly of Pajarillo, there was no sufficient evidence to show that
Safeguard exercised the diligence of a good father of a family in the
supervision of its employee; that Safeguard's evidence simply showed that it
required its guards to attend trainings and seminars which is not the
supervision contemplated under the law; that supervision includes not only
the issuance of regulations and instructions designed for the protection of
persons and property, for the guidance of their servants and employees, but
also the duty to see to it that such regulations and instructions are faithfully
complied with.
Petitioners appealed the RTC decision to the CA. On July 16, 2004, the CA
issued its assailed Decision, the dispositive portion of which reads:
IN VIEW OF ALL THE FOREGOING, the appealed decision is hereby AFFIRMED,
with the modification that Safeguard Security Agency, Inc.'s civil liability in
this case is only subsidiary under Art. 103 of the Revised Penal Code. No
pronouncement as to costs.9
In finding that Safeguard is only subsidiarily liable, the CA held that the
applicable provisions are not Article 2180 in relation to Article 2176 of the
Civil Code, on quasi-delicts, but the provisions on civil liability arising from
felonies under the Revised Penal Code; that since Pajarillo had been found
guilty of Homicide in a final and executory judgment and is said to be serving
sentence in Muntinlupa, he must be adjudged civilly liable under the
provisions of Article 100 of the Revised Penal Code since the civil liability
recoverable in the criminal action is one solely dependent upon conviction,
because said liability arises from the offense charged and no other; that this
is also the civil liability that is deemed extinguished with the extinction of the
penal liability with a pronouncement that the fact from which the civil action
might proceed does not exist; that unlike in civil liability arising from quasi-
delict, the defense of diligence of a good father of a family in the employment
and supervision of employees is inapplicable and irrelevant in civil liabilities
based on crimes or ex-delicto; that Article 103 of the Revised Penal Code
provides that the liability of an employer for the civil liability of their
employees is only subsidiary, not joint or solidary.
Petitioners filed their Motion for Reconsideration which the CA denied in a
Resolution dated October 20, 2004.
Hence, the instant Petition for Review on Certiorari with the following
assignment of errors, to wit:
The Honorable Court of Appeals gravely erred in finding petitioner Pajarillo
liable to respondents for the payment of damages and other money claims.
The Honorable Court of Appeals gravely erred when it applied Article 103 of
the Revised Penal Code in holding petitioner Safeguard solidarily [sic] liable
with petitioner Pajarillo for the payment of damages and other money claims.
The Honorable Court of Appeals gravely erred in failing to find that petitioner
Safeguard Security Agency, Inc. exercised due diligence in the selection and
supervision of its employees, hence, should be excused from any liability.10
The issues for resolution are whether (1) Pajarillo is guilty of negligence in
shooting Evangeline; and (2) Safeguard should be held solidarily liable for the
damages awarded to respondents.
Safeguard insists that the claim for damages by respondents is based
on culpa aquiliana under Article 217611 of the Civil Code, in which case, its
liability is jointly and severally with Pajarillo. However, since it has established
that it had exercised due diligence in the selection and supervision of
Pajarillo, it should be exonerated from civil liability.
We will first resolve whether the CA correctly held that respondents, in filing
a separate civil action against petitioners are limited to the recovery of
damages arising from a crime or delict, in which case the liability of Safeguard
as employer under Articles 102 and 103 of the Revised Penal Code12 is
subsidiary and the defense of due diligence in the selection and supervision
of employee is not available to it.
The CA erred in ruling that the liability of Safeguard is only subsidiary.
The law at the time the complaint for damages was filed is Rule 111 of the
1985 Rules on Criminal Procedure, as amended, to wit:
SECTION 1. Institution of criminal and civil actions. - When a criminal action is
instituted, the civil action for the recovery of civil liability is impliedly
instituted with the criminal action, unless the offended party waives the civil
action, reserves his right to institute it separately, or institutes the civil action
prior to the criminal action.
Such civil action includes recovery of indemnity under the Revised Penal
Code, and damages under Articles 32, 33, 34, and 2176 of the Civil Code of
the Philippines arising from the same act or omission of the accused.
Respondents reserved the right to file a separate civil action and in fact filed
the same on January 14, 1998.
The CA found that the source of damages in the instant case must be the
crime of homicide, for which he had already been found guilty of and serving
sentence thereof, thus must be governed by the Revised Penal Code.
We do not agree.
An act or omission causing damage to another may give rise to two separate
civil liabilities on the part of the offender, i.e., (1) civil liability ex delicto, under
Article 100 of the Revised Penal Code; and (2) independent civil liabilities,
such as those (a) not arising from an act or omission complained of as a
felony, e.g., culpa contractual or obligations arising from law under Article 31
of the Civil Code, intentional torts under Articles 32 and 34, and culpa
aquiliana under Article 2176 of the Civil Code; or (b) where the injured party
is granted a right to file an action independent and distinct from the criminal
action under Article 33 of the Civil Code. Either of these liabilities may be
enforced against the offender subject to the caveat under Article 2177 of the
Civil Code that the offended party cannot recover damages twice for the
same act or omission or under both causes.13
It is important to determine the nature of respondents' cause of action. The
nature of a cause of action is determined by the facts alleged in the complaint
as constituting the cause of action.14 The purpose of an action or suit and the
law to govern it is to be determined not by the claim of the party filing the
action, made in his argument or brief, but rather by the complaint itself, its
allegations and prayer for relief.15
The pertinent portions of the complaint read:
7. That Defendant Admer A. Pajarillo was the guard assigned and posted in
the Ecology Bank – Katipunan Branch, Quezon City, who was employed and
under employment of Safeguard Security Agency, Inc. hence there is
employer-employee relationship between co-defendants.
The Safeguard Security Agency, Inc. failed to observe the diligence of a good
father of a family to prevent damage to herein plaintiffs.
8. That defendant Admer Pajarillo upon seeing Evangeline Tangco, who
brought her firearm out of her bag, suddenly without exercising necessary
caution/care, and in idiotic manner, with the use of his shotgun, fired and
burst bullets upon Evangeline M. Tangco, killing her instantly. x x x
xxxx
16. That defendants, being employer and the employee are jointly and
severally liable for the death of Evangeline M. Tangco.16
Thus, a reading of respondents' complaint shows that the latter are invoking
their right to recover damages against Safeguard for their vicarious
responsibility for the injury caused by Pajarillo's act of shooting and killing
Evangeline under Article 2176, Civil Code which provides:
ARTICLE 2176. Whoever by act or omission causes damage to another, there
being fault or negligence, is obliged to pay for the damage done. Such fault
or negligence, if there is no pre-existing contractual relation between the
parties is called a quasi-delict and is governed by the provisions of this
Chapter.
The scope of Article 2176 is not limited to acts or omissions resulting from
negligence. In Dulay v. Court of Appeals,17 we held:
x x x Well-entrenched is the doctrine that Article 2176 covers not only acts
committed with negligence, but also acts which are voluntary and intentional.
As far back as the definitive case of Elcano v. Hill (77 SCRA 98 [1977]), this
Court already held that:
"x x x Article 2176, where it refers to "fault or negligence," covers not only
acts "not punishable by law" but also acts criminal in character, whether
intentional and voluntary or negligent. Consequently, a separate civil action
lies against the offender in a criminal act, whether or not he is criminally
prosecuted and found guilty or acquitted, provided that the offended party is
not allowed, if he is actually charged also criminally, to recover damages on
both scores, and would be entitled in such eventuality only to the bigger
award of the two, assuming the awards made in the two cases vary. In other
words, the extinction of civil liability referred to in Par. (e) of Section 3, Rule
111, refers exclusively to civil liability founded on Article 100 of the Revised
Penal Code, whereas the civil liability for the same act considered as quasi-
delict only and not as a crime is not extinguished even by a declaration in the
criminal case that the criminal act charged has not happened or has not been
committed by the accused. Briefly stated, We here hold, in reiteration of
Garcia, that culpa aquiliana includes voluntary and negligent acts which may
be punishable by law." (Emphasis supplied)
The civil action filed by respondents was not derived from the criminal liability
of Pajarillo in the criminal case but one based on culpa aquiliana or quasi-
delict which is separate and distinct from the civil liability arising from
crime.18 The source of the obligation sought to be enforced in the civil case is
a quasi-delict not an act or omission punishable by law.
In Bermudez v. Melencio-Herrera,19 where the issue involved was whether
the civil action filed by plaintiff-appellants is founded on crime or on quasi-
delict, we held:
x x x The trial court treated the case as an action based on a crime in view of
the reservation made by the offended party in the criminal case (Criminal
Case No. 92944), also pending before the court, to file a separate civil action.
Said the trial court:
It would appear that plaintiffs instituted this action on the assumption that
defendant Pontino's negligence in the accident of May 10, 1969 constituted
a quasi-delict. The Court cannot accept the validity of that assumption. In
Criminal Case No. 92944 of this Court, plaintiffs had already appeared as
complainants. While that case was pending, the offended parties reserved
the right to institute a separate civil action. If, in a criminal case, the right to
file a separate civil action for damages is reserved, such civil action is to be
based on crime and not on tort. That was the ruling in Joaquin vs. Aniceto, L-
18719, Oct. 31, 1964.
We do not agree. The doctrine in the case cited by the trial court is
inapplicable to the instant case x x x.
xxxx
In cases of negligence, the injured party or his heirs has the choice between
an action to enforce the civil liability arising from crime under Article 100 of
the Revised Penal Code and an action for quasi-delict under Article 2176-
2194 of the Civil Code. If a party chooses the latter, he may hold the employer
solidarily liable for the negligent act of his employee, subject to the
employer's defense of exercise of the diligence of a good father of the family.
In the case at bar, the action filed by appellant was an action for damages
based on quasi-delict. The fact that appellants reserved their right in the
criminal case to file an independent civil action did not preclude them from
choosing to file a civil action for quasi-delict.20 (Emphasis supplied)
Although the judgment in the criminal case finding Pajarillo guilty of Homicide
is already final and executory, such judgment has no relevance or importance
to this case.21 It would have been entirely different if respondents' cause of
action was for damages arising from a delict, in which case the CA is correct
in finding Safeguard to be only subsidiary liable pursuant to Article 103 of the
Revised Penal Code.22
As clearly shown by the allegations in the complaint, respondents' cause of
action is based on quasi-delict. Under Article 2180 of the Civil Code, when the
injury is caused by the negligence of the employee, there instantly arises a
presumption of law that there was negligence on the part of the master or
the employer either in the selection of the servant or employee, or in the
supervision over him after selection or both. The liability of the employer
under Article 2180 is direct and immediate. Therefore, it is incumbent upon
petitioners to prove that they exercised the diligence of a good father of a
family in the selection and supervision of their employee.
We must first resolve the issue of whether Pajarillo was negligent in shooting
Evangeline.
The issue of negligence is factual in nature. Whether a person is negligent or
not is a question of fact, which, as a general rule, we cannot pass upon in a
petition for review on certiorari, as our jurisdiction is limited to reviewing
errors of law.23 Generally, factual findings of the trial court, affirmed by the
CA, are final and conclusive and may not be reviewed on appeal. The
established exceptions are: (1) when the inference made is manifestly
mistaken, absurd or impossible; (2) when there is grave abuse of discretion;
(3) when the findings are grounded entirely on speculations, surmises or
conjectures; (4) when the judgment of the CA is based on misapprehension
of facts; (5) when the findings of fact are conflicting; (6) when the CA, in
making its findings, went beyond the issues of the case and the same is
contrary to the admissions of both appellant and appellee; (7) when the
findings of fact are conclusions without citation of specific evidence on which
they are based; (8) when the CA manifestly overlooked certain relevant facts
not disputed by the parties and which, if properly considered, would justify a
different conclusion; and (9) when the findings of fact of the CA are premised
on the absence of evidence and are contradicted by the evidence on
record. [24]
A thorough review of the records of the case fails to show any cogent reason
for us to deviate from the factual finding of the trial court and affirmed by the
CA that petitioner Pajarillo was guilty of negligence in shooting Evangeline.
Respondents' evidence established that Evangeline's purpose in going to the
bank was to renew her time deposit.25On the other hand, Pajarillo claims that
Evangeline drew a gun from her bag and aimed the same at him, thus, acting
instinctively, he shot her in self-defense.
Pajarillo testified that when Evangeline aimed the gun at him at a distance of
about one meter or one arm's length26he stepped backward, loaded the
chamber of his gun and shot her.27 It is however unimaginable that petitioner
Pajarillo could still make such movements if indeed the gun was already
pointed at him. Any movement could have prompted Evangeline to pull the
trigger to shoot him.
Petitioner Pajarillo would like to justify his action in shooting Evangeline on
his mere apprehension that Evangeline will stage a bank robbery. However,
such claim is befuddled by his own testimony. Pajarillo testified that prior to
the incident, he saw Evangeline roaming under the fly over which was about
10 meters away from the bank28 and saw her talking to a man thereat;29 that
she left the man under the fly-over, crossed the street and approached the
bank. However, except for the bare testimony of Pajarillo, the records do not
show that indeed Evangeline was seen roaming near the vicinity of the bank
and acting suspiciously prior to the shooting incident. In fact, there is no
evidence that Pajarillo called the attention of his head guard or the bank's
branch manager regarding his concerns or that he reported the same to the
police authorities whose outpost is just about 15 meters from the bank.
Moreover, if Evangeline was already roaming the vicinity of the bank, she
could have already apprised herself that Pajarillo, who was posted outside
the bank, was armed with a shotgun; that there were two guards inside the
bank30manning the entrance door. Thus, it is quite incredible that if she really
had a companion, she would leave him under the fly-over which is 10 meters
far from the bank and stage a bank robbery all by herself without a back-up.
In fact, she would have known, after surveying the area, that aiming her gun
at Pajarillo would not ensure entrance to the bank as there were guards
manning the entrance door.
Evidence, to be believed, must not only proceed from the mouth of a credible
witness, but it must be credible in itself — such as the common experience
and observation of mankind can approve as probable under the
circumstances. We have no test of the truth of human testimony, except its
conformity to our knowledge, observation and experience. Whatever is
repugnant to these belongs to the miraculous and is outside judicial
cognizance.31
That Evangeline just wanted to deposit her gun before entering the bank and
was actually in the act of pulling her gun from her bag when petitioner
Pajarillo recklessly shot her, finds support from the contentions raised in
petitioners' petition for review where they argued that when Evangeline
approached the bank, she was seen pulling a gun from inside her bag and
petitioner Pajarillo who was suddenly beset by fear and perceived the act as
a dangerous threat, shot and killed the deceased out of pure instinct;32 that
the act of drawing a gun is a threatening act, regardless of whether or not the
gun was intended to be used against petitioner Pajarillo;33 that the fear that
was created in the mind of petitioner Pajarillo as he saw Evangeline Tangco
drawing a gun from her purse was suddenly very real and the former merely
reacted out of pure self-preservation.34
Considering that unlawful aggression on the part of Evangeline is absent,
Pajarillo's claim of self-defense cannot be accepted specially when such claim
was uncorroborated by any separate competent evidence other than his
testimony which was even doubtful. Pajarillo's apprehension that Evangeline
will shoot him to stage a bank robbery has no basis at all. It is therefore clear
that the alleged threat of bank robbery was just a figment of Pajarillo's
imagination which caused such unfounded unlawful aggression on his part.
Petitioners argue that Evangeline was guilty of contributory negligence.
Although she was a licensed firearm holder, she had no business bringing the
gun in such establishment where people would react instinctively upon
seeing the gun; that had Evangeline been prudent, she could have warned
Pajarillo before drawing the gun and did not conduct herself with suspicion
by roaming outside the vicinity of the bank; that she should not have held the
gun with the nozzle pointed at Pajarillo who mistook the act as hold up or
robbery.
We are not persuaded.
As we have earlier held, Pajarillo failed to substantiate his claim that
Evangeline was seen roaming outside the vicinity of the bank and acting
suspiciously prior to the shooting incident. Evangeline's death was merely
due to Pajarillo's negligence in shooting her on his imagined threat that
Evangeline will rob the bank.
Safeguard contends that it cannot be jointly held liable since it had
adequately shown that it had exercised the diligence required in the selection
and supervision of its employees. It claims that it had required the guards to
undergo the necessary training and to submit the requisite qualifications and
credentials which even the RTC found to have been complied with; that the
RTC erroneously found that it did not exercise the diligence required in the
supervision of its employee. Safeguard further claims that it conducts
monitoring of the activities of its personnel, wherein supervisors are assigned
to routinely check the activities of the security guards which include among
others, whether or not they are in their proper post and with proper
equipment, as well as regular evaluations of the employees' performances;
that the fact that Pajarillo loaded his firearm contrary to Safeguard's
operating procedure is not sufficient basis to say that Safeguard had failed its
duty of proper supervision; that it was likewise error to say that Safeguard
was negligent in seeing to it that the procedures and policies were not
properly implemented by reason of one unfortunate event.
We are not convinced.
Article 2180 of the Civil Code provides:
Art. 2180. The obligation imposed by Article 2176 is demandable not only for
one's own acts or omissions, but also for those of persons for whom one is
responsible.
xxxx
Employers shall be liable for the damages caused by their employees and
household helpers acting within the scope of their assigned tasks, even
though the former are not engaged in any business or industry.
xxxx
The responsibility treated of in this article shall cease when the persons
herein mentioned prove that they observed all the diligence of a good father
of a family to prevent damage.
As the employer of Pajarillo, Safeguard is primarily and solidarily liable for
the quasi-delict committed by the former. Safeguard is presumed to be
negligent in the selection and supervision of his employee by operation of
law. This presumption may be overcome only by satisfactorily showing that
the employer exercised the care and the diligence of a good father of a family
in the selection and the supervision of its employee.
In the selection of prospective employees, employers are required to
examine them as to their qualifications, experience, and service records.35 On
the other hand, due diligence in the supervision of employees includes the
formulation of suitable rules and regulations for the guidance of employees
and the issuance of proper instructions intended for the protection of the
public and persons with whom the employer has relations through his or its
employees and the imposition of necessary disciplinary measures upon
employees in case of breach or as may be warranted to ensure the
performance of acts indispensable to the business of and beneficial to their
employer. To this, we add that actual implementation and monitoring of
consistent compliance with said rules should be the constant concern of the
employer, acting through dependable supervisors who should regularly
report on their supervisory functions.36 To establish these factors in a trial
involving the issue of vicarious liability, employers must submit concrete
proof, including documentary evidence.
We agree with the RTC's finding that Safeguard had exercised the diligence in
the selection of Pajarillo since the record shows that Pajarillo underwent a
psychological and neuro-psychiatric evaluation conducted by the St. Martin
de Porres Center where no psychoses ideations were noted, submitted a
certification on the Pre-licensing training course for security guards, as well
as police and NBI clearances.
The RTC did not err in ruling that Safeguard fell short of the diligence required
in the supervision of its employee, particularly Pajarillo. In this case, while
Safeguard presented Capt. James Camero, its Director for Operations, who
testified on the issuance of company rules and regulations, such as the
Guidelines of Guards Who Will Be Assigned To Banks,37 Weapons
Training,38 Safeguard Training Center Marksmanship Training Lesson
Plan,39Disciplinary/Corrective Sanctions,40 it had also been established during
Camero's cross-examination that Pajarillo was not aware of such rules and
regulations.41 Notwithstanding Camero's clarification on his re-direct
examination that these company rules and regulations are lesson plans as a
basis of guidelines of the instructors during classroom instructions and not
necessary to give students copy of the same,42 the records do not show that
Pajarillo had attended such classroom instructions.
The records also failed to show that there was adequate training and
continuous evaluation of the security guard's performance. Pajarillo had only
attended an in-service training on March 1, 1997 conducted by Toyota Sta.
Rosa, his first assignment as security guard of Safeguard, which was in
collaboration with Safeguard. It was established that the concept of such
training was purely on security of equipments to be guarded and protection
of the life of the employees.43
It had not been established that after Pajarillo's training in Toyota, Safeguard
had ever conducted further training of Pajarillo when he was later assigned
to guard a bank which has a different nature of business with that of Toyota.
In fact, Pajarillo testified that being on duty in a bank is different from being
on duty in a factory since a bank is a very sensitive area.44
Moreover, considering his reactions to Evangeline's act of just depositing her
firearm for safekeeping, i.e., of immediately shooting her, confirms that there
was no training or seminar given on how to handle bank clients and on human
psychology.
Furthermore, while Safeguard would like to show that there were inspectors
who go around the bank two times a day to see the daily performance of the
security guards assigned therein, there was no record ever presented of such
daily inspections. In fact, if there was really such inspection made, the alleged
suspicious act of Evangeline could have been taken noticed and reported.
Turning now to the award of damages, we find that the award of actual
damages in the amount P157,430.00 which were the expenses incurred by
respondents in connection with the burial of Evangeline were supported by
receipts. The award of P50,000.00 as civil indemnity for the death of
Evangeline is likewise in order.
As to the award of moral damages, Article 2206 of the Civil Code provides
that the spouse, legitimate children and illegitimate descendants and
ascendants of the deceased may demand moral damages for mental anguish
by reason of the death of the deceased. Moral damages are awarded to
enable the injured party to obtain means, diversions or amusements that will
serve to alleviate the moral suffering he/she has undergone, by reason of the
defendant's culpable action. Its award is aimed at restoration, as much as
possible, of the spiritual status quo ante; thus it must be proportionate to the
suffering inflicted.45 The intensity of the pain experienced by the relatives of
the victim is proportionate to the intensity of affection for him and bears no
relation whatsoever with the wealth or means of the offender.46
In this case, respondents testified as to their moral suffering caused by
Evangeline's death was so sudden causing respondent Lauro to lose a wife
and a mother to six children who were all minors at the time of her death.
In People v. Teehankee, Jr.,47 we awarded one million pesos as moral
damages to the heirs of a seventeen-year-old girl who was murdered.
In Metro Manila Transit Corporation v. Court of Appeals,48 we likewise
awarded the amount of one million pesos as moral damages to the parents
of a third year high school student and who was also their youngest child who
died in a vehicular accident since the girl's death left a void in their lives.
Hence, we hold that the respondents are also entitled to the amount of one
million pesos as Evangeline's death left a void in the lives of her husband and
minor children as they were deprived of her love and care by her untimely
demise.

We likewise uphold the award of exemplary damages in the amount

of P300,000.00. Under Article 2229 of the Civil Code, exemplary damages are
imposed by way of example or correction for the public good, in addition to
moral, temperate, liquidated or compensatory damages.49 It is awarded as a
deterrent to socially deleterious actions. In quasi-delict, exemplary damages
may be granted if the defendant acted with gross negligence.50

Pursuant to Article 2208 of the Civil Code, attorney's fees may be recovered
when, as in the instant case, exemplary damages are awarded. Hence, we
affirm the award of attorney's fees in the amount of P30,000.00.

WHEREFORE, the petition for review is DENIED. The Decision dated July 16,
2004 of the Court of Appeals is AFFIRMED with MODIFICATION that the civil
liability of petitioner Safeguard Security Agency, Inc.
is SOLIDARYand PRIMARY under Article 2180 of the Civil Code.

SO ORDERED.
G.R. Nos. 141810 & 141812 February 2, 2007
VICENTE DELOS SANTOS, ROBERTO DELOS SANTOS, PACIFICO DELOS
SANTOS, CORAZON DELOS SANTOS, CONSTANCIA DELOS SANTOS, joined by
her husband ELEODORO PRADO; NORMA DELOS SANTOS, joined by her
husband WILFREDO PRADO; LUDOVICO DELOS SANTOS, ALICIA DELOS
SANTOS, joined by her husband RONALDO DEGRAS; DEMOCRITO DELOS
SANTOS, FELICISIMA DELOS SANTOS, joined by her husband TEODULO
ARCIBAL; ADELA S. CASTRO, joined by her husband LUBERATO LAKANDULA;
FELISA S. CASTRO, joined by her husband PAQUITO CASIDSID; NELLY C.
SUALOG, joined by her husband LEONARDO YANKY; REMEDIOS C. SUALOG,
MARIA C. SUALOG, WINIFREDO SUALOG, VICENTE C. SUALOG, FELOGENIA
C. SUALOG, joined by her husband DANILO DIGNADICE; PATRICIO C.
SUALOG, BUENAVENTURA C. SUALOG, ROMEO C. SUALOG, CONCEPCION
ANDRES, AGNES LEVI A. SUALOG, DIONESIO C. SERRANO, ZENAIDA C.
SERRANO, CESAR C. SERRANO, ABUNDIO C. SERRANO, VIOLETA C.
SERRANO, ROMEO C. SERRANO, EFREN C. SERRANO, THELMA CASTRO-
SALIBIO, JESUS S. FERNANDO, RODRIGO DELOS SANTOS, CLARITA DELOS
SANTOS, DANILO TUMALA, ERLINDA TUMALA, EDGARDO TUMALA,
DOMINGO TUMALA, MARIO TUMALA, RONALD TUMALA, FERDINAND
TUMALA, ANASTACIA DELOS SANTOS, joined by her husband FRANCISCO
TUMALA; ARSENIO DELOS SANTOS, JR., VICTORINO DELOS SANTOS,
ERLINDA DELOS SANTOS, NATIVIDAD DELOS SANTOS, joined by her
husband LITO PRADO; HERMINIGILDO DELOS SANTOS, and PETER DELOS
SANTOS, Petitioners,
vs.
FRED ELIZALDE and JOAN ELIZALDE, JESUS DELOS SANTOS and ROSITA
DELOS SANTOS-FLORES, GLORIA MARTIN, DOMINGO CASIMERO, SERGIO
CASIMERO, ABUNDIO CASIMERO, and TEODORO CASIMERO, Respondents.
DECISION
VELASCO, JR., J.:
Diligence is the mother of good fortune.
––Miguel De Cervantes
Parties should not leave the entire business of litigation solely to their
counsels. Basic diligence requires that parties themselves should closely
monitor the developments in their cases. They should provide full support to
their lawyers and even work hand in hand with them to ensure the diligent
pursuit and effective prosecution of their cases. Inevitably, their failure to do
so could result in prejudicial consequences.
The Case
This Petition for Review on Certiorari under Rule 45 of the Rules of Court
seeks to reverse and set aside the May 11, 1999 Decision1 of the Court of
Appeals (CA), dismissing petitioners’ appeal based on a compromise
agreement and considering their appeal as abandoned in CA-G.R. CV No.
54136 and CA-G.R. SP No. 48475; and the January 31, 2000 Resolution2 of the
CA, denying petitioners’ Motion for Reconsideration.3 The CA appeal
stemmed from the Kalibo, Aklan Regional Trial Court (RTC), Branch VI April
29, 1996 Decision4 in Civil Case No. 3683, declaring intervenors Jesus delos
Santos and Rosita delos Santos-Flores as lawful owners of two-thirds (2/3) of
the disputed land, and Fred and Joan Elizalde as owners of the remaining one-
third (1/3) of the land.
The Facts
On December 15, 1986, petitioners filed a Complaint for Quieting of Title,
Damages and Attorney’s Fees before the Kalibo, Aklan RTC, involving four (4)
adjoining lots designated as Lots 393-A, 393-B, 394-D, and 394-E, with areas
of 1,515 square meters (sqm), 1,010 sqm, 5,764 sqm, and 6,482 sqm,
respectively, for a total land area of 14,771 sqm, located in Boracay Island,
Malay, Aklan.5 An amended complaint was thereafter filed on May 8, 1991.
Petitioners claimed the aforementioned lots as their inheritance from the late
Mariano delos Santos, their common ascendant, either by their own right or
by right of representation. Petitioners alleged that the late Mariano delos
Santos was the original owner of the lots. On the other hand, respondents
spouses Fred and Joan Elizalde, the first set of intervenors before the trial
court, claimed that they purchased the lots on June 18, 1974 from the heirs
of Leonardo delos Santos, he being the rightful and exclusive owner of the
said lots. Respondents Gloria Martin, Domingo Casimero, Sergio Casimero,
Abundio Casimero, and Teodoro Casimero, the second set of intervenors
before the trial court, claimed ownership over Lots 393-B and 394-E, as heirs
of Tomasa Prado, who also allegedly owned said lots. Respondents Rosita
delos Santos-Flores and Jesus delos Santos, the third set of intervenors and
two of the three legitimate children of the late Leonardo delos Santos,
claimed 2/3 of the disputed lots as their rightful inheritance. Respondents
delos Santos alleged that they did not sell nor assign their share in the
property to anyone, including respondent Fred Elizalde.
After due hearing of the case, the trial court issued the April 29, 1996
Decision, the dispositive portion of which reads:
WHEREFORE, in view of the foregoing considerations, judgment is hereby
rendered as follows:
(1.) Dismissing the complaint filed by the plaintiffs as well as the complaint in
intervention filed by the second set of intervenors Casimeros, et al. for lack
of merit;
(2.) Declaring the two deeds of sale (Exhibits 29 and 30) as null and void
insofar as they affect the two-thirds (2/3) share of intervenors Jesus and
Rosita;
(3.) Declaring intervenors Jesus delos Santos and Rosita delos Santos Flores
as the lawful owners of the two-thirds portion of the land in question or 9,915
square meters on the northwest portion, representing as their shares in the
intestate estate of Leonardo delos Santos;
(4.) Declaring defendant Fred Elizalde as the rightful owner of one-third of the
land in question or 4,957 square meters on the southeast portion, segregated
by a boundary line running from the seashore to the inland or from the
southwest to northeast;
(5.) Ordering the cancellation or revision of Tax Declaration No. 4422 in the
name of Fred Elizalde (Exhibit 26) and all tax declarations issued subsequent
thereto to conform to paragraphs 3 and 4 hereof as well as the issuance of a
new tax declaration to intervenors Jesus delos Santos and Rosita Flores
covering their two-thirds (2/3) share;
(6.) Ordering the plaintiffs or any persons claiming interest therein to deliver
complete possession of the land to defendants and first set intervenors.
No pronouncement as to costs.
SO ORDERED.6
Thus, petitioners and respondent Fred Elizalde filed their separate Notices of
Appeal dated June 6, 19967 and May 16, 1996,8 respectively. The cases were
docketed as CA-G.R. SP No. 48475 for respondent Elizalde and CA-G.R. CV No.
54136 for petitioners. Subsequently, the CA issued the June 2, 1998 Notice to
File Brief,9 requiring petitioners and respondent Elizalde to file their briefs
within forty-five (45) days from receipt of said notice.
On July 27, 1998, petitioners filed by registered mail a July 27, 1998 Motion
for Extension of Time to File Brief for Plaintiffs-Appellants.10 In their motion,
petitioners admitted having received a copy of the Notice to File Brief on June
15, 1998; thus, they had until July 30, 1998 to file their brief, and prayed for
an extension of forty-five (45) days from July 30, 1998 to September 13, 1998.
On September 10, 1998, petitioners filed another motion for
extension,11seeking another forty five (45)-day extension, or until October 27,
1998, within which to file their brief.
In the meantime, respondents Fred Elizalde, Jesus delos Santos, and Rosita
delos Santos-Flores filed an October 6, 1998 Joint Manifestation and
Motion,12 whereby respondent Elizalde abandoned his appeal by virtue of an
amicable settlement between the parties through the May 27, 1997
Agreement.13 They agreed to swap and re-adjust the areas adjudged by the
trial court in their favor, without prejudice to a final judgment by the CA. In
addition, Elizalde moved that his appeal be considered as withdrawn and that
he be excused from filing an appellant’s brief.
On October 27, 1998, petitioners filed an Ex-Parte Motion for Final Extension
of Period to File Brief for Plaintiffs-Appellants,14 seeking an extension of thirty
(30) days, or until November 27, 1998, within which to file their brief. On
November 27, 1998, petitioners filed another motion for extension,15 asking
for another thirty (30)-day extension. And yet again, on December 28, 1998,
petitioners filed another motion for extension,16 asking for another thirty
(30)-day extension to file their brief, such that the period sought to file
appellant’s brief would be until January 27, 1999. In sum, petitioners had a
total extension of one hundred eighty (180) days from July 27, 1998, when
they filed a motion for extension before the CA for the first time.
Respondents delos Santos opposed the foregoing motions for extension and
moved for the dismissal of the appeal for petitioners’ failure to file the
required appellants’ brief.
However, on April 8, 1999, petitioners, through their former counsel Atty.
Napoleon M. Victoriano, filed an Ex-Parte Motion to Withdraw Appeal.17 Said
motion sought the withdrawal of the appeal on the ground that petitioners
and respondents delos Santos entered into an amicable settlement,
denominated as an Undertaking executed on September 19, 1998,18 whereby
petitioners would be paid the amount of Four Million Pesos (PhP
4,000,000.00), in consideration of their leaving the disputed lots peacefully.
Notably, the Undertaking was signed by 39 of the 46 petitioners,19 and
notarized by Atty. Edgar S. Calizo. More so, it was alleged in said motion that
the counsel for respondents delos Santos, Atty. Romeo R. Robiso, executed a
promissory note on October 15, 199820 on behalf of petitioners, for the
amount of Four Million Pesos (PhP 4,000,000.00).
On May 11, 1999, the CA issued the assailed Decision dismissing CA-G.R. CV
No. 54136 and SP No. 48475 and considering them withdrawn. It justified its
Decision in this wise: "For failure to file their respective appellants’ briefs, and
in accordance with the prayer in the ‘Joint Manifestation and Motion’, and in
the ‘Ex-Parte Motion to Withdraw Appeal’, the appeal should be dismissed,
and considered as withdrawn."21
Thereafter, an Entry of Appearance22 was filed on June 17, 1999 by Atty. Cesar
T. Verano, allegedly in representation of petitioners. The entry contained the
solitary conformity of petitioner Vicente delos Santos. On the same day,
petitioners filed a Motion for Reconsideration of Decision with Prayer for
Reinstatement of Appeal,23which was verified solely by petitioner Vicente
delos Santos. In their Motion for Reconsideration, petitioners alleged that: (1)
they did not have any knowledge of the promulgation of the assailed Decision
of the CA; (2) they never entered into any amicable settlement with
respondents delos Santos; (3) their alleged signatures in the May 27, 1997
Agreement were forged; and (4) they never authorized their former counsel,
Atty. Victoriano, to withdraw their appeal. Thus, petitioners prayed that: (1)
their Motion for Reconsideration be considered as filed on time; (2) the said
Agreement allegedly entered into by petitioners and respondents delos
Santos be considered as invalid; (3) the portion of the assailed Decision
dismissing their appeal be reconsidered; (4) their appeal be reinstated; and
(5) they be granted a period of ninety (90) days within which to file their
appellants’ brief.
On July 16, 1999, respondents delos Santos then filed an Opposition to
Motion for Reconsideration.24 The opposition was based on the following: (1)
that petitioners’ motion should be considered as mere scrap of paper for not
containing any notice of hearing; (2) that the appeal was validly dismissed for
petitioners’ failure to file their appellants’ brief; and (3) that the Agreement
was valid.
Petitioners subsequently filed a Reply (To Opposition) on July 30,
1999,25 refuting the allegations made by respondents delos Santos; and
attached to the reply a handwritten note in Filipino,26 stating that: (1) the
signatories did not sign the alleged Agreement; (2) they did not receive a
single centavo of the money alleged in the Agreement; (3) they did not
authorize Atty. Victoriano to withdraw their appeal; and (4) Atty. Victoriano
did not furnish them a copy of the Decision of the CA. The note was
purportedly signed by Vicente delos Santos, Constancia delos Santos, Terry
Ann S. Carnacete, Greta delos Santos, Daisy delos Santos, Jose delos Santos,
Herminigildo delos Santos, Peter delos Santos, Vivar delos Santos, Ibarra
delos Santos, Rosemarie Tuazon, Natividad Prado, Lito Prado, Felisa Casidsid,
Ricardo Fernando, Jesus Fernando, Rogelio Lacandula, Mergie C. Nieves,
Anita C. Baltazar, and Claire S. Lacandula. Of the signatories, only eight (8) are
among the forty-six (46) petitioners before the appellate court.
On January 31, 2000, the CA issued the assailed Resolution, wherein it was
ruled that:
The "Motion for Reconsideration With Prayer for the Reinstatement of
Appeal" filed on June 17, 1999 by the said new counsel for plaintiffs-
appellants, to which an Opposition has been filed by the first set of
intervenors-appellees, is DENIED admission for being late by nine (9) days.
The records show that plaintiffs-appellants’ counsel of record, Atty. Napoleon
M. Victoriano, who has not filed any notice of withdrawal as counsel as per
report of the Judicial Records Division, received copy of the Court’s Decision
dated May 11, 1998, on May 24, 1999. Thus, appellants had only until June 8,
1999 to file their Motion for Reconsideration.27
Hence, this petition is before us.
The Issues
Petitioners raise the following issues:
I.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN DENYING
ADMISSION TO PETITIONERS’ MOTION FOR RECONSIDERATION WITH
PRAYER FOR THE REINSTATEMENT OF APPEAL FILED BY THEIR NEW COUNSEL
FOR HAVING BEEN FILED NINE (9) DAYS LATE, OVERLOOKING AND
DISREGARDING THE FACT:
A. THAT PETITIONERS LEARNED OF THE DECISION OF THE COURT OF APPEALS
DATED MAY 11, 1999 ONLY ON JUNE 2, 1999, AND ON JUNE 17, 1999, OR
WITHIN THE FIFTEEN (15)-DAY REGLEMENTARY PERIOD THEY FILED THEIR
AFORESAID MOTION FOR RECONSIDERATION;
B. THAT PETITIONERS’ FORMER COUNSEL, ATTY. NAPOLEON M. VICTORIANO,
DID NOT FILE A MOTION FOR RECONSIDERATION WITHIN THE FIFTEEN [15]-
DAY REGLEMENTARY PERIOD FROM HIS RECEIPT OF A COPY OF THE COURT
OF APPEALS’ DECISION ON MAY 24, 1999, SAID COUNSEL WAS CLEARLY AT
FAULT AND/OR GROSSLY NEGLIGENT IN THE PERFORMANCE OF HIS DUTIES
TO HIS CLIENTS. MOREOVER, THE COUNTING OF THE 15-DAY PERIOD TO FILE
MOTION FOR RECONSIDERATION SHOULD BE COUNTED FROM PETITIONERS’
KNOWLEDGE OF THE DECISION ON JUNE 2, 1999, AND NOT ON ATTY.
VICTORIANO’S RECEIPT OF A COPY THEREOF; AND
C. THAT THE NON-ADMISSION OF PETITIONERS’ MOTION FOR
RECONSIDERATION FOR HAVING BEEN FILED NINE (9) DAYS LATE IS
MANIFESTLY UNJUST AND INEQUITABLE BECAUSE IT GIVES PREMIUM TO
TECHNICALITIES RATHER ON SUBSTANTIAL JUSTICE.
II.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN DISMISSING
PETITIONERS’ APPEAL FROM THE TRIAL COURT’S DECISION AND
CONSIDERING THE APPEAL WITHDRAWN AS PRAYED FOR BY COUNSEL FOR
PETITIONERS CONSIDERING THAT THE ALLEGED AGREEMENT BETWEEN
PETITIONERS AND FIRST SET [OF] INTERVENORS THROUGH THEIR COUNSEL
IS NULL AND VOID AND WITHOUT FORCE AND EFFECT BECAUSE THEIR
ALLEGED SIGNATURES THEREIN WERE FORGED, [AND BESIDES,] THEY NEVER
RECEIVED A SINGLE CENTAVO OF THE ALLEGED CONSIDERATION OF THE
AGREEMENT. MOREOVER, PETITIONERS’ APPEAL FROM THE TRIAL COURT’S
DECISION IS MERITORIOUS AS THEIR CLAIM THAT THEY ARE OWNERS OF THE
DISPUTED PROPERTIES ARE SUPPORTED BY SUSBTANTIAL AND COMPETENT
EVIDENCE.28
The Ruling of the Court
The petition must be denied.
Petitioners argue that their Motion for Reconsideration was filed on time as
the reglementary period for the filing of it should be counted from the time
when petitioners themselves obtained a copy of the assailed Decision of the
CA on June 2, 1999, and not from the time that their former counsel, Atty.
Victoriano, received a copy of said Decision on May 24, 1999.
However, petitioners’ allegation is incorrect.
Reglementary period for filing a Motion for Reconsideration
Section 1 of Rule 37, in conjunction with Section 3 of Rule 41 of the Rules of
Court, provides for the period within which a Motion for Reconsideration may
be filed, to wit:
Section 1. Grounds of and period for filing motion for new trial or
reconsideration.—Within the period for taking an appeal, the aggrieved party
may move the trial court to set aside the judgment or final order and grant a
new trial for one or more of the following causes materially affecting the
substantial rights of said party:
xxxx
Within the same period, the aggrieved party may also move for
reconsideration upon the grounds that the damages awarded are excessive,
that the evidence is insufficient to justify the decision or final order, or that
the decision or final order is contrary to law.
Section 3. Period of ordinary appeal.—The appeal shall be taken within fifteen
(15) days from notice of the judgment or final order appealed from. Where a
record on appeal is required, the appellant shall file a notice of appeal and a
record on appeal within thirty (30) days from notice of the judgment or final
order.
The period of appeal shall be interrupted by a timely motion for new trial or
reconsideration. No motion for extension of time to file a motion for new trial
or reconsideration shall be allowed. (Emphasis supplied.)
The abovementioned fifteen (15)-day period begins to run upon receipt of
notice of the decision or final order appealed from. Such period has been
considered to begin upon receipt of notice by the counsel of record, which is
considered notice to the parties.29 Service of judgment on the party is
prohibited and is not considered the official receipt of the judgment.30
Thus, the fifteen (15)-day period should run from May 24, 1999, when Atty.
Victoriano received a copy of the assailed Decision of the CA, and not from
June 2, 1999, when petitioners claimed to have been informed of the CA
decision.31
To reiterate, service upon the parties’ counsels of record is tantamount to
service upon the parties themselves, but service upon the parties themselves
is not considered service upon their lawyers. The reason is simple—the
parties, generally, have no formal education or knowledge of the rules of
procedure, specifically, the mechanics of an appeal or availment of legal
remedies; thus, they may also be unaware of the rights and duties of a litigant
relative to the receipt of a decision. More importantly, it is best for the courts
to deal only with one person in the interest of orderly procedure—either the
lawyer retained by the party or the party him/herself if s/he does not intend
to hire a lawyer.
Even assuming that petitioners had replaced Atty. Victoriano prior to his
receipt of the assailed Decision, the reglementary period for filing a Motion
for Reconsideration would still be reckoned from his receipt of the Decision.
Section 26 of Rule 138 of the Rules of Court requires that "[i]n case of
substitution, the name of the attorney newly employed shall be entered on
the docket of the court in place of the former one, and written notice of the
change shall be given to the adverse party."
In GCP-Manny Transport Services, Inc. v. Principe, the Court ruled that unless
the change of attorneys is carried out properly, the counsel of record shall
still be considered as the party’s counsel, and the notice sent to such counsel
shall be considered as notice to the party represented.32
In the present case, the assailed CA Decision was rendered on May 11, 1999,
and the notice of it was received by Atty. Victoriano on May 24, 1999.
Petitioners’ current counsel, Atty. Verano, filed his appearance only on June
17, 1999, with the sole conformity of Vicente delos Santos. The CA correctly
served a copy of the Decision on Atty. Victoriano, which is considered notice
to petitioners themselves. Therefore, May 24, 1999 is the correct reckoning
point for the reglementary period of filing a Motion for Reconsideration to
the assailed Decision which ended on June 8, 1999. Hence, petitioners’
Motion for Reconsideration filed on June 17, 1999 was belatedly filed and
correctly rejected by the CA.
Liberal application of the period for filing a Motion for Reconsideration
Even assuming that, indeed, their Motion for Reconsideration was filed out
of time, petitioners further allege that a delay of nine (9) days in the filing of
their Motion for Reconsideration cannot justify why the CA did not admit it.
In support of such contention, petitioners cite Republic v. Court of
Appeals,33 and Ramos v. Bagasao,34 where this Court allowed the filing of an
appeal six (6) and four (4) days beyond the reglementary period, respectively.
In Neypes v. Court of Appeals, the Court stressed that "[s]eldom have we
condoned late filing of notices of appeal, and only in very exceptional
instances to better serve the ends of justice"; and also emphasized that the
liberal application of the rules is confined to "situations where technicalities
were dispensed with, our decisions were not meant to undermine the force
and effectivity of the periods set by law. But we hasten to add that in those
rare cases where procedural rules were not stringently applied, there always
existed a clear need to prevent the commission of a grave injustice (emphasis
supplied)."35
In Republic,36 cited by petitioners, We ruled that the CA should have admitted
the Motion for Reconsideration filed by petitioners to prevent gross
miscarriage of justice, as the government stood to lose close to three hundred
(300) hectares of prime sugar land already titled in its name and devoted to
educational purposes; while in Ramos, it was enunciated that a four (4)-day
delay "in filing a notice of appeal and a motion of extension of time to file a
record on appeal can be excused on the basis of equity and considering that
the record on appeal is now with the respondent judge."37
In the instant case, there is no exceptional circumstance to justify the
disregard of the reglementary period for filing a motion for reconsideration.
Hence, petitioners’ position is devoid of merit.
Furthermore, petitioners contend that despite their Motion for
Reconsideration had been filed out of time, this should have been admitted
on the ground of equity. However, equitable grounds cannot be sought when
the party is guilty of negligence. Thus, We ruled in Mesina v. Meer that "this
Court will not allow petitioners, in guise of equity, to benefit from their own
negligence."38
Petitioners’ are guilty of inexcusable negligence
Petitioners attribute the dismissal of their appeal and their failure to file a
motion for reconsideration within the reglementary period to their former
counsel’s negligence, Atty. Victoriano. Thus, petitioners seek the liberal
application of the rules, citing Ginete v. Court of Appeals, wherein the counsel
of record did not file an appellant’s brief within the prescribed period and
continued with the case for fear of reprisal from respondents who were
judges. In said case, We ruled that the negligence of the clients’ counsel does
not bind them. The departure from the rule was explained, thus:
[T]he lawyer’s negligence without any participatory negligence on the part of
petitioners is a sufficient reason to set aside the resolutions of the Court of
Appeals. Aside from matters of life, liberty, honor or property which would
warrant the suspension of the rules of the most mandatory character and an
examination and review by the appellate court of the lower court’s findings
of fact, the other elements that should be considered are the following: (1)
the existence of special or compelling circumstances, (2) the merits of the
case, (3) a cause not entirely attributable to the fault or negligence of the
party favored by the suspension of the rules, (4) a lack of any showing that
the review sought is merely frivolous and dilatory, (5) the other party will not
be unjustly prejudiced thereby.39(Emphasis supplied.)
However, the Ginete case is not a precedent to the case at bar because in said
case, the party had no participatory negligence, while in the case at bar,
petitioners were negligent in not monitoring the developments in their case.
Petitioners’ acts are considered inexcusable negligence in line with our ruling
in Bernardo v. Court of Appeals (Special Sixth Division), where we explicated
the vital participation of the parties in the effective handling of the case by
their lawyers, thus:
Worth mentioning is the fact that petitioner was likewise not entirely
blameless in his alleged deprivation of his day in court. In a recent case, this
Court enunciated:
"Litigants, represented by counsel, should not expect that all they need to do
is sit back, relax and await the outcome of their case. They should give the
necessary assistance to their counsel for what is at stake is their interest in
the case."
In his concurring opinion in Republic vs. Sandiganbayan, Mr. Justice Teodoro
R. Padilla emphasized the value and significance of the party’s presence and
diligence in the advancement of his cause, thus:
"x x x An almost lifetime of experience in litigation is the best witness to the
indispensability of party’s presence (aside from his lawyer, in case he has the
assistance of counsel) in order to litigate with any reasonable opportunity of
success. x x x especially during the cross-examination of adverse party’s
witnesses—where the truth must be determined—every counsel worth his
salt must have the assistance and presence of his client on the spot, for the
client invariably knows the facts far better than his counsel. In short, even in
civil cases, the presence of party (as distinguished from his lawyer alone) is
essential to due process."
True enough, the party-litigant should not rely totally on his counsel to litigate
his case even if the latter expressly assures that the former’s presence in
court will no longer be needed. No prudent party will leave the fate of his
case entirely to his lawyer. Absence in one or two hearings may be negligible
but want of inquiry or update on the status of his case for several months
(four, in this case) is inexcusable. It is the duty of a party-litigant to be in
contact with his counsel from time to time in order to be informed of the
progress of his case. Petitioner simply claims that he was busy with his gravel
and sand and trading businesses which involved frequent traveling from
Manila to outlying provinces. But this was not a justifiable excuse for him to
fail to ask about the developments in his case or to ask somebody to make
the query for him. Petitioner failed to act with prudence and diligence; hence,
his plea that he was not accorded the right to due process cannot elicit this
Court’s approval or even sympathy.40 (Emphasis supplied.)
Concurrently, petitioners did not even know that Atty. Victoriano failed to file
an appellants’ brief on their behalf during the more than one hundred eighty
(180)-day extension that he sought from the CA, aside from their failure to
learn of the Decision of the appellate court. Ordinary prudence would dictate
that petitioners must give utmost importance to the case considering that it
involves their residences, presumably their most valued material possession,
and considering further that they had already lost at the trial court.
Petitioners’ failure to apprise themselves of the status of the case from the
time that Atty. Victoriano received a copy of the notice to file brief on June
15, 1998 up to June 2, 1999, when petitioners allegedly obtained a copy of
the assailed Decision from the CA, is unjustified. Petitioners cannot be
shielded from the repercussions of their counsel’s and their own negligence.
Petitioners themselves are as much to blame in losing their appeal.
The Supreme Court is not a trier of facts
Finally, petitioners claim that the Undertaking or Agreement allegedly
entered into by them and respondents delos Santos is invalid considering that
their purported signatures in it were forged. They argue that the motion to
withdraw is likewise invalid; therefore, there is no basis for the withdrawal of
the appeal. In other words, petitioners question the authenticity of said
documents, raising a question of fact.
There is a "question of fact" when "the doubt or controversy arises as to the
truth or falsity of the alleged facts."41This is distinguished from a question of
law when the doubt or difference arises as to what the law is on a certain
state of facts, and which does not call for an examination of the probative
value of the evidence presented by the parties-litigants.
Furthermore, in Sampayan v. Court of Appeals, this Court ruled, thus:
[S]ettled is the rule that this Court is not a trier of facts and does not normally
embark on a re-examination of the evidence adduced by the parties during
trial. Of course, the rule admits of exceptions. So it is that in Insular Life
Assurance Company, Ltd. vs. CA, we wrote:
"[i]t is a settled rule that in the exercise of the Supreme Court's power of
review, the Court is not a trier of facts and does not normally undertake the
re-examination of the evidence presented by the contending parties' during
the trial of the case considering that the findings of facts of the CA are
conclusive and binding on the Court. However, the Court had recognized
several exceptions to this rule, to wit: (1) when the findings are grounded
entirely on speculation, surmises or conjectures; (2) when the inference
made is manifestly mistaken, absurd or impossible; (3) when there is grave
abuse of discretion; (4) when the judgment is based on a misapprehension of
facts; (5) when the findings of facts are conflicting; (6) when in making its
findings the Court of Appeals went beyond the issues of the case, or its
findings are contrary to the admissions of both the appellant and the
appellee; (7) when the findings are contrary to the trial court; (8) when the
findings are conclusions without citation of specific evidence on which they
are based; (9) when the facts set forth in the petition as well as in the
petitioner's main and reply briefs are not disputed by the respondent; (10)
when the findings of fact are premised on the supposed absence of evidence
and contradicted by the evidence on record; and (11) when the Court of
Appeals manifestly overlooked certain relevant facts not disputed by the
parties, which, if properly considered, would justify a different conclusion."42
A perusal of the exceptions enumerated above reveals that the instant case
does not fall under any of them. Thus, this Court cannot entertain the factual
issues raised in the petition, which include the issue of authenticity of the
Undertaking or Agreement, as well as the issue of non-payment of the
amount mentioned, particularly, in the Undertaking.
Failure to file appellants’ brief
Assuming arguendo that the withdrawal of the appeal was groundless, the CA
still did not commit a reversible error in dismissing the appeal for petitioners’
failure to file an appellant’s brief.
Contrary to petitioners’ allegation, the assailed Decision did not dismiss the
case solely on the basis of the motion to withdraw filed by their former
counsel. To reiterate, the Decision stated that "[f]or failure to file their
respective appellants’ briefs, and in accordance with the prayer in the ‘Joint
Manifestation and Motion’, and in the ‘Ex-Parte Motion to Withdraw Appeal’,
the appeal should be dismissed, and considered as withdrawn (emphasis
supplied)."43

Section 7 of Rule 44 of the Rules of Court provides forty-five (45) days from
receipt of notice within which to file an appellant’s brief, while Section 12
declares that an extension of time for filing of briefs shall not be allowed
except for a good and sufficient cause.1awph?1.net

The general rule is that motions for extension of time to file an appellant’s
brief shall not be granted except for a good cause. No such justification is
present in this case. Petitioners’ failure to apprise themselves of the status of
their case during its pendency before the CA is inexcusable. Moreover, their
former counsel’s failure or neglect to file the required appellant’s brief shall
bind them.

No meritorious cause

With the loss of their right of appeal to the CA, we see no need to resolve the
issue of ownership. Such issue should have been first resolved by the CA, but
it was not able to do so because of the dismissal of the appeal. Thus, the claim
of ownership is a non-issue before this Court.

WHEREFORE, We DENY the petition and AFFIRM the May 11, 1999 Decision
and the January 31, 2000 Resolution of the CA in CA-G.R. CV No. 54136 and
SP No. 48475, with no costs.

SO ORDERED.
NATIONAL POWER CORPORATION vs DELA CRUZ
G.R. No. 156093 February 2, 2007
NATIONAL POWER CORP., Petitioner,
vs.
SPOUSES NORBERTO AND JOSEFINA DELA CRUZ, METROBANK, Dasmariñas,
Cavite Branch, REYNALDO FERRER, and S.K. DYNAMICS MANUFACTURER
CORP., Respondents.
DECISION
VELASCO, JR., J.:
The Case
In this petition for review under Rule 45 of the Rules of Court, petitioner
National Power Corporation (NAPOCOR) seeks to annul and set aside the
November 18, 2002 Decision1 of the Court of Appeals (CA) in CA-G.R. CV No.
67446, which affirmed the December 28, 1999 Order2 of the Imus, Cavite
Regional Trial Court (RTC), Branch XX in Civil Case No. 1816-98, which fixed
the fair market value of the expropriated lots at PhP 10,000.00 per square
meter.
The Facts
Petitioner NAPOCOR is a government-owned and controlled corporation
created under Republic Act No. 6395, as amended, with the mandate of
developing hydroelectric power, producing transmission lines, and
developing hydroelectric power throughout the Philippines. NAPOCOR
decided to acquire an easement of right-of-way over portions of land within
the areas of Dasmariñas and Imus, Cavite for the construction and
maintenance of the proposed Dasmariñas-Zapote 230 kV Transmission Line
Project.3
On November 27, 1998, petitioner filed a Complaint4 for eminent domain and
expropriation of an easement of right-of-way against respondents as
registered owners of the parcels of land sought to be expropriated, which
were covered by Transfer Certificates of Title (TCT) Nos. T-313327, T-671864,
and T-454278. The affected areas were 51.55, 18.25, and 14.625 square
meters, respectively, or a total of 84.425 square meters.
After respondents filed their respective answers to petitioner’s Complaint,
petitioner deposited PhP 5,788.50 to cover the provisional value of the land
in accordance with Section 2, Rule 67 of the Rules of Court.5 Then, on
February 25, 1999, petitioner filed an Urgent Ex-Parte Motion for the
Issuance of a Writ of Possession, which the trial court granted in its March 9,
1999 Order. The trial court issued a Writ of Possession over the lots owned
by respondents spouses de la Cruz and respondent Ferrer on March 10, 1999
and April 12, 1999, respectively.
However, the trial court dropped the Dela Cruz spouses and their mortgagee,
Metrobank, as parties-defendants in its May 11, 1999 Order,6 in view of the
Motion to Intervene filed by respondent/intervenor Virgilio M. Saulog, who
claimed ownership of the land sought to be expropriated from respondents
spouses Dela Cruz.
On June 24, 1999, the trial court terminated the pre-trial in so far as
respondent Ferrer was concerned, considering that the sole issue was the
amount of just compensation, and issued an Order directing the constitution
of a Board of Commissioners with respect to the property of respondent S.K.
Dynamics. The trial court designated Mr. Lamberto C. Parra, Cavite Provincial
Assessor, as chairman, while petitioner nominated the Municipal Assessor of
Dasmariñas, Mr. Regalado T. Andaya, as member. Respondent S.K. Dynamics
did not nominate any commissioner.
As to the just compensation for the property of Saulog, successor-in-interest
of the Dela Cruz spouses, the trial court ordered the latter and petitioner to
submit their compromise agreement.
The commissioners conducted an ocular inspection of S.K. Dynamics’
property, and on October 8, 1999, they submitted a report to the trial court,
with the following pertinent findings:
In arriving our [sic] estimate of values our studies and analysis include the
following:
I. PROPERTY LOCATION
As shown to us on-site during our ocular inspection, the appraised property
is land only, identified as the area affected by the construction of the National
Power Corporation (NPC) Dasmariñas-Zapote 230KV Transmission Lines
Project, located within Barangay Salitran, Dasmariñas, Cavite registered in
the name of S.K. Dynamic[s] Manufacture[r], Corp., under Transfer Certificate
of Title No. T-454278.
II. NEIGHBORHOOD DESCRIPTION
The neighborhood particularly in the immediate vicinity is within a mixed
residential and commercial area, situated in the northern section of the
Municipality of Dasmariñas which was transversed [sic] by Gen. Emilio
Aguinaldo Highway [where] several residential subdivisions and commercial
establishment[s] are located.
Considered as some of the important improvements [on] the vicinity are
(within 1.5 radius)
Orchard Golf and Country Club
Golden City Subdivision
Southfield Subdivisions
Arcontica Sports Complex
Max’s Restaurant
Waltermart Shopping Mall
UMC Medical Center
Several savings and Commercial Banks as well as several Gasoline stations.
Community centers such as, [sic] churches, public markets, shopping malls,
banks and gasoline stations are easily accessible from the subject real
properties.
Convenience facilities such as electricity, telephone service as well as pipe
potable water supply system are all available along Gen. Emilio Aguinaldo
Highway.
Public transportation consisting of passenger jeepneys and buses as well
taxicabs are [sic] regularly available along Gen. E. Emilio Aguinaldo Highway
[sic].
xxxx
IV. HIGHEST AND MOST PROFITABLE USE
xxxx
The subject property is situated within the residential/commercial zone and
considering the area affected and taking into consideration, their location,
shape, lot topography, accessibility and the predominant uses of properties
in the neighborhood, as well as the trend of land developments in the vicinity,
we are on the opinion that the highest and most profitable use of the
property is good for residential and commercial purposes.
V. VALUATION OF LAND MARKET DATA
xxxx
Based on the analysis of data gathered and making the proper adjustments
with respect to the location, area, shape, accessibility, and the highest and
best use of the subject properties, it is the opinion of the herein
commissioners that the fair market value of the subject real properties is
P10,000.00 per square meter, as of this date, October 05, 1999.7
Thus, both commissioners recommended that the property of S.K. Dynamics
to be expropriated by petitioner be valued at PhP 10,000.00 per square
meter.
The records show that the commissioners did not afford the parties the
opportunity to introduce evidence in their favor, nor did they conduct
hearings before them. In fact, the commissioners did not issue notices to the
parties to attend hearings nor provide the concerned parties the opportunity
to argue their respective causes.
Upon the submission of the commissioners’ report, petitioner was not
notified of the completion or filing of it nor given any opportunity to file its
objections to it.
On December 1, 1999, respondent Ferrer filed a motion adopting in toto the
commissioners’ report with respect to the valuation of his property.8 On
December 28, 1999, the trial court consequently issued the Order approving
the commissioners’ report, and granted respondent Ferrer’s motion to adopt
the subject report. Subsequently, the just compensation for the disparate
properties to be expropriated by petitioner for its project was uniformly
pegged at PhP 10,000.00 per square meter.
Incidentally, on February 11, 2000, respondent S.K. Dynamics filed a motion
informing the trial court that in addition to the portion of its property covered
by TCT No. T-454278 sought to be expropriated by petitioner, the latter also
took possession of an 8.55-square meter portion of S.K. Dynamics’ property
covered by TCT No. 503484 for the same purpose––to acquire an easement
of right-of-way for the construction and maintenance of the proposed
Dasmariñas-Zapote 230 kV Transmission Line Project. Respondent S.K.
Dynamics prayed that said portion be included in the computation of the just
compensation to be paid by petitioner.
On the same date, the Imus, Cavite RTC granted S.K. Dynamics’ motion to
have the 8.55-square meter portion of its property included in the
computation of just compensation.1awphi1.net
The Ruling of the Regional Trial Court
As previously stated, in its December 28, 1999 Order, the trial court fixed the
just compensation to be paid by petitioner at PhP 10,000.00 per square
meter. The relevant portion of the said Order reads as follows:
On October 8, 1999, a Commissioner’s Valuation Report was submitted in
Court by the Provincial Assessor of Cavite and by the Municipal Assessor of
Dasmariñas, Cavite. Quoting from said Report, thus:
"Based on the analysis of data gathered and making the proper adjustments
with respect to location, area, shape, accessibility, and the highest and best
use of the subject properties, it is the opinion of herein commissioners that
the fair market value of the subject real properties is ₧10,000.00 per square
meter, as of this date, October 05, 1999."
Finding the opinion of the Commissioners to be in order, this Court approves
the same. Accordingly, the Motion filed by [respondent] Reynaldo Ferrer
adopting said valuation report is granted.
SO ORDERED. 9
On January 20, 2000, petitioner filed a Motion for Reconsideration of the
abovementioned Order, but said motion was denied in the trial court’s March
23, 2000 Order, which states that:
The basis of [petitioner] in seeking to set aside the Order dated December 28,
1999 is its claim that the Commissioners’ Report fixing the just compensation
at P10,000.00 per square meter is exorbitant, unjust and unreasonable. To
support its contention, [petitioner] invoked Provincial Appraisal Committee
Report No. 08-95 dated October 25, 1995 which set the just compensation of
lots along Gen. Aguinaldo Highway at P3,000.00 per sq.m. only.
By way of opposition, [respondent] Dynamics countered that the valuation of
a lot under expropriation is reckoned at the time of its taking by the
government. And since in the case at bar, the writ of possession was issued
on March 10, 1999, the price or value for 1999 must be the one to be
considered.
We find for the defendant.
The PAR Resolution alluded to by [petitioner] was passed in 1995 or four (4)
years [before] the lot in question was taken over by the government. This
explains why the price or cost of the land has considerably increased. Besides,
the valuation of P10,000.00 per sq.m. was the one recommended by the
commissioner designated by [petitioner] itself and concurred in by the
Provincial Assessor of Cavite.
Be that as it may, the Motion for Reconsideration is denied.
SO ORDERED.10
The Ruling of the Court of Appeals
Unsatisfied with the amount of just compensation, petitioner filed an appeal
before the CA. In resolving the appeal, the CA made the following findings:
We find nothing on record which would warrant the reversal of the Order
dated December 28, 1999 of the court a quo.
[Petitioner] submits that the order of the court a quo adopting the
Commissioners [sic] Valuation Report, fixing the just compensation for the
subject lots in the amount of P10,000.00 per square meter is exhorbitant [sic],
highly speculative and without any basis. In support thereto, [petitioner]
presented before the court a quo the Provincial Appraisal Committee of
Cavite Resolution No. 08-95 x x x which fixed the fair market value of lots
located along Gen. Aguinaldo Highway, Dasmariñas, Cavite, which
incidentally includes the lots subject of this proceedings [sic], in the amount
of P3,000.00 per square meter.
We do not agree.
"The nature and character of the land at the time of its taking is the principal
criterion to determine just compensation to the land owner." (National
Power Corporation vs. Henson, 300 SCRA 751-756).
The CA then cited Section 4, Rule 67 of the 1997 Rules of Civil Procedure11 to
explain why Resolution No. 08-95 could not "be used as [a] basis for
determining the just compensation of the subject lots, which by reason of the
changed commercial conditions in the vicinity, could have increased its value
greater than its value three (3) years ago." The said resolution, which fixed
the fair market value of the lots, including that of the disputed lots along Gen.
Aguinaldo Highway, was approved on October 25, 1995, while petitioner filed
the Complaint for the expropriation of the disputed lots on November 27,
1998, or more than three (3) years had elapsed after said resolution was
approved. Reflecting on the commissioners’ report, the CA noted that since
the property underwent important changes and improvements, "the highest
and most profitable use of the property is good for residential and
commercial purposes."
As regards the commissioners’ failure to conduct a hearing "to give the
parties the opportunity to present their respective evidence," as alleged by
petitioner, the CA opined that "[t]he filing by [petitioner] of a motion for
reconsideration accorded it ample opportunity to dispute the findings of the
commissioners, so that [petitioner] was as fully heard as there might have
been hearing actually taken place x x x."
The CA ultimately rendered its judgment, as follows:
WHEREFORE, premises considered, the present appeal is hereby DISMISSED
for lack of merit. The Order dated December 28, 1999 and March 23, 2000 of
the court a quo are hereby AFFIRMED by this Court.
SO ORDERED.12
Significantly, petitioner did not file a Motion for Reconsideration of the CA
November 18, 2002 Decision, but it directly filed a petition for review before
us.
The Issues
In this petition for review, the issues are the following:
PETITIONER WAS DENIED DUE PROCESS WHEN IT WAS NOT ALLOWED TO
PRESENT EVIDENCE ON THE REASONABLE VALUE OF THE EXPROPRIATED
PROPERTY BEFORE THE BOARD OF COMMISSIONERS.
THE VALUATION OF JUST COMPENSATION HEREIN WAS NOT BASED FROM
THE EVIDENCE ON RECORD AND OTHER AUTHENTIC DOCUMENTS.13
The Court’s Ruling
We find this petition meritorious.
It is beyond question that petitions for review may only raise questions of law
which must be distinctly set forth;14thus, this Court is mandated to only
consider purely legal questions in this petition, unless called for by
extraordinary circumstances.
In this case, petitioner raises the issue of denial of due process because it was
allegedly deprived of the opportunity to present its evidence on the just
compensation of properties it wanted to expropriate, and the sufficiency of
the legal basis or bases for the trial court’s Order on the matter of just
compensation. Unquestionably, a petition for review under Rule 45 of the
Rules of Court is the proper vehicle to raise the issues in question before this
Court.
In view of the significance of the issues raised in this petition, because this
case involves the expenditure of public funds for a clear public purpose, this
Court will overlook the fact that petitioner did not file a Motion for
Reconsideration of the CA November 18, 2002 Decision, and brush aside this
technicality in favor of resolving this case on the merits.
First Issue: Petitioner was deprived of due process when it was not given the
opportunity to present evidence before the commissioners
It is undisputed that the commissioners failed to afford the parties the
opportunity to introduce evidence in their favor, conduct hearings before
them, issue notices to the parties to attend hearings, and provide the
opportunity for the parties to argue their respective causes. It is also
undisputed that petitioner was not notified of the completion or filing of the
commissioners’ report, and that petitioner was also not given any
opportunity to file its objections to the said report.
A re-examination of the pertinent provisions on expropriation, under Rule 67
of the Rules of Court, reveals the following:
SEC. 6. Proceedings by commissioners.—Before entering upon the
performance of their duties, the commissioners shall take and subscribe an
oath that they will faithfully perform their duties as commissioners, which
oath shall be filed in court with the other proceedings in the case. Evidence
may be introduced by either party before the commissioners who are
authorized to administer oaths on hearings before them, and the
commissioners shall, unless the parties consent to the contrary, after due
notice to the parties to attend, view and examine the property sought to be
expropriated and its surroundings, and may measure the same, after which
either party may, by himself or counsel, argue the case. The commissioners
shall assess the consequential damages to the property not taken and deduct
from such consequential damages the consequential benefits to be derived
by the owner from the public use or purpose of the property taken, the
operation of its franchise by the corporation or the carrying on of the business
of the corporation or person taking the property. But in no case shall the
consequential benefits assessed exceed the consequential damages
assessed, or the owner be deprived of the actual value of his property so
taken.
SEC. 7. Report by commissioners and judgment thereupon.—The court may
order the commissioners to report when any particular portion of the real
estate shall have been passed upon by them, and may render judgment upon
such partial report, and direct the commissioners to proceed with their work
as to subsequent portions of the property sought to be expropriated, and may
from time to time so deal with such property. The commissioners shall make
a full and accurate report to the court of all their proceedings, and such
proceedings shall not be effectual until the court shall have accepted their
report and rendered judgment in accordance with their recommendations.
Except as otherwise expressly ordered by the court, such report shall be filed
within sixty (60) days from the date the commissioners were notified of their
appointment, which time may be extended in the discretion of the court.
Upon the filing of such report, the clerk of the court shall serve copies thereof
on all interested parties, with notice that they are allowed ten (10) days
within which to file objections to the findings of the report, if they so desire.
SEC. 8. Action upon commissioners’ report.—Upon the expiration of the
period of ten (10) days referred to in the preceding section, or even before
the expiration of such period but after all the interested parties have filed
their objections to the report or their statement of agreement therewith, the
court may, after hearing, accept the report and render judgment in
accordance therewith; or, for cause shown, it may recommit the same to the
commissioners for further report of facts; or it may set aside the report and
appoint new commissioners; or it may accept the report in part and reject it
in part; and it may make such order or render such judgment as shall secure
to the plaintiff the property essential to the exercise of his right of
expropriation, and to the defendant just compensation for the property so
taken.
Based on these provisions, it is clear that in addition to the ocular inspection
performed by the two (2) appointed commissioners in this case, they are also
required to conduct a hearing or hearings to determine just compensation;
and to provide the parties the following: (1) notice of the said hearings and
the opportunity to attend them; (2) the opportunity to introduce evidence in
their favor during the said hearings; and (3) the opportunity for the parties to
argue their respective causes during the said hearings.
The appointment of commissioners to ascertain just compensation for the
property sought to be taken is a mandatory requirement in expropriation
cases. In the instant expropriation case, where the principal issue is the
determination of just compensation, a hearing before the commissioners is
indispensable to allow the parties to present evidence on the issue of just
compensation. While it is true that the findings of commissioners may be
disregarded and the trial court may substitute its own estimate of the value,
the latter may only do so for valid reasons, that is, where the commissioners
have applied illegal principles to the evidence submitted to them, where they
have disregarded a clear preponderance of evidence, or where the amount
allowed is either grossly inadequate or excessive. Thus, "trial with the aid of
the commissioners is a substantial right that may not be done away with
capriciously or for no reason at all."15
In this case, the fact that no trial or hearing was conducted to afford the
parties the opportunity to present their own evidence should have impelled
the trial court to disregard the commissioners’ findings. The absence of such
trial or hearing constitutes reversible error on the part of the trial court
because the parties’ (in particular, petitioner’s) right to due process was
violated.
The Court of Appeals erred in ruling that the petitioner was not deprived of
due process when it was able to file a motion for reconsideration
In ruling that petitioner was not deprived of due process because it was able
to file a Motion for Reconsideration, the CA had this to say:
[Petitioner], further, asserts that "the appointed commissioners failed to
conduct a hearing to give the parties the opportunity to present their
respective evidence. According to [petitioner], the Commissioners Valuation
Report was submitted on October 8, 1999 in violation of the appellant’s right
to due process as it was deprived of the opportunity to present evidence on
the determination of the just compensation."
We are not persuaded.
The filing by [petitioner] of a motion for reconsideration accorded it ample
opportunity to dispute the findings of the commissioners, so that [petitioner]
was as fully heard as there might have been hearing actually taken place.
"Denial of due process cannot be successfully invoked by a party who has had
the opportunity to be heard on his motion for reconsideration." (Vda. De
Chua vs. Court of Appeals, 287 SCRA 33, 50).16
In this respect, we are constrained to disagree with the CA ruling, and
therefore, set it aside.
While it is true that there is jurisprudence supporting the rule that the filing
of a Motion for Reconsideration negates allegations of denial of due process,
it is equally true that there are very specific rules for expropriation cases that
require the strict observance of procedural and substantive due
process,17 because expropriation cases involve the admittedly painful
deprivation of private property for public purposes and the disbursement of
public funds as just compensation for the private property taken. Therefore,
it is insufficient to hold that a Motion for Reconsideration in an expropriation
case cures the defect in due process.
As a corollary, the CA’s ruling that "denial of due process cannot be
successfully invoked by a party who has had the opportunity to be heard on
his motion for reconsideration," citing Vda. de Chua v. Court of Appeals, is not
applicable to the instant case considering that the cited case involved a lack
of notice of the orders of the trial court in granting letters of administration.
It was essentially a private dispute and therefore, no public funds were
involved. It is distinct from this expropriation case where grave consequences
attached to the orders of the trial court when it determined the just
compensation.
The Court takes this opportunity to elucidate the ruling that the opportunity
to present evidence incidental to a Motion for Reconsideration will suffice if
there was no chance to do so during the trial. We find such situation to be
the exception and not the general rule. The opportunity to present evidence
during the trial remains a vital requirement in the observance of due process.
The trial is materially and substantially different from a hearing on a Motion
for Reconsideration. At the trial stage, the party is usually allowed several
hearing dates depending on the number of witnesses who will be presented.
At the hearing of said motion, the trial court may not be more
accommodating with the grant of hearing dates even if the movant has many
available witnesses. Before the decision is rendered, a trial court has an open
mind on the merits of the parties’ positions. After the decision has been
issued, the trial court’s view of these positions might be inclined to the side
of the winning party and might treat the Motion for Reconsideration and the
evidence adduced during the hearing of said motion perfunctorily and in a
cavalier fashion. The incident might not receive the evaluation and judgment
of an impartial or neutral judge. In sum, the constitutional guarantee of due
process still requires that a party should be given the fullest and widest
opportunity to adduce evidence during trial, and the availment of a motion
for reconsideration will not satisfy a party’s right to procedural due process,
unless his/her inability to adduce evidence during trial was due to his/her
own fault or negligence.
Second Issue: The legal basis for the determination of just compensation was
insufficient
In this case, it is not disputed that the commissioners recommended that the
just compensation be pegged at PhP 10,000.00 per square meter. The
commissioners arrived at the figure in question after their ocular inspection
of the property, wherein they considered the surrounding structures, the
property’s location and, allegedly, the prices of the other, contiguous real
properties in the area. Furthermore, based on the commissioners’ report, the
recommended just compensation was determined as of the time of the
preparation of said report on October 5, 1999.
In B.H. Berkenkotter & Co. v. Court of Appeals, we held, thus:
Just compensation is defined as the full and fair equivalent of the property
sought to be expropriated. The measure is not the taker’s gain but the
owner’s loss. The compensation, to be just, must be fair not only to the owner
but also to the taker. Even as undervaluation would deprive the owner of his
property without due process, so too would its overvaluation unduly favor
him to the prejudice of the public.
To determine just compensation, the trial court should first ascertain the
market value of the property, to which should be added the consequential
damages after deducting therefrom the consequential benefits which may
arise from the expropriation. If the consequential benefits exceed the
consequential damages, these items should be disregarded altogether as the
basic value of the property should be paid in every case.
The market value of the property is the price that may be agreed upon by
parties willing but not compelled to enter into the contract of sale. Not
unlikely, a buyer desperate to acquire a piece of property would agree to pay
more, and a seller in urgent need of funds would agree to accept less, than
what it is actually worth. x x x
Among the factors to be considered in arriving at the fair market value of the
property are the cost of acquisition, the current value of like properties, its
actual or potential uses, and in the particular case of lands, their size, shape,
location, and the tax declarations thereon.
It is settled that just compensation is to be ascertained as of the time of the
taking, which usually coincides with the commencement of the expropriation
proceedings. Where the institution of the action precedes entry into the
property, the just compensation is to be ascertained as of the time of the
filing of the complaint.18
We note that in this case, the filing of the complaint for expropriation
preceded the petitioner’s entry into the property.
Therefore, it is clear that in this case, the sole basis for the determination of
just compensation was the commissioners’ ocular inspection of the
properties in question, as gleaned from the commissioners’ October 5, 1999
report. The trial court’s reliance on the said report is a serious error
considering that the recommended compensation was highly speculative and
had no strong factual moorings. For one, the report did not indicate the fair
market value of the lots occupied by the Orchard Golf and Country Club,
Golden City Subdivision, Arcontica Sports Complex, and other business
establishments cited. Also, the report did not show how convenience
facilities, public transportation, and the residential and commercial zoning
could have added value to the lots being expropriated.
Moreover, the trial court did not amply explain the nature and application of
the "highest and best use" method to determine the just compensation in
expropriation cases. No attempt was made to justify the recommended "just
price" in the subject report through other sufficient and reliable means such
as the holding of a trial or hearing at which the parties could have had
adequate opportunity to adduce their own evidence, the testimony of
realtors in the area concerned, the fair market value and tax declaration,
actual sales of lots in the vicinity of the lot being expropriated on or about the
date of the filing of the complaint for expropriation, the pertinent zonal
valuation derived from the Bureau of Internal Revenue, among others.
More so, the commissioners did not take into account that the Asian financial
crisis in the second semester of 1997 affected the fair market value of the
subject lots. Judicial notice can be taken of the fact that after the crisis hit the
real estate market, there was a downward trend in the prices of real estate
in the country.

Furthermore, the commissioners’ report itself is flawed considering that its

recommended just compensation was pegged as of October 5, 1999, or the
date when the said report was issued, and not the just compensation as of
the date of the filing of the complaint for expropriation, or as of November
27, 1998. The period between the time of the filing of the complaint (when
just compensation should have been determined), and the time when the
commissioners’ report recommending the just compensation was issued (or
almost one [1] year after the filing of the complaint), may have distorted the
correct amount of just compensation.

Clearly, the legal basis for the determination of just compensation in this case
is insufficient as earlier enunciated. This being so, the trial court’s ruling in
this respect should be set aside.

WHEREFORE, the petition is GRANTED. The December 28, 1999 and March
23, 2000 Orders of the Imus, Cavite RTC and the November 18, 2002 Decision
of the CA are hereby SET ASIDE. This case is remanded to the said trial court
for the proper determination of just compensation in conformity with this
Decision. No costs.

SO ORDERED.
SPOUSES YU vs NGO YET TE
G.R. No. 155868 February 6, 2007
SPOUSES GREGORIO and JOSEFA YU, Petitioners,
vs.
NGO YET TE, doing business under the name and style, ESSENTIAL
MANUFACTURING, Respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of
Court assailing the March 21, 2001 Decision1 of the Court of Appeals (CA) in
CA-G.R. CV No. 522462 and its October 14, 2002 Resolution.3
The antecedent facts are not disputed.
Spouses Gregorio and Josefa Yu (Spouses Yu) purchased from Ngo Yet Te (Te)
bars of detergent soap worth ₱594,240.00, and issued to the latter three
postdated checks 4 as payment of the purchase price. When Te presented the
checks at maturity for encashment, said checks were returned dishonored
and stamped "ACCOUNT CLOSED".5 Te demanded6 payment from Spouses Yu
but the latter did not heed her demands. Acting through her son and
attorney-in-fact, Charry Sy (Sy), Te filed with the Regional Trial Court (RTC),
Branch 75, Valenzuela, Metro Manila, a Complaint,7 docketed as Civil Case
No. 4061-V-93, for Collection of Sum of Money and Damages with Prayer for
Preliminary Attachment.
In support of her prayer for preliminary attachment, Te attached to her
Complaint an Affidavit executed by Sy that Spouses Yu were guilty of fraud in
entering into the purchase agreement for they never intended to pay the
contract price, and that, based on reliable information, they were about to
move or dispose of their properties to defraud their creditors.8
Upon Te’s posting of an attachment bond,9 the RTC issued an Order of
Attachment/Levy10 dated March 29, 1993 on the basis of which Sheriff
Constancio Alimurung (Sheriff Alimurung) of RTC, Branch 19, Cebu City levied
and attached Spouses Yu’s properties in Cebu City consisting of one parcel of
land (known as Lot No. 11)11 and four units of motor vehicle, specifically, a
Toyota Ford Fierra, a jeep, a Canter delivery van, and a passenger bus.12
On April 21, 1993, Spouses Yu filed an Answer13 with counterclaim for
damages arising from the wrongful attachment of their properties,
specifically, actual damages amounting to ₱1,500.00 per day; moral damages,
₱1,000,000.00; and exemplary damages, ₱50,000.00. They also sought
payment of ₱120,000.00 as attorney’s fees and ₱80,000.00 as litigation
expenses.14 On the same date, Spouses Yu filed an Urgent Motion to Dissolve
Writ of Preliminary Attachment.15 They also filed a Claim Against Surety
Bond16 in which they demanded payment from Visayan Surety and Insurance
Corporation (Visayan Surety), the surety which issued the attachment bond,
of the sum of ₱594,240.00, representing the damages they allegedly
sustained as a consequence of the wrongful attachment of their properties.
While the RTC did not resolve the Claim Against Surety Bond, it issued an
Order17 dated May 3, 1993, discharging from attachment the Toyota Ford
Fierra, jeep, and Canter delivery van on humanitarian grounds, but
maintaining custody of Lot No. 11 and the passenger bus. Spouses Yu filed a
Motion for Reconsideration18 which the RTC denied.19
Dissatisfied, they filed with the CA a Petition for Certiorari,20 docketed as CA-
G.R. SP No. 31230, in which a Decision21 was rendered on September 14,
1993, lifting the RTC Order of Attachment on their remaining properties. It
reads in part:
In the case before Us, the complaint and the accompanying affidavit in
support of the application for the writ only contains general averments.
Neither pleading states in particular how the fraud was committed or the
badges of fraud purportedly committed by the petitioners to establish that
the latter never had an intention to pay the obligation; neither is there a
statement of the particular acts committed to show that the petitioners are
in fact disposing of their properties to defraud creditors. x x x.
xxxx
Moreover, at the hearing on the motion to discharge the order of attachment
x x x petitioners presented evidence showing that private respondent has
been extending multi-million peso credit facilities to the petitioners for the
past seven years and that the latter have consistently settled their
obligations. This was not denied by private respondent. Neither does the
private respondent contest the petitioners’ allegations that they have been
recently robbed of properties of substantial value, hence their inability to pay
on time. By the respondent court’s own pronouncements, it appears that the
order of attachment was upheld because of the admitted financial reverses
the petitioner is undergoing.
This is reversible error. Insolvency is not a ground for attachment especially
when defendant has not been shown to have committed any act intended to
defraud its creditors x x x.
For lack of factual basis to justify its issuance, the writ of preliminary
attachment issued by the respondent court was improvidently issued and
should be discharged.22
23
From said CA Decision, Te filed a Motion for Reconsideration but to no avail.
Te filed with us a Petition for Review on Certiorari24 but we denied the same
in a Resolution dated June 8, 1994 for having been filed late and for failure to
show that a reversible error was committed by the CA.25 Entry of Judgment
of our June 8, 1994 Resolution was made on July 22, 1994.26 Thus, the finding
of the CA in its September 14, 1993 Decision in CA-G.R. SP No. 31230 on the
wrongfulness of the attachment/levy of the properties of Spouses Yu became
conclusive and binding.
However, on July 20, 1994, the RTC, apparently not informed of the SC
Decision, rendered a Decision, the dispositive portion of which reads:
WHEREFORE, premises considered, the Court finds that the plaintiff has
established a valid civil cause of action against the defendants, and therefore,
renders this judgment in favor of the plaintiff and against the defendants, and
hereby orders the following:
1) Defendants are hereby ordered or directed to pay the plaintiff the sum of
₱549,404.00, with interest from the date of the filing of this case (March 3,
1993);
2) The Court, for reasons aforestated, hereby denies the grant of damages to
the plaintiff;
3) The Court hereby adjudicates a reasonable attorney’s fees and litigation
expenses of ₱10,000.00 in favor of the plaintiff;
4) On the counterclaim, this Court declines to rule on this, considering that
the question of the attachment which allegedly gave rise to the damages
incurred by the defendants is being determined by the Supreme Court.
SO ORDERED.27 (Emphasis ours)
Spouses Yu filed with the RTC a Motion for Reconsideration28 questioning the
disposition of their counterclaim. They also filed a Manifestation29 informing
the RTC of our June 8, 1994 Resolution in G.R. No. 114700.
The RTC issued an Order dated August 9, 1994, which read:
xxxx
(2) With regard the counter claim filed by the defendants against the plaintiff
for the alleged improvident issuance of this Court thru its former Presiding
Judge (Honorable Emilio Leachon, Jr.), the same has been ruled with
definiteness by the Supreme Court that, indeed, the issuance by the Court of
the writ of preliminary attachment appears to have been improvidently
done, but nowhere in the decision of the Supreme Court and for that
matter, the Court of Appeal’s decision which was in effect sustained by the
High Court, contains any ruling or directive or imposition, of any damages
to be paid by the plaintiff to the defendants, in other words, both the High
Court and the CA, merely declared the previous issuance of the writ of
attachment by this Court thru its former presiding judge to be improvidently
issued, but it did not award any damages of any kind to the defendants,
hence, unless the High Court or the CA rules on this, this Court coud not grant
any damages by virtue of the improvident attachment made by this Court
thru its former presiding judge, which was claimed by the defendants in their
counter claim.
(3) This Court hereby reiterates in toto its Decision in this case dated July 20,
1994. 30 (Emphasis ours)
The RTC also issued an Order dated December 2, 1994,31 denying the Motion
for Reconsideration of Spouses Yu.32
In the same December 2, 1994 Order, the RTC granted two motions filed by
Te, a Motion to Correct and to Include Specific Amount for Interest and a
Motion for Execution Pending Appeal.33 The RTC also denied Spouses Yu’s
Notice of Appeal34 from the July 20, 1994 Decision and August 9, 1994 Order
of the RTC.
From said December 2, 1994 RTC Order, Spouses Yu filed another Notice of
Appeal 35 which the RTC also denied in an Order36 dated January 5, 1995.
Spouses Yu filed with the CA a Petition37 for Certiorari, Prohibition
and Mandamus, docketed as CA-G.R. SP No. 36205, questioning the denial of
their Notices of Appeal; and seeking the modification of the July 20, 1994
Decision and the issuance of a Writ of Execution. The CA granted the Petition
in a Decision38 dated June 22, 1995.
Hence, Spouses Yu filed with the CA an appeal39 docketed as CA-G.R. CV No.
52246, questioning only that portion of the July 20, 1994 Decision where the
RTC declined to rule on their counterclaim for damages.40 However, Spouses
Yu did not dispute the specific monetary awards granted to respondent Te;
and therefore, the same have become final and executory.
Although in the herein assailed Decision41 dated March 21, 2001, the CA
affirmed in toto the RTC Decision, it nonetheless made a ruling on the
counterclaim of Spouses Yu by declaring that the latter had failed to adduce
sufficient evidence of their entitlement to damages.
Spouses Yu filed a Motion for Reconsideration42 but the CA denied it in the
herein assailed Resolution43 dated October 14, 2002.
Spouses Yu filed the present Petition raising the following issues:
I. Whether or not the appellate court erred in not holding that the writ of
attachment was procured in bad faith, after it was established by final
judgment that there was no true ground therefor.
II. Whether or not the appellate court erred in refusing to award actual, moral
and exemplary damages after it was established by final judgment that the
writ of attachment was procured with no true ground for its issuance.44
There is one preliminary matter to set straight before we resolve the
foregoing issues.
According to respondent Te,45 regardless of the evidence presented by
Spouses Yu, their counterclaim was correctly dismissed for failure to comply
with the procedure laid down in Section 20 of Rule 57. Te contends that as
Visayan Surety was not notified of the counterclaim, no judgment thereon
could be validly rendered.
Such argument is not only flawed, it is also specious.
As stated earlier, Spouses Yu filed a Claim Against Surety Bond on the same
day they filed their Answer and Urgent Motion to Dissolve Writ of Preliminary
Attachment.46 Further, the records reveal that on June 18, 1993, Spouses Yu
filed with the RTC a Motion to Give Notice to Surety.47 The RTC granted the
Motion in an Order48 dated June 23, 1993. Accordingly, Visayan Surety was
notified of the pre-trial conference to apprise it of a pending claim against its
attachment bond. Visayan Surety received the notice on July 12, 1993 as
shown by a registry return receipt attached to the records.49
Moreover, even if it were true that Visayan Surety was left in the proceedings
a quo, such omission is not fatal to the cause of Spouses Yu. In Malayan
Insurance Company, Inc. v. Salas,50 we held that "x x x if the surety was not
given notice when the claim for damages against the principal in the replevin
bond was heard, then as a matter of procedural due process the surety is
entitled to be heard when the judgment for damages against the principal is
sought to be enforced against the surety’s replevin bond."51 This remedy is
applicable for the procedures governing claims for damages
on an attachment bond and on a replevin bond are the same.52
We now proceed to resolve the issues jointly.
Spouses Yu contend that they are entitled to their counterclaim for damages
as a matter of right in view of the finality of our June 8, 1994 Resolution in
G.R. No. 114700 which affirmed the finding of the CA in its September 14,
1993 Decision in CA-G.R. SP No. 31230 that respondent Te had wrongfully
caused the attachment of their properties. Citing Javellana v. D.O. Plaza
Enterprises, Inc.,53 they argue that they should be awarded damages based
solely on the CA finding that the attachment was illegal for it already suggests
that Te acted with malice when she applied for attachment. And even if we
were to assume that Te did not act with malice, still she should be held liable
for the aggravation she inflicted when she applied for attachment even when
she was clearly not entitled to it.54
That is a rather limited understanding of Javellana. The counterclaim disputed
therein was not for moral damages and therefore, there was no need to prove
malice. As early as in Lazatin v. Twaño,55 we laid down the rule that where
there is wrongful attachment, the attachment defendant may recover actual
damages even without proof that the attachment plaintiff acted in bad faith
in obtaining the attachment. However, if it is alleged and established that the
attachment was not merely wrongful but also malicious, the attachment
defendant may recover moral damages and exemplary damages as
well. 56 Either way, the wrongfulness of the attachment does not warrant the
automatic award of damages to the attachment defendant; the latter must
first discharge the burden of proving the nature and extent of the loss or
injury incurred by reason of the wrongful attachment.57
In fine, the CA finding that the attachment of the properties of Spouses Yu
was wrongful did not relieve Spouses Yu of the burden of proving the factual
basis of their counterclaim for damages.
To merit an award of actual damages arising from a wrongful attachment, the
attachment defendant must prove, with the best evidence obtainable, the
fact of loss or injury suffered and the amount thereof.58 Such loss or injury
must be of the kind which is not only capable of proof but must actually be
proved with a reasonable degree of certainty. As to its amount, the same
must be measurable based on specific facts, and not on guesswork or
speculation. 59 In particular, if the claim for actual damages covers unrealized
profits, the amount of unrealized profits must be estalished and supported
by independent evidence of the mean income of the business undertaking
interrupted by the illegal seizure. 60
Spouses Yu insist that the evidence they presented met the foregoing
standards. They point to the lists of their daily net income from the operation
of said passenger bus based on used ticket stubs61 issued to their passengers.
They also cite unused ticket stubs as proof of income foregone when the bus
was wrongfully seized.62 They further cite the unrebutted testimony of Josefa
Yu that, in the day-to-day operation of their passenger bus, they use up at
least three ticket stubs and earn a minimum daily income of ₱1,500.00.63
In ruling that Spouses Yu failed to adduce sufficient evidence to support their
counterclaim for actual damages, the CA stated, thus:
In this case, the actual damages cannot be determined. Defendant-appellant
Josefa Yu testified on supposed lost profits without clear and appreciable
explanation. Despite her submission of the used and unused ticket stubs,
there was no evidence on the daily net income, the routes plied by the bus
and the average fares for each route. The submitted basis is too speculative
and conjectural. No reports regarding the average actual profits and other
evidence of profitability necessary to prove the amount of actual damages
were presented. Thus, the Court a quodid not err in not awarding damages in
favor of defendants-appellants.64
We usually defer to the expertise of the CA, especially when it concurs with
the factual findings of the RTC.65Indeed, findings of fact may be passed upon
and reviewed by the Supreme Court in the following instances: (1) when the
conclusion is a finding grounded entirely on speculations, surmises, or
conjectures; (2) when the inference made is manifestly mistaken, absurd, or
impossible; (3) where there is a grave abuse of discretion in the appreciation
of facts; (4) when judgment is based on a misapprehension of facts; (5) when
the lower court, in making its findings, went beyond the issues of the case
and such findings are contrary to the admissions of both appellant and
appellee; (6) when the factual findings of the CA are contrary to those of the
trial court; (7) when the findings of fact are themselves conflicting; (8) when
the findings of fact are conclusions made without a citation of specific
evidence on which they are based; (9) when the facts set forth in the petition
as well as in the petitioner’s main and reply briefs are not disputed by the
respondents; (10) when the findings of fact of the lower court are premised
on the supposed absence of evidence and are contradicted by the evidence
on record.66 However, the present case does not fall under any of the
exceptions. We are in full accord with the CA that Spouses Yu failed to prove
their counterclaim.
Spouses Yu’s claim for unrealized income of ₱1,500.00 per day was based on
their computation of their average daily income for the year 1992. Said
computation in turn is based on the value of three ticket stubs sold over only
five separate days in 1992.67 By no stretch of the imagination can we consider
ticket sales for five days sufficient evidence of the average daily income of the
passenger bus, much less its mean income. Not even the unrebutted
testimony of Josefa Yu can add credence to such evidence for the testimony
itself lacks corroboration.68
Besides, based on the August 29, 1994 Manifestation69 filed by Sheriff
Alimurung, it would appear that long before the passenger bus was placed
under preliminary attachment in Civil Case No. 4061-V-93, the same had been
previously attached by the Sheriff of Mandaue City in connection with
another case and that it was placed in the Cebu Bonded Warehousing
Corporation, Cebu City. Thus, Spouses Yu cannot complain that they were
unreasonably deprived of the use of the passenger bus by reason of the
subsequent wrongful attachment issued in Civil Case No. 4061-V-93. Nor can
they also attribute to the wrongful attachment their failure to earn income or
profit from the operation of the passenger bus.
Moreover, petitioners did not present evidence as to the damages they
suffered by reason of the wrongful attachment of Lot No. 11.
Nonetheless, we recognize that Spouses Yu suffered some form of pecuniary
loss when their properties were wrongfully seized, although the amount
thereof cannot be definitively ascertained. Hence, an award of temperate or
moderate damages in the amount of ₱50,000.00 is in order.70
As to moral and exemplary damages, to merit an award thereof, it must be
shown that the wrongful attachment was obtained by the attachment
plaintiff with malice or bad faith, such as by appending a false affidavit to his
application.71
Spouses Yu argue that malice attended the issuance of the attachment bond
as shown by the fact that Te deliberately appended to her application for
preliminary attachment an Affidavit where Sy perjured himself by stating that
they had no intention to pay their obligations even when he knew this to be
untrue given that they had always paid their obligations; and by accusing
them of disposing of their properties to defraud their creditors even when he
knew this to be false, considering that the location of said properties was
known to him.72
The testimony of petitioner Josefa Yu herself negates their claim for moral
and exemplary damages. On cross-examination she testified, thus:
Q: Did you ever deposit any amount at that time to fund the check?
A: We requested that it be replaced and staggered into smaller amounts.
COURT: Did you fund it or not?
Atty. Ferrer: The three checks involved?
Atty. Florido: Already answered. She said that they were not able to fund it.
Atty. Ferrer: And as a matter of fact, you went to the bank to close your
account?
A: We closed account with the bank because we transferred the account to
another bank.
Q: How much money did you transfer from that bank to which the three
checks were drawn to this new bank?
A: I don’t know how much was there but we transferred already to the Solid
Bank.
Q: Who transferred?
A: My daughter, sir.73 (Emphasis ours)
Based on the foregoing testimony, it is not difficult to understand why Te
concluded that Spouses Yu never intended to pay their obligation for they
had available funds in their bank but chose to transfer said funds instead of
cover the checks they issued. Thus, we cannot attribute malice nor bad faith
to Te in applying for the attachment writ. We cannot hold her liable for moral
and exemplary damages.
As a rule, attorney’s fees cannot be awarded when moral and exemplary
damages are not granted, the exception however is when a party incurred
expenses to lift a wrongfully issued writ of
74
attachment.1awphi1.net Without a doubt, Spouses Yu waged a protracted
legal battle to fight off the illegal attachment of their properties and pursue
their claims for damages. It is only just and equitable that they be awarded
reasonable attorney’s fees in the amount of ₱30,000.00.
In sum, we affirm the dismissal of the counterclaim of petitioners Spouses Yu
for actual, moral, and exemplary damages. However, we grant them
temperate damages and attorney’s fees.

WHEREFORE, the petition is partly GRANTED. The March 21, 2001 Decision
of the Court of Appeals is AFFIRMED with the MODIFICATION that
petitioners’ counterclaim is PARTLY GRANTED. Gregorio Yu and Josefa Yu are
awarded ₱50,000.00 temperate damages and ₱30,000.00 attorney’s fees.

No costs.

SO ORDERED.
B. JURISDICTION OF THE COURT OF APPEALS
VALDEZ vs CHINA BANKING CORPORATION
G.R. No. 155009. April 12, 2005
SIMEON M. VALDEZ, Petitioners,
vs.
CHINA BANKING CORPORATION, Respondents.
DECISION
GARCIA, J.:
Assailed and sought to be set aside in this petition for review on certiorari
under Rule 45 of the Rules of Court are the following issuances of the Court
of Appeals in CA-G.R. CV No. 24946, to wit:
1. Decision dated February 28, 20021 , affirming an earlier decision of the
Regional Trial Court at Manila in an action for sum of money thereat
commenced by the herein respondent against petitioner and Creative
Texwood Corporation; and
2. Resolution dated August 23, 2002, denying petitioner’s motion for
reconsideration.
The factual milieu:
On January 11, 1978, respondent China Banking Corporation (Chinabank),
represented by its senior vice-president Gilbert Dee, and Creative Texwood
Corporation (CREATIVE), represented by its president, herein
petitioner Simeon M. Valdez, executed a Credit Agreement whereunder
Chinabank agreed to grant CREATIVE a credit facility in the amount of
US$1,000,000.00 to finance the latter’s importation of raw materials, spare
parts and supplies for its manufacturing projects.
Simultaneously with the execution of the aforementioned Credit Agreement,
and in order to assure payment of the credit facility thereunder granted,
CREATIVE, again represented by petitioner as its President, executed in favor
of Chinabank a Promissory Note for the same amount, undertaking to pay
said amount one year thenceforth or until January 11, 1979.
On the same date - January 11, 1978 – CREATIVE, as principal and petitioner,
as surety, further executed in favor of Chinabank a Surety
Agreement whereunder petitioner Valdez bound himself unto Chinabank the
prompt payment on maturity date of the aforesaid promissory note.
The next day, January 12, 1978, pursuant to said credit agreement, Chinabank
drew and issued a check for US$1,000,000.00 with CREATIVE as payee.
Subsequently, CREATIVE indorsed the check back to Chinabank for payment,
which the latter did.
On December 15, 1986, following the failure of both CREATIVE and petitioner
to comply with their obligations despite repeated demands, Chinabank filed
against both a complaint for a sum of money before the Regional Trial Court
at Manila, thereat docketed as Civil Case No. 86-38740 which was raffled to
Branch 35 thereof.
In his separate answer, petitioner, after the usual denial of the material
allegations of the complaint, interposed the defense that the subject Credit
Agreement is fictitious and simulated; that he signed said agreement
and Promissory Note in his official capacity as president of CREATIVE and not
in his personal capacity; and that the Surety Agreement attached to the
complaint is not the one executed and signed by him because what he signed
was a pro-forma document with blank spaces still unfilled.
On July 31, 1987, the trial court dismissed the complaint for failure of plaintiff
Chinabank to prosecute for an unreasonable length of time. However, upon
Chinabank’s motion for reconsideration, the trial court reinstated the
complaint, and, on Chinabank’s further motion, declared defendant
CREATIVE as in default and allowed Chinabank to adduce ex parte its
evidence against the former. Pre-trial was thereafter set between plaintiff
Chinabank and defendant-petitioner.
On May 20, 1988, the trial court, upon Chinabank’s motion, declared
petitioner as in default for his and his counsel’s failure to appear at the
scheduled pre-trial. However, upon petitioner’s motion, the trial court set
aside its default order and set the case anew for pre-trial.
With no amicable settlement having been reached by the parties, trial
ensued.
Eventually, in a decision dated November 20, 1989, the trial court rendered
judgment for plaintiff Chinabank and against defendants CREATIVE and
petitioner, thus:
WHEREFORE, judgment is rendered: (1) ordering defendants Creative
Texwood Corporation and Simeon M. Valdez, jointly and severally, to pay to
the plaintiff the principal amount of P18,069,674.38, the interest thereon at
the rate of ½ per annum computed from December 15, 1986, the date the
complaint was filed, until full payment of the principal obligation, another 1 -
½% per month computed also from the same date until full payment of the
principal obligation, as penalty, and the amount of P3,613,934.00 for
attorney’s fees; and (2) ordering defendant Creative Texwood Corporation to
pay the plaintiff the amount equivalent to 3% per annum also computed from
December 15, 1986, on the amount of the drawdown, as arrangement fee.
SO ORDERED. (Petition, Annex "F"; Rollo, pp. 66-69)
In its decision, the trial court, finding no reason to doubt the authenticity and
due execution of the surety agreement, held that petitioner’s liability to
Chinabank arose from his execution of the same agreement where he
warranted unto Chinabank the prompt payment at maturity date of the
promissory note. The trial court also debunked petitioner’s protestation in his
memorandum that his liability under the same surety agreement was
extinguished pursuant to Article 20792 of the Civil Code when Chinabank
granted CREATIVE an extension of time for the payment of the loan. Partly
says the trial court in its decision:
We do not agree. Defendant Valdez admits in his memorandum that after his
co-defendant corporation failed to pay its loan on due date, a demand letter
dated July 16, 1979 was sent by the plaintiff to defendant corporation to pay
its overdue obligation. This first demand letter was followed by two more
demand letters dated November 26, 1979 and May 20, 1981, respectively,
both addressed to the said defendant corporation. The mere fact that plaintiff
neglected to sue immediately and initiated this court action only on
December 15, 1986, does not relieve and discharge defendant Valdez from
his liability under the Surety Agreement, because such delay in filing the
action does not necessarily imply any change in the efficacy of the contract
or liability of the principal debtor. (See Bank of P.I. vs. Albadejo, 53 Phil. 141;
Paras, Civil Code, Vol. V, 1982 Ed., pp. 806 & 810)." (Rollo, p. 68)
From the aforementioned decision of the trial court, both Chinabank and
petitioner went to the Court of Appeals in CA-G.R. CV No. 24946.
For failure of Chinabank to file its brief within the reglementary period, the
appellate court declared its appeal abandoned and accordingly dismissed the
same. Chinabank’s motion for reconsideration proved unavailing
From the appellate court’s dismissal of its appeal, Chinabank went to this
Court in G.R. No. 97066 via a petition for review on certiorari under Rule 45
of the Rules of Court. In a Resolution dated March 4, 1991,3 this Court
dismissed Chinabank’s petition. Attempt at a reconsideration similarly proved
futile, as in fact an Entry of Judgment4 was rendered declaring the dismissal
of Chinabank’s petition final and executory.
Meanwhile, with petitioner Valdez having filed his Brief on time, the Court of
Appeals proceeded to resolve his appeal.
And, in a decision dated February 28, 2002,5 the appellate court dismissed
petitioner’s appeal and affirmed the appealed decision of the trial court, thus:
WHEREFORE, premises considered, the instant appeal is
hereby DISMISSED for lack of merit the appealed decision of the Regional
Trial Court, Branch 35, Manila, is AFFIRMED.
SO ORDERED.
His motion for reconsideration having been denied by the same court in
its Resolution of August 23, 2003,6petitioner Simeon Valdez is now with us
via the present recourse, it being his submissions that:
"I.
THE COURT OF APPEALS ERRED IN ACTING ON PETITIONER’S APPEAL THEN
ALREADY MOOT AND ACADEMIC DUE TO THE DISMISSAL OF THE BANK’S
APPEAL AND THE ADOPTION OF THE 1997 RULES OF CIVIL PROCEDURE.
II.
THE COURT OF APPEALS ERRED IN RENDERING THE QUESTIONED DECISION
AND RESOLUTION WHICH ARE ALREADY UNENFORCEABLE BY EXECUTION
DUE TO PRESCRIPTION.
III.
THE COURT OF APPEALS ERRED IN SETTING ASIDE PETITIONER’S FAILURE TO
ASSIGN LACK OF CONSIDERATION AS AN ERROR CONSIDERING THE
RESULTING UNJUST ENRICHMENT.
IV.
THERE WAS AN ERROR IN MAKING PETITIONER LIABLE AS THERE WAS NO
SHOWING THAT THE BANK GOT HIS CONSENT IN THE EXTENSION OF THE
ONE-YEAR LOAN PERIOD.
V.
THE QUESTIONED DECISION AND RESOLUTION OF THE COURT OF APPEALS
ARE AGAINST THE RULE OF FINALITY OF JUDGMENT AND PUBLIC POLICY".
We DENY.
It is petitioner’s thesis that the decision of the trial court which he and
respondent Chinabank appealed to the Court of Appeals in CA G.R. CV No.
24946 was vacated when Chinabank’s similar appeal therefrom was
dismissed with finality.
Petitioner’s argument lacks legal moorings.
Under Section 9 (3) of Batas Pambansa Blg. 129, as amended, the Court of
Appeals has exclusive appellate jurisdiction over final judgments or decisions
of regional trial courts. Here, there is no issue at all that petitioner had
perfected his appeal from the decision of the trial court. The well-settled rule
is that jurisdiction, once acquired, continues until the case is finally
terminated.7 Since petitioner invoked the authority of the Court of Appeals
when he filed his appellant’s brief in that court, that same court can resolve
petitioner’s appeal regardless of the dismissal of that of his adversary’s.
Petitioner claims failure on the part of respondent Chinabank to establish
that the credit agreement between it and CREATIVE is supported by a
consideration. According to petitioner, a credit line was created under the
said Credit Agreement which "fixed the loan limit that may be availed of by
[Creative] to cover a series of transactions encountered in importation of its
raw materials, spare parts and supplies", while Chinabank’s complaint before
the trial court did not contain any "allegation on any drawdown from the
subject credit line by [Creative]". Upon this premise, petitioner argues that
Chinabank is practically with no cause of action at all. To petitioner,
Chinabank has to present evidence of importation by CREATIVE, like shipping
documents, which is necessary to establish drawdowns on the
US$1,000,000.00 credit facility. Unfortunately, so petitioner adds,
respondent Chinabank did not present any such document.
We are not persuaded.
As aptly noted by the appellate court, it is already too late in the day for
petitioner to raise an issue on the alleged deficiency of allegations in
Chinabank’s complaint to bolster his theory of lack of alleged consideration
for the parties’ credit agreement.
Under Rule 9, Section 1, of the Rules of Court, defenses which were not raised
in the answer are deemed waived. Petitioner never pleaded in his answer the
defense he presently invokes, namely, the alleged lack of consideration for
the subject credit agreement. His newly minted defense of lack of
consideration must therefore be struck down, the time for interposing the
same having been already passe.
In any event, absence of consideration is the least persuasive argument
petitioner could proffer, if at all he could, colliding as it does with the very
allegations in his answer, particularly paragraphs 9 and 14 thereof, to wit:
"9. That while answering defendant did affix his signature to Annex `C’ [surety
agreement] as co-obligor, he did so merely to accommodate his co-defendant
corporation who actually received the proceeds thereof and if ever the co-
defendant corporation has been unable to pay its obligation to the plaintiff
the same was due to the acts and/or omissions of co-defendant corporation".
"14. Defendants have already made a substantial payment on the said
account but which plaintiff in bad faith did not properly applied and credited
to defendants’ account." (Emphasis supplied).
With his foregoing admissions, we are simply at a loss to understand how
petitioner could now turn his back from his answer and insist on his
preposterous claim of lack of consideration.
Petitioner additionally posits that "there was no showing as to when the
principal got a drawdown or drawdowns for US$875,468.72", and that "[T]he
US$1,000,000.00 was definitely not the loan under litigation, but there must
have been another drawdown or other drawdowns. The drawdown or
drawdowns cannot be presumed to have been made within the period
guaranteed by the petitioner". To petitioner’s mind, the inconsistency
between the amount demanded by Chinabank in its complaint, which is
US$875,468.72, and the amount of the promissory note, which is for
US$1,000,000.00, is an indication that Chinabank had granted CREATIVE an
extension of the loan. Prescinding therefrom, petitioner insists that he could
not be liable to Chinabank because he did not consent to the extension for
the repayment of the original loan of US$1,000,000.00.

Petitioner’s argument cannot hold water.

As it is, petitioner is attempting to create a new issue of fact at this late stage
of the proceedings. A perusal of his answer fails to yield any indication of his
intent to craft an issue based on the inconsistency between the amount
appearing in the promissory note and that demanded by Chinabank. To allow
petitioner to pursue such a defense would undermine basic considerations of
due process. Points of law, theories, issues and arguments not brought to the
attention of the trial court will not be and ought not to be considered by a
reviewing court, as these cannot be raised for the first time on appeal. It
would be unfair to the adverse party who would have no opportunity to
present further evidence material to the new theory not ventilated before
the trial court.8

The Court is the neutral administrator of justice, not the corrector of unsound
business judgments. Having freely assumed the obligations of a surety,
petitioner cannot now evade those obligations by raising factual issues not
proper in this Court. Under Rule 45 of the Rules of Court, this Court’s main
preoccupation is to resolve questions of law not issues of facts.

WHEREFORE, the petition is DENIED, and the assailed decision and resolution
of the Court of Appeals AFFIRMED.
POLANCO vs CRUZ
G.R. No. 182426 February 13, 2009
ZENAIDA POLANCO, CARLOS DE JESUS, AVELINO DE JESUS, BABY DE JESUS,
LUZ DE JESUS, and DEMETRIO SANTOS, Petitioners,
vs.
CARMEN CRUZ, represented by her attorney-in-fact, VIRGILIO
CRUZ, Respondent.
DECISION
YNARES-SANTIAGO, J.:
This Petition for Review on Certiorari1 assails the August 28, 2007 Decision2 of
the Court of Appeals in CA-G.R. CV No. 75079, setting aside the Order3 of
Branch 17 of the Regional Trial Court of Malolos in Civil Case No. 542-M-2000,
which dismissed respondent’s Complaint4 for failure to prosecute. Also
assailed is the March 28, 2008 Resolution5 denying petitioners’ Motion for
Reconsideration.6
The facts are as follows:
Respondent Carmen Cruz, through her attorney-in-fact, Virgilio Cruz, filed a
complaint for damages7 against petitioners for allegedly destroying her palay
crops. While admitting that petitioners own the agricultural land she tilled,
respondent claimed she was a lawful tenant thereof and had been in actual
possession when petitioners maliciously filled so with soil and palay husk on
July 1 and 2, 2000. Respondent prayed that petitioners be held liable for
actual damages, moral damages, exemplary damages, litigation expenses and
attorney’s fees, and costs of the suit.
Petitioners filed a Motion to Dismiss,8 which was denied by the trial court in
an Order9 dated December 4, 2000. It held that it has jurisdiction over the
case because the allegations in the Complaint made a claim for damages, and
not an agrarian dispute which should be referred to the Department of
Agrarian Reform Adjudication Board (DARAB); and that the Complaint was
properly filed because the Certification of Non-forum Shopping was signed by
respondent’s attorney-in-fact.
Petitioners simultaneously filed an Answer10 to the complaint and a Motion
for Reconsideration11 of the December 4, 2000 Order. However, the court a
quo denied the motion for lack of merit in an Order12 dated September 10,
2001. On January 9, 2002, the trial court issued an Order13 dismissing the case
due to respondent’s failure to prosecute.
With the denial14 of her Motion for Reconsideration,15 respondent interposed
an appeal to the Court of Appeals which rendered the assailed Decision dated
August 28, 2007, the dispositive portion of which states:
WHEREFORE, the appeal is hereby GRANTED. Accordingly, the Order, dated
January 9, 2002, of the RTC [Branch 17, Malolos] is hereby REVERSED and SET
ASIDE. Plaintiff-appellant’s Complaint is hereby REINSTATED and the case is
hereby REMANDED to the RTC [Branch 17, Malolos] for further proceedings.
SO ORDERED.16
The Court of Appeals ruled that the trial court erred in finding that the parties
failed to take necessary action regarding the case because the records plainly
show that petitioners filed an Answer to the complaint, while respondent
filed an Opposition to the Motion for Reconsideration with Manifestation Re:
Answer of Defendants.17
With regard to the order of the trial court dismissing the complaint on the
ground of failure to prosecute, the appellate court held that the previous acts
of respondent do not manifest lack of interest to prosecute the case; that
since filing the Complaint, respondent filed an Opposition to petitioners’
Motion to Dismiss, an Answer to petitioners’ counterclaim, and a Comment
to petitioners’ Motion for Reconsideration; that respondent did not ignore
petitioners’ Motion to Dismiss nor did she repeatedly fail to appear before
the court; that no substantial prejudice would be caused to petitioners and
that strict application of the rule on dismissal is unjustified considering the
absence of pattern or scheme to delay the disposition of the case on the part
of respondent; and that justice would be better served if the case is
remanded to the trial court for further proceedings and final disposition.
On March 28, 2008, the Court of Appeals denied petitioners’ Motion for
Reconsideration; hence, this petition based on the following ground:
WHETHER OR NOT THE DECISION OF THE HONORABLE COURT OF APPEALS IN
C.A.-G.R. CV No. 75079, NULLIFYING AND/OR REVERSING AND/OR SETTING
ASIDE THE ORDERS DATED JANUARY 9, 2002 AND MAY 8, 2002 ISSUED BY THE
RTC-BULACAN IN CIVIL CASE No. 542-M-00, IS CONTRARY TO LAW AND
PREVAILING JURISPRUDENCE.
Petitioners allege that respondent failed to comply with the mandate of the
1997 Rules of Civil Procedure to promptly move for the setting of the case for
pre-trial; that "heavy pressures of work" does not justify the failure to move
for the setting of the case for pre-trial; that the allegations in the Complaint
which pertain to respondent’s status as a tenant of Elena C. De Jesus amount
to forum shopping that would extremely prejudice them. Petitioners thus
pray for the nullification of the Decision and Resolution of the Court of
Appeals and the affirmation of the dismissal of the Complaint by the trial
court.
The petition lacks merit.
The Court of Appeals correctly noted that petitioners raised the matter of
respondent’s alleged forum shopping for the first time only in their Motion
for Reconsideration. Issues not previously ventilated cannot be raised for the
first time on appeal,18 much less when first raised in the motion for
reconsideration of a decision of the appellate court.
At any rate, this Court does not find respondent’s allegations in her complaint
in Civil Case No. 542-M-00 to be constitutive of the elements of forum-
shopping. Respondent merely described herself as a tenant of petitioners and
mentioned that there was an unlawful detainer case19 involving the parcel of
land which is also involved in the instant civil case for damages.
There is forum-shopping when as a result of an adverse decision in one forum,
or in anticipation thereof, a party seeks a favorable opinion in another forum
through means other than appeal or certiorari. Forum-shopping exists when
two or more actions involve the same transactions, essential facts, and
circumstances; and raise identical causes of action, subject matter, and
issues. Still another test of forum-shopping is when the elements of litis
pendencia are present or where a final judgment in one case will amount
to res judicata in another – whether in the two or more pending cases, there
is an identity of (a) parties (or at least such parties as represent the same
interests in both actions), (b) rights or causes of action, and (c) reliefs
sought.20
Although there is an identity of some of the parties in the instant case for
damages and the unlawful detainer case, there is, however, no identity of
reliefs prayed for. The former is for recovery of damages allegedly caused by
petitioners’ acts on respondent’s palay crops; while the latter case involved
possessory and tenancy rights of respondent. As such, respondent did not
violate the rule on forum-shopping.
Section 1, Rule 18 of the 1997 Rules of Civil Procedure imposes upon the
plaintiff the duty to promptly move ex parte to have the case set for pre-trial
after the last pleading has been served and filed. Moreover, Section 3, Rule
1721 provides that failure on the part of the plaintiff to comply with said duty
without any justifiable cause may result to the dismissal of the complaint for
failure to prosecute his action for an unreasonable length of time or failure
to comply with the rules of procedure.1avvphi1
It must be stressed that even if the plaintiff fails to promptly move for pre-
trial without any justifiable cause for such delay, the extreme sanction of
dismissal of the complaint might not be warranted if no substantial prejudice
would be caused to the defendant, and there are special and compelling
reasons which would make the strict application of the rule clearly
unjustified.22
In the instant case, the Court of Appeals correctly held that the dismissal of
respondent’s complaint is too severe a sanction for her failure to file a motion
to set the case for pre-trial. It must be pointed out that respondent
prosecuted her action with utmost diligence and with reasonable dispatch
since filing the complaint – she filed an opposition to petitioners’ motion to
dismiss the complaint; a comment to petitioners’ motion for reconsideration
of the December 4, 2000 Order of the trial court; and an Answer to
Counterclaim of petitioners. When the trial court issued an order dismissing
the case, respondent filed without delay a motion for reconsideration; and
upon its denial, she immediately filed a Notice of Appeal.23 Moreover,
contrary to petitioners’ claim that respondent was silent for one year since
she filed her Answer to Counterclaim until the trial court’s dismissal
order,24 records show that between said period, both parties and the trial
court were threshing out petitioners’ motion for reconsideration of the WHEREFORE, the Petition for Review on Certiorari is DENIED. The August 28,
December 4, 2000 Order. 2007 Decision of the Court of Appeals in CA-G.R. CV No. 75079, setting aside
the Order of Branch 17 of the Regional Trial Court of Malolos dismissing Civil
While "heavy pressures of work" was not considered a persuasive reason to
Case No. 542-M-2000 for respondent’s failure to prosecute, and its March 28,
justify the failure to set the case for pre-trial in Olave v. Mistas,25 however,
2008 Resolution denying petitioners’ Motion for Reconsideration are
unlike the respondents in the said case, herein respondent never failed to
AFFIRMED. The clerk of court of Branch 17 of the Regional Trial Court of
comply with the Rules of Court or any order of the trial court at any other
Malolos is DIRECTED to issue a notice of pre-trial to the parties.
time. Failing to file a motion to set the case for pre-trial was her first and only
technical lapse during the entire proceedings. Neither has she manifested an SO ORDERED.
evident pattern or a scheme to delay the disposition of the case nor a wanton
failure to observe the mandatory requirement of the rules. Accordingly, the
ends of justice and fairness would best be served if the parties are given the
full opportunity to litigate their claims and the real issues involved in the case
are threshed out in a full-blown trial. Besides, petitioners would not be
prejudiced should the case proceed as they are not stripped of any affirmative
defenses nor deprived of due process of law.

This is not to say that adherence to the Rules could be dispensed with.
However, exigencies and situations might occasionally demand flexibility in
their application.26 Indeed, on several occasions, the Court relaxed the rigid
application of the rules of procedure to afford the parties opportunity to fully
ventilate the merits of their cases. This is in line with the time-honored
principle that cases should be decided only after giving all parties the chance
to argue their causes and defenses. Technicality and procedural imperfection
should thus not serve as basis of decisions.27

Finally, A.M. No. 03-1-09-SC or the new Guidelines To Be Observed By Trial

Court Judges And Clerks Of Court In The Conduct Of Pre-Trial And Use Of
Deposition-Discovery Measures, which took effect on August 16, 2004, aims
to abbreviate court proceedings, ensure prompt disposition of cases and
decongest court dockets, and to further implement the pre-trial guidelines
laid down in Administrative Circular No. 3-9928 dated January 15, 1999. A.M.
No. 03-1-09-SC states that: "Within five (5) days from date of filing of the
reply,29 the plaintiff must promptly move ex parte that the case be set for pre-
trial conference.30 If the plaintiff fails to file said motion within the given
period, the Branch COC shall issue a notice of pre-trial." As such, the clerk of
court of Branch 17 of the Regional Trial Court of Malolos should issue a notice
of pre-trial to the parties and set the case for pre-trial.
CRISOSTOMO vs SECURITIES AND EXHANGE COMMISSION
G.R. Nos. 89095 & 89555 November 6, 1989
SIXTO P. CRISOSTOMO, petitioner,
vs.
SECURITIES AND EXCHANGE COMMISSION, SPOUSES SHOJI YAMADA and
MICHIYO YAMADA and SPOUSES TOMOTADA ENATSU and EDITA
ENATSU, respondents.
Salma Pir T. Rasul, Rosalinda L. Santos and A.E. Dacanay for petitioner.
Gonzales, Batiller Law Offices for respondents.
Quisumbing, Torres and Evangelista for Spouses Tomotada and Edita Enatsu.
Lino M. Patajo for Spouses Shoji and Michiyo Yamada.
GRIÑO-AQUINO, J.:
In his petition for certiorari, 1 the petitioner seeks to annul and set aside
the en banc resolution dated February 14, 1989 of the Securities and
Exchange Commission in SEC EB Case No. 191 and the concurring opinions
thereto (Annexes F, G, and H, pp. 39-62, Rollo), as well as its orders dated
June 27, 1989 and July 21, 1989 (Annexes M and 0, pp. 83-86, Rollo) directing
the corporate secretary of the United Doctors Medical Center, Inc. (hereafter
"UDMC") to call a special meeting of the stockholders to elect the officers and
directors in the implementation of the SEC's aforementioned en
banc resolution of February 14, 1989, which the Court of Appeals affirmed in
its decision dated June 8, 1989 in CA-G.R. SP No. 17435, entitled "Sixto
Crisostomo, petitioner vs. Securities and Exchange Commission, Spouses Dr.
Shoji Yamada and Michiyo Yamada, and Spouses Dr. Tomotada Enatsu and
Edita Enatsu, respondents." On August 1, 1989, the Court of Appeals denied
Crisostomo's motion for reconsideration of its decision. On August 24, 1989,
he filed a petition for review of said decision in this Court (G.R. No. 89555)
which was originally assigned to the Third Division, but was later consolidated
with G.R. No. 89095.
At first blush, the petitions sound like a patriotic defense of the Constitution,
but, at bottom they are only an artful scheme to defraud a group of foreign
investors who had been persuaded by the officers of UDMC to invest P57
million to save the corporation (its assets as well as those of the Crisostomo's)
from imminent foreclosure by the Development Bank of the Philippines (DBP)
to which UDMC was indebted in the sum of P55 million. It is the kind of
operation that sullies our collective image as a people and sets back our
government's heroic efforts to attract foreign investments to our country.
The antecedent facts, culled from the decision of the Court of Appeals, are as
follows:
Sixto Crisostomo, Felipe Crisostomo (deceased), Veronica Palanca, Juanito
Crisostomo, Carlos Crisostomo, Ricardo Alfonso, Regino Crisostomo and
Ernesto Crisostomo (known as the Crisostomo group) were the original
stockholders of the United Doctors Medical Center (UDMC) which was
organized in 1968 with an authorized capital stock of P1,000,000 (later
increased to P15,000,000 in 1972). They owned approximately 40% of
UDMC's outstanding capital stock, while the 60% majority belonged to the
members of the United Medical Staff Association (UMSA), numbering
approximately 150 doctors and medical personnel of UDMC.
Despite their minority status, the Crisostomo group has managed UDMC from
its inception, with Juanito Crisostomo as president, Ricardo Alfonso, Sr. as
chairman of the board, Carlos Crisostomo as corporate secretary and Sixto
Crisostomo as director and legal counsel.
In 1988, UDMC defaulted in paying its loan obligation of approximately P55
million to the DBP. In the last quarter of 1987, UDMC's assets (principally its
hospital) and those of the Crisostomos which had been given as collateral to
the DBP, faced foreclosure by the Asset Privatization' rust (APT), which had
taken over UDMC's loan obligation to the DBP.
To stave off the threatened foreclosure, UDMC, through its principal officers,
Ricardo Alfonso and Juanito Crisostomo, persuaded the Yamadas and Enatsu
(Shoji Yamada and Tomotada Enatsu are Japanese doctors) to invest fresh
capital in UDMC. The wife of Tomotada Enatsu, Edita Enatsu, is a Filipina. They
invested approximately P57 million in UDMC.
The investment was effected by means of: (1) a Stock Purchase Agreement;
and (2) an Amended Memorandum of Agreement whereby the group
subscribed to 82.09% of the outstanding shares of UDMC.
Both transactions were duly authorized by the board of directors and
stockholders of UDMC. They were submitted to, scrutinized by, and, finally,
approved by the Board of Investments, the Central Bank of the Philippines,
and the Securities and Exchange Commission. The elaborate governmental
approval process was done openly and with full knowledge of all concerned,
including Sixto Crisostomo, the corporate legal counsel. Upon the completion
of the governmental approval process, shares of stock, duly signed by UDMC's
authorized officers, were issued to the Yamadas and Enatsus.
This capital infusion not only saved the assets of the UDMC (especially the
hospital) from foreclosure but also freed the Crisostomos from their
individual and solidary liabilities as sureties for the DBP loan.
As it had been agreed in the Amended Memorandum of Agreement between
UDMC and the Japanese group that upon the latter's acquisition of the
controlling interest in UDMC, the corporation would be reorganized, a special
stockholders' meeting and board of directors' meeting were scheduled to be
held on August 20, 1988.
However, on the eve of the meetings, i.e., on August 19, 1988, Sixto
Crisostomo, supposedly acting for himself, filed SEC Case No. 3420 against
Juanito Crisostomo, Ricardo Alfonso, Shoji Yamada, Michiyo Yamada,
Tomotada Enatsu and Edita Enatsu, praying, among other things, (1) to stop
the holding of the stockholder's and board of directors' meetings; (2) to
disqualify the Japanese investors from holding a controlling interest in UDMC
and from being elected directors or officers of UDMC; and (3) to annul the
Memorandum of Agreement and Stock Purchase Agreement because they
allegedly did not express the true agreement of the parties (pp. 194-203,
Rollo).
Two weeks later, on September 2, 1988, Crisostomo filed Civil Case No. 88-
1823 in the Regional Trial Court of Makati, Metro Manila, where he also
sought a preliminary injunction and the Identical reliefs prayed for by him in
SEC Case No. 3420 (pp. 317-335, Rollo). It was dismissed by the trial court for
lack of jurisdiction and is pending appeal in the Court of Appeals where it is
docketed as CA-G.R. No. 20285-CV.
On September 13, 1988, the hearing officer, Antonio Esteves, granted the
application for a writ of preliminary injunction enjoining the respondents —
... from holding the special meeting of the stockholders and of the Board of
Directors of United Doctors Medical Center, [Inc.] (UDMC) scheduled on
August 20, 1988 or any subsequent meetings; from adopting resolutions to
elect new directors and appoint new officers; from approving resolutions
directly or indirectly affecting the operations, organizational structure, and
financial condition of the corporation, ... and from disbursing funds of the said
corporation except those ordinary day-to-day expenses pending the final
termination of this case. (p. 30, Rollo.)
The private respondents' motion for reconsideration of this order was denied
by the hearing officer on November 16, 1988. In the same order, he created
a management committee to administer UDMC (pp. 32-35, Rollo).
The respondents appealed by certiorari to the SEC en banc. On February
14,1989, Commissioner Jose C. Laureta, with whom Commissioners Rosario
N. Lopez and Gonzalo T. Santos separately concurred, set aside the
preliminary injunction issued by Esteves and the management committee
which he created. The dispositive part of the decision reads:
Wherefore, premises considered, the instant petition for certiorari is
GRANTED and the Commission en banc ORDERS:
1. That the questioned orders of the hearing officer in SEC Case No. 3420 of
September 13, 1988 and November 16, 1988, be immediately vacated;
2. That a special stockholders' meeting of UDMC be held for the purpose of
allowing the stockholders of record of the corporation to elect a new board
of directors, which special meeting is hereby directed to be scheduled within
10 days from receipt of a copy of this resolution by the incumbent corporate
secretary or acting corporate secretary of UDMC, and to this end, that such
officer be, as he hereby is, directed: (a) to issue a call for such special meeting
and serve notice thereof on all stockholders of record of the corporation, in
accordance with section 6 of article VII of UDMC's by-laws; and (b) to submit
to the Commission, through the Commission Secretary, a written report of his
compliance with this particular order of the Commission, not later than 5 days
prior to the scheduled date of the proposed UDMC special stockholders'
meeting;
3. That upon the election of a new board of directors of UDMC, that such
board be, as it hereby is, enjoined to meet as promptly as possible for the
purpose of electing a new set of officers of the corporation in order to ensure
its proper management;
4. That the hearing officer be, as he hereby is, directed to continue with the
proceedings of SEC Case No. 3420, and to do so with all deliberate speed, for
the purpose of resolving the alleged violation of certain rights of Sixto
Crisostomo, as a stockholder of UDMC particularly, his right to inspect the
corporate books and records of UDMC, his preemptive right to subscribe to
the P60 million increase in the authorized capital of UDMC, and his appraisal
rights; and
5. That the board of directors and officers of UDMC be, as they hereby are,
ordered to submit to the Commission, through the Chairman, a written report
as to its plans as regards its nursing school, such report to be submitted at
least one month prior to the commencement of the school year 1989-1990.
SO ORDERED. (pp. 49-50, Rollo.)
Sixto Crisostomo sought a review of the SEC's en banc resolution in the Court
of Appeals (CA-G.R. SP No. 17435).
On June 8, 1989, the Court of Appeals dismissed his petition and lifted the
temporary restraining order that it had issued against the SEC's resolution
(Annex K, pp. 65-81, Rollo). Petitioner filed a motion for reconsideration (pp.
418-434, Rollo). The Court of Appeals required the private respondents to
comment but it denied the petitioner's motion to reinstate the writ of
preliminary injunction (Annex L, p. 82, Rollo),
On motion of the private respondents (Annex K, p. 413, Rollo), the SEC en
banc issued an order on June 27, 1989 directing the secretary of UDMC to call
a special stockholders' meeting to elect a new board of directors and officers
of the corporation (Annex F). Petitioner asked the SEC to recall that order on
account of his pending motion for reconsideration in the Court of Appeals.
The motion was opposed by the private respondents. On July 21, 1989, the
SEC denied petitioner's motion (p. 86, Rollo). Whereupon, he filed this
petition for certiorari and prohibition with a prayer for preliminary injunction
alleging that the SEC en banc abused its discretion:
1. in setting aside Esteves' orders
2. in allowing the Japanese group to have control of UDMC for it will result in
culpable violation of Section 7, Article XII of the 1987 Constitution which
provides that no private lands shall be transferred or conveyed except to
individuals or corporations qualified to acquire or hold land of the public
domain, meaning corporations at least sixty per centum of whose capital is
owned by Filipino citizens (Sec. 2, Article XII, 1987 Constitution); and
3. in allowing the Japanese investors to own more than 40% of the capital
stock of UDMC (which operates a nursing and midwifery school) in violation
of Section 4 (2) Article XIV of the 1987 Constitution which provides that
educational institutions ... shall be owned solely by citizens of the Philippines
or corporations or associations at least sixty per centum of the capital of
which is owned by such citizens.
The public and private respondents, in their comments on the petition, asked
that the petition be dismissed and that the petitioner be cited for contempt
for forum-shopping.
We find no merit in the petition. The first allegation that the SEC en
banc erred in reversing the orders of the hearing officer, Esteves, is the same
ground raised by the petitioner in CA-G.R. No. SP 17435. The issue is frivolous
for the authority of the SEC en banc to review, revise, reverse, or affirm
orders of its hearing officers is too elementary to warrant any debate.
Equally unmeritorious are the second and third grounds of the petition —
that the P57 million investment of the Japanese group in UDMC violates the
constitutional provisions restricting the transfer or conveyance of private
lands (Art. XIII, Sec. 7, 1987 Constitution) and the ownership of educational
institutions (Art. XVI, Sec. 14[a], 1987 Constitution), to citizens of the
Philippines or corporations at least 60% of the capital of which is owned by
Filipino citizens. While 82% of UDMC's capital stock is indeed subscribed by
the Japanese group, only 30% (equivalent to 171,721 shares or P17,172.00)
is owned by the Japanese citizens, namely, the Yamada spouses and
Tomotada Enatsu. 52% is owned by Edita Enatsu, who is a Filipino.
Accordingly, in its application for approval/registration of the foreign equity
investments of these investors, UDMC declared that 70% of its capital stock
is owned by Filipino citizens, including Edita Enatsu. That application was
approved by the Central Bank on August 3, 1988 (p. 249, Rollo,).
The investments in UDMC of Doctors Yamada and Enatsu do not violate the
Constitutional prohibition against foreigners practising a profession in the
Philippines (Section 14, Article XII, 1987 Constitution) for they do not practice
their profession (medicine) in the Philippines, neither have they applied for a
license to do so. They only own shares of stock in a corporation that operates
a hospital. No law limits the sale of hospital shares of stock to doctors only.
The ownership of such shares does not amount to engaging (illegally,) in the
practice of medicine, or, nursing. If it were otherwise, the petitioner's
stockholding in UDMC would also be illegal.
The SEC's orders dated June 27, 1989 and July 21, 1989 (directing the
secretary of UDMC to call a stockholders' meeting, etc.) are not premature,
despite the petitioner's then pending motion for reconsideration of the
decision of the Court of Appeals. The lifting by the Court of Appeals of its writ
of preliminary injunction in CA-G.R. SP No. 17435 cleared the way for the
implementation by the SEC's en banc resolution in SEC EB Case No. 191. The
SEC need not wait for the Court of Appeals to resolve the petitioner's motion
for reconsideration for a judgment decreeing the dissolution of a preliminary
injunction is immediately executory. It "shall not be stayed after its rendition
and before an appeal is taken or during the pendency of an appeal." (Sec. 4,
Rule 39, Rules of Court; Marcelo Steel Corp. vs. Court of Appeals, 54 SCRA 89
[1973]; Aguilar vs. Tan, 31 SCRA 205 [1970]; Sitia Teco vs. Ventura, 1 Phil. 497
[1902]; Watson & Co., Ltd. vs. M. Enriquez, I Phil. 480 [1902]).
We now address the public and private respondents' separate motions to
dismiss the petition and to cite Crisostomo and his counsel for contempt of
court for forum-shopping. The records show that Crisostomo had two actions
pending in the Court of Appeals (CA-G.R. No. SP 17435 and CA-G.R. No. 20285
CV) when he filed the petition for certiorari (G.R. No. 89095) in this Court on
July 27, 1989. The case docketed as CA-G.R. No. 20285-CV, is his appeal from
the decision of the Regional Trial Court of Makati, dismissing his complaint
for annulment of the Memorandum of Agreement and the Stock Purchase
Agreement between UDMC and the Japanese investors. CA-G.R. No. SP 17435
is his petition for certiorari to review the SEC's en banc resolution upholding
those transactions and ordering the holding of a stockholders meeting to
elect the directors of the UDMC, and of a board of directors meeting to elect
the officers.
Notwithstanding the pendency of those two cases in the Court of Appeals,
Crisostomo filed this petition for certiorari 1 and prohibition on July 27, 1989
where he raises the same issues that he raised in the Court of Appeals.
The prayer of his petition in CA-G.R. No. SP 17435 reads thus:
3) After hearing on the merits, judgment be rendered:
a) Annulling and setting aside the questioned rulings of the respondent
COMMISSION 2for having been issued with grave abuse of discretion
tantamount to lack or excess of jurisdiction; and
b) Making permanent the preliminary injunction issued in this case against
the respondents. (p. 241, Rollo.)
In his petition for certiorari (G.R. No. 89095), he also prays that —
1. Upon the filing of this petition, a temporary restraining order issue
enjoining respondents, their representatives or agents from implementing or
executing the SEC opinions (Annexes "F", "G" and "H") and its June 27 and
July 21,1989 orders (Annexes "M" and "O") until further orders from the
Honorable Court.
xxx xxx xxx
3. After notice, this petition be given due course and a writ of preliminary
injunction be issued for the same purpose and effect upon such terms and
conditions the Honorable Court may impose; and thereafter, judgment be
rendered granting the writ prayed for and annulling and setting aside the said
opinions rendered by the SEC in their stead, affirming the orders of the
Hearing Officer (Annexes "A" and "B"). (pp. 27-28, Rollo.)
Additionally, in his petition for review (G.R. No. 89555) he prays this Court to
giant "all the reliefs" prayed for by him in CA-G.R. SP No. 17435. Here is a clear
case of forum-shopping.
There is forum-shopping whenever as a result of an adverse opinion in one SO ORDERED.
forum, a party seeks a favorable opinion (other than by appeal or certiorari)
in another. The principle applies not only with respect to suits filed in the
courts but also in connection with litigations commenced in the courts while
an administrative proceeding is pending, as in this case, in order to defeat
administrative processes and in anticipation of an unfavorable administrative
ruling and a favorable court ruling. This is specially so, as in this case, where
the court in which the second suit was brought, has no jurisdiction.
(Villanueva vs. Adre, G.R. No. 8063, April 27, 1989.) (p. 303, Rollo)

Forum-shopping is prohibited by the Interim Rules of Court for it trifles with

the courts and abuses their processes (E. Razon, Inc. vs. Phil. Port Authority,
101 SCRA 450). Section 17 of the Interim Rules of Courts provides:

17. Petitions for writs of certiorari, etc., — No petition for certiorari,

mandamus, prohibition, habeas corpus or quo warranto may be filed in the
Intermediate Appellate Court if another similar petition has been filed or is
still pending in the Supreme Court. Nor may such petition be filed in the
Supreme Court if a similar petition has been filed or is still pending in the
Intermediate Appellate Court, unless it be to review the action taken by the
Intermediate Appellate Court on the petition filed with it. A violation of this
rule shall constitute contempt of court and shall be a cause for the summary
dismissal of both petitions, without prejudice to the taking of appropriate
action against the counsel or party concerned. (Interim Rules of Court.)

Forum-shopping makes the petitioner subject to disciplinary action and

renders his petitions in this Court and in the Court of Appeals dismissible (E.
Razon, Inc. vs. Philippine Port Authority, et al., G.R. No. 75197, Resolution
dated July 31, 1986; Buan vs. Lopez, Jr., 145 SCRA 34, 38-39; Collado vs.
Hernando, L-43886, May 30, 1988). For this reason, if not for their lack of
merit, the petitions should be, as they are hereby, dismissed.

WHEREFORE, these petitions are dismissed for lack of merit. The temporary
restraining order which this Court issued on August 7, 1989 in G.R. No. 89095
is hereby lifted. The Court of Appeals is ordered to immediately dismiss CA-
G.R. CV No. 20285. The petitioner and his counsel are censured for engaging
in forum-shopping. The petitioner is further ordered to pay double costs in
this instance.
ENEMECIO vs OFFICE OF THE OMBUDSMAN
G.R. No. 146731 January 13, 2004
AGUSTINA M. ENEMECIO, petitioner,
vs.
OFFICE OF THE OMBUDSMAN (VISAYAS) and SERVANDO
BERNANTE, respondents.
DECISION
CARPIO, J.:
The Case
Before us is a petition for review on certiorari1 assailing the Resolution2 dated
31 May 2000 of the Court of Appeals in CA-G.R. SP No. 58875. The Court of
Appeals dismissed for being an inappropriate remedy the petition for
certiorari filed by petitioner Agustina M. Enemecio against respondents
Office of the Ombudsman and Servando Bernante. The present petition also
assails the Court of Appeals’ Resolution dated 7 December 2000 denying
petitioner’s motion for reconsideration.
The Antecedents
Petitioner Agustina M. Enemecio ("Enemecio") is a utility worker at the Cebu
State College of Science and Technology, College of Fisheries Technology
("CSCST-CFT"), Carmen, Cebu. Private respondent Servando Bernante
("Bernante") is an Assistant Professor IV of CSCST-CFT.
On 30 March 1998, Enemecio filed an administrative complaint for gross
misconduct, falsification of public documents, malversation, dishonesty and
defamation against Bernante before the Office of the Executive Dean of
CSCST-CFT.3 Dr. Severino R. Romano, CSCST-CFT Executive Dean, indorsed the
complaint to the Office of the Ombudsman for the Visayas ("Ombudsman").
Enemecio also filed with the Ombudsman a criminal complaint against
Bernante for falsification of public document.4 The Ombudsman ordered
Enemecio to submit her affidavit and the affidavits of her witnesses. After
Enemecio submitted the required affidavits, the Ombudsman ordered
Bernante to submit his counter-affidavit. The administrative complaint was
docketed as OMB-VIS-ADM-98-0201, while the criminal complaint was
docketed as OMB-VIS-CRIM-98-0286. The Ombudsman jointly tried the two
cases.
Enemecio alleged that Bernante had caused the spray-painting of obscene
and unprintable words against her on the walls of the CSCST Carmen Campus.
Enemecio claimed that Bernante also shouted defamatory words against her
while she was inside the school premises. Enemecio further asserted that
Bernante made it appear in his leave application that he was on forced leave
from 15 May 1996 to 21 May 1996 and on vacation leave from 22 May 1996
to 31 May 1996. In truth, Bernante was serving a 20-day prison term, from 14
May 1996 to 2 June 1996, because of his conviction of the crime of slight
physical injuries in Criminal Case No. NR-1678-CR. Bernante was able to
receive his salary during his incarceration since then CSCST-CFT
Superintendent Andres T. Melencion approved Bernante’s application for
leave. Enemecio contended that Bernante was not entitled to receive salary
for that period because of his "falsified leave applications."5
For his part, Bernante did not deny that he was in prison from 15 May 1996
to 31 May 1996. He maintained that he received his salary for that period
because of his duly approved leave applications. Bernante also alleged that
Enemecio filed the criminal and administrative complaints against him in
retaliation for the case he filed against Enemecio’s friends, Dean Severino
Romano and Bernadette Mante. Bernante denied he was behind the spray-
painting of obscenities against Enemecio on the walls of the school campus.6
On 13 January 2000, the Ombudsman rendered a decision dismissing
the administrative complaint against Bernante in OMB-VIS-ADM-98-0201.
The Ombudsman explained:
On the issue of the alleged falsification of respondent’s application for leave
by making it appear that he was on vacation when in truth and in fact he was
serving a sentence for a criminal conviction, we have determined that there
is no regulation restricting the purpose or use of an employee’s earned leave
credits. Considering that the application for leave filed by the respondent was
duly approved by the appropriate official concerned, it matters not how he
utilizes his leave for it is not a requirement that the specifics or reasons for
going on leave be spelled out in such application.
On the issue of the spray painting of obscenities on the walls of the school,
the evidence is insufficient to prove that respondent was the person
responsible for such as there were no eye witnesses to such activity. The
testimony of Bernadette Mante merely identifies the respondent as allegedly
having a drinking session with security guard Estanislao Lavaria at around
11:00 on the night of March 29, 1998. Furthermore, witness Mante states
that there are about ten (10) to twelve (12) families living inside the
dormitory facing the school walls where the grafitti appeared. Despite this
number, not one single person appeared to have witnessed respondent spray
painting the questioned grafitti on the walls of the campus (TSN, April 19,
1999). While it may be probable that the only person or persons who could
have had the opportunity to spray paint the said grafitti on the night of March
29, 1998 or in the early morning hours of March 30, 1998 were the
respondent and security guard Lavaria, this is not sufficient justification to
directly blame them for such event.
Regarding the complainant’s allegation that on March 10 and 25, 1998, the
respondent defamed the former by uttering slanderous words, it appears
that only the incident occurring on March 10, 1998 was corroborated by the
testimony of witness Delfin Buot (TSN, April 7, 1998). Witness Buot testified
that he was about (3) meters from the respondent when the latter shouted
the words ‘buricat’ (whore) ‘putang ina’ and ‘maot’ (snob) to the
complainant. However, the circumstances of the utterance, particularly the
time and the relation of the protagonists involved, leads us to conclude that
the same is removed from the official functions of the respondent as a
professor of the school. Stated otherwise, the act of the respondent was not
in relation to his official functions. In the case of Palma vs. Fortich, et al., 147
SCRA 397, the Supreme Court ruled that:
In administrative actions against municipal officers, the Supreme Court in
Festijo v. Crisologo, et al. (17 SCRA 868, 869 [1966]), classified the grounds
for suspension under two categories, namely: (1) those related to the
discharge of the functions of the officer concerned (neglect of duty,
oppression, corruption or other forms of maladministration of office and (2)
those not so connected with said functions. Under the second category, when
the crime involving moral turpitude is not linked with the performance of
official duties, conviction by final judgment is required as a condition
precedent to administrative action.
Therefore, inasmuch as the oral defamation charge is now pending before the
Municipal Circuit Trial Court in Catmon, Cebu under Criminal Case No. 30006-
CR, the matter of respondent’s administrative culpability is still premature to
be determined herein.7
On the same date, the Ombudsman dismissed the criminal complaint against
Bernante in OMB-VIS-CRIM-98-02868 finding no probable cause to indict
Bernante for falsification of public document. The Ombudsman explained
thus:
It is well established by documentary evidence that the applications for leave
filed by the respondent for the period from May 15 to 31, 1996 were duly
approved by the head of office, which in this case is Mr. Andres T. Melencion,
Vocational School Superintendent. All these leaves were with pay indicating
that the respondent availed of his leave credits which are undeniably due to
him by law. It matters not how the respondent utilizes the days where he is
on leave, be they enjoyed as a vacation or, in this case, incarceration for a
crime. There appears to be no regulation or law against the utilization of leave
credits for purposes other than recreation. As such, there could be no
falsification where nothing is being misrepresented in the official leave forms
which the respondent prepared and submitted.9
The Ombudsman denied Enemecio’s motion to reconsider the dismissal of
the criminal complaint in its Order of 28 February 2000. In denying the
motion, the Ombudsman stated:
We find the complainant’s arguments untenable. There is no dispute that the
leave forms are public documents. What is in dispute is whether or not the
failure of the respondent to indicate therein the reasons for his leave
amounts to a crime of falsification. It is submitted that it does not, for the
simple reason that the form itself does not require stating the reasons for
going on leave. An employee simply indicates through check marks the nature
of the leave he is availing of, which in the case at bar, respondent chose to
avail of his forced and vacation leave credits. Nevertheless, the omission does
not affect the validity of its approval. What is indicated in the leave forms is
only the need to specify the whereabouts of the employee who goes on leave.
However, it is not a requirement that specifics must be provided. In any case
the omission to state the location of a vacationing employee is not a condition
sine-qua-non for its approval.
To sum it up, there is no falsification of leave forms where there is no
requirement for the indication of reasons for going on leave. Regardless of
such a requirement, the need to indicate the whereabouts of a vacationing
employee is not a necessity for its approval.10
Enemecio filed a special civil action for certiorari before the Court of Appeals,
assailing the resolutions which dismissed the criminal complaint and denied
the motion for reconsideration in OMB-VIS-CRIM-98-0286. Applying the
ruling in Fabian v. Desierto,11 the appellate court dismissed Enemecio’s
petition for having been filed out of time. The appellate court also stated that
the proper remedy available to Enemecio was a petition for review under
Rule 43 and not a petition for certiorari under Rule 65.
In her motion for reconsideration, Enemecio argued that the appellate court
should not have relied on Fabian. Enemecio contended that Fabian declared
void only Section 27 of Republic Act No. 6770 ("RA 6770") and Section 7, Rule
III of Administrative Order No. 07 ("AO No. 07") insofar as they provide for
appeals in administrative disciplinary cases from the Ombudsman to the
Supreme Court. Enemecio asserted that the other provisions of Section 27 of
RA 6770 and Section 7 of AO No. 07, including the "final and unappealable
character" of orders, resolutions or decisions exonerating a respondent from
any criminal liability, still stand. Enemecio stated that she filed the petition
for certiorari under Rule 65 with the Court of Appeals because she considered
Bernante’s absolution from the administrative complaint in OMB-VIS-ADM-
98-0201 as already final and unappealable. As there was no adequate remedy
of appeal, Enemecio claimed that her only recourse was a petition for
certiorari before the appellate court under Rule 65.12
The Court of Appeals denied Enemecio’s motion for reconsideration in its
Order of 7 December 2000.
Hence, this petition for review.
The Ruling of the Court of Appeals
In dismissing the petition, the Court of Appeals stated that in Fabian, the
Supreme Court held that appeals in administrative disciplinary cases from the
Ombudsman to the Court of Appeals must be brought by petition for review
under Rule 43. The appellate court stated that a petition for review must be
filed within 15 days from notice of the assailed final order or resolution. Since
Enemecio received on 22 March 2000 a copy of the Ombudsman’s Order
denying her motion for reconsideration, the appellate court ruled that
Enemecio had only until 6 April 2000 to file a petition for review. Enemecio
filed her petition only on 8 May 2000. The appellate court further stated that
Enemecio’s allegation in the petition that there is no appeal or other plain,
speedy or adequate remedy in the ordinary course of law is false. The proper
remedy available to Enemecio is a petition for review.13
In denying Enemecio’s motion for reconsideration, the Court of Appeals
clarified that Fabian does not apply to Enemecio’s petition assailing the
dismissal of the criminal complaint against Bernante. The appellate court
stated that what Fabian declared void was Section 27 of RA 6770, which
authorized appeals to the Supreme Court from decisions of the Ombudsman
in administrative disciplinary cases. Under the Fabian ruling, the appellant
should take such appeal in administrative disciplinary cases to the Court of
Appeals under Rule 43. The Court of Appeals added that it follows that the
power to review decisions of the Ombudsman in criminal cases is retained by
the Supreme Court under Section 14 of RA 6770. Thus, the appellate court
dismissed the petition for lack of jurisdiction.14
The Issues
Enemecio contends that:
1. The Court of Appeals gravely abused its discretion in refusing to assume
jurisdiction over the petition.
2. The Court of Appeals gravely erred in failing to appreciate that a petition
for certiorari under Rule 65 was the appropriate course of action considering
the circumstances obtaining.
3. The Court of Appeals gravely erred in dismissing the petition for certiorari
under Rule 65 filed by petitioner by misinterpreting the ruling of the Supreme
Court in Fabian vs. Desierto.15
The issues boil down to whether a petition for certiorari under Rule 65 filed
before the Court of Appeals is the proper remedy to question the dismissal of
a criminal complaint filed with the Ombudsman.
The Court’s Ruling
We resolve to dismiss this petition. decision favorable to his client’s cause does not escape our attention. As an
officer of the court, Atty. Fernandez is duty bound to uphold the dignity and
Enemecio filed before the Court of Appeals a petition for certiorari under
authority of the court to which he owes fidelity according to the oath he has
Rule 6516 questioning the Ombudsman’s Resolution dated 13 January 2000
taken as attorney, and not to promote distrust in the administration of
and Order dated 28 February 2000 dismissing the criminal case against
justice. He must always bear in mind that good faith and honorable dealings
Bernante.17 Thus, the Prefatory statement of Enemecio’s Petition in the Court
with judicial tribunals are primary obligations of an attorney. He must always
of Appeals states:
remember to deal with courts with truthfulness and not to trifle with court
This is a Petition for Certiorari under Rule 65 of the Rules of Court seeking to proceedings.20 For this, Atty. Fernandez should be admonished not to commit
nullify the Resolution dated 13 January 2000 and the Order dated 28 February similar acts again.
2000 both issued by the Public Respondent in the Ombudsman Case docketed
Even if we consider Enemecio’s petition before the Court of Appeals as
as OMB-VIS-CRIM-98-0201 and entitled, "Agustina Enemecio vs. Servando
questioning the dismissal of the administrative case against Bernante, the
Bernante, Asst. Professor IV, CSCST- College of Fisheries Technology, Carmen,
action must also fail. Appeals from decisions of the Ombudsman in
Cebu", for being a manifest and grave abuse of discretion amounting to
administrative disciplinary actions should be brought to the Court of Appeals
excess of jurisdiction. The Resolution dated 13 January 2000 dismissed
under Rule 43.21 The only provision affected by the Fabian ruling is the
the criminal complaint for malversation and falsification of public documents
designation of the Court of Appeals as the proper forum and of Rule 43 as the
filed against herein Private Respondent while the Order dated 28 February
proper mode of appeal. All other matters in Section 27 of RA 6770, including
2000 denied herein Petitioner’s Motion for Reconsideration. Certified
the finality or non-finality of decisions of the Ombudsman, remain valid.22
machine copies of the aforesaid Resolution and Order are hereto appended
as Annexes "A" and "B" respectively. (Emphasis supplied) In any event, jurisprudence now holds that where the findings of the
Ombudsman on the existence of probable cause in criminal cases is tainted
The appellate court dismissed Enemecio’s petition and denied her motion for
with grave abuse of discretion amounting to lack or excess of jurisdiction, the
reconsideration. Enemecio now comes to this Court via this petition for
aggrieved party may file a petition for certiorari with the Supreme Court
review, claiming that "what was involved in the petition before the
under Rule 65.23 Since Enemecio filed a certiorari petition before the Court of
appellate court was the administrative, not the criminal case."18 Enemecio
Appeals, instead of the Supreme Court, she availed of a wrong remedy in the
thus stresses that "there is no reason for the Court of Appeals to say that the
wrong forum. Hence, the instant petition should be dismissed outright.
petition concerned the criminal case."19
Even if we consider the substance of the case, we find no grave abuse of
We cannot countenance the sudden and complete turnabout of Enemecio
discretion in the Ombudsman’s determination of whether there exists
and her counsel, Atty. Terence L. Fernandez. Atty. Fernandez’s conduct has
a prima facie case against Bernante.
fallen far too short of the honesty required of every member of the Bar.
Enemecio assails the dismissal of the criminal charges against Bernante for
It is clear from the records that Atty. Fernandez filed with the Court of Appeals
two reasons: (1) that she was able to prove before the Ombudsman the
a certiorari petition assailing the Ombudsman’s Resolution and Order
charge for malversation against Bernante; and (2) that Bernante himself
dismissing the criminal case, not the administrative case against Bernante.
admitted that he signed and filed the subject leave applications.
For this reason, the appellate court in its 7 December 2000 Resolution
rectified itself and stated that Fabian does not apply to Enemecio’s petition Enemecio asserts that she was able to present before the Ombudsman the
as the Fabian ruling applies only to administrative disciplinary actions. Atty. payroll of the CSCST-CFT employees covering the period from 16 May 1996
Fernandez’s attempt to mislead this Court in a last ditch effort to secure a to 31 May 1996 signed by Bernante. Enemecio asserts that this document
proved that Bernante "actually received and was paid the amount SO ORDERED.
of P3,185.08 as a result of his falsified letter-requests and leave applications."
According to Enemecio, these constituted acts of malversation.

Enemecio’s contentions do not deserve serious consideration.

Under Article 171, paragraph 4 of the Revised Penal Code, the elements of
falsification of public documents through an untruthful narration of facts are:
(a) the offender makes in a document untruthful statements in a narration of
facts; (b) the offender has a legal obligation to disclose the truth of the facts
narrated; (c) the facts narrated by the offender are absolutely false; and (d)
the perversion of truth in the narration of facts was made with the wrongful
intent to injure a third person.24

As the Ombudsman correctly pointed out, Enemecio failed to point to any law
imposing upon Bernante the legal obligation to disclose where he was going
to spend his leave of absence. "Legal obligation" means that there is a law
requiring the disclosure of the truth of the facts narrated.25 Bernante may not
be convicted of the crime of falsification of public document by making false
statements in a narration of facts absent any legal obligation to disclose
where he would spend his vacation leave and forced leave.

In PCGG v. Desierto,26 the Court ruled that the Ombudsman has the
discretion to determine whether a criminal case, given the facts and
circumstances, should be filed or not. The Ombudsman may dismiss the
complaint forthwith if he finds it insufficient in form or substance. On the
other hand, he may continue with the inquiry if he finds otherwise. If, in the
Ombudsman’s view, the complaint is sufficient in form and substance, he may
proceed with the investigation. In fact, the Ombudsman has the power to
dismiss a complaint outright without going through a preliminary
investigation.27

Our evaluation of the records leads us to the conclusion that the Ombudsman
has carefully studied the merits of the criminal complaint. Where the
Ombudsman has thoroughly examined the merits of the complaint, it would
not be right to subject the private respondent to an unnecessary and
prolonged anguish.28

WHEREFORE, the petition is DENIED for lack of merit. No costs.

GONZALES vs ROSAS
G.R. No. 145363 February 23, 2004
MERCEDES B. GONZALES, petitioner
vs.
NILO L. ROSAS and RICARDO P. NAGPACAN, respondents.
DECISION
QUISUMBING, J.:
For review on certiorari is the decision1 dated October 2, 2000, in CA-
G.R. SP No. 56251 of the Court of Appeals, which dismissed the
special civil action for certiorari, charging the Ombudsman with
grave abuse of discretion.
The antecedent facts, as culled from the records, are as follows:
Petitioner Mercedes B. Gonzales was a public school teacher from
1965 until her forced resignation in 1994. One Purita Avila filed
before the Department of Education, Culture and Sports (DECS),
Division of City Schools, 3rd District, Caloocan City, sometime in
1993, an administrative complaint for grave misconduct, dishonesty,
and estafa against petitioner who was then the Assistant Principal of
Caloocan Elementary School, Unit II. Included in the complaint were
her co-teachers, Fe Padilla and Milagros Zablan. Petitioner herein
and her co-teachers allegedly mortgaged a parcel of land owned by
Avila, and covered by Torrens Certificate of Title (TCT) No.
260609,2 without Avila’s consent.
Respondent Ricardo Nagpacan, Administrative Officer III of City
Schools, 3rd District, Caloocan City, on his own, initially heard the
aforesaid administrative case, contrary to the provisions of Section 9
of Rep. Act No. 4670,3 to wit:
SEC. 9. Administrative Charges. – Administrative charges against a
teacher shall be heard initially by a committee composed of the
corresponding School Superintendent of the Division or a duly
authorized representative who should at least have the rank of a
division supervisor, where the teacher belongs, as chairman, a
representative of the local or, in its absence, any existing provincial
or national teachers’ organization and a supervisor of the Division,
the last two to be designated by the Director of Public Schools. The
committee shall submit its findings and recommendations to the
Director of Public Schools within thirty days from the termination of
the hearings: Provided, however, That where the school
superintendent is the complainant or an interested party, all the
members of the committee shall be appointed by the Secretary of
Education. (Emphasis supplied)
After the initial hearing, Nagpacan issued a Report of
Investigation,4 dated April 22, 1994, recommending the dismissal of
petitioner from the service. Forthwith, then Schools Division
Superintendent Norma Abracia, in a 1st Indorsement5 dated June 8,
1994, recommended that petitioner be suspended for thirty (30)
days effective immediately. Subsequently, then DECS-National
Capital Region Director, respondent Nilo Rosas, rendered a
decision,6 dated July 22, 1994, dismissing petitioner from the service.
Finally, then DECS Secretary Ricardo Gloria issued the following:
(1) 2nd Indorsement,7 dated September 19, 1994, affirming the
decision of respondent Rosas;
(2) Resolution,8 dated October 9, 1996 modifying the 2nd
Indorsement by considering petitioner as resigned from the service
without prejudice to whatever benefits she is entitled under existing
laws as well as reinstatement in the government service except in
the DECS; and
(3) Resolution,9 dated October 27, 1997, denying petitioner’s plea
for reconsideration, which was considered as a petition for relief
from judgment.
Meanwhile, upon Avila’s complaint, petitioner and Padilla were also
criminally charged with estafa before the Regional Trial Court of
Caloocan City, Branch 131, on the very same facts alleged in the
administrative complaint lodged with the DECS.
The Information reads:
That on or about the 14th day of June 1993 in Kalookan City, M.M.
and within the jurisdiction of this Honorable Court, the above-named
accused, Fe Padilla, conspiring together with accused Mercedes
Gonzales and with intent to deceive and defraud complainant
Adriana Presas, the former purporting to be and assuming the
identity of one Purita Avila, a registered owner of house and lot
covered by TCT No. 260609, Kalookan City, and the latter
cooperating and acting convincingly to affirm that accused Fe Padilla
is the person of Purita Avila, well knowing said representation to be
false and fraudulent, the truth being that the true owner of the said
house and lot is Purita Avila, and by said act of deception and
pretension accused were able to obtain from complainant Adriana
Presas a mortgage covering the said house and lot of Purita Avila in
the amount of P30,000.00, thus completely deceiving Presas as to
who is the true owner of the property, to the damage and prejudice
of the latter in the aforementioned amount of P30,000.00.
CONTRARY TO LAW. 10
On May 30, 1995, the trial court convicted petitioner as follows:
WHEREFORE, accused MERCEDES GONZALES is hereby convicted of
the crime for ESTAFA as charged in the Information and, applying the
Indeterminate Sentence Law, is hereby sentenced to suffer the
penalty of TWO YEARS, ELEVEN (11) MONTHS and ELEVEN (11) DAYS
TO FOUR (4) YEARS and TWO (2) MONTHS and to pay to private
complainant ADRIANA PRESAS the amount of THIRTY THOUSAND
(P30,000.00) PESOS plus twelve percent (12%) per annum
commencing from September 21, 1994 when the Information was
filed in Court and until fully paid.
SO ORDERED.11
However, the Court of Appeals in a decision,12 dated August 28,
1997, in CA-G.R. CR No. 18268, acquitted petitioner on appeal,
absent any proof beyond reasonable doubt that petitioner conspired
with co-accused Padilla or that she benefited from the amount given
to Padilla.
All the while, petitioner never applied for judicial relief for resolution
of the jurisdictional issue and declaration of nullity of the
administrative proceedings conducted by respondent Nagpacan.
Instead, she filed on February 25, 1999 an administrative complaint
docketed as OMB-ADM-0-99-0177 for violation of Sec. 9 of the
Magna Carta for Public School Teachers against Abracia, Gloria and
herein respondents Nagpacan and Rosas before the Office of the
Ombudsman.
Graft Investigation Officer Plaridel Oscar Bohol found the complaint
sufficient in form and substance and recommended that an
administrative adjudication be conducted against Abracia,
Nagpacan, and Rosas.
On August 4, 1999, Bohol handed down his decision13 in OMB-ADM
0-99-0177, which disposed as follows:
1. Respondents RICARDO P. NAGPACAN (Administrative Officer III)
and NILO L. ROSAS (Undersecretary) both of the Department of
Education, Culture and Sports, are hereby suspended without pay
for Six (6) Months, for Simple Neglect of Duty.
2. The Secretary of the Department of Education, Culture and Sports
is hereby directed to reopen ADM. CASE NO. DECS-NCR-001-94
entitled PURITA AVILA v. FE PADILLA and MERCEDES GONZALES, and
cause its adjudication pursuant to R.A. No. 4670 otherwise known as
the Magna Carta for Public School Teachers and other existing laws.
SO ORDERED.14
However, Administrative Adjudication Bureau Director Evelyn
Baliton disapproved Bohol’s findings and dismissed petitioner’s
administrative complaint against respondents. Baliton noted that
the administrative complaint was filed five (5) years after the
occurrence of the act complained of, a ground for outright dismissal
of the complaint under Sec. 4(a), Rule III of the Rules of
Procedure15 of the Office of the Ombudsman. Baliton also found that Ombudsman correctly relied upon Sec. 20 of the Ombudsman Act of
complainant had an adequate remedy in another judicial or quasi- 1989,21 when it dismissed petitioner’s administrative complaint
judicial body, also a ground for dismissal under Sec. 2016 of the against respondent DECS officials.
Ombudsman Act of 1989. The proper remedy, Baliton maintained,
Anent herein petitioner’s reliance upon the findings of Graft
was to seek judicial relief from the proper court for resolution of the
Investigation Officer Bohol, the appellate court deemed the same to
jurisdictional issue and for declaration of nullity of the administrative
be misplaced as said findings are subject to the approval of Director
proceedings. Finally, according to Baliton, petitioner failed to adduce
Baliton and hence, do not carry immediate, final, nor binding effect.
substantial evidence showing respondents willfully violated Sec. 9 of
Finally, the Court of Appeals ruled that assuming there was a
the Magna Carta for Public School Teachers17 resulting in the denial
violation of Sec. 9 of the Magna Carta for Public School Teachers,
of petitioner’s right to due process.
petitioner’s remedy is to seek judicial relief from the proper court for
Hence, in a memorandum18 dated September 23, 1999 addressed to resolution of the jurisdictional issue and for declaration of nullity of
and approved by Asst. Ombudsman Abelardo Aportadera, Jr., Baliton the administrative proceedings.
disposed of the administrative complaint thus:
Before us, petitioner ascribes to the appellate court, the sole error,
In view of all the foregoing premises, it is respectfully recommended
. .THAT THE COURT OF APPEALS GRAVELY ERRED IN DISMISSING
that the Decision under review be DISAPPROVED, instead, the
PETITIONER’S PETITION FOR CERTIORARI.22
complaint against the respondents be DISMISSED for insufficiency of
evidence and that the recommendation of Atty. Bohol to direct the First, the petitioner argues that a petition for certiorari under Rule
DECS Secretary to re-open DECS-NCR-001-94 be likewise 65 is the proper remedy because a motion for reconsideration is no
DISAPPROVED.19 longer available as the administrative decision had become final and
unappealable. Neither could she file a petition for review under Rule
Undeterred, petitioner filed with the Court of Appeals a special civil
43 as it only pertains to appeals from the Court of Tax Appeals and
action for certiorari on the ground that the Ombudsman acted with
quasi-judicial agencies to the Court of Appeals, thus implying that
grave abuse of discretion in adopting Director Evelyn Baliton’s
the Office of the Ombudsman is not a quasi-judicial agency.
memorandum of September 23, 1999 recommending the dismissal
of her complaint. The case was docketed as CA-G.R. SP No. 56251. Petitioner’s contentions are untenable. The Office of the
Ombudsman is a quasi-judicial agency covered by the procedure
On October 2, 2000, the appellate court dismissed CA-G.R. SP No.
outlined in Rule 43 of the 1997 Rules of Civil Procedure.23 As a rule,
56251 for want of merit. It held that the petition should have been
appeals from decisions of quasi-judicial agencies, such as the Office
dismissed outright as the proper remedy was a petition for review
of the Ombudsman, in administrative disciplinary cases, should be
under Rule 43 of the 1997 Rules of Civil Procedure.20However,
taken to the Court of Appeals under Rule 43. The rule was
assuming certiorari was available, the same should have been filed
formulated precisely to provide for a uniform rule of appellate
not later than ten (10) days from notice of the assailed
procedure for quasi-judicial agencies.24 Thus, certiorari under Rule
memorandum. Nonetheless, the petition would fail anyway because
65 will not lie, as appeal under Rule 43 is an adequate remedy in the
a motion for reconsideration should have been filed in order to
ordinary course of law.25 Unfortunately, petitioner failed to appeal
enable the Ombudsman to correct his mistake without the
within fifteen (15) days from notice of the assailed decision.
intervention of the courts. The Court of Appeals also found the
Certiorari under Rule 65 cannot be resorted to as a substitute for the
lost remedy of appeal, especially if such lapse was occasioned by Administrative Adjudication Bureau Director. Hence, Director
petitioner’s neglect or error in the choice of remedies, for the Baliton, in reviewing the findings of Bohol, is not estopped thereby,
remedies of appeal and certiorari are mutually exclusive and not for the investigator’s findings do not possess conclusive effect. On
alternative or successive.26 the contrary, the Director is empowered to modify, reverse, or even
supplant said findings with her own.
Second, petitioner claims that the Ombudsman acted with grave
abuse of discretion when it dismissed petitioner’s administrative The proper remedy for petitioner, as suggested by the appellate
complaint against respondents. Her claim, however, is far from court, is to seek judicial relief from the proper court for resolution of
meritorious, as hereafter elucidated. the jurisdictional issue and for declaration of nullity of the
administrative proceeding resulting in her forced resignation,
The Ombudsman dismissed the administrative complaint on the
allegedly in violation of Sec. 9 of the Magna Carta for Public School
ground that it was filed out of time, pursuant to Sec. 20 of the
Teachers. Unfortunately, petitioner chose to pursue another remedy
Ombudsman Act of 1989. Petitioner herself admits that the
not warranted by the circumstances of her case.
administrative complaint was filed only on February 25, 1999, or
almost five years after the act complained of, which was her forced It is now indubitable that the Court of Appeals did not err when it
resignation from the service on September 19, 1994. Hence, in dismissed her petition for certiorari under Rule 65 of the Rules of
dismissing the belated administrative complaint, the Ombudsman, Court.
far from acting with grave abuse of discretion, was simply following
WHEREFORE, the instant petition for review is DENIED for lack of
what the law has mandated.
merit. The decision of the Court of Appeals, dated October 2, 2000,
Petitioner belabors the point that Sec. 20 merely uses the in CA-G.R. SP No. 56251 is AFFIRMED. Costs against petitioner.
word may and not shall, which means that the provision is only
SO ORDERED.
directory and not mandatory in nature. But, at the risk of sounding
rhetorical, no grave abuse of discretion attaches in following what
the law directs any less than in following what the law mandates. No
doubt, in dismissing the complaint for having been filed out of time,
as directed by Sec. 20 of the Ombudsman Act of 1989, the
Ombudsman did not act with grave abuse of discretion. In fact, he
exercised sound discretion in full accord with law.

Finally, in a desperate bid to reopen the administrative case,

petitioner cries estoppel. She argues that Director Baliton was
estopped from dismissing the administrative complaint because
Graft Investigation Officer Bohol had already conducted the
necessary investigation in connection therewith. The theory is
seriously flawed. The findings, conclusions and recommendations of
Bohol are, by the nature of his position as Graft Investigation Officer
I, necessarily subject to the review and approval of Baliton as
WILLY TAN vs PEOPLE OF THEPHILIPPINES
G.R. No. 148194 April 12, 2002
WILLY TAN y CHUA, petitioner,
vs.
PEOPLE OF THE PHILIPPINES, respondents.
VITUG, J.:
On 12 December 1996, petitioner Willy Tan was found guilty of bigamy by the
Regional Trial Court, Branch 75, of San Mateo, Rizal. He was sentenced to
suffer a prison term of prision correccional in its medium period ranging from
two (2) years, four (4) months, and one (1) day, to four (4) years and two (2)
months. On 23 December 1996, petitioner applied for probation. On 8
January 1997, the application was granted by the trial court but the release
order was withheld in view of the filing by the prosecution, on 21 January
1997, of a motion for modification of the penalty. The prosecution pointed
out that the penalty for bigamy under Article 349 of the Revised Penal Code
was prision mayor and the impassable penalty, absent any mitigating nor
aggravating circumstance, should be the medium period of prision mayor, or
from eight (8) years and one (1) day to ten (10) years. Thus, the prosecution
argued, petitioner was not eligible for probation.
The trial court denied the motion of the prosecution for having been filed out
of time since the decision sought to be modified had already attained finality.
Indeed, petitioner had meanwhile applied for probation. Upon motion of the
prosecution, however, the trial court reconsidered its order and rendered an
amended decision, promulgated on 10 July 1998, concluding thusly:
"WHEREFORE, premises considered, judgment is hereby rendered finding
accused Willy Tan GUILTY beyond reasonable doubt of the crime of Bigamy
and applying the Indeterminate Sentence Law, is hereby sentenced to suffer
a minimum prison term of prision [correccional] TWO (2) YEARS, FOUR (4)
MONTHS AND ONE (1) DAY to a maximum prison term of EIGHT (8) YEARS
AND ONE (1) DAY."1
On 13 July 1998, petitioner filed a notice of appeal with the trial court and
elevated the case to the Court of Appeals, contending that -
"THE LOWER COURT ERRED IN AMENDING THE FIRST DECISION INCREASING
THE PENALTY AFTER THE SAME HAD ALREADY BECOME FINAL AND
EXECUTORY."2
The Court of Appeals, in a decision, dated 18 August 2000, dismissed
petitioner's appeal on the ground that petitioner raised a pure question of
law. Citing Article VIII, Section 5(2)(e), of the Constitution, the appellate court
explained that jurisdiction over the case was vested exclusively in the
Supreme Court and that, in accordance with Rule 122, Section 3(e), of the
Rules of Criminal Procedure, the appeal should have been brought up by way
of a petition for review on certiorari with this Court and not by merely filing
a notice of appeal before the trial court.
Petitioner filed a motion for reconsideration which, on 18 May 2001, was
denied by the appellate court. The petition for review on certiorari before this
Court raised the following issues:
"I. THE COURT OF APPEALS GRAVELY ERRED IN APPLYING SECTION 2, RULE 50
ON DISMISSAL OF IMPROPER APPEAL TO THE COURT OF APPEALS AS THE
SAID SECTION REFERS TO AN APPEAL UNDER RULE 41 IN ORDINARY CIVIL
ACTION BUT NOT TO AN APPEAL IN CRIMINAL CASES WHICH IS GOVERNED
BY RULE 122 OF THE REVISED RULES ON CRIMINAL PROCEDURE.
"II. THE COURT OF APPEALS ERRED IN HOLDING THAT THE SUPREME COURT
HAS EXCLUSIVE APPELLATE JURISDICTION ON PURE QUESTIONS OF LAW.
"III. THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT BECAUSE THE
APPEAL RAISED PURE QUESTIONS OF LAW, IT IS WITHOUT JURISDICTION TO
RESOLVE THE ISSUE RAISED IN THE APPEAL.
"IV. THE COURT OF APPEALS GRAVELY ERRED IN DISMISSING THE APPEAL
OUTRIGHT INSTEAD OF DECLARING THE AMENDED DECISION VOID FOR
UTTER WANT OF JURISDICTION.1âwphi1.nêt
"V. THE COURT OF APPEALS ERRED IN HOLDING THAT RULE 65 IS THE PROPER
REMEDY TO RAISE THE ISSUE OF JURISDICTION AND IF SO IN NOT TREATING
THE APPEAL AS A SPECIAL CIVIL ACTION FOR CERTIORARI."3
In all criminal prosecutions, the accused shall have the right to appeal in the
manner prescribed by law.4 While this right is statutory, once it is granted by
law, however, its suppression would be a violation of due process, itself a jeopardy,11 however, should here warrant the exercise of the prerogative by
right guaranteed by the Constitution.5 Section 3(a), Rule 122 of the Rules of this Court to relax the stringent application of the rules on the matter. When
Criminal Procedure states: the trial court increased the penalty on petitioner for his crime of bigamy
after it had already pronounced judgment and on which basis he then, in fact,
"Section 3. How appeal is taken. –
applied for probation, the previous verdict could only be deemed to have
(a) The appeal to the Regional Trial Court, or to the Court of Appeals in cases lapsed into finality.
decided by the Regional Trial Court in the exercise of its original jurisdiction,
Section 7, Rule 120, of the Rules on Criminal Procedure that states –
shall be taken by filing a notice of appeal with the court which rendered the
judgment or final order appealed from and by serving a copy thereof upon "Sec. 7. Modification of judgment. – A judgment of conviction may, upon
the adverse party. (Emphasis supplied). motion of the accused, be modified or set aside before it becomes final or
before appeal is perfected. Except where the death penalty is imposed, a
The above rule is plain and unambiguous – the remedy of ordinary appeal by
judgment becomes final after the lapse of the period for perfecting an
notice of appeal, although not necessarily preclusive of other remedies
appeal, or when the sentence has been partially or totally satisfied or
provided for by the rules, is open and available to petitioner.
served, or when the accused has waived in writing his right to appeal, or has
The notice of appeal was timely filed by petitioner on 13 July 1998, three days applied for probation"-
after the questioned decision was promulgated.6 It was a remedy that the law
implements a substantive provision of the Probation Law which enunciates
allowed him to avail himself of, and it threw the whole case effectively open
that the mere filing of an application for probation forecloses the right to
for review on both questions of law and of fact whether or not raised by the
appeal.
parties.
"SEC. 4. Grant of Probation. – Subject to the provisions of this Decree, the trial
Neither the Constitution nor the Rules of Criminal Procedure exclusively vests
court may, after it shall have convicted and sentenced a defendant, and upon
in the Supreme Court the power to hear cases on appeal in which only an
application by said defendant within the period for perfecting an appeal,
error of law is involved.7 Indeed, the Court of Appeals, under Rule 42 and 44
suspend the execution of the sentence and place the defendant on probation
of the Rules of Civil Procedure, is authorized to determine "errors of fact, of
for such period and upon such terms and conditions as it may deem
law, or both."8 These rules are expressly adopted to apply to appeals in
best: Provided, That no application for probation shall be entertained or
criminal cases,9 and they do not thereby divest the Supreme Court of
granted if the defendant has perfected the appeal from the judgment or
its ultimate jurisdiction over such questions.
conviction.
Anent the argument that petitioner should have filed a petition
"Probation may be granted whether the sentence imposes a term of
for certiorari under Rule 65, it might be pointed out that this remedy can only
imprisonment or a fine only. An application for probation shall be filed with
be resorted to when there is no appeal, or any plain, speedy, and adequate
the trial court. The filing of the application shall be deemed a waiver of the
remedy in the ordinary course of law.10 Appeal, being a remedy still available
right to appeal.
to petitioner, a petition for certiorari would have been premature.
"An order granting or denying probation shall not be appealable. (As
In fine, petitioner had taken an appropriate legal step in filing a notice of
amended by PD 1257, and by PD 1990, Oct. 5, 1985.)"12
appeal with the trial court. Ordinarily, the Court should have the case
remanded to the Court of Appeals for further proceedings. The clear Such a waiver amounts to a voluntary compliance with the decision and
impingement upon petitioner's basic right against double writes finis to the jurisdiction of the trial court over the judgment.13 There is
no principle better settled, or of more universal application, than that no
court can reverse or annul, reconsider or amend, its own final decree or
judgment.14 Any attempt by the court to thereafter alter, amend or modify
the same, except in respect to correct clerical errors, would be unwarranted.

WHEREFORE, the petition is given due course. The assailed amendatory

judgment of the trial court is SET ASIDEand its decision of 12 December 1996
is REINSTATED. No costs.

SO ORDERED.
ROBIN M. CANO vs CHIEF OF PHIL. NATIONAL POLICE August 7, 1995, pursuant to Special Order No. 1690 dated August 8, 1995, the
penalty imposed is considered deemed served. Respondent-Appellant is
strongly warned to be more prudent and responsible in the exercise of his
G.R. No. 139368 November 21, 2002] duties as a member of the PNP.3
ROBIN M. CANO, petitioner, The NAPOLCOM decision having been allowed by both parties to become
vs. final and executory, petitioner was restored to full duty status effective May
THE CHIEF, PHILIPPINE NATIONAL POLICE, EDGAR C. GALVANTE, as Police 15, 1997. He also received all benefits and emoluments pertaining to his post
Director for Personnel and Records Management, PNP, pursuant to PNP Special Order No. 1341. With the modification of his penalty
and the DEPARTMENT OF INTERIOR AND LOCAL to three (3) months suspension, petitioner filed a claim for payment of back
GOVERNMENT, respondents. salaries and other allowances corresponding to the period he was allegedly
RESOLUTION unjustly discharged from service until he was restored to full duty status, or
from August 7, 1995 to May 15, 1997. However, this claim, computed by the
QUISUMBING, J.: PNP Regional Police Comptrollership and Finance Division to be Three
Hundred One Thousand Eighteen Pesos (P301,018.00), was denied by
This petition for review on certiorari assails (a) the order1 dated May 17, 1999
respondent Police Director Edgar C. Galvante of the PNP Directorate for
of the Regional Trial Court of Quezon City, Branch 224, in Civil Case No. Q-98-
Personnel and Records Management (DPRM) on the strength of a
36370, dismissing the complaint filed on December 21, 1998 by petitioner
Memorandum/Opinion from the PNP Legal Service. Petitioner forthwith
against respondents for payment of back salaries and allowances amounting
asked for a reconsideration of the denial but the same was rejected.
to P301,018; and (b) the order of said court denying on July 15, 1999, his
motion for reconsideration. On account of said denial, petitioner filed on December 23, 1998 a
complaint4 before the Regional Trial Court of Quezon City for the recovery of
The factual background of the instant petition, as culled from the records of
his back salaries and other allowances for the said period. The court a quo
the case, is as follows:
dismissed the complaint in an order dated May 17, 1999. Said the trial court:
For the alleged bungled investigation of the Eileen Sarmenta and Allan Gomez
The Court is prone to agree with the stand and position of the defendants
rape-slay, a complaint for grave misconduct was filed with the National Police
that plaintiff's claim should not be granted because plaintiff has not shown
Commission under the Department of Interior and Local Government against
any clear and legal right which would entitle him to back salaries, allowances
petitioner, then Police Chief Inspector of the Calauan Police Station. The Chief
and other benefits and besides, plaintiff has failed to exhaust administrative
of the Philippine National Police (PNP) found petitioner guilty and ordered his
remedies no[t] discounting the fact that his claim against defendants is
summary dismissal from the service, in a decision2 dated July 12, 1995.
actually a suit against the state.
Petitioner appealed his dismissal to the National Appellate Board of the
National Police Commission (NAPOLCOM). On May 15, 1997, the NAPOLCOM xxx
reversed the decision of the PNP Chief:
This complaint is actually a suit against the government because the ultimate
WHEREFORE, premises considered, we find respondent appellant, Chief liability for payment of back salaries, etc. will fall on the government. This
Inspector ROBIN M. CANO administratively culpable for Simple Misconduct being so, this case should be dismissed because the government cannot be
and hereby orders (sic) his suspension for a period of three (3) months. sued without its consent.
Considering, however, that said respondent had been under suspension since
Accordingly, therefore, the Court has to dismiss this case without costs and law, and not a proper subject for a petition for review on certiorari, we
against the plaintiff. are constrained to decline exercise of our equity jurisdiction in this case.

IT IS SO ORDERED.5 At any rate, petitioner also failed without justifiable cause to observe due
regard for the hierarchy of courts. Even on this reason alone, we are
On May 31, 1999, petitioner moved for the reconsideration of the trial court's
constrained to deny the petition. The policy of this Court respecting the
decision, but his motion was denied in an order dated July 15, 1999.
hierarchy of courts and, consequently, prohibiting the filing of a petition in
Accordingly, petitioner filed the instant appeal via petition for review on this Court in view of the concurrent jurisdiction with the lower courts has
certiorari, raising only one issue: been consistently observed in the absence of any compelling reason for
departing from such policy.10Pursuant to Section 2, Rule 41 of the Rules of
Whether or not the petitioner is entitled to his claim for back salaries and Court,11 petitioner should have taken his appeal to the Court of Appeals.
allowances under the terms of the decision of the NAPOLCOM Appellate
Board.6 Having ruled for the denial of the petition, we need not tarry on the other
issues that may have been raised in the petition.
Mainly involved in this controversy is petitioner's entitlement to back salaries
and other allowances upon the reduction of his penalty of dismissal to mere WHEREFORE, the instant petition is DENIED. The order of the Regional Trial
suspension for three months. But secondarily, it should be asked whether Court, Branch 224, Quezon City, in Civil Case No. Q-98-36370 is AFFIRMED.
petitioner failed to exhaust the administrative remedies available to him so No pronouncement as to costs.
as to render the filing of the complaint with the trial court premature?
SO ORDERED.
At the outset, we note that the principal issue raised before us is a mixed
question of fact and law. There is a question of fact when doubt or difference
arises as to the truth or falsehood of the alleged facts,7 and there is a question
of law where the doubt or difference arises as to what the law is on a certain
state of facts.8 Here, petitioner seeks to recover back salaries and allowances
allegedly due him from August 7, 1995, when he was unjustly discharged from
the service, to May 15, 1997, when he was restored to full duty status. The
determination of petitioner's entitlement to said back salaries and
allowances is a mixed question as it involves the determination of his duty
status for the period of his claim and the resolution of whether the petitioner
was acquitted by the NAPOLCOM Appellate Board in its decision finding him
liable only for simple misconduct, not gross misconduct.

Under Section 1 of Rule 45 of the Rules of Court, an appeal by certiorari to

this Court should raise only questions of law which must be distinctly set forth
in the petition. It is elementary that a review is not a matter of right, but of
sound judicial discretion, and will be granted only when there are special and
important reasons therefor.9 As the error raised herein includes one of fact
ALCARAZEN vs UNIVET AGRICULTURAL PRODUCTS, INC.
G.R. No. 149628 November 22, 2005
EDGARDO B. ALCAZAREN, Petitioner,
vs.
UNIVET AGRICULTURAL PRODUCTS, INC., Respondent.
DECISION
CALLEJO, SR., J.:
Before us is a petition for review on certiorari of the Court of Appeals (CA)
Decision1 in CA-G.R. SP No. 51311 which set aside the Decision2 of the
National Labor Relations Commission (NLRC) in NLRC Case No. V-0261-97.
Sometime in 1982, Univet Agricultural Products, Inc. (Univet) employed
Edgardo B. Alcazaren as a casual employee performing the work
of a sales representative in Capiz and Aklan. Over time, he was promoted to
different positions. In November 1994, he was promoted as sales supervisor
in the West Visayas Area.3
On July 3, 1996, Alcazaren was transferred as sales supervisor from West
Visayas to East Visayas via an inter-office Memorandum of Operations
Manager Romeo Savella.4 However, despite attempts to serve the
memorandum on Alcazaren, he refused to receive the same.5 On July 10,
1996, Savella ordered Alcazaren to participate in the mid-year meeting of
sales supervisors of the West Visayas Area at the Amigo Hotel, Iloilo City
scheduled on July 15, 19966 and in a meeting set on July 16, 1996 at the
Montebello Hotel, Cebu City. Alcazaren failed to attend the meetings.
On July 16, 1996, Savella ordered Alcazaren to report to his supervisor, OVP
General Manager Conrado S. Baylon, at the Montebello Hotel, Cebu City
either that day or the following day, July 17, 1996.7 Alcazaren read the
directive but refused to receive it.
On July 20, 1996, Savella issued a Memorandum8 requiring Alcazaren to
explain, in writing, within 48 hours from notice thereof why no disciplinary
sanction should be imposed on him for his failure to attend the conference
despite notice. On July 27, 1996, the Personnel Committee
issued a Memorandum9 requiring Alcazaren to explain within 48 hours why
he should not be meted disciplinary actions for his failure to comply with the
July 16 and 20, 1996 Memoranda of Savella.
On August 5, 1996, Alcazaren submitted his written explanation.10 He claimed
that his grandmother Ecspectacion Bacero died on July 7, 1996 and he had to
attend her burial in President Roxas, Capiz on July 15, 1996. He alleged that
he received notice of the July 15, 1996 meeting in Iloilo City only on July 11,
1996; he immediately contacted Baylon by long distance, who advised him to
just try and catch up and attend the meeting even after the burial. He
narrated that he arrived in Iloilo City on July 15, 1996 at around 7:30 p.m. and
attended the meeting only to be berated by Savella. He left the meeting to
avoid further complications. He explained that he failed to attend the July 16,
1996 meeting because the burial of his grandmother was reset to July 17,
1996. He informed Ernie Poral that he needed to attend the burial of his
grandmother. He averred that he should not be faulted for his failure to
submit his explanation to the July 20, 1996 Memorandum of Savella because
he received it only on July 29, 1996 in Bacolod City when it was given to him
by his housemaid.11
On August 12, 1996, Alcazaren was directed to report to Univet at
Mandaluyong City on August 13, 1996 and to turn over to Ernie Poral or
Rolly12 Banson all accountable forms in his possession and the service vehicle
assigned to him13 described as Toyota Corolla, Model 1990 with Plate No.
PRX-856 to Dr. Rey Labaco. However, Alcazaren failed to turn over the vehicle
to Dr. Labaco.
The Personnel Committee issued a Memorandum14 to Alcazaren, on August
14, 1996, requiring him to explain why he should not be disciplined for his
unauthorized absences in his area from July 15-20, 22-27, 29-31, 1996, and
August 1-3, 5-10, 1996, and for his failure to turn over the company vehicle
to Dr. Rey Labaco.
The Committee pointed out that under Page 1, Article A, Paragraph 1,
subparagraph (b) of the Company House Rules, absence without leave
(AWOL) for six consecutive working days is meted with the penalty of
dismissal; and that under Article 282(b) of the Labor Code of the Philippines,
gross and habitual neglect by the employee of his duties is also punishable by
dismissal. The Committee also pointed out that Page 6, Paragraph G, Article
4 of the Company House Rules provides a 15-day suspension with warning of
dismissal as a penalty for insubordination or willful disobedience in carrying
out reasonable requests or instructions of superior, or acts of grave
misconduct/disrespect towards superior.15
On the same date, August 14, 1996, Alcazaren submitted his explanation to
the Memorandum of the Personnel Committee.16 He also
17
submitted a separate explanation to the charge of his being AWOL. He
reiterated his explanation contained in his August 5, 1996 letter to the
Committee.
The Personnel Committee conducted an investigation of the matter and, on
August 16, 1996, ruled that Alcazaren was guilty of an infraction. He was
suspended for 15 days effective August 19-24, 26-30, 1996 and September 2-
5, 1996, and warned that a more severe penalty would be meted against him
for future violations.18
However, Alcazaren still refused to turn over the company vehicle to Dr.
Labaco or to Univet. On September 3, 1996, Alcazaren informed Univet that
he would be reporting to the East Visayas Area on September 6, 1996 after
the expiration of his suspension, but that he will bring with him the service
vehicle. He claimed that he had already acquired certain rights over the said
car pursuant to existing company rules regarding his option to buy the
same.19
On September 4, 1996, Alcazaren received a Memorandum from the
Personnel Committee of Univet directing him to claim his plane ticket at the
Iloilo Depot and to report at Univet’s office in Mandaluyong City on
September 6, 1996. Univet also reiterated its directive for him to turn over
the service vehicle to Ernie Poral or Rolly Banson, including the sample stocks
and accountable forms in his possession.20 Alcazaren still refused to turn over
the vehicle to Dr. Labaco; worse, Alcazaren had the vehicle shipped to Cebu
City.
In a Memorandum21 dated September 6, 1996, the Personnel Committee
ordered Alcazaren to appear before the Committee the following day to
answer violations of the Company House Rules, particularly insubordination
and continuous noncompliance with home office directives. When he
received the directive on September 7, 1996, Alcazaren had the service
vehicle parked at the Unilab Depot compound in Mandaue City.22
In a Memorandum23 dated September 9, 1996, the Personnel Committee
informed Alcazaren that Univet had already lost its trust and confidence in
him as a result of his continuous and repeated violations of company rules
and regulations, and deliberate defiance of legitimate orders from superiors.
He was required to explain in writing within 5 days from receipt of said
Memorandum why his services should not be terminated. In the meantime,
he was further placed under preventive suspension effective September 16,
1996 to October 15, 1996.24
On September 10, 1996, the Personnel Committee reiterated its directive for
Alcazaren to turn over the service vehicle for shipment to Iloilo City and all
sample stocks in his possession intended for West Visayas.25 Finally,
Alcazaren relented and turned over all accountables in his possession to
Mario Dueñas and released the key of the service vehicle to David Pinor.26
On September 19, 1996, Alcazaren submitted to the Personnel Committee his
explanation. He claimed that he had not received the August 21, 1996 Order
directing him to turn over the service vehicle because he was already
suspended at the time. He claimed that when Mr. Winston Young went to
Iloilo, he, together with Poral, forcibly entered his (Alcazaren’s) residence. He
also claimed that he advised Univet about his reporting to East Visayas Area
after the expiration of his suspension on September 5, 1996 and that he held
the service vehicle in his possession because he was under the impression
that he had already acquired certain rights over it; when the service vehicle
he shipped arrived in Cebu, he immediately placed the same in the possession
of the security guard on duty at the Unilab Depot. He claimed that he was
already in Cebu when Univet’s instructions dated September 4, 1996 arrived
in Bacolod, thus, it was impossible for him to comply with the said directives.
He also requested Baylon of Univet if he could report on September 9 instead
of September 7, 1996, which was apparently granted. He pointed out that he
had already complied with the memorandum directing him to turn over the
service vehicle and other accountables in his possession.
Alcazaren asserted that his previous 15-day suspension and the current 30-
day preventive suspension imposed upon him were devoid of
factual and legal bases and that he had not been afforded due process. He
also claimed that despite the expiration of his 15-day suspension, Univet had
not given him any work assignment, thus he felt that "he had been placed in
a freezer." He was convinced that he was being harassed, threatened and
intimidated by management for acts which did not constitute valid causes or
grounds for severance of his employment.
On September 23, 1996, Alcazaren filed his complaint27 against Univet and its
officers before the NLRC Regional Arbitration Branch No. VI in Bacolod City. It
was docketed as RAB Case No. 06-09-10506-96. Alcazaren alleged, inter alia,
that he had been illegally suspended, that he was illegally dismissed
(constructive dismissal), that his salaries were not paid, and that he would
like to exercise his option to buy the service vehicle assigned to him. He
prayed for his reinstatement with full backwages from date of dismissal until
reinstatement, payment of unpaid salaries/wages, moral damages,
exemplary damages and attorney’s fees.28
On October 5, 1996, Poral submitted his Answer29 to the above letter-
explanation of Alcazaren, and alleged that he and Young had not broken into
Alcazaren’s house but were allowed entry by the latter’s cousin.
Although he had already filed his complaint with the NLRC, Alcazaren
requested Univet home office, on October 2, 1996, to send him
₱10,000.00 as traveling allowance so that he could attend the meeting on
October 3, 1996 at the Univet Office in Mandaluyong City.30 Still unaware of
the complaint of Alcazaren, Univet advised Alcazaren, on October 4, 1996,
that his plane ticket had already been delivered at his residence in Bacolod
on October 2, 1996 as reflected on LBC air cargo records. Enclosed in the
letter was a check amounting to ₱10,000.00. Univet informed Alcazaren that
the meeting was reset to October 8, 1996.31
On October 5, 1996, Alcazaren notified Univet that he had already filed a
complaint for illegal/constructive dismissal against it before the NLRC.32
On October 15, 1996, the Personnel Committee issued its
Memorandum33 terminating Alcazaren’s employment due to violations of
company house rules and the Labor Code.
Univet, in its position paper,34 asserted, inter alia, that there was no
constructive discharge or illegal dismissal of Alcazaren. As a sales supervisor,
he was vested with the unqualified trust and confidence of the higher
management, and was entrusted with the custody and care of various
company properties. It pointed out that he had not only breached the trust
and confidence reposed on him, but continuously and habitually broke the
rules. Univet further averred that Alcazaren’s acts constituted serious
misconduct, and can be described as willful disobedience to lawful orders in
connection with his work. Moreover, his explanations were flimsy - he could
always attend the scheduled meetings since Iloilo was only about 3 hours
away from Capiz. Univet further claimed that it had been accommodating to
Alcazaren as it considered his availability on scheduled conferences.
However, he went AWOL from July 15 to August 10, 1996.
On June 30, 1997, the Labor Arbiter rendered a Decision35 ordering the
dismissal of the complaint. The decretal portion of the decision reads:
WHEREFORE, in view of all the foregoing, judgment is hereby rendered:
a) DISMISSING the complaint for constructive dismissal and illegal dismissal
for lack of merit;
b) DISMISSING the complaint for moral and exemplary damages for lack of
merit;
c) DISMISSING all other claims for lack of merit;
d) As a measure of social and compassionate justice, ORDERING respondent
Univet Agricultural Products, Inc. to pay separation pay as form of financial
assistance to the complainant Edgardo Alcazaren the sum of TWO HUNDRED
EIGHTY-SEVEN THOUSAND FOUR HUNDRED TWO PESOS & 22/100
(₱287,402.22) and attorney’s fee in the amount of TWENTY-EIGHT
THOUSAND SEVEN HUNDRED FORTY PESOS & 22/100 (₱28,740.22) or in the
total sum of THREE HUNDRED SIXTEEN THOUSAND ONE HUNDRED FORTY-
TWO PESOS & 44/100 (₱316,142.44) to be deposited with this Office within
ten (10) days from receipt of this decision; and
e) DISMISSING all claims and causes of action against respondents Unilab Inc.,
Winston Young, Conrado S. Baylon, Wan Lian Tan and Dr. Delfin Samson for
lack of merit.
SO ORDERED.36 c) Commission/Incentive:

Alcazaren appealed the decision to the NLRC which rendered judgment ₱5,000.00/month x 15 months = 75,000.00
granting the appeal and reversing the decision of the Labor Arbiter. The NLRC
-------------------
declared that the refusal of Alcazaren to turn over his service vehicle cannot
be considered as willful disobedience since the said vehicle is "retirable" after Total backwages ₱701,593.95
a year, and that Alcazaren had "ample grounds to initially hold on to said
vehicle" under Univet’s Revised Motor Vehicle Replacement Policy. Further, Add: Attorney’s Fees 70,159.39
the NLRC stated that although Alcazaren committed an infraction relative to -------------------
said turn over, considering that he had been an employee of Univet for 14
years, the penalty of dismissal was too harsh and highly disproportionate to Grand Total ₱771,753.34
the offense committed. Alcazaren felt that he was being harassed and that ===========
he had not been given any work assignment after the expiration of his 15-day
suspension. Thus, the NLRC found that Alcazaren was illegally and SO ORDERED.37
constructively dismissed entitling him to be reinstated with backwages.
Univet elevated the case to the CA, alleging that:
The fallo of its decision reads:
I
WHEREFORE, premises considered, the decision of the Labor Arbiter is hereby
SET ASIDE and VACATED and a new one entered declaring complainant to PUBLIC RESPONDENT COMMITTED A GRAVE ABUSE OF DISCRETION
have been illegally and constructively dismissed. Respondent Univet AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION IN HOLDING THAT
Agricultural Products is hereby ordered to reinstate complainant to his PRIVATE RESPONDENT WAS ILLEGALLY AND CONSTRUCTIVELY DISMISSED,
former position without loss of seniority rights and other privileges and to ERRONEOUSLY AND ARBITRARILY REVERSING THE FINDINGS OF THE LABOR
pay him the following: ARBITER A QUO.

1. Backwages (Sept. 6/96 to Dec. 31/97) II

1 year, 3 months & 25 days PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION IN HOLDING THAT THE
a) Basic Salary:
EVIDENCE WAS INSUFFICIENT TO DISMISS PRIVATE RESPONDENT, A
₱22,048.73/mo. x 15 mos. = ₱330,730.95 SUPERVISORY EMPLOYEE, FOR LOSS OF TRUST AND CONFIDENCE.

842.52/day x 25 days = 21,063.00 III

--------------- ₱351,793.95 PUBLIC RESPONDENT COMMITTED A GRAVE ABUSE OF DISCRETION

AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION IN HOLDING THAT
b) Allowance/per diem: PRIVATE RESPONDENT WAS IN GOOD FAITH IN INITIALLY HOLDING ON TO HIS
(₱6,620.00 + 11,700.00 = 18,320.00) SERVICE VEHICLE.

₱18,320.00/month x 15 months = 274,800.00 IV

PUBLIC RESPONDENT COMMITTED A GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OF OR IN EXCESS OF JURISDICTION IN HOLDING THAT
PRIVATE RESPONDENT WAS ENTITLED TO REINSTATEMENT, PAYMENT OF
BACKWAGES, ALLOWANCES, AND COMMISSIONS.38
On December 26, 2000, the CA rendered a decision granting the petition. It
found that Alcazaren was not constructively dismissed since he was still
employed with Univet at the time he filed his complaint for constructive and
illegal dismissal although under suspension;
he had not been demoted, nor his pay decreased, as he was only transferred
to a different area which had the same sales potential as his previous
assignment; he had the same position, privileges and pay. The CA declared
that the transfer of an employee ordinarily lies within the ambit of
management prerogatives, and that Alcazaren defied his reassignment by
reporting for work at his old post in West Visayas. Moreover, he was given
sufficient opportunity to explain and comply with Univet’s orders and
memoranda but repeatedly refused to turn over the service vehicle despite
clear orders of his employer; in fact, he shipped said vehicle to Cebu.
According to the CA, his acts were tantamount to an "appropriation of
company asset for personal use."
The CA further held that no evidence was adduced to show that the subject
service vehicle was scheduled for disposition. It found that Alcazaren’s
termination from employment was justified under Article 282(a) and (c) of
the Labor Code. The decretal portion of the decision reads:
WHEREFORE, the petition is hereby GRANTED and the challenged decision
and resolution of respondent NLRC dated January 6, 1998 and April 27, 1998
are hereby REVERSED and SET ASIDE. The complaint filed by private
respondent against petitioner is DISMISSED for lack of merit.
SO ORDERED.39
Alcazaren filed a motion for reconsideration of the decision, which the
appellate court denied.40
Alcazaren, now the petitioner, avers in his petition that:
I
THE COURT OF APPEALS GRAVELY ERRED IN GIVING DUE COURSE AND
GRANTING RESPONDENT’S PATENTLY DEFECTIVE PETITION FOR CERTIORARI.
IN DOING SO, THE COURT OF APPEALS DEPARTED FROM THE ACCEPTED AND
USUAL COURSE OF JUDICIAL PROCEEDINGS.
II
THE COURT OF APPEALS GRAVELY ERRED IN REVERSING THE DECISION AND
RESOLUTION OF THE NLRC AND IN DECLARING THAT PETITIONER WAS NOT
ILLEGALLY AND CONSTRUCTIVELY DISMISSED. IN DOING SO, THE COURT OF
APPEALS DECIDED THE CASE IN A MANNER NOT IN ACCORD WITH LAW OR
WITH APPLICABLE DECISIONS OF THE SUPREME COURT.41
On the first ground, the petitioner avers that the CA erred in granting the
respondent’s petition for certiorari under Rule 65 of the Rules of Court. He
avers that in a petition for certiorari, only a question of law or lack of
jurisdiction may be raised. The appellate court is not to reexamine the
evidence before the Labor Arbiter and reevaluate the probative weight of the
evidence of the parties. The petitioner maintains that the issues raised by the
respondent as the petitioner in the CA are factual, and the laws ascribed to
the NLRC were factual and not error of jurisdiction. He insists that the CA
should have dismissed the petition for certiorari.
The petitioner asserts that there is no factual basis for his dismissal from his
employment based on serious misconduct or willful disobedience. He
reiterated that as borne by his explanations submitted to respondent Univet
and the Personnel Committee, his absences at the conferences in Iloilo City
and Cebu City were justified.
The petition has no merit.
On the first issue, this Court has ruled that under Section 9 of Batas Pambansa
Blg. 129, as amended by Republic Act No. 7902, the CA, pursuant to the
exercise of its original jurisdiction over the petition for certiorari, was
specifically given the power to pass upon the evidence, if and when
necessary, to resolve factual issues.42 When factual findings of the NLRC are
contrary to those of the Labor Arbiter, the appellate court may review the
evidentiary facts.43 In this case, the factual findings of the Labor Arbiter were
reversed by the NLRC. Hence, the CA had to review the evidence of the parties
and determine for itself the evidentiary facts.
The general rule is that the factual findings of administrative tribunals, if
supported by substantial evidence, are accorded respect and even finality.
However, such general rule admits of an exception, such as where it is clear
that a palpable and demonstrable mistake that needs rectification has been
committed by the quasi-administrative tribunal.44 In the case at bench, the
CA found that the NLRC had misappreciated the evidence presented and had
committed grave abuse of discretion amounting to lack or excess of
jurisdiction in setting aside the Labor Arbiter’s decision.
On the petitioner’s suspension for being AWOL, the records show that the
petitioner had agreed thereto. Indeed, he informed the respondent that he
was reporting to his new station after serving his suspension.
The respondent could not be faulted for suspending the petitioner anew for
30 days pending resolution of the charges against him because he insisted on
keeping the service vehicle and accountable forms despite the respondent’s
repeated orders. The respondent had to spend for the reshipment of the
vehicle from Cebu City to Iloilo City where it was needed for the company’s
operational use. The petitioner gave up the possession of the vehicle only on
September 7, 1996 after he received the Personnel Committee Memorandum
dated September 6, 1996, requiring him to appear before the Committee for
insubordination. He even had the vehicle kept in Mandaue City.
The petitioner’s claim, that he did not return the vehicle despite the directives
of the management because he had acquired certain rights over the said
service vehicle under the Company’s Revised Motor Vehicle Replacement
Policy or Revised Motor Vehicle Option-to-Buy Policy, is merely an
afterthought. The petitioner had been ordered as early as August 12, 1996 to
turn over the vehicle to Poral or Banson or to Dr. Labaco for his operational
use. He refused to do so. In his Explanations dated August 5 and 14, 1996, the
petitioner did not claim that he had such option to acquire the vehicle. He
invoked for the first time that he had "certain rights" over the vehicle only on
September 3, 1996. In the meantime, instead of complying with the directive
of the management, the petitioner even had the vehicle shipped to Cebu City.
Even a cursory reading of the corporate guidelines45 will readily show that the
option of an officer of the company to purchase a second vehicle occurs only
when the car is retired. Even then, the officer has to accomplish the requisite
form and submit the same to the company for processing and approval.
However, the service vehicle still had one more year before it will be retired.
Indeed, the respondent had the vehicle assigned to Dr. Labaco for his
operational use. The petitioner never accomplished the requisite form. He
simply refused to return the vehicle and opted to defy the directives of the
respondent.
It was only after he was meted a 30-day suspension did the petitioner finally
turn over the vehicle to the respondent. He intentionally did not turn over
the vehicle to hold on to his non-existent option to buy it. The disobedience
of the petitioner was clearly willful, and as a result, the respondent lost its
trust and confidence in him.46
The petitioner had not yet been dismissed from his employment when he
filed his complaint against the respondent with the NLRC. He was expected
to report to his new assignment after serving his 30-day suspension, but
instead of requesting reconsideration thereof, or reporting for work after
such period, the petitioner filed a complaint against the respondent for illegal
dismissal.
The eventual termination of the petitioner’s employment is justified under
the respondent’s Company House Rules and under Article 282(a) and (c) of
the Labor Code, to wit:
ART. 282. Termination by employer. – An employer may terminate an
employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful
orders of his employer or representative in connection with his work;
…
(c) Fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative.
Thus, loss of trust and confidence is a valid ground for dismissing an
employee, provided that "the loss of confidence arises from particular proven
facts." Termination of employment on this ground does not require proof
beyond reasonable doubt of the employee's misconduct. It is sufficient that
there is some basis for the loss of trust or that the employer has reasonable
ground to believe that the employee is responsible for the misconduct which
renders him unworthy of the trust and confidence demanded by his parameters of the law and pursuant to the basic tenets of equity, justice and
position.47 It bears stressing that the petitioner is not an ordinary rank-and- fair play.
file employee. He was a sales representative, reposed with managerial duties
IN LIGHT OF ALL THE FOREGOING, the petition is hereby DENIED. The
in overseeing the respondent’s business in his assigned area. As a managerial
Decision of the Court of Appeals in CA-G.R. SP No. 51311 is AFFIRMED. Cost
employee, the petitioner was tasked to perform key and sensitive functions,
against the petitioner.
and thus "bound by more exacting work ethics."48 He should have realized
that such sensitive position required the full trust and confidence of his SO ORDERED.
employer in every exercise of managerial discretion insofar as the conduct of
the latter’s business is concerned.

In fact, the petitioner’s dealings with the respondent during his preventive
suspension were attended by bad faith. He had already filed his complaint
with the Labor Arbiter on September 23, 1996, and yet, on October 2, 1996,
he had the gall to ask the respondent to send him ₱10,000.00 traveling
allowance and a plane ticket to attend a scheduled meeting on October 8,
1996, per letter memorandum in the respondent’s office in Mandaluyong
City.49Upon receipt of the ₱10,000.00 check and the plane ticket, the
petitioner notified the respondent that he could no longer attend the
scheduled meeting as he had already filed a complaint for illegal/constructive
dismissal.50

The validity of the petitioner’s dismissal hinges on the satisfaction of the two
substantive requirements for a lawful termination of an employee's services,
to wit: (1) the employee was accorded due process, basic of which are
opportunity to be heard and to defend himself, and (2) the dismissal must be
for any of the causes provided in Article 282 of the Labor Code.51

In this case, the respondent complied with the twin procedural requirement
of written notices to effect a valid dismissal, viz.: (a) a notice of preventive
suspension was given to the petitioner apprising him of the acts and
omissions for which his dismissal was sought,52 and (b) a subsequent notice
after investigation informing the petitioner of the respondent’s decision to
dismiss him.53 The petitioner preempted a formal investigation and opted to
file his complaint against the respondent thereby rendering a formal
investigation moot and academic.

In fine, the respondent had sufficiently discharged its burden of proving that
the dismissal of the petitioner was for just cause, that it was made within the
LINGNER & FISHER GMBH vs IAC
G.R. No. L-63557 October 28, 1983
LINGNER & FISHER GMBH, petitioner,
vs.
INTERMEDIATE APPELLATE COURT, HON. RICARDO L. PRONOVE JR. and
PHILIPPINE CHEMICAL LABORATORIES, INC., respondents.
Romulo, Mabanta, Buenaventura & Sayoc & De los Reyes Law Office for
petitioner.
Bueno, Bilog and Villa Law Office for respondent.
RESOLUTION
MELENCIO-HERRERA, J.:
The factual background of this case may be stated as follows: DEUTCHE
MILCHWERKE DR. A. SAUER (DMW for brevity) was a firm in West Germany
manufacturing PRODUCTS (probably chemicals) under the trademarks
FISSAN, etc. Private respondent Philippine Chemical Laboratories, Inc.
(PHILCHEM, for brevity) is a local company which apparently also
manufactures and sells chemicals.
On February 28, 1963, DMW and PHILCHEM executed a so-called Agency
AGREEMENT the basic provision of which was that PHILCHEM would be the
exclusive importer of the PRODUCTS into the Philippines. The benefit to
PHILCHEM would be the profits realized from re-sale in this country of
imported PRODUCTS. Other relevant provisions, generally stated, were that:
(a) The term of the AGREEMENT was five years renewable automatically for
five years each time unless one party gives due notice of termination to the
other.
(b) PHILCHEM could manufacture the PRODUCTS locally with raw materials
from sources other than LINGNER, but in such case DMW will have to be paid
5% of 80% of PHILCHEM's wholesale prices.
(c) After termination of the AGREEMENT, PHILCHEM will be entitled, for five
years, to 10% royalty on sales of PRODUCTS in the Philippines (hereinafter to
be referred to as the ROYALTY CLAUSE).
(d) "All legal settlements within the compass of this AGREEMENT shall fall
under the jurisdiction of Philippine courts."
It appears that, subsequently, the DMW interests were acquired by LINGNER
& FISHER GMBH LINGNER for brevity). On other hand, LINGNER was a
subsidiary of
BEECHAM GROUP LTD. which, through BEECHAM PRODUCTS
INTERNATIONAL (BEECHAM, for brevity), had opened an office in this country
at Unit A, Padilla Building, Emerald Avenue, Pasig, Metro Manila, under the
supervision or managership of one named TANNER. LINGNER and BEECHAM
can be deemed to constitute a single personality. Subsequent reference to
LINGNER will include reference to DMW and BEECHAM.
The AGREEMENT was automatically renewed once, or up to February 28,
1973, and finally terminated on August 31, 1977. The events relative to the
termination were as follows:
Before February 28, 1973, the parties agreed to extend the AGREEMENT up
to February 28, 1975. If it is not terminated by prior notice six months before
February 28, 1975, as it was not, it would be extended for a further two years
up to February 28, 1977.
By letter dated February 25, 1977, through the law firm of Ozaeta Romulo,
De Leon, Mabanta, Buenaventura, Sayoc and De los Angeles (the Law Firm,
for brevity) PHILCHEM was advised that LINGNER was interested in
continuing business relationship with PHILCHEM and will be interested in
negotiating a new contract and that, prior to the signing of a new contract,
LINGNER was proposing that the old contract be extended by mutual
agreement for a period of six (6) calendar months beginning March 1, 1977
to expire automatically on August 31, 1977 if no contract is entered into. The
proposal was accepted by PHILCHEM, and no new contract having been
signed by August 31, 1977, the AGREEMENT terminated on that date,
On July 20, 1979, PHILCHEM presented a claim to LINGNER for P1,055,000.00
under the ROYALTY CLAUSE. The claim was discussed between PHILCHEM and
TANNER of BEECHAM with the intervention of the Law Firm. No settlement
having been arrived at, PHILCHEM, on August 6, 1980, filed a complaint
against BEECHAM alone in Civil Case No. 38086 of the then Court of First
Instance of Rizal. The summons issued could not be served on BEECHAM, the
Sheriff having reported that BEECHAM was neither a company registered in
the Philippines, nor resident at the given address of Unit A, Padilla Building,
Emerald Avenue, Pasig, Metro Manila.
PHILCHEM then filed an amended complaint, this time making LINGNER and
BEECHAM as the defendants, and pleading that summons could be served on
the Law Firm as an agent of the defendants. The Law Firm submitted a special
appearance in the case on behalf of LINGNER, and, also on behalf of LINGNER,
moved for dismissal on the grounds (a) that LINGNER was not a foreign
corporation doing business in the Philippines and hence could not be sued
locally, and, (b) that LINGNER could not be served with summons through the
Law Firm. It will thus be noted that two issues were being raised. The first was
whether or not LINGNER was doing business in the Philippines; and the
second was whether or not LINGNER could be validly summoned through the
Law Firm as its agent. The Trial Court denied the Motion to Dismiss, assuming
that LINGNER could be sued in this jurisdiction, and holding that LINGNER can
be served with summons through the Law Firm.
LINGNER went on certiorari to the Intermediate Appellate Court where it
reiterated the plea that summons could not be validly served on it through
the Law Firm; and it also requested that a hearing be held, conformably to
the provisions of Section 9(3) of Batas Pambansa Blg. 129, on the question of
whether or not LINGNER was doing business in this country.
The Appellate Court held that summons served through the Law Firm was
valid on the strength of Johnlo Trading Co. vs. Flores (88 Phil. 741 [1951]); and
it further ruled that receiving evidence on whether or not LINGNER was doing
business in the Philippines could not be justified under the cited Batas
Pambansa Blg. 129.
Considering the Comment, Reply, Rejoinder and Surrejoinder submitted by
the parties, we resolved to give due course, without requiring the submittal
of memoranda.
The Appellate Court acted correctly in denying the request for an evidentiary
hearing. Evidence necessary in regards to factual issues raised in cases falling
within the Appellate Court's original and appellate jurisdiction contemplates
"incidental" facts which were not touched upon, or fully heard by the trial or
respondent Court. The law could not have intended that the Appellate Court
would hold an original and full trial of a main factual issue in a case, which
properly pertains to Trial Courts.
It is our view that evidence as to whether LINGNER was doing business in the
Philippines, even before the Trial Court, is no longer necessary in view of the
fact that PHILCHEM and LINGNER were contractees in the AGREEMENT and
the claim of PHILCHEM is based on the ROYALTY CLAUSE of that AGREEMENT.
Whether LINGNER is or is not doing business in the Philippines will not matter
because the parties had expressly stipulated in the AGREEMENT that all
controversies based on the AGREEMENT "shall fall under the jurisdiction of
Philippine courts". In other words, there was a covenant on venue to the
effect that LINGNER can be sued by PHILCHEM before Philippine Courts in
regards to a controversy related to the AGREEMENT.
A case should not be dismissed simply because an original summons was
wrongfully served. It should be difficult to conceive, for example, that when
a defendant personally appears before a Court complaining that he had not
been validly summoned, that the case filed against him should be dismissed.
An alias summons can be actually served on said defendant.
For the expeditious determination of this controversy, therefore, in view of
the insufficiency of evidence that LINGNER is doing business in the
Philippines, which is a sine qua non requirement under the provision of
Section 14, Rule 14 1 of the Rules before service of process can be effected
upon a foreign corporation and jurisdiction over the same may be acquired,
it is best that alias summons on LINGNER be issued, in this case under the
provisions of Section 17, Rule 14, 2 in relation to Rule 4 of the Rules of Court,
which recognizes the principle that venue can be agreed upon by the parties.
If a local plaintiff and a foreign corporation have agreed on Philippine venue,
summons by publication can be made on the foreign corporation under the
principle of liberal construction of the rules to promote just determination of
actions.
ACCORDINGLY, the judgment under review of the Intermediate Appellate
Court (Third Special Cases Division) is hereby upheld insofar as it sustained
the Orders, dated August 24, 1981 and December 18, 1981, of the then Court
of First Instance of Rizal, Branch XI, Pasig, denying petitioner's Motion to
Dismiss and the subsequent Motion for Reconsideration, albeit on grounds
different from those relied upon by the Intermediate Appellate Court. The
now Regional Trial Court, to which the case below has been assigned, is
hereby directed to allow private respondent Philippine Chemical
Laboratories, Inc., to apply for the issuance of alias summons on petitioner
Lingner and Fischer GMBH by publication under the provisions of Section 17,
Rule 14 in relation to Rule 4 of the Rules of Court, and after issues have been
joined, to proceed to trial and judgment accordingly.

No pronouncement as to costs.

SO ORDERED.
WIDOWS & ORPHANS ASSOCIATION INC vs CA
G.R. No. 91797 August 28, 1991
WIDOWS AND ORPHANS ASSOCIATION, INC., petitioner,
vs.
COURT OF APPEALS and ORTIGAS & COMPANY LIMITED
PARTNERSHIP, respondents.
Quijano & Padilla for petitioner.
Santiago & Santiago for private respondent.
Jose Teodorico V. Molina for intervenor-oppositor.
BIDIN, J.:
From the decision rendered by respondent court dated November 27, 1989,
declaring respondent Ortigas and Company Limited Partnership (Ortigas) as
the registered owner of the disputed parcel of land, petitioner Widows and
Orphans Association, Inc. (Widora), interposes this petition for review
seeking ng to annul the aforesaid judgment and prays that the case be
remanded to the trial court and there be tried on the merits. The facts, as
found by respondent court, are as follows:
On August 27, 1974, respondent Widora filed LRC Case No. Q-336 before the
respondent (trial) court an application for registration of title of a parcel of
land as shown in Plan No. LRC (SWO)-l5352. Widora alleged that the parcel of
land is covered by Titulo de Propriedad Numero 4136, dated April 25, 1894,
issued in the name of the deceased Mariano San Pedro y Esteban. Later, on
June 14, 1978, Widora filed an amended application for registration of the
said parcel of land. It alleged that the parcel of land is situated at Malitlit-
Uoogong, Quezon City, with an area of 156 hectares, more or less, described
in Plan No. LRC (SWO)-15352; and that the applicant acquired said property
from the heirs of Don Mariano San Pedro on December 12, 1954. The
amended application prayed that said parcel of land be ordered registered in
the name of Widora.
On August 25, 1978, respondent Dolores Molina filed an opposition, claiming
ownership over 12 to 14 hectares of Lot 8 (LRC) SWO-15352, and praying for
a decree of registration over said portions of Lot 8.
On October 24, 1978, petitioner Ortigas filed a motion to dismiss the case
alleging, among others, that respondent court had no jurisdiction over the
case, the land being applied for having been already registered under the
Torrens System and in the name of Ortigas under TCT 77652 and TCT 77653.
On April 20, 1979, the respondent (trial) court issued an order directing the
applicant to prove its contention that TCT 77652 and TCT 77653 are not
proper derivatives of the original certificates of titles from which they were
purportedly issued, and setting the case for hearing on June 28, 1979, at 8:30
a.m.
On June 27, 1979, petitioner Ortigas filed a motion for reconsideration of said
order of April 20, 1979, alleging that a Torrens title becomes indefeasible
after a year and that the same becomes conclusive upon the entire world;
that the Land Registration Commission itself has advised the court that the
156 hectare property sought to be registered is covered by valid and
subsisting titles in the name of Ortigas; that Courts of First Instance and the
appellate courts in previous cases had sustained the Ortigas titles over the
land in question.
On October 3, 1979, the motion for reconsideration of petitioner Ortigas was
denied by the respondent (trial) court, but the latter set the motion to dismiss
for hearing on October 18 and 19, 1979 at 8:30 a.m., for the purpose of
enabling the applicant to prove its contention that TCT Nos. 77652 and 77653
are not proper derivatives of the original certificates of title from which they
were purportedly issued.
The parties presented their testimonial and documentary evidence before
the respondent (trial) court in support of their respective positions.
On March 30, 1988, the respondent (trial) court denied the motion to dismiss
of petitioner Ortigas, holding, among others, that TCT 77652 and TCT 77653
on their face show that they were derived from OCT 337, 19, 336, 334,
pursuant to Decree 1425; that if there was error in the correct number of OCT
on said titles, no step or measure to rectify the same was taken; that Decree
No. 1425 shows that it covers a total area of only 17 hectares, more or less,
located in Sta. Ana, Manila, which was four kilometers away from the land
subject of the application for registration which covers an area of 156
hectares, more or less, described in Plan No. LRC (SWO)-15352 situated at
Malitlit-Uoogong, Quezon City; that the contention of Ortigas that Decree No.
1425 covers an area in Manila and also a part of Rizal is not credible, for if this
were true then the area of said Rizal portion should appear on the face of said
decree of registration, which is not the case; that TCT 77652 and TCT 77653
were not derived from any decree of registration, and that the said TCTs being
null and void, cannot be used as basis to contest the right of the applicant to
apply for registration over the subject land. The order of March 30, 1988, in
its dispositive portion stated:
"WHEREFORE, premises considered, the Omnibus Motion dated October 4,
1978 and Motion to Dismiss, dated, October 23, 1978 filed by oppositor
Ortigas & Company, Limited Partnership are both DENIED for lack of merit;
while this Court's order of September 15, 1978 directing the City Assessor of
Quezon City to issue a separate tax declaration corresponding to the 12 or 14
hectares which is an undivided portion of the land applied for registration and
now belonging to the said Dolores V. Molina; further, authorizing the City
Treasurer of Quezon City to accept the corresponding realty taxes due
thereon; and further the said Dolores V. Molina is allowed to intervene in
these proceedings, is hereby affirmed; likewise, the City Treasurer is directed
to accept the whole of the taxes due on the property subject of the instant
petition from applicants Widows & Orphans Association, Inc., as prayed for in
its Manifestation with Motion subject to the right of the oppositor Dolores V.
Molina as contained in this Court's order of September 15, 1978."
On April 26, 1988, petitioner Ortigas filed a motion for reconsider
consideration of the said order of March 30, 1988, taking exception to the
ruling that TCT Nos. 77652 and 77653 are null and void, and alleging, among
others, that respondent (trial) court had no jurisdiction to hear an application
for registration of a previously registered land; that the parcels of land
applied for are covered by TCT 77652 and TCT 77653 in the name of Ortigas;
that the parcels of land covered by TCT 77652 and TCT 77653 are within the
parcel of land covered by OCT 351; and that OCT 351 is a copy of Decree No.
1425 issued on April 26, 1905. The motion for reconsideration prayed the
respondent court to reconsider its order of March 30, 1988 on the ground
that it had no jurisdiction over the application for registration, the parcels of
land subject thereof being already covered by Torrens Certificates of Title.
On May 19, 1989, the respondent (trial) court issued an order, denying the
motion for reconsideration of Ortigas, and setting the hearing on the merits
on July 26, 1989, ... for the "eventual presentation of the parties' respective
evidence respecting their alleged ownership of the property subject of this
petition." (Rollo, pp. 24-26)
Not satisfied, respondent Ortigas instituted an action for certiorari,
prohibition and mandamus before respondent court praying for the
annulment of the March 30, 1988 and May 19, 1989 orders of the trial court.
It also prayed that the trial court be ordered to dismiss the land registration
case.
On November 27, 1989, respondent court rendered the decision sought to be
reviewed, the decretal portion of which reads:
WHEREFORE, the petition for certiorari, prohibition and mandamus of
petitioner Ortigas & Company Limited Partnership is GRANTED. The orders of
March 30, 1988 and May 19, 1989 of the Regional Trial Court of Quezon City,
Branch 83, in LRC Case No. Q-336, are REVERSED and ANNULLED, and said
LRC Case No. Q-336 is DISMISSED. The injunction issued by the Court, per
Resolution of August 8, 1989, is made permanent. (Rollo, p. 35)
Based on the plan and other evidence submitted by respondent Ortigas at the
hearing of its application for preliminary injunction to enjoin the trial court
from proceeding with the hearing of LRC Case No. Q-336, respondent court
held that TCT Nos. 77652 and 77653, albeit reflecting their origins as OCT Nos.
337, 19, 336 and 334, are actually derivatives of OCT No. 351, the latter having
been issued pursuant to Decree 1425 and that since OCT 351 is allegedly a
copy of Decree 1425, the mere fact that the original copy of Decree 1425, or
a certified copy thereof, can no longer be located or produced, does not mean
that Decree 1425 covering the lots embraced in TCT Nos. 77652 and 77653
was not issued. Concluding, respondent court said:
It may be that TCT 77652 and 77653 do not show on their face (sic) that they
were derived from OCT 351. But the fact remains, as shown above, that the
parcel of land covered by OCT 351 embraced the parcels of land, Lots 7 and
8, of TCT 77652 and 77653. There was, therefore a mistake in the entries in
TCT 77652 and 77653 when the same referred to OCTs 337, 19, 336, 337 (sic)
and 334, as their source, for the correct OCT insofar as Lots 7 and 8 are
concerned, should be OCT 351. (Rollo, p. 27)
In this petition, petitioner WIDORA avers that the respondent Court of
Appeals has decided questions of substance contrary to law and the
applicable decisions of this Court because:
I testimony of its surveyor and OCT 351) adduced by private respondent to
THE COURT OF APPEALS INSISTED IN UPHOLDING THE EXISTENCE OR
VALIDITY OF TCTs 77652 and 77653 DESPITE THE ABSENCE OF A SUPPORTING
DECREE OF REGISTRATION.
II
THE QUESTIONED DECISION UTILIZED SECONDARY EVIDENCE DESPITE THE
EXISTENCE AND AVAILABILITY OF THE ORIGINAL DOCUMENT.
III
THE RESPONDENT COURT HAS NO POWER OR AUTHORITY TO ENJOIN THE
TRIAL ON THE MERITS OF LRC NO. Q-336 SINCE JURISDICTION RESIDES WITH
THE RTC ACTING AS A LAND REGISTRATION COURT.
In essence, it is the contention of petitioner that respondent court's grounds
and reasoning in support of its findings that respondent Ortigas is the
registered owner of the disputed property are baseless in law and fact.
Petitioner argues that respondent court erred in sustaining the validity of
TCTs Nos. 77652 and 77653 despite the absence of a supporting decree of
registration and instead utilized secondary evidence, OCT 351 which is
supposedly a copy of Decree 1425. Petitioner maintains that Decree 1425 is
itself existing and available at the Register of Deeds of Manila and on its face
shows that it covers a parcel of land with an area of only 17 hectares in Sta.
Ana, Manila while the parcel of land applied for contains an area of 156
hectares, located at Malitlit-Uoogong Quezon City, four (4) kilometers away
from Sta. Ana, Manila and is certified by the Bureau of Lands and the Bureau
of Forestry as alienable and disposable.
Respondent Ortigas claims that respondent court committed no error in
rectifying the mistake in the entries in TCT Nos. 77652 and 77653 as regards
their sources and/or origins arguing that the correction was justified by the
fact that the plan of OCT 351 coincides with the parcels of land covered by
TCT Nos. 77652 and 77653; that OCT 351 was issued pursuant to Decree 1425
and that OCT 351 is a copy of the Decree itself.
We find the petition impressed with merit.
Undoubtedly, the evidence (i.e., plan submitted by respondent Ortigas,
prove the contents of Decree 1425 and admitted by respondent court is
merely secondary and should not have been admitted in the first place.
Before secondary evidence may be admitted, there must be 1) proof of the
execution of the original writing and 2) that it has been lost or destroyed or
cannot be produced in court or that it is in the possession of the adverse party
who has failed to produce it after reasonable notice (Michael and Co. v.
Enriquez, 33 Phil. 87 [1915]; Republic v. Court of Appeals, 73 SCRA 146
[1976]). Private respondent has not shown compliance with the above
requisites which would justify the admission of the secondary evidence used
and erroneously relied upon by respondent court.
Furthermore, the unilateral action of respondent court in substituting its own
findings regarding the extent of the coverage of the land included in TCT Nos.
77652 and 77653, ostensibly to correct the error in, and conform with, the
technical description found in OCT 351 based on the plan and other evidence
submitted by respondent Ortigas cannot be sustained. That function is
properly lodged with the office of the trial court sitting as a land registration
court and only after a full-dress investigation of the matter on the merits. It
is before the land registration court that private respondent must adduce the
proof that the disputed parcels of land is legally registered in its favor.
In Dioquino v. Intermediate Appellate Court (179 SCRA 163 [1989]), this Court
held that "(w)hile it is true that the Court of Appeals is vested with the 'power
to try cases and conduct hearings, receive evidence and perform any and all
acts necessary to resolve factual issues raised ..." (Sec. 9 [3], BP 129), there
was not even a request for evidentiary hearing filed in this case. The Court of
Appeals therefore should not have admitted said evidence without giving the
adverse party opportunity to present counter evidence, if any. Besides,
"evidence necessary in regards to factual issues raised in cases falling within
the Appellate Court's original and appellate jurisdiction contemplates
incidental facts which were not touched upon, or fully heard by the trial or
respondent Court. The law could not have intended that the Appellate Court
would hold an original and full trial of a main factual issue in a case, which
properly pertains to trial courts" (citing Lingner & Fisher GMBH v. IAC, 125
SCRA 522 [1983]). In the case at bar, it appears that the parties have yet to
fully present their respective evidence in support of their claims before the
trial court. As a matter of fact, the trial court had set the case for hearing on
the merits in its order dated May 19, 1989. What is more, the case involves a
vast tract of land consisting of 156 hectares, separately situated in two
outlaying localities (i.e., Quezon City and Sta. Ana, Manila.) The resolution of
this controversy calls for a full-blown trial on the merits if only to afford the
contending parties their respective days in court. Further, a ground for
dismissal based on disputed facts, as in this case is not proper in a motion to
dismiss (Spouses Jayme and Solidarios v. Alampay, 62 SCRA 131 [1975]).
In the case at bar, respondent Ortigas alleges that Decree 1425 embraces the
lots covered by its TCT Nos. 77652 and 77653 which are identical to the lots
applied for by petitioner. On the other hand, petitioner maintains that Decree
1425 covers a 17-hectare lot located at Sta. Ana, Manila while the lot applied
for is alienable and disposable as certified by the Bureau of Lands and by the
Bureau of Forestry and has an area of 156 hectares located in Quezon City
four (4) kilometers away from Sta. Ana, Manila. Hence, the necessity of a trial
on the merits to ascertain the disputed facts, i.e., whether the lot applied for
is covered by Decree No. 1425 or is alienable and disposable. Under Act 496,
it is the decree of registration issued by the Land Registration Commission
which is the basis for the subsequent issuance of the certificate of title by the
corresponding Register of Deeds that quiets the title to and binds the land
(De la Merced v. Court of Appeals, 5 SCRA 240 [1962]). Consequently, if no
decree of registration had been issued covering the parcel of land applied for,
then the certificate of title issued over the said parcel of land does not quiet
the title to nor bind the land and is null and void.
Besides, an order denying a motion to dismiss is merely interlocutory and,
unless it constitutes clearly a grave abuse of discretion or was issued without
or in excess of jurisdiction, the error, if any, should be corrected by appeal in
due time, after trial and judgment on the merits and not by the extraordinary
writ of prohibition (Moreno v. Macadaeg, 7 SCRA 700 [1963]; National
Investment and Development Corporation v. Aquino, 163 SCRA 53 [1988]).
Furthermore, on grounds of pre-maturity, interlocutory orders cannot be
decided by the appellate courts until the lower court shall have decided the
merit of the case. Thus, in Villegas v. Fernando (27 SCRA 1119 [1969]), this
Court held:
This first assigned error (assailing the personality of the appellees to ask for a
review of the decision and decree in the registration case) is actually directed
at an earlier order dated 26 April 1961 denying appellants heirs' motion to
dismiss the petitions for review filed by the present appellees. And inasmuch
as said order of 26 April 1961 is interlocutory, there being as yet no trial and
decision on the merits of the petition for review, it is premature to raise said
assigned error in appellants heirs' instant appeal. We shall rule thereon only
when the proper time comes, i. e., after the lower court shall have settled not
only the still unresolved status and rights of the parties, particularly those of
petitioners (sic) for review, now appellees herein, almost all of whom are
claiming that they are not mere homestead or free patent applicants but
patent or title holders, but also whether the original decision should be
maintained or not. For the court below, after receiving and hearing the
parties, may still conclude in favor of appellants herein. (Emphasis supplied)
But not only that. Respondent court committed a procedural lapse in
correcting the alleged error in the questioned TCTs.1âwphi1 A certificate of
title cannot be altered, amended or cancelled except in a direct proceeding
in accordance with law (Sec. 48, PD 1529; Natalia Realty Corp. v. Vallez, 173
SCRA 534 [1989]; Legarda v. Saleeby, 31 Phil. 590 [1915]). Also, no correction
of certificate of title shall be made except by order of the court in a petition
filed for the purpose and entitled in the original case in which the decree of
registration was entered (Sec. 112, Act 496; now Sec. 108, PD 1529). While
the law fixes no prescriptive period therefor, the court, however, is not
authorized to alter or correct the certificate of title if it would mean the
reopening of the decree of registration beyond the period allowed by law
(Rodriguez, v. Tirona, 68 Phil. 264 [1939]).
Respondent Ortigas, on the other hand, argues that this Court has already
recognized the fact that the parcel of land under TCT No. 227758 from which
TCT Nos. 77652 and 77653 were issued, are covered by, among others,
Decree 1425 issued in GLRO Record No. 917 (Rollo, p. 94).
The argument is without merit True this Court declared in Ortigas &
Company, Limited Partnership v. Ruiz (148 SCRA 326 [1987]) that "petitioner
is the duly registered owner of the land * (then) in dispute as evidenced by
OCT Nos. 13, 33, 334, and 337 by virtue of Decrees Nos. 240, 1942 and 1925
issued in GLRO Record Nos. 699, 875 and 917 ..." Nowhere in said decision,
however, is a pronouncement that TCT Nos. 77652 and 77653 were issued
from TCT No. 227758. On the contrary, it is not disputed by the parties that
TCT Nos. 77652 and 77653 themselves show that they were derived from OCT
No. 337, 19, 336 and 334 and not from OCT 351 or TCT 227758. If indeed, the
real origin thereof is OCT No. 351, what respondent Ortigas should have done
was to file a petition for the correction of the TCTs in question as stated
earlier.
While it may be true, as respondent Ortigas argues, that a land registration
court has no jurisdiction over parcels of land already covered by a certificate
of title, it is nevertheless true that the aforesaid rule only applies where there
exists no serious controversy as to the certificate's authenticity visa vis the
land covered therein. In the case at bar, the claimed origin of the questioned
TCTs evidently appear to be different from what is stated therein. It does not
appear indubitable that the disputed parcels of land are properly reflected in
the TCTs relied upon by private respondent. Off-hand, and as the parties
admit, the TCTs do not show that they are actually derivatives of OCT 351.
Such being the case, the rule relied upon cannot therefore apply. One who
relies on a document evidencing his title to the property must prove not only
the genuineness thereof but also the identity of the land therein referred to
(CF. Lasam v. Director of Lands, 65 Phil. 637 [1938]). In the case at bar, private
respondent's TCT Nos. 77652 and 77653 trace their origins from OCT Nos.
337, 19, 336 and 334 and not from OCT 351 as it is now claimed by respondent
Ortigas.
the true owner of all the property described therein. If a person obtains a
title, under the Torrens System, which includes by mistake or oversight land
which cannot be registered under the Torrens System, he does not, by virtue
of said certificate alone, become the owner of the lands illegally included
(citing Legarda and Prieto v. Saleeby, 31 Phil. 590 [1915])." TMs
pronouncement was reiterated by the Court in Caragay-Layno v. Court of
Appeals (133 SCRA 718 [1984]; Coronel v. Intermediate Appellate Court (155
SCRA 270 [1987]; Goloy v. Court of Appeals (173 SCRA 26 [1989]; and Miranda
v. Court of Appeals (177 SCRA 303 [1989]). As it is in this case, a certificate of
title cannot be considered conclusive evidence of ownership where the
certificate itself is faulty as to its purported origin.
Further, the fact that respondent Ortigas' motion to dismiss was denied does
not mean that it could no longer participate in the resolution of the case and
factual determination of the parties' allegations. As correctly stated by the
trial court, "(i)t is to be stressed, however, that the denial of oppositor
Ortigas' instant motion for reconsideration does not necessarily mean that it
is deprived of any participation in the instant petition. For as already stated,
what follows after its denial is the eventual presentation of all the parties'
respective evidence respecting their alleged ownership of the property
subject of this petition." (Rollo, p. 65)
WHEREFORE, the assailed judgment of respondent court is SET ASIDE and the
orders of the trial court in LRC Case No. Q336 entitled, "In Re-Application for
Registration of Title, WIDOWS and ORPHANS ASSOCIATION, Inc., Applicant,
ORTIGAS & COMPANY LIMITED PARTNERSHIP and DOLORES V. MOLINA,
Oppositors", dated March 30, 1988 and May 19, 1989 are hereby REINSTATED
insofar as the denial of oppositor Ortigas' motion to dismiss and motion for
reconsideration, respectively, are concerned and the case remanded to the
trial court for trial and adjudication on the merits.
SO ORDERED.

The trial court cannot be faulted for not having granted respondent Ortigas'
motion to dismiss simply because the TCTs relied upon by the latter do not
accurately reflect their supposed origin. Thus, in Ledesma v. Municipality of
Iloilo (49 Phil. 769 [1926]) this Court held that the "simple possession of a
certificate of title, under the Torrens System, does not make the possessor
C. JURISDICTION OF THE REGIONAL TRIAL COURT
DURISOL PHILIPPINES, INC vs CA
G.R. No. 121106 February 20, 2002
DURISOL PHILIPPINES, INC., petitioner,
vs.
COURT OF APPEALS, HON. ADRIANO R. OSORIO, Judge, RTC, Branch 171,
Valenzuela, Metro Manila, DEVELOPMENT BANK OF THE PHILIPPINES,
MANILA FERTILIZERS, INC., POLAR MINES AND DEVELOPMENT
CORPORATION, SPOUSES ISABEL S. VILLARAMA and CONRADO D.
VILLARAMA, SPOUSES MARIBEL CABRALES and DANILO CABRALES,
ROLANDO ANG SEE, SPOUSES ALEXANDER GABRIEL and MARILOU GO
GABRIEL and REMEDIOS REYES, respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review of the decision of the Court of Appeals in CA-G.R.
SP No. 35069 dated January 20, 1995, dismissing petitioner Durisol
Philippines, Inc.’s petition for annulment of judgment.1
On January 17, 1962 and December 5, 1969, petitioner Durisol obtained
industrial loans from respondent Development Bank of the Philippines (DBP)
amounting to P1,213,000.00 and P2,698,800.00, respectively. As security
therefor, petitioner executed a mortgage on two parcels of registered land
located in Polo (now Valenzuela), Bulacan, covered by Transfer Certificates of
Title Nos. 29906 and 29909.
After petitioner defaulted in the payment of the loans, DBP instituted on
August 21, 1970 a petition for the extrajudicial foreclosure of mortgage. On
March 6, 1972, petitioner’s president, Rene Knecht, borrowed from DBP the
two TCT’s purportedly to obtain new titles in accordance with the approved
subdivision plan of the properties. DBP agreed provided that the bank’s
existing encumbrances, including the mortgage, shall be annotated on all the
new certificates of title.
In the meantime, the foreclosure sale was held, wherein DBP emerged as the
highest bidder. On October 9, 1973, the corresponding certificates of sale
were issued to DBP. Petitioner, however, filed a complaint for annulment of
the extrajudicial foreclosure before the then Court of First Instance (CFI) of
Valenzuela, Bulacan, docketed as Civil Case No. 605-V. The CFI rendered
judgment upholding the validity of the foreclosure. Petitioner appealed to the
Court of Appeals, which affirmed the decision of the CFI. The decision of the
Court of Appeals became final on April 30, 1975.
Petitioner was able to obtain TCT Nos. T-167751 and T-167752 in lieu of the
mother title, TCT No. 29906, and TCT Nos. T-187023 to T-187027 in lieu of the
other mother title, TCT No. 29909, all issued in its name.
Contrary to its promise, however, petitioner never returned the titles to the
properties to DBP. Thus, despite having purchased the properties at the
foreclosure sale, DBP was unable to register the property in its name. On
February 25, 1977, DBP instituted before the Court of First Instance of
Valenzuela, Bulacan, Branch VIII, a petition for surrender of the owner’s
duplicate titles covering the foreclosed properties, docketed as (AD) Case No.
35-V-77, LRC Record No. 5941.2
Petitioner filed its answer, raising the defenses that the petition fails to state
a cause of action; that it had already paid its loans to DBP; that it had a valid
adverse claim on the properties covered by the seven new titles; and that
DBP’s action was barred by laches and estoppel.3 DBP filed a reply alleging
that petitioner failed to exercise its right of redemption of the properties
which were sold at public auction after foreclosure of the mortgage thereof.
On April 15, 1977, the trial court rendered summary judgment, ordering
petitioner to surrender to the court within five days the seven certificates of
title.4 Petitioner filed a motion for reconsideration, which contained an
alternative prayer to record in the titles its adverse claim representing the
amount of improvements it introduced on the property.5 The lower court
denied petitioner’s motion for reconsideration in an Order dated August 22,
1977.6
Petitioner thus appealed to the Intermediate Appellate Court, docketed as
AC-G.R. CV No. 65324. On July 9, 1984, the IAC rendered a decision ordering
that the case be remanded to the lower court for further proceedings.7 The
IAC held that it was improper for the trial court to render summary judgment
because there were genuine issues involved. This decision became final and
executory.
Respondent DBP filed before the lower court a motion to dispense with the
proceedings and, instead, to pronounce judgment based on the admissions
contained in the pleadings and the decision of the IAC.8 This motion was
denied.9 The case was then set for hearing on November 15, 1988. On the
scheduled date, neither petitioner nor its counsel appeared despite due
notice. DBP was therefore allowed to present evidence ex parte.
On January 10, 1989, the trial court issued the following Resolution:
IN VIEW OF ALL THE FOREGOING, the Court hereby holds that the petition
should be granted and the respondent through its President and General
Manager is hereby ordered to surrender and deliver the owner’s duplicate of
Transfer Certificate of Title Nos. T-187023, T-187024, T-187025, T-187026, T-
187027, T-167751 and T-167752, all of Bulacan Registry, to the Clerk of Court,
or to the petitioner, within five (5) from receipt of this resolution.10
Sixteen days after receipt of the copy of the resolution, petitioner filed a
motion for reconsideration alleging that the ex parte presentation of
evidence, being akin to a judgment by default, was done in violation of its
right to due process. The lower court denied the motion for having been filed
out of time and for lack of notice of hearing.11
Respondent DBP, thus, filed a motion for execution, which was granted.12 The
writ, however, was returned unserved because petitioner was not found in
the address stated in the record. An alias writ of execution was issued against
petitioner’s president, Rene Knecht, but the latter refused to comply with the
order to surrender the titles. Hence, on motion of DBP, an Order was issued
on April 4, 1990 directing the Register of Deeds of Bulacan to cancel the seven
titles and to issue new ones in lieu thereof.13 Accordingly, new certificates of
title were issued to DBP.14
Thereafter, DBP sold the lots covered by TCT Nos. T-180723 to T-180727 and
T-167752 to respondent Manila Fertilizers, Inc.. The latter, in turn, sold the
lots covered by TCT Nos. T-108723 to T-108727 to respondent Polar Mines
and Development Corporation. On the other hand, the property included in
TCT No. T-167751 was sold by DBP to respondent spouses Villarama, for
which TCT Nos. V-18494 to V-18501 were issued, and to respondents Rolando
Ang See, Remedios Reyes, the spouses Cabrales and the spouses Go Gabriel.
More than four years later, or on September 2, 1994, petitioner instituted
before the Court of Appeals a petition to annul the trial court’s decision dated
January 10, 1989 and Resolution dated April 4, 1990, alleging for the first time
that the trial court had no jurisdiction over the case.15 Petitioner prayed that
the certificates of title issued in the names of all private respondents, except
DBP, be annulled and that TCT Nos. T-167751 and T-167752 and T-187023-
187027 be reinstated.
On January 20, 1995, the Court of Appeals rendered the now assailed decision
dismissing the petition for annulment of judgment.16 Petitioner Durisol’s
subsequent motion for reconsideration was likewise denied for lack of
merit.17 Hence this petition.
The issues raised in this petition are: (1) whether or not the trial court had
jurisdiction over the petition for issuance of new duplicate owner’s certificate
of title; and (2) whether or not petitioner was estopped from challenging the
court’s lack of jurisdiction.
The first paragraph of Rule 47, Section 2, of the 1997 Rules of Civil Procedure
provides:
Grounds for annulment. — The annulment may be based only on the ground
of extrinsic fraud and lack of jurisdiction.
At the outset, it should be stressed that in a petition for annulment of
judgment based on lack of jurisdiction, petitioner must show not merely an
abuse of jurisdictional discretion but an absolute lack of jurisdiction. Lack of
jurisdiction means absence of or no jurisdiction, that is, the court should not
have taken cognizance of the petition because the law does not vest it with
jurisdiction over the subject matter. Jurisdiction over the nature of the action
or subject matter is conferred by law.18
The regional trial court, formerly the court of first instance, is a court of
general jurisdiction. All cases, the jurisdiction over which is not specifically
provided for by law to be within the jurisdiction of any other court, fall under
the jurisdiction of the regional trial court. But the regional trial court is also a
court of limited jurisdiction over, among others, cadastral and land
registration cases. All proceedings involving title to real property,19 or
specifically land registration cases, including its incidents such as the issuance
of owner’s duplicate certificate of title, are matters cognizable by the regional
trial courts.20 It has been ruled that the regional trial courts have jurisdiction
over all actions involving possession of land, except forcible entry and illegal
detainer.21
Respondent DBP, after petitioner’s president unjustly refused to comply with
the directive of the trial court to surrender the seven certificates of title, filed
a petition under Section 107 of the Property Registration Decree (Presidential
Decree No. 1529), to wit:
Surrender of withheld duplicate certificates. --- Where it is necessary to issue
a new certificate of title pursuant to any involuntary instrument which divests
the title of the registered owner against his consent of where a voluntary
instrument cannot be registered by reason of the refusal or failure of the
holder to surrender the owner’s duplicate certificate of title, the party in
interest may file a petition in court to compel the surrender of the same to
the Register of Deeds. The court, after hearing, may order the registered
owner or any person withholding the duplicate certificate to surrender the
same, and direct the entry of a new certificate or memorandum upon such
surrender. If the person withholding the duplicate certificate is not amenable
to the process of the court, or if for any reason the outstanding owner’s
duplicate certificate cannot be delivered, the court may order the annulment
of the same as well as the issuance of a new certificate of title in lieu thereof.
Such new certificate and all duplicates thereof shall contain a memorandum
of the annulment of the outstanding duplicate.
The term "court" in the above-quoted section refers to Courts of First
Instance, now Regional Trial Courts, as provided in Section 2 of the Property
Registration Decree.
Even assuming arguendo that the regional trial court had no jurisdiction over
the surrender of duplicate title, petitioner can no longer raise this ground
after having actively participated in the prosecution of the case. A judgment
rendered by a trial court for alleged lack of jurisdiction cannot be considered
void where the party who has the right to challenge it failed to do so at the
first instance. In the case at bar, petitioner did not raise the defense of lack
of jurisdiction in its answer to respondent DBP’s petition for surrender of
owner’s duplicate certificate. Neither did petitioner file any motion to dismiss
on this ground. On the contrary, petitioner raised the affirmative defenses of
failure to state a cause of action and payment.22 To be sure, a court’s lack of
jurisdiction over the subject matter and the failure of the complaint to state
a cause of action are distinct and separate grounds for dismissal of a case.
As stated, petitioner actively participated in the course of the proceedings
both in the trial court and in the appellate court. In its motion for
reconsideration, petitioner assailed the merits of the decision without raising
any argument pertaining to lack of jurisdiction of the trial court. When the
case was elevated to the IAC and when the case was remanded to the trial
court, petitioner did not allege lack of jurisdiction. In its motion for
reconsideration of the trial court’s order directing the issuance of new
certificates of title, petitioner again failed to raise the ground of lack of
jurisdiction.
Indeed, it was only two decades after the institution of the case at bar, when
the issue of lack of jurisdiction was first raised. However, it is already too late
since the judgment had already attained finality, considering that more than
four years have elapsed without any action from petitioner.
Rule 47, Section 3 expressly provides that a petition for annulment of
judgment based on lack of jurisdiction must be filed before it is barred by
laches or estoppel. Hence, it has been held that while jurisdiction over the
subject matter of a case may be raised at any time of the proceedings, this
rule presupposes that laches or estoppel has not supervened. Thus:
This Court has time and again frowned upon the undesirable practice of a
party submitting his case for decision and then accepting the judgment, only
if favorable, and attacking it for lack of jurisdiction when adverse. Here, the
principle of estoppel lies. Hence, a party may be estopped or barred from
raising the question of jurisdiction for the first time in a petition before the
Supreme Court when it failed to do so in the early stages of the proceedings.23
Petitioner argues that the then CFI had no jurisdiction when the case was
remanded to it by the then IAC because as a cadastral court, the CFI had
limited jurisdiction. It should be noted, however, that when the CFI took
cognizance of the remanded case, the distinction between the CFI acting as a
land registration court with limited jurisdiction, on the one hand, and a CFI
acting as an ordinary court exercising general jurisdiction, on the other hand,
has already been removed with the effectivity of the Property Registration
Decree (PD 1529). The amendment was aimed at avoiding multiplicity of
suits. The change has simplified registration proceedings by conferring upon
the designated trial courts the authority to act not only on applications for
"original registration" but also "over all petitions filed after original
registration of title, with power to hear and determine all questions arising
from such applications or petition."24

WHEREFORE, based on the foregoing, the petition is DENIED. The Decision of

the Court of Appeals in CA-G.R. SP No. 35069 dated January 20 1995 is
AFFIRMED in toto.

SO ORDERED.
RUSSEL ET. AL vs VESTIL ET AL.
G.R. No. 119347 March 17, 1999
EULALIA RUSSELL, PUPERTO TAUTHO, FRANCISCO TAUTHO, SUSANA T.
REALES, APITACIO TAUTHO, DANILO TAUTHO, JUDITHA PROS, GREGORIO
TAUTHO, DEODITA T. JUDILLA, AGRIPINO TAUTHO, FELIX TAUTHO, WILLIAM
TAUTHO, AND MARILYN PERALES, petitioners,
vs.
HONORABLE AUGUSTINE A. VESTlL, ADRIANO TAGALOG, MARCELO
TAUTHO, JUANITA MENDOZA, DOMINGO BANTILAN, RAUL BATALUNA AND
ARTEMIO CABATINGAN, respondent.
KAPUNAN, J.:
Before us is a Petition for Certiorari to set aside the Order dated January 12,
1995 issued by respondent Judge Augustine A. Vestil of the Regional Trial
Court of Mandaue City, Branch 56, dismissing the complaint filed by
petitioners on ground of lack of jurisdiction, as well as his Order dated
February 13, 1995 denying petitioners' Motion for Reconsideration of the
order of dismissal.
The facts of the case are as follows:
On September 28, 1994, petitioners filed a complaint against private
respondents, denominated "DECLARATION OF NULLITY AND PARTITION,"
with the Regional Trial Court of Mandaue City, Branch 56, docketed as Civil
Case No. MAN-2275. The complaint, in substance, alleged that petitioners are
co-owners of that parcel of land, Lot 6149 situated in Liloan, Cebu and
containing an area of 56,977.40 square meters, more or less. The land was
previously owned by the spouses Casimero Tautho and Cesaria Tautho. Upon
the death of said spouses, the property was inherited by their legal heirs,
herein petitioners and private respondents. Since then, the lot had remained
undivided until petitioners discovered a public document denominated
"DECLARATION OF HEIRS AND DEED OF CONFIRMATION OF A PREVIOUS
ORAL AGREEMENT OF PARTITION," executed on June 6, 1990. By virtue of this
deed, private respondents divided the property among themselves to the
exclusion of petitioners who are also entitled to the said lot as heirs of the
late spouses Casimero Tautho and Cesaria Tautho. Petitioners claimed that
the document was false and perjurious as the private respondents were not
the only heirs and that no oral partition of the property whatsoever had been
made between the heirs. The complaint prayed that the document be
declared null and void and an order be issued to partition the land among all
the heirs. 1
On November 24, 1994, private respondents filed a Motion to Dismiss 2 the
complaint on the ground of lack of jurisdiction over the nature of the case as
the total assessed value of the subject land is P5,000.00 which under section
33 (3) 3 of Batas Pambansa Blg. 129, as amended by R.A. No. 7691, 4 falls
within the exclusive jurisdiction of the Municipal Circuit Trial Curt of Liloan,
Compostela. 5
Petitioners filed an Opposition to the Motion to Dismiss 6 saying that the
Regional Trial Court has jurisdiction over the case since the action is one
which is incapable of pecuniary estimation within the contemplation of
Section 19(1) of B.P. 129, as amended. 7
On January 12, 1995, the respondent judge issued an Order granting the
Motion to Dismiss. 8 A Motion for Reconsideration of said order was filed by
petitioners on January 30, 1995 alleging that the same is contrary to law
because their action is not one for recovery of title to or possession of the
land but an action to annul a document or declare it null and void, 9 hence,
one incapable of pecuniary estimation falling within the jurisdiction of the
Regional Trial Court. Private respondents did not oppose the motion for
reconsideration.
On February 13, 1995, the respondent judge issued another Order denying
the motion for reconsideration. 10
Hence, this petition wherein the sole issue raised is whether or not the
Regional Trial Court has jurisdiction to entertain Civil Case No. MAN-2275.
We find merit in the petition.
Petitioners maintain the view that the complaint filed before the Regional
Trial Court is for the annulment of a document denominated as
"DECLARATION OF HEIRS AND DEED OF CONFIRMATION OF PREVIOUS ORAL
PARTITION," which is clearly one incapable of pecuniary estimation, thus,
cognizable by the Regional Trial Court.
Private respondents, on the other hand, insists that the action is one for re-
partition and since the assessed value of the property as stated in the
complaint is P5,000.00, then, the case falls within the jurisdiction of the
Municipal Circuit Trial Court of Liloan, Compostela, Cebu.
For better appreciation of the facts, the pertinent portions of the complaint
are reproduced hereunder:
xxx xxx xxx
3. That the plaintiffs and the defendants are the legal heirs of spouses
Casimero Tautho and Cesaria N. Tautho who died long time ago;
4. That in life the spouses became the owners in fee simple of a certain parcel
of land, which is more particularly described as follows:
A parcel of land containing 56,97740 square meters, more or less, located at
Cotcot, Liloan, Cebu.
designated as Lot 6149 per Technical Description and Certification issued by
the Office of the Land Management copy of which are hereto attached as
Annexes "A" and "A-1" and are made part hereof: total assessed value is
P5,000.00;
5. That the passed to the children of the spouses (who are all deceased except
for defendant Marcelo Tautho), namely: Zacarias, Epifania, Vicenta,
Felecisimo, Maria, Lorencia and Marcelo, and which in turn passed to the
plaintiffs and defendants upon their death they being their descendants and
legal heirs;
6. That the subject parcel of land has for year been undivided by and among
the legal heirs of said previous owners;
7. That, very recently, plaintiffs discovered a public document, which is a
declaration of heirs and deed of confirmation of a previous oral agreement of
partition, affecting the land executed by and among the defendants whereby
defendants divided the property among themselves to the exclusion of
plaintiffs who are entitled thereto; attached hereto as Annex "B" and is made
part hereof is xerox copy of said document;
8. That the instrument (Annex "B") is false and perjurious and is a complete
nullity because the defendants are not the only heirs of Casimero Tautho;
plaintiffs are also heirs and descendants of said deceased; moreover, there
has been no oral partition of the property;
9. That pursuant to said document (Annex "B"), defendants had procured tax
declarations of the land for their supposed "shares" to the great damage and
prejudice of plaintiffs;
10. That the property in controversy should be divided into seven (7) equal
parts since Casimero Tautho and Cesaria N. Tautho had seven children;
11. That the parties had failed to settle the controversy amicably at the
barangay level; attached hereto as Annex "C" is Certification to file Action;
12. That by reason of the foregoing unjust and illegal act of defendants,
plaintiffs were forced to bring instant action and contract the services of the
undersigned counsel with whom they bind themselves to pay P30,000.00 as
attorney's fees.
WHEREFORE, it is most respectfully prayed of this Honorable Court to declare
null and void the document (Annex "B") of declaration of heirs and
confirmation and to order the partition of the land into seven (7) equal parts;
each part shall respectively go to the seven (7) children of Casimero Tautho
and considering six (6) of them died already the same shall go to their children
or descendants, and to order the defendants to pay plaintiffs attorney's fees
in the amount of P30,000.00.
Plaintiffs further pray for such other reliefs and remedies just and equitable
under the premises. 11
We agree with petitioners.
The complaint filed before the Regional Trial Court is doubtless one incapable
of pecuniary estimation and therefore within the jurisdiction of said court.
In Singsong vs. Isabela Sawmill, 12 we had the occasion to rule that:
[I]n determining whether an action is one the subject matter of which is not character of the relief sought, irrespective of whether the plaintiff is entitled
capable of pecuniary estimation this Court has adopted the criterion of first to all or some of the claims asserted therein. 19
ascertaining the nature of the principal action or remedy sought. If it is
WHEREFORE, premises considered, the petition is hereby GRANTED. The
primarily for the recovery of a sum of money, the claim is considered capable
Order dismissing Civil Case No. MAN-2275, as well as the Order denying the
of pecuniary estimation, and whether jurisdiction is in the municipal courts
motion for reconsideration of said Order, is SET ASIDE.
or in instance would depend on the amount of the claim. However, where the
basic issue is something other than the right to recover a sum of money, The Regional Trial Court, Branch 56, Mandaue City is ORDERED to proceed
where the money claim is purely incidental to, or a consequence of, the with dispatch in resolving Civil Case No. MAN-2275. No costs.
principal relief sought, this Court has considered such where the subject of
the litigation may not be estimated in terms of money, and are cognizable SO ORDERED.
exclusively by courts of first instance (now Regional Trial Courts). 13

Examples of actions incapable of pecuniary estimation are those for specific

performance, support, or foreclosure of mortgage or annulment of
judgment; 14 also actions questioning the validity of a mortgage, 15 annulling
a deed of sale or conveyance and to recover the price paid 16 and for
rescession, which is a counterpart of specific performance. 17

While actions under Sec. 33(3) of B.P. 129 are also incapable of pecuniary
estimation, the law specifically mandates that they are cognizable by the
MTC, METC, or MCTC where the assessed value of the real property involved
does exceed P20,000.00 in Metro Manila, or P50,000.00, if located
elsewhere. If the value exceeds P20,000.00 or P50,000.00 as the case may be,
it is the Regional Trial Courts which have jurisdiction under Sec.
19(2). 18 However, the subject matter of the complaint in this case is
annulment of a document denominated as "DECLARATION OF HEIRS AND
DEED OF CONFIRMATION OF PREVIOUS ORAL PARTITION."

The main purpose of petitioners in filing the complaint is to declare null and
void the document in which private respondents declared themselves as the
only heirs of the late spouses Casimero Tautho and Cesaria Tautho and
divided his property among themselves to the exclusion of petitioners who
also claim to be legal heirs and entitled to the property. While the complaint
also prays for the partition of the property, this is just incidental to the main
action, which is the declaration of nullity of the document above-described.
It is axiomatic that jurisdiction over the subject matter of a case is conferred
by law and is determined by the allegations in the complaint and the
DEVORAH E. BARDILLON vs BRGY. MASILI OF CALAMBA
G.R. No. 146886 April 30, 2003
DEVORAH E. BARDILLON, petitioner,
vs.
BARANGAY MASILI OF CALAMBA, LAGUNA, respondent.
PANGANIBAN, J.:
An expropriation suit is incapable of pecuniary estimation. Accordingly, it falls
within the jurisdiction of regional trial courts, regardless of the value of the
subject property.
The Case
Before us is a Petition for Review1 under Rule 45 of the Rules of Court, seeking
to set aside the January 10, 2001 Decision and the February 5, 2001
Resolution of the Court of Appeals2 (CA) in CA-GR SP No. 61088. The
dispositive part of the Decision reads:
"WHEREFORE, premises considered, the present [P]etition for [C]ertiorari is
hereby DENIED DUE COURSE and accordingly DISMISSED, for lack of merit."3
The assailed Resolution4 denied petitioner's Motion for Reconsideration.
The Facts
The factual antecedents are summarized by the CA as follows:
"At the root of this present [P]etition is the controversy surrounding the two
(2) [C]omplaints for eminent domain which were filed by herein respondent
for the purpose of expropriating a ONE HUNDRED FORTY FOUR (144) square
meter-parcel of land, otherwise known as Lot 4381-D situated in Barangay
Masili, Calamba, Laguna and owned by herein petitioner under Transfer
Certificate of Title No. 383605 of the Registry of Deeds of Calamba, Laguna.
Petitioner acquired from Makiling Consolidated Credit Corporation the said
lot pursuant to a Deed of Absolute Sale which was executed by and between
the former and the latter on October 7, 1996.
"The first [C]omplaint for eminent domain, docketed as Civil Case No. 3648
and entitled 'Brgy. Masili, Calamba, Laguna v. Emelita A. Reblara, Eugenia
Almazan & Devorah E. Bardillon,' was filed before the Municipal Trial Court
of Calamba, Laguna ('MTC') on February 23, 1998, following the failure of
Barangay Masili to reach an agreement with herein petitioner on the
purchase offer of TWO HUNDRED THOUSAND PESOS (P200,000.00). The
expropriation of Lot 4381-D was being pursued in view of providing Barangay
Masili a multi-purpose hall for the use and benefit of its constituents.
"On March 5, 1999, the MTC issued an order dismissing Civil Case No. 3648
'for lack of interest' for failure of the [respondent] and its counsel to appear
at the pre-trial. The MTC, in its Order dated May 3, 1999, denied
[respondent's] [M]otion for [R]econsideration thereof.
"The second [C]omplaint for eminent domain, docketed as Civil Case No.
2845-99-C and entitled 'Brgy. Masili, Calamba, Laguna v. Devorah E. Bardillon'
was filed before Branch 37 of the Regional Trial Court of Calamba, Laguna
('RTC') on October 18, 1999. This [C]omplaint also sought the expropriation
of the said Lot 4381-D for the erection of a multi-purpose hall of Barangay
Masili, but petitioner, by way of a Motion to Dismiss, opposed this
[C]omplaint by alleging in the main that it violated Section 19(f) of Rule 16 in
that [respondent's] cause of action is barred by prior judgment, pursuant to
the doctrine of res judicata.
"On January 21, 2000, [the] Judge issued an order denying
petitioner's Motion to Dismiss, holding that the MTC which ordered the
dismissal of Civil Case No. 3648 has no jurisdiction over the said expropriation
proceeding.
"With the subsequent approval of Municipal Ordinance No. 2000-261 on July
10, 2000, and the submission thereof in compliance with [the] Judge's Order
dated June 9, 2000 requiring herein respondent to produce the authority for
the expropriation through the Municipal Council of Calamba, Laguna, the
assailed Order dated August 4, 2000 was issued in favor of Barangay Masili x
x x and, on August 16, 2000, the corresponding order for the issuance of
the [W]rit of [P]ossession over Lot 4381-D."5
Ruling of the Court of Appeals
In dismissing the Petition, the CA held that the Regional Trial Court (RTC) of
Calamba, Laguna (Branch 37)6 did not commit grave abuse of discretion in
issuing the assailed Orders. It ruled that the second Complaint for eminent
domain (Civil Case No. 2845-99-C) was not barred by res judicata. The reason
is that the Municipal Trial Court (MTC), which dismissed the first Complaint
for eminent domain (Civil Case No. 3648), had no jurisdiction over the action.
Hence, this Petition.7
The Issues
In her Memorandum, petitioner raises the following issues for our
consideration:
"A. Whether or not, the Honorable Respondent Court committed grave abuse
of discretion amounting to lack of jurisdiction when it denied and dismissed
petitioner's appeal;
"B. Whether or not, the Honorable Respondent Court committed grave abuse
of discretion when it did not pass upon and consider the pending Motion for
Reconsideration which was not resolved by the Regional Trial Court before
issuing the questioned Orders of 4 and 16 August 2000;
"C. Whether or not, the Honorable Respondent Court committed grave abuse
of discretion in taking the total amount of the assessed value of the land and
building to confer jurisdiction to the court a quo;
"D. Whether or not, the Honorable Respondent Court committed grave abuse
of discretion in ignoring the fact that there is an existing multi-purpose hall
erected in the land owned by Eugenia Almazan which should be subject of
expropriation; and
"E. Whether or not, the Honorable Respondent Court committed grave abuse
of discretion in failing to consider the issue of forum shopping committed by
Respondent Masili."8
Simply put, the issues are as follows: (1) whether the MTC had jurisdiction
over the expropriation case; (2) whether the dismissal of that case before the
MTC constituted res judicata; (3) whether the CA erred when it ignored the
issue of entry upon the premises; and (4) whether respondent is guilty of
forum shopping.
The Court's Ruling
The Petition has no merit.
First Issue:
Jurisdiction Over Expropriation
Petitioner claims that, since the value of the land is only P11,448, the MTC
had jurisdiction over the case.9
On the other hand, the appellate court held that the assessed value of the
property was P28,960.10 Thus, the MTC did not have jurisdiction over the
expropriation proceedings, because the amount involved was beyond the
P20,000 jurisdictional amount cognizable by MTCs.
An expropriation suit does not involve the recovery of a sum of money.
Rather, it deals with the exercise by the government of its authority and right
to take property for public use.11 As such, it is incapable of pecuniary
estimation and should be filed with the regional trial courts.12
This was explained by the Court in Barangay San Roque v. Heirs of Francisco
Pastor:13
"It should be stressed that the primary consideration in an expropriation suit
is whether the government or any of its instrumentalities has complied with
the requisites for the taking of private property. Hence, the courts determine
the authority of the government entity, the necessity of the expropriation,
and the observance of due process. In the main, the subject of an
expropriation suit is the government's exercise of eminent domain, a matter
that is incapable of pecuniary estimation.
"True, the value of the property to be expropriated is estimated in monetary
terms, for the court is duty-bound to determine the just compensation for it.
This, however, is merely incidental to the expropriation suit. Indeed, that
amount is determined only after the court is satisfied with the propriety of the
expropriation."
"Verily, the Court held in Republic of the Philippines v. Zurbano that
'condemnation proceedings are within the jurisdiction of Courts of First
Instance,' the forerunners of the regional trial courts. The said case was
decided during the effectivity of the Judiciary Act of 1948 which, like BP 129
in respect to RTCs, provided that courts of first instance had original Reconsideration of the ruling dismissing the Complaint. We are not
jurisdiction over 'all civil actions in which the subject of the litigation is not persuaded.
capable of pecuniary estimation.' The 1997 amendments to the Rules of Court
The requirements for the issuance of a writ of possession in an expropriation
were not intended to change these jurisprudential precedents.14
case are expressly and specifically governed by Section 2 of Rule 67 of the
To reiterate, an expropriation suit is within the jurisdiction of the RTC 1997 Rules of Civil Procedure.18 On the part of local government units,
regardless of the value of the land, because the subject of the action is the expropriation is also governed by Section 19 of the Local Government
government's exercise of eminent domain — a matter that is incapable of Code.19 Accordingly, in expropriation proceedings, the requisites for
pecuniary estimation. authorizing immediate entry are as follows: (1) the filing of a complaint for
expropriation sufficient in form and substance; and (2) the deposit of the
Second Issue:
amount equivalent to 15 percent of the fair market value of the property to
Res Judicata
be expropriated based on its current tax declaration.20
Petitioner claims that the MTC's dismissal of the first Complaint for eminent
In the instant case, the issuance of the Writ of Possession in favor of
domain was with prejudice, since there was no indication to the contrary in
respondent after it had filed the Complaint for expropriation and deposited
the Order of dismissal. She contends that the filing of the second Complaint
the amount required was proper, because it had complied with the foregoing
before the RTC should therefore be dismissed on account of res judicata.
requisites.
Res judicata literally means a matter adjudged, judicially acted upon or
The issue of the necessity of the expropriation is a matter properly addressed
decided, or settled by judgment.15 It provides that a final judgment on the
to the RTC in the course of the expropriation proceedings. If petitioner
merits rendered by a court of competent jurisdiction is conclusive as to the
objects to the necessity of the takeover of her property, she should say so in
rights of the parties and their privies; and constitutes an absolute bar to
her Answer to the Complaint.21 The RTC has the power to inquire into the
subsequent actions involving the same claim, demand or cause of action.16
legality of the exercise of the right of eminent domain and to determine
The following are the requisites of res judicata: (1) the former judgment must whether there is a genuine necessity for it.22
be final; (2) the court that rendered it had jurisdiction over the subject matter
Fourth Issue:
and the parties; (3) it is a judgment on the merits; and (4) there is — between
Forum Shopping
the first and the second actions — an identity of parties, subject matter and
cause of action.17 Petitioner claims that respondent is guilty of forum shopping, because it
scouted for another forum after obtaining an unfavorable Decision from the
Since the MTC had no jurisdiction over expropriation proceedings, the
MTC.
doctrine of res judicata finds no application even if the Order of dismissal may
have been an adjudication on the merits. The test for determining the presence of forum shopping is whether the
elements of litis pendentia are present in two or more pending cases, such
Third Issue:
that a final judgment in one case will amount to res judicata in another.23
Legality of Entry Into Premises
Be it noted that the earlier case lodged with the MTC had already been
Petitioner argues that the CA erred when it ignored the RTC's Writ of
dismissed when the Complaint was filed before the RTC. Even
Possession over her property, issued despite the pending Motion for
granting arguendo that both cases were still pending, a final judgment in the
MTC case will not constitute res judicata in the RTC, since the former had no
jurisdiction over the expropriation case.

WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED.

Costs against petitioner.

SO ORDERED.
INIEGO vs PURGANAN ET AL
G. R. No. 166876 March 24, 2006
ARTEMIO INIEGO,1Petitioner,
vs.
The HONORABLE JUDGE GUILLERMO G. PURGANAN, in his official capacity
as Presiding Judge of the Regional Trial Court, Branch 42, City of Manila, and
FOKKER C. SANTOS, Respondents.
DECISION
CHICO-NAZARIO, J.:
For this Court to grant this petition for review on certiorari under Rule 45 of
the Rules of Court, petitioner has to persuade us on two engaging questions
of law. First, he has to convince us that actions for damages based on quasi-
delict are actions that are capable of pecuniary estimation, and therefore
would fall under the jurisdiction of the municipal courts if the claim does not
exceed the jurisdictional amount of P400,000.00 in Metro Manila. Second, he
has to convince us that the moral and exemplary damages claimed by the
private respondent should be excluded from the computation of the above-
mentioned jurisdictional amount because they arose from a cause of action
other than the negligent act of the defendant.
Petitioner urges us to reverse the 28 October 2004 Decision and 26 January
2005 Resolution of the Court of Appeals, Eighth Division, in CA-G.R. SP No.
76206 denying due course to the petition for certiorari filed by petitioner
under Rule 65, elevating the 21 October 2002 Omnibus Order and the 21
January 2003 Order of the Regional Trial Court (RTC), Branch 42, City of
Manila. The dispositive portion of the 28 October 2004 Decision of the Court
of Appeals reads:
WHEREFORE, the petition is DENIED DUE COURSE and DISMISSED for lack of
merit.2
The factual and procedural antecedents of this case are as follows:
On 1 March 2002, private respondent Fokker Santos filed a complaint for
quasi-delict and damages against Jimmy T. Pinion, the driver of a truck
involved in a traffic accident, and against petitioner Artemio Iniego, as owner
of the said truck and employer of Pinion. The complaint stemmed from a
vehicular accident that happened on 11 December 1999, when a freight truck
allegedly being driven by Pinion hit private respondent’s jitney which private
respondent was driving at the time of the accident.
On 24 August 2002, private respondent filed a Motion to Declare defendant
in Default allegedly for failure of the latter to file his answer within the final
extended period. On 28 August 2002, petitioner filed a Motion to Admit and
a Motion to Dismiss the complaint on the ground, among other things, that
the RTC has no jurisdiction over the cause of action of the case.
On 21 October 2002, public respondent Judge Guillermo G. Purganan, acting
as presiding judge of the RTC, Branch 42, Manila, issued the assailed Omnibus
Order denying the Motion to Dismiss of the petitioner and the Motion to
Declare Defendant in Default of the private respondent. Pertinent portions of
the Omnibus Order and the dispositive portion thereof read:
In his opposition to the motion to declare him in default and his Motion to
Admit defendant IÑEGO alleged that he never received the Order dated 12
August 2002. But believing in good faith, without being presumptuous, that
his 3rd Motion for additional Time to file or any appropriate [pleading] would
be granted, he filed the aforesaid Motion received by the Court on 23 August
2002.
The explanation of defendant IÑEGO has merit. The order dated 12 August
2002 was sent to a wrong address, thus defendant IÑEGO did not receive it.
Since it was not received, he was not aware that the court would grant no
further extension. The Motion to Admit Motion to Dismiss has to be granted
and the Motion to declare Defendant IÑEGO [in default] has to be DENIED.
xxxx
The plaintiff opines that this court has exclusive jurisdiction because the
cause of action is the claim for damages, which exceeds P400,000.00. The
complaint prays for actual damages in the amount of P40,000.00, moral
damages in the amount of P300,000.00, and exemplary damages in the
amount of P150,000.00. Excluding attorney’s fees in the amount
of P50,000.00, the total amount of damages being claimed is P490,000.00.
Proceeding on the assumption that the cause of action is the claim of (sic) for
damages in the total amount of P490,000.00, this court has jurisdiction. But
is the main cause of action the claim for damages?
This court is of the view that the main cause of action is not the claim for
damages but quasi-delict. Damages are being claimed only as a result of the
alleged fault or negligence of both defendants under Article 2176 of the Civil
Code in the case of defendant Pinion and under Article 2180 also of the Civil
Code in the case of defendant Iniego. But since fault or negligence (quasi-
delicts) could not be the subject of pecuniary estimation, this court has
exclusive jurisdiction.
xxxx
WHEREFORE, in view of all the foregoing, the motion to declare defendant
Iniego in default and the said defendant’s motion to dismiss are denied.3
On 7 November 2002, petitioner filed a Motion for Reconsideration of the
Omnibus Order of 21 October 2002. On 21 January 2003, public respondent
issued an Order denying petitioner’s motion for reconsideration. Pertinent
portions of the 21 January 2003 Order are reproduced hereunder:
What this court referred to in its Order sought to be reconsidered as not
capable of pecuniary estimation is the CAUSE OF ACTION, which is quasi-
delict and NOT the amount of damage prayed for.
xxxx
WHEREFORE, in view of the foregoing, the motion for reconsideration is
DENIED.4
Petitioner elevated the 21 October 2002 and 21 January 2003 Orders of the
RTC to the Court of Appeals on petition for certiorari under Rule 65 of the
Rules of Court. On 28 October 2004, the Court of Appeals promulgated the
assailed Decision, the dispositive portion thereof reads:
WHEREFORE, the petition is DENIED DUE COURSE and dismissed for lack of
merit.5
On 22 November 2004, petitioner moved for reconsideration, which was
denied by the Court of Appeals on 26 January 2005. Hence, this present
petition.
Petitioner claims that actions for damages based on quasi-delict are actions
that are capable of pecuniary estimation; hence, the jurisdiction in such cases
falls upon either the municipal courts (the Municipal Trial Courts,
Metropolitan Trial Courts, Municipal Trial Courts In Cities, And Municipal
Circuit Trial Courts), or the Regional Trial Courts, depending on the value of
the damages claimed.
Petitioner argues further that should this Court find actions for damages
capable of pecuniary estimation, then the total amount of damages claimed
by the private respondent must exceed P400,000.00 in order that it may fall
under the jurisdiction of the RTC. Petitioner asserts, however, that the moral
and exemplary damages claimed by private respondent be excluded from the
computation of the total amount of damages for jurisdictional purposes
because the said moral and exemplary damages arose, not from the quasi-
delict, but from the petitioner’s refusal to pay the actual damages.
I
Actions for damages based on quasi-delicts are primarily and effectively
actions for the recovery of a sum of money for the damages suffered because
of the defendant’s alleged tortious acts, and are therefore capable of
pecuniary estimation.
In a recent case,6 we did affirm the jurisdiction of a Municipal Circuit Trial
Court in actions for damages based on quasi-delict, although the ground used
to challenge said jurisdiction was an alleged forum shopping, and not the
applicability of Section 19(1) of Batas Pambansa Blg. 129.
According to respondent Judge, what he referred to in his assailed Order as
not capable of pecuniary estimation is the cause of action, which is a quasi-
delict, and not the amount of damage prayed for.7 From this, respondent
Judge concluded that since fault or negligence in quasi-delicts cannot be the
subject of pecuniary estimation, the RTC has jurisdiction. The Court of
Appeals affirmed respondent Judge in this respect.8
Respondent Judge’s observation is erroneous. It is crystal clear from B.P. Blg.
129, as amended by Republic Act No. 7691, that what must be determined to
be capable or incapable of pecuniary estimation is not the cause of action,
but the subject matter of the action.9 A cause of action is "the delict or
wrongful act or omission committed by the defendant in violation of the
primary rights of the plaintiff."10 On the other hand, the "subject matter of
the action" is "the physical facts, the thing real or personal, the money, lands,
chattels, and the like, in relation to which the suit is prosecuted, and not the
delict or wrong committed by the defendant."11
The case of Lapitan v. Scandia, Inc., et al.,12 has guided this Court time and
again in determining whether the subject matter of the action is capable of
pecuniary estimation. In Lapitan, the Court spoke through the eminent Mr.
Justice Jose B.L. Reyes:
In determining whether an action is one the subject matter of which is not
capable of pecuniary estimation this Court has adopted the criterion of first
ascertaining the nature of the principal action or remedy sought. If it is
primarily for the recovery of a sum of money, the claim is considered capable
of pecuniary estimation, and whether jurisdiction is in the municipal courts
or in the courts of first instance [now Regional Trial Courts] would depend on
the amount of the claim. However, where the basic issue is something other
than the right to recover a sum of money, where the money claim is purely
incidental to, or a consequence of, the principal relief sought like suits to have
the defendant perform his part of the contract (specific performance) and in
actions for support, or for annulment of a judgment or to foreclose a
mortgage, this court has considered such actions as cases where the subject
of the litigation may not be estimated in terms of money, and are cognizable
exclusively by courts of first instance [now Regional Trial Courts]. x x
x.13 (Emphasis supplied.)
Actions for damages based on quasi-delicts are primarily and effectively
actions for the recovery of a sum of money for the damages suffered because
of the defendant’s alleged tortious acts. The damages claimed in such actions
represent the monetary equivalent of the injury caused to the plaintiff by the
defendant, which are thus sought to be recovered by the plaintiff. This money
claim is the principal relief sought, and is not merely incidental thereto or a
consequence thereof. It bears to point out that the complaint filed by private
respondent before the RTC actually bears the caption "for DAMAGES."
Fault or negligence, which the Court of Appeals claims is not capable of
pecuniary estimation, is not actionable by itself. For such fault or negligence
to be actionable, there must be a resulting damage to a third person. The
relief available to the offended party in such cases is for the reparation,
restitution, or payment of such damage, without which any alleged offended
party has no cause of action or relief. The fault or negligence of the
defendant, therefore, is inextricably intertwined with the claim for damages,
and there can be no action based on quasi-delict without a claim for damages.
We therefore rule that the subject matter of actions for damages based on
quasi-delict is capable of pecuniary estimation.
II
The amount of damages claimed is within the jurisdiction of the RTC, since it
is the claim for all kinds of damages that is the basis of determining the
jurisdiction of courts, whether the claims for damages arise from the same or
from different causes of action.
Despite our concurrence in petitioner’s claim that actions for damages based
on quasi-delict are actions that are capable of pecuniary estimation, we find
that the total amount of damages claimed by the private respondent
nevertheless still exceeds the jurisdictional limit of P400,000.00 and remains
under the jurisdiction of the RTC.
Petitioner argues that in actions for damages based on quasi-delict, claims for
damages arising from a different cause of action (i.e., other than the fault or
negligence of the defendant) should not be included in the computation of
the jurisdictional amount. According to petitioner, the moral and exemplary
damages claimed by the respondents in the case at bar are not direct and
proximate consequences of the alleged negligent act. Petitioner points out
that the complaint itself stated that such moral and exemplary damages
arose from the alleged refusal of defendants to honor the demand for
damages, and therefore there is no reasonable cause and effect between the
fault or negligence of the defendant and the claim for moral and exemplary
damages.14 If the claims for moral and exemplary damages are not included
in the computation for purposes of determining jurisdiction, only the claim
for actual damages in the amount of P40,000.00 will be considered, and the October 2004 and 26 January 2005, respectively, are AFFIRMED insofar as
MeTC will have jurisdiction. they held that the Regional Trial Court has jurisdiction. No costs.

We cannot give credence to petitioner’s arguments. The distinction he made SO ORDERED.

between damages arising directly from injuries in a quasi-delict and those
arising from a refusal to admit liability for a quasi-delict is more apparent than
real, as the damages sought by respondent originate from the same cause of
action: the quasi-delict. The fault or negligence of the employee and the juris
tantum presumption of negligence of his employer in his selection and
supervision are the seeds of the damages claimed, without distinction.

Even assuming, for the sake of argument, that the claims for moral and
exemplary damages arose from a cause of action other than the quasi-delict,
their inclusion in the computation of damages for jurisdictional purposes is
still proper. All claims for damages should be considered in determining the
jurisdiction of the court regardless of whether they arose from a single cause
of action or several causes of action. Rule 2, Section 5, of the Rules of Court
allows a party to assert as many causes of action as he may have against the
opposing party. Subsection (d) of said section provides that where the claims
in all such joined causes of action are principally for recovery of money, the
aggregate amount claimed shall be the test of jurisdiction.15

Hence, whether or not the different claims for damages are based on a single
cause of action or different causes of action, it is the total amount thereof
which shall govern. Jurisdiction in the case at bar remains with the RTC,
considering that the total amount claimed, inclusive of the moral and
exemplary damages claimed, is P490,000.00.

In sum, actions for damages based on quasi-delicts are actions that are
capable of pecuniary estimation. As such, they fall within the jurisdiction of
either the RTC or the municipal courts, depending on the amount of damages
claimed. In this case, the amount of damages claimed is within the jurisdiction
of the RTC, since it is the claim for all kinds of damages that is the basis of
determining the jurisdiction of courts, whether the claims for damages arise
from the same or from different causes of action.

WHEREFORE, the petition for review on certiorari is hereby DENIED for lack
of merit. The Decision and Resolution of the Court of Appeals dated 28
MENDOZA vs TEH
G.R. No. 122646 March 14, 1997
ADELIA C. MENDOZA, for herself and Administratix of the Intestate Estate
of the late NORBERTO B. MENDOZA, petitioners,
vs.
HON. ANGELITO C. TEH, Presiding Judge, Branch 87, RTC, Rosario, Batangas,
SPS. HERMINIO & CLARITA TAYAG @ SPS. GEORGE T. TIGLAO & CLARIZZA T.
TIGLAO and/or @ TEOFILO M. ESGUERRA, LEONOR M. ESGUERRA. LETICIA
M. ESGUERRA, JOEL M. ESGUERRA, RICARDO M. ESGUERRA, VOLTAIRE E.
TAYAG, BENITO I. TAYAG, MERLIE MALIG, ALBERTO T. TAYAG, ROSEMARIE
T. TAYAG, LETICIA E. LULU and the REGISTER OF DEED for the Province of
Batangas, respondents.
FRANCISCO, J.:
On October 28, 1994, petitioner "for herself and as administratrix of the
intestate estate" of her deceased husband Norberto Mendoza filed before
the Regional Trial Court (RTC) of Batangas a complaint for "reconveyance of
title (involving parcels of lot in Batangas) and damages with petition for
preliminary injunction" docketed as Civil Case No. R94-009.1 Paragraphs 2 and
3 of said complaint states:
2. That Adelia C. Mendoza likewise represents her co-plaintiff, the Intestate
Estate of the late Norberto B. Mendoza in her capacity as the surviving wife
of the deceased Norberto B. Mendoza who died on December 29, 1993;
3. That Adelia C. Mendoza should be appointed by this Honorable Court as
the judicial administratrix of her co-plaintiff for purposes of this case;2
Private respondents filed on January 21, 19953 their "answer with motion to
dismiss"4 alleging among others that the complaint states no cause of action
and that petitioner's demand had already been paid.5 On February 17, 1995,
private respondents filed another pleading entitled "motion to dismiss"
invoking, this time, lack of jurisdiction, lack of cause of action, estoppel,
laches and prescription. In support of their argument of lack of jurisdiction,
private respondents contend that a special proceedings case for appointment
of administratrix of an estate cannot be incorporated in the ordinary action
for reconveyance. In her opposition to the motions, petitioner asserts among
others, that the allegation seeking appointment as administratrix is only an
incidental matter which is not even prayed for in the complaint. Replying to
the opposition, private respondents argued that since petitioner's husband
resided in Quezon City at the time of his death, the appointment of the estate
administratrix should be filed in the RTC of that place in accordance with
Section 1 Rule 73 of the Rules of Court. Accordingly, it is their argument that
the RTC of Batangas has no jurisdiction over the case.
In a Resolution dated June 14, 1995, the RTC of Batangas thru respondent
Judge Teh "dismissed without prejudice" the complaint for lack of jurisdiction
"on the ground that the rules governing an ordinary civil action and a special
proceeding are different." Accordingly, the lower court found it unnecessary
to discuss the other grounds raised in the motion to dismiss.6 Upon denial of
petitioner's motion for reconsideration, he filed this petition under Rule 45
on pure questions of law. The Court thereafter gave due course to the
petition.
The issue is whether or not in an action for reconveyance, an allegation
seeking appointment as administratrix of an estate, would oust the RTC of its
jurisdiction over the whole case?
We rule in the negative. First, Section 19 of B.P. 129 as amended by RA 7691
provides:
Jurisdiction in Civil Cases. — Regional Trial Courts shall exercise exclusive
original jurisdiction:
(1) In all civil actions in which the subject of the litigation is incapable of
pecuniary estimation;
(2) In all civil actions which involve the title to, or possession of, real property,
or any interest therein, where the assessed value of property involved
exceeds Twenty thousand pesos (P20,000.00). . .
xxx xxx xxx
(4) In all matters of probate, both testate and intestat . . . .
Likewise, Section 33 of the same law provides that:
Metropolitan Trial Court shall exercise:
(1) Exclusive original jurisdiction over civil actions and probate proceedings,
testate and intestate . . . (emphasis ours).
The above law is clear. An action for reconveyance, which involves title to
property worth millions of pesos, such as the lots subject of this case, is
cognizable by the RTC. Likewise falling within its jurisdiction are actions
"incapable of pecuniary estimation," such as the appointment of an
administratrix for an estate. Even the Rules on venue of estate proceedings
(Section 1 of Rule 737) impliedly recognizes the jurisdiction of the RTC over
petitions for granting of letters of administration. On the other hand, probate
proceedings for the settlement of estate are within the ambit of either the
RTC or MTC depending on the net worth of the estate. By arguing that the
allegation seeking such appointment as administratrix ousted the RTC of its
jurisdiction, both public and private respondents confuse jurisdiction with
venue. Section 2 of Rule 4 as revised by Circular 13-958 provides that actions
involving title to property shall be tried in the province where the property is
located, in this case, — Batangas. The mere fact that petitioner's deceased
husband resides in Quezon City at the time of his death affects only the venue
but not the jurisdiction of the Court.9
particular matter should be resolved by the RTC in the exercise of its general
jurisdiction or its limited probate jurisdiction, is not a jurisdictional issue but
a mere question of procedure.12 Moreover, the instant action for
reconveyance does not even invoke the limited jurisdiction of a probate
court. 13 Considering that the RTC has jurisdiction, whether it be on the
reconveyance suit or as to the appointment of an administratrix, it was
improper for respondent judge to dismiss the whole complaint for alleged
lack of jurisdiction.
Finally, judges should not dismiss with precipitate haste, complaints or
petitions filed before them, just so they can comply with their administrative
duty to dispose cases within 90 days at the expense of their judicial
responsibility.
WHEREFORE, the Resolutions dated June 14, 1995 and November 14, 1995 of
the RTC of Batangas are REVERSED and SET ASIDE. The trial court is ordered
to immediately proceed with the disposition of the case in accordance with
this Decision.
SO ORDERED.

Second, the cases cited 10 by private respondents are not at point as they
involve settlement of estate where the probate court was asked to resolve
questions of ownership of certain properties.In the present suit, no
settlement of estate is involved, but merely an allegation seeking
appointment as estate administratrix which does not necessarily involve
settlement of estate that would have invited the exercise of the limited
jurisdiction of a probate court. The above allegation is not even a
jurisdictional fact which must be stated in an action for reconveyance. The
Court therefore, should have at least, proceeded with the reconveyance suit
rather than dismiss the entire case.

Third, jurisprudential rulings that a probate court cannot generally decide

questions of ownership or title to property 11 is not applicable in this case,
because: there is no settlement of estate involved and the RTC of Batangas
was not acting as a probate court. It should be clarified that whether a
SPOUSES ROMEO PAJARES vs REMARKABLE LAUNDRY
G.R. No. 212690*
SPOUSES ROMEO PAJARES and IDA T. PAJARES, Petitioners
vs.
REMARKABLE LAUNDRY AND DRY CLEANING, represented by ARCHEMEDES
G. SOLIS, Respondent
DECISION
DEL CASTILLO, J.:
Breach of contract may give rise to an action for specific performance or
rescission of contract.1 It may also be the cause of action in a complaint for
damages filed pursuant to Art. 1170 of the Civil Code.2 In the specific
performance and rescission of contract cases, the subject matter is incapable
of pecuniary estimation, hence jurisdiction belongs to the Regional Trial Court
(RTC). In the case for damages, however, the court that has jurisdiction
depends upon the total amount of the damages claimed.
Assailed in this Petition for Review on Certiorari3 is the December 11, 2013
Decision4 of the Court of Appeals (CA) in CA-G.R. CEB SP No. 07711 that set
aside the February 19, 2013 Order5 of the RTC, Branch 17, Cebu City
dismissing Civil Case No. CEB-39025 for lack of jurisdiction.
Factual Antecedents
On September 3, 2012, Remarkable Laundry and Dry Cleaning (respondent)
filed a Complaint denominated as "Breach of Contract and Damages"6 against
spouses Romeo and Ida Pajares (petitioners) before the RTC of Cebu City,
which was docketed as Civil Case No. CEB-39025 and assigned to Branch 17
of said court. Respondent alleged that it entered into a Remarkable Dealer
Outlet Contract7 with petitioners whereby the latter, acting as a dealer outlet,
shall accept and receive items or materials for laundry which are then picked
up and processed by the former in its main plant or laundry outlet; that
petitioners violated Article IV (Standard Required Quota & Penalties) of said
contract, which required them to produce at least 200 kilos of laundry items
each week, when, on April 30, 2012, they ceased dealer outlet operations on
account of lack of personnel; that respondent made written demands upon
petitioners for the payment of penalties imposed and provided for in the
contract, but the latter failed to pay; and, that petitioners' violation
constitutes breach of contract. Respondent thus prayed, as fol1ows:
WHEREFORE, premises considered, by reason of the above-mentioned
breach of the subject dealer contract agreement made by the defendant, it is
most respectfully prayed of the Honorable Court to order the said defendant
to pay the following incidental and consequential damages to the plaintiff, to
wit:
a) TWO HUNDRED THOUSAND PESOS (PHP200,000.00) plus legal interest
as incidental and consequential [sic] for violating Articles IV and XVI of the
Remarkable Laundry Dealer Contract dated 08 September 2011.
b) Thirty Thousand Pesos (₱30,000.00) as legal expenses.
c) Thirty Thousand Pesos (₱30,000.00) as exemplary damages.
d) Twenty Thousand Pesos (₱20,000.00) as cost of suit.
e) Such other reliefs that the Honorable Court deems as just and
equitable.8 (Italics in the original)
Petitioners submitted their Answer,9 to which respondent filed its Reply.10
During pre-trial, the issue of jurisdiction was raised, and the parties were
required to submit their respective position papers.
Ruling of the Regional Trial Court
On February 19, 2013, the RTC issued an Order dismissing Civil Case No. CEB-
39025 for lack of jurisdiction, stating:
In the instant case, the plaintiffs complaint is for the recovery of damages for
the alleged breach of contract. The complaint sought the award of
₱200,000.00 as incidental and consequential damages; the amount of
₱30,000.00 as legal expenses; the amount of ₱30,000.00 as exemplary
damages; and the amount of ₱20,000.00 as cost of the suit, or for the total
amount of ₱280,000.00 as damages.
Under the provisions of Batas Pambansa Blg. 129 as amended by Republic Act
No. 7691, the amount of demand or claim in the complaint for the Regional
Trial Courts (RTCs) to exercise exclusive original jurisdiction shall exceed
₱300,000.00; otherwise, the action shall fall under the jurisdiction of the
Municipal Trial Courts. In this case, the total amount of demand in the
complaint is only ₱280,000.00, which is less than the jurisdictional amount of
the RTCs. Hence, this Court (RTC) has no jurisdiction over the instant
case.1âwphi1
WHEREFORE, premises considered, the instant case is hereby DISMISSED for
lack of jurisdiction.
Notify the counsels.
SO ORDERED.11 (Emphasis in the original)
12
Respondent filed its Motion for Reconsideration, arguing that as Civil Case
No. CEB-39025 is for breach of contract, or one whose subject is incapable of
pecuniary estimation, jurisdiction thus falls with the RTC. However, in an April
29, 2013 Order,13 the RTC held its ground.
Ruling of the Court of Appeals
14
Respondent filed CA-G.R. CEB SP No. 07711, a Petition for Certiorari seeking
to nullify the RTC's February 19, 2013 and April 29, 2013 Orders. It argued
that the RTC acted with grave abuse of discretion in dismissing Civil Case No.
CEB-39025. According to respondent, said case is one whose subject matter
is incapable of pecuniary estimation and that the damages prayed for therein
are merely incidental thereto. Hence, Civil Case No. CEB-39025 falls within
the jurisdiction of the RTC pursuant to Section 19 of Batas Pambansa
Blg. 129, as amended (BP 129).
On December 11, 2013, the CA rendered the assailed Decision setting aside
the February 19, 2013 Order of the RTC and remanding the case to the court a
quo for further proceedings. It held as follows:
In determining the jurisdiction of an action whose subject is incapable of
pecuniary estimation, the nature of the principal action or remedy sought
must first be ascertained. If it is primarily for the recovery of a sum of money,
the claim is considered capable of pecuniary estimation and the jurisdiction
of the court depends on the amount of the claim. But, where the primary
issue is something other than the right to recover a sum of money, where the
money claim is purely incidental to, or a consequence of the principal relief
sought, such are actions whose subjects are incapable of pecuniary
estimation, hence cognizable by the RTCs.15
x x xx
Verily, what determines the nature of the action and which court has
jurisdiction over it are the allegations of the complaint and the character of
the relief sought.16
In our considered view, the complaint, is one incapable of pecuniary
estimation; thus, one within the RTC's jurisdiction. x x x
x x xx
A case for breach of contract [sic] is a cause of action either for specific
performance or rescission of contracts. An action for rescission of contract,
as a counterpart of an action for specific performance, is incapable of
pecuniary estimation, and therefore falls under the jurisdiction of the RTC.17
Thus, the totality of damages principle finds no application in the instant case
since the same applies only when damages is principally and primarily
demanded in accordance with the specification in Administrative Circular No.
09-94 which reads: 'in cases where the claim for damages is the main cause
of action ... the amount of such claim shall be considered in determining the
jurisdiction of the court.'
Thus, the court a quo should not have dismissed the instant case.
WHEREFORE, in view of the foregoing, the Order dated February 19, 2013 of
the Regional Trial Court, 7th Judicial Region, Branch 17, Cebu City in Civil Case
No. CEB-39025 for Breach of Contract and Damages is hereby REVERSED and
SET ASCDE. This case is hereby REMANDED to the RTC which is ORDERED to
PROCEED with the trial on the merits with dispatch.
SO ORDERED.18
Petitioners sought to reconsider, but were denied. Hence, the present
Petition.
Issue Our Ruling

In a June 29, 2015 Resolution,19 this Court resolved to give due course to the
Petition, which claims that the CA erred in declaring that the RTC had
jurisdiction over respondent's Complaint which, although denominated as
one for breach of contract, is essentially one for simple payment of damages.
Petitioners' Arguments
In praying that the assailed CA dispositions be set aside and that the RTC's
February 19, 2013 Order dismissing Civil Case No. CEB-39025 be reinstated,
petitioners in their Petition and Reply20 espouse the original findings of the
RTC that Civil Case No. CEB-39025 is for the recovery of a sum of money in
the form of damages. They asserted that in determining jurisdiction over the
subject matter, the allegations in the Complaint and the principal relief in the
prayer thereof must be considered; that since respondent merely prayed for
the payment of damages in its Complaint and not a judgment on the claim of
breach of contract, then jurisdiction should be determined based solely on
the total amount of the claim or demand as alleged in the prayer; that while
breach of contract may involve a claim for specific performance or rescission,
neither relief was sought in respondent's Complaint; and, that respondent
"chose to focus his [sic] primary relief on the payment of damages,"21 which
is "the true, actual, and principal relief sought, and is not merely incidental to
or a consequence of the alleged breach of contract."22Petitioners conclude
that, applying the totality of claims rule, respondent's Complaint should be
dismissed as the claim stated therein is below the jurisdictional amount of
the RTC.
Respondent's Arguments
Respondent, on the other hand, counters in its Comment23 that the CA is
correct in declaring that Civil Case No. CEB-39025 is primarily based on breach
of contract, and the damages prayed for are merely incidental to the principal
action; that the Complaint itself made reference to the Remarkable Dealer
Outlet Contract and the breach committed by petitioners, which gave rise to
a cause of action against the latter; and, that with the filing of the case, the
trial court was thus called upon to determine whether petitioners violated
the dealer outlet contract, and if so, the amount of damages that may be
adjudged in respondent's favor.
The Court grants the Petition. The RTC was correct in categorizing Civil Case
No. CEB-39025 as an action for damages seeking to recover an amount below
its jurisdictional limit.
Respondent's complaint denominated
as one for "'Breach of Contract &
Damages" is neither an action for
specific performance nor a complaint
for rescission of contract.
In ruling that respondent's Complaint is incapable of pecuniary estimation
and that the RTC has jurisdiction, the CA comported itself with the following
ratiocination:
A case for breach of contract [sic] is a cause of action either for specific
performance or rescission of contracts. An action for rescission of contract,
as a counterpart of an action for specific performance, is incapable of
pecuniary estimation, and therefore falls under the jurisdiction of the RTC.24
without, however, determining whether, from the four corners of the
Complaint, respondent actually intended to initiate an action for specific
performance or an action for rescission of contract. Specific performance is
''[t]he remedy of requiring exact performance of a contract in the specific
form in which it was made, or according to the precise terms agreed upon. [It
is t]he actual accomplishment of a contract by a party bound to fulfill
it."25 Rescission of contract under Article 1191 of the Civil Code, on the other
hand, is a remedy available to the obligee when the obligor cannot comply
with what is incumbent upon him.26 It is predicated on a breach of faith by
the other party who violates the reciprocity between them. Rescission may
also refer to a remedy granted by law to the contracting parties and
sometimes even to third persons in order to secure reparation of damages
caused them by a valid contract; by means of restoration of things to their
condition in which they were prior to the celebration of the contract.27
In a line of cases, this Court held that –
In determining whether an action is one the subject matter of which is not
capable of pecuniary estimation this Court has adopted the criterion of first
ascertaining the nature of the principal action or remedy sought. If it is
primarily for the recovery of a sum of money, the claim is considered capable
of pecuniary estimation, and whether jurisdiction is in the municipal trial
courts or in the courts of first instance would depend on the amount of the
claim. However, where the basic issue is something other than the right to
recover a sum of money, where the money claim is purely incidental to, or a
consequence of, the principal relief sought, this Court has considered such
actions as cases where the subject of the litigation may not be estimated in
terms of money, and are cognizable exclusively by courts 1of first instance
(now Regional Trial Courts).28
To write finis to this controversy, therefore, it is imperative that we first
determine the real nature of respondent's principal action, as well as the
relief sought in its Complaint, which we 1quote in haec verba:
REPUBLIC OF THE
REGIONAL TRIAL
BRANCH
CEBU CITY
Remarkable Laundry and Dry Cleaning herein Civil Case
represented by Archemedes G. Solis, Plaintiff, For: Breach
& Damages
vs.
Spouses Romeo Pajares and Ida T. Pajares,
Defendants.
-----------------------------------------------------------------------------------------------------
-----
COMPLAINT
Plaintiff, by counsels, to the Honorable Court most respectfully states THAT:
1. Plaintiff Remarkable Laundry and Dry Cleaning Services, is a sole
proprietorship business owned by Archemedes Solis with principal office
address at PREDECO CMPD AS-Ostechi Bldg. Banilad, Heman Cortes St.,
Mandaue City.
2. Defendant Ida Pajares is of legal age, Filipino, married with address at
Hermag Village, Basak Mandaue City where she can be served with summons
and other processes of the Honorable Court.
3. On 08 SEP 2011, parties entered and signed a Remarkable Laundry Dealer
Outlet Contract for the processing of laundry materials, plaintiff being the
owner of Remarkable Laundry and the defendant being the authorized dealer
of the said business. (Attached and marked as Annex "A" is a copy of the
Remarkable Laundry Dealer Outlet Contract.)
CAUSES OF ACTION:
4. Sometime on [sic] the second (2nd) quarter of 2012, defendant failed to
PHILIPPNES follow the required standard purchase quota mentioned in article IV of the
COURT subject dealership agreement.
______
5. Defendant through a letter dated April 24, 2012 said it [sic] would CEASE
OPERATION. It [sic] further stated that they [sic] would just notify or advise
No. the office when they are [sic] ready for the business again making the whole
______
of business endeavor totally dependent upon their [sic] whims and caprices.
Contract
(Attached and marked as Annex "B'' is a copy of letter of the defendant dated
April 24, 2012.)
6. The aforementioned act of unilateral cessation of operation by the
defendant constitutes a serious breach to [sic] the contract because it totally,
whimsically and grossly disregarded the Remarkable Laundry Dealer Outlet
Contract, which resulted to [sic] failure on its part in obtaining the minimum
purchase or delivery of 200 kilos per week for the entire duration of its
cessation of operations.
7. Under the aforementioned Dealer Contract, specifically in Article XV of the
same are classified as BREACH BY THE OUTLETS:
'The parties agree that the happening of any of the stipulation and events by
the dealer outlet is otherwise [sic] in default of any of its obligations or violate
any of the terms and condition under this agreement.
Any violation of the above-mentioned provisions shall result in the immediate
termination of this agreement, without prejudice to any of the RL Main
Operators rights or remedies granted to it by law.
THE DEALER OUTLET SHALL ALSO BE LIABLE TO PAY A FINE OF TWENTY FIVE
THOUSAND PESOS, (₱25,000), FOR EVERY VIOLATION AND PHP 50,000 IF PRE-
TERMINATION BY THE RL MAIN OPERATOR DUE TO BREACH OF THIS
AGREEMENT.'
8. Likewise it is provided in the said contract that:
' ... The DEALER OUTLET must have a minimum 200 kilos on a six-day or per
week pick-up for the entire duration of the contract to free the dealer outlet
from being charge[d] Php 200/week on falling below required minimum kilos
per week of laundry materials. Automatic charging shall become part of the
billing on the services of the dealer outlet on cases where the minimum
requirements on required kilos are not met.[']
9. The cessation of operation by the defendant, which is tantamount to gross
infraction to [sic] the subject contract, resulted to [sic] incidental damages
amounting to Two Hundred Thousand Pesos (PHP200,000.00). Defendant
should have opted to comply with the Pre-termination clause in the subject
contract other than its [sic] unilateral and whimsical cessation of operations.
10. The plaintiff formally reminded the defendant of her obligations under
the subject contract through demand letters, but to no avail. The defendant
purposely ignored the letters by [sic] the plaintiff. (Attached and marked as
Annex "C" to "C-2" are the Demand Letters dated May 2, 2012, June 2, 2012
and June 19, 2012 respectively.)
11. To reiterate, the defendant temporarily stopped its business operation
prior to the two-year contract duration had elapsed to the prejudice of the
plaintiff, which is a clear disregard of its two-year obligation to operate the
business unless a pre-termination is called.
12. Under Article 1159 of the Civil Code of the Philippines provides [sic]:
'Obligations arising .from contracts have the force of law between the
contracting parties and should be complied with in good faith. '
13. Likewise, Article 1170 of the Civil Code of the Philippines [provides] that:
'Those who in the performance of their obligations are guilty of fraud,
negligence, or delay, and those who in any manner contravene the tenor
thereof are liable for damages. '
14. That the above-mentioned violations by the defendant to the Remarkable
Laundry Dealer Contract, specifically Articles IV and XVI thereof constitute
gross breach of contract which are unlawful and malicious under the Civil
Code of the Philippines, which caused the plaintiff to incur incidental and
consequential damages as found in the subject dealer contract in the total
amount of Two Hundred Thousand Pesos (PHP200,000.00) and incidental
legal expenses to protect its rights in the amount of ₱30,000.00.
PRAYER:
WHEREFORE, premises considered, by reason of the above-mentioned
breach of the subject dealer contract agreement made by the defendant, it is
most respectfully prayed of the Honorable Court to order the said defendant
to pay the following incidental and consequential damages to the plaintiff, to
wit:
a) TWO HUNDRED THOUSAND PESOS (PHP200,000.00) plus legal interest
as incidental and consequential [damages] for violating Articles IV and XVI of
the Remarkable Laundry Dealer Contract dated 08 SEP 2011;
b) Thirty Thousand Pesos (₱30,000.00) as legal expenses;
c) Thirty Thousand Pesos (₱30,000.00) as exemplary damages;
d) Twenty Thousand Pesos (₱20,000.00) as cost of suit;
e) Such other reliefs that the Honorable Court deems as just and equitable.
August 31, 2012, Cebu City, Philippines.29
An analysis of the factual and material allegations in the Complaint shows
that there is nothing therein which would support a conclusion that
respondent's Complaint is one for specific performance or rescission of
contract. It should be recalled that the principal obligation of petitioners
under the Remarkable Laundry Dealership Contract is to act as respondent's
dealer outlet. Respondent, however, neither asked the RTC to compel
petitioners to perfom1 such obligation as contemplated in said contract nor
sought the rescission thereof. The Complaint's body, heading, and relief are The RL Main Operator has the option to cancel, terminate this dealership
bereft of such allegation. In fact, neither phrase appeared on or was used in outlet contract, at its option should [sic] in the event that there are unpaid
the Complaint when, for purposes of clarity, respondent's counsels, who are services equivalent to a two-week minimum required number of kilos of
presumed to be learned in law, could and should have used any of those laundry materials but not ₱8,000 worth of collectibles, for services performed
phrases to indicate the proper designation of the Complaint. To the contrary, by the RL Main Operator or its assigned Franchise Outlet, unpaid bills on
respondent's counsels designated the Complaint as one for "Breach of ordered and delivered support products, falling below required monthly
Contract & Damages," which is a misnomer and inaccurate. This erroneous minimum number of kilos.
notion was reiterated in respondent's Memorandum30 wherein it was stated
Ten [percent] (10%) interest charge per month will be collected on all unpaid
that "the main action of CEB 39025 is one for a breach of contract."31 There
obligations but should not be more than 45 days or an additional 10% on top
is no such thing as an "action for breach of contract." Rather, "[b]reach of
of uncollected amount shall be imposed and shall earn additional 10% on the
contract is a cause of action,32 but not the action or relief itself"33 Breach of
next succeeding months if it still remains unpaid. However, if the cause of
contract may be the cause of action in a complaint for specific performance
default is due to issuance of a bouncing check the amount of such check shall
or rescission of contract, both of which are incapable of pecuniary estimation
earn same penalty charge with additional 5% for the first two weeks and 10%
and, therefore, cognizable by the RTC. However, as will be discussed below,
for the next two weeks and its succeeding two weeks thereafter from the
breach of contract may also be the cause of action in a complaint for
date of dishonor until fully paid without prejudice to the filling of appropriate
damages.
cases before the courts of justice. Violation of this provision if remained
A complaint primarily seeking to unsettled for two months shall be considered as violation [wherein] Article
enforce the accessory obligation XV of this agreement shall be applied.34
contained in the penal clause is actually
To Our mind, petitioners' responsibility under the above penal clause involves
an action for damages capable of
the payment of liquidated damages because under Article 222635 of the Civil
pecuniary estimation.
Code the amount the parties stipulated to pay in case of breach are liquidated
Neither can we sustain respondent's contention that its Complaint is damages. "It is attached to an obligation in order to ensure performance and
incapable of pecuniary estimation since it primarily seeks to enforce the penal has a double function: (1) to provide for liquidated damages, and (2) to
clause contained in Article IV of the Remarkable Dealer Outlet Contract, strengthen the coercive force of the obligation by the threat of greater
which reads: responsibility in the event of breach."36

Article IV: STANDARD REQUIRED QUOTA & PENALTIES
In consideration [sic] for such renewal of franchise-dealership rights, the
dealer outlet must have a minimum 200 kilos on a six-day or per week pick-
up for the entire duration of the contract to FREE the dealer outlet from being
charge [sic] Php200/week on falling below required minimum kilos per week
of laundry materials. Automatic charging shall become part of the billing on
the services of the dealer outlet on cases where the minimum requirements
on required kilos are not met.
Concomitantly, what respondent primarily seeks in its Complaint is to recover
aforesaid liquidated damages (which it termed as "incidental and
consequential damages") premised on the alleged breach of contract
committed by the petitioners when they unilaterally ceased business
operations. Breach of contract may also be the cause of action in a complaint
for damages filed pursuant to Article 1170 of the Civil Code. It provides:
Art. 1170. Those who in the performance of their obligations are guilty of
fraud, negligence, or delay, and those who in any manner contravene the
tenor thereof; are liable for damages. (Emphasis supplied)
In Pacmac, Inc. v. Intermediate Appellate Court,37 this Court held that the determining which court has jurisdiction over the subject matter of the case
party who unilaterally terminated the exclusive distributorship contract regardless of whether they arose from a single cause of action or several
without any legal justification can be held liable for damages by reason of the causes of action.1âwphi1
breach committed pursuant to Article 1170.
Since the total amount of the damages claimed by the respondent in its
In sum, after juxtaposing Article IV of the Remarkable Dealer Outlet Complaint filed with the RTC on September 3, 2012 amounted only to
Contract vis-a-vis the prayer sought in respondent's Complaint, this Court is ₱280,000.00, said court was correct in refusing to take cognizance of the case.
convinced that said Complaint is one for damages. True, breach of contract
WHEREFORE, the Petition is GRANTED and the December 11, 2013 Decision
may give rise to a complaint for specific performance or rescission of contract.
and March 19, 2014 Resolution of the Court of Appeals in CA-G.R. CEB SP No.
In which case, the subject matter is incapable of pecuniary estimation and,
07711 are REVERSED and SET ASIDE. The February 19, 2013 Order of the
therefore, jurisdiction is lodged with the RTC. However, breach of contract
Regional Trial Court, Branch 17, Cebu City dismissing Civil Case No. CEB-39025
may also be the cause of action in a complaint for damages. Thus, it is not
for lack of jurisdiction is REINSTATED.
correct to immediately conclude, as the CA erroneously did, that since the
cause of action is breach of contract, the case would only either be specific SO ORDERED.
pe1formance or rescission of contract because it may happen, as in this case,
that the complaint is one for damages.

In an action for damages, the court

which has jurisdiction is determined by
the total amount of damages claimed.

Having thus determined the nature of respondent's principal action, the next
question brought to fore is whether it is the RTC which has jurisdiction over
the subject matter of Civil Case No. CEB-39025.

Paragraph 8, Section 1938 of BP 129, as amended by Republic Act No.

7691,39 provides that where the amount of the demand exceeds
₱100,000.00, exclusive of interest, damages of whatever kind, attorney's
fees, litigation expenses, and costs, exclusive jurisdiction is lodged with the
RTC. Otherwise, jurisdiction belongs to the Municipal Trial Court.40

The above jurisdictional amount had been increased to ₱200,000.00 on

March 20, 1999 and further raised to ₱300,000.00 on February 22, 2004
pursuant to Section 5 of RA 7691.41

Then in Administrative Circular No. 09-9442 this Court declared that "where
the claim for damages is the main cause of action, or one of the causes of
action, the amount of such claim shall be considered in determining the
jurisdiction of the court." In other words, where the complaint primarily seeks
to recover damages, all claims for damages should be considered in
SOCIAL SECURITY SYSTEM vs ATLANTIC GULF
G.R. No. 175952 April 30, 2008
SOCIAL SECURITY SYSTEM, petitioner,
vs.
ATLANTIC GULF AND PACIFIC COMPANY OF MANILA, INC. and
SEMIRARA COAL CORPORATION, respondents.
DECISION
TINGA, J.:
In this Petition for Review on Certiorari1 under Rule 45 of the 1997
Rules of Civil Procedure, petitioner Republic of the Philippines
represented by the Social Security System (SSS) assails the Decision2
dated 31 August 2006 of the Eleventh Division of the Court of
Appeals and its Resolution3 dated 19 December 2006 denying
petitioner’s Motion for Reconsideration.
Following are the antecedents culled from the decision of the Court
of Appeals:
On 13 February 2004, Atlantic Gulf and Pacific Company of Manila,
Inc. (AG & P) and Semirara Coal Corporation (SEMIRARA) (collectively
referred to as private respondents) filed a complaint for specific
performance and damages against SSS before the Regional Trial
Court of Batangas City, Branch 3, docketed as Civil Case No. 7441.
The complaint alleged that:
xxx
3. Sometime in 2000, plaintiff informed the SSS in writing of its
premiums and loan amortization delinquencies covering the period
from January 2000 to May 2000 amounting to P7.3 Million. AG&P
proposed to pay its said arrears by end of 2000, but requested for
the condonation of all penalties;
4. In turn, the defendant suggested two (2) options to AG&P, either
to pay by installment or through "dacion en pago";
5. AG&P chose to settle its obligation with the SSS under the second
option, that is through dacion en pago of its 5,999 sq. m. property
situated in Baguio City covered by TCT No. 3941 with an appraised
value of about P80.0 Million. SSS proposes to carve-out from the said
property an area sufficient to cover plaintiffs’ delinquencies. AG&P,
however, is not amenable to subdivide its Baguio property;
6. AG&P then made another proposal to SSS. This time, offering as
payment a portion of its 58,153 square meter-lot, situated in F.S.
Sebastian, Sto. Niño, San Pascual, Batangas. In addition, SSS
informed AG&P of its decision to include other companies within the
umbrella of DMCI group with arrearages with the SSS. In the process
of elimination of the companies belonging to the DMCI group with
possible outstanding obligation with the SSS, it was only SEMIRARA
which was left with outstanding delinquencies with the SSS. Thus,
SEMIRARA’s inclusion in the proposed settlement through dacion en
pago;
7. AG&P was, thereafter, directed by the defendant to submit certain
documents, such as Transfer Certificate of Title, Tax Declaration
covering the subject lot, and the proposed subdivision plan, which
requirements AG&P immediately complied;
8. On April 4, 2001, SSS, in its Resolution No. 270, finally approved
AG&P’s proposal to settle its and SEMIRARA’s delinquencies
through dacion en pago, which as of March 31, 2001 amounted
to P29,261,902.45. Approval of AG&P’s proposal was communicated
to it by Ms. Aurora E.L. Ortega, Vice-President, NCR-Group of the SSS
in a letter dated April 23, 2001. … ;
9. As a result of the approval of the dacion en pago, posting of
contributions and loan amortization to individual member accounts,
both for AG&P and SEMIRARA employees, was effected immediately
thereafter. Thus, the benefits of the member-employees of both
companies were restored;
10. From the time of the approval of AG&P’s proposal up to the
present, AG&P is (sic) religiously remitting the premium
contributions and loan amortization of its member-employees to the
defendant;
11. To effect the property transfer, a Deed of Assignment has to be
executed between the plaintiffs and the defendant. Because of SSS
failure to come up with the required Deed of Assignment to effect
said transfer, AG&P prepared the draft and submitted it to the Office
of the Vice-President – NCR thru SSS Baclaran Branch in July 2001.
Unfortunately, the defendant failed to take any action on said Deed
of Assignment causing AG&P to re-submit it to the same office of the
Vice-President – NCR in December 2001. From its original submission
of the Deed of Assignment in July 2001 to its re-submission in
December 2001, and SSS returning of the revised draft in February
28, 2003 AG&P was consistent in its regular follow ups with SSS as to
the status of its submitted Deed of Assignment;
12. On February 28, 2003, or more than a year after the approval of
AG&P’s proposal, defendant sent the revised copy of the Deed of
Assignment to AG&P. However, the amount of the plaintiffs’
obligation appearing in the approved Deed of Assignment has
ballooned from P29,261,902.45 to P40,846,610.64 allegedly
because of the additional interests and penalty charges assessed on
plaintiffs’ outstanding obligation from April 2001, the date of
approval of the proposal, up to January 2003;
13. AG&P demanded for the waiver and deletion of the additional
interests on the ground that delay in the approval of the deed and
the subsequent delay in conveyance of the property in defendant’s
name was solely attributable to the defendant; hence, to charge
plaintiffs with additional interests and penalties amounting to more
than P10,000,000.00, would be unreasonable….;
14. AG&P and SEMIRARA maintain their willingness to settle their
alleged obligation of P29,261,902.45 to SSS. Defendant, however,
refused to accept the payment through dacion en pago, unless
plaintiffs also pay the additional interests and penalties being
charged;
xxx
Instead of filing an answer, SSS moved for the dismissal of the
complaint for lack of jurisdiction and non-exhaustion of
administrative remedies. In an order dated 28 July 2004, the trial
court granted SSS’s motion and dismissed private respondents’
complaint. The pertinent portions of the assailed order are as
follows:
Clearly, the motion is triggered on the issue of the court’s jurisdiction
over the subject matter and the nature of the instant complaint. The
length and breadth of the complaint as perused, boils down to the
questions of premium and loan amortization delinquencies of the
plaintiff, the option taken for the payment of the same in favor of
the defendant and the disagreement between the parties as to the
amount of the unpaid contributions and salary loan repayments. In
other words, said questions are directly related to the collection of
contributions due the defendant. Republic Act No. 1161 as amended
by R.A. No. 8282, specifically provides that any dispute arising under
the said Act shall be cognizable by the Commission and any case filed
with respect thereto shall be heard by the Commission. Hence, a
procedural process mandated by a special law.
Observingly, the running dispute between plaintiffs and defendant
originated from the disagreement as to the amount of unpaid
contributions and the amount of the penalties imposed appurtenant
thereto. The alleged dacion en pago is crystal clear manifestation of
offering a special form of payment which to the mind of the court
will produce effect only upon acceptance by the offeree and the
observance and compliance of the required formalities by the
parties. No matter in what form it may be, still the court believes that
the subject matter is the payment of contributions and the
corresponding penalties which are within the ambit of Sec. 5 (a) of
R.A. No. 1161, as amended by R.A. No. 8282.
WHEREFORE, the Court having no jurisdiction over the subject
matter of the instant complaint, the motion is granted and this case
is hereby ordered DISMISSED.
4
SO ORDERED.
Private respondents moved for the reconsideration of the order but
the same was denied in an Order dated 15 September 2004.
Consequently, private respondents filed an appeal before the Court
of Appeals alleging that the trial court erred in its pronouncement
that it had no jurisdiction over the subject matter of the complaint
and in granting the motion to dismiss.
The Court of Appeals reversed and set aside the trial court’s
challenged order, granted private respondents’ appeal and ordered
the trial court to proceed with the civil case with dispatch. From the
averments in their complaint, the appellate court observed that
private respondents are seeking to implement the Deed of
Assignment which they had drafted and submitted to SSS sometime
in July 2001, pursuant to SSS’s letter addressed to AG& P dated 23
April 2001 approving AG&P and SEMIRARA’S delinquencies
through dacion en pago, which as of 31 March 2001, amounted
to P29,261,902.45. The appellate court thus held that the subject of
the complaint is no longer the payment of the premium and loan
amortization delinquencies, as well as the penalties appurtenant
thereto, but the enforcement of the dacion en pago pursuant to SSS
Resolution No. 270. The action then is one for specific performance
which case law holds is an action incapable of pecuniary estimation
falling under the jurisdiction of the Regional Trial Court.5
SSS filed a motion for reconsideration of the appellate court’s
decision but the same was denied in a Resolution dated 19
December 2006.
Now before the Court, SSS insists on the Social Security
Commission’s (the Commission) jurisdiction over the complaint
pursuant to Section 5 (a) of Republic Act (R.A.) No. 8282. SSS
maintains the Commission’s jurisdiction over all disputes arising
from the provisions of R.A. No. 1161, amended by R.A. No. 8282 to
the exclusion of trial courts.6
The main issue in this case pertains to which body has jurisdiction to
entertain a controversy arising from the non-implementation of
a dacion en pago agreed upon by the parties as a means of
settlement of private respondents’ liabilities.
At the outset, it is well to restate the rule that what determines the
nature of the action as well as the tribunal or body which has
jurisdiction over the case are the allegations in the complaint.7
The pertinent provision of law detailing the jurisdiction of the
Commission is Section 5(a) of R.A. No. 1161, as amended by R.A. No.
8282, otherwise known as the Social Security Act of 1997, to wit:
SEC. 5. Settlement of Disputes.– (a) Any dispute arising under this Act
with respect to coverage, benefits, contributions and penalties
thereon or any other matter related thereto, shall be cognizable by
the Commission, and any case filed with respect thereto shall be
heard by the Commission, or any of its members, or by hearing
officers duly authorized by the Commission and decided within the
mandatory period of twenty (20) days after the submission of the
evidence. The filing, determination and settlement of disputes shall
be governed by the rules and regulations promulgated by the
Commission.
The law clearly vests upon the Commission jurisdiction over
"disputes arising under this Act with respect to coverage, benefits,
contributions and penalties thereon or any matter related thereto..."
Dispute is defined as "a conflict or controversy."8
From the allegations of respondents’ complaint, it readily appears
that there is no longer any dispute with respect to respondents’
accountability to the SSS. Respondents had, in fact, admitted their
delinquency and offered to settle them by way of dacion en
pagosubsequently approved by the SSS in Resolution No. 270-s.
2001. SSS stated in said resolution that "the dacion en pago proposal
of AG&P Co. of Manila and Semirara Coals Corporation to pay their
liabilities in the total amount of P30,652,710.71 as of 31 March 2001 instance would depend on the amount of the claim. However, where
by offering their 5.8 ha. property located in San Pascual, Batangas, the basic issue is something other than the right to recover a sum of
be, as it is hereby, approved.."9 This statement unequivocally evinces money, where the money claim is purely incidental to, or a
its consent to the dacion en pago. In Vda. de Jayme v. Court of consequence of, the principal relief sought, this Court has
Appeals,10 the Court ruled significantly as follows: considered such actions as cases where the subject of the litigation
may not be estimated in terms of money, and are cognizable
Dacion en pago is the delivery and transmission of ownership of a
exclusively by courts of first instance (now Regional Trial Courts).14
thing by the debtor to the creditor as an accepted equivalent of the
performance of the obligation. It is a special mode of payment where In fine, the Court finds the decision of the Court of Appeals in accord
the debtor offers another thing to the creditor who accepts it as with law and jurisprudence.
equivalent of payment of an outstanding debt. The undertaking
WHEREFORE, the petition is DENIED. The Decision dated 31 August
really partakes in one sense of the nature of sale, that is the creditor
2006 of the Court of Appeals Eleventh Division in CA-G.R. CV No.
is really buying the thing or property of the debtor, payment for
83775 AFFIRMED.
which is to be charged against the debtor’s debt. As such, the
essential elements of a contract of sale, namely, consent, object Let the case be remanded to the trial court for further proceedings.
certain, and cause or consideration must be present. In its modern
concept, what actually takes place in dacion en pago is an objective SO ORDERED.
novation of the obligation where the thing offered as an accepted
equivalent of the performance of an obligation is considered as the
object of the contract of sale, while the debt is considered as the
purchase price. In any case, common consent is an essential
prerequisite, be it sale or novation, to have the effect of totally
extinguishing the debt or obligation.11

The controversy, instead, lies in the non-implementation of the

approved and agreed dacion en pago on the part of the SSS. As such,
respondents filed a suit to obtain its enforcement which is,
doubtless, a suit for specific performance and one incapable of
pecuniary estimation beyond the competence of the
Commission.12 Pertinently, the Court ruled in Singson v. Isabela
Sawmill,13 as follows:

In determining whether an action is one the subject matter of which

is not capable of pecuniary estimation this Court has adopted the
criterion of first ascertaining the nature of the principal action or
remedy sought. If it is primarily for the recovery of a sum of money,
the claim is considered capable of pecuniary estimation, and
whether jurisdiction in the municipal courts or in the courts of first
JACOBUS BERNARD HULST vs PR BUILDERS INC
G.R. No. 156364 September 3, 2007
JACOBUS BERNHARD HULST, petitioner,
vs.
PR BUILDERS, INC., respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of the
Revised Rules of Court assailing the Decision1 dated October 30, 2002 of the
Court of Appeals (CA) in CA-G.R. SP No. 60981.
The facts:
Jacobus Bernhard Hulst (petitioner) and his spouse Ida Johanna Hulst-Van
Ijzeren (Ida), Dutch nationals, entered into a Contract to Sell with PR Builders,
Inc. (respondent), for the purchase of a 210-sq m residential unit in
respondent's townhouse project in Barangay Niyugan, Laurel, Batangas.
When respondent failed to comply with its verbal promise to complete the
project by June 1995, the spouses Hulst filed before the Housing and Land
Use Regulatory Board (HLURB) a complaint for rescission of contract with
interest, damages and attorney's fees, docketed as HLRB Case No. IV6-
071196-0618.
On April 22, 1997, HLURB Arbiter Ma. Perpetua Y. Aquino (HLURB Arbiter)
rendered a Decision2 in favor of spouses Hulst, the dispositive portion of
which reads:
WHEREFORE, premises considered, judgment is hereby rendered in favor of
the complainant, rescinding the Contract to Sell and ordering respondent to:
1) Reimburse complainant the sum of P3,187,500.00, representing the
purchase price paid by the complainants to P.R. Builders, plus interest
thereon at the rate of twelve percent (12%) per annum from the time
complaint was filed;
2) Pay complainant the sum of P297,000.00 as actual damages;
3) Pay complainant the sum of P100,000.00 by way of moral damages;
4) Pay complainant the sum of P150,000.00 as exemplary damages;
5) P50,000.00 as attorney's fees and for other litigation expenses; and
6) Cost of suit.
SO ORDERED.3
Meanwhile, spouses Hulst divorced. Ida assigned her rights over the
purchased property to petitioner.4 From then on, petitioner alone pursued
the case.
On August 21, 1997, the HLURB Arbiter issued a Writ of Execution addressed
to the Ex-Officio Sheriff of the Regional Trial Court of Tanauan, Batangas
directing the latter to execute its judgment.5
On April 13, 1998, the Ex-Officio Sheriff proceeded to implement the Writ of
Execution. However, upon complaint of respondent with the CA on a Petition
for Certiorari and Prohibition, the levy made by the Sheriff was set aside,
requiring the Sheriff to levy first on respondent's personal properties.6 Sheriff
Jaime B. Ozaeta (Sheriff) tried to implement the writ as directed but the writ
was returned unsatisfied.7
On January 26, 1999, upon petitioner's motion, the HLURB Arbiter issued an
Alias Writ of Execution.8
On March 23, 1999, the Sheriff levied on respondent's 15 parcels of land
covered by 13 Transfer Certificates of Title (TCT)9 in Barangay Niyugan,
Laurel, Batangas.10
In a Notice of Sale dated March 27, 2000, the Sheriff set the public auction of
the levied properties on April 28, 2000 at 10:00 a.m..11
Two days before the scheduled public auction or on April 26, 2000,
respondent filed an Urgent Motion to Quash Writ of Levy with the HLURB on
the ground that the Sheriff made an overlevy since the aggregate appraised
value of the levied properties at P6,500.00 per sq m is P83,616,000.00, based
on the Appraisal Report12 of Henry Hunter Bayne Co., Inc. dated December
11, 1996, which is over and above the judgment award.13
At 10:15 a.m. of the scheduled auction date of April 28, 2000, respondent's
counsel objected to the conduct of the public auction on the ground that
respondent's Urgent Motion to Quash Writ of Levy was pending resolution.
Absent any restraining order from the HLURB, the Sheriff proceeded to sell
the 15 parcels of land. Holly Properties Realty Corporation was the winning
bidder for all 15 parcels of land for the total amount of P5,450,653.33. The
sum of P5,313,040.00 was turned over to the petitioner in satisfaction of the
judgment award after deducting the legal fees.14
At 4:15 p.m. of the same day, while the Sheriff was at the HLURB office to
remit the legal fees relative to the auction sale and to submit the Certificates
of Sale15 for the signature of HLURB Director Belen G. Ceniza (HLURB
Director), he received the Order dated April 28, 2000 issued by the HLURB
Arbiter to suspend the proceedings on the matter.16
Four months later, or on August 28, 2000, the HLURB Arbiter and HLURB
Director issued an Order setting aside the sheriff's levy on respondent's real
properties,17 reasoning as follows:
While we are not making a ruling that the fair market value of the levied
properties is PhP6,500.00 per square meter (or an aggregate value of
PhP83,616,000.00) as indicated in the Hunter Baynes Appraisal Report, we
definitely cannot agree with the position of the Complainants and the Sheriff
that the aggregate value of the 12,864.00-square meter levied properties is
only around PhP6,000,000.00. The disparity between the two valuations are
[sic] so egregious that the Sheriff should have looked into the matter first
before proceeding with the execution sale of the said properties, especially
when the auction sale proceedings was seasonably objected by Respondent's
counsel, Atty. Noel Mingoa. However, instead of resolving first the objection
timely posed by Atty. Mingoa, Sheriff Ozaete totally disregarded the
objection raised and, posthaste, issued the corresponding Certificate of Sale
even prior to the payment of the legal fees (pars. 7 & 8, Sheriff's Return).
While we agree with the Complainants that what is material in an execution
sale proceeding is the amount for which the properties were bidded and sold
during the public auction and that, mere inadequacy of the price is not a
sufficient ground to annul the sale, the court is justified to intervene where
the inadequacy of the price shocks the conscience (Barrozo vs. Macaraeg, 83
Phil. 378). The difference between PhP83,616,000.00 and Php6,000,000.00 is
PhP77,616,000.00 and it definitely invites our attention to look into the
proceedings had especially so when there was only one bidder, the HOLLY
PROPERTIES REALTY CORPORATION represented by Ma, Chandra Cacho (par.
7, Sheriff's Return) and the auction sale proceedings was timely objected by
Respondent's counsel (par. 6, Sheriff's Return) due to the pendency of the
Urgent Motion to Quash the Writ of Levy which was filed prior to the
execution sale.
Besides, what is at issue is not the value of the subject properties as
determined during the auction sale, but the determination of the value of
the properties levied upon by the Sheriff taking into consideration Section
9(b) of the 1997 Rules of Civil Procedure x x x.
xxxx
It is very clear from the foregoing that, even during levy, the Sheriff has to
consider the fair market value of the properties levied upon to determine
whether they are sufficient to satisfy the judgment, and any levy in excess of
the judgment award is void (Buan v. Court of Appeals, 235 SCRA 424).
x x x x18 (Emphasis supplied).
The dispositive portion of the Order reads:
WHEREFORE, the levy on the subject properties made by the Ex-Officio Sheriff
of the RTC of Tanauan, Batangas, is hereby SET ASIDE and the said Sheriff is
hereby directed to levy instead Respondent's real properties that are
reasonably sufficient to enforce its final and executory judgment, this time,
taking into consideration not only the value of the properties as indicated in
their respective tax declarations, but also all the other determinants at
arriving at a fair market value, namely: the cost of acquisition, the current
value of like properties, its actual or potential uses, and in the particular case
of lands, their size, shape or location, and the tax declarations thereon.
SO ORDERED.19
A motion for reconsideration being a prohibited pleading under Section 1(h),
Rule IV of the 1996 HLURB Rules and Procedure, petitioner filed a Petition
for Certiorari and Prohibition with the CA on September 27, 2000.
On October 30, 2002, the CA rendered herein assailed Decision20 dismissing
the petition. The CA held that petitioner's insistence that Barrozo v.
Macaraeg21 does not apply since said case stated that "when there is a right
to redeem inadequacy of price should not be material" holds no water as
what is obtaining in this case is not "mere inadequacy," but an inadequacy
that shocks the senses; that Buan v. Court of Appeals22 properly applies since
the questioned levy covered 15 parcels of land posited to have an aggregate
value of P83,616,000.00 which shockingly exceeded the judgment debt of
only around P6,000,000.00.
Without filing a motion for reconsideration,23 petitioner took the present
recourse on the sole ground that:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE
ARBITER'S ORDER SETTING ASIDE THE LEVY MADE BY THE SHERIFF ON THE
SUBJECT PROPERTIES.24
Before resolving the question whether the CA erred in affirming the Order of
the HLURB setting aside the levy made by the sheriff, it behooves this Court
to address a matter of public and national importance which completely
escaped the attention of the HLURB Arbiter and the CA: petitioner and his
wife are foreign nationals who are disqualified under the Constitution from
owning real property in their names.
Section 7 of Article XII of the 1987 Constitution provides:
Sec. 7. Save in cases of hereditary succession, no private lands shall be
transferred or conveyed except to individuals, corporations, or
associations qualified to acquire or hold lands of the public domain.
(Emphasis supplied).
The capacity to acquire private land is made dependent upon the capacity to
acquire or hold lands of the public domain. Private land may be transferred
or conveyed only to individuals or entities "qualified to acquire lands of the
public domain." The 1987 Constitution reserved the right to participate in the
disposition, exploitation, development and utilization of lands of the public
domain for Filipino citizens25 or corporations at least 60 percent of the capital
of which is owned by Filipinos.26 Aliens, whether individuals or corporations,
have been disqualified from acquiring public lands; hence, they have also
been disqualified from acquiring private lands.27
Since petitioner and his wife, being Dutch nationals, are proscribed under the
Constitution from acquiring and owning real property, it is unequivocal that
the Contract to Sell entered into by petitioner together with his wife and
respondent is void. Under Article 1409 (1) and (7) of the Civil Code, all
contracts whose cause, object or purpose is contrary to law or public policy
and those expressly prohibited or declared void by law are inexistent and void
from the beginning. Article 1410 of the same Code provides that the action
or defense for the declaration of the inexistence of a contract does not
prescribe. A void contract is equivalent to nothing; it produces no civil
effect.28 It does not create, modify or extinguish a juridical relation.29
Generally, parties to a void agreement cannot expect the aid of the law; the
courts leave them as they are, because they are deemed in pari delicto or "in
equal fault."30 In pari delicto is "a universal doctrine which holds that no
action arises, in equity or at law, from an illegal contract; no suit can be
maintained for its specific performance, or to recover the property agreed to
be sold or delivered, or the money agreed to be paid, or damages for its
violation; and where the parties are in pari delicto, no affirmative relief of any
kind will be given to one against the other."31
This rule, however, is subject to exceptions32 that permit the return of that
which may have been given under a void contract to: (a) the innocent party
(Arts. 1411-1412, Civil Code);33 (b) the debtor who pays usurious interest (Art.
1413, Civil Code);34 (c) the party repudiating the void contract before the
illegal purpose is accomplished or before damage is caused to a third person
and if public interest is subserved by allowing recovery (Art. 1414, Civil
Code);35 (d) the incapacitated party if the interest of justice so demands (Art.
1415, Civil Code);36 (e) the party for whose protection the prohibition by law
is intended if the agreement is not illegal per se but merely prohibited and if
public policy would be enhanced by permitting recovery (Art. 1416, Civil
Code);37 and (f) the party for whose benefit the law has been intended such
as in price ceiling laws (Art. 1417, Civil Code)38 and labor laws (Arts. 1418-
1419, Civil Code).39
It is significant to note that the agreement executed by the parties in this case
is a Contract to Sell and not a contract of sale. A distinction between the two
is material in the determination of when ownership is deemed to have been
transferred to the buyer or vendee and, ultimately, the resolution of the
question on whether the constitutional proscription has been breached.
In a contract of sale, the title passes to the buyer upon the delivery of the
thing sold. The vendor has lost and cannot recover the ownership of the
property until and unless the contract of sale is itself resolved and set
aside.40 On the other hand, a contract to sell is akin to a conditional sale
where the efficacy or obligatory force of the vendor's obligation to transfer
title is subordinated to the happening of a future and uncertain event, so that
if the suspensive condition does not take place, the parties would stand as if
the conditional obligation had never existed.41 In other words, in a contract
to sell, the prospective seller agrees to transfer ownership of the property to
the buyer upon the happening of an event, which normally is the full payment
of the purchase price. But even upon the fulfillment of the suspensive
condition, ownership does not automatically transfer to the buyer. The
prospective seller still has to convey title to the prospective buyer by
executing a contract of absolute sale.42
Since the contract involved here is a Contract to Sell, ownership has not yet
transferred to the petitioner when he filed the suit for rescission. While the
intent to circumvent the constitutional proscription on aliens owning real
property was evident by virtue of the execution of the Contract to Sell, such
violation of the law did not materialize because petitioner caused the
rescission of the contract before the execution of the final deed transferring
ownership.
Thus, exception (c) finds application in this case. Under Article 1414, one who
repudiates the agreement and demands his money before the illegal act has
taken place is entitled to recover. Petitioner is therefore entitled to recover
what he has paid, although the basis of his claim for rescission, which was
granted by the HLURB, was not the fact that he is not allowed to acquire
private land under the Philippine Constitution. But petitioner is entitled to the
recovery only of the amount of P3,187,500.00, representing the purchase
price paid to respondent. No damages may be recovered on the basis of a
void contract; being nonexistent, the agreement produces no juridical tie
between the parties involved.43 Further, petitioner is not entitled to actual as
well as interests thereon,44 moral and exemplary damages and attorney's
fees.
The Court takes into consideration the fact that the HLURB Decision dated
April 22, 1997 has long been final and executory. Nothing is more settled in
the law than that a decision that has acquired finality becomes immutable
and unalterable and may no longer be modified in any respect even if the
modification is meant to correct erroneous conclusions of fact or law and
whether it was made by the court that rendered it or by the highest court of
the land.45The only recognized exceptions to the general rule are the
correction of clerical errors, the so-called nunc pro tunc entries which cause
no prejudice to any party, void judgments, and whenever circumstances
transpire after the finality of the decision rendering its execution unjust and
inequitable.46 None of the exceptions is present in this case. The HLURB
decision cannot be considered a void judgment, as it was rendered by a
tribunal with jurisdiction over the subject matter of the complaint.47
Ineluctably, the HLURB Decision resulted in the unjust enrichment of
petitioner at the expense of respondent. Petitioner received more than what
he is entitled to recover under the circumstances.
Article 22 of the Civil Code which embodies the maxim, nemo ex alterius
incommode debet lecupletari (no man ought to be made rich out of another's
injury), states:
Art. 22. Every person who through an act of performance by another, or any
other means, acquires or comes into possession of something at the expense
of the latter without just or legal ground, shall return the same to him.
The above-quoted article is part of the chapter of the Civil Code on Human
Relations, the provisions of which were formulated as basic principles to be
observed for the rightful relationship between human beings and for the
stability of the social order; designed to indicate certain norms that spring
from the fountain of good conscience; guides for human conduct that should
run as golden threads through society to the end that law may approach its
supreme ideal which is the sway and dominance of justice.48 There is unjust
enrichment when a person unjustly retains a benefit at the loss of another,
or when a person retains money or property of another against the
fundamental principles of justice, equity and good conscience.49
A sense of justice and fairness demands that petitioner should not be allowed
to benefit from his act of entering into a contract to sell that violates the
constitutional proscription.
This is not a case of equity overruling or supplanting a positive provision of
law or judicial rule. Rather, equity is exercised in this case "as the complement
of legal jurisdiction [that] seeks to reach and to complete justice where courts
of law, through the inflexibility of their rules and want of power to adapt their
judgments to the special circumstances of cases, are incompetent to do so."50
The purpose of the exercise of equity jurisdiction in this case is to prevent
unjust enrichment and to ensure restitution. Equity jurisdiction aims to do
complete justice in cases where a court of law is unable to adapt its
judgments to the special circumstances of a case because of the inflexibility
of its statutory or legal jurisdiction.51
The sheriff delivered to petitioner the amount of P5,313,040.00 representing
the net proceeds (bidded amount is P5,450,653.33) of the auction sale after
deducting the legal fees in the amount of P137,613.33.52 Petitioner is only
entitled to P3,187,500.00, the amount of the purchase price of the real
property paid by petitioner to respondent under the Contract to Sell. Thus,
the Court in the exercise of its equity jurisdiction may validly order petitioner
to return the excess amount of P2,125,540.00.
The Court shall now proceed to resolve the single issue raised in the present
petition: whether the CA seriously erred in affirming the HLURB Order setting
aside the levy made by the Sheriff on the subject properties.
Petitioner avers that the HLURB Arbiter and Director had no factual basis for
pegging the fair market value of the levied properties at P6,500.00 per sq m
or P83,616,000.00; that reliance on the appraisal report was misplaced since
the appraisal was based on the value of land in neighboring developed
subdivisions and on the assumption that the residential unit appraised had
already been built; that the Sheriff need not determine the fair market value
of the subject properties before levying on the same since what is material is
the amount for which the properties were bidded and sold during the public
auction; that the pendency of any motion is not a valid ground for the Sheriff
to suspend the execution proceedings and, by itself, does not have the effect
of restraining the Sheriff from proceeding with the execution.
Respondent, on the other hand, contends that while it is true that the HLURB
Arbiter and Director did not categorically state the exact value of the levied
properties, said properties cannot just amount to P6,000,000.00; that the
HLURB Arbiter and Director correctly held that the value indicated in the tax
declaration is not the sole determinant of the value of the property.
The petition is impressed with merit.
If the judgment is for money, the sheriff or other authorized officer must
execute the same pursuant to the provisions of Section 9, Rule 39 of the
Revised Rules of Court, viz:
Sec. 9. Execution of judgments for money, how enforced. –
(a) Immediate payment on demand. - The officer shall enforce an execution
of a judgment for money by demanding from the judgment obligor the
immediate payment of the full amount stated in the writ of execution and all
lawful fees. x x x
(b) Satisfaction by levy. - If the judgment obligor cannot pay all or part of the
obligation in cash, certified bank check or other mode of payment acceptable
to the judgment obligee, the officer shall levy upon the properties of the
judgment obligor of every kind and nature whatsoever which may be
disposed of for value and not otherwise exempt from execution, giving the
latter the option to immediately choose which property or part thereof may
be levied upon, sufficient to satisfy the judgment. If the judgment obligor
does not exercise the option, the officer shall first levy on the personal
properties, if any, and then on the real properties if the personal properties
are insufficient to answer for the judgment.
The sheriff shall sell only a sufficient portion of the personal or real property
of the judgment obligor which has been levied upon.
When there is more property of the judgment obligor than is sufficient to
satisfy the judgment and lawful fees, he must sell only so much of the
personal or real property as is sufficient to satisfy the judgment and lawful
fees.
Real property, stocks, shares, debts, credits, and other personal property, or
any interest in either real or personal property, may be levied upon in like
manner and with like effect as under a writ of attachment(Emphasis
supplied).53
Thus, under Rule 39, in executing a money judgment against the property of
the judgment debtor, the sheriff shall levy on all property belonging to the
judgment debtor as is amply sufficient to satisfy the judgment and costs, and
sell the same paying to the judgment creditor so much of the proceeds as will
satisfy the amount of the judgment debt and costs. Any excess in the
proceeds shall be delivered to the judgment debtor unless otherwise directed
by the judgment or order of the court.54
Clearly, there are two stages in the execution of money judgments. First, the
levy and then the execution sale.
Levy has been defined as the act or acts by which an officer sets apart or
appropriates a part or the whole of a judgment debtor's property for the
purpose of satisfying the command of the writ of execution.55 The object of a
levy is to take property into the custody of the law, and thereby render it
liable to the lien of the execution, and put it out of the power of the judgment
debtor to divert it to any other use or purpose.56
On the other hand, an execution sale is a sale by a sheriff or other ministerial
officer under the authority of a writ of execution of the levied property of the
debtor.57
In the present case, the HLURB Arbiter and Director gravely abused their
discretion in setting aside the levy conducted by the Sheriff for the reason
that the auction sale conducted by the sheriff rendered moot and academic
the motion to quash the levy. The HLURB Arbiter lost jurisdiction to act on
the motion to quash the levy by virtue of the consummation of the auction
sale. Absent any order from the HLURB suspending the auction sale, the
sheriff rightfully proceeded with the auction sale. The winning bidder had
already paid the winning bid. The legal fees had already been remitted to the
HLURB. The judgment award had already been turned over to the judgment
creditor. What was left to be done was only the issuance of the corresponding
certificates of sale to the winning bidder. In fact, only the signature of the
HLURB Director for that purpose was needed58 – a purely ministerial act.
A purely ministerial act or duty is one which an officer or tribunal performs in
a given state of facts, in a prescribed manner, in obedience to the mandate
of a legal authority, without regard for or the exercise of his own judgment
upon the propriety or impropriety of the act done. If the law imposes a duty
upon a public officer and gives him the right to decide how or when the duty
shall be performed, such duty is discretionary and not ministerial. The duty is
ministerial only when the discharge of the same requires neither the exercise
of official discretion nor judgment.59 In the present case, all the requirements
of auction sale under the Rules have been fully complied with to warrant the
issuance of the corresponding certificates of sale.
And even if the Court should go into the merits of the assailed Order, the
petition is meritorious on the following grounds:
Firstly, the reliance of the HLURB Arbiter and Director, as well as the CA,
on Barrozo v. Macaraeg60 and Buan v. Court of Appeals61 is misplaced.
The HLURB and the CA misconstrued the Court's pronouncements
in Barrozo. Barrozo involved a judgment debtor who wanted to repurchase
properties sold at execution beyond the one-year redemption period. The
statement of the Court in Barrozo, that "only where such inadequacy shocks
the conscience the courts will intervene," is at best a mere obiter dictum. This
declaration should be taken in the context of the other declarations of the
Court in Barrozo,to wit:
Another point raised by appellant is that the price paid at the auction sale
was so inadequate as to shock the conscience of the court. Supposing that
this issue is open even after the one-year period has expired and after the
properties have passed into the hands of third persons who may have paid a
price higher than the auction sale money, the first thing to consider is that
the stipulation contains no statement of the reasonable value of the
properties; and although defendant' answer avers that the assessed value
was P3,960 it also avers that their real market value was P2,000
only. Anyway, mere inadequacy of price – which was the complaint'
allegation – is not sufficient ground to annul the sale. It is only where such
inadequacy shocks the conscience that the courts will intervene. x x x
Another consideration is that the assessed value being P3,960 and the
purchase price being in effect P1,864 (P464 sale price plus P1,400 mortgage
lien which had to be discharged) the conscience is not shocked upon
examining the prices paid in the sales in National Bank v. Gonzales, 45 Phil.,
693 and Guerrero v. Guerrero, 57 Phil., 445, sales which were left undisturbed
by this Court.
Furthermore, where there is the right to redeem – as in this case
– inadequacy of price should not be material because the judgment debtor
may re-acquire the property or else sell his right to redeem and thus recover
any loss he claims to have suffered by reason of the price obtained at the
execution sale.
x x x x (Emphasis supplied).62
In other words, gross inadequacy of price does not nullify an execution sale.
In an ordinary sale, for reason of equity, a transaction may be invalidated on
the ground of inadequacy of price, or when such inadequacy shocks one's
conscience as to justify the courts to interfere; such does not follow when the
law gives the owner the right to redeem as when a sale is made at public
auction,63 upon the theory that the lesser the price, the easier it is for the
owner to effect redemption.64 When there is a right to redeem, inadequacy
of price should not be material because the judgment debtor may re-acquire
the property or else sell his right to redeem and thus recover any loss he
claims to have suffered by reason of the price obtained at the execution
sale.65 Thus, respondent stood to gain rather than be harmed by the low sale
value of the auctioned properties because it possesses the right of
redemption. More importantly, the subject matter in Barrozo is the auction
sale, not the levy made by the Sheriff.
The Court does not sanction the piecemeal interpretation of a decision. To
get the true intent and meaning of a decision, no specific portion thereof
should be isolated and resorted to, but the decision must be considered in its
entirety.66
As regards Buan, it is cast under an entirely different factual milieu. It involved
the levy on two parcels of land owned by the judgment debtor; and the sale
at public auction of one was sufficient to fully satisfy the judgment, such that
the levy and attempted execution of the second parcel of land was declared
void for being in excess of and beyond the original judgment award granted
in favor of the judgment creditor.
In the present case, the Sheriff complied with the mandate of Section 9, Rule
39 of the Revised Rules of Court, to "sell only a sufficient portion" of the levied
properties "as is sufficient to satisfy the judgment and the lawful fees." Each
of the 15 levied properties was successively bidded upon and sold, one after
the other until the judgment debt and the lawful fees were fully satisfied.
Holly Properties Realty Corporation successively bidded upon and bought
each of the levied properties for the total amount of P5,450,653.33 in full
satisfaction of the judgment award and legal fees.67
Secondly, the Rules of Court do not require that the value of the property
levied be exactly the same as the judgment debt; it can be less or more than
the amount of debt. This is the contingency addressed by Section 9, Rule 39
of the Rules of Court. In the levy of property, the Sheriff does not determine
the exact valuation of the levied property. Under Section 9, Rule 39, in
conjunction with Section 7, Rule 57 of the Rules of Court, the sheriff is
required to do only two specific things to effect a levy upon a realty: (a) file
with the register of deeds a copy of the order of execution, together with the
description of the levied property and notice of execution; and (b) leave with
the occupant of the property copy of the same order, description and
notice.68 Records do not show that respondent alleged non-compliance by
the Sheriff of said requisites.
Thirdly, in determining what amount of property is sufficient out of which to
secure satisfaction of the execution, the Sheriff is left to his own judgment.
He may exercise a reasonable discretion, and must exercise the care which a
reasonably prudent person would exercise under like conditions and
circumstances, endeavoring on the one hand to obtain sufficient property to
satisfy the purposes of the writ, and on the other hand not to make an
unreasonable and unnecessary levy.69 Because it is impossible to know the
precise quantity of land or other property necessary to satisfy an execution,
the Sheriff should be allowed a reasonable margin between the value of the
property levied upon and the amount of the execution; the fact that the
Sheriff levies upon a little more than is necessary to satisfy the execution does
not render his actions improper.70 Section 9, Rule 39, provides adequate
safeguards against excessive levying. The Sheriff is mandated to sell so much
only of such real property as is sufficient to satisfy the judgment and lawful
fees.
In the absence of a restraining order, no error, much less abuse of discretion, sheriff's levy on respondent's real properties, was clearly issued with grave
can be imputed to the Sheriff in proceeding with the auction sale despite the abuse of discretion. The CA erred in affirming said Order.
pending motion to quash the levy filed by the respondents with the HLURB.
WHEREFORE, the instant petition is GRANTED. The Decision dated October
It is elementary that sheriffs, as officers charged with the delicate task of the
30, 2002 of the Court of Appeals in CA-G.R. SP No. 60981
enforcement and/or implementation of judgments, must, in the absence of a
is REVERSED and SET ASIDE. The Order dated August 28, 2000 of HLURB
restraining order, act with considerable dispatch so as not to unduly delay the
Arbiter Ma. Perpetua Y. Aquino and Director Belen G. Ceniza in HLRB Case No.
administration of justice; otherwise, the decisions, orders, or other processes
IV6-071196-0618 is declared NULL and VOID.HLURB Arbiter Aquino and
of the courts of justice and the like would be futile.71 It is not within the
Director Ceniza are directed to issue the corresponding certificates of sale in
jurisdiction of the Sheriff to consider, much less resolve, respondent's
favor of the winning bidder, Holly Properties Realty Corporation. Petitioner is
objection to the continuation of the conduct of the auction sale. The Sheriff
ordered to return to respondent the amount of P2,125,540.00, without
has no authority, on his own, to suspend the auction sale. His duty being
interest, in excess of the proceeds of the auction sale delivered to petitioner.
ministerial, he has no discretion to postpone the conduct of the auction sale.
After the finality of herein judgment, the amount of P2,125,540.00 shall earn
Finally, one who attacks a levy on the ground of excessiveness carries the 6% interest until fully paid.
burden of sustaining that contention.72 In the determination of whether a
SO ORDERED.
levy of execution is excessive, it is proper to take into consideration
encumbrances upon the property, as well as the fact that a forced sale usually
results in a sacrifice; that is, the price demanded for the property upon a
private sale is not the standard for determining the excessiveness of the
levy.73

Here, the HLURB Arbiter and Director had no sufficient factual basis to
determine the value of the levied property. Respondent only submitted an
Appraisal Report, based merely on surmises. The Report was based on the
projected value of the townhouse project after it shall have been fully
developed, that is, on the assumption that the residential units appraised had
already been built. The Appraiser in fact made this qualification in its
Appraisal Report: "[t]he property subject of this appraisal has not been
constructed. The basis of the appraiser is on the existing model units."74 Since
it is undisputed that the townhouse project did not push through, the
projected value did not become a reality. Thus, the appraisal value cannot be
equated with the fair market value. The Appraisal Report is not the best proof
to accurately show the value of the levied properties as it is clearly self-
serving.

Therefore, the Order dated August 28, 2000 of HLURB Arbiter Aquino and
Director Ceniza in HLRB Case No. IV6-071196-0618 which set aside the
UNIVERSITY OF THE PHILIPPINES vs PHILAB INDUSTRIES On July 13, 1982, Padolina wrote Lirio and requested for the issuance of the
purchase order and downpayment for the office and laboratory furniture for
the project, thus:
G.R. No. 152411 September 29, 2004
1. Supply and Installation of Laboratory furniture for the BIOTECH Building P
UNIVERSITY OF THE PHILIPPINES, petitioner,
vs.
Amount : P2,934,068.90
PHILAB INDUSTRIES, INC., respondent.

DECISION Supplier : Philippine Laboratory Furniture

College, Laguna
CALLEJO, SR., J.:

Before the Court is a petition for review on certiorari of the Decision1 of the Attention : Mr. Hector C. Nav
Court of Appeals in CA-G.R. CV No. 44209, as well as its Resolution2 denying President
the petitioner’s motion for the reconsideration thereof. Themo1 mo2 Court of
Appeals set aside the Decision3 of Branch 150 of the Regional Trial Court (RTC) Downpayment : 40% or ₱1,173,627.56
of Makati City, which dismissed the complaint of the respondent against the
petitioner for sum of money and damages. 2. Fabrication and Supply of office furniture for the BIOTECH Building Proje
The Facts of the Case
Amount : P573,375.00
Sometime in 1979, the University of the Philippines (UP) decided to construct
an integrated system of research organization known as the Research Supplier : Trans-Oriental Woodworks,
Complex. As part of the project, laboratory equipment and furniture were 1st Avenue, Bagumbayan Tanyag, Taguig, Metro Man
purchased for the National Institute of Biotechnology and Applied
Microbiology (BIOTECH) at the UP Los Baños. Providentially, the Ferdinand E. Downpayment : 50% or ₱286,687.504
Marcos Foundation (FEMF) came forward and agreed to fund the acquisition
of the laboratory furniture, including the fabrication thereof. Padolina assured Lirio that the contract would be prepared as soon as
possible before the issuance of the purchase orders and the downpayment
Renato E. Lirio, the Executive Assistant of the FEMF, gave the go-signal to
for the goods, and would be transmitted to the FEMF as soon as possible.
BIOTECH to contact a corporation to accomplish the project. On July 23, 1982,
Dr. William Padolina, the Executive Deputy Director of BIOTECH, arranged for In a Letter dated July 23, 1982, Padolina informed Hector Navasero, the
Philippine Laboratory Industries, Inc. (PHILAB), to fabricate the laboratory President of PHILAB, to proceed with the fabrication of the laboratory
furniture and deliver the same to BIOTECH for the BIOTECH Building Project, furniture, per the directive of FEMF Executive Assistant Lirio. Padolina also
for the account of the FEMF. Lirio directed Padolina to give the go-signal to requested for copies of the shop drawings and a sample contract5 for the
PHILAB to proceed with the fabrication of the laboratory furniture, and project, and that such contract and drawings had to be finalized before the
requested Padolina to forward the contract of the project to FEMF for its down payment could be remitted to the PHILAB the following week.
approval. However, PHILAB failed to forward any sample contract.
Subsequently, PHILAB made partial deliveries of office and laboratory
furniture to BIOTECH after having been duly inspected by their
representatives and FEMF Executive Assistant Lirio.
On August 24, 1982, FEMF remitted ₱600,000 to PHILAB as downpayment for
the laboratory furniture for the BIOTECH project, for which PHILAB issued
Official Receipt No. 253 to FEMF. On October 22, 1982, FEMF made another
partial payment of ₱800,000 to PHILAB, for which the latter issued Official
Receipt No. 256 to FEMF. The remittances were in the form of checks drawn
by FEMF and delivered to PHILAB, through Padolina.
On October 16, 1982, UP, through Emil Q. Javier, the Chancellor of UP Los
Baños and FEMF, represented by its Executive Officer, Rolando Gapud,
executed a Memorandum of Agreement (MOA) in which FEMF agreed to
grant financial support and donate sums of money to UP for the construction
of buildings, installation of laboratory and other capitalization for the project,
not to exceed ₱29,000,000.00. The obligations of FEMF under the MOA are
the following:
ARTICLE II
OBLIGATIONS OF THE FOUNDATION
2.1. The FOUNDATION, in carrying out its principal objectives of promoting
philantrophic and scientific projects through financial support to such
projects that will contribute to the country’s economic development, shall
grant such financial support and donate such sums of money to the
RESEARCH COMPLEX as may be necessary for the construction of buildings,
installation of laboratories, setting up of offices and physical plants and
facilities and other capital investment of the RESEARCH COMPLEX and/or any
of its component Research Institutes not to exceed ₱29 Million. For this
purpose, the FOUNDATION shall:
(a) Acquire and donate to the UNIVERSITY the site for the RESEARCH
COMPLEX; and
(b) Donate or cause to be donated to the UNIVERSITY the sum of TWENTY-
NINE MILLION PESOS (₱29,000,000.00) for the construction of the buildings
of the National Institutes of Biotechnology and Applied Microbiology
(BIOTECH) and the installation of their laboratories and their physical plants
and other facilities to enable them to commence operations.
2.2. In addition, the FOUNDATION shall, subject to the approval of the Board
of Trustees of the FOUNDATION, continue to support the activities of the
RESEARCH COMPLEX by way of recurrent additional grants and donations for
specific research and development projects which may be mutually agreed
upon and, from time to time, additional grants and donations of such
amounts as may be necessary to provide the RESEARCH COMPLEX and/or any
of its Research Institutes with operational flexibility especially with regard to
incentives to staff purchase of equipment/facilities, travel abroad,
recruitment of local and expatriate staff and such other activities and inputs
which are difficult to obtain under usual government rules and regulations.6
The Board of Regents of the UP approved the MOA on November 25, 1982.7
In the meantime, Navasero promised to submit the contract for the
installation of laboratory furniture to BIOTECH, by January 12, 1983.
However, Navasero failed to do so. In a Letter dated February 1, 1983,
BIOTECH reminded Navasero of the need to submit the contract so that it
could be submitted to FEMF for its evaluation and approval.8Instead of
submitting the said contract, PHILAB submitted to BIOTECH an
accomplishment report on the project as of February 28, 1983, and requested
payment thereon.9 By May 1983, PHILAB had completed 78% of the project,
amounting to ₱2,288,573.74 out of the total cost of ₱2,934,068.90. The FEMF
had already paid forty percent (40%) of the total cost of the project. On May
12, 1983, Padolina wrote Lirio and furnished him the progress billing from
PHILAB.10 On August 11, 1983, the FEMF made another partial payment of
₱836,119.52 representing the already delivered laboratory and office
furniture after the requisite inspection and verification thereof by
representatives from the BIOTECH, FEMF, and PHILAB. The payment was
made in the form of a check, for which PHILAB issued Official Receipt No. 202
to FEMF through Padolina.11
On July 1, 1984, PHILAB submitted to BIOTECH Invoice No. 01643 in the
amount of ₱702,939.40 for the final payment of laboratory furniture.
Representatives from BIOTECH, PHILAB, and Lirio for the FEMF, conducted a
verification of the accomplishment of the work and confirmed the same.
BIOTECH forwarded the invoice to Lirio on December 18, 1984 for its
payment.12 Lirio, in turn, forwarded the invoice to Gapud, presumably
sometime in the early part of 1985. However, the FEMF failed to pay the bill.
PHILAB reiterated its request for payment through a letter on May 9,
1985.13 BIOTECH again wrote Lirio on March 21, 1985, requesting the
payment of PHILAB’s bill.14It sent another letter to Gapud, on November 22,
1985, again appealing for the payment of PHILAB’s bill.15 In a Letter to
BIOTECH dated December 5, 1985, PHILAB requested payment of
₱702,939.40 plus interest thereon of ₱224,940.61.16 There was, however, no
response from the FEMF. On February 24, 1986, PHILAB wrote BIOTECH,
appealing for the payment of its bill even on installment basis.17
President Marcos was ousted from office during the February 1986 EDSA
Revolution. On March 26, 1986, Navasero wrote BIOTECH requesting for its
much-needed assistance for the payment of the balance already due plus
interest of ₱295,234.55 for its fabrication and supply of laboratory
furniture.18
On April 22, 1986, PHILAB wrote President Corazon C. Aquino asking her help
to secure the payment of the amount due from the FEMF.19 The letter was
referred to then Budget Minister Alberto Romulo, who referred the letter to
then UP President Edgardo Angara on June 9, 1986. On September 30, 1986,
Raul P. de Guzman, the Chancellor of UP Los Baños, wrote then Chairman of
the Presidential Commission on Good Government (PCGG) Jovito Salonga,
submitting PHILAB’s claim to be officially entered as "accounts payable" as
soon as the assets of FEMF were liquidated by the PCGG.20
In the meantime, the PCGG wrote UP requesting for a copy of the relevant
contract and the MOA for its perusal.21
Chancellor De Guzman wrote Navasero requesting for a copy of the contract
executed between PHILAB and FEMF. In a Letter dated October 20, 1987,
Navasero informed De Guzman that PHILAB and FEMF did not execute any
contract regarding the fabrication and delivery of laboratory furniture to
BIOTECH.
Exasperated, PHILAB filed a complaint for sum of money and damages against
UP. In the complaint, PHILAB prayed that it be paid the following:
(1) PESOS: SEVEN HUNDRED TWO THOUSAND NINE HUNDRED THIRTY NINE
& 40/100 (₱702,939.40) plus an additional amount (as shall be determined
during the hearing) to cover the actual cost of money which at the time of
transaction the value of the peso was eleven to a dollar (₱11.00:$1) and
twenty seven (27%) percent interest on the total amount from August 1982
until fully paid;
(2) PESOS: ONE HUNDRED THOUSAND (₱100,000.00) exemplary damages;
(3) FIFTY THOUSAND [PESOS] (₱50,000.00) as and for attorney’s fees; and
(4) Cost of suit.22
PHILAB alleged, inter alia, that:
3. Sometime in August 1982, defendant, through its officials, particularly MR.
WILLIAM PADOLINA, Director, asked plaintiff to supply and install several
laboratory furnitures and equipment at BIOTECH, a research laboratory of
herein defendant located at its campus in College, Laguna, for a total contract
price of PESOS: TWO MILLION NINE HUNDRED THIRTY-NINE THOUSAND
FIFTY-EIGHT & 90/100 (₱2,939,058.90);
4. After the completion of the delivery and installation of said laboratory
furnitures and equipment at defendant’s BIOTECH Laboratory, defendant
paid three (3) times on installment basis:
a) ₱600,000.00 as per Official Receipt No. 253 dated August 24, 1982;
b) ₱800,000.00 as per Official Receipt No. 256 dated October 22, 1982;
c) ₱836,119.52 as per Official Receipt No. 202 dated August 11, 1983;
thus leaving a balance of PESOS: SEVEN HUNDRED TWO THOUSAND NINE
HUNDRED THIRTY-NINE & 40/100 (₱702,939.40).
5. That notwithstanding repeated demands for the past eight years,
defendant arrogantly and maliciously made plaintiff believe that it was going
to pay the balance aforestated, that was why plaintiff’s President and General
Manager himself, HECTOR C. NAVASERO, personally went to and from UP Los
Baños to talk with defendant’s responsible officers in the hope of expecting
payment, when, in truth and in fact, defendant had no intention to pay
whatsoever right from the start on a misplaced ground of technicalities. Some
of plaintiff’s demand letters since year 1983 up to the present are hereto
attached as Annexes A, B, C, D, E, F, G, and H hereof;
6. That by reason of defendant’s malicious, evil and unnecessary
misrepresentations that it was going to pay its obligation and asking plaintiff
so many red tapes and requirements to submit, compliance of all of which
took plaintiff almost eight (8) years to finish, when, in truth and in fact,
defendant had no intention to pay, defendant should be ordered to pay
plaintiff no less than PESOS: ONE HUNDRED THOUSAND (₱100,000.00)
exemplary damages, so that other government institutions may be warned
that they must not unjustly enrich themselves at the expense of the people
they serve.23
In its answer, UP denied liability and alleged that PHILAB had no cause of
action against it because it was merely the donee/beneficiary of the
laboratory furniture in the BIOTECH; and that the FEMF, which funded the
project, was liable to the PHILAB for the purchase price of the laboratory
furniture. UP specifically denied obliging itself to pay for the laboratory
furniture supplied by PHILAB.
After due proceedings, the trial court rendered judgment dismissing the
complaint without prejudice to PHILAB’s recourse against the FEMF. The fallo
of the decision reads:
WHEREFORE, this case is hereby DISMISSED for lack of merit without
prejudice to plaintiff's recourse to the assets of the Marcos Foundation for
the unpaid balance of ₱792,939.49.
SO ORDERED.24
Undaunted, PHILAB appealed to the Court of Appeals (CA) alleging that the
trial court erred in finding that:
1. the contract for the supply and installation of subject laboratory furniture
and equipment was between PHILAB and the Marcos Foundation; and,
2. the Marcos Foundation, not the University of the Philippines, is liable to
pay the respondent the balance of the purchase price.25
The CA reversed and set aside the decision of the RTC and held that there was
never a contract between FEMF and PHILAB. Consequently, PHILAB could not
be bound by the MOA between the FEMF and UP since it was never a party
thereto. The appellate court ruled that, although UP did not bind itself to pay
for the laboratory furniture; nevertheless, it is liable to PHILAB under the
maxim: "No one should unjustly enrich himself at the expense of another."
The Present Petition
Upon the denial of its motion for reconsideration of the appellate court’s
decision, UP, now the petitioner, filed its petition for review contending that:
I. THE COURT OF APPEALS ERRED WHEN IT FAILED TO APPLY THE LAW ON
CONTRACTS BETWEEN PHILAB AND THE MARCOS FOUNDATION.
II. THE COURT OF APPEALS ERRED IN APPLYING THE LEGAL PRINCIPLE OF
UNJUST ENRICHMENT WHEN IT HELD THAT THE UNIVERSITY, AND NOT THE
MARCOS FOUNDATION, IS LIABLE TO PHILAB.26
Prefatorily, the doctrinal rule is that pure questions of facts may not be the
subject of appeal by certiorari under Rule 45 of the 1997 Rules of Civil
Procedure, as this mode of appeal is generally restricted to questions of
law.27However, this rule is not absolute. The Court may review the factual
findings of the CA should they be contrary to those of the trial
court.28 Correspondingly, this Court may review findings of facts when the
judgment of the CA is premised on a misapprehension of facts.29
On the first assigned error, the petitioner argues that the CA overlooked the
evidentiary effect and substance of the corresponding letters and
communications which support the statements of the witnesses showing
affirmatively that an implied contract of sale existed between PHILAB and the
FEMF. The petitioner furthermore asserts that no contract existed between
it and the respondent as it could not have entered into any agreement
without the requisite public bidding and a formal written contract.
The respondent, on the other hand, submits that the CA did not err in not
applying the law on contracts between the respondent and the FEMF. It,
likewise, attests that it was never privy to the MOA entered into between the
petitioner and the FEMF. The respondent adds that what the FEMF donated
was a sum of money equivalent to ₱29,000,000, and not the laboratory
equipment supplied by it to the petitioner. The respondent submits that the
petitioner, being the recipient of the laboratory furniture, should not enrich
itself at the expense of the respondent.
The petition is meritorious.
It bears stressing that the respondent’s cause of action is one for sum of
money predicated on the alleged promise of the petitioner to pay for the
purchase price of the furniture, which, despite demands, the petitioner failed
to do. However, the respondent failed to prove that the petitioner ever
obliged itself to pay for the laboratory furniture supplied by it. Hence, the
respondent is not entitled to its claim against the petitioner.
There is no dispute that the respondent is not privy to the MOA executed by
the petitioner and FEMF; hence, it is not bound by the said agreement.
Contracts take effect only between the parties and their assigns.30 A contract
cannot be binding upon and cannot be enforced against one who is not a
party to it, even if he is aware of such contract and has acted with knowledge
thereof.31 Likewise admitted by the parties, is the fact that there was no
written contract executed by the petitioner, the respondent and FEMF
relating to the fabrication and delivery of office and laboratory furniture to
the BIOTECH. Even the CA failed to specifically declare that the petitioner and
the respondent entered into a contract of sale over the said laboratory
furniture. The parties are in accord that the FEMF had remitted to the
respondent partial payments via checks drawn and issued by the FEMF to the
respondent, through Padolina, in the total amount of ₱2,288,573.74 out of
the total cost of the project of ₱2,934,068.90 and that the respondent
received the said checks and issued receipts therefor to the FEMF. There is
also no controversy that the petitioner did not pay a single centavo for the
said furniture delivered by the respondent that the petitioner had been using
ever since.
We agree with the petitioner that, based on the records, an implied-in-fact
contract of sale was entered into between the respondent and FEMF. A
contract implied in fact is one implied from facts and circumstances showing
a mutual intention to contract. It arises where the intention of the parties is
not expressed, but an agreement in fact creating an obligation. It is a contract,
the existence and terms of which are manifested by conduct and not by direct
or explicit words between parties but is to be deduced from conduct of the
parties, language used, or things done by them, or other pertinent
circumstances attending the transaction. To create contracts implied in fact,
circumstances must warrant inference that one expected compensation and
the other to pay.32 An implied-in-fact contract requires the parties’ intent to
enter into a contract; it is a true contract.33 The conduct of the parties is to be
viewed as a reasonable man would view it, to determine the existence or not
of an implied-in-fact contract.34 The totality of the acts/conducts of the
parties must be considered to determine their intention. An implied-in-fact
contract will not arise unless the meeting of minds is indicated by some
intelligent conduct, act or sign.35
In this case, the respondent was aware, from the time Padolina contacted it
for the fabrication and supply of the laboratory furniture until the go-signal
was given to it to fabricate and deliver the furniture to BIOTECH as
beneficiary, that the FEMF was to pay for the same. Indeed, Padolina asked
the respondent to prepare the draft of the contract to be received by the
FEMF prior to the execution of the parties (the respondent and FEMF), but
somehow, the respondent failed to prepare one. The respondent knew that
the petitioner was merely the donee-beneficiary of the laboratory furniture
and not the buyer; nor was it liable for the payment of the purchase price
thereof. From the inception, the FEMF paid for the bills and statement of
accounts of the respondent, for which the latter unconditionally issued
receipts to and under the name of the FEMF. Indeed, witness Lirio testified:
Q: Now, did you know, Mr. Witness, if PHILAB Industries was aware that it
was the Marcos Foundation who would be paying for this particular
transaction for the completion of this particular transaction?
A: I think they are fully aware.
Q: What is your basis for saying so?
A: First, I think they were appraised by Dr. Padolina. Secondly, there were
occasions during our inspection in Los Baños, at the installation site, there
were occasions, two or three occasions, when we met with Mr. Navasero who
is the President, I think, or manager of PHILAB, and we appraised him that it
was really between the foundation and him to which includes (sic) the
construction company constructing the building. He is fully aware that it is
the foundation who (sic) engaged them and issued the payments.36
The respondent, in its Letter dated March 26, 1986, informed the petitioner
and sought its assistance for the collection of the amount due from the FEMF:
Dear Dr. Padolina:
May we request for your much-needed assistance in the payment of the
balance still due us on the laboratory furniture we supplied and installed two
years ago?
Business is still slow and we will appreciate having these funds as soon as
possible to keep up our operations.
We look forward to hearing from you regarding this matter.
Very truly yours,
PHILAB INDUSTRIES, INC.37
The respondent even wrote former President Aquino seeking her assistance
for the payment of the amount due, in which the respondent admitted it tried
to collect from her predecessor, namely, the former President Ferdinand E.
Marcos:
YOUR EXCELLENCY:
At the instance of the national government, subject laboratory furnitures
were supplied by our company to the National Institute of Biotechnology &
Applied Microbiology (BIOTECH), University of the Philippines, Los Baños,
Laguna, in 1984.
Out of the total contract price of PESOS: TWO MILLION NINE HUNDRED
THIRTY-NINE THOUSAND FIFTY-EIGHT & 90/100 (₱2,939,058.90), the
previous administration had so far paid us the sum of ₱2,236,119.52 thus
leaving a balance of PESOS: ONE MILLION FOUR HUNDRED TWELVE
THOUSAND SEVEN HUNDRED FORTY-EIGHT & 61/100 (₱1,412.748.61)
inclusive of interest of 24% per annum and 30% exchange rate adjustment.
On several occasions, we have tried to collect this amount from your
predecessor, the latest of which was subject invoice (01643) we submitted to
DR. W. PADOLINA, deputy director of BIOTECH. But this, notwithstanding, our
claim has remained unacted upon up to now. Copy of said invoice is hereto
attached for easy reference.
Now that your excellency is the head of our government, we sincerely hope
that payment of this obligation will soon be made as this is one project the
Republic of the Philippines has use of and derives benefit from.38
Admittedly, the respondent sent to the petitioner its bills and statements of
accounts for the payments of the laboratory furniture it delivered to the
petitioner which the petitioner, through Padolina, transmitted to the FEMF
for its payment. However, the FEMF failed to pay the last statement of
account of the respondent because of the onset of the EDSA upheaval. It was
only when the respondent lost all hope of collecting its claim from the
government and/or the PCGG did it file the complaint against the petitioner
for the collection of the payment of its last delivery of laboratory furniture.
We reject the ruling of the CA holding the petitioner liable for the claim of the
respondent based on the maxim that no one should enrich itself at the
expense of another.
Unjust enrichment claims do not lie simply because one party benefits from
the efforts or obligations of others, but instead it must be shown that a party
was unjustly enriched in the sense that the term unjustly could mean illegally
or unlawfully.39
Moreover, to substantiate a claim for unjust enrichment, the claimant must
unequivocally prove that another party knowingly received something of
value to which he was not entitled and that the state of affairs are such that
it would be unjust for the person to keep the benefit.40 Unjust enrichment is
a term used to depict result or effect of failure to make remuneration of or
for property or benefits received under circumstances that give rise to legal
or equitable obligation to account for them; to be entitled to remuneration,
one must confer benefit by mistake, fraud, coercion, or request.41 Unjust
enrichment is not itself a theory of reconvey. Rather, it is a prerequisite for
the enforcement of the doctrine of restitution.42
Article 22 of the New Civil Code reads:
Every person who, through an act of performance by another, or any other
means, acquires or comes into possession of something at the expense of the
latter without just or legal ground, shall return the same to him. (Boldface
supplied)
In order that accion in rem verso may prosper, the essential elements must
be present: (1) that the defendant has been enriched, (2) that the plaintiff has
suffered a loss, (3) that the enrichment of the defendant is without just or
legal ground, and (4) that the plaintiff has no other action based on contract,
quasi-contract, crime or quasi-delict.43

An accion in rem verso is considered merely an auxiliary action, available only

when there is no other remedy on contract, quasi-contract, crime, and quasi-
delict. If there is an obtainable action under any other institution of positive
law, that action must be resorted to, and the principle of accion in rem
verso will not lie.44

The essential requisites for the application of Article 22 of the New Civil Code
do not obtain in this case. The respondent had a remedy against the FEMF via
an action based on an implied-in-fact contract with the FEMF for the payment
of its claim. The petitioner legally acquired the laboratory furniture under the
MOA with FEMF; hence, it is entitled to keep the laboratory furniture.

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The assailed

Decision of the Court of Appeals is REVERSED AND SET ASIDE. The Decision
of the Regional Trial Court, Makati City, Branch 150, is REINSTATED. No costs.

SO ORDERED.
BARANGAY SAN ROQUE vs HEIRS OF PASTOR
G.R. No. 138896 June 20, 2000
BARANGAY SAN ROQUE, TALISAY, CEBU, petitioner,
vs.
Heirs of FRANCISCO PASTOR namely: EUGENIO SYLIANCO, TEODORO
SYLIANCO, TEODORO SYLIANCO, ISABEL SYLIANCO, EUGENIA S. ONG,
LAWRENCE SYLIANCO, LAWSON SYLIANCO, LAWINA S. NOTARIO,
LEONARDO SYLIANCO JR. and LAWFORD SYLIANCO, respondents.
PANGANIBAN, J.:
An expropriation suit is incapable of pecuniary estimation. Accordingly, it falls
within the jurisdiction of the regional trial courts, regardless of the value of
the subject property.
The Case
Before us is a Petition for Review on Certiorari assailing the March 29, 1999
Order1 of the Regional Trial Court (RTC) of Cebu City (Branch 58) in Civil Case
No. CEB-21978, in which it dismissed a Complaint for eminent domain. It
ruled as follows:
Premises considered, the motion to dismiss is hereby granted on the ground
that this Court has no jurisdiction over the case. Accordingly, the Orders
dated February 19, 1999 and February 26, 1999, as well as the Writ of
Possession issued by virtue of the latter Order are hereby recalled for being
without force and effect.2
Petitioner also challenges the May 14, 1999 Order of the RTC denying
reconsideration.
The Facts
Petitioner filed before the Municipal Trial Court (MTC) of Talisay, Cebu
(Branch 1)3 a Complaint to expropriate a property of the respondents. In an
Order dated April 8, 1997, the MTC dismissed the Complaint on the ground
of lack of jurisdiction. It reasoned that "[e]minent domain is an exercise of the
power to take private property for public use after payment of just
compensation. In an action for eminent domain, therefore, the principal
cause of action is the exercise of such power or right. The fact that the action
also involves real property is merely incidental. An action for eminent domain
is therefore within the exclusive original jurisdiction of the Regional Trial
Court and not with this Court."4
Assailed RTC Ruling
The RTC also dismissed the Complaint when filed before it, holding that an
action for eminent domain affected title to real property; hence, the value of
the property to be expropriated would determine whether the case should
be filed before the MTC or the RTC. Concluding that the action should have
been filed before the MTC since the value of the subject property was less
than P20,000, the RTC ratiocinated in this wise:
The instant action is for eminent domain. It appears from the current Tax
Declaration of the land involved that its assessed value is only One Thousand
Seven Hundred Forty Pesos (P1,740.00). Pursuant to Section 3, paragraph (3),
of Republic Act No. 7691, all civil actions involving title to, or possession of,
real property with an assessed value of less than P20,000.00 are within the
exclusive original jurisdiction of the Municipal Trial Courts. In the case at bar,
it is within the exclusive original jurisdiction of the Municipal Trial Court of
Talisay, Cebu, where the property involved is located.
The instant action for eminent domain or condemnation of real property is a
real action affecting title to or possession of real property, hence, it is the
assessed value of the property involved which determines the jurisdiction of
the court. That the right of eminent domain or condemnation of real,
property is included in a real action affecting title to or possession of real
property, is pronounced by retired Justice Jose Y. Feria, thus, "Real actions
are those affecting title to or possession of real property. These include
partition or condemnation of, or foreclosures of mortgage on, real property.
. . ."5
Aggrieved, petitioner appealed directly to this Court, raising a pure question
of law.6 In a Resolution dated July 28, 1999, the Court denied the Petition for
Review "for being posted out of time on July 2, 1999, the due date being June
2, 1999, as the motion for extension of time to file petition was denied in the
resolution of July 14, 1999."7 In a subsequent Resolution dated October 6,
1999, the Court reinstated the Petition.8
Issue
In its Memorandum, petitioner submits this sole issue for the consideration
of this Court:
Which court, MTC or RTC, has jurisdiction over cases for eminent domain or
expropriation where the assessed value of the subject property is below
Twenty Thousand (P20,000.00) Pesos?9
This Court's Ruling
The Petition is meritorious.
Main Issue:
Jurisdiction over an Expropriation Suit
In support of its appeal, petitioner cites Section 19 (1) of BP 129, which
provides that RTCs shall exercise exclusive original jurisdiction over "all civil
actions in which the subject of the litigation is incapable of pecuniary
estimation; . . . . ." It argues that the present action involves the exercise of
the right to eminent domain, and that such right is incapable of pecuniary
estimation.
Respondents, on the other hand, contend that the Complaint for Eminent
Domain affects the title to or possession of real property. Thus, they argue
that the case should have been brought before the MTC, pursuant to BP 129
as amended by Section 3 (3) of RA 7691. This law provides that MTCs shall
have exclusive original jurisdiction over all civil actions that involve title to or
possession of real property, the assessed value of which does not exceed
twenty thousand pesos or, in civil actions in Metro Manila, fifty thousand
pesos exclusive of interest, damages of whatever kind, attorney's fees,
litigation expenses and costs.
We agree with the petitioner that an expropriation suit is incapable of
pecuniary estimation. The test to determine whether it is so was laid down
by the Court in this wise:
A review of the jurisprudence of this Court indicates that in determining
whether an action is one the subject matter of which is not capable of
pecuniary estimation, this Court has adopted the criterion of first ascertaining
the nature of the principal action or remedy sought. If it is primarily for the
recovery of a sum of money, the claim is considered capable of pecuniary
estimation, and whether jurisdiction is in the municipal courts or in the courts
of first instance would depend on the amount of the claim. However, where
the basic issue is something other than the right to recover a sum of money,
or where the money claim is purely incidental to, or a consequence of, the
principal relief sought, like in suits to have the defendant perform his part of
the contract (specific performance) and in actions for support, or for
annulment of a judgment or to foreclose a mortgage, this Court has
considered such actions as cases where the subject of the litigation may not
be estimated in terms of money, and are cognizable exclusively by courts of
first instance. The rationale of the rule is plainly that the second class cases,
besides the determination of damages, demand an inquiry into other factors
which the law has deemed to be more within the competence of courts of
first instance, which were the lowest courts of record at the time that the first
organic laws of the Judiciary were enacted allocating jurisdiction (Act 136 of
the Philippine Commission of June 11, 1901). 10
In the present case, an expropriation suit does not involve the recovery of a
sum of money. Rather, it deals with the exercise by the government of its
authority and right to take private property for public use. 11 In National
Power Corporation v. Jocson, 12 the Court ruled that expropriation
proceedings have two phases:
The first is concerned with the determination of the authority of the plaintiff
to exercise the power of eminent domain and the propriety of its exercise in
the context of the facts involved in the suit. It ends with an order, if not of
dismissal of the action, "of condemnation declaring that the plaintiff has a
lawful right to take the property sought to be condemned, for the public use
or purpose described in the complaint, upon the payment of just
compensation to be determined as of the date of the filing of the complaint."
An order of dismissal, if this be ordained, would be a final one, of course, since
it finally disposes of the action and leaves nothing more to be done by the
Court on the merits. So, too, would an order of condemnation be a final one,
for thereafter as the Rules expressly state, in the proceedings before the Trial
Court, "no objection to the exercise of the right of condemnation (or the Their reliance is misplaced. Justice Feria sought merely to distinguish
propriety thereof) shall be filed or heard." between real and personal actions. His discussion on this point pertained to
the nature of actions, not to the jurisdiction of courts. In fact, in his pre-bar
The second phase of the eminent domain action is concerned with the
lectures, he emphasizes that jurisdiction over eminent domain cases is still
determination by the court of "the just compensation for the property sought
within the RTCs under the 1997 Rules.
to be taken." This is done by the Court with the assistance of not more than
three (3) commissioners. The order fixing the just compensation on the basis To emphasize, the question in the present suit is whether the government
of the evidence before, and findings of, the commissioners would be final, may expropriate private property under the given set of circumstances. The
too. It would finally dispose of the second stage of the suit, and leave nothing government does not dispute respondents' title to or possession of the same.
more to be done by the Court regarding the issue. . . . Indeed, it is not a question of who has a better title or right, for the
government does not even claim that it has a title to the property. It merely
It should be stressed that the primary consideration in an expropriation suit
asserts its inherent sovereign power to "appropriate and control individual
is whether the government or any of its instrumentalities has complied with
property for the public benefit, as the public necessity, convenience or
the requisites for the taking of private property. Hence, the courts determine
welfare may demand." 17
the authority of the government entity, the necessity of the expropriation,
and the observance of due process. 1 In the main, the subject of an WHEREFORE, the Petition is hereby GRANTED and the assailed Orders SET
expropriation suit is the government's exercise of eminent domain, a matter ASIDE. The Regional Trial Court is directed to HEAR the case. No costs.
that is incapable of pecuniary estimation.
SO ORDERED.
True, the value of the property to be expropriated is estimated in monetary
terms, for the court is duty-bound to determine the just compensation for
it.1avvphi1 This, however, is merely incidental to the expropriation suit.
Indeed, that amount is determined only after the court is satisfied with the
propriety of the expropriation.

Verily, the Court held in Republic of the Philippines v. Zurbano that

"condemnation proceedings are within the jurisdiction of Courts of First
Instance," 14 the forerunners of the regional trial courts. The said case was
decided during the effectivity of the Judiciary Act of 1948 which, like BP 129
in respect to RTCs, provided that courts of first instance had original
jurisdiction over "all civil actions in which the subject of the litigation is not
capable of pecuniary estimation." 15 The 1997 amendments to the Rules of
Court were not intended to change these jurisprudential precedents.

We are not persuaded by respondents' argument that the present action

involves the title to or possession of a parcel of land. They cite the observation
of retired Justice Jose Y. Feria, an eminent authority in remedial law, that
condemnation or expropriation proceedings are examples of real actions that
affect the title to or possession of a parcel of land. 16
POLOMOLOK WATER DISTRICT vs POLOMOLOK GEN. CONSUMERS
G.R. No. 162124 October 18, 2007
POLOMOLOK WATER DISTRICT, Petitioner,
vs.
POLOMOLOK GENERAL CONSUMERS ASSOCIATION, INC., Respondent.
DECISION
SANDOVAL-GUTIERREZ, J.:
For the Court’s resolution is the instant Petition for Review
on Certiorari seeking to reverse the Decision1 of the Court of Appeals (Third
Division) dated August 29, 2003 in CA-G.R. SP No. 66037.
Polomolok Water District (PWD), petitioner, is a government-owned and
controlled corporation engaged in producing and supplying potable water to
the residents of the Municipality of Polomolok, South Cotabato.
Polomolok General Consumers Association, Inc., respondent, is a non-stock,
non-profit corporation organized and existing under Philippine laws.
In October 1994, petitioner passed PWD Resolution No. 94-023, S. 1994
imposing new and higher water rates upon its customers.
Respondent and its members vigorously opposed petitioner’s Resolution,
hence, they filed an administrative complaint with the National Water
Resources Board (NWRB). But in an Order dated October 13, 1999, the NWRB
dismissed the complaint for having been filed out of time.
On November 3, 1999, respondent filed with the Regional Trial Court, Branch
39, Polomolok, South Cotabato, a class suit for declaration of nullity of PWD
Resolution No. 94-023, with prayer for a temporary restraining order and
preliminary injunction, docketed as Civil Case No. 281. Respondent alleged
that the Resolution was passed without due notice to its members and
hearing as required by Presidential Decree (P.D.) No. 198, as amended.
In its answer, petitioner claimed that it posted notices at various conspicuous
public places at least one week before the public hearing; that it conducted
two public hearings on March 2 and June 22, 1994; and that during the second
hearing, 187 residents of Polomolok were present.
On December 3, 1999, the trial court issued a writ of preliminary injunction
enjoining petitioner from disconnecting the water supply of respondent’s
members.
Meanwhile, on June 23, 2000, through the earnest efforts of the Mayor of
Polomolok, the parties entered into a "Memorandum of Agreement."
Respondent agreed to submit a list of all its members, the amounts of dues
and the dates of payments. Petitioner, in turn, committed to accept the
payments of respondent’s members at the rate of ₱60.00 for the first 10 cubic
meters of water consumption or any amount as may be decreed by the trial
court in Civil Case No. 281. The parties also agreed that payments of water
dues would be made directly to petitioner rather than coursed through
respondent; and that the "Memorandum of Agreement" would be without
prejudice to the final outcome of Civil Case No. 281.
However, both parties violated their stipulations.
Meanwhile, on January 18, 2001, the trial court rendered an Order2 which
reads:
In view of the foregoing, the Court finds that plaintiff has established
sufficient proof of violation of its rights to justify the issuance of a writ of
preliminary injunction in its favor during the pendency of the main suit for
declaration of nullity of defendant’s Resolution No. 94-023.
Correspondingly, let therefore a writ of preliminary injunction be issued
restraining the defendant from disconnecting the water meter/connection of
the plaintiff and its members.
The injunction bond is hereby fixed at ₱200,000.00 which the plaintiff will pay
to such defendant all damages that it may sustain by reason of the injunction
if the Court should finally decide that the said plaintiff was not entitled
thereto.
The Court Sheriff is hereby directed to serve this Order and the Writ of
Preliminary Injunction to the defendant Polomolok Water District
immediately upon receipt thereof and to make his return with proceeding
thereon.
SO ORDERED.
Petitioner filed a motion for reconsideration, but this was denied by the trial
court in its Order dated May 10, 2001.
Thereupon, petitioner filed with the Court of Appeals a petition for certiorari,
contending that the trial court committed grave abuse of discretion
amounting to lack or excess of jurisdiction in issuing the Orders dated January
18 and May 10, 2001 directing the issuance of a writ of preliminary injunction;
that respondent failed to exhaust all administrative remedies before seeking
judicial relief; and that, therefore, the trial court has no jurisdiction over Civil
Case No. 281.
In its Decision of August 29, 2003, the Court of Appeals dismissed petitioner’s
petition for certiorari and affirmed the trial court’s questioned Orders, thus:
WHEREFORE, the assailed orders dated January 18, 2001 and May 10, 2001
are AFFIRMED. The case is remanded to the Regional Trial Court of
Polomolok, South Cotabato, Branch 39. The said court is ordered to resolve
with deliberate dispatch the class suit for declaration of nullity of Polomolok
Water District Resolution No. 94-023. Accordingly, the instant petition is
DISMISSED.
SO ORDERED.
The Court of Appeals held that the issue before the trial court was the validity
of PWD Resolution No. 94-023, S. 1994 which is incapable of pecuniary
estimation. Hence, the doctrine of exhaustion of administrative remedies is
inapplicable.
Petitioner seasonably filed its motion for reconsideration, but this was denied
by the Court of Appeals in its Resolution3 dated January 21, 2004.
Hence, this petition.
Petitioner contends that based upon the allegations of the complaint, it is the
National Water Rights Board, created under P.D. Nos. 700 and 744, which has
jurisdiction over Civil Case No. 281. Its decision is appealable to the National
Water Resources Council and the latter’s ruling should be appealed to the
Office of the President. As respondent failed to exhaust all these
administrative remedies, its complaint with the trial court was premature and
should have been dismissed.
It is well settled that jurisdiction of the court is determined on the basis of the
material allegations of the complaint and the character of the relief prayed
for irrespective of whether plaintiff is entitled to such relief.4 The pertinent
allegations in the complaint in Civil Case No. 281 are:
xxx
4. Sometime in October 1994, the defendant imposed new water rates,
allegedly through PWD Resolution No. 94-023, Series of 1994. A photocopy
of the said Resolution is hereto attached as Annex "D.";
5. PWD Resolution No. 94-023 was passed without complying with the
provisions of PD 198, Letter of Instruction No. 700, Par (c), Section 1, as well
as Letter of Instruction No. 744, and other related laws;
6. The non-compliance on the requirements of public hearing, posting,
publication and other requirements, as required by the said law and Letters
of Instruction would render Resolution No. 94-023 null and void;
7. Plaintiff originally filed before this Honorable Court Civil Case No. 115 for
damages and Preliminary Injunction, but since the issue in the said case
intertwined with the proper rates that will be imposed, the Honorable Court
dismissed the said case for lack of cause of action for clearly the issue of water
rates pertain to the National Water Rights Board (NWRB, for brevity);
8. The case filed by the plaintiff before the NWRB has already been withdrawn
by the plaintiff. A photocopy of the withdrawal is hereto attached as Annex
"E" as the NWRB resolved that it has no jurisdiction to pass on the legality of
Resolution No. 94-023;
9. The present action is based only on the legality of the adoption of
Resolution No. 94-023 (stress supplied);
xxx
WHEREFORE, foregoing premises considered, it is respectfully prayed that a
Temporary Restraining Order And/Or Writ of Preliminary Injunction be issued
after summary hearing restraining the defendant from disconnecting the
water connection of the members of the plaintiff until further orders from
the Honorable Court;

AND AFTER DUE NOTICE AND HEARING

1. Declaring as null and void, PWD Resolution No. 94-023, Series of 1994 for
failure to comply with existing laws and Letters of Instruction;

2. Ordering the defendant to pay attorney’s fees in the amount of

₱100,000.00;

3. Ordering the defendant to pay exemplary damages in the amount of

₱100,000.00;

4. Ordering the defendant to pay the cost of suit.

From respondent’s allegations and relief prayed for in its complaint, the issue
raised is whether PWD Resolution No. 94-023, S. 1994 is valid. Respondent
alleged that petitioner did not comply with the requisites of notice,
publication and public hearing. Verily, the Court of Appeals did not err in
holding that the subject of litigation is incapable of pecuniary
estimation.1âwphi1 Section 19 of Batas Pambansa Blg. 129 provides that the
Regional Trial Courts shall exercise exclusive original jurisdiction in "all civil
actions in which the subject of the litigation is incapable of pecuniary
estimation."

WHEREFORE, we DENY the petition. The assailed Decision of the Court of

Appeals (Third Division) in CA-G.R. SP No. 66037 is AFFIRMED. Costs against
the petitioner.

SO ORDERED.
HEIRS OF GENEROSO SEBE vs HEIRS OF VERONICO SEVILLA
G.R. No. 174497 October 12, 2009
HEIRS OF GENEROSO SEBE AURELIA CENSERO SEBE and LYDIA
SEBE, Petitioners,
vs.
HEIRS OF VERONICO SEVILLA and TECHNOLOGY AND LIVELIHOOD
RESOURCE CENTER, Respondents.
DECISION
ABAD, J.:
This case concerns the jurisdiction of Municipal Trial Courts over actions
involving real properties with assessed values of less than ₱20,000.00.
The Facts and the Case
In this petition for review on certiorari1 petitioners seek to reverse the
Order2 dated August 8, 2006, of the Regional Trial Court (RTC) of Dipolog City,
Branch 9, in Civil Case 5435, for annulment of documents, reconveyance and
recovery of possession with damages. The trial court dismissed the complaint
for lack of jurisdiction over an action where the assessed value of the
properties is less than ₱20,000.00. Petitioners asked for reconsideration3 but
the court denied it.4
On August 10, 1999 plaintiff spouses Generoso and Aurelia Sebe and their
daughter, Lydia Sebe, (the Sebes) filed with the RTC of Dipolog City5 a
complaint against defendants Veronico Sevilla and Technology and Livelihood
Resources Center for Annulment of Document, Reconveyance and Recovery
of Possession of two lots, which had a total assessed value of ₱9,910.00, plus
damages.6 On November 25, 1999 they amended their complaint7 to address
a deed of confirmation of sale that surfaced in defendant Sevilla’s Answer8 to
the complaint. The Sebes claimed that they owned the subject lots but,
through fraud, defendant Sevilla got them to sign documents conveying the
lots to him. In his Answer9 Sevilla insisted that he bought the lots from the
Sebes in a regular manner.
While the case was pending before the RTC, plaintiff Generoso Sebe died so
his wife and children substituted him.10 Parenthetically, with defendant
Veronico Sevilla’s death in 2006, his heirs substituted him as respondents in
this case.11
On August 8, 2006 the RTC dismissed the case for lack of jurisdiction over the
subject matter considering that the ultimate relief that the Sebes sought was
the reconveyance of title and possession over two lots that had a total
assessed value of less than ₱20,000.00. Under the law,12 said the RTC, it has
jurisdiction over such actions when the assessed value of the property
exceeds ₱20,000.00,13 otherwise, jurisdiction shall be with the first level
courts.14 The RTC concluded that the Sebes should have filed their action with
the Municipal Trial Court (MTC) of Dipolog City.
On August 22, 2006 the Sebes filed a motion for reconsideration.15 They
pointed out that the RTC mistakenly classified their action as one involving
title to or possession of real property when, in fact, it was a case for the
annulment of the documents and titles that defendant Sevilla got. Since such
an action for annulment was incapable of pecuniary estimation, it squarely
fell within the jurisdiction of the RTC as provided in Section 19 of Batas
Pambansa 129, as amended.
To illustrate their point, the Sebes drew parallelisms between their case and
the cases of De Rivera v. Halili16 and Copioso v. Copioso.17
The De Rivera involved the possession of a fishpond. The Supreme Court
there said that, since it also had to resolve the issue of the validity of the
contracts of lease on which the opposing parties based their rights of
possession, the case had been transformed from a mere detainer suit to one
that was incapable of pecuniary estimation. Under Republic Act 296 or the
Judiciary Act of 1948, as amended, civil actions, which were incapable of
pecuniary estimation, came under the original jurisdiction of the Court of First
Instance (now the RTC).18 The Sebes pointed out that, like De Rivera, the
subject of their case was "incapable of pecuniary estimation" since they asked
the court, not only to resolve the dispute over possession of the lots, but also
to rule on the validity of the affidavits of quitclaim, the deeds of confirmation
of sale, and the titles over the properties.19 Thus, the RTC should try the case.
The Copioso, on the other hand, involves the reconveyance of land the
assessed value of which was allegedly ₱3,770.00. The Supreme Court ruled
that the case comprehended more than just the title to, possession of, or any
interest in the real property. It sought the annulment of contracts,
reconveyance or specific performance, and a claim for damages. In other
words, there had been a joinder of causes of action, some of which were
incapable of pecuniary estimation. Consequently, the case properly fell
within the jurisdiction of the RTC. Here, petitioners argued that their case had
the same causes of actions and reliefs as those involved in Copioso. Thus, the
RTC had jurisdiction over their case.
On August 31, 2006 the RTC denied the Sebes’s motion for reconsideration,
pointing out that the Copioso ruling had already been overturned by Spouses
Huguete v. Spouses Embudo.20 Before the Huguete, cancellation of titles,
declaration of deeds of sale as null and void and partition were actions
incapable of pecuniary estimation. Now, however, the jurisdiction over
actions of this nature, said the RTC, depended on the valuation of the
properties. In this case, the MTC had jurisdiction because the assessed value
of the lots did not exceed ₱20,000.00.
The Issue
The issue in this case is whether or not the Sebes’s action involving the two
lots valued at less than ₱20,000.00 falls within the jurisdiction of the RTC.
The Court’s Ruling
Whether a court has jurisdiction over the subject matter of a particular action
is determined by the plaintiff’s allegations in the complaint and the principal
relief he seeks in the light of the law that apportions the jurisdiction of
courts.21
The gist of the Sebes’s complaint is that they had been the owner for over 40
years of two unregistered lots22 in Dampalan, San Jose, Dipolog City, covered
by Tax Declaration 012-239, with a total assessed value of ₱9,910.00.23On
June 3, 1991 defendant Sevilla caused the Sebes to sign documents entitled
affidavits of quitclaim.24 Being illiterate, they relied on Sevilla’s explanation
that what they signed were "deeds of real estate mortgage" covering a loan
that they got from him.25 And, although the documents which turned out to
be deeds conveying ownership over the two lots to Sevilla for
₱10,000.0026 were notarized, the Sebes did not appear before any notary
public.27 Using the affidavits of quitclaim, defendant Sevilla applied for28 and
obtained free patent titles covering the two lots on September 23,
1991.29 Subsequently, he mortgaged the lots to defendant Technology and
Livelihood Resource Center for ₱869,555.00.30
On December 24, 1991 the Sebes signed deeds of confirmation of sale
covering the two lots.31 Upon closer examination, however, their signatures
had apparently been forged.32 The Sebes were perplexed with the reason for
making them sign such documents to confirm the sale of the lots when
defendant Sevilla already got titles to them as early as September.33 At any
rate, in 1992, defendant Sevilla declared the lots for tax purposes under his
name.34 Then, using force and intimidation, he seized possession of the lots
from their tenants35 and harvested that planting season’s yield36 of coconut
and palay worth ₱20,000.00.37
Despite demands by the Sebes, defendant Sevilla refused to return the lots,
forcing them to hire a lawyer38 and incur expenses of litigation.39 Further the
Sebes suffered loss of earnings over the years.40 They were also entitled to
moral41 and exemplary damages.42 They thus asked the RTC a) to declare void
the affidavits of quitclaim and the deeds of confirmation of sale in the case;
b) to declare the Sebes as lawful owners of the two lots; c) to restore
possession to them; and d) to order defendant Sevilla to pay them
₱140,000.00 in lost produce from June 3, 1991 to the date of the filing of the
complaint, ₱30,000.00 in moral damages, ₱100,000.00 in attorney’s fee,
₱30,000.00 in litigation expenses, and such amount of exemplary damages as
the RTC might fix.43
Based on the above allegations and prayers of the Sebes’s complaint, the law
that applies to the action is Batas Pambansa 129, as amended. If this case
were decided under the original text of Batas Pambansa 129 or even under
its predecessor, Republic Act 296, determination of the nature of the case as
a real action would have ended the controversy. Both real actions and actions
incapable of pecuniary estimation fell within the exclusive original jurisdiction
of the RTC.
But, with the amendment of Batas Pambansa 129 by Republic Act 7601, the
distinction between these two kinds of actions has become pivotal. The
amendment expanded the exclusive original jurisdiction of the first level
courts to include real actions involving property with an assessed value of less
than ₱20,000.00.44
The power of the RTC under Section 19 of Batas Pambansa 129,45 as
amended,46 to hear actions involving title to, or possession of, real property
or any interest in it now covers only real properties with assessed value in
excess of ₱20,000.00. But the RTC retained the exclusive power to hear
actions the subject matter of which is not capable of pecuniary estimation.
Thus–
SEC. 19. Jurisdiction in Civil Cases. – Regional Trial Courts shall exercise
exclusive original jurisdiction:
(1) In all civil actions in which the subject of the litigations is incapable of
pecuniary estimation.
(2) In all civil actions which involve the title to, or possession of, real property,
or any interest therein, where the assessed value of the property involved
exceeds Twenty thousand pesos (₱20,000.00) or for civil actions in Metro
Manila, where such value exceeds Fifty thousand pesos (₱50,000.00) except
actions for forcible entry into and unlawful detainer of lands or buildings,
original jurisdiction over which is conferred upon the Metropolitan Trial
Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts; x x x.
Section 33, on the other hand provides that, if the assessed value of the real
property outside Metro Manila involved in the suit is ₱20,000.00 and below,
as in this case, jurisdiction over the action lies in the first level courts. Thus—
SEC. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and
Municipal Circuit Trial Courts in Civil Cases -- Metropolitan Trial Courts,
Municipal Trial Courts and Municipal Circuit Trial Courts shall exercise:
xxxx
(3) Exclusive original jurisdiction in all civil actions which involve title to, or
possession of, real property, or any interest therein where the assessed value
of the property or interest therein does not exceed Twenty thousand pesos
(₱20,000.00) or, in civil actions in Metro Manila, where such assessed value
does not exceed Fifty thousand pesos (₱50,000.00) x x x.
But was the Sebes’s action one involving title to, or possession of, real
property or any interest in it or one the subject of which is incapable of
pecuniary estimation?
The Sebes claim that their action is, first, for the declaration of nullity of the
documents of conveyance that defendant Sevilla tricked them into signing
and, second, for the reconveyance of the certificate of title for the two lots
that Sevilla succeeded in getting. The subject of their action is, they conclude,
incapable of pecuniary estimation.1avvphi1
An action "involving title to real property" means that the plaintiff’s cause of
action is based on a claim that he owns such property or that he has the legal
rights to have exclusive control, possession, enjoyment, or disposition of the
same.47 Title is the "legal link between (1) a person who owns property and
(2) the property itself."48
"Title" is different from a "certificate of title" which is the document of
ownership under the Torrens system of registration issued by the
government through the Register of Deeds.49 While title is the claim, right or
interest in real property, a certificate of title is the evidence of such claim.
Another way of looking at it is that, while "title" gives the owner the right to
demand or be issued a "certificate of title," the holder of a certificate of title
does not necessarily possess valid title to the real property. The issuance of a
certificate of title does not give the owner any better title than what he
actually has in law.50 Thus, a plaintiff’s action for cancellation or nullification
of a certificate of title may only be a necessary consequence of the
defendant’s lack of title to real property. Further, although the certificate of
title may have been lost, burned, or destroyed and later on reconstituted,
title subsists and remains unaffected unless it is transferred or conveyed to
another or subjected to a lien or encumbrance.51
Nestled between what distinguishes a "title" from a "certificate of title" is the
present controversy between the Sebes and defendant Sevilla. Which of
them has valid title to the two lots and would thus be legally entitled to the
certificates of title covering them?
The Sebes claim ownership because according to them, they never
transferred ownership of the same to anyone. Such title, they insist, has
remained with them untouched throughout the years, excepting only that in
1991 they constituted a real estate mortgage over it in defendant Sevilla’s
favor. The Sebes alleged that defendant Sevilla violated their right of
ownership by tricking them into signing documents of absolute sale, rather
than just a real estate mortgage to secure the loan that they got from him.

Assuming that the Sebes can prove that they have title to or a rightful claim
of ownership over the two lots, they would then be entitled, first, to secure
evidence of ownership or certificates of title covering the same and, second,
to possess and enjoy them. The court, in this situation, may in the exercise of
its equity jurisdiction and without ordering the cancellation of the Torrens
titles issued to defendant Sevilla, direct the latter to reconvey the two lots
and their corresponding Torrens titles to them as true owners.52

The present action is, therefore, not about the declaration of the nullity of
the documents or the reconveyance to the Sebes of the certificates of title
covering the two lots. These would merely follow after the trial court shall
have first resolved the issue of which between the contending parties is the
lawful owner of such lots, the one also entitled to their possession. Based on
the pleadings, the ultimate issue is whether or not defendant Sevilla
defrauded the Sebes of their property by making them sign documents of
conveyance rather than just a deed of real mortgage to secure their debt to
him. The action is, therefore, about ascertaining which of these parties is the
lawful owner of the subject lots, jurisdiction over which is determined by the
assessed value of such lots.

Here, the total assessed value of the two lots subject of the suit is ₱9,910.00.
Clearly, this amount does not exceed the jurisdictional threshold value of
₱20,000.00 fixed by law. The other damages that the Sebes claim are merely
incidental to their main action and, therefore, are excluded in the
computation of the jurisdictional amount.

WHEREFORE, premises considered, the petition is DISMISSED. The Order

dated August 8, 2006, of the Regional Trial Court of Dipolog City, Branch 9, in
Civil Case 5435, is AFFIRMED.

SO ORDERED.
SAN PEDRO vs ASDALA
G.R. No. 164560 July 22, 2009
ANA DE GUIA SAN PEDRO and ALEJO DOPEÑO, Petitioners,
vs.
HON. FATIMA G. ASDALA, in her capacity as the Presiding Judge of the
Regional Trial Court of Quezon City, Branch 87; HON. MANUEL TARO, in his
capacity as the Presiding Judge of the Metropolitan Trial Court of Quezon
City, Branch 42; and the HEIRS OF SPOUSES APOLONIO V. DIONISIO and
VALERIANA DIONISIO (namely, ALLAN GEORGE R. DIONISIO and ELEANOR
R. DIONISIO, herein represented by ALLAN GEORGE R.
DIONISIO), Respondents.
DECISION
DEL CASTILLO, J.:
This resolves the petition for certiorari under Rule 65 of the Rules of Court,
praying that the Resolutions1 of the Court of Appeals (CA) dated September
15, 2003 and June 1, 2004, respectively, in CA-G.R. SP No. 78978, be reversed
and set aside.
The antecedent facts are as follows.
Sometime in July 2001, private respondents, heirs of spouses Apolonio and
Valeriana Dionisio, filed with the Metropolitan Trial Court (MeTC) of Quezon
City, Branch 42, a Complaint2 against herein petitioners and Wood Crest
Residents Association, Inc., for Accion Reivindicatoria, Quieting of Title and
Damages, with Prayer for Preliminary Mandatory Injunction. Private
respondents alleged that subject property located in Batasan Hills, Quezon
City, with an assessed value of ₱32,100.00, was titled in the name of spouses
Apolonio and Valeriana Dionisio; but petitioners, with malice and evident bad
faith, claimed that they were the owners of a parcel of land that encompasses
and covers subject property. Private respondents had allegedly been
prevented from entering, possessing and using subject property. It was
further alleged in the Complaint that petitioners' Transfer Certificate of Title
over their alleged property was spurious. Private respondents then prayed
that they be declared the sole and absolute owners of the subject property;
that petitioners be ordered to surrender possession of subject property to
them; that petitioners and Wood Crest and/or its members be ordered to pay
actual and moral damages, and attorney's fees.
Petitioners, for their part, filed a Motion to Dismiss3 said complaint on the
ground that the MeTC had no jurisdiction over the subject matter of the
action, as the subject of litigation was incapable of pecuniary estimation.
The MeTC then issued an Order4 dated July 4, 2002 denying the motion to
dismiss, ruling that, under Batas Pambansa (B.P.) Blg. 129, as amended, the
MeTC had exclusive original jurisdiction over actions involving title to or
possession of real property of small value.
Petitioners' Motion for Reconsideration of said Order dated July 4, 2002 was
denied.
Petitioners assailed the aforementioned Order by filing a petition for
certiorari with the Regional Trial Court (RTC) of Quezon City, Branch 87.
However, in its Decision5 dated March 10, 2003, the RTC dismissed the
petition, finding no grave abuse of discretion on the part of the MeTC
Presiding Judge. The RTC sustained the MeTC ruling, stating that, in
accordance with Section 33(3) of Republic Act (R.A.) No. 7691, amending B.P.
Blg. 129, the MeTC had jurisdiction over the complaint for Accion
Reivindicatoria, as it involves recovery of ownership and possession of real
property located in Quezon City, with an assessed value not exceeding
₱50,000.00. A Motion for Reconsideration6of the Decision was filed by
petitioners, but was denied in an Order7 dated July 3, 2003.
Petitioners then filed with the Court of Appeals another petition for certiorari,
insisting that both the MeTC and RTC acted with grave abuse of discretion
amounting to lack or excess of jurisdiction by not ordering the dismissal of
the complaint for Accion Reivindicatoria, for lack of jurisdiction over the
same. In the assailed CA Resolution dated September 15, 2003, the CA
dismissed the petition outright, holding that certiorari was not available to
petitioners as they should have availed themselves of the remedy of appeal.
Petitioners' motion for reconsideration of the resolution of dismissal was
denied per Resolution8 dated June 1, 2004.
Thus, petitioners filed the instant petition and, in support thereof, they allege
that:
THE HONORABLE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR IN (SIC) EXCESS OF JURISDICTION IN
DENYING THE PETITION FOR CERTIORARI AND FOR FAILURE TO RESOLVE THE
ISSUE RAISED IN THE CERTIORARI REGARDING THE JURISDICTION OF THE
METROPOLITAN TRIAL COURT TO TAKE COGNIZANCE OF A CASE OF ACCION
REINVINDICATORIA.
THE HONORABLE PUBLIC RESPONDENT FATIMA GONZALES-ASDALA, AS
PRESIDING JUDGE OF RTC BRANCH 87, QUEZON CITY, ACTED WITH GRAVE
ABUSE OF DISCRETION AMOUNTING TO LACK OR IN EXCESS OF (SIC)
JURISDICTION IN DISMISSING THE PETITION FOR CERTIORARI AND IN
RESOLVING THAT A CASE OF ACCION REINVINDICATORIA IS WITHIN THE
JURISDICTION OF THE METROPOLITAN TRIAL COURT.
THE HONORABLE PUBLIC RESPONDENT MANUEL TARO AS PRESIDING JUDGE
MeTC, BRANCH 42, QUEZON CITY, ACTED WITH GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR IN (SIC) EXCESS OF JURISDICTION IN
SO TAKING COGNIZANCE OF THE COMPLAINT FOR ACCION
REINVINDICATORIA IN CIVIL CASE NO. 27434 ENTITLED, "HEIRS OF SPS.
APOLONIO V. DIONISIO AND VALERIANA DIONISIO, ETC. VS. ANA DE GUIA
SAN PEDRO, ET. AL."9
The present Petition for Certiorari is doomed and should not have been
entertained from the very beginning.
The settled rule is that appeals from judgments or final orders or resolutions
of the CA should be by a verified petition for review on certiorari, as provided
for under Rule 45 of the Revised Rules of Civil Procedure. Thus, in Pasiona, Jr.
v. Court of Appeals,10 the Court expounded as follows:
The aggrieved party is proscribed from assailing a decision or final order of
the CA via Rule 65, because such recourse is proper only if the party has no
plain, speedy and adequate remedy in the course of law. In this case,
petitioner had an adequate remedy, namely, a petition for review on
certiorari under Rule 45 of the Rules of Court. A petition for review on
certiorari, not a special civil action for certiorari was, therefore, the correct
remedy.
xxxx
Settled is the rule that where appeal is available to the aggrieved party, the
special civil action for certiorari will not be entertained – remedies of appeal
and certiorari are mutually exclusive, not alternative or successive. Hence,
certiorari is not and cannot be a substitute for a lost appeal, especially if one's
own negligence or error in one's choice of remedy occasioned such loss or
lapse. One of the requisites of certiorari is that there be no available appeal
or any plain, speedy and adequate remedy. Where an appeal was available,
as in this case, certiorari will not prosper, even if the ground therefor is
grave abuse of discretion. Petitioner's resort to this Court by Petition for
Certiorari was a fatal procedural error, and the instant petition must,
therefore, fail.11
For the very same reason given above, the CA, therefore, acted properly
when it dismissed the petition for certiorari outright, on the ground that
petitioners should have resorted to the remedy of appeal instead
of certiorari. Verily, the present Petition for Certiorari should not have been
given due course at all.
Moreover, since the period for petitioners to file a petition for review
on certiorari had lapsed by the time the instant petition was filed, the assailed
CA Resolutions have attained finality.1avvphi1
Nevertheless, just to put the matter to rest, the Court reiterates the ruling in
Heirs of Valeriano S. Concha, Sr. v. Spouses Lumocso,12 to wit:
In a number of cases, we have held that actions for reconveyance of or for
cancellation of title to or to quiet title over real property are actions that fall
under the classification of cases that involve "title to, or possession of, real
property, or any interest therein."
xxxx
x x x Thus, under the old law, there was no substantial effect on jurisdiction
whether a case is one, the subject matter of which was incapable of pecuniary
estimation, under Section 19(1) of B.P. 129, or one involving title to property
under Section 19(2). The distinction between the two classes became crucial
with the amendment introduced by R.A. No. 7691 in 1994, which expanded
the exclusive original jurisdiction of the first level courts to include "all civil
actions which involve title to, or possession of, real property, or any interest
therein where the assessed value of the property or interest therein does not
exceed Twenty thousand pesos (₱20,000.00) or, in civil actions in Metro
Manila, where such assessed value does not exceed Fifty thousand pesos
(₱50,000.00) exclusive of interest, damages of whatever kind, attorney's fees,
litigation expenses and costs." Thus, under the present law, original
jurisdiction over cases the subject matter of which involves "title to,
possession of, real property or any interest therein" under Section 19(2) of
B.P. 129 is divided between the first and second level courts, with the
assessed value of the real property involved as the benchmark. This
amendment was introduced to "unclog the overloaded dockets of the RTCs
which would result in the speedier administration of justice."13

Clearly, the RTC and the CA ruled correctly that the MeTC had jurisdiction
over private respondents' complaint for Accion Reivindicatoria.

IN VIEW OF THE FOREGOING, the petition is DISMISSED for utter lack of

merit. The Resolutions of the Court of Appeals in CA-G.R. SP No. 78978, dated
September 15, 2003 and June 1, 2004, are AFFIRMED.

SO ORDERED.
SPS. JORGE J. HUGUETE ET AL vs SPS. TEOFEDO AMARILLO
G.R. No. 149554 July 1, 2003
SPOUSES JORGE J. HUGUETE and YOLANDA B. HUGUETE, petitioners,
vs.
SPOUSES TEOFEDO AMARILLO EMBUDO and MARITES HUGUETE-
EMBUDO, respondents.
YNARES-SANTIAGO, J.:
This is a petition for review assailing the Orders dated June 27, 20011 and July
26, 20012 of the Regional Trial Court of Cebu City, Branch 7, in Civil Case No.
CEB-24925.
On March 2, 2000, petitioner spouses Jorge and Yolanda Huguete instituted
against respondent spouses Teofredo Amarillo Embudo and Marites
Huguete-Embudo a complaint for "Annulment of TCT No. 99694, Tax
Declaration No. 46493, and Deed of Sale, Partition, Damages and Attorney’s
Fees," docketed as Civil Case No. CEB-24925 of the Regional Trial Court of
Cebu City, Branch 7. Petitioners alleged that their son-in-law, respondent
Teofredo, sold to them a 50-square meter portion of his 150-square meter
parcel of land, known as Lot No. 1920-F-2, situated in San Isidro, Talisay, Cebu,
for a consideration of P15,000.00; that Teofredo acquired the lot from Ma.
Lourdes Villaber-Padillo by virtue of a deed of sale,3 after which Transfer
Certificate of Title No. 99694 was issued solely in his name; that despite
demands, Teofredo refused to partition the lot between them.
On March 15, 2001, respondents filed a Motion to Dismiss4 the complaint on
the ground of lack of jurisdiction over the subject matter of the case, arguing
that the total assessed value of the subject land was only P15,000.00 which
falls within the exclusive jurisdiction of the Municipal Trial Court, pursuant to
Section 33(3)5 of Batas Pambansa Blg. 129, as amended by Republic Act No.
7691.6
Petitioners filed an Opposition to the Motion to Dismiss7 alleging that the
subject matter of the action is incapable of pecuniary estimation and,
therefore, is cognizable by the Regional Trial Court, as provided by Section
19(1) of B.P. 129, as amended.8
The trial court dismissed the complaint for lack of jurisdiction. Petitioners
filed a Motion for Reconsideration,9 which was denied on July 26, 2001.
Hence, this petition for review based on the following errors:
I
THE HONORABLE COURT ERRED IN HOLDING THAT IT HAS NO JURISDICTION
OVER THE CASE PURSUANT TO SECTION 33 (3) OF BATAS PAMBANSA BILANG
129 IN UTTER DISREGARD OF SECTION 19 (1) OF THE SAME LAW AS WELL AS
SETTLED JURISPRUDENCE ENUNCIATED IN RUSSEL VS. VESTIL, 304 SCRA 738
(MARCH 17, 1999) WHICH, WITH DUE RESPECT, WAS TAKEN OUT OF
CONTEXT.
II
THE HONORABLE COURT COMMITTED AN ERROR IN NOT HOLDING THAT
RESPONDENTS WHO SEEK AFFIRMATIVE RELIEF AND THEREBY INVOKE THE
AUTHORITY OF THE COURT IN THEIR COUNTERCLAIM ARE ESTOPPED TO
DENY THE JURISDICTION OF THE HONORABLE COURT.10
The petition lacks merit.
Petitioners maintain that the complaint filed before the Regional Trial Court
is for the annulment of deed of sale and partition, and is thus incapable of
pecuniary estimation. Respondents, on the other hand, insist that the action
is one for annulment of title and since the assessed value of the property as
stated in the complaint is P15,000.00, it falls within the exclusive jurisdiction
of the Municipal Trial Court.
The pertinent portions of the complaint alleged:
4. Sometime in the year 1995, Teofredo A. Embudo, the son-in-law of
plaintiffs offered them portion of Lot No. 1920-F-2, situated in San Isidro,
Talisay, Cebu, which defendants bought on installment basis from Ma.
Lourdes Villaber-Padillo. Desirous to live near their daughter and
grandchildren, they accepted defendant’s offer. Immediately, plaintiffs paid
defendants the sum of FIFTEEN THOUSAND PESOS (P15,000.00) as full
consideration and payment of the purchase of 50-square meter lot at a price
of THREE HUNDRED PESOS (P300.00) per square meter;
5. Happily, plaintiffs built their house on the portion they bought from
defendants which is adjacent to defendant’s house. Plaintiffs were issued Tax
Declaration No. 53170 for the house, copy is hereto attached to form part
hereof and marked as Annex "A";
6. Notwithstanding repeated demands for the execution of the Deed of Sale,
defendants with insidious machination led plaintiffs to believe that the
necessary document of conveyance could not as yet be executed for the
reason that they have not yet paid in full their obligation to Ma. Lourdes
Villaber-Padillo, the original owner of the lot in question, when in truth and
in fact, as plaintiffs came to know later, that the aforesaid defendants were
already in possession of a Deed of Sale over the entire lot in litigation in which
it appeared that they are the sole buyers of the lot, thusly consolidating their
ownership of the entire lot to the exclusion of the plaintiffs. A copy of the
Deed of Sale is hereto attached to form part hereof and marked as Annex "B."
7. As a way to further their fraudulent design, defendants secured the
issuance of Transfer Certificate of Title No. T-99694 solely in their names on
the basis of the Deed of Sale aforementioned (Annex "A" hereof), without the
knowledge of the plaintiffs. A copy of the aforesaid Transfer Certificate of
Title is hereto attached as an integral part hereof and marked as Annex "C."
8. Since considerable time had already elapsed that defendants had given
plaintiffs a run-around, plaintiffs then demanded for the partition of the lot,
segregating a portion in which their residential house stands, and despite
such demand defendants, without qualm of conscience refused and still
refuse to partition the lot;
xxx xxx xxx;
PRAYER
WHEREFORE, premises considered, this Honorable Court is most respectfully
prayed to render judgment in favor of plaintiffs and against defendants,
ordering –
1. Defendants to partition, divide and segregate a portion on which the house
of plaintiffs is situated, with an area of Fifty (50) Square Meters;
2. That the Deed of Sale dated December 28, 1995 entered into by and
between defendants and the previous owner of the lot in question be
annulled and cancelled;
3. The Register of Deeds of the Province of Cebu to annul/cancel Transfer
Certificate of Title No. 99694 in the name of the defendants and in lieu
thereof directing him to issue Transfer Certificate of Title in favor of plaintiffs
for the 50-square meter lot and another Transfer Certificate of Title in favor
of defendants for the remaining 100-square meter lot;
4. The Municipal Assessor of Talisay, Cebu to cancel Tax Declaration No.
46493 in the name of the defendants and directing him to issue Tax
Declaration in the name of the defendants for the 50-square meter lot and
another Tax Declaration in the name of the plaintiffs for the remaining 100-
square meter lot;
xxx xxx xxx.11
In Cañiza v. Court of Appeals,12 it was held that what determines the nature
of an action as well as which court has jurisdiction over it are the allegations
of the complaint and the character of the relief sought. Moreover, in Singsong
v. Isabela Sawmill,13 we ruled that:
In determining whether an action is one the subject matter of which is not
capable of pecuniary estimation this Court has adopted the criterion of first
ascertaining the nature of the principal action or remedy sought. If it is
primarily for the recovery of a sum of money, the claim is considered capable
of pecuniary estimation, and whether the jurisdiction is in the municipal
courts or in the courts of first instance would depend on the amount of the
claim. However, where the basic issue is something other than the right to
recover a sum of money, where the money claim is purely incidental to, or a
consequence of, the principal relief sought, this Court has considered such
actions as cases where the subject of the litigation may not be estimated in
terms of money, and are cognizable exclusively by courts of first instance
(now Regional Trial Courts).
The reliance of the petitioners on the case of Russell v. Vestil14 is misplaced.
In the said case, petitioners sought the annulment of the document entitled,
"Declaration of Heirs and Deed of Confirmation of Previous Oral Partition,"
whereby respondents declared themselves as the only heirs of the late
Spouses Casimero and Cesaria Tautho to the exclusion of petitioners. City, Branch 7, dismissing Civil Case No. CEB-24925, and its Order dated July
Petitioners brought the action in order for them to be recognized as heirs in 26, 2001 denying petitioners’ Motion for Reconsideration, are AFFIRMED.
the partition of the property of the deceased. It was held that the action to
SO ORDERED.
annul the said deed was incapable of pecuniary estimation and the
consequent annulment of title and partition of the property was merely
incidental to the main action. Indeed, it was also ruled in said case:

While actions under Section. 33(3) of B.P. 129 are also incapable of pecuniary
estimation, the law specifically mandates that they are cognizable by the
MTC, METC, or MCTC where the assessed value of the real property involved
does not exceed P20,000.00 in Metro Manila, or P50,000.00, if located
elsewhere. x x x.15

In the case at bar, the principal purpose of petitioners in filing the complaint
was to secure title to the 50-square meter portion of the property which they
purchased from respondents.

Petitioners’ cause of action is based on their right as purchaser of the 50-

square meter portion of the land from respondents. They pray that they be
declared owners of the property sold. Thus, their complaint involved title to
real property or any interest therein. The alleged value of the land which they
purchased was P15,000.00, which was within the jurisdiction of Municipal
Trial Court. The annulment of the deed of sale between Ma. Lourdes Villaber-
Padillo and respondents, as well as of TCT No. 99694, were prayed for in the
complaint because they were necessary before the lot may be partitioned
and the 50-square meter portion subject thereof may be conveyed to
petitioners.

Petitioners’ argument that the present action is one incapable of pecuniary

estimation considering that it is for annulment of deed of sale and partition
is not well-taken. As stated above, the nature of an action is not determined
by what is stated in the caption of the complaint but by the allegations of the
complaint and the reliefs prayed for. Where, as in this case, the ultimate
objective of the plaintiffs is to obtain title to real property, it should be filed
in the proper court having jurisdiction over the assessed value of the property
subject thereof.

WHEREFORE, in view of the foregoing, the instant petition for review is

DENIED. The Order dated June 27, 2001 of the Regional Trial Court of Cebu
ORTIGAS & COMPANY LIMITED PARTNERSHIP vs JUDGE HERRERA
G.R. No. L-36098 January 21, 1983
ORTIGAS & COMPANY, LIMITED PARTNERSHIP, petitioner,
vs.
JUDGE JOSE B. HERRERA, respondent.
RESOLUTION
PER CURIAM:
G.R. No. L-36098 (Ortigas & Company, Limited Partnership vs. Judge Jose B.
Herrera, City Court of Manila, Branch II, and Emiliano Samson). – On August
14, 1969, petitioner and private respondent entered into an agreement
thereby for and in consideration of P55,430.00, the former agreed to sell to
the latter a parcel of land with a special condition that should private
respondent as purchaser complete the construction including the painting of
his residential house on said lot within two (2) years from August 14, 1969,
petitioner, as owner, has agreed to refund to private respondent the amount
of P10.00 per square meter. When the aforesaid special condition was
fulfilled, private respondent, on May 17, 1971 accordingly notified in writing
the petitioner of the same and requested for his refund amounting to
P4,820.00.
Upon failure of petitioner to pay his obligation, private respondent on May 6,
1972 filed a complaint for sum of money and damages with the City Court of
Manila, Branch II, against petitioner docketed as Civil Case No. 211673. A
motion to dismiss was filed by petitioner on grounds of lack of jurisdiction,
failure of the complaint to state a cause of action and improper avenue. City
Court Judge Jose B. Herrera in his order dated June 27, 1972 held in abeyance
the resolution on the motion until after the trial of the case on the merits.
A reconsideration of the said order having been denied, petitioner on October
12, 1972 filed with the Court of First Instance of Manila Branch XXVII, a special
civil action for certiorari and prohibition with preliminary injunction docketed
as Civil Case No. 88510. A motion to dismiss was filed by private respondent,
and on November 17, 1972, the petition was dismissed on the ground that
the claim of private respondent in his complaint, being less than P10,000.00,
is within the exclusive jurisdiction of the city court.
Petitioner thus filed the present petition and argues among others that: (a)
as determined from the allegations of the complaint, the action is for specific
performance of contract; and (b) actions in which the subject of litigation is
not capable of pecuniary estimation such as complaints for specific
performance of contract are exclusively cognizable by the Court of First
Instance. Hence, the decisive question to be resolved in this present petition
is whether or not the City Court of Manila, Branch II, has jurisdiction over the
complaint.
The action involved in this case is one for specific performance and not for a
sum of money and wherefore incapable of pecuniary estimation because
what private respondent seeks is the performance of petitioner's obligation
under a written contract to make a refund but under certain specific
conditions still to be proven or established. In a case for the recovery of a sum
of money, as the collection of a debt, the claim is considered capable of
pecuniary estimation (Lapitan vs. Scandia Inc., 24 SCRA 479) because the
obligation to pay the debt is not conditioned upon any specific fact or matter.
But when a party to a contract has agreed to refund to the other party a sum
of money upon compliance by the latter of certain conditions and only upon
compliance therewith may what is legally due him under the written contract
be demanded, the action is one not capable of pecuniary estimation. The
payment of a sum of money is only incidental which can only be ordered after
a determination of certain acts the performance of which being the more
basic issue to be inquired into.
Although private respondent's complaint in the court a quo is designated as
one for a sum of money and damages, an analysis of all the factual allegations
of the complaint patently shows that what private respondent seeks is the
performance of petitioner's obligation under the written contract to make
the refund of the rate of P10.00 per square meter or in the total amount of
P4,820.00, but only after proof of having himself fulfilled the conditions that
will give rise to petitioner's obligation, a matter clearly incapable of pecuniary
estimation.
In view of the foregoing, the Court RESOLVED to reverse the order appealed
from and the complaint filed with the City Court of Manila, Branch II,
docketed as Civil Case No. 211673 is hereby ordered dismissed for lack of
jurisdiction.
MAKATI DEVT CORPORATION vs TANJUATCO
G.R. No. L-26443 March 25, 1969
MAKATI DEVELOPMENT CORPORATION, plaintiff-appellant,
vs.
PEDRO C. TANJUATCO and CONCRETE AGGREGATES, INC., defendants-
appellees.
Salvador J. Lorayes for plaintiff-appellant.
P. C. Tanjuatco and F. Garcia for defendants-appellees.
CONCEPCION, C.J.:
Appeal by plaintiff Makati Development Corporation from an order of
dismissal of the Court of First Instance of Rizal (Pasig), predicated upon lack
of jurisdiction.
On February 21, 1963, said plaintiff and defendant Pedro C. Tanjuatco
entered into a contract whereby the latter bound himself to construct a
reinforced concrete covered water reservoir, office and pump house and
water main at Forbes Park, Makati, Rizal, furnishing, inter alia, the materials
necessary therefor. Before making the final payment of the consideration
agreed upon, plaintiff inquired from the suppliers of materials, who had
called its attention to unpaid bills therefor of Tanjuatco, whether the latter
had settled his accounts with them. In response to this inquiry, Concrete
Aggregates, Inc. — hereinafter referred to as the Supplier — made a claim in
the sum of P5,198.75, representing the cost of transit-mixed concrete
allegedly delivered to Tanjuatco. With his consent, plaintiff withheld said
amount from the final payment made to him and, in view of his subsequent
failure to settle the issue thereon with the Supplier, on September 16, 1955,
plaintiff instituted the present action, in the Court of First Instance of Rizal,
against Tanjuatco and the Supplier, to compel them "to interplead their
conflicting claims."
On October 4, 1965, Tanjuatco moved to dismiss the case, upon the ground
that the court had no jurisdiction over the subject-matter of the litigation, the
amount involved therein being less than P10,000.00. 1 Finding this motion "to
be well-taken", the lower court granted the same, over plaintiffs opposition
thereto, and, accordingly, issued an order, dated November 16, 1965,
dismissing the case, without costs. Hence, this appeal, in which plaintiff
maintains that the subject-matter of this litigation is not the aforementioned
sum of P5,198.75, but the right to compel the defendants "to litigate among
themselves" in order to protect the plaintiff "against a double vexation in
respect to one liability."
We find no merit in this contention. There is no question in this case that
plaintiff may compel the defendants to interplead among themselves,
concerning the aforementioned sum of P5,198.75. The only issue is who
among the defendants is entitled to collect the same. This is the object of the
action, which is not within the jurisdiction of the lower court. As a matter of
fact, on May 25, 1966 the Supplier sued Tanjuatco, in Civil Case No. 149173
of the Municipal Court of Manila, for the recovery of said amount of
P5,198.75, and the decision therein will settle the question as to who has a
right to the sum withheld by plaintiff herein.lawphi1.ñet
The latter relies upon Rule 63 of the present Rules of Court, prescribing the
procedure in cases of interpleading, and section 19 of Rule 5 of said Rules of
Court, which, unlike section 19 of Rule 4 of the Old Rules, omits the Rules on
Interpleading among those made applicable to inferior courts. This fact does
not warrant, however, the conclusion drawn therefrom by plaintiff herein. To
begin with, the jurisdiction of our courts over the subject-matter of justiciable
controversies is governed by Rep. Act No. 296, as amended, pursuant to
which 2 municipal courts shall have exclusive original jurisdiction in all civil
cases "in which the demand, exclusive of interest, or the value of the property
in controversy", amounts to not more than "ten thousand pesos." Secondly,
"the power to define, prescribe, and apportion the jurisdiction of the various
courts" belongs to Congress 3 and is beyond the rule-making power of the
Supreme Court, which is limited to matters concerning pleading, practice, and
procedure in all courts, and the admission to the practice of law. 4 Thirdly, the
failure of said section 19 of Rule 5 of the present Rules of Court to make its
Rule 63, on interpleading, applicable to inferior courts, merely implies that
the same are not bound to follow Rule 63 in dealing with cases of
interpleading, but may apply thereto the general rules on procedure
applicable to ordinary civil action in said courts.
 WHEREFORE, the order appealed from is hereby affirmed, with the costs of
this instance against plaintiff Makati Development Corporation. It is so
ordered.
CUIZON vs RAMOLETE
G.R. No. L-51291 May 29, 1984
FRANCISCO CUIZON, ROSITA CUIZON, PURIFICATION C. GUIDO married to
TEODORO GUIDO, and JUAN ARCHE, petitioners,
vs.
HON. JOSE R. RAMOLETE, Presiding Judge of the Court of First Instance of
Cebu, Branch III, DOMINGO L. ANTIGUA and SEGUNDO
ZAMBO, respondents.
Eliseo C. Alinsug for petitioners.
Loreto M. Pono for respondents Domingo Antigua and Segundo Zambo.
GUTIERREZ, JR., J.:
The sole issue in this petition for certiorari is whether or not a probate court
has jurisdiction over parcels of land already covered by a Transfer Certificate
of Title issued in favor of owners who are not parties to the intestate
proceedings if the said parcels have been included in the inventory of
properties of the estate prepared by the administrator.
For a clearer understanding of the present case, the background facts may be
appreciated. As far back as 1961, Marciano Cuizon applied for the registration
of several parcels of land located at Opao, Mandaue City then covered by
certificates of Tax Declaration in Land Registration Case No. N-179. In 1970,
he distributed his property between his two children, Rufina and Irene. Part
of the property given to Irene consisted largely of salt beds which eventually
became the subject of this controversy.
On December 29, 1971, Irene Cuizon executed a Deed of Sale with
Reservation of Usufruct involving the said salt beds in favor of the petitioners
Francisco, Rosita and Purificacion, all surnamed Cuizon. At that time,
Francisco and Rosita were minors and assisted by their mother, Rufina, only
sister of Irene. However, the sale was not registered because the petitioners
felt it was unnecessary due to the lifetime usufructuary rights of Irene.
Although the decision in L.R. Case No. N-179 was rendered way back in 1962,
the decree of registration No. N-161246 and the corresponding Original
Certificate of Title No. 0171 was issued only in 1976 in the name of Marciano
Cuizon. In that same year, Transfer Certificate of Title No. 10477 covering the
property in question was issued by the Register of Deeds to Irene Cuizon. The
latter died in 1978. In the extrajudicial settlement of the estate, her alleged
half sister and sole heir Rufina adjudicated to herself all the property of the
decedent including the property in question. After the notice of the
extrajudicial settlement was duly published in a newspaper of general
circulation, Rufina thereafter, executed a deed of Confirmation of Sale
wherein she confirmed and ratified the deed of sale of December 29, 1971
executed by the late Irene and renounced and waived whatever rights,
interest, and participation she may have in the property in question in favor
of the petitioners. The deed was duly registered with the Registry of Deeds
and annotated at the back of TCT No. 10477. Subsequently, TCT No. 12665
was issued in favor of the petitioners.
On September 28, 1978, a petition for letters of administrator was filed
before the Court of First Instance of Cebu (Sp. Proc. No. 3864-R) by
respondent Domingo Antigua, allegedly selected by the heirs of Irene
numbering seventeen (17) in all to act as administrator of the estate of the
decedent. The petition was granted.
Respondent Antigua as administrator filed an inventory of the estate of Irene.
He included in the inventory the property in question which was being
administered by Juan Arche, one of the petitioners. On June 27, 1979,
respondent Antigua filed a motion asking the court for authority to sell the
salt from the property and praying that petitioner Arche be ordered to deliver
the salt to the administrator. The motion was granted and respondent court
issued the following order:
The administrator, thru this motion, informs the Court that the estate owns
some beds and fish pond located in Opao, Mandaue City that these salt beds
are producing salt which are now in the warehouse in Mandaue City, under
the custody of Juan Arche that the value of the salt in the warehouse is
estimated to be worth P5,000.00 are beginning to melt and, unless they are
sold as soon as possible, they may depreciate in value. It is likewise prayed in
this motion that Juan Arche be ordered to deliver the salt in question to the
administrator such other products of the land now in his (Juan Arche)
possession.
xxx xxx xxx
Let this motion be, as it is hereby GRANTED. The administrator is hereby
authorized to sell the salt now in the custody of Juan Arche and the latter
(Juan Arche) is hereby ordered to deliver the salt in question to the
administrator in order to effect the sale thereof and he is likewise directed to
deliver such other products of the land to the administrator.
Subsequently, on three different occasions, respondent Segundo Zambo with
the aid of several men, sought to enforce the order of the respondent court,
compelling the petitioners to come to us on certiorari. On September 14,
1979, we issued a restraining order enjoining the respondents from enforcing
the above order of the respondent court and from further interfering with
the petitioners in their peaceful possession and cultivation of the property in
question.
The thrust of the petitioners' argument is that the respondent court, as a
court handling only the intestate proceedings, had neither the authority to
adjudicate controverted rights nor to divest them of their possession and
ownership of the property in question and hand over the same to the
administrator. Petitioners further contend that the proper remedy of the
respondent administrator is to file a separate civil action to recover the same.
On the other hand, the respondent administrator banked on the failure of the
petitioners to first apply for relief in the court of origin before filing the
present petition. According to him this was a fatal defect. In addition, the
administrator stated that the deed of sale of December 29, 1971 lost its
efficacy upon the rendition of judgment and issuance of the decree in favor
of Irene Cuizon.
It is a well-settled rule that a probate court or one in charge of proceedings
whether testate or intestate cannot adjudicate or determine title to
properties claimed to be a part of the estate and which are equally (claimed
to belong to outside parties. All that the said court could do as regards said
properties is to determine whether they should or should not be included in
the inventory or list of properties to be administered by the administrator. If
there is no dispute, well and good; but if there is, then the parties, the
administrator, and the opposing parties have to resort to an ordinary action
for a final determination of the conflicting claims of title because the probate
court cannot do so (Mallari v. Mallari, 92 Phil. 694; Baquial v. Amihan, 92 Phil.
501).
Similarly, in Valero Vda. de Rodriguez vs. CA., (91 SCRA 540) we held that for
the purpose of determining whether a certain property should or should not
be included in the inventory the probate court may pass upon the title
thereto but such determination is not conclusive and is subject to the final
decision in a separate a petition regarding ownership which may be instituted
by the parties (3 Moran's Comments on the Rules of Court, 1970 Edition,
pages 448-9 and 473: Lachenal v. Salas, L-42257, June 14, 1976, 71 SCRA 262,
266).
In the instant case, the property involved is not only claimed by outside
parties but it, was sold seven years before the death of the decedent and is
duly titled in the name of the vendees who are not party to the proceedings.
In Bolisay vs. Alcid, (85 SCRA 213), this Court was confronted with a similar
situation. The petitioners therein sought to annul the order of the respondent
court in a special proceeding which in effect ruled that notwithstanding that
the subject property was duly titled in the name of petitioners, the
administratrix of the intestate estate involved in said proceeding had the right
to collect the rentals of said property over the objection of the titled owners
just because it was included in the inventory of said estate and there was an
ordinary action in the regular court over the ownership thereof and the estate
was one of the parties therein. This Court viewed the petition as one seeking
for a prima facie determination and not a final resolution of the claim of
ownership.
We held that:
... Considering that as aforestated the said property is titled under the Torrens
System in the names of the petitioners, it does appear strange, in the light of
the probate court's own ruling that it has no jurisdiction to pass on the issue
of ownership, that the same court deemed the same as part of the estate
under administration just because the administratrix, alleges it is still owned
by the estate and has in fact listed it in the inventory submitted by her to the
court.
It does not matter that respondent - administratrix has evidence purporting Even assuming the truth of the private respondents' allegations that the sale
to support her claim of ownership, for, on the other hand, petitioners have a of December 29, 1971 was effected under suspicious circumstances and
Torrens title in their favor, which under the law is endowed with tainted with fraud and that the right of Rufina as alleged half-sister and sole
incontestability until after it has been set aside in the manner indicated in the heir of Irene remains open to question, these issues may only be threshed
law itself, which, of course, does not include, bringing up the matter as a mere out in a separate civil action filed by the respondent administrator against the
incident in special proceedings for the settlement of the estate of deceased petitioners and not in the intestate proceedings.
persons. In other words, in Our considered view, the mere inclusion in the
WHEREFORE, the petition for certiorari is GRANTED and the respondent
inventory submitted by the administrator of the estate of a deceased person
court's order dated June 27, 1979 is hereby set aside and declared void as
of a given property does not of itself deprive the probate court of authority
issued in excess of its jurisdiction. Our restraining order enjoining the
to inquire into the property of such inclusion in case an heir or a third party
enforcement of the June 27, 1979 order and the respondents from further
claims adverse title thereto. To hold otherwise would render inutile the
interfering, through the intestate proceedings, in the peaceful possession and
power of that court to make a prima facie determination of the issue of
cultivation of the land in question by the petitioners is hereby made
ownership recognized in the above quoted precedents. The correct rule is
PERMANENT.
that the probate court should resolve the issue before it provisionally, as basis
for its inclusion in or exclusion from the inventory. It does not even matter SO ORDERED.
that the issue is raised after approval of the inventory because "apparently,
it is not necessary that the inventory and appraisal be approved by the Court."
(Francisco on the Rules of Court Vol. V-B, p. 99, citing Siy Chong Keng vs.
Collector of Internal Revenue, 60 Phil. 494)

In regard to such incident of inclusion or exclusion, We hold that if a property

covered by Torrens Title is involved, the presumptive conclusiveness of such
title should be given due weight, and in the absence of strong compelling
evidence to the contrary, the holder thereof should be considered as the
owner of the property in controversy until his title is nullified or modified in
an appropriate ordinary action, particularly, when as in the case at bar,
possession of the property itself is in the persons named in the title.

Having been apprised of the fact that the property in question was in the
possession of third parties and more important, covered by a transfer
certificate of title issued in the name of such third parties, the respondent
court should have denied the motion of the respondent administrator and
excluded the property in question from the inventory of the property of the
estate. It had no authority to deprive such third persons of their possession
and ownership of the property. Respondent court was clearly without
jurisdiction to issue the order of June 27, 1979. Thus, it was unnecessary for
the petitioners to first apply for relief with the intestate court.
BOLISAY vs ALCID
G.R. No. L-45494 August 31, 1978
BENITO BOLISAY and GENEROSA BUTED BOLISAY, petitioners,
vs.
HON. LEONARDO S. ALCID in his capacity as Judge of the Court of First
Instance of Ilocos Norte, Branch in Laoag City, and ANGELA BUTED
PASCUAL, respondents.
Sumulong Law Office for petitioners.
Rafael B. Ruiz for private respondent.
BARREDO, J.:
Petition for certiorari to annul the order of respondent judge in Special
Proceedings No. 4560-11 dated July 27, 1976 which in effect ruled that
notwithstanding that the subject property is duly titled in the name of
petitioners, the administratrix of the intestate estate involved in said
proceedings has the right to collect the rentals of said property over the
objection of the titled owners just because it is included in the inventory of
said estate and there is an ordinary action in the regular court over the
ownership thereof and the estate is one of the parties therein.
Petitioner Generosa Buted Bolisay and private respondent-administratrix
Angela Buted Pascual are sisters, the daughters of the deceased Luciana
Abadilla whose intestate estate is being settled. The subject property is a lot
situated in the Barrio of San Jacinto, Laoag City, with an area of 538 square
meters. It is now covered by Transfer Certificate of Title No. T-12782, of the
Register of Deeds of the City of Laoag, in the name of petitioners issued on
August 20, 1976. As a matter of fact, they already had the title over it since
June 5, 1961, TCT No. (T-7271)-3377. This earlier title was over 549 square
meters, while the latter is for 538 square meters, the explanation being that,
as per Entry No. 6220 made on August 20, 1952 at the back of the title as it
originally was in the name of the deceased Luciana Abadilla, she sold a small
portion to Filemon Pascua for P50.00.
With said lost as security by way of mortgage, petitioners secured from the
Government Service Insurance System a loan of P30,000 in June, 1962.
Allegedly, with the proceeds of said loan plus their own funds, they built a 7-
door apartment thereon and the same has been declared in their names for
tax purposes since 1970. The mortgage to the GSIS was released upon full
payment by them of the loan on June 24, 1974.
On the other hand, in August 1975, private respondent Angela Buted and
Maria Buted filed an action for the annulment of the Deed of Sale executed
by their deceased mother Luciana in favor of petitioners, which deed was
precisely the basis of the aforementioned titles in the names of said
petitioners The complaint alleged lack of consideration and disputed that
petitioners were the ones who spent for the construction of the 7 door
apartment. The case is docketed as Civil Case No. 6135-II of the Court of First
Instance of Ilocos Norte.
Pending also before Branch I of the same court is an action of partition, Civil
Case No. 2452-I, wherein a compromise agreement was reached excluding
the lot in question from the list of partitionable properties.
The foregoing notwithstanding, on May 19, 1973, respondent administratrix
filed an inventory of the properties comprising the estate of Luciana and
included therein the property here in controversy. Said inventory was
approved without opposition on June 1, 1973. And on July 16, 1976, she filed
a motion to collect rentals from the 7-door apartment in the accumulated
amount of P7,310 in the actual possession of one Alfredo Palanca. Without
notice to either the petitioners, Alfredo Palanca or the tenants, respondent
judge granted the motion on July 27, 1976. On August 11, 1976, petitioners
moved for reconsideration of said order. Further, on September 6, 1976, they
filed a motion to exclude the said property from the inventory. On December
9, 1976, both motions were denied, the court reasoning out as follows:
From the record and the pleadings, the following appears: The administratrix
filed on May 19, 1973 an inventory of the properties comprising the estate of
the deceased Luciana Abadilla Vda. de Buted which inventory was approved
by the Court in its Order dated June 1, 1973. Its approval was not opposed.
The property now in controversy is listed as Parcel 31 of said inventory. It is a
parcel of land containing an area of 538 square meters. This same parcel of
land is also one of several parcels subject matters of an amended complaint
dated on April 2, 1957 in Civil Case No. 2452-1 for partition filed by Domingo
Buted, Maria Buted, Enrique Buted, Angela Buted and Generosa Buted
against Juan Buted, Narciso Buted and Luciana Abadilla the determination of
which is pending before Branch I of this Court. In the answer of Benito Bolisay
to the third party complaint filed by Juan Buted against him in said Civil Case
No. 2452-1, Benito Bolisay claims that he bought Parcel 31 from Luciana
Abadilla on June 5, 1961. In Civil Case No. 6135-11 of this Court which is an
action for annulment of the alleged sale of Parcel 31 between Luciana
Abadilla and Benito Bolisay said Benito Bolisay and his wife Generosa Buted
alleged that as a consequence of said sale, said spouses were issued Transfer
Certificate of Title No. 3377. The record further shows that on June 27, 1962,
using this property as a collateral the above-mentioned spouses were able to
obtain a loan of P30,000.00 from the GSIS which proceeds of loan were used
to construct the building now standing on the property.
In short, Civil Case No. 2452-1 is an action for Partition of several properties
including Parcel 31 allegedly owned in common by plaintiffs and defendants
therein, the compromise agreement approved in said case notwithstanding,
while Civil Case No. 6135- 11 is an action for Annulment of that contract of
sale allegedly executed by Luciana Abadilla in favor of spouses Benito Bolisay
and Generosa Buted of said Parcel 31.
In a long line of jurisprudence it has been established that the court in its
capacity as a probate court has no jurisdiction to determine with finality the
question of ownership of properties included in the inventory of an estate.
This is a matter that must be litigated in a separate action.
In the instant case, the ownership of Parcel 31 with its improvements is an
issue not only in Civil Case No. 2452-I for partition but also in Civil Case No.
6135-11 for annulment of contract of sale. This Court, therefore, sitting as a
probate court, does not have the jurisdiction to de e with finality the question
of ownership of the property in question because the same might as well be
determined in Civil Case No. 2452-1 or Civil Case No. 6135-1 I or in both cases.
Nor this Court win attempt to pass on the motion for exclusion provisionally
even if it can do so because it is of the opinion that it will only amount to an
exercise in futility.
WHEREFORE, the motion for reconsideration filed by Generosa Buted Bolisay
on August 11, 1976 of the order of July 27, 1976 is hereby DENIED. Likewise,
the motion of Generosa Buted Bolisay and Benito Bolisay filed on September
6. 1976 to exclude Parcel 31 from the inventory submitted by the
administratrix in this case and to order said administratrix to desist from
collecting the rentals of the improvements due is also DENIED. (Pages 10-12,
Memorandum for Petitioners.)
His Honor's statement of the control jurisprudence is correct. Indeed, the
illustrative expression of the comprehensive ruling on the matter may be
found in Garcia vs. Garcia, 67 Phil 353, which reads thus:
It is the duty of every administrator, whether special or regular, imposed by
section 668 of the Code of Civil Procedure, to return to. the court within three
months after his appointment a true inventory of the real estate and an the
goods, chattels, rights, and credits of the deceased which come into his
possession or knowledge, unless he is residuary legatee and has given the
prescribed bond. The court which acquires jurisdiction over the properties of
a deceased person through the filing of the corresponding proceedings, has
supervision and control over the said properties, and under the said power,
it is its inherent duty to see that the inventory submitted by the administrator
appointed by it contains all the properties, rights and credits which the law
requires the administrator to set out in his inventory. In compliance with this
duty the court has also inherent power to determine what properties, rights
and credits of the deceased should be included in or excluded from the
inventory. Should an heir or person interested in the properties of a deceased
person duly can the court's attention to the fact that certain properties, rights
or credits have been left out in the inventory, it is likewise the court's duty to
hear the observations, with power to determine if such observations should
be attendee to or not and if the properties referred to therein belong prima
facie to the intestate, but no such determination is final and ultimate in
nature as to the ownership of the said properties (23 C.J., P. 1163, par. 381).
The lower court, therefore, had jurisdiction to hear the opposition of the heir
Teresa Garcia to the inventory filed by the special administratrix Luisa Garcia,
as well as the observations made by the former as to certain properties and
credits, and to determine for purposes of the inventory alone if they should
be included therein or excluded therefrom. As Teresa Garcia withdrew her
opposition after evidence was adduced tending to show whether or not
certain properties belonged to the intestate and, hence, whether they should
be included in the inventory, alleging that the lower court had no jurisdiction
to do so, she cannot be heard to complain that the court suspended the trial
of her opposition.
In view of the foregoing, we are of the opinion and so hold that a court which
takes cognizance of testate or intestate proceedings has power and
jurisdiction to determine whether or not the properties included therein or
excluded therefrom belong prima facie to the d although such a
determination is not final or ultimate in nature, and without prejudice to the
right of the interested parties, in a proper action, to raise the question bearing
on the ownership or existence of the right or credit.
To the same effect was Santos vs. Antonio, 70 Phil. 388, where the Court held:
En cuanto a la exclusion del inventario de ciertas propiedades si bien es cierto,
como regla general, que el tribunal, en esas actual ciones, no tiene facultad
para decidir questiones sobre titulo de propiedad, ya hemos declarado, sin
embargo que puede hacerlo, de un modo provisional cuando el proposito es
solamente para determiner si deben o no ex del inventario as propiedades en
particular.
And the ruling was reiterated in Baquial vs. Amihan, 92 Phil. 501, at p. 503.
Rather, it is His Honor's application of the jurisprudential rule that calls for
modification. As We see the situation before Us, petitioners are not after a
final resolution of their claim of ownership by the probate court. All that they
are asking is that a prima facie determination be made on that score as a basis
for their prayer that the property in dispute be excluded from the inventory,
prepared and filed by respondent administratrix. Indeed, We perceive merit
in petitioners' contention that in effect His Honor's order denying the motion
for exclusion is somehow inconsistent, since it is in itself a determination that
for the purposes of Special Proceedings No. 4560-II, and accordingly, until the
question of ownership between petitioners and private respondent has been
finally determined in appropriate ordinary action, the disputed pro. property
must be deemed part of the intestate estate of Luciana Abadilla, hence the
order to allow the administratrix to collect the rentals due therefrom.
Considering that as aforestated the said property is titled under the Torrens
System in the names of the petitioners, it does appear strange, in the light of
the probate court's own ruling that it has no jurisdiction to pass on the issue
of ownership, that the same court deemed the same as part of the estate
under administration just because the administratrix, alleges it is still owned
by the estate and has in fact listed it in the inventory submitted by her to the
court.
It does not matter that respondent-administratrix has evidence purporting to
support her claim of ownership, for, on the other hand, petitioners have a
Torrens title in their favor, which under the law is endowed with
incontestability until after it has been set aside in the manner indicated in the
law itself, which, of course, does not include, bringing up the matter as a mere
incident in special proceedings for the settlement of the estate of deceased
persons. In other words, in Our considered view, the mere inclusion in the
inventory submitted by the administrator of the estate of a deceased person
of a given property does not of itself deprive the probate court of authority
to inquire into the propriety of such inclusion in case an heir or a third party
claims adverse title thereto. To hold otherwise would render inutile the
power of that court to make a prima facie determination of the issue of
ownership recognized in the above-quoted precedents. The correct rule is
that the probate court should resolve the issue before it provisionally, as basis
for its inclusion in or exclusion from the inventory. It does not even matter
than the issue is raised after approval of the inventory because "apparently,
it is not necessary that the inventory and appraisal be approved by the Court."
(Francisco on the Rules of Court Vol., V-B p. 99, citing Siy Chong Keng v.
Collector of Internal Revenue, 60 Phil. 494)
In regard to such incident of inclusion or exclusion, We hold that if a property
covered by Torrens title is involved, the presumptive conclusiveness of such
title should be given due weight, and in the absence of strong compelling
evidence to the contrary, the holder thereof should be considered as the
owner of the property in controversy until his title is nullified or modified in
an appropriate ordinary action, particularly, when as in the case at bar,
possession of the property itself is in the persons named in the title.
As regards the respondent court's order allowing the administratrix Angela
Buted Pascual to collect the rentals from the property here in question and
ordering Alfredo Palanca to deliver the P7,310.00 of rentals in his possession
to said administratrix, it is evident that with Our holding above that the
property in issue should be excluded from the inventory of the subject estate,
said order has no more legal basis. The probate court's authority extends only
over properties listed in the inventory, without prejudice to any party
adversely affected asserting or protecting his rights or interests in a separate
appropriate remedy.

PREMISES CONSIDERED, the assailed orders of respondent judge of July 27,

1976 and December 9, 1976 are hereby completely set aside, for having been
issued in grave abuse of discretion, without prejudice to the proper
determination of the issue of ownership between the parties herein of the
property in dispute in the action filed by respondent-administratrix for the
annulment of the Torrens title now in the names of petitioners. Costs against
private respondent.
PACIOLES, JR vs CHUATOCO-CHING
G.R. No. 127920. August 9, 2005
EMILIO B. PACIOLES, JR., IN HIS CAPACITY AS ADMINISTRATOR AND HEIR OF
THE INTESTATE ESTATE OF MIGUELITA CHING-PACIOLES, Petitioners,
vs.
MIGUELA CHUATOCO-CHING, Respondent.
DECISION
SANDOVAL-GUTIERREZ, J.:
Oftentimes death brings peace only to the person who dies but not to the
people he leaves behind. For in death, a person’s estate remains, providing a
fertile ground for discords that break the familial bonds. Before us is another
case that illustrates such reality. Here, a husband and a mother of the
deceased are locked in an acrimonious dispute over the estate of their loved
one.
This is a petition for review on certiorari filed by Emilio B. Pacioles, Jr., herein
petitioner, against Miguela Chuatoco-Ching, herein respondent, assailing the
Court of Appeals Decision1 dated September 25, 1996 and Resolution2dated
January 27, 1997 in CA-G.R. SP No. 41571.3 The Appellate Court affirmed the
Order dated January 17, 1996 of the Regional Trial Court (RTC), Branch 99,
Quezon City denying petitioner’s motion for partition and distribution of the
estate of his wife, Miguelita Ching-Pacioles; and his motion for
reconsideration.
The facts are undisputed.
On March 13, 1992, Miguelita died intestate, leaving real properties with an
estimated value of ₱10.5 million, stock investments worth ₱518,783.00, bank
deposits amounting to ₱6.54 million, and interests in certain businesses. She
was survived by her husband, petitioner herein, and their two minor children.
Consequently, on August 20, 1992, petitioner filed with the RTC a verified
petition4 for the settlement of Miguelita’s estate. He prayed that (a) letters of
administration be issued in his name, and (b) that the net residue of the
estate be divided among the compulsory heirs.
Miguelita’s mother, Miguela Chuatoco-Ching, herein respondent, filed an
opposition, specifically to petitioner’s prayer for the issuance of letters of
administration on the grounds that (a) petitioner is incompetent and unfit to
exercise the duties of an administrator; and (b) the bulk of Miguelita’s estate
is composed of "paraphernalproperties." Respondent prayed that the letters
of administration be issued to her instead.5 Afterwards, she also filed a
motion for her appointment as special administratrix.6
Petitioner moved to strike out respondent’s opposition, alleging that the
latter has no direct and material interest in the estate, she not being a
compulsory heir, and that he, being the surviving spouse, has the preferential
right to be appointed as administrator under the law.7
Respondent countered that she has direct and material interest in the estate
because she gave half of her inherited properties to Miguelita on condition
that both of them "would undertake whatever business endeavor they
decided to, in the capacity of business partners."8
In her omnibus motion9 dated April 23, 1993, respondent nominated her
son Emmanuel Ching to act as special administrator.
On April 20, 1994, the intestate court issued an order appointing petitioner
and Emmanuel as joint regular administrators of the estate.10 Both were
issued letters of administration after taking their oath and posting the
requisite bond.
Consequently, Notice to Creditors was published in the issues of the Manila
Standard on September 12, 19, and 26, 1994. However, no claims were filed
against the estate within the period set by the Revised Rules of Court.
Thereafter, petitioner submitted to the intestate court an inventory of
Miguelita’s estate.11 Emmanuel did not submit an inventory.
On May 17, 1995, the intestate court declared petitioner and his two minor
children as the only compulsory heirs of Miguelita.12
On July 21, 1995, petitioner filed with the intestate court an omnibus
motion13 praying, among others, that an Order be issued directing
the: 1) payment of estate taxes; 2) partition and distribution of the estate
among the declared heirs; and 3) payment of attorney’s fees.
Respondent opposed petitioner’s motion on the ground that the partition
and distribution of the estate is "premature and precipitate," considering
that there is yet no determination "whether the properties specified in the
inventory are conjugal, paraphernal or owned in a joint
venture."14 Respondent claimed that she owns the bulk of Miguelita’s estate
as an "heir and co-owner." Thus, she prayed that a hearing be scheduled.
On January 17, 1996, the intestate court allowed the payment of the estate
taxes and attorney’s fees but denied petitioner’s prayer for partition and
distribution of the estate, holding that it is indeed "premature." The intestate
court ratiocinated as follows:
"On the partition and distribution of the deceased’s properties, among the
declared heirs, the Court finds the prayer of petitioner in this regard to be
premature. Thus, a hearing on oppositor’s claim as indicated in her opposition
to the instant petition is necessary to determine ‘whether the properties
listed in the amended complaint filed by petitioner are entirely conjugal or
the paraphernal properties of the deceased, or a co-ownership between the
oppositor and the petitioner in their partnership venture.’"
Petitioner filed a motion for reconsideration but it was denied in the
Resolution dated May 7, 1996.
Forthwith, petitioner filed with the Court of Appeals a petition
for certiorari seeking to annul and set aside the intestate court’s Order dated
January 17, 1996 and Resolution dated May 7, 1996 which denied petitioner’s
prayer for partition and distribution of the estate for being premature,
indicating that it (intestate court) will first resolve respondent’s claim of
ownership.
The Appellate Court dismissed the petition for certiorari, holding that in
issuing the challenged Order and Resolution, the intestate court did not
commit grave abuse of discretion.
The Appellate Court ruled:
"Regarding the second issue raised, respondent judge did not commit grave
abuse of discretion in entertaining private respondent’s unsupported claim
of ownership against the estate. In fact, there is no indication that the
probate court has already made a finding of title or ownership. It is inevitable
that in probate proceedings, questions of collation or of advancement are
involved for these are matters which can be passed upon in the course of the
proceedings. The probate court in exercising its prerogative to schedule a
hearing, to inquire into the propriety of private respondent’s claim, is being
extremely cautious in determining the composition of the estate. This act is
not tainted with an iota of grave abuse of discretion."
Petitioner moved for a reconsideration but it was likewise denied. Hence, this
petition for review on certiorari anchored on the following assignments of
error:
"I
RESPONDENT COURT’S DECISION WHICH AFFIRMS THE INTESTATE COURT’S
ORDER IS A GRAVE ERROR FOR BEING CONTRARY TO THE SETTLED
JURISPRUDENCE AND POLICY OF THE LAW THAT ESTATE PROCEEDINGS MUST
BE SETTLED EXPEDITIOUSLY.
II
RESPONDENT COURT COMMITTED GRAVE ERROR IN SUSTAINING THE
INTESTATE COURT’S ORDER TO CONDUCT HEARING ON THE ISSUE OF
OWNERSHIP CLAIM AGAINST THE ESTATE, AS SAID FUNCTION IS OUTSIDE
AND BEYOND THE JURISDICTION OF THE INTESTATE COURT.
III
RESPONDENT COURT GRAVELY ERRED IN AFFIRMING THE INTESTATE
COURT’S ORDER AND RESOLUTION NOTWITHSTANDING THAT RESPONDENT
CHING’S OWNERSHIP CLAIMS ARE CONFLICTING, FRIVOLOUS AND
BASELESS."
The fundamental issue for our resolution is: May a trial court, acting as an
intestate court, hear and pass upon questions of ownership involving
properties claimed to be part of the decedent’s estate?
The general rule is that the jurisdiction of the trial court either as an intestate
or a probate court relates only to matters having to do with the settlement
of the estate and probate of will of deceased persons but does not extend to
the determination of questions of ownership that arise during the
proceedings.15 The patent rationale for this rule is that such court exercises
special and limited jurisdiction.16
A well-recognized deviation to the rule is the principle that an intestate or a
probate court may hear and pass upon questions of ownership when its
purpose is to determine whether or not a property should be included in the
inventory. In such situations the adjudication is merely incidental and
provisional. Thus, in Pastor, Jr. vs. Court of Appeals,17 we held:
"x x x As a rule, the question of ownership is an extraneous matter which the
probate court cannot resolve with finality. Thus, for the purpose of
determining whether a certain property should or should not be included in
the inventory of estate properties, the probate court may pass upon the
title thereto, but such determination is provisional, not conclusive, and is
subject to the final decision in a separate action to resolve title."
The Court of Appeals relied heavily on the above principle in sustaining the
jurisdiction of the intestate court to conduct a hearing on respondent’s
claim. Such reliance is misplaced. Under the said principle, the key
consideration is that the purpose of the intestate or probate court in hearing
and passing upon questions of ownership is merely to determine whether or
not a property should be included in the inventory. The facts of this case
show that such was not the purpose of the intestate court.
First, the inventory was not disputed. In fact, in her Manifestation and
Opposition18 dated September 18, 1995, respondent expressly adopted the
inventory prepared by petitioner, thus:
"6. She adopts the inventory submitted by the petitioner in his Amended
Compliance dated October 6, 1994, and filed only on November 4, 1994 not
October 5, 1995 as erroneously asserted in Par. 12 of the Omnibus Motion.
Oppositor, however, takes exception to the low valuation placed on the real
estate properties and reserves her right to submit a more accurate and
realistic pricing on each."
Respondent could have opposed petitioner’s inventory and sought the
exclusion of the specific properties which she believed or considered to be
hers. But instead of doing so, she expressly adopted the inventory, taking
exception only to the low valuation placed on the real estate properties.
And second, Emmanuel, respondent’s son and representative in the
settlement of Miguelita’s estate, did not submit his own inventory. His
mandate, as co-administrator, is "to submit within three (3) months after his
appointment a true inventory and appraisal of all the real and personal estate
of the deceased which have come into his possession or knowledge."19 He
could have submitted an inventory, excluding therefrom those properties
which respondent considered to be hers. The fact that he did not endeavor
to submit one shows that he acquiesced with petitioner’s inventory.
Obviously, respondent’s purpose here was not to obtain from the intestate
court a ruling of what properties should or should not be included in the
inventory. She wanted something else, i.e., to secure from the intestate
court a final determination of her claim of ownership over properties
comprising the bulk of Miguelita’s estate. The intestate court went along
with respondent on this point as evident in its Resolution20 dated May 7,
1996, thus:
"On petitioner’s motion for partition and distribution of the estate of the late
Miguelita Ching Pacioles, it is believed that since oppositor had interposed a
claim against the subject estate, the distribution thereof in favor of the heirs
could not possibly be implemented as there is still a need for appropriate
proceedings to determine the propriety of oppositor’s claim. It must be
mentioned that if it is true that oppositor owns the bulk of the properties,
which she allegedly placed/registered in the name of the deceased for
convenience, Oppositor, therefore, has a material and direct interest in the
estate and hence, should be given her day in Court."
It is apparent from the foregoing Resolution that the purpose of the hearing
set by the intestate court was actually to "determine the propriety of
oppositor’s (respondent’s) claim." According to the intestate court, "if it is
true that the oppositor (respondent) owns the bulk of (Miguelita’s)
properties," then it means that she has a "material and direct interest in the
estate" and, hence, "she should be given her day in court." The intended
"day in court" or hearing is geared towards resolving the propriety of
respondent’s contention that she is the true owner of the bulk of Miguelita’s
estate.
Surely, we cannot be deluded by respondent’s ingenious attempt to secure a
proceeding for the purpose of resolving her blanket claim against Miguelita’s
estate. Although, she made it appear that her only intent was to determine
the accuracy of petitioner’s inventory, however, a close review of the facts
and the pleadings reveals her real intention.
Clearly, the RTC, acting as an intestate court, had overstepped its jurisdiction.
Its proper course should have been to maintain a hands-off stance on the
matter. It is well-settled in this jurisdiction, sanctioned and reiterated in a
long line of decisions, that when a question arises as to ownership of property
alleged to be a part of the estate of the deceased person, but claimed by some
other person to be his property, not by virtue of any right of inheritance from
the deceased but by title adverse to that of the deceased and his estate, such
question cannot be determined in the course of an intestate or probate
proceedings. The intestate or probate court has no jurisdiction to adjudicate
such contentions, which must be submitted to the court in the exercise of
its general jurisdiction as a regional trial court.21 Jurisprudence teaches us
that:
"[A] probate court or one in charge of proceedings whether testate or
intestate cannot adjudicate or determine title to properties claimed to be a
part of the estate and which are claimed to belong to outside parties. All
that the said court could do as regards said properties is to determine
whether they should or should not be included in the inventory or list of
properties to be administered by the administrator. If there is no dispute,
well and good, but if there is, then the parties, the administrator, and the
opposing parties have to resort to an ordinary action for a final
determination of the conflicting claims of title because the probate court
cannot do so."22
Hence, respondent’s recourse is to file a separate action with a court of
general jurisdiction. The intestate court is not the appropriate forum for the
resolution of her adverse claim of ownership over properties ostensibly
belonging to Miguelita's estate.
Now, even assuming that the intestate court merely intended to make a
provisional or prima facie determination of the issue of ownership, still
respondent’s claim cannot prosper. It bears stressing that the bulk of
Miguelita’s estate, as stated in petitioner’s inventory, comprises real estates
covered by the Torrens System which are registered either in the name of
Miguelita alone or with petitioner. As such, they are considered the owners
of the properties until their title is nullified or modified in an appropriate
ordinary action. We find this Court’s pronouncement in Bolisay vs.
Alcid23 relevant, thus:
"It does not matter that respondent-administratrix has evidence purporting
to support her claim of ownership, for, on the other hand, petitioners have a
Torrens title in their favor, which under the law is endowed with
incontestability until after it has been set aside in the manner indicated in the
law itself, which, of course, does not include, bringing up the matter as a
mere incident in special proceedings for the settlement of the estate of
deceased persons. x x x
x x x In regard to such incident of inclusion or exclusion, We hold that if a
property covered by Torrens Title is involved, the presumptive conclusiveness
of such title should be given due weight, and in the absence of strong
compelling evidence to the contrary, the holder thereof should be
considered as the owner of the property in controversy until his title is
nullified or modified in an appropriate ordinary action, particularly, when
as in the case at bar, possession of the property itself is in the persons
named in the title. x x x"
Corrolarily, P.D. 1529, otherwise known as, "The Property Registration
Decree," proscribes collateral attack against Torrens Title, hence:
"Section 48. Certificate not subject to collateral attack.
A certificate of title shall not be subject to collateral attack. It cannot be
altered, modified or cancelled except in a direct proceeding in accordance
with law."
Significantly, a perusal of the records reveals that respondent failed to
present convincing evidence to bolster her bare assertion of ownership. We
quote her testimony, thus:
"Q: I now direct your attention to paragraph (5) appearing on page 1 of this
sworn statement of yours which I quote:" In accordance with the Chinese
tradition and culture in the distribution of properties to the legal heirs, we
decided to give only a token to our daughter Miguelita and leave the rest to
our only son Emmanuel, with the undertaking that being the son he will take
full responsibility of the rest of the family despite his marriage. Madame
witness, do you recall having stated that in your sworn statement?
A: Yes sir, but it was not carried out.
Q What was actually given to your daughter Miguelita is only a token, is that
right?
A: Not a token, sir, but one half of the share of the estate was given to Lita
and the other half was given to Emmanuel.
Q: What went to Emmanuel was also ½, is that right?
A: Yes, sir.
Q: What makes up the one half share of Lita, if you recall?
A: What was given to her were all checks, sir, but I cannot remember any
more the amount.
xxxxxx
Q: Summing up your testimony, Madame, you cannot itemize the one half
share of the estate of Miguelita, is that right?
A: Yes, sir.
Q: Was there any document covering this partition of the estate among you,
Emmanuel and Miguelita with respect to the estate of your late husband?
A: If I only knew that this will happen…
Q: Samakatuwid po ay walang dokumento?
A: Wala po."24
She further testified as follows:
"Q: Among the properties listed like the various parcels of land, stocks,
investments, bank accounts and deposits both here and abroad, interests
and participation in IFS Pharmaceuticals and Medical Supplies, Inc. and
various motor vehicles, per your pleasure, Madam Witness, how should
these properties be partitioned or what should be done with these
properties? According to you earlier, you are agreeable for the partition of
the said properties with Emil on a 50-50 basis, is that right?
A: Kung ano po ang sa akin, iyon ang dapat na bumalik sa akin, sir.
Q Halimbawa ay ano po iyon? Real estate properties, parcels of land located
in Pag-Asa, in Silangan, in San Lazaro, in Sta. Cruz, in San Francisco del
Monte and shares of stock. Alinsunod sa inyo, paano po ang dapat na
partihan o hatian ninyo ni Emil?
A: Kung ano ang sa akin…
xxxxxx
Q Ang tanong ko po sa inyo ay ganito, ito po ba ang inyong iminungkahi kay
Emil? Ito po ba ang inyong paghahatian or hindi?
A: Iyo akin talaga na hindi nila pinaghirapan, sir."25
Unfortunately, respondent could not even specify which of the properties
listed in petitioner’s inventory belong to her. Neither could she present any
document to prove her claim of ownership. The consistently changing basis
of her claim did nothing to improve her posture. Initially, she insisted that the
bulk of Miguelita’s estate is composed of paraphernal properties.26 Sensing
that such assertion could not strengthen her claim of ownership, she opted
to change her submission and declare that she and Miguelita were "business
partners" and that she gave to the latter most of her properties to be used in
a joint business venture.27 Respondent must have realized early on that if the
properties listed in petitioner’s inventory are paraphernal, then Miguelita had
the absolute title and ownership over them and upon her death, such
properties would be vested to her compulsory heirs, petitioner herein and
their two minor children.28
At any rate, we must stress that our pronouncements herein cannot diminish
or deprive respondent of whatever rights or properties she believes or
considers to be rightfully hers. We reiterate that the question of ownership
of properties alleged to be part of the estate must be submitted to the
Regional Trial Court in the exercise of its general jurisdiction.29
WHEREFORE, the instant petition is GRANTED. The assailed Decision and
Resolution of the Court of Appeals in CA-G.R. SP No. 41571 are hereby
REVERSED.

SO ORDERED.
COCA vs PANGILINAN
G.R. No. L-27082 January 31, 1978
Intestate Estate of the Spouses Juan C. Pangilinan and Teresa Magtuba.
FILOMENO COCA, Administrator, PRIMA PANGILINAN, and HEIRS OF
CONCEPCION PANGILINAN-YAMUTA, namely, MARIA P. YAMUTA DE ATAY,
EUSEBIO P. YAMUTA, and APOLINAR P. YAMUTA, petitioners-appellants,
vs.
GUADALUPE PIZARRAS VDA. DE PANGILINAN, HEIRS OF FRANCISCO
PANGILINAN, namely, FRANCIS, ALGERIAN, BENJAMIN, PERLA and
FRANCISCO, JR., all surnamed PANGILINAN, and CRISPIN
BORROMEO, oppositors-appellees.
G.R. No. L-29545 January 31, 1978
FILOMENO COCA, administrator-appellant,
vs.
CRISPIN BORROMEO and GUADALUPE PIZARRAS VDA. DE PANGILINAN and
her Children, claimants-appellees.
Casiano U. Laput and Lorenzo D. de Guzman for appellants.
Paulino A. Conol and Felicidario M. Batoy for appellees.
AQUINO, J.:
These two cases involve the question of whether the ownership of a parcel
of land, whether belonging to the deceased spouses or to their heirs, should
be decided in the intestate proceeding or in a separate action. Also in issue in
these two cases is the liability of the decedents' estate for the litigation
expenses allegedly incurred in a case regarding that same land.
Being related cases, their adjudication in a single decision was allowed in this
Court's resolution of August 13, 1969.
The spouses Juan Pan and Teresa Magtuba died intestate in 1943 and 1948,
respectively. They possession a homestead, consisting of two parcels of land,
located at Barrio Bunawan or Mauswagon, Calamba, Misamis Occidental.
One parcel is Identified as Lot No. 1927. It has an area of 3.9791 hectares. It
was covered by Original Certificate of Title (OCT) No. 10 of the registry of
deeds of Oriental Misamis in the name of Juan Pangilinan issued in 1927. It is
now covered by Transfer Certificate of Title No. 86 (T-10) of the registry of
deeds of Misamis Occidental (p. 7, Appellees' brief in L-27082).
The other parcel is Identified as Lot No. 1112. It has an area of 18.0291
hectares. It is covered by OCT No. P-8419 issued on November 21, 1961 in the
name of the Heirs of Juan Pan , represented by Concepcion Pan de Yamuta
(p. 73, Record on Appeal in
L-27082).
According to Guadalupe Pizarras and her children, a third parcel, Lot No.
1920, with an area of eight hectares which was surveyed in the name of
Concepcion Pan and which adjoins Lots Nos. 1927 and 1112, also forms part
of the estate of the deceased Pangilinan spouses (pp. 61-64, Record on
Appeal).
The Pangilinan spouses were survived by the following heirs: (1) Prima
Pangilinan, (2) Maria, Eusebio and Apolinar all surnamed Yamuta, the children
of Concepcion Pangilinan Yamuta who died in 1961, and (3) Francis, A
Benjamin Perla and Francisco, Jr., all surnamed Pan the children of Francisco
Pan who died in 1948 and who was also survived by his widow, Guadalupe
Pizarras. (It is not clear whether Roseller, Demosthenes and Eliza, all
surnamed Japay, were the children of the deceased Helen Pangilinan,
presumably a daughter of Francisco Pangilinan and Teresa Magtuba. See
pages 81-82, Record on Appeal).
Special Proceeding No. 508 of the Court of First Instance of Misamis
Occidental was instituted on September 5, 1963 for the settlement of the
estate of the deceased spouses, Juan C. Pangilinan and Teresa Magtuba.
On September 25, 1965 the administrator presented a project of partition
wherein the combined areas of Lots Nos. 1112 and 1927, or 22.0082 hectares,
were partitioned as follows:
(a) To Crispin Borromeo as payment of his attorney's fees in Civil Case No. 560
or CA-G.R. No. 6721-R, February 27, 1952, Crispin Labaria vs. Juan C.
Pangilinan, in accordance with the lower court's decision dated July 19, 1965
in Civil Case No. 2440. Borromeo vs. Coca (p. 11, Appellees' brief in L-
27082), three hectares which should be taken from Lot No. 1112 and hectares, which lot was surveyed at should be included in the project of
designated as Lot No. 1112-A; partition.

(b) To the heirs of Francisco Pangilinan (Mrs. Pizarras and children), 5.3361 On August 31, 1966 the lower court, apparently acting on its own volition,
hectares taken from Lot No. 1112 and designated as Lot No. 1112-B; tackled once more the project of partition. After noting that no separate
action had been filed to determine the ownership of the twelve hectares, it
(c) To Prima Pangilinan, 6.3361 hectares, taken from Lot No. 1112 and
issued an order approving the project of partition but excluding the twelve
designated as Lot No. 1112-C, and presumably a daughter of Francisco Pan
hectares claimed by the heirs of Francisco Pangilinan.
81-82, Record on Appeal).
That order on its face appears to be incomplete because, after excluding the
(d) To the heirs of Concepcion Pangilinan, 7.3360 hectares, consisting of Lot
twelve hectares, the lower court did not bother to decide how the remainder
No. 1927 and the remainder of Lot No. 1112, which remainder is designated
should be partitioned and whether Prima Pangilinan had a share in that
as Lot No. 1112-D.
remainder.
It was also provided in the project of partition that the sum of P5,088.50, as
That is the order under appeal in L-27082 by Filomeno Coca as administrator,
the alleged debt of the estate to Concepcion Pan should be divided equally
Prima Pangilinan and the heirs of Concepcion Pangilinan. However, the said
among the three sets of heirs, or P1,696.16 for each set of heirs, and that
appellants in their brief also assail the lower court's order of December 6,
Prima Pangilinan and the heirs of Francisco Pangilinan should pay that
1963, excluding eighteen hectares from the inventory, which order was
amount to the heirs of Concepcion Pangilinan.
sustained by the Court of Appeals in its decision in Atay vs. Catolico, CA-G.R.
The heirs of Francisco Pangilinan (Guadalupe Pizarras, et al.) opposed that Nos. 33165-R, and 3426-R, May 14,1964, 5 CAR 1200. This Court refused to
project of partition. They contended that the proposed partition contravened review that decision in its resolution of July 29, 1964, in
the lower court's order of December 6, 1963 which recognized the right of L-23088-89, Atay vs. Court of Appeals.
the heirs of Francisco Pan to a twelve-hectare portion of Lot No. 1112; that
The other incident involves the lower court's order of May 11, 1968 which
Prima Pangilinan, who sold her share to Francisco Pan should be excluded
directed that the claim of the heirs of Francisco Pangilinan for reimbursement
from the partition; that the total share of the heirs of Francisco Pangilinan in
of litigation expenses (apart from the sum of P1,459.49, as the value of the
Lot No. 1112 is 12.6720 hectares, while that of the heirs of Concepcion
produce of the twelve hectares already mentioned, which was appropriated
Pangilinan is 6.3360 hectares, and that the claim of the heirs of Concepcion
by the special administrator), be referred to the clerk of court for reception
Pangilinan for 115,088.50 had not been properly allowed.
of the evidence.
The lower court in its order of October 2, 1965 directed the administrator to
In another order, also dated May 11, 1968, the lower court reiterated its
pay the debt of the estate to the heirs of Concepcion Pangilinan. It deferred
order of October 2, 1965 that the administrator should pay the heirs of
action on the project of partition until the ownership of the twelve hectares,
Concepcion Pan the. amount to be reimbursed to her estate. The court
which were claimed by the heirs of Francisco Pan and the six hectares, which
further directed the administrator to account for the income of the estate, to
were claimed by Crispen Borromeo (eighteen hectares in all which were
recover any amount due from the special administrator, and to pay the claim
excluded from the inventory in the court's order of December 6, 1963) is
of Crispin Borromeo and the amount due to the heirs of Concepcion
determined in an ordinary action.
Pangilinan as directed in its order of August 31, 1966 and in its approval of
On may 14,1966 the heirs of Francisco Pangilinan filed a supplemental the accounting of the special administrator.
opposition wherein they asked that Lot No. 1920, with an area of eight
The administrator, Filomeno Coca, Prima Pangilinan and the heirs of
Concepcion Pan also appealed from those two orders dated May 11, 1968 (L-
29545).
The appellant contend that the lower court, as a probate court, has no
jurisdiction to decide the ownership of the twelve-hectare portion of Lot No.
1112. On the other hand, the appellees" or the heirs of Francisco Pangilinan
counter that the lower court did not decide the ownership of the twelve
hectares when it ordered their exclusion from the project of partition. So, the
problem is how the title to the twelve hectares should be decided, whether
in a separate action or in the intestate. proceeding.
It should be clarified that whether a particular matter should be resolved by
the Court of First Instance in the exercise of its general jurisdiction or of its
limited probate jurisdiction is in reality not a jurisdictional question. In
essence, it is a procedural question involving a mode of practice "which may
be waived" (Cunanan vs. Amparo, 80 Phil. 227, 232. Cf. Reyes vs. Diaz, 73 Phil.
484 re jurisdiction over the issue).
As a general rule, the question as to title to property should not be passed
upon in the estate or intestate proceeding. That question should be
ventilated in a separate action. (Lachenal vs. Salas, L-42257, June 14, 1976,
71 SCRA 262, 266). That general rule has qualifications or exceptions justified
by expediency and convenience.
Thus, the probate court may provisionally pass upon in an intestate or testate
proceeding the question of inclusion in, or exclusion from, the inventory of a
piece of property without prejudice to its final determination in a separate
action Lachenal vs. Salas, supra).
Although generally, a probate court may not decide a question of title or
ownership, yet if the interested parties are all heirs or the question is one of
collation or advancement, or the parties consent to the assumption of
jurisdiction by the probate court and the rights of 'third parties are not
impaired, then the probate court is competent to decide the question of
ownership (Pascual vs. Pascual 73 Phil. 561; Alvarez vs. Espiritu, L-18833,
August 14, 1965, 14 SCRA 892; Cunanan vs. Amparo, supra; 3 Morans
Comments on the Rules of Court, 1970 Ed., p. 4731).
We hold that the instant case may be treated as an exception to the general
rule that questions of title should be ventilated in a separate action.
Here, the probate court had already received evidence on the ownership of
the twelve-hectare portion during the hearing of the motion for its exclusion
from title inventory The only interested parties are the heirs who have all
appeared in the intestate proceeding.
As pointed out by the appellees, they belong to the poor stratum of society.
They should not be forced to incur additional expenses (such as filing fees) by
bringing a separate action to determine the ownership of the twelve-hectare
portion.
The just, expeditious and inexpensive solution is to require the heirs of
Francisco Pangilinan to the in the intestate, proceeding, Special Proceeding
No. 568, a motion in the form of a complaint wherein they should set forth
their claim for the twelve hectares in question, stating the ultimate facts in
support of their claim, such as the partition made by Juan C. Pangilinan, their
acquisition of the share of Prima Pangilinan and the usufructuary rights of
their parents, their long possession of the said portion, their claim for the
produce of the land, the expenses incurred by them in Civil Case No.
560, Labaria vs. Pangilinan, and their contention that Lot No. 1920 forms part
of the estate of the Pangilinan spouses.
Copies of that motion should be serves upon the administrator and upon
Prima Pangilinan and the heirs of Concepcion Pangilinan (who are all
represented by the same lawyers). They should answer the motion within
fifteen days from service. In their answer the appellants should set forth the
ultimate facts and the defenses (such as the violation of section 118 of the
Public Land Law) to support their theory that Lot No. 1112 still forms part of
the estate of the spouses Juan C. Pangilinan and Teresa Magtuba and that the
heirs of Francisco Pangilinan should bear one-third of the expenses incurred
by Concepcion Pan in Civil Case No. 560.
After the issues have been joined and in case no amicable settlement has
been reached, the probate court should receive evidence or, as indicated by
the Court of Appeals in Atay vs. Catolico, supra a full-dress hearing should be
held.
Crispin Borromeo may set forth also his claim for the three hectares but only
for the purpose of deciding what portion of the estate should be given to him
in satisfaction of his share. His claim for the sum of P416 had already been
adjudicated by the lower court in its order of August 31, 1966 (pp. 26- 27,
Record on Appeal in L-29545). No appeal was interposed from that
adjudication.

After trial the lower court's decision on the issues as to what constitutes the
estate of the Pangilinan spouses should include the partition thereof and
should indicate what portion of the estate should be allocated to Crispen
Borromeo. If necessary, the validity of the donation or partition of Lot No.
1112, made by Juan C. Pangilinan during his lifetime, should be passed upon.

Considering that the respective claims of the heirs of Francisco Pangilinan .

and the heirs of Concepcion Pangilinan for reimbursement of the litigation
expenses allegedly incurred in Civil Case No. 560 will be included in the trial,
the two orders of the trial court dated May 11, 1968 regarding those matters
(L-29545) should not be enforced. They should be set aside.

WHEREFORE, (1) the lower court's amended order of August 31, 1966,
excluding twelve hectares from the partition of the estate of the deceased
Pan spouses (L-27082) and (2) the two orders dated May 11, 1968, regarding
the claim of Guadalupe Pizarras and her children and the debt of the estate
to Concepcion Pangilinan (L-29545) are reversed and set aside.

A new trial should be held on those matters after the filing of the proper
pleadings and in case no amicable settlement is reached. The heirs of
Francisco Pangilinan should file their motion within thirty days from notice of
the entry of judgment in this case.

The case is remanded to the lower court for further proceedings in

accordance with the guidelines already set forth. No costs.

SO ORDERED.
CUNANAN vs AMPARO On June 1, 1944, Rosalina Cunanan manifested to the court that she had
tendered to Bonifacio Soriano in March of that year P880 but that Soriano
refused to accept it on the ground that the money she offered was Japanese
G.R. No. L-1313 February 16, 1948 notes and had no value. She prayed that the creditor be ordered to accept
ROSALINA CUNANAN, in her capacity as administratix of the intestate of the amount tendered, to execute the necessary deed of cancellation, and to
Isaac Cunanan and Candida Joaquin — Special Proceeding No. 8355 of Court return the possession of two parcels of land which had been conveyed to him.
of First Instance of Nueva Ecija, petitioner, (Exhibit "D.")
vs. On June 15, 1944, the Honorable Quintin Paredes, Jr., Judge, authorized the
RAFAEL AMPARO, Judge of First Instance of Nueva Ecija, and BONIFACIO administratix to deposit with the clerk of court P880 in full payment of the
SORIANO, respondents. obligation in favor of Bonifacio Soriano and ordered Soriano to deliver the
Herminio E. Algas and Jose Cando for petitioner. property in his possession to the administratix. (Exhibit "E".) This order was
Alfonso G. Espinosa for respondent Soriano. not appealed nor was any motion for its reconsideration filed, so far as the
pleadings would reveal.
TUASON, J.:
On July 17, 1944, the administratix filed a complaint against Soriano for
The petitioner, Rosalina Cunanan, in her capacity as administratix of the contempt of court, alleging that she had complied with the court's order of
Intestate Estate of Isaac Cunanan and Candida Joaquin (Special Proceeding June 15, 1944, but that Soriano disobeyed that part of it which commanded
No. 8355 of the Court of First Instance of Nueva Ecija), seeks a review of two him to return the two parcels of land to the estate of Isaac Cunanan and
orders of the respondent Judge, Honorable Rafael Amparo, alleging that Candida Joaquin (Exhibit "F".)
these orders were made "without and/or in excess of his jurisdiction, with
grave abuse of discretion." After hearing, Judge Paredes, on August 4, 1944, found Soriano not guilty of
contempt, having "granted him the benefit of doubt" on the strength of
It results that in the aforesaid special proceeding, Bonifacio Soriano, one of Soriano's defense that he, in the words of the decision, "misunderstood, or
the present respondents, under date of September 26, 1940, filed a money misconstrued, the order of this court, dated June 15, 1944." However, Judge
claim for P880 against the decedent's estate. He alleged that on various dates Paredes reiterated his order that Soriano "deliver the property in question to
in 1937 and 1938, the deceased received from him diverse sums of money the administratix Rosalina Cunanan for the benefit of the Intestate Estate."
aggregating P880. (Exhibit "A.") He also directed the clerk of court to turn over to Soriano the P880 which had
been deposited with him, "upon proper proof that the possession of the
On April 17, 1941, Rosalina Cunanan, the administratix, filed a motion setting
property has been actually delivered to the Intestate Estate." (Exhibit "G".)
out Bonifacio Soriano's claim and two others totalling P2,054, besides a debt
of P1,600 in favor of one Filomeno Santos bearing 12 per cent interest per On September 1, 1944, Bonifacio Soriano filed a motion for reconsideration
year. To pay these obligations, and because funds were needed to defray the of the order of August 4, 1944, that is, the last order of Judge Paredes. Soriano
expenses on the farm, she asked the court for authority to negotiate a loan stated as grounds of his motion, first, that the title to those lots had been
in such amount or to sell so much of the property described in the inventory consolidated in his and his wife's names "by virtue of a deed of sale in their
as might be sufficient to satisfy the said obligations. (Exhibit "B".) The favor by Isaac Cunanan and Rosalina Cunanan on April 7, 1938, which was
Honorable Sotero Rodas, Judge, in an order dated April 23, 1941, granted the later on amended by another instrument dated July 28, 1938," and, second,
motion. (Exhibit "C".) that under the terms of the sale, the vendors were given the option to
repurchase the said lots not later than April 7, 1944. Soriano also alleged that
a transfer certificate of title to the two lots had been issued to him and his
wife by the Register of Deeds of Nueva Ecija. (Exhibit "H.")
On August 16, 1946, the Honorable Rafael Amparo, who now was presiding
over the Court of First Instance of Nueva Ecija, in a lengthy order granted
Soriano's motion (Exhibit "I"), and on September 16 following he confirmed
that order. (Exhibit "K".) He justified the refusal of Bonifacio Soriano to accept
Japanese military notes and Soriano's insistence on being paid in the same
currency which he had paid for the land. In fine, he set aside the order of
Judge Paredes of August 4, 1944, and denied "the petition of the
administratix dated July 25, 1946, praying, in effect, that said order be
enforced."
One important thing that at once strikes attention upon reading the foregoing
statement of the case, is that the order of Judge Paredes of June 15, 1944
"directing Bonifacio Soriano to accept from the petitioner Rosalina Cunanan
the amount of P880 and to execute the necessary document in favor of said
administratix and to deliver the possession of the property in question," was
not appealed or excepted to and is now final. It had already become final
when, on August 16, 1946, Judge Amparo made his order, identified herein
as Annex I. It was Judge Paredes' order of August 4, 1944, on the
administratix's motion for contempt of court filed on July 17, 1944, which
Soriano sought to have reconsidered and which Judge Amparo set aside on
August 16, 1946. Although the allegations do not show when Soriano
received notice of Judge of Paredes' order of June 15, 1944, he must have
been notified of it before the proceeding for contempt against him started,
at the latest, proceeding in which he was absolved. And the tenor of the order
acquitting Soriano gives rise to the inference that he abided by the order of
June 15 which he was accused of disobeying, for the order gave as reason for
his exoneration the fact that he had not properly disobeyed him.
We do not agreed with the respondents that the court lacked jurisdiction to
order the delivery of the possession of the lots to the estate. This power is a
mere consequence of the power to approve Soriano's claim; a power which
the court undoubtedly had and which Soriano himself invoked with full
knowledge of then facts. As a general rule, with the consent of the parties
matters affecting property under judicial administration may be taken
cognizance of by the court in the course of the intestate proceeding provided
the interests of third persons are not prejudiced. Determination of title to
property is within the jurisdiction of Courts of First Instance. The respondent
Soriano's objection relates exclusively to the procedure, which is distinct from
jurisdiction. It affects only personal rights to a mode of practice which may be
waived. Certainly, there is waiver where, as here, and has been pointed out,
the party who raises the objection was the one who set the court in motion,
and who, by failing to disclose the existence of a sale under pacto de retro,
suppressed jurisdictional facts that might be in the way of his claim's success.
Soriano is bound by his own petition and by the court's adjudication of his
claim made in consonance with his prayer. A party can not trifle with a court's
decision or order which he himself sought with full awareness of his rights
under the premises, by taking it or leaving it at pleasure. The allegations,
statements, or admissions contained in a pleading are conclusively as against
the pleader. A party cannot subsequently take a position contradictory of, or
inconsistent with, his pleadings. (McDaniel vs. Apacible, 44 Phil., 248; 49 C. J.,
122-124.) Specifically, he is not allowed to ask money back when the peso
value is good, and later say he wants to keep the land when the peso's
purchasing power is down.
Under the theory on which the respondents would have the case decided;
i.e., viewed in the light of a sale with the right of repurchase, the respondents'
position is not a whit improved. The tender of payment by the administratix,
to say the least, operated to preserve her right of redemption. The Court's
ruling that the repurchase of the lots should have been effected in
Commonwealth currency is bereft of reason and justice and is not the law.
Japanese war notes were the only money in circulation in March, 1944. It
seems to us extremely unjust and unreasonable to expect the administratix
at that time to repurchase the lots in any other means of exchange. If it be
correct — a point which we do not decide — that the purchaser could not be
compelled to accept payment in the currency in use at the time of
repurchase, then the period of redemption should have been considered
extended until that currency was replaced with one more acceptable to the
creditor. Suspension of the time of repurchase should have followed the
vendor's inability to effect the redemption in Commonwealth currency by
reason of circumstances not of his own making. As we have said, this was the
least that should have been conceded to the debtor. Thus given a grace, the
administratix had until within reasonable time after liberation top repurchase
the property. It is fortunate, be it said to the credit of the administratix, that
she expressed to the respondent judge, before he made the orders
complained of, her willingness to pay the debt or to repurchase the lots, as
the case may be, in genuine Philippine money, forgetting the deposit and
without insisting that it be regarded as a sufficient and valid exercise of her
option. This attitude of the administratix relieves us of the necessity of
passing on what otherwise would be a more serious question — the question
of who should bear the loss consequent on the destruction of the notes
deposited or the subsequent evanescence of their utility.

The petition is granted and the orders of the respondent judge of August 16
and September 16, 1946, (Annexes I and "K"), are reversed, with costs against
the respondent Bonifacio Soriano.
VDA. DE MAFIALAC vs OCAMPO (*VDA. DE MAÑALAC) that, the resolution of the court of September 2, 1941, had already become
final and could not thus be modified. Parties were notified of this denial on
October 21, 1941. Petitioner thereupon instituted the
G.R. No. L-48753 August 31, 1942 present certiorari proceeding, praying that the finding of the probate court in
ANDREA CORDOVA VDA. DE MAÑALAC, ETC., petitioner, its resolution of September 2, and September 23, 1941, regarding the
vs. ownership of the properties "La Joyeria El Diamante" and "La Agencia El
BUENAVENTURA OCAMPO, ETC., ANA MAÑALAC, and LAUREANO Diamante," be declared null and void because in excess of its jurisdiction;
MAÑALAC, respondents. otherwise, that said resolution of September 2, 1941, be declared not final.

Camus, Zavalla and Bautista for petitioner. We hold that the resolution of September 2, 1941, is valid, the probate court
Antonio T. Carrascoso, Jr. for respondent. having jurisdiction to render the same. As a general rule, a question as to title
to property cannot be passed upon in testate or intestate proceedings
MORAN, J.: (Bauermann vs. Casas, 10 Phil., 386; Devesa vs. Arbes, 13 Phil., 273;
Franco vs. O'Brien, 13 Phil., 359; De los Santos vs. Jarra, 15 Phil., 147;
Petitioner, Andrea Cordova Vda. de Mañalac, in her capacity as heir of her
Guzman vs. Anog, 37 Phil., 61, Lunsod vs. Ortega, 46 Phil., 664;
deceased husband, Laureano Mañalac, and administratrix of his estate, filed
Santiago vs. Court of First Instance, 55 Phil., 62; Adapon vs. Maralit, 40 Off.
on September 10, 1940, a petition in the probate court, praying that the
Gaz., 6th Sup., 84; Pascual vs. Pascual, G.R. No. 48140, May 4, 1942), except
properties "La Joyeria El Diamante" and "La Agencia El Diamante" be, among
where one of the parties prays merely for the inclusion in or exclusion from
the others enumerated therein, included in the inventory of his estate.
the inventory of the property , in which case the probate court may pass
Respondents Ana Mañalac and Laureano Mañalac, Jr., heirs of the deceased,
provisionally upon the question without prejudice to its final determination
opposed the petition, and on September 2, 1941, the probate court, after
in a separate action (Garcia vs. Garcia, 40 Off. Gaz., 1st Sup., 65;
hearing, issued its resolution declaring, among others, that the properties
Marcelino vs. Antonio, 40 Off. Gaz., 8th Sup., 221; Guingguing vs. Abuton, 48
aforementioned do not pertain to the conjugal partnership of the deceased
Phil., 144, 147). When, however, the interested parties are all heirs, it is
and the petitioner. Notice of this resolution was served upon the parties on
optional to them to submit to the probate court a question as to title to
the following day, September 3, 1941. Ana Mañalac moved on September 11,
property, and when so submitted, said probate court may definitely pass
1941, for reconsideration praying that said declaration be included in the
judgment thereon, the reason being that questions of collation or of
dispositive part of the resolution, but on September 23, 1941, the court
advancement are generally inevitably involved therein which are proper
denied the motion on the ground that the declaration may in itself be
matters to be passed upon in the due course of administration
considered as part of the dispositive portion of the resolution. Parties were
(Pascual vs. Pascual, G. R. No. 48140, May 4, 1942, Guingguing vs. Abuton, 48
notified of t his order of denial on September 24, 1941. On October 8, 1941,
Phil., 144, 147; Rule 91, section 2, Rules of Court).
petitioner moved for reconsideration of the resolution of September 2, 1941,
and the order of September 23, 1941 praying that the finding of the probate In the instant case, the interested parties are all heirs of the deceased. Since
court as to the ownership of "La Joyeria El Diamante and "La Agencia El the question of ownership of "La Joyeria El Diamante "and "La Agencia El
Diamante" be omitted, as any finding to such effect was beyond its probate Diamante" has, by motion, been submitted by the widow herself, she cannot
jurisdiction. On October 18, 1941, respondent court denied this motion for thereafter be permitted to complain if the court, after examination of the
reconsideration upon the ground that, as petitioner's first motion for evidence presented by both parties, adjudges the question against her.
reconsideration did not partake of the nature of a motion for new trial, it did
not suspend the running of the period for the perfection of an appeal and
Petitioner prays that the resolution of the probate court if adjudged to be The resolution of the probate court of September 2, 1941, is accordingly
valid be declared not to be final so that an appeal may still be imposed hereby held to be valid but has not yet become final thereby permitting
therefrom. In the ordinary procedure, a prayer of this kind is not proper in petitioner, if she so desires, to appeal therefrom within 16 days after this
a certiorariproceeding before this Court. Notwithstanding the order of the judgment has become final. Without costs.
probate court of October 18, 1941, declaring its resolution aforementioned
Yulo, C.J., Ozaeta, and Bocobo, JJ., concur.
to have become final, petitioner should have perfected her appeal within the
time provided by the Rules of Court, and if her appeal be dismissed she may
apply here for a writ of mandamus. We are not inclined, however, to require
her to follow this procedure under the circumstances of the case since she is
here on a like proceeding and we may very well pass upon the question by
her raised to avoid further litigation and in the interest of prompt
administration of justice.

It should be observed that notice of the resolution of September 2, 1941, was

served upon the parties on September 3, 1941. In the dispositive part of this
resolution ordering certain properties to be included in the inventory, there
was absolutely no declaration in connection with "La Joyeria El Diamante"
and "La Agencia El Diamante." For this reason, on September 11, 1941, Ana
Mañalac filed her motion for reconsideration, which was denied on the
ground that in the resolution, in a paragraph immediately preceding the
dispositive part, there is an express statement to the effect that "La Joyeria El
Diamante" and "La Agencia El Diamante "did not belong to the conjugal
partnership of the deceased and the petitioner, which statement could be
considered as a sufficient disposition of the question regarding said
properties. Practically, by this order, the paragraph therein mentioned was
made a portion of the dispositive part contained in the resolution, and,
therefore, it was only after this order was issued that there was a judgment
regarding the two properties, from which the petitioner could appeal. The
parties were notified of such order of September 24, 1941. From this date to
October 8, 1941, when the petitioner filed a motion for reconsideration, 14
days had elapsed. When, therefore, the probate court on October 18, 1941
denied the motion filed by the petitioner declaring that its resolution of
September 2, 1941, had become final, only 14 days of the 30-day period for
perfecting an appeal had elapsed. The days following the order of October
18, 1941 cannot be counted against petitioners right to appeal since such
order may be treated as a virtual refusal to allow her appeal. Consequently
petitioner had still 16 days within which to perfect her appeal.
QUISMONDO vs COURT OF APPEALS
G.R. No. 95664 September 13, 1991
NINA M. QUISMUNDO, petitioner,
vs.
HON. COURT OF APPEALS, HON. REYNALDO B. DAWAY, FELICISIMO
OCAMPO, CATALINO OCAMPO, PEDRO MARQUEZ, ROMEO ENRIQUEZ and
HERMINIO YUSON, respondents.
Aladdin F. Trinidad for petitioner.
The Trial Attorney III for private respondents.
REGALADO, J.:
This petition for review on certiorari seeks the reversal of the decision and
resolution of respondent Court of Appeals in C.A.-G.R. SP No. 16418,1 dated
November 29, 1989 and October 9, 1990, respectively, which upheld the
jurisdiction of the Regional Trial Court of Angeles City, Branch 58, in AGRA.
Case No. 5174.2
It appears that on February 19, 1988, private respondents, as tenants of
petitioner, filed a complaint with the trial court praying that their relationship
with petitioner be changed from share tenancy to a leasehold system,
pursuant to Section 4 of Republic Act No. 3844, as amended, their request
therefor having been denied by petitioner.3
On March 2, 1988, private respondents further filed a motion for the issuance
of an order authorizing the supervision by the deputy sheriff of the court of
the harvesting and liquidation of the 1987-1988 sugarcane crops, which
motion was granted by the trial court in an order dated March 3, 1988.4
On March 16, 1988, petitioner filed a motion to dismiss on the ground of lack
of cause of action since the law that should allegedly govern the relationship
of the parties is Act No. 4115, as amended by Commonwealth Act No. 271,
and not Republic Act No. 3844, as amended. The trial court denied the motion
for lack of merit in an order dated June 2, 1988.5
On June 18, 1988, petitioner filed a motion for reconsideration of the denial
order, invoking as an additional ground the lack of jurisdiction of the court
over the case under the authority and by reason of the Comprehensive
Agrarian Reform Program, specifically Executive Order No. 229 and Republic
Act No. 6657.6
Pending the resolution of said motion for reconsideration, private
respondents filed another motion dated November 9, 1988, for the
supervision of harvesting. On December 6, 1988, the trial court granted the
motion of private respondents and denied petitioner's motion for
reconsideration.7
Petitioner then elevated the controversy to respondent court on a petition
for certiorari but, as stated at the outset, said court upheld the jurisdiction of
the court below, ruling that:
xxx xxx xxx
Second. The right of the private respondents to choose leasehold tenancy is
governed by RA 3844. We find nothing in Proclamation No. 131, E.O. No. 229
and RA 6657 divesting the trial court of jurisdiction over the case. To be sure,
RA 6657 was enacted on June 10, 1988 or later than the filing of the
Complaint in AGRA Case No. 5174 on February 13, 1988. On the other hand,
sec. 27 of E.O. 229 approved on July 22, 1987 provides that "... the provisions
of RA 3844 and other agrarian laws not inconsistent with this order shall have
suppletory effect." We see no inconsistency between RA 3844 and E.O. No.
229 with respect to the jurisdiction of the trial court over the cause of action
of the private respondent who desires to adopt a leasehold system pursuant
to RA 3844. E.O. No. 229 vests quasi-judicial powers on the DAR to determine
and adjudicate "agrarian reform matters" subject of Proclamation No.
229.8 We hold that the right of private respondents to adopt a leasehold
system under RA 3844 is distinct and separate and not affected by the
enactment of E.O. No. 229 and, hence, may be enforced pursuant to the
judicial mechanism provided for by RA 3844.9
Petitioner's motion for reconsideration was denied by respondent Court of
Appeals in its resolution dated October 9, 1990.10 Not satisfied therewith,
petitioner is now before us raising the sole issue of jurisdiction.
It is the contention of petitioner that the Regional Trial Court of Angeles City
has no jurisdiction to try the case at bar considering that the exclusive original
jurisdiction to adjudicate agrarian cases has already been vested in the
Department of Agrarian Reform (DAR) by Executive Order No. 229, as
amended by Republic Act No. 6657.
We find said contention tenable.
Executive Order No. 229, which provides for the mechanism for the
implementation of the Comprehensive Agrarian Reform Program instituted
by Proclamation No. 131, dated July 22, 1987, vests in the Department of
Agrarian Reform quasi-judicial powers to determine and adjudicate agrarian
reform matters. The pertinent provision of said executive order reads as
follows:
SECTION 17. Quasi-Judicial Powers of the DAR. — The DAR is hereby vested
with quasi-judicial powers to determine and adjudicate agrarian reform
matters, and shall have exclusive original jurisdiction over all matters
involving implementation of agrarian reform, except those falling under the
exclusive original jurisdiction of the DENR and the Department of Agriculture
(DA).
The DAR shall have powers to punish for contempt and to issue subpoena,
subpoena duces tecum and writs to enforce its order or decisions.
The decisions of the DAR may, in proper cases, be appealed to the Regional
Trial Courts but shall be immediately executory notwithstanding such appeal.
The above quoted provision should be deemed to have repealed11 Section 12
(a) and (b) of Presidential Decree No. 946 which invested the then courts of
agrarian relations with original exclusive jurisdiction over cases and questions
involving rights granted and obligations imposed by presidential issuances
promulgated in relation to the agrarian reform program.
Formerly, under Presidential Decree No. 946, amending Chapter IX of
Republic Act No. 3844, the courts of agrarian relations had original and
exclusive jurisdiction over "cases involving the rights and obligations of
persons in the cultivation and use of agricultural land except those cognizable
by the National Labor Relations Commission" and "questions involving rights
granted and obligations imposed by laws, Presidential Decrees, Orders,
Instructions, Rules and Regulations issued and promulgated in relation to the
agrarian reform program," except those matters involving the administrative
implementation of the transfer of land to the tenant-farmer under
Presidential Decree No. 27 and amendments thereto which shall be
exclusively cognizable by the Secretary of Agrarian Reform.12
In 1980, upon the passage of Batas Pambansa Blg. 129, otherwise known as
the Judiciary Reorganization Act, the courts of agrarian relations were
integrated into the regional trial courts and the jurisdiction of the former was
vested in the latter courts.13
However, with the enactment of Executive Order No. 229, which took effect
on August 29, 1987, fifteen (15) days after its release for publication in the
Official Gazette,14 the regional trial courts were divested of their general
jurisdiction to try agrarian reform matters. The said jurisdiction is now vested
in the Department of Agrarian Reform.
Thus, in the case at bar, the Regional Trial Court of Angeles City, at the time
private respondents filed their complaint, was already bereft of authority to
act on the same. The allegation of private respondents that their complaint
was filed on November 3, 1987, and not on February 13, 1988 as found by the
Court of Appeals, is immaterial since as of either date Executive Order No.
229 was already in effect.
The foregoing holding is further sustained by the passage of Republic Act No.
6657, the Comprehensive Agrarian Reform Law, which took effect on June 15,
1988. The said law contains provisions which evince and support the
intention of the legislature to vest in the Department of Agrarian Reform
exclusive jurisdiction over all agrarian reform matters.
Section 50 of said Act substantially reiterates Section 17 of Executive Order
No. 229 vesting in the Department of Agrarian Reform exclusive and original
jurisdiction over all matters involving the implementation of agrarian reform,
to wit:
SECTION 50. Quasi-Judicial Powers of the DAR. — The DAR is hereby vested
with primary jurisdiction to determine and adjudicate agrarian reform
matters and shall have exclusive original jurisdiction over all matters involving
the implementation of agrarian reform, except those falling under the
exclusive jurisdiction of the Department of Agriculture (DA) and the
Department of Environment and Natural Resources (DENR).

xxx xxx xxx

In addition, Sections 56 and 57 thereof provide for the designation by the

Supreme Court of at least one (1) branch of the regional trial court within
each province to act as a special agrarian court. The said special court shall
have original and exclusive jurisdiction only over petitions for the
determination of just compensation to landowners and the prosecution of
criminal offenses under said Act. Said provisions thus delimit the jurisdiction
of the regional trial court in agrarian cases only to these two instances.

It is also worth noting at this juncture that the resolution of this case by the
Department of Agrarian Reform is to the best advantage of private
respondents since it is in a better position to resolve agrarian disputes, being
the administrative agency possessing the necessary expertise on the matter.
Further, the proceedings therein are summary in nature and the department
is not bound by technical rules of procedure and evidence, to the end that
agrarian reform disputes and other issues will be adjudicated in a just,
expeditious and inexpensive action or proceeding.15

WHEREFORE, the petition at bar is GRANTED. The decision of the Court of

Appeals is REVERSED and another judgment is hereby rendered declaring
NULL and VOID the orders of the lower court dated March 3, 1988, June 2,
1988 and December 6, 1988. The respondent judge, or whosoever now
presides over the court a quo or to which the case is assigned, is ordered to
cease and desist from further proceeding with AGRA Case No. 5176 which is
hereby dismissed for lack of jurisdiction, without prejudice, however, to the
refiling of the same with the Department of Agrarian Reform.

SO ORDERED.
**REITERATED** DEPT. OF AGRARIAN REFORM vs ROBERTO CUENCA
G.R. No. 154112 September 23, 2004
DEPARTMENT OF AGRARIAN REFORM, petitioner,
vs.
ROBERTO J. CUENCA and Hon. ALFONSO B. COMBONG JR., in His Capacity
as the Presiding Judge of the Regional Trial Court, Branch 63, La Carlota
City, respondents.
DECISION
PANGANIBAN, J.:
All controversies on the implementation of the Comprehensive Agrarian
Reform Program (CARP) fall under the jurisdiction of the Department of
Agrarian Reform (DAR), even though they raise questions that are also legal
or constitutional in nature. All doubts should be resolved in favor of the DAR,
since the law has granted it special and original authority to hear and
adjudicate agrarian matters.
The Case
Before us is a Petition for Review1 under Rule 45 of the Rules of Court,
assailing the March 15, 2002 Decision2 and the June 18, 2002 Resolution3 of
the Court of Appeals in CA-GR SP No. 58536. In the challenged Decision, the
CA disposed as follows:
"As previously stated, the principal issue raised in the court below involves a
pure question of law. Thus, it being clear that the court a quo has jurisdiction
over the nature and subject matter of the case below, it did not commit grave
abuse of discretion when it issued the assailed order denying petitioner’s
motion to dismiss and granting private respondent’s application for the
issuance of a writ of preliminary injunction.
"WHEREFORE, premises considered, the petition is denied due course and is
accordingly DISMISSED."4
The assailed Resolution, on the other hand, denied petitioner’s Motion for
Reconsideration.
The Facts
The CA narrated the facts as follows:
"Private respondent Roberto J. Cuenca is the registered owner of a parcel of
land designated as Lot No. 816-A and covered by TCT No. 1084, containing an
area of 81.6117 hectares, situated in Brgy. Haguimit, La Carlota City and
devoted principally to the planting of sugar cane.
"On 21 September 1999, Noe Fortunado, Municipal Agrarian Reform Officer
(MARO) of La Carlota City issued and sent a NOTICE OF COVERAGE to private
respondent Cuenca placing the above-described landholding under the
compulsory coverage of R.A. 6657, otherwise known as the Comprehensive
Agrarian Reform Program (CARP). The NOTICE OF COVERAGE also stated that
the Land Bank of the Philippines (LBP) will determine the value of the subject
land pursuant to Executive Order No. 405 dated 14 June 1990.
"On 29 September 1999, private respondent Cuenca filed with the Regional
Trial Court, Branch 63, La Carlota City, a complaint against Noe Fortunado and
Land Bank of the Philippines for ‘Annulment of Notice of Coverage and
Declaration of Unconstitutionality of E.O. No. 405, Series of 1990, With
Preliminary Injunction and Restraining Order.’ The case was docketed as Civil
Case No. 713.
"In his complaint, Cuenca alleged, inter alia, that the implementation of CARP
in his landholding is no longer with authority of law considering that, if at all,
the implementation should have commenced and should have been
completed between June 1988 to June 1992, as provided in the
Comprehensive Agrarian Reform Law (CARL); that the placing of the subject
landholding under CARP is without the imprimatur of the Presidential
Agrarian Reform Council (PARC) and the Provincial Agrarian Reform
Coordinating Committee (PARCOM) as required by R.A. 7905; that Executive
Order No. 405 dated 14 June 1990 amends, modifies and/or repeals CARL
and, therefore, it is unconstitutional considering that on 14 June 1990, then
President Corazon Aquino no longer had law-making powers; that the NOTICE
OF COVERAGE is a gross violation of PD 399 dated 28 February 1974.
"Private respondent Cuenca prayed that the Notice of Coverage be declared
null and void ab initio and Executive Order No. 405 dated 14 June 1990 be
declared unconstitutional.
"On 05 October 1999, MARO Noe Fortunado filed a motion to dismiss the
complaint on the ground that the court a quo has no jurisdiction over the
nature and subject matter of the action, pursuant to R.A. 6657.
"On 12 January 2000, the respondent Judge issued a Temporary Restraining
Order directing MARO and LBP to cease and desist from implementing the
Notice of Coverage. In the same order, the respondent Judge set the hearing
on the application for the issuance of a writ of preliminary injunction on
January 17 and 18, 2000.
"On 14 January 2000, MARO Fortunado filed a Motion for Reconsideration of
the order granting the TRO contending inter alia that the DAR, through the
MARO, in the course of implementing the Notice of Coverage under CARP
cannot be enjoined through a Temporary Restraining Order in the light of
Sections 55 and 68 of R.A. 6657.
"In an order dated 16 February 2000, the respondent Judge denied MARO
Noe Fortunado’s motion to dismiss and issued a Writ of Preliminary
Injunction directing Fortunado and all persons acting in his behalf to cease
and desist from implementing the Notice of Coverage, and the LBP from
proceeding with the determination of the value of the subject land.
"The Department of Agrarian Reform (DAR) [thereafter filed before the CA] a
petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure,
assailing the writ of preliminary injunction issued by respondent Judge on the
ground of grave abuse of discretion amounting to lack of jurisdiction.
"It is the submission of the petitioner that the assailed order is ‘in direct
defiance… of Republic Act 6657, particularly Section 55 and 68’ thereof, which
read:
‘SECTION 55. NO RESTRAINING ORDERS OR PRELIMINARY INJUNCTIONS – No
court in the Philippines shall have jurisdiction to issue any restraining order
or writ of preliminary injunction against the PARC or any of its duly authorized
or designated agencies in any case, dispute or controversy arising from,
necessary to, or in connection with the application, implementation, or
enforcement or interpretation of this Act and other pertinent laws on
agrarian reform.’
‘SECTION 68 – IMMUNITY OF GOVERNMENT AGENCIES FROM COURT’S
INTERFERENCE – No injunction, Restraining Order, prohibition or mandamus
shall be issued by the lower court against the Department of Agrarian Reform
(DAR), the Department of Agriculture (DA), the Department of Environment
and Natural Resources (DENR), and the Department of Justice (DOJ) in the
implementation of their program.’
"Petitioner contends that by virtue of the above provisions, all lower courts,
such as the court presided over by respondent Judge, ‘are barred if not
prohibited by law to issue orders of injunctions against the Department of
Agrarian Reform in the full implementation of the Notice of Coverage which
is the initial step of acquiring lands under R.A. 6657.’
"Petitioner also contends that the nature and subject matter of the case
below is purely agrarian in character over which the court a quo has no
jurisdiction and that therefore, it had no authority to issue the assailed
injunction order."5
Ruling of the Court of Appeals
Stressing that the issue was not simply the improper issuance of the Notice
of Coverage, but was mainly the constitutionality of Executive Order No. 405,
the CA ruled that the Regional Trial Court (RTC) had jurisdiction over the case.
Consonant with that authority, the court a quo also had the power to issue
writs and processes to enforce or protect the rights of the parties.
The appellate court likewise held that petitioner’s reliance on Sections 55 and
68 of RA 6657 had been misplaced, because the case was not about a purely
agrarian matter. It opined that the prohibition in certain statutes against such
writs pertained only to injunctions against administrative acts, to
controversies involving facts, or to the exercise of discretion in technical
cases. But on issues involving pure questions of law, courts were not
prevented from exercising their power to restrain or prohibit administrative
acts.
Hence, this Petition.6
Issues
In its Memorandum, petitioner raises the following issues:
"1. The Honorable Court of Appeals committed serious error by not taking
into cognizance that the issues raised in the complaint filed by the private
respondent, which seeks to exclude his land from the coverage of the CARP,
is an agrarian reform matter and within the jurisdiction of the DAR, not with
the trial court.
"2. The Honorable Court of Appeals, with due respect, gravely abused its
discretion by sustaining the writ of injunction issued by the trial court, which
is a violation of Sections 55 and 68 of Republic Act No. 6657."7
The Court’s Ruling
The Petition has merit.
First Issue:
Jurisdiction
In its bare essentials, petitioner’s argument is that private respondent, in his
Complaint for Annulment of the Notice of Coverage, is asking for the
exclusion of his landholding from the coverage of the Comprehensive
Agrarian Reform Program (CARP). According to the DAR, the issue involves
the implementation of agrarian reform, a matter over which the DAR has
original and exclusive jurisdiction, pursuant to Section 50 of the
Comprehensive Agrarian Reform Law (RA 6657).
On the other hand, private respondent maintains that his Complaint assails
mainly the constitutionality of EO 405. He contends that since the Complaint
raises a purely legal issue, it thus falls within the jurisdiction of the RTC. We
do not agree.
Conflicts involving jurisdiction over agrarian disputes are as tortuous as the
history of Philippine agrarian reform laws. The changing jurisdictional
landscape is matched only by the tumultuous struggle for, and resistance to,
the breaking up and distribution of large landholdings.
Two Basic Rules
Two basic rules have guided this Court in determining jurisdiction in these
cases. First, jurisdiction is conferred by law.8 And second, the nature of the
action and the issue of jurisdiction are shaped by the material averments of
the complaint and the character of the relief sought.9 The defenses resorted
to in the answer or motion to dismiss are disregarded; otherwise, the
question of jurisdiction would depend entirely upon the whim of the
defendant.10
Grant of Jurisdiction
Ever since agrarian reform legislations began, litigants have invariably sought
the aid of the courts. Courts of Agrarian Relations (CARs) were organized
under RA 126711 "[f]or the enforcement of all laws and regulations governing
the relation of capital and labor on all agricultural lands under any system of
cultivation." The jurisdiction of these courts was spelled out in Section 7 of
the said law as follows:
"Sec. 7. Jurisdiction of the Court. - The Court shall have original and exclusive
jurisdiction over the entire Philippines, to consider, investigate, decide, and
settle all questions, matters, controversies or disputes involving all those
relationships established by law which determine the varying rights of
persons in the cultivation and use of agricultural land where one of the parties
works the land, and shall have concurrent jurisdiction with the Court of First
Instance over employer and farm employee or labor under Republic Act
Numbered six hundred two and over landlord and tenant involving violations
of the Usury Law (Act No. 2655, as amended) and of inflicting the penalties
provided therefor."
All the powers and prerogatives inherent in or belonging to the then Courts
of First Instance12 (now the RTCs) were granted to the CARs. The latter were
further vested by the Agricultural Land Reform Code (RA 3844) with original
and exclusive jurisdiction over the following matters:
"(1) All cases or actions involving matters, controversies, disputes, or money
claims arising from agrarian relations: x x x
"(2) All cases or actions involving violations of Chapters I and II of this Code
and Republic Act Number eight hundred and nine; and
"(3) Expropriations to be instituted by the Land Authority: x x x."13
Presidential Decree (PD) No. 946 thereafter reorganized the CARs,
streamlined their operations, and expanded their jurisdiction as follows:
"Sec. 12. Jurisdiction over Subject Matter. - The Courts of Agrarian Relations
shall have original and exclusive jurisdiction over:
a) Cases involving the rights and obligations of persons in the cultivation and
use of agricultural land except those cognizable by the National Labor
Relations Commission; x x x ;
b) Questions involving rights granted and obligations imposed by laws,
Presidential Decrees, Orders, Instructions, Rules and Regulations issued and
promulgated in relation to the agrarian reform program; Provided, however,
That matters involving the administrative implementation of the transfer of
the land to the tenant-farmer under Presidential Decree No. 27 and
amendatory and related decrees, orders, instructions, rules and regulations,
shall be exclusively cognizable by the Secretary of Agrarian Reform, namely:
(1) classification and identification of landholdings;
(2) x x x;
(3) parcellary mapping;
(4) x x x;
xxx xxx xxx
m) Cases involving expropriation of all kinds of land in furtherance of the
agrarian reform program;
xxx xxx xxx
p) Ejectment proceedings instituted by the Department of Agrarian Reform
and the Land Bank involving lands under their administration and disposition,
except urban properties belonging to the Land Bank;
q) Cases involving violations of the penal provisions of Republic Act
Numbered eleven hundred and ninety-nine, as amended, Republic Act
Numbered thirty eight hundred and forty-four, as amended, Presidential
Decrees and laws relating to agrarian reform; Provided, however, That
violations of the said penal provisions committed by any Judge shall be tried
by the courts of general jurisdiction; and
r) Violations of Presidential Decrees Nos. 815 and 816.
The CARs were abolished, however, pursuant to Section 4414 of Batas
Pambansa Blg. 12915 (approved August 14, 1981), which had fully been
implemented on February 14, 1983. Jurisdiction over cases theretofore given
to the CAR’s was vested in the RTCs.16
Then came Executive Order No. 229.17 Under Section 17 thereof, the DAR
shall exercise "quasi-judicial powers to determine and adjudicate agrarian
reform matters, and shall have exclusive jurisdiction over all matters involving
implementation of agrarian reform, except those falling under the exclusive
original jurisdiction of the DENR and the Department of Agriculture [DA]." The
DAR shall also have the "powers to punish for contempt and to issue
subpoena, subpoena duces tecum and writs to enforce its orders or
decisions."
In Quismundo v. CA,18 this provision was deemed to have repealed Section 12
(a) and (b) of Presidential Decree No. 946, which vested the then Courts of
Agrarian Relations with "original exclusive jurisdiction over cases and
questions involving rights granted and obligations imposed by presidential
issuances promulgated in relation to the agrarian reform program."
Under Section 4 of Executive Order No. 129-A, the DAR was also made
"responsible for implementing the Comprehensive Agrarian Reform
Program." In accordance with Section 5 of the same EO, it possessed the
following powers and functions:
"(b) Implement all agrarian laws, and for this purpose, punish for contempt
and issue subpoena, subpoena duces tecum, writs of execution of its
decisions, and other legal processes to ensure successful and expeditious
program implementation; the decisions of the Department may in proper
cases, be appealed to the Regional Trial Courts but shall be immediately
executory notwithstanding such appeal;
xxx xxx xxx
"(h) Provide free legal services to agrarian reform beneficiaries and resolve
agrarian conflicts and land-tenure related problems as may be provided for
by law;
xxx xxx xxx
"(l) Have exclusive authority to approve or disapprove conversion of
agricultural lands for residential, commercial, industrial, and other land uses
as may be provided x x x."
The above grant of jurisdiction to the DAR covers these areas:
(a) adjudication of all matters involving implementation of agrarian reform;
(b) resolution of agrarian conflicts and land tenure related problems; and
(c) approval or disapproval of the conversion, restructuring or readjustment
of agricultural lands into residential, commercial, industrial, and other non-
agricultural uses.
The foregoing provision was as broad as those "theretofore vested in the
Regional Trial Court by Presidential Decree No. 946," as the Court ruled in
Vda. de Tangub v. CA,19 which we quote:
"x x x. The intention evidently was to transfer original jurisdiction to the
Department of Agrarian Reform, a proposition stressed by the rules
formulated and promulgated by the Department for the implementation of
the executive orders just quoted. The rules included the creation of the
Agrarian Reform Adjudication Board designed to exercise the adjudicatory
functions of the Department, and the allocation to it of —
‘x x x [O]riginal and exclusive jurisdiction over the subject matter vested upon
it by law, and all cases, disputes, controversies and matters or incidents
involving the implementation of the Comprehensive Agrarian Reform
Program under Executive Order No. 229, Executive Order No. 129-A, Republic
Act No. 3844, as amended by Republic Act No. 6289, Presidential Decree No.
27 and other agrarian laws and their implementing rules and regulations.’
"The implementing rules also declare that ‘(s)pecifically, such jurisdiction
shall extend over but not be limited to x x x (that theretofore vested in the
Regional Trial Courts, i.e.) (c)ases involving the rights and obligations of
persons engaged in the cultivation and use of agricultural land covered by the
Comprehensive Agrarian Reform Program (CARP) and other agrarian laws x x
x."20
In the same case, the Court also held that the jurisdictional competence of
the DAR had further been clarified by RA 6657 thus:
"x x x. The Act [RA 6657] makes references to and explicitly recognizes the
effectivity and applicability of Presidential Decree No. 229. More particularly,
the Act echoes the provisions of Section 17 of Presidential Decree No. 229,
supra, investing the Department of Agrarian Reform with original jurisdiction,
generally, over all cases involving agrarian laws, although, as shall shortly be
pointed out, it restores to the Regional Trial Court, limited jurisdiction over
two groups of cases. Section 50 reads as follows:
‘SEC. 50. Quasi-Judicial Powers of the DAR. — The DAR is hereby vested with
primary jurisdiction to determine and adjudicate agrarian reform matters and
shall have exclusive original jurisdiction over all matters involving the
implementation of agrarian reform, except those falling under the exclusive
jurisdiction of the Department of Agriculture [DA] and the Department of
Environment and Natural Resources [DENR].
xxx xxx xxx
‘It shall have the power to summon witnesses, administer oaths, take
testimony, require submission of reports, compel the production of books
and documents and answers to interrogatories and issue subpoena and
subpoena duces tecum and to enforce its writs through sheriffs or other duly
deputized officers. It shall likewise have the power to punish direct and
indirect contempt in the same manner and subject to the same penalties as
provided in the Rules of Court.’"21
Nonetheless, we have held that the RTCs have not been completely divested
of jurisdiction over agrarian reform matters. Section 56 of RA 6657 confers
special jurisdiction on "Special Agrarian Courts," which are actually RTCs
designated as such by the Supreme Court.22 Under Section 57 of the same
law, these Special Agrarian Courts have original and exclusive jurisdiction
over the following matters:
"1) ‘all petitions for the determination of just compensation to land-owners,’
and
"2) ‘the prosecution of all criminal offenses under x x x [the] Act.’"
The above delineation of jurisdiction remains in place to this date.
Administrative Circular No. 29-200223 of this Court stresses the distinction
between the quasi-judicial powers of the DAR under Sections 50 and 55 of RA
6657 and the jurisdiction of the Special Agrarian Courts referred to by
Sections 56 and 57 of the same law.
Allegations of the Complaint
A careful perusal of respondent’s Complaint24 shows that the principal
averments and reliefs prayed for refer -- not to the "pure question of law"
spawned by the alleged unconstitutionality of EO 405 -- but to the annulment
of the DAR’s Notice of Coverage. Clearly, the main thrust of the allegations is
the propriety of the Notice of Coverage, as may be gleaned from the following
averments, among others:
"6. This implementation of CARP in the landholding of the [respondent] is
contrary to law and, therefore, violates [respondent’s] constitutional right
not to be deprived of his property without due process of law. The coverage
of [respondent’s] landholding under CARP is NO longer with authority of law.
If at all, the implementation of CARP in the landholding of [respondent]
should have commenced and [been] completed between June 1988 to June
1992 as provided for in CARL, to wit: x x x;
"7. Moreover, the placing of [respondent’s] landholding under CARP as of 21
September 1999 is without the imprimatur of the Presidential Agrarian
Reform Council (PARC) and the Provincial Agrarian Reform Coordinating
Committee (PARCOM) as mandated and required by law pursuant to R.A.
7905 x x x;
xxx xxx xxx
"9. Under the provisions of CARL, it is the PARC and/or the DAR, and not x x x
Land Bank, which is authorized to preliminarily determine the value of the
lands as compensation therefor, thus – x x x;
xxx xxx xxx
"12. That the aforementioned NOTICE OF COVERAGE with intendment and
purpose of acquiring [respondent’s] aforementioned land is a gross violation
of law (PD 399 dated 28 February 1974 which is still effective up to now)
inasmuch as [respondent’s] land is traversed by and a road frontage as
admitted by the DAR’s technician and defendant FORTUNADO (MARO) x x x;"
"13. That as reflected in said Pre-Ocular Inspection Report, copy of which is
hereto attached as annex ‘D’ forming part hereof, [respondent’s] land is
above eighteen percent (18%) slope and therefore, automatically exempted
and excluded from the operation of Rep. Act 6657, x x x.25 (Italics supplied)
In contrast, the 14-page Complaint touches on the alleged unconstitutionality
of EO 405 by merely making these two allegations:
"10. Executive Order No. 405 dated 14 June 1990 (issued by the then
President Corazon Aquino) is unconstitutional for it plainly amends, modifies
and/or repeals CARL. On 14 June 1990, then President Corazon Aquino had
no longer law-making powers as the Philippine Congress was by then already
organized, existing and operational pursuant to the 1987 Constitution. A copy
of the said Executive Order is hereto attached as Annex ‘B’ forming part
hereof.
"11. Our constitutional system of separation of powers renders the said
Executive Order No. 405 unconstitutional and all valuations made, and to be
made, by the defendant Land Bank pursuant thereto are null and void and
without force and effect. Indispensably and ineludibly, all related rules,
regulations, orders and other issuances issued or promulgated pursuant to
said Executive Order No. 405 are also null and void ab initio and without force
and effect."26
We stress that the main subject matter raised by private respondent before
the trial court was not the issue of compensation (the subject matter of EO
40527). Note that no amount had yet been determined nor proposed by the
DAR. Hence, there was no occasion to invoke the court’s function of
determining just compensation.28
To be sure, the issuance of the Notice of Coverage29 constitutes the first
necessary step towards the acquisition of private land under the CARP. Plainly
then, the propriety of the Notice relates to the implementation of the CARP,
which is under the quasi-judicial jurisdiction of the DAR. Thus, the DAR could
not be ousted from its authority by the simple expediency of appending an
allegedly constitutional or legal dimension to an issue that is clearly agrarian.
In view of the foregoing, there is no need to address the other points pleaded
by respondent in relation to the jurisdictional issue. We need only to point
that in case of doubt, the jurisprudential trend is for courts to refrain from
resolving a controversy involving matters that demand the special
competence of administrative agencies, "even if the question[s] involved
[are] also judicial in character,"30 as in this case.

Second Issue:

Preliminary Injunction

Having declared the RTCs to be without jurisdiction over the instant case, it
follows that the RTC of La Carlota City (Branch 63) was devoid of authority to
issue the assailed Writ of Preliminary Injunction. That Writ must perforce be
stricken down as a nullity. Such nullity is particularly true in the light of the
express prohibitory provisions of the CARP and this Court’s Administrative
Circular Nos. 29-2002 and 38-2002. These Circulars enjoin all trial judges to
strictly observe Section 68 of RA 6657, which reads:

"Section 68. Immunity of Government Agencies from Undue Interference. –

No injunction, restraining order, prohibition or mandamus shall be issued by
the lower courts against the Department of Agrarian Reform (DAR), the
Department of Agriculture (DA), the Department of Environment and Natural
Resources (DENR) and the Department of Justice (DOJ) in their
implementation of the program."

WHEREFORE, the Petition is hereby GRANTED, and the challenged Decision

and Resolution REVERSED AND SET ASIDE. Accordingly, the February 16,
2000 Order of the Regional Trial Court of La Carlota City (Branch 63)
is ANNULLED and a new one entered, DISMISSING the Complaint in Civil Case
713. The Writ of Preliminary Injunction issued therein is also
expressly VOIDED. No costs.

SO ORDERED.
SUMULONG vs COURT OF APPEALS
G.R. No. 108817 May 10, 1994
ESPERANZA P. SUMULONG, represented by MARIO P.
SUMULONG, petitioner,
vs.
HON. COURT OF APPEALS and INLAND TRAILWAYS, INC., respondents.
Tanjuatco, Corpus, Tanjuatco, Tagle-Chua, Cruz & Aquino, for petitioner.
Melencio S. Sta. Maria for private respondent.
DAVIDE, JR., J.:
This is a petition for review on certiorari to set aside the decision 1 of the
Court of Appeals of 28 January 1993 in CA-G.R. SP No. 27987 2 affirming the
decision of Branch 51 of the Regional Trial Court (RTC) of Manila of 23 April
1992 in Civil Case No. 91-58122. 3 The RTC judgment had reversed the
decision of Branch 9 of the Metropolitan Trial Court (MTC) of Manila of
3 June 1991 4 in Civil Case No. 132844-CV, a complaint denominated as one
for forcible entry and entitled "Esperanza P. Sumulong vs. Inland Trailways,
Inc. The dispositive portion of the MTC decision reads:
WHEREFORE, judgment is hereby rendered:
1. Ordering Defendant and anyone acting in its behalf to vacate the premises
located at M. Earnshaw Street, Sampaloc, Manila, covered by Transfer
Certificate of Title Nos. 102994 and 102995;
2. To pay to Plaintiff reasonable compensation for the use of the premises at
the rate of P70,000.00 a month starting from June, 1989 until it finally vacates
the premises, deducting therefrom any and all amount heretofore advanced
by Defendant to Plaintiff;
3. Ordering Defendant to pay to Plaintiff the sum of P5,000.00 as and for
attorney's fees; and
4. To pay the costs. 5
The MTC sustained the theory of plaintiff Esperanza P. Sumulong
(hereinafter Sumulong) that the defendant (hereinafter INLAND) entered the
premises "by stealth and strategy, since it has no sublease when it entered
the premises and remained because it misrepresented itself as owned by
Jopson and also because it asked to negotiate for a new lease." 6 The MTC
disregarded the defense of INLAND that the proper action should have been
for unlawful detainer. 7
On appeal to the RTC by INLAND (Civil Case No. 91-58122), the MTC decision
was reversed. The RTC held that the MTC's ruling "betrays a misapplication
and/or misinterpretation of the law and jurisprudence on Forcible
Entry," 8and that although Sumulong had constructive possession of the
subject premises, she was, nevertheless, not in prior physical and actual
possession thereof. The latter kind of possession is an essential element in
forcible entry; accordingly, her action for forcible entry should fail. It
concluded:
Under the facts as established and the evidence adduced before the Court a
quo, in relation to the applicable law and jurisprudence, the complaint for
Forcible Entry as instituted cannot be sustained. Plaintiff's assertion of its
right to the possession of the subject properties may nevertheless be
ventilated by way of another action, not for Forcible
Entry. 9
Hence, it ordered the dismissal of Civil Case No. 132844-CV.
Sumulong filed a petition for review with the respondent Court of Appeals
which was docketed as CA-G.R. SP No. 27987.10 Sumulong contended therein
that the RTC seriously erred in holding that she had failed to establish prior
physical possession of the subject premises despite overwhelming evidence
to the contrary and in disregarding long established law and jurisprudence
when it ordered the dismissal of the complaint for forcible
entry. 11
In its challenged Decision of 28 January 1993, the Court of Appeals affirmed
the RTC decision on the ground that Sumulong failed to specifically aver in
her complaint facts which would clearly show that her cause of action is for
forcible entry. It held:
Those pertinent allegations in the complaint as well as Mario Sumulong's
testimony are facts, intimate and intertwined, proving that private
respondent's entry, possession and occupation of the premises were upon
the broad knowledge and acquiescence, if not express upon the implied
permission of petitioner. And thus, the private respondent, is admittedly in
the actual possession of the premises in question. All doubts should be
resolved in his [sic] favor, it being the rule of law that the present possessor
is to be preferred should a question arise regarding the fact of possession
(Art. 539, NCC). We, therefore, find and so hold that petitioner failed to
specifically aver in her complaint facts which would clearly show that her
cause of action should be for forcible entry, well supporting the findings of
the RTC that the petitioner has not shown that she has been deprived of the
possession of the premises by force, intimidation, stealth, threat or strategy.
On this basis, the complaint for forcible entry cannot be sustained on the
ground of lack of cause of action and which should be dismissed on that
ground (sec. 1-[g], Rule 16, Revised Rules of Court). To use the words in
[S]arona vs. Villegas [22 SCRA 1257] the failure of a plaintiff to specifically
aver in the complaint facts which would definitely show that plaintiff's action
is for forcible entry — that defendant's entry into the land is illegal — "is not
to be lightly treated." The reason and philosophy behind this rule, apart from
the fact that there is distinct difference between the cause of action for
forcible entry, on the one hand, and unlawful detainer, on the other hand, is
that whatever may be the character of one's prior possession, if he has in his
favor priority of time, he has the security that entitles him to stay on the
property until he is lawfully ejected by a person having a better right to such
possession. 12
In the instant petition filed on 23 March 1993, Sumulong avers that the Court
of Appeals gravely erred in holding that she has no cause of action for forcible
entry against INLAND and asserts that she was the prior physical possessor of
the premises in question and that INLAND's intrusion, occupation, and
possession of the subject premises were effected through stealth and
strategy. 13 She argues that the prior possession for purposes of the action for
forcible entry is not to be reckoned from June 1989 when INLAND first
entered the premises, as held by the RTC and the Court of Appeals, but from
November 1989, when she "successfully regained actual physical possession
of the subject premises" from INLAND which "failed to resist the physical
take-over and
re-entry." 14
She further contends that the claim of INLAND that it had entered the
property in June 1989 by virtue of an oral sublease contract between it and
Jopson Management and Development Corp. (hereinafter Jopson), which
was, allegedly, part of the consideration for the purchase by INLAND of the
adjoining Jopson Supermarket, is untenable because the Deed of Sale
executed by Jopson makes no stipulation regarding the sublease, and even
granting arguendo that such sublease was made, it was void because the
lessee-sublessor (Jopson) had no more authority to sublease it since the
contract of lease in its favor had been cancelled and terminated in view of its
abandonment of the premises. Moreover, pursuant to Section VIII of the
Lease Contract, Jopson's right to sublease refers only to the improvements it
had introduced on the leased lots and not to the latter.
In its comment to the petition, INLAND maintains that the complaint in Civil
Case No. 132844-CV shows that Sumulong has no cause of action for forcible
entry, that Jopson did not abandon the leased premises, that Sumulong had
no prior physical possession of the premises, and that INLAND did not employ
stealth and strategy to gain possession thereof.
After the filing of the reply to the comment, this Court resolved to
give due course to the petition and to require the parties to submit their
memoranda, 15 which they subsequently did.
The chief issues for our resolution are (1) whether the complaint in Civil Case
No. 132844-CV before the MTC fails to state a cause of action for forcible
entry; and (2) assuming that it does not, whether it, in fact, contains sufficient
allegations for unlawful detainer for which judgment may be rendered
accordingly.
Settled is the rule that the lack of a cause of action, which is a ground for a
motion to dismiss under Section 1(g), Rule 16 of the Rules of Court, must
appear on the face of the complaint, i.e., it must be determined from the
allegations of the complaint and from none other. A complaint should not be
dismissed for insufficiency unless it appears clearly from the face of the
complaint that the plaintiff is not entitled to any relief under any state of facts
which could be proved within the facts alleged therein. Stated otherwise,
though the allegations in the complaint are ambiguous, indefinite or
uncertain but, nevertheless, a cause of action can, in any manner, be made
out therefrom, and the plaintiff would be entitled to recover in any aspect of
the facts or any combination of the facts alleged, if they were to be proved,
then the motion to dismiss should be denied. 16
When a defendant perceives that the complaint states no cause of action, the
better procedure would be to file a motion to dismiss. If, however, none is
filed, that defense may be pleaded as an affirmative defense in accordance
with Section 5, Rule 16 of the Rules of Court. And, pursuant to Section 2 of
Rule 9, even if it is not so pleaded, that defense is not deemed waived; it may
be pleaded in a later pleading, if one is permitted, by motion for judgment on
the pleadings, or at the trial on the merits. In the last instance, however, the
motion shall be disposed of in the light of any evidence which may have been
received.
Accordingly, the issues thus defined can only be properly resolved by an
examination and evaluation of the allegations in the complaint in Civil Case
No. 132844-CV of the MTC of Manila, whose subject matter involves two
adjoining lots owned by Sumulong located along M. Earnshaw Street,
Sampaloc, Manila, and covered by Transfer Certificates of Title Nos. 102994
and 102995. The pertinent paragraphs of the complaint read:
4. On November 27, 1975, plaintiff, represented by her then attorney-in-fact,
Juan Sumulong III, entered into a Contract of Lease with Jopson Management
and Development Corporation (hereinafter "Jopson"), covering the premises
set forth in TCT Nos. 102994 and 102995, thru its President, Mr. Hernan
Jopson. The properties subject of the said Contract of Lease (which are also
the properties subject of this complaint) adjoin the Jopson Supermarket
owned and operated by Jopson, and were utilized by Jopson as parking lot
and warehouse of goods/products sold in the supermarket. A copy of said
Contract of Lease is hereto attached, marked as Annex "B", and made an
integral part hereof;
5. Pertinently, Section III of the Contract of Lease provides:
. . . If LESSEE shall at any time fail or neglect to perform or comply with any of
the covenants, conditions or restrictions, stipulated, or if LESSEE shall become
bankrupt or insolvent, or the LESSEE abandons the property or refuses to pay
the rent for six (6) months, then, in any such cases, this lease contract shall
become automatically terminated and cancelled, and premises subject of this
lease shall be vacated peacefully by LESSEE for LESSOR to hold and enjoy
henceforth. . . . Upon cancellation of this contract, LESSEE hereby grants to
LESSOR the right to enter and take possession of the premises. . . . (Emphasis
supplied).'
Likewise, paragraph two (2), Sec. VII of the Contract of Lease provides:
VII. ENTRY AND INSPECTION OF PROPERTY.
xxx xxx xxx
In case the premises shall be deserted or vacated before the expiration of this
lease, the LESSOR shall have the right to enter the same, as agent of the
LESSEE, without being liable for any prosecution of damages therefor, and the
LESSOR shall have the option to re-let the same, as the agent of the LESSEE,
and received the rent therefor to be applied in payment of the rentals and
damages due hereunder, holding the LESSEE liable for any deficiency.
6. Sometime in 1988, Jopson Supermarket (adjoining the leased premises)
was beset with a strike by its laborers. Consequently, it ceased operations for
about two (2) years;
7. Thereafter, in 1989, plaintiff's representative were informed through the
print media, of the sale of Jopson's business (supermarket) to Inland
Supermarket;
8. Thus, upon her arrival from the United States in the second quarter of 1989,
plaintiff instructed her representatives to inspect the leased premises
adjoining Jopson Supermarket, pursuant to Section VII of the lease contract.
True indeed, plaintiff discovered, after a series of inspections done by
plaintiff's representatives, that Jopson had vacated and deserted the leased
premises covered under the Contract of Lease (Annex "B"). Even worse,
plaintiff discovered that Jopson tolerated the illegal entry of defendant Inland
Trailways into the property, without any valid agreement;
9. Accordingly, pursuant to Section III of the Contract of Lease, the plaintiff's
lease contract with Jopson was rendered automatically terminated and
canceled. In November 1989, by virtue of Sections II and VII of the Contract
of Lease, plaintiff through her attorney-in-fact, Mario P. Sumulong, took Trailways occupy the subject properties. Negotiations were then held from
possession of the subject properties. Defendant Inland which was then February 1 to March 1, 1990;
occupying the subject properties, offered no resistance to the take over, since
14. However, due to defendant's insistence on an unreasonably low amount
defendant Inland Trailways could not present any valid agreement granting it
of the lease rental, plaintiff decided not to lease her properties to defendant
the right of possession over the subject properties. (It is noteworthy that
Inland Trailways. This was made known to the defendant in a letter dated
alleged sublease procured by defendant Inland Trailways from Jopson was
March 14, 1990 by plaintiff's son, Mario P. Sumulong. A copy of said letter is
executed only on April 2, 1990.)
hereto attached, marked as Annex "D", and made an integral part hereof;
10. A couple of days later, defendant Inland Trailways misrepresented to
15. At the same time, to fully protect her interest, on March 14, 1990,
plaintiff that Mr. Hernan Jopson is also the owner of Inland Supermarket, and
plaintiff, thru her son Mario P. Sumulong, formally notified Jopson of the
that Jopson Supermarket had resumed operations under the name of Inland
termination of the Contract of Lease due to abandonment of the leased
Supermarket. Because of defendant Inland Trailways' misrepresentation,
premises. A copy of said letter is hereto attached, marked as Annex "E", and
plaintiff was misled into accepting a check payment from defendant Inland
made an integral part hereof;
Trailways. . . .
16. Likewise, on April 25, 1990, plaintiff thru counsel, confirmed of such
11. However, in December 1989, upon verification by plaintiff's
termination. A copy of said letter is hereto attached, marked as Annex "F,"
representatives, plaintiff discovered that Jopson does not have any interest
and made an integral part hereof;
in Inland Supermarket, or in Inland Trailways and that Jopson and Inland
Supermarket/Inland Trailways have a totally different set of directors and 17. However, on April 25, 1990, without plaintiff's knowledge, defendant
stockholders. When confronted by plaintiff's representative, defendant's Inland Trailways, through strategy and stealth, procured a
representatives admitted such fact, and further admitted that defendant sub-lease agreement from Jopson, despite the fact that plaintiff's lease
Inland Trailways has no sub-lease agreement with Jopson. Worse, neither contract with Jopson had earlier been terminated and cancelled. . . . It is
defendant Inland Trailways nor Inland Supermarket has any written contract significant that the monthly rental of ELEVEN THOUSAND (P11,000.00) PESOS
with plaintiff; for the sub-lease of the subject properties as contained in the
sub-lease agreement, is grossly disproportionate to the prevailing rental rates
12. Consequently, but still in December 1989, upon discovering the
of real properties in the area, and therefore show that the sub-lease
misrepresentation, plaintiff notified Jopson of the termination and
agreement is a mere sham or ploy designed to enable defendant Inland
cancellation of their lease contract, and took possession of the subject
Trailways to gain entry and possession of the subject properties without any
properties. Again, defendant Inland Trailways offered no resistance for lack
valid lease contract with the plaintiff, and after plaintiff decided not to lease
of a valid agreement granting it the right of possession over the subject
the subject properties to the defendant. Furthermore, it bears to emphasize
properties;
that the sub-lease agreement was entered into only after Jopson had been
13. Thereafter, during the take over by the plaintiff, defendant Inland served with the notice of termination of its lease contract with plaintiff, and
Trailways, through its representatives Riza Moises and Evelyn Castro, only after defendant Inland Trailways was informed by plaintiff that she is not
persuaded plaintiff's representative Mario P. Sumulong, to grant defendant leasing her premises to defendant;
Inland Trailways the temporary use of the subject properties, pending
18. This alarming development compelled plaintiff, through her
negotiations for the lease of the premises. Anticipating in good faith that a
representatives, to take over the physical possession of the leased premises
lease contract would be finalized, plaintiff agreed to let defendant Inland
on April 4, 1990. However, on the night of April 4, 1990, defendant Inland
Trailways again misrepresented to plaintiff that it was ready to finalize the
appropriate lease contract with plaintiff. Such misrepresentation misled
plaintiff into allowing defendant Inland Trailways once more to enter the
subject properties;
19. However, after defendant Inland Trailways took possession of the subject
properties, it maliciously refused to execute and enter into a lease contract
with plaintiff, and failed to deliver the agreed monetary consideration for the
temporary use of subject premises, or to peacefully return possession of the
same;
20. Through such stealth and strategy, defendant Inland Trailways illegally
deprived plaintiff of the possession of the subject properties to plaintiff's
great damage and prejudice;
21. Except those times when plaintiff took over the subject properties for a
while, defendant Inland Trailways has remained in illegal possession of the
said premises, since June 1989, and, up to the present, still retains such
possession thereof;
22. Despite repeated demands, defendant Inland Trailways refuses to vacate
the subject properties' premises and to turn over the peaceful possession
thereof to plaintiff, having repeatedly threatened to use "goons", the
military, judges and senators to repel any attempt of plaintiff to peacefully
enforce her right. A copy of counsel's latest demand letter to defendant dated
April 25, 1990 is hereto attached, marked as Annex "H", and made an integral
part hereof;
23. The reasonable rental value of said premises based on an estimated fair
market value of P6,500.00 per square meter is EIGHTY THOUSAND PESOS
(P80,000.00) a month; 17
Forcible entry and unlawful detainer are two distinct causes of action defined
in Section 1, Rule 70 of the Rules of Court. In forcible entry, one is deprived
of physical possession of any land or building by means of force, intimidation,
threat, strategy, or stealth. In unlawful detainer, one unlawfully withholds
possession thereof after the expiration or termination of his right to hold
possession under any contract, express or implied. In forcible entry, the
possession is illegal from the beginning and the only issue is who has the prior
possession de facto. In unlawful detainer, possession was originally lawful but
became unlawful by the expiration or termination of the right to possess and
the issue of rightful possession is the one decisive, for in such action, the
defendant is the party in actual possession and the plaintiff's cause of action
is the termination of the defendant's right to continue in possession. 18
Accordingly, in forcible entry, the plaintiff must allege in the complaint and
prove that he was in prior physical possession of the property in litigation
until he was deprived thereof by the defendant, but in unlawful detainer, the
plaintiff need not have prior physical possession of the property,19 or,
elsewise stated, prior physical possession is not an indispensable
requirement in an unlawful detainer case. 20
The aforequoted allegations in the complaint of Sumulong indubitably show
that she anchors her claim of prior physical possession on her peaceful take-
over of the leased premises in November 1989 from INLAND who had been
in possession thereof since June 1989 allegedly by virtue of an oral sublease
contract. She overlooks, however, that as her allegations show, she allowed
INLAND to re-occupy the premises in December 1989 when it misrepresented
to her that Jopson was also its (INLAND's) owner. When it was ascertained
that Jopson was not, she again re-took possession of the premises, only,
thereafter, to allow again INLAND to temporarily re-occupy the premises
because of its representation that it will negotiate with her a contract of lease
in its favor. Such negotiations were undertaken from 1 February 1990 to 1
March 1990.
However, since the parties could not agree on the rate of rentals, and INLAND
procured through "strategy and stealth" a sublease agreement from Jopson
on 2 April 1990, Sumulong re-took the physical possession of the leased
premises on 4 April 1990. However, on the night of the said date, INLAND
misrepresented to her that it was ready to finalize the appropriate lease
contract and because of that misrepresentation, INLAND was again able to
re-occupy the premises. It is clear then that since Sumulong's first re-taking
of possession in November 1989, INLAND was permitted to re-occupy the
premises thrice.
The words strategy and stealth, as means of forcible entry, are used by
Sumulong in paragraphs 17 and 20 of her complaint. They refer, however, to
the procurement by INLAND of the sublease agreement on 2 April 1990 and
its misrepresentation that it was ready to finalize the appropriate lease
contract. Assuming them to be true, those acts hardly constitute
either strategy or stealth as a means of forcible entry. "Strategy" in this
regard could only mean machination or artifice and considering that the
parties tangled for weeks to reach an agreement on the terms and conditions
of a contract of lease, no such machination or artifice could be said to have
been employed by INLAND. "Stealth," on the other hand, is defined as any
secret, sly, or clandestine act to avoid discovery and to gain entrance into or
remain within residence of another without permission. 21 The allegations
then in paragraphs 17 and 20 of the complaint that INLAND employed
"strategy" and "stealth" are conclusions which are not supported by the
material operative facts averred in the complaint. On the contrary, they are
negated by paragraph 21 which reads:
21. Except those times when plaintiff took over the subject properties for a
while, defendant Inland Trailways has remained in illegal possession of the
said premises, since June 1989, and, up to the present, still retains such
possession thereof." (Emphasis supplied).
This paragraph and Sumulong's allegations of strategy and stealth on
4 April 1990 also refute her argument that for purposes of determining prior
physical possession, her retaking of the property in November 1989 should
be the basis in determining her cause of action for forcible entry. It must be
stated, however, that whatever illegality may have tainted INLAND's entry in
June 1989 was removed by Sumulong's acceptance of rentals from INLAND
after her November 1989 take-over, even if such acceptance was thru the
latter's misrepresentation that Jopson is also its owner. INLAND's succeeding
acts of re-occupying the premises twice thereafter were tolerated by
Sumulong for the reasons earlier adverted to. We thus agree with the RTC
and the Court of Appeals that the complaint fails to show a cause of action
for forcible entry. Neither was Sumulong able to prove it by her evidence,
which on the contrary, established that she allowed INLAND to re-occupy the
premises, not because of the claim of the latter of an oral sublease agreement
and then of a written sublease agreement, but because of the allegation that
Jopson is the owner of INLAND; that INLAND would negotiate for a formal
lease contract; and that INLAND was ready to finalize the lease contract.
Also, from the allegations in the complaint, the nullity of the sublease
agreement which INLAND allegedly obtained from Jopson on 2 April 1990 is
beyond question. Jopson had no right to sublease the property since the
contract of lease in its favor had already been automatically cancelled
pursuant to Section III thereof and Jopson was properly notified of such
automatic cancellation first in December 1989 and then on 14 March 1990.
Neither party proved that Jopson protested the cancellation of the contract
of lease. A sublessee can invoke no right superior to that of his
sublessor. 22 Consequently, as correctly held by the MTC, "the written
sublease was only resorted to by Defendant [INLAND] when the parties could
not agree as to the terms of a new lease," 23 which, however, the MTC
erroneously considered as the act which constituted "stealth and strategy." 24
Notwithstanding the foregoing, the complaint should not have been
dismissed merely for its failure to state a cause of action for forcible entry,
for although Sumulong has designated or denominated it in the caption as
one for forcible entry, her allegations in the body thereof sufficiently establish
a cause of action for unlawful detainer. Well-settled is the rule that what
determines the nature of the action as well as the court which has jurisdiction
over the case are the allegations in the complaint. 25 The cause of action in a
complaint is not what the designation of the complaint states, but what the
allegations in the body of the complaint define or describe. The designation
or caption is not controlling, more than the allegations in the complaint
themselves are, for it is not even an indispensable part of the complaint. 26 It
is equally settled that in an action for unlawful detainer, an allegation that
the defendant is unlawfully withholding possession from the plaintiff is
deemed sufficient, 27 and a complaint for unlawful detainer is sufficient if it
alleges that the withholding of possession or the refusal to vacate is unlawful
without necessarily employing the terminology of the law. 28
It is easily discernible from the allegations in the complaint that the
re-occupation by INLAND of the premises in question in December 1989 —
after it was discovered that INLAND was not owned by Jopson — was by
virtue of Sumulong's tolerance because INLAND promised to negotiate for a
contract of lease and consequently, its continuance in possession was
conditioned on the execution of a lease contract. Possession by tolerance is
lawful.29 However, a person who occupies the land of another at the latter's
tolerance or permission without any contract between them is necessarily
bound by an implied promise that he will vacate upon demand, failing which
a summary action for ejectment is the proper remedy against him. 30 So here,
as alleged in the complaint, when the negotiations for a lease contract fell
through and Sumulong made "repeated demands" 31 for INLAND to vacate
the Sumulong property but "defendant Inland Trailways refuse[d] to vacate
the subject properties' premises and to turn over the peaceful possession
thereof to plaintiff," 32 INLAND's possession became unlawful. Such repeated
demands for INLAND to vacate the property are sufficient compliance with
the jurisdictional requirement of demand in an unlawful detainer case.
In Hautea vs. Magallon, 33 we held that an allegation in an original complaint
for illegal detainer that in spite of demands made by the plaintiff the
defendants had refused to restore the land is considered sufficient
compliance with the jurisdictional requirement of previous demand.

Accordingly, we rule that the allegations in the complaint in Civil Case No.
132844-CV adequately and sufficiently establish a cause of action for
unlawful detainer and that the prayer therein is equally appropriate for an
action for unlawful detainer. The evidence summarized in the MTC's decision
preponderantly supports that cause of action. A judgment then for unlawful
detainer could be validly rendered in Civil Case No. 132844-CV and the
dispositive portion of the MTC's decision therein is consistent with that for
unlawful detainer, except that the fixed reasonable compensation for the use
of the premises should only commence to run from December 1989 and not
from June 1989.

WHEREFORE, the instant petition is GRANTED. The challenged decision of the

Court of Appeals of 28 January 1993 in CA-G.R. SP No. 27987 and the decision
of Branch 51 of the Regional Trial Court of Manila of 23 April 1992 in Civil Case
No. 91-58122 are SET ASIDE while the decision of
Branch 9 of the Metropolitan Trial Court of Manila of 3 June 1991 in Civil Case
No. 132844-CV is REINSTATED, subject to the modification indicated above.

No pronouncement as to costs.

SO ORDERED.
RUBY SHELTER BUILDERS vs FORMARAN indebtedness, and condoned the interests, penalties and surcharges accruing
thereon from 1 October 2004 to 31 December 2005 which amounted to
₱74,678,647.00. The Memorandum of Agreement required, in turn, that
G.R. No. 175914 February 10, 2009 petitioner execute simultaneously with the said Memorandum, "by way of
RUBY SHELTER BUILDERS AND REALTY DEVELOPMENT dacion en pago," Deeds of Absolute Sale in favor of respondents Tan and
CORPORATION, Petitioner, Obiedo, covering the same parcels of land subject of the mortgages. The
vs. Deeds of Absolute Sale would be uniformly dated 2 January 2006, and state
HON. PABLO C. FORMARAN III, Presiding Judge of Regional Trial Court that petitioner sold to respondents Tan and Obiedo the parcels of land for the
Branch 21, Naga City, as Pairing Judge for Regional Trial Court Branch 22, following purchase prices:
Formerly Presided By HON. NOVELITA VILLEGAS-LLAGUNO (Retired 01 May
TCT No. Purchase Price
2006), ROMEO Y. TAN, ROBERTO L. OBIEDO and ATTY. TOMAS A.
REYES, Respondents.
38376 ₱ 9,340,000.00
DECISION
29918 ₱ 28,000,000.00
CHICO-NAZARIO, J.:

Before this Court is a Petition for Review on Certiorari under Rule 45 of the 38374 ₱ 12,000,000.00
Rules of Court seeking the reversal of the Decision1 dated 22 November 2006
of the Court of Appeals in CA-G.R. SP No. 94800. The Court of Appeals, in its 39232 ₱ 1,600,000.00
assailed Decision, affirmed the Order2 dated 24 March 2006 of the Regional
Trial Court (RTC), Branch 22, of Naga City, in Civil Case No. RTC-2006-0030, 39225 ₱ 1,600,000.00
ordering petitioner Ruby Shelter Builders and Realty Development
Corporation to pay additional docket/filing fees, computed based on Section Petitioner could choose to pay off its indebtedness with individual or all five
7(a) of Rule 141 of the Rules of Court, as amended. parcels of land; or it could redeem said properties by paying respondents Tan
and Obiedo the following prices for the same, inclusive of interest and
The present Petition arose from the following facts:
penalties:
Petitioner obtained a loan3 in the total amount of ₱95,700,620.00 from
respondents Romeo Y. Tan (Tan) and Roberto L. Obiedo (Obiedo), secured by TCT No. Redemption Price
real estate mortgages over five parcels of land, all located in Triangulo, Naga
City, covered by Transfer Certificates of Title (TCTs) No. 38376,4 No. 38376 ₱ 25,328,939.00
29918,5 No. 38374,6 No. 39232,7 and No. 39225,8 issued by the Registry of
Deeds for Naga City, in the name of petitioner. When petitioner was unable 29918 ₱ 35,660,800.00
to pay the loan when it became due and demandable, respondents Tan and
Obiedo agreed to an extension of the same. 38374 ₱ 28,477,600.00

In a Memorandum of Agreement9 dated 17 March 2005, respondents Tan

39232 ₱ 6,233,381.00
and Obiedo granted petitioner until 31 December 2005 to settle its
 39225 ₱ 6,233,381.00
In the event that petitioner is able to redeem any of the afore-mentioned
parcels of land, the Deed of Absolute Sale covering the said property shall be
nullified and have no force and effect; and respondents Tan and Obiedo shall
then return the owner’s duplicate of the corresponding TCT to petitioner and
also execute a Deed of Discharge of Mortgage. However, if petitioner is
unable to redeem the parcels of land within the period agreed upon,
respondents Tan and Obiedo could already present the Deeds of Absolute
Sale covering the same to the Office of the Register of Deeds for Naga City so
respondents Tan and Obiedo could acquire TCTs to the said properties in their
names.
The Memorandum of Agreement further provided that should petitioner
contest, judicially or otherwise, any act, transaction, or event related to or
necessarily connected with the said Memorandum and the Deeds of Absolute
Sale involving the five parcels of land, it would pay respondents Tan and
Obiedo ₱10,000,000.00 as liquidated damages inclusive of costs and
attorney’s fees. Petitioner would likewise pay respondents Tan and Obiedo
the condoned interests, surcharges and penalties.10 Finally, should a contest
arise from the Memorandum of Agreement, Mr. Ruben Sia (Sia), President of
petitioner corporation, personally assumes, jointly and severally with
petitioner, the latter’s monetary obligation to respondent Tan and Obiedo.
Respondent Atty. Tomas A. Reyes (Reyes) was the Notary Public who
notarized the Memorandum of Agreement dated 17 March 2005 between
respondent Tan and Obiedo, on one hand, and petitioner, on the other.
Pursuant to the Memorandum of Agreement, petitioner, represented by Mr.
Sia, executed separate Deeds of Absolute Sale,11 over the five parcels of land,
in favor of respondents Tan and Obiedo. On the blank spaces provided for in
the said Deeds, somebody wrote the 3rd of January 2006 as the date of their
execution. The Deeds were again notarized by respondent Atty. Reyes also on
3 January 2006.
Without payment having been made by petitioner on 31 December 2005,
respondents Tan and Obiedo presented the Deeds of Absolute Sale dated 3
January 2006 before the Register of Deeds of Naga City on 8 March 2006, as
a result of which, they were able to secure TCTs over the five parcels of land
in their names.
On 16 March 2006, petitioner filed before the RTC a Complaint12 against
respondents Tan, Obiedo, and Atty. Reyes, for declaration of nullity of deeds
of sales and damages, with prayer for the issuance of a writ of preliminary
injunction and/or temporary restraining order (TRO). The Complaint was
docketed as Civil Case No. 2006-0030.
On the basis of the facts already recounted above, petitioner raised two
causes of action in its Complaint.
As for the first cause of action, petitioner alleged that as early as 27 December
2005, its President already wrote a letter informing respondents Tan and
Obiedo of the intention of petitioner to pay its loan and requesting a meeting
to compute the final amount due. The parties held meetings on 3 and 4
January 2006 but they failed to arrive at a mutually acceptable computation
of the final amount of loan payable. Respondents Tan and Obiedo then
refused the request of petitioner for further dialogues. Unbeknownst to
petitioner, despite the ongoing meetings, respondents Tan and Obiedo, in
evident bad faith, already had the pre-executed Deeds of Absolute Sale
notarized on 3 January 2006 by respondent Atty. Reyes. Atty. Reyes, in
connivance with respondents Tan and Obiedo, falsely made it appear in the
Deeds of Absolute Sale that Mr. Sia had personally acknowledged/ratified the
said Deeds before Atty. Reyes.
Asserting that the Deeds of Absolute Sale over the five parcels of land were
executed merely as security for the payment of its loan to respondents Tan
and Obiedo; that the Deeds of Absolute Sale, executed in accordance with
the Memorandum of Agreement, constituted pactum commisorium and as
such, were null and void; and that the acknowledgment in the Deeds of
Absolute Sale were falsified, petitioner averred:
13. That by reason of the fraudulent actions by the [herein respondents],
[herein petitioner] is prejudiced and is now in danger of being deprived,
physically and legally, of the mortgaged properties without benefit of legal
processes such as the remedy of foreclosure and its attendant procedures,
solemnities and remedies available to a mortgagor, while [petitioner] is
desirous and willing to pay its obligation and have the mortgaged properties
released.13
In support of its second cause of action, petitioner narrated in its Complaint
that on 18 January 2006, respondents Tan and Obiedo forcibly took over, with
the use of armed men, possession of the five parcels of land subject of the
falsified Deeds of Absolute Sale and fenced the said properties with barbed
wire. Beginning 3 March 2006, respondents Tan and Obiedo started
demolishing some of the commercial spaces standing on the parcels of land
in question which were being rented out by petitioner. Respondents Tan and
Obiedo were also about to tear down a principal improvement on the
properties consisting of a steel-and-concrete structure housing a motor
vehicle terminal operated by petitioner. The actions of respondents Tan and
Obiedo were to the damage and prejudice of petitioner and its
tenants/lessees. Petitioner, alone, claimed to have suffered at least
₱300,000.00 in actual damages by reason of the physical invasion by
respondents Tan and Obiedo and their armed goons of the five parcels of
land.
Ultimately, petitioner’s prayer in its Complaint reads:
WHEREFORE, premises considered, it is most respectfully prayed of this
Honorable Court that upon the filing of this complaint, a 72-hour temporary
restraining order be forthwith issued ex parte:
(a) Restraining [herein respondents] Tan and Obiedo, their agents, privies or
representatives, from committing act/s tending to alienate the mortgaged
properties from the [herein petitioner] pending the resolution of the case,
including but not limited to the acts complained of in paragraph "14", above;
(b) Restraining the Register of Deeds of Naga City from entertaining moves by
the [respondents] to have [petitioner’s] certificates of title to the mortgaged
properties cancelled and changed/registered in [respondents] Tan’s and
Obiedo’s names, and/or released to them;
(c) After notice and hearing, that a writ of preliminary injunction be issued
imposing the same restraints indicated in the next preceding two paragraphs
of this prayer; and
(d) After trial, judgment be rendered:
1. Making the injunction permanent;
2. Declaring the provision in the Memorandum of Agreement requiring the
[petitioner] to execute deed of sales (sic) in favor of the [respondents Tan and
Obiedo] as dacion en pago in the event of non-payment of the debt as pactum
commissorium;
3. Annulling the Deed[s] of Sale for TCT Nos. 29918, 38374, 38376, 39225 and
39232, all dated January 3, 2006, the same being in contravention of law;
4. Ordering the [respondents] jointly and solidarily to pay the [petitioner]
actual damages of at least ₱300,000.00; attorney’s fees in the amount of
₱100,000.00 plus P1,000.00 per court attendance of counsel as appearance
fee; litigation expenses in the amount of at least ₱10,000.00 and exemplary
damages in the amount of ₱300,000.00, plus the costs.
[Petitioner] further prays for such other reliefs as may be proper, just and
equitable under the premises.14
Upon filing its Complaint with the RTC on 16 March 2006, petitioner paid the
sum of ₱13,644.25 for docket and other legal fees, as assessed by the Office
of the Clerk of Court. The Clerk of Court initially considered Civil Case No.
2006-0030 as an action incapable of pecuniary estimation and computed the
docket and other legal fees due thereon according to Section 7(b)(1), Rule
141 of the Rules of Court.
Only respondent Tan filed an Answer15 to the Complaint of petitioner.
Respondent Tan did admit that meetings were held with Mr. Sia, as the
representative of petitioner, to thresh out Mr. Sia’s charge that the
computation by respondents Tan and Obiedo of the interests, surcharges and
penalties accruing on the loan of petitioner was replete with errors and
uncertainties. However, Mr. Sia failed to back up his accusation of errors and
uncertainties and to present his own final computation of the amount due.
Disappointed and exasperated, respondents Tan and Obiedo informed Mr.
Sia that they had already asked respondent Atty. Reyes to come over to
notarize the Deeds of Absolute Sale. Respondent Atty. Reyes asked Mr. Sia
whether it was his signature appearing above his printed name on the Deeds
of Absolute Sale, to which Mr. Sia replied yes. On 4 January 2006, Mr. Sia still
failed to establish his claim of errors and uncertainties in the computation of
the total amount which petitioner must pay respondent Tan and Obiedo. Mr.
Sia, instead, sought a nine-month extension for paying the loan obligation of
petitioner and the reduction of the interest rate thereon to only one percent
(1%) per month. Respondents Tan and Obiedo rejected both demands.
Respondent Tan maintained that the Deeds of Absolute Sale were not
executed merely as securities for the loan of petitioner. The Deeds of
Absolute Sale over the five parcels of land were the consideration for the
payment of the total indebtedness of petitioner to respondents Tan and
Obiedo, and the condonation of the 15-month interest which already accrued
on the loan, while providing petitioner with the golden opportunity to still
redeem all or even portions of the properties covered by said Deeds.
Unfortunately, petitioner failed to exercise its right to redeem any of the said
properties.
Belying that they forcibly took possession of the five parcels of land,
respondent Tan alleged that it was Mr. Sia who, with the aid of armed men,
on board a Sports Utility Vehicle and a truck, rammed into the personnel of
respondents Tan and Obiedo causing melee and disturbance. Moreover, by
the execution of the Deeds of Absolute Sale, the properties subject thereof
were, ipso jure, delivered to respondents Tan and Obiedo. The demolition of
the existing structures on the properties was nothing but an exercise of
dominion by respondents Tan and Obiedo.
Respondent Tan, thus, sought not just the dismissal of the Complaint of
petitioner, but also the grant of his counterclaim. The prayer in his Answer is
faithfully reproduced below:
Wherefore, premises considered, it is most respectfully prayed that, after due
hearing, judgment be rendered dismissing the complaint, and on the
counterclaim, [herein petitioner] and Ruben Sia, be ordered to indemnify,
jointly and severally [herein respondents Tan and Obiedo] the amounts of not
less than ₱10,000,000.00 as liquidated damages and the further sum of not
less than ₱500,000.00 as attorney’s fees. In the alternative, and should it
become necessary, it is hereby prayed that [petitioner] be ordered to pay
herein [respondents Tan and Obiedo] the entire principal loan of
₱95,700,620.00, plus interests, surcharges and penalties computed from
March 17, 2005 until the entire sum is fully paid, including the amount of
₱74,678,647.00 foregone interest covering the period from October 1, 2004
to December 31, 2005 or for a total of fifteen (15) months, plus incidental
expenses as may be proved in court, in the event that Annexes "G" to "L" be
nullified. Other relief and remedies as are just and equitable under the
premises are hereby prayed for.16
Thereafter, respondent Tan filed before the RTC an Omnibus Motion in which
he contended that Civil Case No. 2006-0030 involved real properties, the
docket fees for which should be computed in accordance with Section 7(a),
not Section 7(b)(1), of Rule 141 of the Rules of Court, as amended by A.M.
No. 04-2-04-SC which took effect on 16 August 2004. Since petitioner did not
pay the appropriate docket fees for Civil Case No. 2006-0030, the RTC did not
acquire jurisdiction over the said case. Hence, respondent Tan asked the RTC
to issue an order requiring petitioner to pay the correct and accurate docket
fees pursuant to Section 7(a), Rule 141 of the Rules of Court, as amended;
and should petitioner fail to do so, to deny and dismiss the prayer of
petitioner for the annulment of the Deeds of Absolute Sale for having been
executed in contravention of the law or of the Memorandum of Agreement
as pactum commisorium.
As required by the RTC, the parties submitted their Position Papers on the
matter. On 24 March 2006, the RTC issued an Order17 granting respondent
Tan’s Omnibus Motion. In holding that both petitioner and respondent Tan
must pay docket fees in accordance with Section 7(a), Rule 141 of the Rules
of Court, as amended, the RTC reasoned:
It must be noted that under paragraph (b) 2. of the said Section 7, it is
provided that QUIETING OF TITLE which is an action classified as beyond
pecuniary estimation "shall be governed by paragraph (a)". Hence, the filing
fee in an action for Declaration of Nullity of Deed which is also classified as
beyond pecuniary estimation, must be computed based on the provision of
Section 7(A) herein-above, in part, quoted.
Since [herein respondent], Romeo Tan in his Answer has a counterclaim
against the plaintiff, the former must likewise pay the necessary filling (sic)
fees as provided for under Section 7 (A) of Amended Administrative Circular
No. 35-2004 issued by the Supreme Court.18
Consequently, the RTC decreed on the matter of docket/filing fees:
WHEREFORE, premises considered, the [herein petitioner] is hereby ordered
to pay additional filing fee and the [herein respondent], Romeo Tan is also
ordered to pay docket and filing fees on his counterclaim, both computed
based on Section 7(a) of the Supreme Court Amended Administrative Circular
No. 35-2004 within fifteen (15) days from receipt of this Order to the Clerk of
Court, Regional Trial Court, Naga City and for the latter to compute and to
collect the said fees accordingly.19
Petitioner moved20 for the partial reconsideration of the 24 March 2006
Order of the RTC, arguing that Civil Case No. 2006-0030 was principally for
the annulment of the Deeds of Absolute Sale and, as such, incapable of
pecuniary estimation. Petitioner submitted that the RTC erred in applying
Section 7(a), Rule 141 of the Rules of Court, as amended, to petitioner’s first
cause of action in its Complaint in Civil Case No. 2006-0030.
In its Order21 dated 29 March 2006, the RTC refused to reconsider its 24
March 2006 Order, based on the following ratiocination:
Analyzing, the action herein pertains to real property, for as admitted by the
[herein petitioner], "the deeds of sale in question pertain to real property" x
x x. The Deeds of Sale subject of the instant case have already been
transferred in the name of the [herein respondents Tan and Obiedo].
Compared with Quieting of Title, the latter action is brought when there is
cloud on the title to real property or any interest therein or to prevent a cloud
from being cast upon title to the real property (Art. 476, Civil Code of the
Philippines) and the plaintiff must have legal or equitable title to or interest
in the real property which is the subject matter of the action (Art. 447, ibid.),
and yet plaintiff in QUIETING OF TITLE is required to pay the fees in
accordance with paragraph (a) of Section 7 of the said Amended
Administrative Circular No. 35-2004, hence, with more reason that the
[petitioner] who no longer has title to the real properties subject of the
instant case must be required to pay the required fees in accordance with
Section 7(a) of the Amended Administrative Circular No. 35-2004 afore-
mentioned.
Furthermore, while [petitioner] claims that the action for declaration of
nullity of deed of sale and memorandum of agreement is one incapable of
pecuniary estimation, however, as argued by the [respondent Tan], the issue
as to how much filing and docket fees should be paid was never raised as an
issue in the case of Russell vs. Vestil, 304 SCRA 738.
xxxx
WHEREFORE, the Motion for Partial Reconsideration is hereby DENIED.22
In a letter dated 19 April 2006, the RTC Clerk of Court computed, upon the
request of counsel for the petitioner, the additional docket fees petitioner
must pay for in Civil Case No. 2006-0030 as directed in the afore-mentioned
RTC Orders. Per the computation of the RTC Clerk of Court, after excluding
the amount petitioner previously paid on 16 March 2006, petitioner must still
pay the amount of ₱720,392.60 as docket fees.23
Petitioner, however, had not yet conceded, and it filed a Petition for
Certiorari with the Court of Appeals; the petition was docketed as CA-G.R. SP
No. 94800. According to petitioner, the RTC24 acted with grave abuse of
discretion, amounting to lack or excess of jurisdiction, when it issued its
Orders dated 24 March 2006 and 29 March 2006 mandating that the
docket/filing fees for Civil Case No. 2006-0030, an action for annulment of
deeds of sale, be assessed under Section 7(a), Rule 141 of the Rules of Court,
as amended. If the Orders would not be revoked, corrected, or rectified,
petitioner would suffer grave injustice and irreparable damage.
On 22 November 2006, the Court of Appeals promulgated its Decision
wherein it held that:
Clearly, the petitioner’s complaint involves not only the annulment of the
deeds of sale, but also the recovery of the real properties identified in the
said documents. In other words, the objectives of the petitioner in filing the
complaint were to cancel the deeds of sale and ultimately, to recover
possession of the same. It is therefore a real action.
Consequently, the additional docket fees that must be paid cannot be
assessed in accordance with Section 7(b). As a real action, Section 7(a) must
be applied in the assessment and payment of the proper docket fee.
Resultantly, there is no grave abuse of discretion amounting to lack or excess
of jurisdiction on the part of the court a quo. By grave abuse of discretion is
meant capricious and whimsical exercise of judgment as is equivalent to lack
of jurisdiction, and mere abuse of discretion is not enough – it must be grave.
The abuse must be grave and patent, and it must be shown that the discretion
was exercised arbitrarily and despotically.1avvphi1
Such a situation does not exist in this particular case. The evidence is
insufficient to prove that the court a quo acted despotically in rendering the
assailed orders. It acted properly and in accordance with law. Hence, error
cannot be attributed to it.25
Hence, the fallo of the Decision of the appellate court reads:
WHEREFORE, the petition for certiorari is DENIED. The assailed Orders of the
court a quo are AFFIRMED.26
Without seeking reconsideration of the foregoing Decision with the Court of
Appeals, petitioner filed its Petition for Review on Certiorari before this Court,
with a lone assignment of error, to wit:
18. The herein petitioner most respectfully submits that the Court of Appeals
committed a grave and serious reversible error in affirming the assailed
Orders of the Regional Trial Court which are clearly contrary to the
pronouncement of this Honorable Court in the case of Spouses De Leon v.
Court of Appeals, G.R. No. 104796, March 6, 1998, not to mention the fact
that if the said judgment is allowed to stand and not rectified, the same would
result in grave injustice and irreparable damage to herein petitioner in view
of the prohibitive amount assessed as a consequence of said Orders.27
In Manchester Development Corporation v. Court of Appeals,28 the Court
explicitly pronounced that "[t]he court acquires jurisdiction over any case
only upon the payment of the prescribed docket fee." Hence, the payment of
docket fees is not only mandatory, but also jurisdictional.
In Sun Insurance Office, Ltd. (SIOL) v. Asuncion,29 the Court laid down
guidelines for the implementation of its previous pronouncement in
Manchester under particular circumstances, to wit:
1. It is not simply the filing of the complaint or appropriate initiatory pleading,
but the payment of the prescribed docket fee, that vests a trial court with
jurisdiction over the subject matter or nature of the action. Where the filing
of the initiatory pleading is not accompanied by payment of the docket fee,
the court may allow payment of the fee within a reasonable time but in no
case beyond the applicable prescriptive or reglementary period.
2. The same rule applies to permissive counterclaims, third-party claims and
similar pleadings, which shall not be considered filed until and unless the filing
fee prescribed therefor is paid. The court may also allow payment of said fee
within a reasonable time but also in no case beyond its applicable prescriptive
or reglementary period.
3. Where the trial court acquires jurisdiction over a claim by the filing of the
appropriate pleading and payment of the prescribed filing fee but,
subsequently, the judgment awards a claim not specified in the pleading, or
if specified the same has been left for determination by the court, the
additional filing fee therefor shall constitute a lien on the judgment. It shall
be the responsibility of the Clerk of Court or his duly authorized deputy to
enforce said lien and assess and collect the additional fee.
In the Petition at bar, the RTC found, and the Court of Appeals affirmed, that
petitioner did not pay the correct amount of docket fees for Civil Case No.
2006-0030. According to both the trial and appellate courts, petitioner should
pay docket fees in accordance with Section 7(a), Rule 141 of the Rules of
Court, as amended. Consistent with the liberal tenor of Sun Insurance, the
RTC, instead of dismissing outright petitioner’s Complaint in Civil Case No.
2006-0030, granted petitioner time to pay the additional docket fees. Despite
the seeming munificence of the RTC, petitioner refused to pay the additional
docket fees assessed against it, believing that it had already paid the correct
amount before, pursuant to Section 7(b)(1), Rule 141 of the Rules of Court,
as amended.
Relevant to the present controversy are the following provisions under Rule
141 of the Rules of Court, as amended by A.M. No. 04-2-04-SC30 and Supreme
Court Amended Administrative Circular No. 35-200431 :
SEC. 7. Clerks of Regional Trial Courts. –
(a) For filing an action or a permissive OR COMPULSORY counterclaim, CROSS-
CLAIM, or money claim against an estate not based on judgment, or for filing
a third-party, fourth-party, etc. complaint, or a complaint-in-intervention, if
the total sum claimed, INCLUSIVE OF INTERESTS, PENALTIES, SURCHARGES,
DAMAGES OF WHATEVER KIND, AND ATTORNEY’S FEES, LITIGATIO
NEXPENSES AND COSTS and/or in cases involving property, the FAIR MARKET
value of the REAL property in litigation STATED IN THE CURRENT TAX
DECLARATION OR CURRENT ZONAL VALUATION OF THE BUREAU OF
INTERNAL REVENUE, WHICHEVER IS HIGHER, OR IF THERE IS NONE, THE
STATED VALUE OF THE PROPERTY IN LITIGATION OR THE VALUE OF THE
PERSONAL PROPERTY IN LITIGATION OR THE VALUE OF THE PERSONAL
PROPERTY IN LITIGATION AS ALLEGED BY THE CLAIMANT, is:
[Table of fees omitted.]
If the action involves both a money claim and relief pertaining to property,
then THE fees will be charged on both the amounts claimed and value of
property based on the formula prescribed in this paragraph a.
(b) For filing:
1. Actions where the value of the subject matter cannot be estimated
2. Special civil actions, except judicial foreclosure of mortgage,
EXPROPRIATION PROCEEDINGS, PARTITION AND QUIETING OF TITLE which
will
3. All other actions not involving property
[Table of fees omitted.]
The docket fees under Section 7(a), Rule 141, in cases involving real property
depend on the fair market value of the same: the higher the value of the real
property, the higher the docket fees due. In contrast, Section 7(b)(1), Rule
141 imposes a fixed or flat rate of docket fees on actions incapable of
pecuniary estimation.
In order to resolve the issue of whether petitioner paid the correct amount
of docket fees, it is necessary to determine the true nature of its Complaint.
The dictum adhered to in this jurisdiction is that the nature of an action is
determined by the allegations in the body of the pleading or Complaint itself,
rather than by its title or heading.32However, the Court finds it necessary, in
ascertaining the true nature of Civil Case No. 2006-0030, to take into account
significant facts and circumstances beyond the Complaint of petitioner, facts
and circumstances which petitioner failed to state in its Complaint but were
disclosed in the preliminary proceedings before the court a quo.
Petitioner persistently avers that its Complaint in Civil Case No. 2006-0030 is
primarily for the annulment of the Deeds of Absolute Sale. Based on the
allegations and reliefs in the Complaint alone, one would get the impression
that the titles to the subject real properties still rest with petitioner; and that
the interest of respondents Tan and Obiedo in the same lies only in the Deeds
of Absolute Sale sought to be annulled.
What petitioner failed to mention in its Complaint was that respondents Tan
and Obiedo already had the Memorandum of Agreement, which clearly
provided for the execution of the Deeds of Absolute Sale, registered on the
TCTs over the five parcels of land, then still in the name of petitioner. After
respondents Tan and Obiedo had the Deeds of Absolute Sale notarized on 3
January 2006 and presented the same to Register of Deeds for Naga City on
8 March 2006, they were already issued TCTs over the real properties in
question, in their own names. Respondents Tan and Obiedo have also
acquired possession of the said properties, enabling them, by petitioner’s
own admission, to demolish the improvements thereon.
It is, thus, suspect that petitioner kept mum about the afore-mentioned facts
and circumstances when they had already taken place before it filed its
Complaint before the RTC on 16 March 2006. Petitioner never expressed
surprise when such facts and circumstances were established before the RTC,
nor moved to amend its Complaint accordingly.1avvphi1.zw+ Even though
the Memorandum of Agreement was supposed to have long been registered
on its TCTs over the five parcels of land, petitioner did not pray for the
removal of the same as a cloud on its title. In the same vein, although
petitioner alleged that respondents Tan and Obiedo forcibly took physical
possession of the subject real properties, petitioner did not seek the
restoration of such possession to itself. And despite learning that
respondents Tan and Obiedo already secured TCTs over the subject
properties in their names, petitioner did not ask for the cancellation of said
titles. The only logical and reasonable explanation is that petitioner is
reluctant to bring to the attention of the Court certain facts and
circumstances, keeping its Complaint safely worded, so as to institute only an
action for annulment of Deeds of Absolute Sale. Petitioner deliberately
avoided raising issues on the title and possession of the real properties that
may lead the Court to classify its case as a real action.
No matter how fastidiously petitioner attempts to conceal them, the
allegations and reliefs it sought in its Complaint in Civil Case No. 2006-0030
appears to be ultimately a real action, involving as they do the recovery by
petitioner of its title to and possession of the five parcels of land from
respondents Tan and Obiedo.
A real action is one in which the plaintiff seeks the recovery of real property;
or, as indicated in what is now Section 1, Rule 4 of the Rules of Court, a real
action is an action affecting title to or recovery of possession of real
property.33
Section 7, Rule 141 of the Rules of Court, prior to its amendment by A.M. No.
04-2-04-SC, had a specific paragraph governing the assessment of the docket
fees for real action, to wit:
In a real action, the assessed value of the property, or if there is none, the
estimated value thereof shall be alleged by the claimant and shall be the basis
in computing the fees.
It was in accordance with the afore-quoted provision that the Court, in
Gochan v. Gochan,34 held that although the caption of the complaint filed by
therein respondents Mercedes Gochan, et al. with the RTC was denominated
as one for "specific performance and damages," the relief sought was the
conveyance or transfer of real property, or ultimately, the execution of deeds
of conveyance in their favor of the real properties enumerated in the
provisional memorandum of agreement. Under these circumstances, the
case before the RTC was actually a real action, affecting as it did title to or
possession of real property. Consequently, the basis for determining the
correct docket fees shall be the assessed value of the property, or the
estimated value thereof as alleged in the complaint. But since Mercedes
Gochan failed to allege in their complaint the value of the real properties, the
Court found that the RTC did not acquire jurisdiction over the same for non-
payment of the correct docket fees.
Likewise, in Siapno v. Manalo,35 the Court disregarded the title/denomination
of therein plaintiff Manalo’s amended petition as one for Mandamus with
Revocation of Title and Damages; and adjudged the same to be a real action,
the filing fees for which should have been computed based on the assessed
value of the subject property or, if there was none, the estimated value
thereof. The Court expounded in Siapno that:
In his amended petition, respondent Manalo prayed that NTA’s sale of the
property in dispute to Standford East Realty Corporation and the title issued
to the latter on the basis thereof, be declared null and void. In a very real
sense, albeit the amended petition is styled as one for "Mandamus with
Revocation of Title and Damages," it is, at bottom, a suit to recover from
Standford the realty in question and to vest in respondent the ownership and
possession thereof. In short, the amended petition is in reality an action in
res or a real action. Our pronouncement in Fortune Motors (Phils.), Inc. vs.
Court of Appeals is instructive. There, we said:
A prayer for annulment or rescission of contract does not operate to efface
the true objectives and nature of the action which is to recover real property.
(Inton, et al., v. Quintan, 81 Phil. 97, 1948)
An action for the annulment or rescission of a sale of real property is a real
action. Its prime objective is to recover said real property. (Gavieres v.
Sanchez, 94 Phil. 760, 1954)
An action to annul a real estate mortgage foreclosure sale is no different from
an action to annul a private sale of real property. (Muñoz v. Llamas, 87 Phil.
737, 1950).
While it is true that petitioner does not directly seek the recovery of title or
possession of the property in question, his action for annulment of sale and
his claim for damages are closely intertwined with the issue of ownership of
the building which, under the law, is considered immovable property, the
recovery of which is petitioner's primary objective. The prevalent doctrine is
that an action for the annulment or rescission of a sale of real property does
not operate to efface the fundamental and prime objective and nature of the
case, which is to recover said real property. It is a real action.
Unfortunately, and evidently to evade payment of the correct amount of
filing fee, respondent Manalo never alleged in the body of his amended
petition, much less in the prayer portion thereof, the assessed value of the
subject res, or, if there is none, the estimated value thereof, to serve as basis
for the receiving clerk in computing and arriving at the proper amount of filing
fee due thereon, as required under Section 7 of this Court’s en banc
resolution of 04 September 1990 (Re: Proposed Amendments to Rule 141 on
Legal Fees).
Even the amended petition, therefore, should have been expunged from the
records.
In fine, we rule and so hold that the trial court never acquired jurisdiction
over its Civil Case No. Q-95-24791.36
It was in Serrano v. Delica,37 however, that the Court dealt with a complaint
that bore the most similarity to the one at bar. Therein respondent Delica
averred that undue influence, coercion, and intimidation were exerted upon
him by therein petitioners Serrano, et al. to effect transfer of his properties.
Thus, Delica filed a complaint before the RTC against Serrano, et al., praying
that the special power of attorney, the affidavit, the new titles issued in the
names of Serrano, et al., and the contracts of sale of the disputed properties
be cancelled; that Serrano, et al. be ordered to pay Delica, jointly and
severally, actual, moral and exemplary damages in the amount of
₱200,000.00, as well as attorney’s fee of ₱200,000.00 and costs of litigation;
that a TRO and a writ of preliminary injunction be issued ordering Serrano, et
al. to immediately restore him to his possession of the parcels of land in
question; and that after trial, the writ of injunction be made permanent. The
Court dismissed Delica’s complaint for the following reasons:
A careful examination of respondent’s complaint is that it is a real action. In
Paderanga vs. Buissan, we held that "in a real action, the plaintiff seeks the
recovery of real property, or, as stated in Section 2(a), Rule 4 of the Revised
Rules of Court, a real action is one ‘affecting title to real property or for the
recovery of possession of, or for partition or condemnation of, or foreclosure
of a mortgage on a real property.’"
Obviously, respondent’s complaint is a real action involving not only the
recovery of real properties, but likewise the cancellation of the titles thereto.
Considering that respondent’s complaint is a real action, the Rule requires
that "the assessed value of the property, or if there is none, the estimated
value thereof shall be alleged by the claimant and shall be the basis in
computing the fees."
We note, however, that neither the "assessed value" nor the "estimated
value" of the questioned parcels of land were alleged by respondent in both
his original and amended complaint. What he stated in his amended
complaint is that the disputed realties have a "BIR zonal valuation" of
₱1,200.00 per square meter. However, the alleged "BIR zonal valuation" is
not the kind of valuation required by the Rule. It is the assessed value of the
realty. Having utterly failed to comply with the requirement of the Rule that
he shall allege in his complaint the assessed value of his real properties in
controversy, the correct docket fee cannot be computed. As such, his
complaint should not have been accepted by the trial court. We thus rule that
it has not acquired jurisdiction over the present case for failure of herein
respondent to pay the required docket fee. On this ground alone,
respondent’s complaint is vulnerable to dismissal.38
Brushing aside the significance of Serrano, petitioner argues that said
decision, rendered by the Third Division of the Court, and not by the Court en
banc, cannot modify or reverse the doctrine laid down in Spouses De Leon v.
Court of Appeals.39 Petitioner relies heavily on the declaration of this Court in
Spouses De Leon that an action for annulment or rescission of a contract of
sale of real property is incapable of pecuniary estimation.
The Court, however, does not perceive a contradiction between Serrano and
the Spouses De Leon. The Court calls attention to the following statement in
Spouses De Leon: "A review of the jurisprudence of this Court indicates that
in determining whether an action is one the subject matter of which is not
capable of pecuniary estimation, this Court has adopted the criterion of first
ascertaining the nature of the principal action or remedy sought."
Necessarily, the determination must be done on a case-to-case basis,
depending on the facts and circumstances of each. What petitioner
conveniently ignores is that in Spouses De Leon, the action therein that
private respondents instituted before the RTC was "solely for annulment or
rescission" of the contract of sale over a real property.40 There appeared to
be no transfer of title or possession to the adverse party. Their complaint
simply prayed for:
1. Ordering the nullification or rescission of the Contract of Conditional Sale
(Supplementary Agreement) for having violated the rights of plaintiffs
(private respondents) guaranteed to them under Article 886 of the Civil Code
and/or violation of the terms and conditions of the said contract.
2. Declaring void ab initio the Deed of Absolute Sale for being absolutely
simulated; and
3. Ordering defendants (petitioners) to pay plaintiffs (private respondents)
attorney's fees in the amount of ₱100,000.00.41
As this Court has previously discussed herein, the nature of Civil Case No.
2006-0030 instituted by petitioner before the RTC is closer to that of Serrano,
rather than of Spouses De Leon, hence, calling for the application of the ruling
of the Court in the former, rather than in the latter.
It is also important to note that, with the amendments introduced by A.M.
No. 04-2-04-SC, which became effective on 16 August 2004, the paragraph in
Section 7, Rule 141 of the Rules of Court, pertaining specifically to the basis
for computation of docket fees for real actions was deleted. Instead, Section
7(1) of Rule 141, as amended, provides that "in cases involving real property,
the FAIR MARKET value of the REAL property in litigation STATED IN THE
CURRENT TAX DECLARATION OR CURRENT ZONAL VALUATION OF THE
BUREAU OF INTERNAL REVENUE, WHICH IS HIGHER, OR IF THERE IS NONE,
THE STATED VALUE OF THE PROPERTY IN LITIGATION x x x" shall be the basis
for the computation of the docket fees. Would such an amendment have an
impact on Gochan, Siapno, and Serrano? The Court rules in the negative.
A real action indisputably involves real property. The docket fees for a real
action would still be determined in accordance with the value of the real
property involved therein; the only difference is in what constitutes the
acceptable value. In computing the docket fees for cases involving real
properties, the courts, instead of relying on the assessed or estimated value,
would now be using the fair market value of the real properties (as stated in
the Tax Declaration or the Zonal Valuation of the Bureau of Internal Revenue,
whichever is higher) or, in the absence thereof, the stated value of the same.
In sum, the Court finds that the true nature of the action instituted by
petitioner against respondents is the recovery of title to and possession of
real property. It is a real action necessarily involving real property, the docket
fees for which must be computed in accordance with Section 7(1), Rule 141
of the Rules of Court, as amended. The Court of Appeals, therefore, did not
commit any error in affirming the RTC Orders requiring petitioner to pay
additional docket fees for its Complaint in Civil Case No. 2006-0030.
The Court does not give much credence to the allegation of petitioner that if
the judgment of the Court of Appeals is allowed to stand and not rectified, it
would result in grave injustice and irreparable injury to petitioner in view of
the prohibitive amount assessed against it. It is a sweeping assertion which
lacks evidentiary support. Undeniably, before the Court can conclude that the
amount of docket fees is indeed prohibitive for a party, it would have to look
into the financial capacity of said party. It baffles this Court that herein
petitioner, having the capacity to enter into multi-million transactions, now
stalls at paying ₱720,392.60 additional docket fees so it could champion
before the courts its rights over the disputed real properties. Moreover, even
though the Court exempts individuals, as indigent or pauper litigants, from
paying docket fees, it has never extended such an exemption to a corporate
entity.
WHEREFORE, premises considered, the instant Petition for Review is hereby
DENIED. The Decision, dated 22 November 2006, of the Court of Appeals in
CA-G.R. SP No. 94800, which affirmed the Orders dated 24 March 2006 and
29 March 2006 of the RTC, Branch 22, of Naga City, in Civil Case No. RTC-2006-
0030, ordering petitioner Ruby Shelter Builders and Realty Development
Corporation to pay additional docket/filing fees, computed based on Section
7(a), Rule 141 of the Rules of Court, as amended, is hereby AFFIRMED. Costs
against the petitioner.
SO ORDERED.
LAND BANK OF THE PHILIPPINES vs JOSE MARIE M. RUFINO
G.R. No. 175644 October 2, 2009
LAND BANK OF THE PHILIPPINES, Petitioner,
vs.
JOSE MARIE M. RUFINO, NILO M. RESURRECCION, ARNEL M. ATANACIO and
SUZETTE G. MATEO,Respondents,
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 175702
DEPARTMENT OF AGRARIAN REFORM, represented by OIC-SECRETARY
NASSER C. PANGANDAMAN,Petitioner,
vs.
JOSE MARIE M. RUFINO, NILO M. RESURRECCION, ARNEL M. ATANACIO and
SUZETTE G. MATEO,Respondents.
DECISION
CARPIO MORALES, J.:
Challenged in these consolidated Petitions for Review is the December 15,
2005 Decision of the Court of Appeals1in CA-G.R. CV No. 69640 affirming with
modification that of Branch 52 of the Regional Trial Court (RTC) of Sorsogon
in Civil Case No. 98-6438 setting the valuation of respondents’ 138.4018-
hectare land taken under the Comprehensive Agrarian Reform Program
(CARP) at ₱29,926,000, exclusive of the value of secondary crops thereon.
Respondents Jose Marie M. Rufino (Rufino), Nilo M. Resurreccion
(Resureccion), Arnel M. Atanacio (Atanacio), and Suzette G. Mateo (Suzette)
are the registered owners in equal share of a parcel of agricultural land
situated in Barangay San Benon, Irosin, Sorsogon, with an area of 239.7113
hectares covered by Transfer Certificate of Title (TCT) No. T-22934.2
By respondents’ claim, in 1989, they voluntarily offered the aforesaid
property to the government for CARP coverage at ₱120,000 per hectare.
Acting thereon, petitioner Department of Agrarian Reform (DAR) issued a
Notice of Land Valuation and Acquisition dated October 21, 1996 declaring
that out of the total area indicated in the title, 138.4018 hectares was subject
to immediate acquisition at a valuation of ₱8,736,270.40 based on the
assessment of petitioner Land Bank of the Philippines (LBP).
Respondents having found the valuation unacceptable, the matter was
referred by the provincial agrarian reform officer of Sorsogon to the DAR
Adjudication Board (DARAB) for the conduct of summary administrative
proceedings to determine just compensation.3
By Decision of November 21, 1997,4 the DARAB sustained LBP’s valuation
upon respondents’ failure to present any evidence to warrant an increase
thereof.
Meanwhile, upon the DAR’s application, accompanied with LBP’s certification
of deposit of payment, the Register of Deeds of Sorsogon partially cancelled
TCT No. T-22934 corresponding to the 138.4018-hectare covered area
(hereafter the property) and issued TCT No. T-47571 in the name of the
Republic of the Philippines (the Republic). The Republic thereupon subdivided
the property into 85 lots for distribution to qualified farmer-beneficiaries
under Republic Act No. 6657 (RA 6657) or the Comprehensive Agrarian
Reform Law of 1988.5
On February 23, 1998, respondents lodged with Branch 52 of the Sorsogon
RTC (acting as a Special Agrarian Court) a complaint for determination of just
compensation against Ernesto Garilao, in his capacity as then DAR Secretary,
and LBP. Respondents contended that LBP’s valuation was not the full and
fair equivalent of the property at the time of its taking, the same having been
offered in 1989 at ₱120,000 per hectare.6
LBP countered that the property was acquired by the DAR for CARP coverage
in 1993 by compulsory acquisition and not by respondents’ voluntary offer to
sell; and that it determined the valuation thereof in accordance with RA 6657
and pertinent DAR regulations.7
The DAR Secretary argued that LBP’s valuation was properly based on DAR
issuances.8
The trial court appointed the parties’ respective nominated commissioners to
appraise the property.
Commissioner Jesus S. Empleo, LBP’s nominee, appraised the property based LBP filed a Motion for Reconsideration, while the DAR filed a Notice of
on, among other things, the applicable DAR issuances, average gross Appeal. By Order dated August 21, 2000, the trial court denied the motion of
production, and prevailing selling prices of the crops planted thereon which LBP,13 prompting it to also file a Notice of Appeal.14
included coconut, abaca, coffee, and rice. He arrived at a valuation of
By consolidated Decision of December 15, 2005,15 the Court of Appeals
₱13,449,579.08.9
sustained the trial court’s valuation of ₱29,926,000 as just compensation.
Commissioner Amando Chua of Cuervo Appraisers, Inc., respondents’
The appellate court found that, among other things, it would be specious to
nominee, used the market data approach which relies primarily on sales and
rely on the DAR’s computation in ostensible compliance with its own
listings of comparable lots in the neighborhood. Excluding the secondary
issuances; that Commissioner Empleo failed to consider available sales data
crops planted thereon, he valued the property at ₱29,925,725.10
of comparable properties in the locality; and that the value of secondary
At the witness stand, Eugenio Mateo, Sr. (Mateo), attorney-in-fact of crops should be excluded as the same is inconclusive in view of conflicting
respondents Rufino, Resurreccion, and Atanacio, declared that Commissioner evidence.
Chua erroneously considered the secondary crops as merely enhancing the
Petitioners and respondents filed their respective Motions for
demand for the property without them significantly increasing its value; and
Reconsideration which were denied by the appellate court by Resolution of
that the coffee intercropping on the property which yielded an estimated
November 28, 2006.16 Hence, petitioners LBP and DAR separately sought
profit of ₱3,000,000, spread over a 12-year period, should be considered in
recourse to this Court through the present Petitions for Review, which were
the determination of just compensation.11
consolidated in the interest of uniformity of rulings on related cases.
By Decision of July 4, 2000,12 the trial court found the market data approach
In G.R. No. 175644, LBP maintains that its valuation of the property at
to be more realistic and consistent with law and jurisprudence on the full and
₱13,449,579.08 was based on the factors mentioned in RA 6657 and formula
fair equivalent of the property. Applying the average rate of ₱216,226 per
prescribed by the DAR; that its determination should be given weight as it has
hectare, it arrived at a valuation of the 138.4018-hectare property at
the expertise to do the same; and that the taking of private property for
₱29,926,000, to which it added ₱8,000,000 representing 50% of the value of
agrarian reform is not a traditional exercise of the power of eminent domain
trees, plants, and other improvements thereon, bringing the total to
as it also involves the exercise of police power, hence, part of the loss is not
₱37,926,000. It disposed thus:
compensable.17
WHEREFORE, premises considered, judgment is hereby rendered to wit:
In G.R. No. 175702, the DAR avers that the valuation sustained by the
a) Fixing the Just Compensation of the entire 138.4018 hectares for appellate court was determined in contravention of the criteria set by RA
acquisition covered by TCT No. T-22934 in the total amount of THIRTY SEVEN 6657 and relevant jurisprudence.18
MILLION NINE HUNDRED TWENTY-SIX THOUSAND (Php37,926,000.00) Pesos
Respondents, for their part, posit in their consolidated Comment19 that
Philippine Currency, less the amount previously deposited in trust with the
factual findings of the trial court, when affirmed by the appellate court, are
Land Bank which was already received by the plaintiffs.
conclusive; and that the just compensation due them should be equivalent to
b) The Land Bank of the Philippines is hereby ordered to pay the landowners- the market value of the property.
plaintiffs the afore-cited amount less the amount previously paid to them in
In determining the just compensation due owners of lands taken for CARP
the manner provided by law.
coverage, the RTC, acting as a Special Agrarian Court, should take into
c) Without pronouncement as to costs.
account the factors enumerated in Section 17 of RA 6657, as amended, to
wit:
Sec. 17. Determination of Just Compensation. — In determining just
compensation, the cost of acquisition of the land, the current value of like
properties, its nature, actual use and income, the sworn valuation by the
owner, the tax declarations, and the assessment made by government
assessors shall be considered. The social and economic benefits contributed
by the farmers and the farmworkers and by the Government to the property
as well as the non-payment of taxes or loans secured from any government
financing institution on the said land shall be considered as additional factors
to determine its valuation. (Emphasis supplied)
The DAR, being the government agency primarily charged with the
implementation of the CARP, issued Administrative Order No. 6, Series of
1992 (DAR AO 6-92), as amended by DAR Administrative Order No. 11, Series
of 1994 (DAR AO 11-94), translating the factors mentioned in Section 17 of
RA 6657 into a basic formula, presented as follows:
LV = (CNI x 0.6) + ( CS x 0.3) + (MV x 0.1)
Where: LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
The above formula shall be used if all the three factors are present, relevant,
and applicable.
A.1. When the CS factor is not present and CNI and MV are applicable, the
formula shall be:
LV = (CNI x 0.9) + (MV x 0.1)
A.2. When the CNI factor is not present, and CS and MV are applicable, the
formula shall be:
LV = (CS x 0.9) + (MV x 0.1)
A.3. When both the CS and CNI are not present and only MV is applicable, the
formula shall be:
LV = MV x 2
The threshold issue then is whether the appellate court correctly upheld the
valuation by the trial court of the property on the basis of the market data
approach, in disregard of the formula prescribed by DAR AO 6-92, as
amended.
The petitions are partly meritorious.
While the determination of just compensation is essentially a judicial function
which is vested in the RTC acting as a Special Agrarian Court, the Court, in LBP
v. Banal,20 LBP v. Celada,21 and LBP v. Lim,22 nonetheless disregarded the
RTC’s determination thereof when, as in the present case, the judge did not
fully consider the factors specifically identified by law and implementing
rules.
In LBP v. Banal,23 the Court ruled that the factors laid down in Section 17 of
RA 6657 and the formula stated in DAR AO 6-92, as amended, must be
adhered to by the RTC in fixing the valuation of lands subjected to agrarian
reform:
In determining just compensation, the RTC is required to consider several
factors enumerated in Section 17 of R.A. 6657, as amended, thus:
xxxx
These factors have been translated into a basic formula in [DAO 6-92], as
amended by [DAO 11-94], issued pursuant to the DAR's rule-making power to
carry out the object and purposes of R.A. 6657, as amended.
xxxx
While the determination of just compensation involves the exercise of judicial
discretion, however, such discretion must be discharged within the bounds
of the law. Here, the RTC wantonly disregarded R.A. 6657, as amended, and
its implementing rules and regulations. ([DAO 6-92], as amended by [DAO 11-
94]).
xxxx
WHEREFORE, . . . The trial judge is directed to observe strictly the procedures Where: LV = Land Value
specified above in determining the proper valuation of the subject property.
CNI = Capitalized Net Income
(Underscoring supplied)
CS = Comparable Sales
And in LBP v. Celada,24 the Court was emphatic that the RTC is not at liberty
to disregard the DAR valuation formula which filled in the details of Section MV = Market Value per Tax Declaration
17 of RA 6657, it being elementary that rules and regulations issued by
administrative bodies to interpret the law they are entrusted to enforce have The above formula shall be used if all the three factors are present, relevant
the force of law. and applicable.

In fixing the just compensation in the present case, the trial court, adopting A.1. When the CS factor is not present and CNI and MV are applicable, the
the market data approach on which Commissioner Chua relied,25 merely put formula shall be:
premium on the location of the property and the crops planted thereon which LV = (CNI x 0.9) + (MV x 0.1)
are not among the factors enumerated in Section 17 of RA 6657. And the trial
court did not apply the formula provided in DAR AO 6-92, as amended. This xxxx
is a clear departure from the settled doctrine regarding the mandatory nature A.5 For purposes of this Administrative Order, the date of receipt of
of Section 17 of RA 6657 and the DAR issuances implementing it. claimfolder by LBP from DAR shall mean the date when the claimfolder is
Not only did Commissioner Chua not consider Section 17 of RA 6657 and DAR determined by the LBP to be complete with all the required documents and
AO 6-92, as amended, in his appraisal of the property. His conclusion that the valuation inputs duly verified and validated, and is ready for final
market data approach conformed with statutory and regulatory computation/processing.
requirements is bereft of basis.1avvphi1 A.6 The basic formula in the grossing-up of valuation inputs such as . . . Market
Resolving in the negative the issue of whether the RTC can resort to any other Value per Tax Declaration (MV) shall be:
means of determining just compensation, aside from Section 17 of RA 6657
and DAR AO 6-92, as amended, this Court, in LBP v. Lim,26 held that Section Valuation Input Regional
Grossed-up
17 of RA 6657 and DAR AO 6-92, as amended, are mandatory and not mere x = Consumer Price Index
Valuation input
guides that the RTC may disregard. (RCPI) Adjustment Factor

Petitioners maintain that the correct valuation of the property is
₱13,449,579.08 as computed by Commissioner Empleo.
The pertinent provisions of Item II of DAR AO 6-92, as amended by DAR AO
11-94, read:
A. There shall be one basic formula for the valuation of lands covered by
[Voluntary Offer to Sell] or [Compulsory Acquisition] regardless of the date of
offer or coverage of the claim:
The RCPI Adjustment Factor shall refer to the ratio of RCPI for the month
issued by the National Statistics Office as of the date when the claimfolder
(CF) was received by LBP from DAR for processing or, in its absence, the most
recent available RCPI for the month issued prior to the date of receipt of CF
from DAR and the RCPI for the month as of the date/effectivity/registration
of the valuation input. Expressed in equation form:

LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)

 RCPI for the Month as of the Date
of Receipt of Claimfolder by LBP
from DAR or the Most recent RCPI
for the Month Issued Prior to the
RCPI
Date of Receipt of CF
Adjustment =
Factor
RCPI for the Month Issued as of
the Date/Effectivity/Registration
of the Valuation Input
B. Capitalized Net Income (CNI) — This shall refer to the difference between
the gross sales (AGP x SP) and total cost of operations (CO) capitalized at 12%.
Expressed in equation form:
(AGP x SP) - CO
CNI =
.12
Where: CNI = Capitalized Net Income
AGP = Latest available 12-month's gross production
immediately preceding the date of offer in
case of VOS or date of notice of coverage in
case of CA.
SP = The average of the latest available 12-month's
selling prices prior to the date of receipt of the
claimfolder by LBP for processing, such prices
to be secured from the Department of
Agriculture (DA) and other appropriate
regulatory bodies or, in their absence, from
the Bureau of Agricultural Statistics. If
possible, SP data shall be gathered from the
barangay or municipality where the property
is located. In the absence thereof, SP may be
secured within the province or region.
CO = Cost of Operations
Whenever the cost of operations could not be
obtained or verified, an assumed net income
rate (NIR) of 20% shall be used. Landholdings
planted to coconut which are productive at
the time of offer/coverage shall continue to
use the 70% NIR. DAR and LBP shall continue
to conduct joint industry studies to establish
the applicable NIR for each crop covered
under CARP.
.12 = Capitalization Rate
xxxx
D. In the computation of Market Value per Tax Declaration (MV), the most
recent Tax Declaration (TD) and Schedule of Unit Market Value (SMV) issued
prior to receipt of claimfolder by LBP shall be considered. The Unit Market
Value (UMV) shall be grossed up from the date of its effectivity up to the date
of receipt of claimfolder by LBP from DAR for processing, in accordance with
item II.A.A.6. (Emphasis and italics supplied)
In thus computing Capitalized Net Income (CNI), the Average Gross
Production (AGP) of the latest available 12 months immediately preceding
the date of offer in case of voluntary offer to sell or date of notice of coverage
in case of compulsory acquisition, and the average Selling Price (SP) of the
latest available 12 months prior to the date of receipt of the claimfolder by
LBP for processing, should be used.
While these dates-bases of computation are not clearly indicated in the
records (as the mode of acquisition is in fact disputed), the date of offer
(assuming the acquisition was by voluntary offer to sell) would have to be
sometime in 1989, the alleged time of voluntary offer to sell; whereas the
date of notice of coverage (assuming the acquisition was compulsory) would
be sometime prior to October 21, 1996, which is the date of the Notice of Valuation and Acquisition; while the data for the SP and the RCPIs would still
Land Valuation and Acquisition, because under DAR Administrative Order No. pertain to 1997 or earlier, there being no substantial revisions in their
9, series of 1990,27 as amended by DAR Administrative Order No. 1, series of reference dates.
1993, the notice of coverage precedes the Notice of Land Valuation and
Finally, as reflected earlier, Commissioner Empleo did not consider in his
Acquisition.
computation the secondary crops planted on the property (coffee, pili,
And the claimfolder would have been received by LBP in or before 1997, the cashew, etc.), contrary to DAR AO 6-92, as amended, which provides that the
year the property was distributed to agrarian reform beneficiaries,28 because "[t]otal income shall be computed from the combination of crops actually
land distribution is the last step in the procedure prescribed by the above- produced on the covered land whether seasonal or permanent."35
said DAR administrative orders. Hence, the data for the AGP should pertain
In fine, the valuation asserted by petitioners does not lie.
to a period in 1989 (in case of voluntary offer to sell) or prior to October, 1996
(in case of compulsory acquisition), while the data for the SP should pertain While the Court is minded to write finis to this protracted litigation by itself
to 1997 or earlier. computing the just compensation due respondents, the evidence on record
is not sufficient for the purpose. The Court is thus constrained to remand the
Commissioner Empleo, however, instead used available data within the 12-
case for determination of the valuation of the property by the trial court,
month period prior to his ocular inspection in October 1998 for the
which is mandated to consider the factors provided under Section 17 of RA
AGP,29 and the average selling price for the period January 1998 to December
6657, as amended, and as translated into the formula prescribed in DAR AO
1998 for the SP,30 contrary to DAR AO 6-92, as amended.
6-92, as amended by DAR AO 11-94.
Furthermore, the Regional Consumer Price Index (RCPI) Adjustment Factor,
The trial court may, motu proprio or at the instance of any of the parties,
which is used in computing the market value of the property, is the ratio of
again appoint one or more commissioners to ascertain facts relevant to the
the RCPI for the month when the claimfolder was received by LBP, to the RCPI
dispute and file a written report thereof. The amount determined by the trial
for the month of the registration of the most recent Tax Declaration and
court would then be the basis of interest income on the cash and bond
Schedule of Unit Market Value31 issued prior to receipt of claimfolder by LBP.
deposits due respondents from the time of the taking of the property up to
Consistent with the previous discussion, the applicable RCPIs should
the time of actual payment of just compensation.36
therefore be dated 1997 or earlier.1avvphi1
WHEREFORE, the challenged Decision of the Court of Appeals is REVERSED
Again, Commissioner Empleo instead used RCPI data for January 1999 in
and SET ASIDE. Civil Case No. 98-6438 is REMANDED to Branch 52 of the
computing the RCPI Adjustment Factor,32 contrary to DAR AO 6-92, as
Sorsogon RTC which is directed to determine with dispatch the just
amended.
compensation due respondents strictly in accordance with the procedures
Parenthetically, Commissioner Empleo testified33 that his computations were specified above.
based on DAR Administrative Order No. 5, series of 1998.34 This
SO ORDERED.
Administrative Order took effect only on May 11, 1998, however, hence, the
applicable valuation rules in this case remain to be those prescribed by DAR
AO 6-92, as amended by DAR AO 11-94.

But even if the 1998 valuation rules were applied, the data for the AGP would
still pertain to a period prior to October 1996, the revised reference date
being the date of the field investigation which precedes the Notice of Land

LAND BANK OF THE PHILIPPINES vs J. L. JOCSON AND SONS
G.R. No. 180803 October 23, 2009
LAND BANK OF THE PHILIPPINES, Petitioner,
vs.
J. L. JOCSON AND SONS, Respondent.
DECISION
CARPIO MORALES, J.:
Subject of the present controversy is a 27.3808-hectare portion (the
property) of two (2) parcels of tenanted rice land located at Barangay
Magallon Cadre, Moises Padilla, Negros Occidental, covered by Transfer
Certificates of Title (TCT) Nos. T-72323 and T-72324 registered in the name of
J. L. Jocson and Sons1 (respondent).
The property was placed under the coverage of the government’s Operation
Land Transfer2 (OLT) pursuant to Presidential Decree (P.D.) No. 273 and
awarded to the tenant-beneficiaries by the Department of Agrarian Reform
(DAR), which valued the compensation therefor in the total amount of
₱250,563.80 following the formula prescribed in P.D. No. 27 and Executive
Order (E.O.) No. 228.4
The valuation was later increased to ₱903,637.03 after computing the 6%
annual interest increment5 due on the property per DAR Administrative
Order No. 13, series of 1994, which amount respondent withdrew in 1997,
without prejudice to the outcome of the case it had filed hereunder to fix just
compensation.
Finding the DAR’s offer of compensation for the property to be grossly
inadequate, respondent filed a complaint6 on July 18, 1997 before the
Regional Trial Court of Bacolod City, Br. 46, sitting as a Special Agrarian Court
(SAC), against the Land Bank (petitioner),7 the DAR, and the tenant-
beneficiaries, for "Determination and Fixing of Just Compensation for the
Acquisition of Land and Payment of Rentals."
The complaint prayed that petitioner and the DAR be ordered to compute the
just compensation for the property in accordance with the guidelines laid
down in Section 17 of Republic Act (R.A.) No. 66578 or the Comprehensive
Agrarian Reform Law of 1988.
In their respective Answers, petitioner and the DAR claimed that the property
was acquired by the government under its OLT program and their valuation
thereof constituted just compensation, having been made pursuant to the
guidelines set by E.O. No. 228 and P.D. No. 27.
By Decision9 of May 19, 2003, the SAC, after noting the report contained in a
Compliance10 submitted on February 29, 2000 of the
Commissioners11 appointed to receive and evaluate evidence on the amount
of compensation to be paid to respondent, fixed the just compensation at
₱2,564,403.5812 (inclusive of the ₱903,637.03 earlier withdrawn).
In arriving at the just compensation, the SAC adopted a higher valuation
(₱93,657.00/hectare) which the DAR had applied to a similar landholding
belonging to one Pablo Estacion adjacent to respondent’s. Thus the SAC
disposed:
WHEREFORE, premises considered, judgment is hereby rendered ordering
defendant Land Bank of the Philippines to pay plaintiff the total amount of
P1,660,766.55.
No pronouncement as to costs.
SO ORDERED.13
Both petitioner and the DAR filed motions for reconsideration of the SAC
Decision but the same were denied,14prompting petitioner to appeal to the
Court of Appeals15 via petition for review16 pursuant to Section 6017 of R.A.
No. 6657 vis a vis Rule 42 of the Revised Rules of Court.
Assailing the SAC’s decision fixing the amount of just compensation for
respondent’s properties at ₱2,564,403.58 as a violation of P.D. No. 27 and
E.O. No. 228, petitioner insisted that the SAC erred in using ₱300.00 as the
government support price (GSP) in 1992, instead of ₱35.00 as provided under
E.O. No. 228, considering that respondent’s property was acquired under OLT
pursuant to P.D. No. 27.
The appellate court dismissed petitioner’s petition for review for lack of
jurisdiction. It held that aside from the fact that the SAC’s factual findings
were not controverted, the main issue - whether P.D. No. 27 and E.O. No.
228, as claimed by petitioner, or R.A. No. 6657, as claimed by respondent,
should govern in determining the value of the property - involved pure
questions of law and, as such, cognizable only by this Court.18
19
Its Motion for Reconsideration having been denied, the present petition for
review was filed, petitioner arguing that "the allegations in petitioner LBP’s
Petition for Review filed with the Court of Appeals raise mixed questions of
fact and law, . . . [hence,] cognizable by the Court of Appeals."20
The petition is partly impressed with merit.
Gabatin v. Land Bank of the Philippines21 reiterated the settled rule that a
petition for review under Rule 42 of the Revised Rules of Court, and not an
ordinary appeal under Rule 41, is the appropriate mode of appeal from
decisions of RTCs acting as SACs. In Gabatin, the Court sustained the appellate
court’s assumption of jurisdiction over an appeal from the SAC even if its
dismissal had been sought on the ground that the issues presented before
the appellate court were purely legal in nature. Also apropos is this Court’s
ruling in Land Bank of the Philippines v. De Leon:22
Third, far from being in conflict, Section 61 of RA 6657 can easily be
harmonized with Section 60. The reference to the Rules of Court means that
the specific rules for petitions for review in the Rules of Court and other
relevant procedures in appeals filed before the Court of Appeals shall be
followed in appealed decisions of Special Agrarian Courts. Considering that
RA 6657 cannot and does not provide the details on how the petition for
review shall be conducted, a suppletory application of the pertinent
provisions of the Rules of Court is necessary. In fact, Section 61 uses the word
"review" to designate the mode by which the appeal is to be effected. The
reference therefore by Section 61 to the Rules of Court only means that the
procedure under Rule 42 for petitions for review is to be followed for appeals
in agrarian cases. (Underlining supplied.)
Clearly, jurisdiction over appeals from decisions of the SAC resides in the
Court of Appeals via a Rule 42 petition for review, which may raise either
questions of fact, or of law, or mixed questions of fact and law.23
AT ALL EVENTS, this Court resolves to exercise its mandate as a court of justice
and equity,24 taking into account that more than a decade has passed since
the case was filed before the SAC, and thus disposes of
the lonesubstantive issue raised – whether the SAC erred in using ₱300.00 as
the GSP in 1992.
Petitioner maintains that the SAC erred in adopting such GSP rate in
determining just compensation for rice and corn lands; and that the factual
question brought before the appellate court for resolution is: "What is the
GSP that must be used in valuing subject property? Is it THIRTY FIVE PESOS
(Php 35.00), as mandated under P.D. No. 27/E.O. No. 228? Or THREE
HUNDRED PESOS (Php 300.00), the alleged GSP for 1992?"25
What petitioner essentially assails is the SAC’s application of R.A. No. 6657 in
the valuation of properties acquired under P.D. No. 27’s OLT.
Citing National Power Corp. v. Gutierrez,26 petitioner argues that the
determination of just compensation should be based on the value of the land
at the time it was taken by the government, and since it is not disputed that
respondent’s property falls under the coverage of OLT, then P.D. No. 27
should apply vis a vis Section 2 of E.O. No. 228 which laid down the formula
for determining the value of remaining unvalued rice and corn lands subject
to P.D. No. 27, to wit:
SECTION 2. Henceforth, the valuation of rice and corn lands covered by P.D.
No. 27 shall be based on the average gross production determined by the
Barangay Committee on Land Production in accordance with Department
Memorandum Circular No. 26, Series of 1973, and related issuances and
regulations of the Department of Agrarian Reform. The average gross
production per hectare shall be multiplied by two and a half (2.5), the product
of which shall be multiplied by Thirty Five Pesos (₱35.00), the government
support price for one cavan of 50 kilos of palay on October 21, 1972, or Thirty
One Pesos (₱31.00), the government support price for one cavan of 50 kilos
of corn on October 21, 1972, and the amount arrived at shall be the value of
the rice and corn land, as the case may be, for the purpose of determining its
cost to the farmer and compensation to the landowner.
Petitioner’s interpretation is flawed. In the recent case of Land Bank of the
Philippines v. Chico,27 the Court declared in no uncertain terms that R.A. No.
6657 is the relevant law for determining just compensation after noting
several decided cases28 where the Court found it more equitable to
determine just compensation based on the value of the property at the time
of payment. This was a clear departure from the Court’s earlier stance
in Gabatin v. Land Bank of the Philippines29 where it declared that the
reckoning period for the determination of just compensation is the time
when the land was taken applying P.D. No. 27 and E.O. No. 228.
P.D. No. 27/E.O. No. 228 vis a vis R.A. No. 6657 was applied to cases involving
lands placed under the coverage of P.D. No. 27/E.O. No. 228 where payment
of just compensation had not been completed. When in the interim R.A. No.
6657 was passed before the full payment of just compensation, as in the case
at bar, the provisions of R.A. No. 6657 on just compensation
control.301avvphi1
Discussing the retroactive application of the provisions of R.A. No. 6657 for
lands yet to be paid by the government although expropriated under P.D. No.
27, this Court in Land Bank of the Philippines v. Estanislao31 ratiocinated:
Petitioner, citing Gabatin v. Land Bank of the Philippines, contends that the
taking of the subject lots was deemed effected on October 21, 1972, when
respondents were, under P.D. No. 27 deprived of ownership over the subject
lands in favor of qualified beneficiaries.
Petitioner further contends that the fixing of the value of the land under E.O.
228, using the government support price of ₱35 for one cavan of 50 kilos of
palay as of October 21, 1972, was in keeping with the settled rule that just
compensation should be based on the value of the property at the time of
taking.
The petition is bereft of merit.
This Court held in Land Bank of the Philippines v. Natividad that seizure of
landholdings or properties covered by P.D. No. 27 did not take place on
October 21, 1972, but upon the payment of just compensation. Taking into
account the passage in 1988 of R.A. No. 6657 pending the settlement of just
compensation, this Court concluded that it is R.A. No. 6657 which is the
applicable law, with P.D. No. 27 and E.O. 228 having only suppletory effect.
Land Bank's contention that the property was acquired for purposes of
agrarian reform on October 21, 1972, the time of the effectivity of PD 27, ergo
just compensation should be based on the value of the property as of that
time and not at the time of possession in 1993, is likewise erroneous. In Office
of the President, Malacañang, Manila v. Court of Appeals, we ruled that
the seizure of the landholding did not take place on the date of effectivity of
PD 27 but would take effect on the payment of just compensation.
Under the factual circumstances of this case, the agrarian reform process is
still incomplete as the just compensation to be paid private respondents has
yet to be settled. Considering the passage of Republic Act No. 6657 (RA 6657)
before the completion of this process, the just compensation should be
determined and the process concluded under the said law. Indeed, RA 6657
is the applicable law, with PD 27 and EO 228 having only suppletory effect,
conformably with our ruling in Paris v. Alfeche.
xxxx
It would certainly be inequitable to determine just compensation based on
the guideline provided by PD 27 and EO 228 considering the DAR's failure to
determine the just compensation for a considerable length of time. That just
compensation should be determined in accordance with RA 6657, and not
PD 27 or EO 228, is especially imperative considering that just compensation
should be the full and fair equivalent of the property taken from its owner by
the expropriator, the equivalent being real, substantial, full and ample.
In this case, the trial court arrived at the just compensation due private
respondents for their property, taking into account its nature as irrigated
land, location along the highway, market value, assessor's value and the
volume and value of its produce. This Court is convinced that the trial court
correctly determined the amount of just compensation due private
respondents in accordance with, and guided by, RA 6657 and existing
jurisprudence." (Emphasis and italics supplied; citations omitted)
The SAC’s adoption of ₱300.00 as GSP for one cavan of 50 kilos of palay for
1992 is thus in order, petitioner not having adduced any evidence that a
different or contrary figure should apply for that period.
The determination of just compensation in eminent domain cases is
a judicial function, and the Court does not find the SAC to have acted
capriciously or arbitrarily in setting the price at ₱93,657.00 per hectare as the
said amount does not appear to be grossly exorbitant or otherwise
unjustified. For the Court notes that the SAC properly took into account
various factors such as the nature of the land, when it is irrigated, the average
harvests per hectare (expressed as AGP based on three normal crop years) at
117.73 cavans per hectare, and the higher valuation applied by the DAR to a
similar adjacent landholding belonging to Estacion. Petitioner itself admits
that a higher land valuation formula was applied to Estacion’s property
because it had been acquired under R.A. No. 6657.32

WHEREFORE, the assailed Decision and Resolution of the Court of Appeals in

CA-G.R. SP No. 79663 are SET ASIDE. The May 19, 2003 Decision of the
Bacolod City RTC, Br. 46, sitting as a SAC in Special Carp Case No. 97-9886, is
REINSTATED.

SO ORDERED.
ONGSUCO VS MALONES
G.R. No. 182065 October 27, 2009
EVELYN ONGSUCO and ANTONIA SALAYA, Petitioners,
vs.
HON. MARIANO M. MALONES, both in his private and official capacity as
Mayor of the Municipality of Maasin, Iloilo, Respondent.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court,
assailing the Decision1 dated 28 November 2006, rendered by the Court of
Appeals in CA-G.R. SP No. 86182, which affirmed the Decision2 dated 15 July
2003, of the Regional Trial Court (RTC), Branch 39, of Iloilo City, in Civil Case
No. 25843, dismissing the special civil action for Mandamus/Prohibition with
Prayer for Issuance of a Temporary Restraining Order and/or Writ of
Preliminary Injunction, filed by petitioners Evelyn Ongsuco and Antonia
Salaya against respondent Mayor Mariano Malones of the Municipality of
Maasin, Iloilo.
Petitioners are stall holders at the Maasin Public Market, which had just been
newly renovated. In a letter3 dated 6 August 1998, the Office of the Municipal
Mayor informed petitioners of a meeting scheduled on 11 August 1998
concerning the municipal public market. Revenue measures were discussed
during the said meeting, including the increase in the rentals for the market
stalls and the imposition of "goodwill fees" in the amount of
₱20,000.00,4payable every month.
On 17 August 1998, the Sangguniang Bayan of Maasin approved Municipal
Ordinance No. 98-01, entitled "The Municipal Revised Revenue Code." The
Code contained a provision for increased rentals for the stalls and the
imposition of goodwill fees in the amount of ₱20,000.00 and ₱15,000.00 for
stalls located on the first and second floors of the municipal public market,
respectively. The same Code authorized respondent to enter into lease
contracts over the said market stalls,5 and incorporated a standard contract
of lease for the stall holders at the municipal public market.
Only a month later, on 18 September 1998, the Sangguniang Bayan of
Maasin approved Resolution No. 68, series of 1998,6 moving to have the
meeting dated 11 August 1998 declared inoperative as a public hearing,
because majority of the persons affected by the imposition of the goodwill
fee failed to agree to the said measure. However, Resolution No. 68, series of
1998, of the Sangguniang Bayan of Maasin was vetoed by respondent on 30
September 1998.7
After Municipal Ordinance No. 98-01 was approved on 17 August 1998,
another purported public hearing was held on 22 January 1999.8
On 9 June 1999, respondent wrote a letter to petitioners informing them that
they were occupying stalls in the newly renovated municipal public market
without any lease contract, as a consequence of which, the stalls were
considered vacant and open for qualified and interested applicants.9
This prompted petitioners, together with other similarly situated stall holders
at the municipal public market,10 to file before the RTC on 25 June 1999 a
Petition for Prohibition/Mandamus, with Prayer for Issuance of Temporary
Restraining Order and/or Writ of Preliminary Injunction,11 against
respondent. The Petition was docketed as Civil Case No. 25843.
Petitioners alleged that they were bona fide occupants of the stalls at the
municipal public market, who had been religiously paying the monthly rentals
for the stalls they occupied.
Petitioners argued that public hearing was mandatory in the imposition of
goodwill fees. Section 186 of the Local Government Code of 1991 provides
that an ordinance levying taxes, fees, or charges shall not be enacted without
any prior hearing conducted for the purpose. Municipal Ordinance No. 98-01,
imposing goodwill fees, is invalid on the ground that the conferences held on
11 August 1998 and 22 January 1999 could not be considered public hearings.
According to Article 277(b)(3) of the Implementing Rules and Regulations of
the Local Government Code:
(3) The notice or notices shall specify the date or dates and venue of the
public hearing or hearings. The initial public hearing shall be held not earlier
than ten (10) days from the sending out of the notice or notices, or the last
day of publication, or date of posting thereof, whichever is later. (Emphasis
ours.)
The letter from the Office of the Municipal Mayor was sent to stall holders on
6 August 1998, informing the latter of the meeting to be held, as was in fact
held, on 11 August 1998, only five days after notice.12
Hence, petitioners prayed that respondent be enjoined from imposing the
goodwill fees pending the determination of the reasonableness thereof, and
from barring petitioners from occupying the stalls at the municipal public
market and continuing with the operation of their businesses.
Respondent, in answer, maintained that Municipal Ordinance No. 98-01 is
valid. He reasoned that Municipal Ordinance No. 98-01 imposed goodwill fees
to raise income to pay for the loan obtained by the Municipality of Maasin for
the renovation of its public market. Said ordinance is not per se a tax or
revenue measure, but involves the operation and management of an
economic enterprise of the Municipality of Maasin as a local government
unit; thus, there was no mandatory requirement to hold a public hearing for
the enactment thereof. And, even granting that a public hearing was
required, respondent insisted that public hearings take place on 11 August
1998 and 22 January 1999.
Respondent further averred that petitioners were illegally occupying the
market stalls, and the only way petitioners could legitimize their occupancy
of said market stalls would be to execute lease contracts with the
Municipality of Maasin. While respondent admitted that petitioners had been
paying rentals for their market stalls in the amount of ₱45.00 per month prior
to the renovation of the municipal public market, respondent asserted that
no rentals were paid or collected from petitioners ever since the renovation
began.
Respondent sought from the RTC an award for moral damages in the amount
of not less than ₱500,000.00, for the social humiliation and hurt feelings he
suffered by reason of the unjustified filing by petitioners of Civil Case No.
25843; and an order for petitioners to vacate the renovated market stalls and
pay reasonable rentals from the date they began to occupy said stalls until
they vacate the same. 13
The RTC subsequently rendered a Decision14 on 15 July 2003 dismissing the
Petition in Civil Case No. 25843.
The RTC found that petitioners could not avail themselves of the remedy of
mandamus or prohibition. It reasoned that mandamus would not lie in this
case where petitioners failed to show a clear legal right to the use of the
market stalls without paying the goodwill fees imposed by the municipal
government. Prohibition likewise would not apply to the present case where
respondent’s acts, sought to be enjoined, did not involve the exercise of
judicial or quasi-judicial functions.
The RTC also dismissed the Petition in Civil Case No. 25843 on the ground of
non-exhaustion of administrative remedies. Petitioners’ failure to question
the legality of Municipal Ordinance No. 98-01 before the Secretary of Justice,
as provided under Section 187 of the Local Government Code,15 rendered the
Petition raising the very same issue before the RTC premature.
The dispositive part of the RTC Decision dated 15 July 2003 reads:
WHEREFORE, in view of all the foregoing, and finding the petition without
merit, the same is, as it is hereby ordered, dismissed. 16
On 12 August 2003, petitioners and their co-plaintiffs filed a Motion for
Reconsideration.17 The RTC denied petitioners’ Motion for Reconsideration in
a Resolution dated 18 June 2004.18
While Civil Case No. 25843 was pending, respondent filed before the 12th
Municipal Circuit Trial Court (MCTC) of Cabatuan-Maasin, Iloilo City a case in
behalf of the Municipality of Maasin against petitioner Evelyn Ongsuco,
entitled Municipality of Maasin v. Ongsuco, a Complaint for Unlawful
Detainer with Damages, docketed as MCTC Civil Case No. 257. On 18 June
2002, the MCTC decided in favor of the Municipality of Maasin and ordered
petitioner Ongsuco to vacate the market stalls she occupied, Stall No. 1-03
and Stall No. 1-04, and to pay monthly rentals in the amount of ₱350.00 for
each stall from October 2001 until she vacates the said market stalls.19 On
appeal, Branch 36 of the RTC of Maasin, Iloilo City, promulgated a Decision,
dated 29 April 2003, in a case docketed as Civil Case No. 02-27229 affirming
the decision of the MCTC. A Writ of Execution was issued by the MCTC on 8
December 2003.20
Petitioners, in their appeal before the Court of Appeals, docketed as CA-G.R.
SP No. 86182, challenged the dismissal of their Petition for
Prohibition/Mandamus docketed as Civil Case No. 25843 by the RTC.
Petitioners explained that they did appeal the enactment of Municipal
Ordinance No. 98-01 before the Department of Justice, but their appeal was
not acted upon because of their failure to attach a copy of said municipal
ordinance. Petitioners claimed that one of their fellow stall holders, Ritchelle
Mondejar, wrote a letter to the Officer-in-Charge (OIC), Municipal Treasurer
of Maasin, requesting a copy of Municipal Ordinance No. 98-01, but received
no reply.21
In its Decision dated 28 November 2006 in CA-G.R. SP No. 86182, the Court
of Appeals again ruled in respondent’s favor.
The Court of Appeals declared that the "goodwill fee" was a form of revenue
measure, which the Municipality of Maasin was empowered to impose under
Section 186 of the Local Government Code. Petitioners failed to establish any
grave abuse of discretion committed by respondent in enforcing goodwill
fees.
The Court of Appeals additionally held that even if respondent acted in grave
abuse of discretion, petitioners’ resort to a petition for prohibition was
improper, since respondent’s acts in question herein did not involve the
exercise of judicial, quasi-judicial, or ministerial functions, as required under
Section 2, Rule 65 of the Rules of Court. Also, the filing by petitioners of the
Petition for Prohibition/Mandamus before the RTC was premature, as they
failed to exhaust administrative remedies prior thereto. The appellate court
did not give any weight to petitioners’ assertion that they filed an appeal
challenging the legality of Municipal Ordinance No. 98-01 before the
Secretary of Justice, as no proof was presented to support the same.
In the end, the Court of Appeals decreed:
WHEREFORE, in view of the foregoing, this Court finds the instant appeal
bereft of merit. The assailed decision dated July 15, 2003 as well as the
subsequent resolution dated 18 June 2004 are hereby AFFIRMED and the
instant appeal is hereby DISMISSED. 22
Petitioners filed a Motion for Reconsideration23 of the foregoing Decision, but
it was denied by the Court of Appeals in a Resolution24 dated 8 February 2008.
Hence, the present Petition, where petitioners raise the following issues:
I
WHETHER OR NOT THE PETITIONERS HAVE EXHAUSTED ADMINISTRATIVE
REMEDIES BEFORE FILING THE INSTANT CASE IN COURT;
II
WHETHER OR NOT EXHAUSTION OF ADMINISTRATIVE REMEDIES IS
APPLICABLE IN THIS CASE; AND
III
WHETHER OR NOT THE APPELLEE MARIANO MALONES WHO WAS THEN THE
MUNICIPAL MAYOR OF MAASIN, ILOILO HAS COMMITTED GRAVE ABUSE OF
DISCRETION.25
After a close scrutiny of the circumstances that gave rise to this case, the
Court determines that there is no need for petitioners to exhaust
administrative remedies before resorting to the courts.
The findings of both the RTC and the Court of Appeals that petitioners’
Petition for Prohibition/Mandamus in Civil Case No. 25843 was premature is
anchored on Section 187 of the Local Government Code, which reads:
Section 187. Procedure for Approval and Effectivity of Tax Ordinances and
Revenue Measures; Mandatory Public Hearings.—The procedure for
approval of local tax ordinances and revenue measures shall be in accordance
with the provisions of this Code: Provided, That public hearings shall be
conducted for the purpose prior to the enactment thereof: Provided, further,
That any question on the constitutionality or legality of tax ordinances or
revenue measures may be raised on appeal within thirty (30) days from the
effectivity thereof to the Secretary of Justice who shall render a decision
within sixty (60) days from the date of receipt of the appeal: Provided,
however, That such appeal shall not have the effect of suspending the
effectivity of the ordinance and the accrual and payment of the tax, fee, or
charge levied therein: Provided, finally, That within thirty (30) days after
receipt of the decision or the lapse of the sixty-day period without the
Secretary of Justice acting upon the appeal, the aggrieved party may file
appropriate proceedings with a court of competent jurisdiction. (Emphasis
ours.)
It is true that the general rule is that before a party is allowed to seek the
intervention of the court, he or she should have availed himself or herself of
all the means of administrative processes afforded him or her. Hence, if resort
to a remedy within the administrative machinery can still be made by giving
the administrative officer concerned every opportunity to decide on a matter
that comes within his or her jurisdiction, then such remedy should be
exhausted first before the court’s judicial power can be sought. The
premature invocation of the intervention of the court is fatal to one’s cause
of action. The doctrine of exhaustion of administrative remedies is based on
practical and legal reasons. The availment of administrative remedy entails
lesser expenses and provides for a speedier disposition of controversies.
Furthermore, the courts of justice, for reasons of comity and convenience,
will shy away from a dispute until the system of administrative redress has
been completed and complied with, so as to give the administrative agency
concerned every opportunity to correct its error and dispose of the case.
However, there are several exceptions to this rule. 26
The rule on the exhaustion of administrative remedies is intended to preclude
a court from arrogating unto itself the authority to resolve a controversy, the
jurisdiction over which is initially lodged with an administrative body of
special competence. Thus, a case where the issue raised is a purely legal
question, well within the competence; and the jurisdiction of the court and
not the administrative agency, would clearly constitute an
exception.27 Resolving questions of law, which involve the interpretation and
application of laws, constitutes essentially an exercise of judicial power that
is exclusively allocated to the Supreme Court and such lower courts the
Legislature may establish. 28
In this case, the parties are not disputing any factual matter on which they
still need to present evidence. The sole issue petitioners raised before the
RTC in Civil Case No. 25843 was whether Municipal Ordinance No. 98-01 was
valid and enforceable despite the absence, prior to its enactment, of a public
hearing held in accordance with Article 276 of the Implementing Rules and
Regulations of the Local Government Code. This is undoubtedly a pure
question of law, within the competence and jurisdiction of the RTC to resolve.
Paragraph 2(a) of Section 5, Article VIII of the Constitution, expressly
establishes the appellate jurisdiction of this Court, and impliedly recognizes
the original jurisdiction of lower courts over cases involving the
constitutionality or validity of an ordinance:
Section 5. The Supreme Court shall have the following powers:
xxxx
(2) Review, revise, reverse, modify or affirm on appeal or certiorari, as the law
or the Rules of Court may provide, final judgments and orders of lower courts
in:
(a) All cases in which the constitutionality or validity of any treaty,
international or executive agreement, law, presidential decree,
proclamation, order, instruction, ordinance, or regulation is in question.
(Emphases ours.)
In J.M. Tuason and Co., Inc. v. Court of Appeals,29 Ynot v. Intermediate
Appellate Court,30 and Commissioner of Internal Revenue v. Santos,31 the
Court has affirmed the jurisdiction of the RTC to resolve questions of
constitutionality and validity of laws (deemed to include local ordinances) in
the first instance, without deciding questions which pertain to legislative
policy.
Although not raised in the Petition at bar, the Court is compelled to discuss
another procedural issue, specifically, the declaration by the RTC, and
affirmed by the Court of Appeals, that petitioners availed themselves of the
wrong remedy in filing a Petition for Prohibition/Mandamus before the RTC.
Sections 2 and 3, Rule 65 of the Rules of the Rules of Court lay down under
what circumstances petitions for prohibition and mandamus may be filed, to
wit:
SEC. 2. Petition for prohibition. – When the proceedings of any tribunal,
corporation, board, officer or person, whether exercising judicial, quasi-
judicial or ministerial functions, are without or in excess of its or his
jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction, and there is no appeal or any other plain, speedy, and adequate
remedy in the ordinary course of law, a person aggrieved thereby may file a
verified petition in the proper court, alleging the facts with certainty and
praying that judgment be rendered commanding the respondent to desist
from further proceedings in the action or matter specified therein, or
otherwise granting such incidental reliefs as law and justice may require.
SEC. 3. Petition for mandamus. – When any tribunal, corporation, board,
officer or person unlawfully neglects the performance of an act which the law
specifically enjoins as a duty resulting from an office, trust, or station, or
unlawfully excludes another from the use and enjoyment of a right or office
to which such other is entitled, and there is no other plain, speedy and
adequate remedy in the ordinary course of law, the person aggrieved thereby
may file a verified petition in the proper court, alleging the facts with certainty
and praying that judgment be rendered commanding the respondent,
immediately or at some other time to be specified by the court, to do the act
required to be done to protect the rights of the petitioner, and to pay the
damages sustained by the petitioner by reason of the wrongful acts of the
respondent. (Emphases ours.)
In a petition for prohibition against any tribunal, corporation, board, or
person -- whether exercising judicial, quasi-judicial, or ministerial functions -
- who has acted without or in excess of jurisdiction or with grave abuse of
discretion, the petitioner prays that judgment be rendered, commanding the
respondent to desist from further proceeding in the action or matter
specified in the petition.32 On the other hand, the remedy of mandamus
lies to compelperformance of a ministerial duty.33 The petitioner for such a
writ should have a well-defined, clear and certain legal right to the
performance of the act, and it must be the clear and imperative duty of
respondent to do the act required to be done.34
In this case, petitioners’ primary intention is to prevent respondent from
implementing Municipal Ordinance No. 98-01, i.e., by collecting the goodwill
fees from petitioners and barring them from occupying the stalls at the
municipal public market. Obviously, the writ petitioners seek is more in the
nature of prohibition (commanding desistance), rather than mandamus
(compelling performance).
For a writ of prohibition, the requisites are: (1) the impugned act must be that
of a "tribunal, corporation, board, officer, or person, whether exercising
judicial, quasi-judicial or ministerial functions"; and (2) there is no plain,
speedy, and adequate remedy in the ordinary course of law."35
The exercise of judicial function consists of the power to determine what the
law is and what the legal rights of the parties are, and then to adjudicate upon
the rights of the parties. The term quasi-judicial function applies to the action
and discretion of public administrative officers or bodies that are required to
investigate facts or ascertain the existence of facts, hold hearings, and draw
conclusions from them as a basis for their official action and to exercise
discretion of a judicial nature. In implementing Municipal Ordinance No. 98-
01, respondent is not called upon to adjudicate the rights of contending
parties or to exercise, in any manner, discretion of a judicial nature.
A ministerial function is one that an officer or tribunal performs in the context
of a given set of facts, in a prescribed manner and without regard for the
exercise of his or its own judgment, upon the propriety or impropriety of the
act done.36
The Court holds that respondent herein is performing a ministerial function.
It bears to emphasize that Municipal Ordinance No. 98-01 enjoys the
presumption of validity, unless declared otherwise. Respondent has the duty
to carry out the provisions of the ordinance under Section 444 of the Local
Government Code:
Section 444. The Chief Executive: Powers, Duties, Functions and
Compensation. – (a) The Municipal mayor, as the chief executive of the
municipal government, shall exercise such powers and perform such duties
and functions as provided by this Code and other laws.
(b) For efficient, effective and economical governance the purpose of which
is the general welfare of the municipality and its inhabitants pursuant to
Section 16 of this Code, the Municipal mayor shall:
xxxx
(2) Enforce all laws and ordinances relative to the governance of the
municipality and the exercise of its corporate powers provided for under
Section 22 of this Code, implement all approved policies, programs, projects,
services and activities of the municipality x x x.
xxxx
(3) Initiate and maximize the generation of resources and revenues, and apply
the same to the implementation of development plans, program objectives
sand priorities as provided for under Section 18 of this Code, particularly
those resources and revenues programmed for agro-industrial development
and country-wide growth and progress, and relative thereto, shall:
xxxx
(iii) Ensure that all taxes and other revenues of the municipality are collected,
and that municipal funds are applied in accordance with law or ordinance to
the payment of expenses and settlement of obligations of the municipality; x
x x. (Emphasis ours.)
Municipal Ordinance No. 98-01 imposes increased rentals and goodwill fees
on stall holders at the renovated municipal public market, leaving
respondent, or the municipal treasurer acting as his alter ego, no discretion
on whether or not to collect the said rentals and fees from the stall holders,
or whether or to collect the same in the amounts fixed by the ordinance.
The Court further notes that respondent already deemed petitioners’ stalls
at the municipal public market vacated. Without such stalls, petitioners
would be unable to conduct their businesses, thus, depriving them of their
means of livelihood. It is imperative on petitioners’ part to have the
implementation of Municipal Ordinance No. 98-01 by respondent stopped
the soonest. As this Court has established in its previous discussion, there is
no more need for petitioners to exhaust administrative remedies, considering
that the fundamental issue between them and respondent is one of law, over
which the courts have competence and jurisdiction. There is no other plain,
speedy, and adequate remedy for petitioners in the ordinary course of law,
except to seek from the courts the issuance of a writ of prohibition
commanding respondent to desist from continuing to implement what is
allegedly an invalid ordinance.1 a vv p h i 1
This brings the Court to the substantive issue in this Petition on the validity of
Municipal Ordinance N. 98-01.
Respondent maintains that the imposition of goodwill fees upon stall holders
at the municipal public market is not a revenue measure that requires a prior
public hearing. Rentals and other consideration for occupancy of the stalls at
the municipal public market are not matters of taxation.
Respondent’s argument is specious.
Article 219 of the Local Government Code provides that a local government
unit exercising its power to impose taxes, fees and charges should comply
with the requirements set in Rule XXX, entitled "Local Government Taxation":
Article 219. Power to Create Sources of Revenue.—Consistent with the basic
policy of local autonomy, each LGU shall exercise its power to create its own
sources of revenue and to levy taxes, fees, or charges, subject to the
provisions of this Rule. Such taxes, fees, or charges shall accrue exclusively to
the LGU. (Emphasis ours.)
Article 221(g) of the Local Government Code of 1991 defines "charges" as:
Article 221. Definition of Terms.
xxxx
(g) Charges refer to pecuniary liability, as rents or fees against persons or
property. (Emphasis ours.)
Evidently, the revenues of a local government unit do not consist of taxes
alone, but also other fees and charges. And rentals and goodwill fees,
imposed by Municipal Ordinance No. 98-01 for the occupancy of the stalls at
the municipal public market, fall under the definition of charges.
For the valid enactment of ordinances imposing charges, certain legal
requisites must be met. Section 186 of the Local Government Code identifies
such requisites as follows:
Section 186. Power to Levy Other Taxes, Fees or Charges.—Local government
units may exercise the power to levy taxes, fees or charges on any base or
subject not otherwise specifically enumerated herein or taxed under the
provisions of the National Internal Revenue Code, as amended, or other
applicable laws: Provided, That the taxes, fees or charges shall not be unjust,
excessive, oppressive, confiscatory or contrary to declared national policy:
Provided, further, That the ordinance levying such taxes, fees or charges shall
not be enacted without any prior public hearing conducted for the purpose.
(Emphasis ours.)
Section 277 of the Implementing Rules and Regulations of the Local
Government Code establishes in detail the procedure for the enactment of
such an ordinance, relevant provisions of which are reproduced below:
Section 277. Publication of Tax Ordinance and Revenue Measures.—x x x.
xxxx
(b) The conduct of public hearings shall be governed by the following
procedure:
xxxx
(2) In addition to the requirement for publication or posting, the sanggunian
concerned shall cause the sending of written notices of the proposed
ordinance, enclosing a copy thereof, to the interested or affected parties
operating or doing business within the territorial jurisdiction of the LGU
concerned.
(3) The notice or notices shall specify the date or dates and venue of the
public hearing or hearings. The initial public hearing shall be held not earlier
than ten (10) days from the sending out of the notice or notices, or the last
day of publication, or date of posting thereof, whichever is later;
xxxx
(c) No tax ordinance or revenue measure shall be enacted or approved in the
absence of a public hearing duly conducted in the manner provided under
this Article. (Emphases ours.)
It is categorical, therefore, that a public hearing be held prior to the
enactment of an ordinance levying taxes, fees, or charges; and that such
public hearing be conducted as provided under Section 277 of the
Implementing Rules and Regulations of the Local Government Code.
There is no dispute herein that the notices sent to petitioners and other stall
holders at the municipal public market were sent out on 6 August 1998,
informing them of the supposed "public hearing" to be held on 11 August
1998. Even assuming that petitioners received their notice also on 6 August
1998, the "public hearing" was already scheduled, and actually conducted,
only five days later, on 11 August 1998. This contravenes Article 277(b)(3) of
the Implementing Rules and Regulations of the Local Government Code which
requires that the public hearing be held no less than ten days from the time
the notices were sent out, posted, or published.
When the Sangguniang Bayan of Maasin sought to correct this procedural
defect through Resolution No. 68, series of 1998, dated 18 September 1998,
respondent vetoed the said resolution. Although the Sangguniang Bayan may
have had the power to override respondent’s veto,37 it no longer did so.
The defect in the enactment of Municipal Ordinance No. 98 was not cured
when another public hearing was held on 22 January 1999, after the
questioned ordinance was passed by the Sangguniang Bayan and approved
by respondent on 17 August 1998. Section 186 of the Local Government Code
prescribes that the public hearing be held prior to the enactment by a local
government unit of an ordinance levying taxes, fees, and charges.
Since no public hearing had been duly conducted prior to the enactment of
Municipal Ordinance No. 98-01, said ordinance is void and cannot be given
any effect. Consequently, a void and ineffective ordinance could not have
conferred upon respondent the jurisdiction to order petitioners’ stalls at the
municipal public market vacant.
IN VIEW OF THE FOREGOING, the instant Petition is GRANTED. The assailed
Decision dated 28 November 2006 of the Court of Appeals in CA-G.R. SP No.
86182 is REVERSED and SET ASIDE. Municipal Ordinance No. 98-01 is
DECLARED void and ineffective, and a writ of prohibition is ISSUED
commanding the Mayor of the Municipality of Maasin, Iloilo, to permanently
desist from enforcing the said ordinance. Petitioners are also DECLARED as
lawful occupants of the market stalls they occupied at the time they filed the
Petition for Mandamus/Prohibition docketed as Civil Case No. 25843. In the
event that they were deprived of possession of the said market stalls,
petitioners are entitled to recover possession of these stalls.
SO ORDERED.
SANDOVAL VS CAÑEBA AND ESTATE DEVELOPERS
G.R. No. 90503 September 27, 1990
NESTOR SANDOVAL, petitioner,
vs.
HON. DOROTEO CAÑEBA, Presiding Judge, RTC, Manila, Branch 20, DEPUTY
SHERIFF OF MANILA (RTC, Manila, Branch 20), and ESTATE DEVELOPERS &
INVESTORS CORPORATION, respondents.
Arnold V. Guerrero & Associates for petitioner.
Lino M. Patajo for private respondent.
GANCAYCO, J.:
The issue in this petition is whether or not the ordinary courts have
jurisdiction over the collection of unpaid installments regarding a subdivision
lot.
On August 20, 1987 private respondent filed a complaint in the Regional Trial
Court (RTC) of Manila for the collection of unpaid installments regarding a
subdivision lot, pursuant to a promissory note, plus interest. On January 29,
1988 the trial court rendered a decision.
It appears that petitioner was declared in default so much so that after
receiving the evidence of private respondent, the trial court rendered its
decision on January 19,1988, the dispositive portion of which reads as
follows:
WHEREFORE, on the allegations and the prayer of the complaint and the
evidence adduced in support therefor, judgment is hereby rendered, ordering
the defendant to pay plaintiff the following:
1. The sum of P73,867.42 plus interest and other charges commencing from
January 1, 1988 until fully paid;
2. Such sum which shall not be less than P2,000.00 or 25% of the amount of
delinquency whichever is greater, as and for attorney's fees.
3. Costs against the defendant.
4. SO ORDERED. 1
On September 28, 1988 the trial court issued an order directing the issuance
of a writ of execution to enforce its decision that had become final and
executory.
On September 30, 1988 petitioner filed a motion to vacate judgment and to
dismiss the complaint on the ground that the lower court has no jurisdiction
over the subject matter and that its decision is null and void. A motion for
reconsideration of the writ of execution was also filed by petitioner. An
opposition to both motions was filed by private respondent to which a reply
was filed by petitioner.
On February 17, 1989 the trial court denied the motion to vacate the
judgment on the ground that it is now beyond the jurisdiction of the Court to
do so. It directed the issuance of a writ of execution anew.
Hence the herein petition wherein it is alleged that the trial court committed
a grave abuse of discretion as follows:
5.1. The respondent Judge gravely abused his discretion and acted without
jurisdiction in taking cognizance of the complaint before him notwithstanding
that exclusive and original jurisdiction over the subject-matter thereof is
vested with the Housing and Land Use Regulatory Board (HLURB) pursuant to
PD 957.
5.2. The respondent Judge gravely abused his discretion and acted without
jurisdiction in refusing to vacate his judgment rendered without jurisdiction
and in issuing a writ of execution to implement his abovesaid void judgment. 2
The petition is impressed with merit.
Under Section 1 of Presidential Decree No. 957 the National Housing
Authority (NHA) was given the exclusive jurisdiction to hear and decide
certain cases as follows:
SEC.1. In the exercise of its function to regulate the real estate trade and
business and in addition to its powers provided for in Presidential Decree No.
957, the National Housing Authority shall have exclusive jurisdiction to hear In Estate Developers and Investors Corporation vs. Antonio Sarte and Erlinda
and decide cases of the following nature: Sarte, G.R. No. 93646, which is a case substantially similar to the instant case,
in a resolution of August 13, 1990 this Court upheld the exclusive jurisdiction
A. Unsound real estate business practices:
of the HLURB over the collection suit.
B. Claims involving refund and any other claims filed by subdivision lot or
Considering that the trial court has no jurisdiction under the circumstances
condominium unit buyer against the project owner, developer, dealer, broker
obtaining in this case, the decision it rendered is null and void ab initio. It is
or salesman;and
as if no decision was rendered by the trial court at all.
C. Cases involving specific performance of contractual and
When as in this case the attention of the trial court is drawn to its lack of
statutory obligations filed by buyers of subdivision lot or condominium unit
competence and authority to act on the case, certainly the trial court has a
against the owner, developer, dealer, broker or salesman. (Emphasis
duty to vacate the judgment by declaring the same to be null and void ab
supplied.)
initio.
The language of this section, particularly, the second portion thereof, leaves
This is as it should be. Inasmuch as the questioned judgment is null and void,
no room for doubt that exclusive jurisdiction over the case between the
it is, as above observed, as if no decision had been rendered by the trial court.
petitioner and private respondent is vested not on the RTC but on the NHA.
It cannot become final and exucutory, much less can it be enforced by a writ
The NHA was re-named Human Settlements Regulatory Commission and
of execution.
thereafter it was re-named as the Housing and Land Use Regulatory Board
(HLURB). 3 The trial court, rather than reiterating the issuance of a writ of execution in
this case, which it did, should have recalled and cancelled the writ of
Undeniably the sum of money sought to be collected by private respondent
execution of the judgment.
from petitioner represented unpaid installments of a subdivision lot which
the petitioner purchased. Petitioner alleges that he suspended payments WHEREFORE, the petition is GRANTED. The questioned decision of the trial
thereof because of the failure of the developer to develop the subdivision court dated January 29, 1988 is hereby declared null and void for lack of
pursuant to their agreement. jurisdiction. No pronouncement as to costs.

In Antipolo Realty Corporation vs. National Housing Authority, 4 the suit SO ORDERED.
which was filed with the NHA, likewise involved non-payment of installments
over a subdivision lot, wherein this Court held that the NHA has exclusive
authority to hear and decide the case.

In Solid Homes, Inc. vs. Teresita Payawal, 5 this Court ruled that upon the
issuance of Presidential Decree No. 957, the trial court may no longer assume
jurisdiction over the cases enumerated in Section 1 of Presidential Decree No.
397. We even stated therein that the Housing and Land Use Regulatory Board
has the authority to award damages in the exercise of this exclusive power
conferred upon it by Presidential Decree No. 1344.
FAJARDO vs BAUTISTA except those expressly provided for in the Contract to Sell. The Contracts to
Sell are herein described:

G.R. Nos. 102193-97 May 10, 1994 Petitioners-Buyers Lot subject Date of execution of
of contract to sell contract to sell
MS. EMILY YU FAJARDO, SPOUSES SALVADOR and ENGRACIA GIANAN,
RENE and BEVERLY RODELAS, SPOUSES JULIAN and TERESITA CUIZON, MS. 1) Spouses Julian a) Lot No. 9, Block
TERESITA RIVERA and RICARDO VILLANUEVA, petitioners, and Teresita No. 3, covered by
1
vs. Cuizon TCT No. T-66231 25 January 1979
HON. ODILON I. BAUTISTA, in his capacity as the Presiding Judge of the b) Lot No. 11, Block
Regional Trial Court, Branch 37, Calamba, Laguna, SPOUSES ISABELO and No. 1. 24 April 19793
2
PURITA JAREÑO, RUBEN HABACON, and CESAR S. REYES, in his capacity as
the Register of Deeds, Calamba, Laguna, respondents. 2) Teresita Rivera Lot No. 12, BLock 5 December 19854
and Ricardo No. 3, covered by
Encanto, Mabugat & Associates for petitioners. Villanueva TCT No. 7-62229
Narciso M. Habacon for respondents Ruben Habacon and Cesar S. Reyes. 3) Spouses Rene and Lot No. 14, Block 17 December 1985 5
Beverly Rodelas No. 3, covered by
TCT No. T-66231
DAVIDE, JR., J.:
4) Spouses Salvador Lot No. 9, Block 17 March 19886
This is a special civil action for certiorari which seeks to annul the 4 and Engracia No. 2, covered by
September 1991 Order of the respondent Judge dismissing the complaints of Gianan TCT No. T-66273
the petitioners for lack of jurisdiction, and the 20 September 1991 Order
denying the petitioners' motion for reconsideration. The respondent Judge On the other hand, private respondent Fernando Realty and Development
had ruled that jurisdiction over the cases pertained to the Housing and Land Corporation (hereinafter FERNANDO) as SELLER, and petitioner Emily Yu
Use Regulatory Board (HLRB) and not the Regional Trial Court. The petitioners Fajardo as BUYER signed on 22 February 1985 a CONTRACT TO SELL 7 under
asseverate that the RTC has jurisdiction over the cases. which for the considerations therein stated, FERNANDO agreed to sell to
Fajardo Lot No. 10, Block No. 3, also located at the Calamba Central
The pleadings of the parties disclose the following facts: Compound Subdivision, 8 and upon full payment of the agreed price and
Private respondents Isabelo Jareño and Purita Jareño (hereinafter JAREÑOS) interest thereon, to execute a deed of absolute sale in favor of Fajardo.
are the owners and developers of a subdivision known as the Calamba Central It appears, however, that on 18 October 1986, the JAREÑOS sold the
Compound. On various dates, they as SELLERS, and the petitioners as BUYERS aforesaid lots subject of the different contracts to sell to private respondent
signed separate contracts, each designated as a CONTRACT TO SELL, under Ruben Habacon (hereinafter HABACON) under separate documents
which, for the considerations therein stated, they bound themselves to sell denominated as "Kasulatan ng Bilihan." 9 On 18 February 1991, HABACON
to the petitioners the lots subject thereof, and after the latter shall have paid caused the cancellation of the certificates of title covering the said lots and
the purchase price and interest, to execute in favor of the petitioners the the issuance of new ones in his name. 10
corresponding deeds of transfer of title, free from any lien or encumbrance
When the petitioners learned of these, they filed on 21 June 1991 separate
complaints with the court a quo for annulment of the sales in favor of
HABACON and of the new certificates of title issued to him, for reinstatement
of the certificates of title cancelled by those issued to HABACON, and for
accounting and damages. They prayed in their complaints for a judgment
(a) declaring the "Kasulatan na Bilihan" executed in favor of HABACON as an
equitable mortgage; (b) annulling the new certificates of title issued to
HABACON and reinstating those previously cancelled by the new certificates
of title; (c) ordering HABACON and the JAREÑOS to determine the unpaid
balance of the purchase price under the Contracts to Sell, to accept payments
thereof, and to execute the deeds of absolute sale in favor of the petitioners;
and (e) ordering the defendants to pay actual and exemplary damages and
attorney's fees specified therein, as well as the costs.
The complaints were docketed as Civil Cases Nos. 1683-91-C, 11 1684-91-
C, 12 1685-91-C, 13 1686-91-C, 14 and 1688-91-C, 15 and were assigned to
Branch 37 of the Regional Trial Court of Calamba.
On 9 August 1991, HABACON filed a motion to dismiss the complaints on the
ground that the plaintiffs (petitioners herein) have no legal capacity to sue
because they were not parties to the "BILIHAN." 16
17
In its Order of 12 August 1991, the trial court, through the respondent
Judge, directed the plaintiffs to show cause why their complaints should not
be dismissed for lack of jurisdiction pursuant to P.D. No. 957 (Subdivision and
Condominium Buyers' Protective Decree), as amended by P.D. No. 1344, and
the doctrine laid down by this Court in Solid Homes, Inc. vs. Payawal. 18
In their compliance 19 with the show cause order, the petitioners maintained
that it is the trial court, and not the HLRB, which has jurisdiction over the
complaint. They contend that Solid Homes, Inc. vs. Payawal is inapplicable
because in their cases: (1) the title of the developers, the JAREÑOS, had
already passed to a third person, HABACON; (2) their action is for the
annulment of the title of a third person; (3) HABACON is not a developer; and
(4) Section 19(1) of B.P. Blg. 129 vests upon the Regional Trial Court the
jurisdiction to hear and decide all civil actions which involve title to or
possession of any real property or any interest therein, except actions for
unlawful detainer and forcible entry.
In its Order of 4 September 1991, 20 the trial court dismissed the aforesaid
civil cases for lack of jurisdiction. It held:
The Court does not agree with the plaintiffs. PD No. 957 as amended by P.D.
No. 1344 gives the National Housing Authority now the Human Settlement
Regulatory Commission (HSRC) 21 inclusive [sic] jurisdiction to hear and,
decide cases of "unsound real estate business practices" (Sec. 1(a), P.D.
1344). This authority is broad enough to include all kinds of real estate
transactions involving subdivision lot or condominium, wherein either the
subdivision lot or condominium buyer, project owner, developer, dealer,
broker or salesman is involved.
The petitioners filed a motion for the reconsideration of the order, but the
trial court denied this in its Order of 20 September 1991. 22 It ruled that while
HABACON may not be the developer, the JAREÑOS are, and by selling the
same lots to HABACON after they were previously sold to different parties,
the JAREÑOS may have committed an "unsound business practice."
Moreover, it ruled that Section 19(2) of B.P. Blg. 129, being a general law,
should yield to P.D. No. 957, as amended by P.D. No. 1344, which is a special
law.
On 24 December 1991, the petitioners filed the instant special civil action
for certiorari to annul the 4 September 1991 and 20 September 1991 Orders
of the trial court on the ground that the judge acted with grave abuse of
discretion amounting to lack of jurisdiction in dismissing their complaints and
that they have no other plain, speedy, and adequate remedy in the ordinary
course of law. The petitioners maintain that the trial court has jurisdiction
over their complaints.
In the Resolution of 18 November 1991, 23 we required the respondents to
comment on the petition. Private respondent HABACON filed his comment
and opposition on 27 August 1992 24 while public respondent Cesar S. Reyes
filed his comment on 24 August 1993. 25 Both respondents rely on our
pronouncement in Solid Homes, Inc. vs. Payawal and echo the ruling of the
trial court in the questioned orders. The copy of the resolution sent to the
JAREÑOS was returned unserved and in the Resolution of 21 July 1993, we
considered it as served on them. 26 As required, the petitioners filed a reply
to the comment. 27 On 8 November 1993, we resolved to give due course to
the petition and required the parties to submit their memoranda, which the
petitioners complied with on 29 December 1993 28 and the private
respondents, on 28 March 1994. 29
The core issue in this case is whether the trial court gravely abused its
discretion in dismissing, for lack of jurisdiction, the complaints filed by the
petitioners. Before resolving this issue, a procedural matter must first be
considered. Generally, an order of dismissal, whether right or wrong, is a
final order, and hence a proper subject of appeal, not certiorari. 30 The
remedies of appeal and certiorari are mutually exclusive and not alternative
or
successive. 31 Accordingly, although the special civil action of certiorari is not
proper when an ordinary appeal is available, it may be granted where it is
shown that the appeal would be inadequate, slow, insufficient, and will not
promptly relieve a party from the injurious effects of the order complained
of, or where appeal is inadequate and
32
ineffectual. Nevertheless, certiorari cannot be a substitute for the lost or
lapsed remedy of appeal, 33 where such loss is occasioned by the petitioner's
own neglect or error in the choice of remedies. 34
The petitioners admit that they received a copy of the trial court's order
dismissing their complaints on 4 October 1991. 35 The instant petition was
filed on 24 October 1991 or beyond the 15-day period to appeal from the
order. The petitioners have not even attempted to explain why they were
unable to appeal from the challenged order within the reglementary period.
This civil action then was resorted to as a substitute for the lost or lapsed
remedy of appeal, and since none of the exceptions to the rigid rule barring
substitution of remedies was alleged to exist in this petition, or even indicated
by the pleadings, this petition must be dismissed.
Even if we were to accept this petition in the broader interest of justice, it
must still fail for the trial court correctly ruled that it has no jurisdiction over
the subject matter in Civil Cases Nos. 1683-91-C, 1684-91-C, 1685-91-C, 1686-
91-C, and 1688-91-C. Jurisdiction thereon was originally vested in the
National Housing Authority (NHA) under P.D. No. 957, as amended by P.D.
No. 1344. Under E.O. No. 648 of 7 February 1981, this jurisdiction was
transferred to the Human Settlements Regulatory Commission (HSRC) which,
pursuant to E.O. No. 90 of 17 December 1986, was renamed as the Housing
and Land Use Regulatory Board.
We agree with the trial court that the complaints do involve unsound real
estate business practices on the part of the owners and developers of the
subdivision who entered into Contracts to Sell with the petitioners. By virtue
of Section 1 of P.D. No. 1344 and our decision in Solid Homes, Inc. vs. Payawal,
the NHA, now HLRB, has the exclusive jurisdiction to hear and decide the
matter. In addition to involving unsound real estate business practices, the
complaints also involve specific performance of the contractual and statutory
obligations of the owners or developers of the subdivision. The claims for
annulment of the "Kasulatan ng Bilihan" in favor of HABACON and the
certificates of title issued to him and for damages are merely incidental.
Section 1 of P.D. No. 1344, promulgated on 2 April 1978, provides as follows:
Sec. 1. In the exercise of its functions to regulate the real estate trade and
business and in addition to its powers provided for in Presidential Decree No.
957, the National Housing Authority shall have exclusive jurisdiction to hear
and decide cases of the following nature:
A. Unsound real estate business practices;
B. Claims involving refund and any other claims filed by subdivision lot or
condominium unit buyer against the project owner, developer, dealer, broker
or salesman; and
C. Cases involving specific performance of contractual and statutory
obligations filed by buyers of subdivision lots or condominium units against
the owner, developer, dealer, broker or salesman. (Italics supplied)
Conformably with this section, we had earlier upheld the jurisdiction of the
NHA to determine the rights of the parties under a contract to sell a
subdivision lot in Antipolo Reality Corp. vs. National Housing Authority 36 and
struck down the exercise of jurisdiction by the Regional Trial Court over a case
instituted by a lot buyer for delivery of title against the subdivision owner
in Solid Homes, Inc. vs. Payawal. We also sustained the jurisdiction of the
HLRB over complaints for (a) the refund of reservation fees for the purchase
of a subdivision lot, 37 (b) specific performance filed by a lot buyer against the
seller of a subdivision lot, 38 (c) annulment of the mortgage constituted by the
project owner without the buyer's consent, the mortgage foreclosure sale,
and the condominium certificate of title issued to the highest bidder at the
said foreclosure sale, 39 and (d) collection of the balance of the unpaid
purchase price of a subdivision lot filed by the developer of a subdivision
against the lot
buyer. 40

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

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

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

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

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

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

dismissing the complaints of the petitioners.

WHEREFORE, the due course Resolution of 8 November 1993 is RECALLED

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

SO ORDERED.
LUPANGCO vs COURT OF APPEALS
G.R. No. 77372 April 29, 1988
LUPO L. LUPANGCO, RAYMOND S. MANGKAL, NORMAN A. MESINA,
ALEXANDER R. REGUYAL, JOCELYN P. CATAPANG, ENRICO V. REGALADO,
JEROME O. ARCEGA, ERNESTOC. BLAS, JR., ELPEDIO M. ALMAZAN, KARL
CAESAR R. RIMANDO, petitioner,
vs.
COURT OF APPEALS and PROFESSIONAL REGULATION
COMMISSION, respondent.
Balgos & Perez Law Offices for petitioners.
The Solicitor General for respondents.
GANCAYCO, J.:
Is the Regional Trial Court of the same category as the Professional Regulation
Commission so that it cannot pass upon the validity of the administrative acts
of the latter? Can this Commission lawfully prohibit the examiness from
attending review classes, receiving handout materials, tips, or the like three
(3) days before the date of the examination? Theses are the issues presented
to the court by this petition for certiorari to review the decision of the Court
of Appeals promulagated on January 13, 1987, in CA-G.R. SP No.
10598, * declaring null and void the other dated Ocober 21, 1986 issued by
the Regional Trial Court of Manila, Branch 32 in Civil Case No. 86-37950
entitled " Lupo L. Lupangco, et al. vs. Professional Regulation Commission."
The records shows the following undisputed facts:
On or about October 6, 1986, herein respondent Professional Regulation
Commission (PRC) issued Resolution No. 105 as parts of its "Additional
Instructions to Examiness," to all those applying for admission to take the
licensure examinations in accountancy. The resolution embodied the
following pertinent provisions:
No examinee shall attend any review class, briefing, conference or the like
conducted by, or shall receive any hand-out, review material, or any tip from
any school, college or university, or any review center or the like or any
reviewer, lecturer, instructor official or employee of any of the
aforementioned or similars institutions during the three days immediately
proceeding every examination day including examination day.
Any examinee violating this instruction shall be subject to the sanctions
prescribed by Sec. 8, Art. III of the Rules and Regulations of the Commission. 1
On October 16, 1986, herein petitioners, all reviewees preparing to take the
licensure examinations in accountancy schedule on October 25 and
November 2 of the same year, filed on their own behalf of all others similarly
situated like them, with the Regional Trial Court of Manila, Branch XXXII, a
complaint for injuction with a prayer with the issuance of a writ of a
preliminary injunction against respondent PRC to restrain the latter from
enforcing the above-mentioned resolution and to declare the same
unconstitution.
Respondent PRC filed a motion to dismiss on October 21, 1987 on the ground
that the lower court had no jurisdiction to review and to enjoin the
enforcement of its resolution. In an Order of October 21, 1987, the lower
court declared that it had jurisdiction to try the case and enjoined the
respondent commission from enforcing and giving effect to Resolution No.
105 which it found to be unconstitutional.
Not satisfied therewith, respondent PRC, on November 10, 1986, filed with
the Court of Appeals a petition for the nullification of the above Order of the
lower court. Said petiton was granted in the Decision of the Court of Appeals
promulagated on January 13, 1987, to wit:
WHEREFORE, finding the petition meritorious the same is hereby GRANTED
and the other dated October 21, 1986 issued by respondent court is declared
null and void. The respondent court is further directed to dismiss with
prejudice Civil Case No. 86-37950 for want of jurisdiction over the subject
matter thereof. No cost in this instance.
SO ORDERED. 2
Hence, this petition.
The Court of Appeals, in deciding that the Regional Trial Court of Manila had
no jurisdiction to entertain the case and to enjoin the enforcement of the
Resolution No. 105, stated as its basis its conclusion that the Professional
Regulation Commission and the Regional Trial Court are co-equal bodies.
Thus it held —
That the petitioner Professional Regulatory Commission is at least a co-equal
body with the Regional Trial Court is beyond question, and co-equal bodies
have no power to control each other or interfere with each other's acts. 3
To strenghten its position, the Court of Appeals relied heavily on National
Electrification Administration vs. Mendoza, 4 which cites Pineda vs.
Lantin 5 and Philippine Pacific Fishing, Inc. vs. Luna, 6 where this Court held
that a Court of First Instance cannot interfere with the orders of the Securities
and Exchange Commission, the two being co-equal bodies.
After a close scrutiny of the facts and the record of this case,
We rule in favor of the petitioner.
The cases cited by respondent court are not in point. It is glaringly apparent
that the reason why this Court ruled that the Court of First Instance could not
interfere with the orders of the Securities and Exchange Commission was that
this was so provided for by the law. In Pineda vs. Lantin, We explained that
whenever a party is aggrieved by or disagree with an order or ruling of the
Securities and Exchange Commission, he cannot seek relief from courts of
general jurisdiction since under the Rules of Court and Commonwealth Act
No. 83, as amended by Republic Act No. 635, creating and setting forth the
powers and functions of the old Securities and Exchange Commission, his
remedy is to go the Supreme Court on a petition for review. Likewise,
in Philippine Pacific Fishing Co., Inc. vs. Luna,it was stressed that if an order of
the Securities and Exchange Commission is erroneous, the appropriate
remedy take is first, within the Commission itself, then, to the Supreme Court
as mandated in Presidential Decree No. 902-A, the law creating the new
Securities and Exchange Commission. Nowhere in the said cases was it held
that a Court of First Instance has no jurisdiction over all other government
agencies. On the contrary, the ruling was specifically limited to the Securities
and Exchange Commission.
The respondent court erred when it place the Securities and Exchange
Commission and the Professional Regulation Commsision in the same
category. As alraedy mentioned, with respect to the Securities and Exchange
Commission, the laws cited explicitly provide with the procedure that need
be taken when one is aggrieved by its order or ruling. Upon the other hand,
there is no law providing for the next course of action for a party who wants
to question a ruling or order of the Professional Regulation Commission.
Unlike Commonwealth Act No. 83 and Presidential Decree No. 902-A, there
is no provision in Presidential Decree No. 223, creating the Professional
Regulation Commission, that orders or resolutions of the Commission are
appealable either to the Court of Appeals or to theSupreme Court.
Consequently, Civil Case No. 86-37950, which was filed in order to enjoin the
enforcement of a resolution of the respondent Professional Regulation
Commission alleged to be unconstitutional, should fall within the general
jurisdiction of the Court of First Instance, now the Regional Trial Court. 7
What is clear from Presidential Decree No. 223 is that the Professional
Regulation Commission is attached to the Office of the President for general
direction and coordination. 8 Well settled in our jurisprudence is the view that
even acts of the Office of the President may be reviewed by the Court of First
Instance (now the Regional Trial Court). In Medalla vs. Sayo, 9 this rule was
thoroughly propounded on, to wit:
In so far as jurisdiction of the Court below to review by certiorari decisions
and/or resolutions of the Civil Service Commission and of the residential
Executive Asssistant is concerned, there should be no question but that the
power of judicial review should be upheld. The following rulings buttress this
conclusion:
The objection to a judicial review of a Presidential act arises from a failure to
recognize the most important principle in our system of government, i.e., the
separation of powers into three co-equal departments, the executives, the
legislative and the judicial, each supreme within its own assigned powers and
duties. When a presidential act is challenged before the courts of justice, it is
not to be implied therefrom that the Executive is being made subject and
subordinate to the courts. The legality of his acts are under judicial review,
not because the Executive is inferior to the courts, but because the law is
above the Chief Executive himself, and the courts seek only to interpret, apply
or implement it (the law). A judicial review of the President's decision on a
case of an employee decided by the Civil Service Board of Appeals should be
viewed in this light and the bringing of the case to the Courts should be
governed by the same principles as govern the jucucial review of all
administrative acts of all administrative officers. 10
Republic vs. Presiding Judge, CFI of Lanao del Norte, Br. II, 11 is another case
in point. Here, "the Executive Office"' of the Department of Education and
Culture issued Memorandum Order No. 93 under the authority of then
Secretary of Education Juan Manuel. As in this case, a complaint for injunction
was filed with the Court of First Instance of Lanao del Norte because,
allegedly, the enforcement of the circular would impair some contracts
already entered into by public school teachers. It was the contention of
petitioner therein that "the Court of First Instance is not empowered to
amend, reverse and modify what is otherwise the clear and explicit provision
of the memorandum circular issued by the Executive Office which has the
force and effect of law." In resolving the issue, We held:
... We definitely state that respondent Court lawfully acquired jurisdiction in
Civil Case No. II-240 (8) because the plaintiff therein asked the lower court for
relief, in the form of injunction, in defense of a legal right (freedom to enter
into contracts) . . . . .
Hence there is a clear infringement of private respondent's constitutional
right to enter into agreements not contrary to law, which might run the risk
of being violated by the threatened implementation of Executive Office
Memorandum Circular No. 93, dated February 5, 1968, which prohibits, with
certain exceptions, cashiers and disbursing officers from honoring special
powers of attorney executed by the payee employees. The respondent Court
is not only right but duty bound to take cognizance of cases of this nature
wherein a constitutional and statutory right is allegedly infringed by the
administrative action of a government office. Courts of first Instance have
original jurisdiction over all civil actions in which the subject of the litigation
is not capable of pecuniary estimation (Sec. 44, Republic Act 296, as
amended). 12 (Emphasis supplied.)
In San Miguel Corporation vs. Avelino, 13 We ruled that a judge of the Court
of First Instance has the authority to decide on the validity of a city tax
ordinance even after its validity had been contested before the Secretary of
Justice and an opinion thereon had been rendered.
In view of the foregoing, We find no cogent reason why Resolution No. 105,
issued by the respondent Professional Regulation Commission, should be
exempted from the general jurisdiction of the Regional Trial Court.
Respondent PRC, on the other hand, contends that under Section 9,
paragraph 3 of B.P. Blg. 129, it is the Court of Appeals which has jurisdiction
over the case. The said law provides:
SEC. 9. Jurisdiction. — The Intermediate Appellate Court shall exercise:
xxx xxx xxx
(3) Exclusive appellate jurisdiction over all final judgments, decisions,
resolutions, orders, or awards of Regional Trial Courts and quasi-
judicial agencies, instrumentalities, boards or commissions, except those
falling within the appellate jurisdiction of the Supreme Court in accordance
with the Constitution, the provisions of this Act, and of subparagraph (1) of
the third paragraph and subparagraph (4) of the fourth paragraph of Section
17 of the Judiciary Act of 1948.
The contention is devoid of merit.
In order to invoke the exclusive appellate jurisdiction of the Court of Appeals
as provided for in Section 9, paragraph 3 of B.P. Blg. 129, there has to be a
final order or ruling which resulted from proceedings wherein the
administrative body involved exercised its quasi-judicial functions. In Black's
Law Dictionary, quasi-judicial is defined as a term applied to the action,
discretion, etc., of public administrative officers or bodies required to
investigate facts, or ascertain the existence of facts, hold hearings, and draw
conclusions from them, as a basis for their official action, and to exercise
discretion of a judicial nature. To expound thereon, quasi-
judicial adjudication would mean a determination of rights, privileges and
duties resulting in a decision or order which applies to a specific situation
. 14This does not cover rules and regulations of general applicability issued by
the administrative body to implement its purely administrative policies and
functions like Resolution No. 105 which was adopted by the respondent PRC
as a measure to preserve the integrity of licensure examinations.
The above rule was adhered to in Filipinas Engineering and Machine Shop vs.
Ferrer. 15 In this case, the issue presented was whether or not the Court of
First Instance had jurisdiction over a case involving an order of the
Commission on Elections awarding a contract to a private party which
originated from an invitation to bid. The said issue came about because under
the laws then in force, final awards, judgments, decisions or orders of the
Commission on Elections fall within the exclusive jurisdiction of the Supreme
Court by way of certiorari. Hence, it has been consistently held that "it is the
Supreme Court, not the Court of First Instance, which has exclusive
jurisdiction to review on certiorari final decisions, orders, or rulings of the
Commission on Elections relative to the conduct of elections and the
enforcement of election laws." 16
As to whether or not the Court of First Instance had jurisdiction in saidcase,
We said:
We are however, far from convinced that an order of the COMELEC awarding
a contract to a private party, as a result of its choice among various proposals
submitted in response to its invitation to bid comes within the purview of a
"final order" which is exclusively and directly appealable to this court on
certiorari. What is contemplated by the term "final orders, rulings and
decisions, of the COMELEC reviewable by certiorari by the Supreme Court as
provided by law are those rendered in actions or proceedings before the
COMELEC and taken cognizance of by the said body in the exercise of its
adjudicatory or quasi-judicial powers. (Emphasis supplied.)
xxx xxx xxx
We agree with petitioner's contention that the order of the Commission
granting the award to a bidder is not an order rendered in a legal controversy
before it wherein the parties filed their respective pleadings and presented
evidence after which the questioned order was issued; and that this order of
the commission was issued pursuant to its authority to enter into contracts
in relation to election purposes. In short, the COMELEC resolution awarding
the contract in favor of Acme was not issued pursuant to its quasi-judicial
functions but merely as an incident of its inherent administrative functions
over the conduct of elections, and hence, the said resolution may not be
deemed as a "final order reviewable by certiorari by the Supreme Court. Being
non-judicial in character, no contempt order may be imposed by the
COMELEC from said order, and no direct and exclusive appeal by certiorari to
this Tribunal lie from such order. Any question arising from said order may be
well taken in an ordinary civil action before the trial courts. (Emphasis
supplied.) 17
One other case that should be mentioned in this regard is Salud vs. Central
Bank of the Philippines. 18 Here, petitioner Central Bank, like respondent in
this case, argued that under Section 9, paragraph 3 of B.P. Blg. 129, orders of
the Monetary Board are appealable only to the Intermediate Appellate Court.
Thus:
The Central Bank and its Liquidator also postulate, for the very first time, that
the Monetary Board is among the "quasi-judicial ... boards" whose judgments
are within the exclusive appellate jurisdiction of the IAC; hence, it is only said
Court, "to the exclusion of the Regional Trial Courts," that may review the
Monetary Board's resolutions. 19
Anent the posture of the Central Bank, We made the following
pronouncement:
The contention is utterly devoid of merit. The IAC has no appellate jurisdiction
over resolution or orders of the Monetary Board. No law prescribes any mode
of appeal from the Monetary Board to the IAC. 20
In view of the foregoing, We hold that the Regional Trial Court has jurisdiction
to entertain Civil Case No. 86-37950 and enjoin the respondent PRC from
enforcing its resolution.
Although We have finally settled the issue of jurisdiction, We find it
imperative to decide once and for all the validity of Resolution No. 105 so as
to provide the much awaited relief to those who are and will be affected by
it.
Of course, We realize that the questioned resolution was adopted for a
commendable purpose which is "to preserve the integrity and purity of the
licensure examinations." However, its good aim cannot be a cloak to conceal
its constitutional infirmities. On its face, it can be readily seen that it is
unreasonable in that an examinee cannot even attend any review class,
briefing, conference or the like, or receive any hand-out, review material, or
any tip from any school, collge or university, or any review center or the like
or any reviewer, lecturer, instructor, official or employee of any of the
aforementioned or similar institutions . ... 21
The unreasonableness is more obvious in that one who is caught committing
the prohibited acts even without any ill motives will be barred from taking
future examinations conducted by the respondent PRC. Furthermore, it is
inconceivable how the Commission can manage to have a watchful eye on
each and every examinee during the three days before the examination
period.
It is an aixiom in administrative law that administrative authorities should not
act arbitrarily and capriciously in the issuance of rules and regulations. To be
valid, such rules and regulations must be reasonable and fairly adapted to the
end in view. If shown to bear no reasonable relation to the purposes for which
they are authorized to be issued, then they must be held to be invalid. 22
Resolution No. 105 is not only unreasonable and arbitrary, it also infringes on
the examinees' right to liberty guaranteed by the Constitution. Respondent
PRC has no authority to dictate on the reviewees as to how they should
prepare themselves for the licensure examinations. They cannot be
restrained from taking all the lawful steps needed to assure the fulfillment of
their ambition to become public accountants. They have every right to make
use of their faculties in attaining success in their endeavors. They should be
allowed to enjoy their freedom to acquire useful knowledge that will promote
their personal growth. As defined in a decision of the United States Supreme
Court:
The term "liberty" means more than mere freedom from physical restraint or
the bounds of a prison. It means freedom to go where one may choose and
to act in such a manner not inconsistent with the equal rights of others, as his
judgment may dictate for the promotion of his happiness, to pursue such
callings and vocations as may be most suitable to develop his capacities, and
giv to them their highest enjoyment. 23
Another evident objection to Resolution No. 105 is that it violates the
academic freedom of the schools concerned. Respondent PRC cannot
interfere with the conduct of review that review schools and centers believe
would best enable their enrolees to meet the standards required before
becoming a full fledged public accountant. Unless the means or methods of
instruction are clearly found to be inefficient, impractical, or riddled with
corruption, review schools and centers may not be stopped from helping out
their students. At this juncture, We call attention to Our pronouncement
in Garcia vs. The Faculty Admission Committee, Loyola School of
Theology, 24 regarding academic freedom to wit:
... It would follow then that the school or college itself is possessed of such a
right. It decides for itself its aims and objectives and how best to attain them.
It is free from outside coercion or interference save possibly when the
overriding public welfare calls for some restraint. It has a wide sphere of
autonomy certainly extending to the choice of students. This constitutional
provision is not to be construed in a niggardly manner or in a grudging
fashion.
Needless to say, the enforcement of Resolution No. 105 is not a guarantee
that the alleged leakages in the licensure examinations will be eradicated or
at least minimized. Making the examinees suffer by depriving them of
legitimate means of review or preparation on those last three precious days-
when they should be refreshing themselves with all that they have learned in
the review classes and preparing their mental and psychological make-up for
the examination day itself-would be like uprooting the tree to get ride of a
rotten branch. What is needed to be done by the respondent is to find out
the source of such leakages and stop it right there. If corrupt officials or
personnel should be terminated from their loss, then so be it. Fixers or
swindlers should be flushed out. Strict guidelines to be observed by
examiners should be set up and if violations are committed, then licenses
should be suspended or revoked. These are all within the powers of the
respondent commission as provided for in Presidential Decree No. 223. But
by all means the right and freedom of the examinees to avail of all legitimate
means to prepare for the examinations should not be curtailed.
In the light of the above, We hereby REVERSE and SET ASIDE, the decision of
the Court of Appeals in CA-G.R. SP No. 10591 and another judgment is hereby
rendered declaring Resolution No. 105 null and void and of no force and
effect for being unconstitutional. This decision is immediately executory. No
costs.
SO ORDERED.
BERNARDO vs CALTEX
G.R. No. 101345 December 1, 1992
NONITO J. BERNARDO, petitioner,
vs.
CALTEX (PHILIPPINES), INC., respondent.
Edito A. Rodriguez for petitioner.
Siguion Reyna, Montecillo and Ongsiako for private respondent.
NARVASA, C.J.:
The appeal on certiorari at bar1 treats of the jurisdiction of the Regional Trial
Court over the controversy between petitioner and respondent in light of
Sections 3 (par. 2 [a]) and 7 of Executive Order No. 172 and "Section 2, Rule
VIII of the Rules and Regulations Governing the Establishment, Construction,
Operation, Remodelling, and/or Refurbishing of Petroleum Products Retail
Outlets," promulgated by the Oil Industry Commission on 1 September 1972
(68 O.G. 73472 ), adopted by the BEU3 in its Memorandum Circular No. 78-04-
06, Series of 1978 . . ."4 The provision reads as follows:
Sec. 2. All disputes between any operator/dealer and an oil company
regarding dealership agreement except those arising out of their relationship
as debtor and creditor shall be under the jurisdiction of the Oil Industry
Commission.
A party seeking relief from or enforcement of any provision of a dealer
agreement, except those as hereinabove provided, may do so by filing with
the Commission a petition defined in the Rules of Practice and Procedure
governing hearings before the Commission. The hearing shall be conducted
as provided in said Rules.
The "operator/dealer" involved is the petitioner, Nonito J. Bernardo, and the
"oil company," the respondent Caltex (Philippines), Inc. (hereafter referred to
simply as Caltex). Bernardo Operates two (2) Caltex gasoline stations.
On December 3, 1990, Bernardo placed with the Caltex Pandacan Terminal
an order for 10,000 liters of diesel fuel. He made full payment therefor in the
sum of P57,937.50 on the same day, the payment being evidenced by an
official receipt. On December 4, 1990,5 he placed with the same terminal
another order, this time for 10,000 liters of premium gasoline — for which he
also made full payment in the amount of P84,193.50 on December 5, 1990,
the payment being evidenced by an official receipt issued on said day.6
Bernardo sent his tanker to the Pandacan Terminal as early as 11:20 o'clock
in the morning of December 5, 1990, to take delivery of the petroleum
products thus purchased.7 But despite waiting until 6 P.M. on that day, the
tanker's driver failed to take delivery, because Caltex's computer system had
allegedly malfunctioned and broken down as early as 3:45 A.M. and remained
out of order up to 12:10 P.M. on that day, December 5.8
It appears that on that same day, December 5, 1990, the Energy Regulatory
Board announced an increase in the prices of petroleum products effective at
6 o'clock in the evening of that day. According to Caltex, "(a)t exactly 6:00 in
the evening of December 5, 1990, . . . (it) had to cut-off the delivery or hauling
by dealers of products in order to make the necessary adjustments in its
computers as a result of the price increase . . . (and after that time) all orders,
even for those pre-paid and delivered ex-plant, were invoiced at the new
rates . . . in accordance with the Purchase and Sale Agreement . . . ."9
Demands subsequently made by Bernardo for delivery of the petroleum
products paid for by him, 10 were refused by Caltex unless Bernardo paid the
difference between the old and new prices. Caltex claimed, in justification of
its refusal, 11 that when Bernardo demanded "delivery of his orders, the
prices had already increased due to the ERB order on December 5, 1990," and
Bernardo was bound to pay the increased price in accordance with Section 3
of his "Purchase and Sale Agreement" with Caltex providing as follows:
3) PRICES: Prices to be paid by BUYER ex SELLER's storage point shall be at
SELLER's official wholesale selling price ex storage point at Pandacan Terminal
in effect on date of delivery.
On January 8, 1991, Bernardo filed a complaint in the Regional Trial Court at
Quezon City praying that Caltex be ordered to deliver the petroleum products
in question and to pay compensatory, exemplary and nominal damages, loss
of earnings and profits expected "from the sale of the undelivered petroleum
products," and attorney's fees. 12
Caltex moved to dismiss under date of January 23, 1991, 13 the ground that
(a) venue was improperly laid — it being provided in the parties' Purchase and
Sale Agreement that in case "of any judicial proceedings to enforce any or all
of the terms or conditions of . . . (said) Agreement, BUYER shall submit itself
to the jurisdiction of the Court of the City of Manila or to SELLER's places of
transactions at SELLER'S option;" 14 and (b) the plaintiff had no cause of action
against it — Caltex having "cut-off the delivery or hauling by dealers of
products in order to make the necessary adjustment in its computers as a
result of the price increase" (set by ERB on December 5, 1990),
and accordingly invoiced "all orders, even for those pre-paid and delivered
ex-plant, . . . at the new rates," as was allegedly its right under Paragraph (3)
of the Purchase and Sale Agreement, supra, reiterated in a Circular dated
August 1, 1990 sent to all its dealers and customers pertinently reading as
follows:
1. All orders that have (been) invoiced and paid for before the effectively of a
wholesale Selling Price increase but are not yet delivered to or picked-up by
the customers as of the effectivity of the price increase shall be cancelled and
a new invoice shall be prepared using the new price/s.
By Order dated January 30, 1991, the Trial Court denied Caltex's motion to
dismiss and issued a preliminary mandatory injunction requiring immediate
delivery by Caltex of the petroleum products in question upon Bernardo's
posting of a bond in the sum of P50,000.00. 15 To invalidate that order, Caltex
forthwith instituted in this Court a special civil action of certiorari; but by this
Court's Resolution of February 6, 1991, the case was referred to the Court of
Appeals where it was docketed as CA-G.R. SP No. 24091. The action resulted
in a judgment rendered by said Court of Appeals on March 16,
1991, 16 disposing as follows:
WHEREFORE, the petition is hereby given due course, the order of
respondent judge dated January 30, 1991, is hereby set aside insofar as it
granted the application for a writ of preliminary injunction. However, the
order is upheld insofar as it denied petitioner's motion to dismiss. The
temporary restraining order issued by this Court is hereby made permanent.
This judgment became final and executory. Caltex thereafter filed its answer
to the complaint. 17 The answer re-stated the position it had already
expressed at one time or another, and set up a compulsory counterclaim. It
also asserted the "special and affirmative defense" that it was the Energy
Regulatory Board, not the Trial Court which had jurisdiction of the subject
matter of the case since it involved "a dispute between an oil company and
its dealer, particularly as to the price by which petroleum products are to be
sold." Caltex then moved "to Set its Affirmative Defenses for Preliminary
Hearing." Bernardo opposed the motion. He also filed a motion for summary
judgment. Both motions were denied by the Trial Court, in an order dated
July 1, 1991.
Caltex moved for reconsideration. The Court required the parties to submit
memoranda. On August 14, 1991, the Trial Court promulgated an Order
dismissing Bernardo's suit for lack of jurisdiction. The Court cited the
judgment of the Court of Appeals in CA-G.R. SP No. 24091, supra,
holding inter alia that "there is still an unsettled dispute as regards the pricing
of the . . . (petroleum) products" in question, as well as this Court's own
holding in G.R. No. 95203-05 (Maceda v. ERB and companion cases, prom.
Dec. 18, 1990) to the effect that it "is not the suitable forum for debate"
regarding the wisdom of policy or the logic behind increases in oil prices, in
relation to the powers of the Energy Regulatory Board (a) "to fix and regulate
the prices of petroleum products," 18 and of (b) supervision and
jurisdiction19 —
. . . over all persons, corporations, firms or entities engaged in the business of
importing, exporting, re-exporting, shipping, transporting, processing or
refining of indigenous and imported crude oil or other petroleum products,
storing, marketing, distributing, or selling, both at wholesale and retail, and
other crude or refined petroleum products, and shall regulate and supervise
the operations and activities of said persons and entities. . . .
Upon these undisputed facts, Bernardo submits for resolution the question,
"which body has the original jurisdiction over the instant case, the Energy,
Regulatory Board or . . . (the) Court a quo."
The situation in this case is similar to that in Mobil Oil Philippines, Inc. v. Court
of Appeals, which this Court decided on December 29, 1989. 20 In said case,
the facts where as follows:
On February 15, 1974 — a Friday — while there was still this oil crisis, plaintiff
(Fernando A. Pedrosa) placed with defendant (Mobil Oil) a pre-paid order for
8,000 liters of premium gasoline and 2,000 liters of regular gasoline paying
therefor a PBTC Cashier's Check in the amount of P4,610.00 . . . on the basis
of the following computations:
8,000 liters MP at P0.85 P 3,510.00
2,000 liters MR at P0.53 1,060.00
Delivery Freight Cargo 40.00
—————
Total P 4,610.00
The above computation is contained in a product order form, Exh. 3, which
was prepared and filled up by defendant's order clerk when plaintiff placed
his order on Feb. 15, 1974, as in fact the handwritings thereon are those of
the said order clerk. It is stated in Exh. 6 that the order was taken at "2:20"
(Exh. 3-A) and "12/15" and the delivery due date is Today. (p. 645)
. . . (I)t appears from the record that there was an increase in the price of
gasoline on February 18, 1974. Plaintiff was charged the cost of the gasoline
under the increased rates, or in the total sum of P7,490.00 including delivery
and freight charges. It was defendant's contention that since the gasoline was
actually delivered on March 5, 1974, the then prevailing increased rates
should be made to apply and not the price prevailing on February 14, 1974
the date when the order was made and paid by plaintiff with a cashier's
check. (p. 655)
Upon these facts, the Court ruled that since plaintiff Pedrosa's "prepaid order
was prepared on the same date by . . . (Mobil Oil's) credit man and after being
thus approved by . . . (Mobil Oil's) credit man, . . . (Pedrosa) paid for the price
therein indicated by tendering a Prudential Bank Cashier's Check #19972.
Because of this, . . . Mobil became duty bound to deliver the gasoline to
private respondent on February 15, 1974 and the price paid for by . . .
(Pedrosa) was that price then prevailing which was the amount indicated in .
. . (Pedrosa's) cashier's check . . . . By actually delivering the gasoline on March
6, 1974, petitioner committed a contractual breach and incurred in delay that
should make it liable for damages." 21 The Court further held that the
"prepaid order form was a perfected contract of sale the moment it was
approved and accepted by Mobil through its proper representative on the
same day and paid for by . . . Pedrosa likewise on the same day . . . . On the
part of Pedrosa it can even be said that the contract was consummated as far
as he was concerned since he executed his part of the contract by his
prepayment of the order." 22
It thus appears to the Court that as in that case, a contract of sale of
petroleum products was here perfected between Caltex and its
"operator/dealer," Bernardo; that in virtue of the payment admittedly made
by Bernardo, Caltex became a "debtor" to him in the sense that it was
obligated to make delivery to Bernardo's of the petroleum products ordered
by him; and that the only issue is the manner by which Caltex shall perform
its commitment in Bernardo's favor, or more precisely, what quantity of
petroleum products it is bound to deliver to Bernardo: that corresponding to
(or at the rate of) the price at the time of the payment effected by Bernardo
or the higher price fixed by the Energy Regulatory Board on December 5,
1990; and that the controversy between them cannot be characterized as a
dispute within the original jurisdiction of the Energy Regulatory Board, which
as already stated, extends to "(a)ll disputes between any operator/dealer and
an oil company regarding dealership agreement except those arising out of
their relationship as debtor and creditor . . . ." It is rather one cognizable by
the Regional Trial Court, as a dispute indeed "arising out of their relationship
as debtor and creditor."
As the facts make clearly apparent, there is no "unsettled dispute as regards
the pricing of the . . . (petroleum) products," as the Regional Trial Court opines
in its challenged Order of August 14, 1991. On the contrary, the parties are in
agreement about the prices of the petroleum products in question which
became effective on December 5, 1990 at 6 o'clock P.M., and those prevailing
prior thereto. Their disagreement is as regards which of the two sets of prices
shall apply to the transactions subject of Bernardo's complaint.
Neither do the parties impugn the validity or the propriety or wisdom of the
specific exercise by the Energy Regulatory Board of its power "to fix and
regulate the prices of petroleum products," or its power of supervision over
the operations and activities, generally, of persons and entities dealing in oil
and petroleum products, as said Regional Trial Court posits in its order of
August 14, 1991.
What the controversy is all about, to repeat, is simply the prices at which the
petroleum products shall be deemed to have been purchased from Caltex by
Bernardo in December, 1990. This is obviously a civil law question, one
determinable according to the provisions of the Civil Code and hence, beyond
the cognizance of the Energy Regulatory Board of the Oil Industry
Commission.

WHEREFORE, the petition is GRANTED, the Order of the Regional Trial Court
rendered on August 14, 1991 in Civil Case No. Q-91-7630 is ANNULLED AND
SET ASIDE, and said Court is DIRECTED to forthwith resume the proceedings
in the case in accordance with the Rules of Court and to dispose of the case
in due course. Costs against respondent.

SO ORDERED.
HALAGUEÑA, ET AL vs PHILIPPINE AIRLINES
G.R. No. 172013 October 2, 2009
PATRICIA HALAGUEÑA, MA. ANGELITA L. PULIDO, MA. TERESITA P.
SANTIAGO, MARIANNE V. KATINDIG, BERNADETTE A. CABALQUINTO,
LORNA B. TUGAS, MARY CHRISTINE A. VILLARETE, CYNTHIA A. STEHMEIER,
ROSE ANNA G. VICTA, NOEMI R. CRESENCIO, and other flight attendants of
PHILIPPINE AIRLINES, Petitioners,
vs.
PHILIPPINE AIRLINES INCORPORATED, Respondent.
DECISION
PERALTA, J.:
Before this Court is a petition for review on certiorari under Rule 45 of the
Rules of Court seeking to annul and set aside the Decision1 and the
Resolution2 of the Court of Appeals (CA) in CA-G.R. SP. No. 86813.
Petitioners were employed as female flight attendants of respondent
Philippine Airlines (PAL) on different dates prior to November 22, 1996. They
are members of the Flight Attendants and Stewards Association of the
Philippines (FASAP), a labor organization certified as the sole and exclusive
certified as the sole and exclusive bargaining representative of the flight
attendants, flight stewards and pursers of respondent.
On July 11, 2001, respondent and FASAP entered into a Collective Bargaining
Agreement3 incorporating the terms and conditions of their agreement for
the years 2000 to 2005, hereinafter referred to as PAL-FASAP CBA.
Section 144, Part A of the PAL-FASAP CBA, provides that:
A. For the Cabin Attendants hired before 22 November 1996:
xxxx
3. Compulsory Retirement
Subject to the grooming standards provisions of this Agreement, compulsory
retirement shall be fifty-five (55) for females and sixty (60) for males. x x x.
In a letter dated July 22, 2003,4 petitioners and several female cabin crews
manifested that the aforementioned CBA provision on compulsory
retirement is discriminatory, and demanded for an equal treatment with their
male counterparts. This demand was reiterated in a letter5 by petitioners'
counsel addressed to respondent demanding the removal of gender
discrimination provisions in the coming re-negotiations of the PAL-FASAP
CBA.
On July 12, 2004, Robert D. Anduiza, President of FASAP submitted their
2004-2005 CBA proposals6 and manifested their willingness to commence the
collective bargaining negotiations between the management and the
association, at the soonest possible time.
On July 29, 2004, petitioners filed a Special Civil Action for Declaratory Relief
with Prayer for the Issuance of Temporary Restraining Order and Writ of
Preliminary Injunction7 with the Regional Trial Court (RTC) of Makati City,
Branch 147, docketed as Civil Case No. 04-886, against respondent for the
invalidity of Section 144, Part A of the PAL-FASAP CBA. The RTC set a hearing
on petitioners' application for a TRO and, thereafter, required the parties to
submit their respective memoranda.
On August 9, 2004, the RTC issued an Order8 upholding its jurisdiction over
the present case. The RTC reasoned that:
In the instant case, the thrust of the Petition is Sec. 144 of the subject CBA
which is allegedly discriminatory as it discriminates against female flight
attendants, in violation of the Constitution, the Labor Code, and the CEDAW.
The allegations in the Petition do not make out a labor dispute arising from
employer-employee relationship as none is shown to exist. This case is not
directed specifically against respondent arising from any act of the latter, nor
does it involve a claim against the respondent. Rather, this case seeks a
declaration of the nullity of the questioned provision of the CBA, which is
within the Court's competence, with the allegations in the Petition
constituting the bases for such relief sought.
The RTC issued a TRO on August 10, 2004,9 enjoining the respondent for
implementing Section 144, Part A of the PAL-FASAP CBA.
The respondent filed an omnibus motion10 seeking reconsideration of the
order overruling its objection to the jurisdiction of the RTC the lifting of the
TRO. It further prayed that the (1) petitioners' application for the issuance of
a writ of preliminary injunction be denied; and (2) the petition be dismissed
or the proceedings in this case be suspended.
On September 27, 2004, the RTC issued an Order11 directing the issuance of
a writ of preliminary injunction enjoining the respondent or any of its agents
and representatives from further implementing Sec. 144, Part A of the PAL-
FASAP CBA pending the resolution of the case.
Aggrieved, respondent, on October 8, 2004, filed a Petition for Certiorari and
Prohibition with Prayer for a Temporary Restraining Order and Writ of
Preliminary Injunction12 with the Court of Appeals (CA) praying that the order
of the RTC, which denied its objection to its jurisdiction, be annuled and set
aside for having been issued without and/or with grave abuse of discretion
amounting to lack of jurisdiction.
The CA rendered a Decision, dated August 31, 2005, granting the
respondent's petition, and ruled that:
WHEREFORE, the respondent court is by us declared to have NO
JURISDICTION OVER THE CASE BELOW and, consequently, all the proceedings,
orders and processes it has so far issued therein are ANNULED and SET ASIDE.
Respondent court is ordered to DISMISS its Civil Case No. 04-886.
SO ORDERED.
Petitioner filed a motion for reconsideration,13 which was denied by the CA in
its Resolution dated March 7, 2006.
Hence, the instant petition assigning the following error:
THE COURT OF APPEALS' CONCLUSION THAT THE SUBJECT MATTER IS A
LABOR DISPUTE OR GRIEVANCE IS CONTRARY TO LAW AND JURISPRUDENCE.
The main issue in this case is whether the RTC has jurisdiction over the
petitioners' action challenging the legality or constitutionality of the
provisions on the compulsory retirement age contained in the CBA between
respondent PAL and FASAP.
Petitioners submit that the RTC has jurisdiction in all civil actions in which the
subject of the litigation is incapable of pecuniary estimation and in all cases
not within the exclusive jurisdiction of any court, tribunal, person or body
exercising judicial or quasi-judicial functions. The RTC has the power to
adjudicate all controversies except those expressly witheld from the plenary
powers of the court. Accordingly, it has the power to decide issues of
constitutionality or legality of the provisions of Section 144, Part A of the PAL-
FASAP CBA. As the issue involved is constitutional in character, the labor
arbiter or the National Labor Relations Commission (NLRC) has no jurisdiction
over the case and, thus, the petitioners pray that judgment be rendered on
the merits declaring Section 144, Part A of the PAL-FASAP CBA null and void.
Respondent, on the other hand, alleges that the labor tribunals have
jurisdiction over the present case, as the controversy partakes of a labor
dispute. The dispute concerns the terms and conditions of petitioners'
employment in PAL, specifically their retirement age. The RTC has no
jurisdiction over the subject matter of petitioners' petition for declaratory
relief because the Voluntary Arbitrator or panel of Voluntary Arbitrators have
original and exclusive jurisdiction to hear and decide all unresolved
grievances arising from the interpretation or implementation of the CBA.
Regular courts have no power to set and fix the terms and conditions of
employment. Finally, respondent alleged that petitioners' prayer before this
Court to resolve their petition for declaratory relief on the merits is
procedurally improper and baseless.
The petition is meritorious.
Jurisdiction of the court is determined on the basis of the material allegations
of the complaint and the character of the relief prayed for irrespective of
whether plaintiff is entitled to such relief.14
In the case at bar, the allegations in the petition for declaratory relief plainly
show that petitioners' cause of action is the annulment of Section 144, Part A
of the PAL-FASAP CBA. The pertinent portion of the petition recites:
CAUSE OF ACTION
24. Petitioners have the constitutional right to fundamental equality with
men under Section 14, Article II, 1987 of the Constitution and, within the
specific context of this case, with the male cabin attendants of Philippine
Airlines.
26. Petitioners have the statutory right to equal work and employment
opportunities with men under Article 3, Presidential Decree No. 442, The
Labor Code and, within the specific context of this case, with the male cabin
attendants of Philippine Airlines.
27. It is unlawful, even criminal, for an employer to discriminate against
women employees with respect to terms and conditions of employment
solely on account of their sex under Article 135 of the Labor Code as amended
by Republic Act No. 6725 or the Act Strengthening Prohibition on
Discrimination Against Women.
28. This discrimination against Petitioners is likewise against the Convention
on the Elimination of All Forms of Discrimination Against Women (hereafter,
"CEDAW"), a multilateral convention that the Philippines ratified in 1981. The
Government and its agents, including our courts, not only must condemn all
forms of discrimination against women, but must also implement measures
towards its elimination.
29. This case is a matter of public interest not only because of Philippine
Airlines' violation of the Constitution and existing laws, but also because it
highlights the fact that twenty-three years after the Philippine Senate ratified
the CEDAW, discrimination against women continues.
31. Section 114, Part A of the PAL-FASAP 2000-20005 CBA on compulsory
retirement from service is invidiously discriminatory against and manifestly
prejudicial to Petitioners because, they are compelled to retire at a lower age
(fifty-five (55) relative to their male counterparts (sixty (60).
33. There is no reasonable, much less lawful, basis for Philippine Airlines to
distinguish, differentiate or classify cabin attendants on the basis of sex and
thereby arbitrarily set a lower compulsory retirement age of 55 for
Petitioners for the sole reason that they are women.
37. For being patently unconstitutional and unlawful, Section 114, Part A of
the PAL-FASAP 2000-2005 CBA must be declared invalid and stricken down to
the extent that it discriminates against petitioner.
38. Accordingly, consistent with the constitutional and statutory guarantee of
equality between men and women, Petitioners should be adjudged and
declared entitled, like their male counterparts, to work until they are sixty
(60) years old.
PRAYER
WHEREFORE, it is most respectfully prayed that the Honorable Court:
c. after trial on the merits:
(I) declare Section 114, Part A of the PAL-FASAP 2000-2005 CBA INVALID,
NULL and VOID to the extent that it discriminates against Petitioners; x x x x
From the petitioners' allegations and relief prayed for in its petition, it is clear
that the issue raised is whether Section 144, Part A of the PAL-FASAP CBA is
unlawful and unconstitutional. Here, the petitioners' primary relief in Civil
Case No. 04-886 is the annulment of Section 144, Part A of the PAL-FASAP
CBA, which allegedly discriminates against them for being female flight
attendants. The subject of litigation is incapable of pecuniary estimation,
exclusively cognizable by the RTC, pursuant to Section 19 (1) of Batas
Pambansa Blg. 129, as amended.15 Being an ordinary civil action, the same is
beyond the jurisdiction of labor tribunals.
The said issue cannot be resolved solely by applying the Labor Code. Rather,
it requires the application of the Constitution, labor statutes, law on contracts
and the Convention on the Elimination of All Forms of Discrimination Against
Women,16 and the power to apply and interpret the constitution and CEDAW
is within the jurisdiction of trial courts, a court of general jurisdiction.
In Georg Grotjahn GMBH & Co. v. Isnani,17 this Court held that not every
dispute between an employer and employee involves matters that only labor
arbiters and the NLRC can resolve in the exercise of their adjudicatory or
quasi-judicial powers. The jurisdiction of labor arbiters and the NLRC under
Article 217 of the Labor Code is limited to disputes arising from an employer-
employee relationship which can only be resolved by reference to the Labor
Code, other labor statutes, or their collective bargaining agreement.
Not every controversy or money claim by an employee against the employer
or vice-versa is within the exclusive jurisdiction of the labor arbiter. Actions
between employees and employer where the employer-employee
relationship is merely incidental and the cause of action precedes from a
different source of obligation is within the exclusive jurisdiction of the regular
court.18 Here, the employer-employee relationship between the parties is
merely incidental and the cause of action ultimately arose from different
sources of obligation, i.e., the Constitution and CEDAW.
Thus, where the principal relief sought is to be resolved not by reference to
the Labor Code or other labor relations statute or a collective bargaining
agreement but by the general civil law, the jurisdiction over the dispute
belongs to the regular courts of justice and not to the labor arbiter and the
NLRC. In such situations, resolution of the dispute requires expertise, not in
labor management relations nor in wage structures and other terms and
conditions of employment, but rather in the application of the general civil
law. Clearly, such claims fall outside the area of competence or expertise
ordinarily ascribed to labor arbiters and the NLRC and the rationale for
granting jurisdiction over such claims to these agencies disappears.19
If We divest the regular courts of jurisdiction over the case, then which
tribunal or forum shall determine the constitutionality or legality of the
assailed CBA provision?
This Court holds that the grievance machinery and voluntary arbitrators do
not have the power to determine and settle the issues at hand. They have no
jurisdiction and competence to decide constitutional issues relative to the
questioned compulsory retirement age. Their exercise of jurisdiction is futile,
as it is like vesting power to someone who cannot wield it.
In Gonzales v. Climax Mining Ltd.,20 this Court affirmed the jurisdiction of
courts over questions on constitutionality of contracts, as the same involves
the exercise of judicial power. The Court said:
Whether the case involves void or voidable contracts is still a judicial
question. It may, in some instances, involve questions of fact especially with
regard to the determination of the circumstances of the execution of the
contracts. But the resolution of the validity or voidness of the contracts
remains a legal or judicial question as it requires the exercise of judicial
function. It requires the ascertainment of what laws are applicable to the
dispute, the interpretation and application of those laws, and the rendering
of a judgment based thereon. Clearly, the dispute is not a mining conflict. It
is essentially judicial. The complaint was not merely for the determination of
rights under the mining contracts since the very validity of those contracts is
put in issue.
In Saura v. Saura, Jr.,21 this Court emphasized the primacy of the regular
court's judicial power enshrined in the Constitution that is true that the trend
is towards vesting administrative bodies like the SEC with the power to
adjudicate matters coming under their particular specialization, to insure a
more knowledgeable solution of the problems submitted to them. This would
also relieve the regular courts of a substantial number of cases that would
otherwise swell their already clogged dockets. But as expedient as this policy
may be, it should not deprive the courts of justice of their power to decide
ordinary cases in accordance with the general laws that do not require any
particular expertise or training to interpret and apply. Otherwise, the
creeping take-over by the administrative agencies of the judicial power
vested in the courts would render the judiciary virtually impotent in the
discharge of the duties assigned to it by the Constitution.
To be sure, in Rivera v. Espiritu,22 after Philippine Airlines (PAL) and PAL
Employees Association (PALEA) entered into an agreement, which includes
the provision to suspend the PAL-PALEA CBA for 10 years, several employees
questioned its validity via a petition for certiorari directly to the Supreme
Court. They said that the suspension was unconstitutional and contrary to
public policy. Petitioners submit that the suspension was inordinately long,
way beyond the maximum statutory life of 5 years for a CBA provided for in
Article 253-A of the Labor Code. By agreeing to a 10-year suspension, PALEA,
in effect, abdicated the workers' constitutional right to bargain for another
CBA at the mandated time.
In that case, this Court denied the petition for certiorari, ruling that there is
available to petitioners a plain, speedy, and adequate remedy in the ordinary
course of law. The Court said that while the petition was denominated as one
for certiorari and prohibition, its object was actually the nullification of the
PAL-PALEA agreement. As such, petitioners' proper remedy is an ordinary civil
action for annulment of contract, an action which properly falls under the
jurisdiction of the regional trial courts.
The change in the terms and conditions of employment, should Section 144
of the CBA be held invalid, is but a necessary and unavoidable consequence
of the principal relief sought, i.e., nullification of the alleged discriminatory
provision in the CBA. Thus, it does not necessarily follow that a resolution of
controversy that would bring about a change in the terms and conditions of
employment is a labor dispute, cognizable by labor tribunals. It is unfair to
preclude petitioners from invoking the trial court's jurisdiction merely
because it may eventually result into a change of the terms and conditions of
employment. Along that line, the trial court is not asked to set and fix the
terms and conditions of employment, but is called upon to determine
whether CBA is consistent with the laws.
Although the CBA provides for a procedure for the adjustment of grievances,
such referral to the grievance machinery and thereafter to voluntary
arbitration would be inappropriate to the petitioners, because the union and
the management have unanimously agreed to the terms of the CBA and their
interest is unified.
In Pantranco North Express, Inc., v. NLRC,23 this Court held that:
x x x Hence, only disputes involving the union and the company shall be
referred to the grievance machinery or voluntary arbitrators.
In the instant case, both the union and the company are united or have come
to an agreement regarding the dismissal of private respondents. No grievance
between them exists which could be brought to a grievance machinery. The
problem or dispute in the present case is between the union and the company
on the one hand and some union and non-union members who were
dismissed, on the other hand. The dispute has to be settled before an
impartial body. The grievance machinery with members designated by the
union and the company cannot be expected to be impartial against the
dismissed employees. Due process demands that the dismissed workers’
grievances be ventilated before an impartial body. x x x .
Applying the same rationale to the case at bar, it cannot be said that the
"dispute" is between the union and petitioner company because both have
previously agreed upon the provision on "compulsory retirement" as
embodied in the CBA. Also, it was only private respondent on his own who
questioned the compulsory retirement. x x x.
In the same vein, the dispute in the case at bar is not between FASAP and
respondent PAL, who have both previously agreed upon the provision on the
compulsory retirement of female flight attendants as embodied in the CBA.
The dispute is between respondent PAL and several female flight attendants
who questioned the provision on compulsory retirement of female flight
attendants. Thus, applying the principle in the aforementioned case cited,
referral to the grievance machinery and voluntary arbitration would not serve
the interest of the petitioners.
Besides, a referral of the case to the grievance machinery and to the voluntary
arbitrator under the CBA would be futile because respondent already
implemented Section 114, Part A of PAL-FASAP CBA when several of its
female flight attendants reached the compulsory retirement age of 55.
Further, FASAP, in a letter dated July 12, 2004, addressed to PAL, submitted
its association's bargaining proposal for the remaining period of 2004-2005
of the PAL-FASAP CBA, which includes the renegotiation of the subject
Section 144. However, FASAP's attempt to change the questioned provision
was shallow and superficial, to say the least, because it exerted no further
efforts to pursue its proposal. When petitioners in their individual capacities
questioned the legality of the compulsory retirement in the CBA before the
trial court, there was no showing that FASAP, as their representative,
endeavored to adjust, settle or negotiate with PAL for the removal of the
difference in compulsory age retirement between its female and male flight
attendants, particularly those employed before November 22, 1996. Without
FASAP's active participation on behalf of its female flight attendants, the
utilization of the grievance machinery or voluntary arbitration would be
pointless.
The trial court in this case is not asked to interpret Section 144, Part A of the
PAL-FASAP CBA. Interpretation, as defined in Black's Law Dictionary, is the art
of or process of discovering and ascertaining the meaning of a statute, will,
contract, or other written document.24 The provision regarding the
compulsory retirement of flight attendants is not ambiguous and does not
require interpretation. Neither is there any question regarding the
implementation of the subject CBA provision, because the manner of
implementing the same is clear in itself. The only controversy lies in its
intrinsic validity.
Although it is a rule that a contract freely entered between the parties should
be respected, since a contract is the law between the parties, said rule is not
absolute.
In Pakistan International Airlines Corporation v. Ople,25 this Court held that: Revised Rules of Court. This mode of appeal is generally limited only to
questions of law which must be distinctly set forth in the petition. The
The principle of party autonomy in contracts is not, however, an absolute
Supreme Court is not a trier of facts.29
principle. The rule in Article 1306, of our Civil Code is that the contracting
parties may establish such stipulations as they may deem convenient, The question as to whether said Section 114, Part A of the PAL-FASAP CBA is
"provided they are not contrary to law, morals, good customs, public order discriminatory or not is a question of fact. This would require the
or public policy." Thus, counter-balancing the principle of autonomy of presentation and reception of evidence by the parties in order for the trial
contracting parties is the equally general rule that provisions of applicable court to ascertain the facts of the case and whether said provision violates
law, especially provisions relating to matters affected with public policy, are the Constitution, statutes and treaties. A full-blown trial is necessary, which
deemed written into the contract. Put a little differently, the governing jurisdiction to hear the same is properly lodged with the the RTC. Therefore,
principle is that parties may not contract away applicable provisions of law a remand of this case to the RTC for the proper determination of the merits
especially peremptory provisions dealing with matters heavily impressed of the petition for declaratory relief is just and proper.1avvphi1
with public interest. The law relating to labor and employment is clearly such
WHEREFORE, the petition is PARTLY GRANTED. The Decision and Resolution
an area and parties are not at liberty to insulate themselves and their
of the Court of Appeals, dated August 31, 2005 and March 7, 2006,
relationships from the impact of labor laws and regulations by simply
respectively, in CA-G.R. SP. No. 86813 are REVERSED and SET ASIDE. The
contracting with each other.
Regional Trial Court of Makati City, Branch 147 is DIRECTED to continue the
Moreover, the relations between capital and labor are not merely proceedings in Civil Case No. 04-886 with deliberate dispatch.
contractual. They are so impressed with public interest that labor contracts
SO ORDERED.
must yield to the common good.x x x 26 The supremacy of the law over
contracts is explained by the fact that labor contracts are not ordinary
contracts; these are imbued with public interest and therefore are subject to
the police power of the state.27 It should not be taken to mean that
retirement provisions agreed upon in the CBA are absolutely beyond the
ambit of judicial review and nullification. A CBA, as a labor contract, is not
merely contractual in nature but impressed with public interest. If the
retirement provisions in the CBA run contrary to law, public morals, or public
policy, such provisions may very well be voided.28

Finally, the issue in the petition for certiorari brought before the CA by the
respondent was the alleged exercise of grave abuse of discretion of the RTC
in taking cognizance of the case for declaratory relief. When the CA annuled
and set aside the RTC's order, petitioners sought relief before this Court
through the instant petition for review under Rule 45. A perusal of the
petition before Us, petitioners pray for the declaration of the alleged
discriminatory provision in the CBA against its female flight attendants.

This Court is not persuaded. The rule is settled that pure questions of fact
may not be the proper subject of an appeal by certiorari under Rule 45 of the
PICO vs SALCEDO
G.R. No. 152006 October 2, 2009
MONTANO PICO and ROSITA PICO, Petitioners,
vs.
CATALINA ADALIM-SALCEDO and URBANO SALCEDO, Respondents.
DECISION
BRION, J.:
In their Petition for Review on Certiorari,1 petitioners Montano Pico and
Rosita Pico (collectively Picos) assail the Court of Appeals (CA) decision2 in CA-
G.R. CV No. 50278, affirming the decision of the Regional Trial Court (RTC),
Branch 27, Tandag, Surigao del Sur. The RTC decision, in turn, declared
respondent spouses Catalina Salcedo (Catalina) and Urbano Salcedo
(collectively Salcedos) as the owners of the entire Lot No. 1188 Cad. 392-D,
covered by Original Certificate of Title (OCT) No. 5930, and ordered the Picos
to vacate the portion of Lot No. 1188 that they are occupying.
BACKGROUND FACTS
The present petition originated from an action for recovery of possession and
quieting of title filed by the Salcedos against the Picos with the RTC of Tandag,
Surigao del Sur on December 3, 1986.
In the complaint, the Salcedos claimed that Catalina bought coconut lands
situated in Barangay Bioto, Municipality of Tandag, Surigao del Sur, with a
total area of 17,153 square meters, from the Vallescas family. After Catalina
acquired these lands, Virginia Pico, the daughter of Pionono Vallescas, one of
the former owners, and her husband Jose Pico asked if they could remain as
tenants on a 1,215-square meter portion of the property (first lot), with a
promise to plant coconuts in lieu of paying rent. Catalina agreed to this
arrangement, and Jose and Virginia Pico, together with their son Montano
Pico (Montano), stayed on the first lot.
The Salcedos narrated that while the Picos were occupying the first lot, the
Bureau of Lands conducted a survey on the property. Since the Salcedos were
in Bohol at the time of the survey, Montano succeeded in making it appear
that his father Jose Pico was the owner of the first lot so that the survey
reflected Jose Pico’s name as owner. As a result, the first lot was denominated
as Lot No. 1192 Cad-392-D in the name of Jose Pico and only 15,961 square
meters of the original 17,153 square meters was registered under OCT No.
5930 in Catalina’s name.
In their second cause of action, the Salcedos alleged that the Picos also laid
claim to a 1,247-square meter portion of the land covered by OCT No. 5930
(second lot), which the Picos maintained they bought from a certain Vicente
Diaz. Thus, the Salcedos prayed that the RTC render a decision declaring them
the rightful owners of both properties.
In their Answer, the Picos denied that Jose Pico was a tenant of Catalina,
insisting that Jose had always owned the first lot. While admitting that
Catalina bought lands from Pionono Vallescas, Virginia Pico’s father, the Picos
alleged that the purchased property did not include the first lot since Jose and
Virginia Pico were already in possession of this property and, upon the deaths
of Jose and Virginia Pico, Montano became the legal owner of the property
as their compulsory heir.
The Picos also denied Catalina’s claim that she was absent at the time the
property was surveyed, asserting that the cadastral survey conducted on the
property was done with the knowledge of all the adjoining owners, including
the Salcedos.
As to the second lot, the Picos insisted that they legally bought the land from
Vicente Diaz, the lawful owner, on March 7, 1977; Vicente Diaz, in turn,
purchased the second lot from Teodorico Plaza on September 4, 1954. The
Picos alleged that they are currently in possession of the second lot to further
support their claim of ownership.
On October 14, 1991, the heirs of Catalina filed an Amended Complaint,
informing the RTC that Catalina had died and her husband and children, as
her only compulsory heirs, were taking her place in the case.
After both parties presented their evidence, the RTC issued a decision3 on
April 3, 1995, with a dispositive portion that reads:
WHEREFORE, judgment is rendered:
1. Declaring the [Salcedos] as the owners pro indiviso of the entire lot no.
1188 Cad. 392-D covered by the Original Certificate of Title No. 5930 in the
name of Catalina Adalim and, as such, entitled to recover the possession of
any portion thereof occupied or possessed by the [Picos] or anyone acting for
and in behalf;
2. Ordering the [Picos] to vacate and turn over peacefully to the [Salcedos]
the possession of their occupied portion of Lot No. 1188 Cad. 392-D [second
lot];
3. Declaring the [Picos] and their co-heirs, if any, as the owners of pro diviso of
Lot No. 1192 Cad. 392-D [first lot] covered by Original Certificate of Title No.
P-24679 in the name of the Heirs of Jose Pico;
4. The respective claims for damages of the plaintiffs and the defendants are
dismissed.
NO COSTS.
SO ORDERED.
Both parties appealed this decision with the CA.
On January 25, 2000, the CA rendered its own decision, dismissing both
appeals for lack of merit.4 The CA found that both parties were estopped from
questioning the regularity of the survey. As the CA pointed out, "only after a
long lapse of time after each of the parties was issued their respective
certificates of titles covering the disputed lots did they contest and claim
ownership against each other."5
The Picos moved for a reconsideration of the decision, which the CA
subsequently denied in its Resolution dated January 22, 2002.
Hence, this petition.
THE PETITION
As only the Picos assail the CA decision, the sole question we are asked to
resolve is -- who owns the portion of land registered in Catalina’s name, but
is currently in the Picos’ possession?
In their petition, the Picos insist that they were able to prove that they legally
acquired the second lot by preponderance of evidence given that they
presented the following: (a) the Deed of Sale which proved that Vicente Diaz
had sold the second lot to the Picos; (b) Vicente Diaz’s "Declaracion Jurada,"
where Vicente Diaz swore to the fact that he had lawfully acquired the second
lot from Teodorico Plaza sometime in 1954; (c) Teodorico Plaza’s attestation
that he bought the second lot in 1932 when he was still single; and (d) the
testimony of Pociano Ajos, who testified that he knew about the sale of the
second lot between Vicente Diaz and the Picos.
While Torrens titles are imprescriptible, the Picos argue that where the
registration was procured by fraud, the lawful owner has the right to pursue
all legal and equitable remedies against the person who committed the fraud,
pursuant to Section 55 of Act No. 496 (The Land Registration Act).6 Since the
Salcedos fraudulently included the second lot in the registration of Catalina’s
Certificate of Title, the Picos conclude that they can still question the
registration.
On the other hand, the Salcedos claim that the Picos merely filed the present
petition for delay, arguing that the petition presents no new matter for the
Court’s consideration. The Salcedos also point out that the issues raised by
the Picos are factual questions, which the Court cannot review on appeal by
certiorari.
THE COURT’S RULING
We deny the petition for lack of merit.
The petition raises mere questions of fact.
In a petition for review on certiorari, we are limited to reviewing errors of law
absent any showing that the findings of fact of the appellate court are not
supported by the records.7
A question of law exists when the doubt or controversy concerns the correct
application of law or jurisprudence to a certain set of facts; or when the issue
does not call for an examination of the probative value of the evidence
presented, the truth or falsehood of facts being admitted. A question of fact
exists when the doubt or difference arises as to the truth or falsehood of facts
or when the query invites calibration of the whole evidence considering
mainly the credibility of the witnesses, the existence and relevancy of specific
surrounding circumstances, as well as their relation to each other and to the
whole, and the probability of the situation.8
In asking us to declare them as the lawful owners of the second lot, the Picos
are in effect praying that we overturn the factual findings made by the RTC,
which findings have already been affirmed by the CA. In other words, we are
asked to substitute our own judgment for those of the trial court and the
appellate court by conducting another evaluation of the evidence.
We have consistently declared that factual findings of the trial court, when
adopted and confirmed by the CA, are binding and conclusive on this Court
and will generally not be reviewed on appeal9 as this Court is not a trier of
facts.10 It is not its function to analyze or weigh evidence all over again,
subject to certain exceptions,11 none of which is present in this case. As we
said in Zaragoza vs. Nobleza:12
Whether the body of proofs presented by a party, weighed and analyzed in
relation to contrary evidence submitted by an adverse party, may be said to
be strong, clear and convincing, whether certain documents presented by
one side should be accorded full faith and credit in the face of protests as to
their spurious character by the other side, whether inconsistencies in the
body of proofs of a party are of such gravity as to justify refusing to give said
proofs weight – all these are issues of fact which may not be passed upon in
a petition for review on certiorari under Rule 45 of the Rules of Court.
Property covered by Torrens title cannot be acquired by possession
Even if we were to review the facts of the case, we would still find no reason
to grant the petition.
As found by the RTC, the survey of the lots was conducted from December
16, 1965 to June 16, 1967. Thereafter, OCT No. 5930, covering 15,961 square
meters of coconut lands, was issued in Catalina’s name and subsequently
transcribed in the Registration Book for the Province of Surigao del Sur on
January 13, 1969. In contrast, the Picos purchased the second lot from
Vicente Diaz on March 7, 1977, or more than 8 years after the land had
already been registered in Catalina’s name.
A title, once registered, cannot be defeated, even by adverse, open and
notorious possession.13 The title, once registered, is notice to the world. All
persons must take notice. No one can plead ignorance of the registration.14
Hence, while the Picos’ may have been in open, notorious, and continuous
possession of the second lot from the time it was purchased in 1977 until the
present time, such possession no matter how long could not ripen into
ownership as the second lot is part of registered land.
Even the Picos admit the indefeasible nature of Torrens titles; however, they
argue that since the second lot was fraudulently included in the survey and
registration of Catalina’s land, they may still question the title, pursuant to
Section 55 of the Land Registration Act.
We note that the Picos have not shown any evidence to support their claim
of fraudulent registration. Also telling is the Picos’ inaction to correct this
alleged fraudulent registration. As we observed earlier, OCT No. 5930 was
issued in Catalina’s name and transcribed in the Registration Book for the
Province of Surigao del Sur on January 13, 1969. Since then, the Picos have
not filed any action to correct the alleged fraudulent inclusion of their
property in the land registered in Catalina’s name. In fact, the present case
arose from the complaint filed by the Salcedos, not the Picos, to quiet their
title over the second lot.
We therefore see no reason to overturn the factual findings of the RTC, as
affirmed by the CA.
WHEREFORE, we DENY the petition and AFFIRM the decision of the Court of
Appeals in CA-G.R. CV No. 50278 dated January 25, 2000.
Costs against the petitioners.
SO ORDERED.
ENGR. APOLINARIO DUEÑAS vs ALICE GUCE himself to furnish all the necessary materials and labor for the completion of
the project. Petitioner likewise undertook to finish all interior portions of the
house on or before March 31, 1998, or more than two weeks before Sally’s
G.R. No. 165679 October 5, 2009 wedding.
ENGR. APOLINARIO DUEÑAS, Petitioner, On April 18, 1998, however, the house remained unfinished. The wedding
vs. ceremony was thus held at the Club Victorina and respondent’s relatives were
ALICE GUCE-AFRICA, Respondent. forced to stay in a hotel. Her mother lived with her children, transferring from
DECISION one place to another.

DEL CASTILLO, J.: On July 27, 1998, respondent filed a Complaint6 for breach of contract and
damages against petitioner before the Regional Trial Court of Pasig City. She
Time and again, we have held that in a petition for review on certiorari filed alleged, among others, that petitioner started the project without securing
under Rule 45 of the Rules of Court, we cannot review or pass upon factual the necessary permit from the City Engineer’s Office of Lipa City. Respondent
matters, save under exceptional circumstances, none of which obtains in the likewise alleged that, all in all, she gave petitioner ₱550,000.00 (which is
present case. Petitioner endeavors in vain to convince us that the trial court ₱50,000.00 more than the contract price). However, and despite knowledge
and the Court of Appeals erred in finding him negligent in the construction of that the construction of the house was intended for the forthcoming
respondent’s house and holding him liable for breach of contract. marriage of respondent’s sister, petitioner unjustly and fraudulently
abandoned the project leaving it substantially unfinished and incomplete.
This is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court
Several demands were made, but petitioner obstinately refused to make
seeking to reverse and set aside the April 29, 2004 Decision2 of the Court
good his contractual obligations. Worse, petitioner’s workmanship on the
Appeals in CA-G.R. CV No. 70757, which affirmed the December 21, 2000
incomplete residential house was substandard.
Decision3 of the Regional Trial Court, Branch 157, Pasig City, in an action for
breach of contract with damages4 filed by respondent against petitioner. Respondent prayed for the return of the ₱50,000.00 overpayment. She also
prayed for an award of ₱100,000.00 for the purpose of repairing what had
THE FACTS
been poorly constructed and at least ₱200,000.00 to complete the project.
For respondent and her family, April 18, 1998 was supposed to be a special
In his Answer with Counterclaim,7 petitioner asserted that it was respondent
occasion and a time for family reunion. It was the wedding date of her sister
who undertook to secure the necessary government permits.8 With regard to
Sally Guce, and respondent’s other siblings from the United States of
the alleged overpayment, petitioner claimed that the amount of ₱50,000.00
America, as well as her mother, were expected to return to the country. The
was in payment for the additional works which respondent requested while
wedding ceremony was set to be held at the family’s ancestral house at San
the construction was still on going. In fact, the estimated cost for the
Vicente, Banay-banay, Lipa City, where respondent’s relatives planned to stay
additional works amounted to ₱133,960.00, over and above the ₱500,000.00
while in the Philippines.
contract price.
Respondent found the occasion an opportune time to renovate their
Petitioner likewise alleged that the delay in the construction of the house was
ancestral house. Thus, in January 1998 she entered into a Construction
due to circumstances beyond his control, namely: heavy rains, observance of
Contract5 with petitioner for the demolition of the ancestral house and the
Holy Week, and celebration of barangay fiesta. Ultimately, he was not able
construction of a new four-bedroom residential house. The parties agreed
that respondent would pay ₱500,000.00 to the petitioner, who obliged
to complete the project because on May 27, 1998, respondent went to his
house and told him to stop the work.
He maintained that he cannot be held liable for the amounts claimed by the
respondent in her complaint considering that he had faithfully complied with
the
terms and conditions of the Construction Contract.
On February 19, 1999, pre-trial conference was conducted. Thereafter, trial
ensued.
Respondent testified on the material points alleged in her complaint. She also
presented the testimony of her brother Romeo Guce, who declared on the
witness stand that petitioner confided to him that he had to stop the
construction because he could no longer pay his workers. He also testified
that petitioner asked for additional amount of about ₱20,000.00 to finish the
house. He relayed this to the respondent who refused to release any
additional amount because of petitioner’s unsatisfactory and substandard
work. But later on, respondent acceded and gave petitioner ₱20,000.00.
To establish the status of the project and determine the amount necessary
for the repair and completion of the house, respondent presented Romeo
Dela Cruz, a licensed realtor and a graduate of an engineering course at the
Technological Institute of the Philippines. Dela Cruz testified that he
conducted an ocular inspection on the construction site in November 1998
and found that only about 60% of the project had been accomplished. Some
parts of the project, according to the witness, were even poorly done. He
likewise testified that in order to repair the poorly constructed portion of the
house, respondent would need to spend about ₱100,000.00 and another
₱200,000.00 to complete it.
Petitioner also took the witness stand and testified on matters relative to the
defenses he raised in his answer.
On December 21, 2000, the RTC rendered a Decision9 in favor of the
respondent and against the petitioner. The RTC gave more credence to
respondent’s version of the facts, finding that-
Clearly, Dueñas [herein petitioner] failed to tender performance in
accordance with the terms and conditions of the construction contract he
executed with Africa [herein respondent]. He failed to construct a four-
bedroom residential house suitable and ready for occupancy on a stipulated
date. Dueñas was fully aware that Africa needed the new house for a long
scheduled family event precisely a completion date was included and
specified in the transaction. Despite knowledge and receipt of payment from
Africa, Dueñas failed to deliver what was incumbent upon him under the
undertaking. He unjustifiably incurred delay in the construction of the new
building and wrongfully deprived Africa and her family of the use and
enjoyment of the subject property. Bad weather, observance of the Holy
Week and barangay fiesta are insufficient excuses. As a building contractor
Dueñas should have provided for such contingencies. Mere inconvenience or
unexpected impediments will not relieve a party of his obligation. Granting
that he was not yet fully paid for the additional work by Africa, provisions or
arrangements should have been made to ensure completion of the project
within the agreed period.
Moreover, Dueñas negligently abandoned the unfinished structure shortly
after a confrontation with Africa and family. Rain water sipped[sic] into the
house because Dueñas failed to secure the roofing and wall flushing. The
house remained [un]habitable because fixtures and devises were yet to be
installed. Dueñas failed to exercise the required diligence as a contractor and
is guilty of negligence and delay. He must be made responsible for the
foreseen effect of the exposure of the new structure to the elements.
Significantly, the poor construction performance manifested in the structure
after Dueñas in bad faith abandoned it. Indeed, the newly constructed edifice
needs significant repairs if only to make it habitable for its occupants.10
Consequently, the fallo of the RTC decision reads:
WHEREFORE, judgment is hereby rendered in favor of plaintiff Alice G. Africa
and against defendant Apolinario Dueñas who is hereby directed to pay
plaintiff:
- ₱100,000.00 for the necessary repair of the structure;
- 200,000.00 for the completion of the construction;
- 50,000.00 as and for attorney’s fees;
- and costs of suit.
Plaintiff’s claim for moral, nominal and exemplary damages are hereby
denied for lack of sufficient basis.
SO ORDERED.11
Both parties were unsatisfied. They thus brought the matter to the Court of
Appeals assailing the Decision of the RTC. The appellate court, however,
found no cogent reason to depart from the trial court’s conclusion. Thus, on
April 29, 2004, it rendered the herein assailed Decision12 affirming with
modification the RTC’s ruling, viz:
WHEREFORE, in view of the foregoing, the Decision of the Regional Trial Court
of Pasig City, Branch 157, dated 21 December 2000, is hereby AFFIRMED
WITH MODIFICATION that the award of attorney’s fees is hereby DELETED.
SO ORDERED. 13
ISSUES
Feeling aggrieved but still undeterred, petitioner interposes the present
recourse anchored on the following grounds:
For purposes of clarity, we shall tackle simultaneously the second and third
arguments raised by the petitioner.
Instant petition not available to determine whether petitioner violated the
contract or abandoned the construction of the house
Petitioner contends that he neither abandoned the project nor violated the
contract. He maintains that continuous rains caused the delay in the
construction of the house and that he was not able to finish the project
because respondent ordered him to stop the work. In fact, there was no
reason for him to stop the project because he still had available workers and
materials at that time, as well as collectibles from the respondent. Petitioner
likewise contends that the Court of Appeals erred in upholding the trial
court’s finding that he was guilty of negligence.
The contentions lack merit.
Petitioner endeavors to convince us to determine, yet again, the weight,
credence, and probative value of the evidence presented. This cannot be
done in this petition for review on certiorari under Rule 45 of the Rules of
Court where only questions of law may be raised by the parties and passed
upon by us. In Fong v. Velayo,17 we defined a question of law as distinguished
from a question of fact, viz:

I. A question of law arises when there is doubt as to what the law is on a certain
state of facts, while there is a question of fact when the doubt arises as to the
THE COSTS OF ACTUAL DAMAGES AWARDED ARE BASED ON MERE truth or falsity of the alleged facts. For a question to be one of law, the same
SPECULATIONS AND CONJECTURES.14 must not involve an examination of the probative value of the evidence
II. presented by the litigants or any of them. The resolution of the issue must
rest solely on what the law provides on the given set of circumstances. Once
THE RULINGS THAT DUEÑAS ABANDONED THE WORK AND INCURRED DELAY it is clear that the issue invites a review of the evidence presented, the
ARE CONTRARY TO THE EVIDENCE.15 questioned posed is one of fact. Thus, the test of whether a question is one
of law or of fact is not the appellation given to such question by the party
III.
raising the same; rather, it is whether the appellate court can determine the
THE DAMAGES CAUSED BY RAIN WATER WERE NOT DUE TO APOLINARIO issue raised without reviewing or evaluating the evidence, in which case, it is
DUEÑAS’ FAULT OR NEGLIGENCE.16 a question of law; otherwise, it is a question of fact.

OUR RULING It has already been held that the determination of the existence of a breach
of contract is a factual matter not usually reviewable in a petition filed under
Rule 45.18 We will not review, much less reverse, the factual findings of the
Court of Appeals especially where, as in this case, such findings coincide with
those of the trial court, since we are not a trier of facts.19 The established rule
is that the factual findings of the Court of Appeals affirming those of the RTC
are conclusive and binding on us. We are not wont to review them, save
under exceptional circumstances as: (1) when the inference made is
manifestly mistaken, absurd or impossible; (2) when there is grave abuse of
discretion; (3) when the findings are grounded entirely on speculations,
surmises or conjectures; (4) when the judgment of the Court of Appeals is
based on misapprehension of facts; (5) when the Court of Appeals, in making
its findings, went beyond the issues of the case and the same is contrary to
the admissions of both appellant and appellee; (6) when the findings of fact
are conclusions without citation of specific evidence on which they are based;
(7) when the Court of Appeals manifestly overlooked certain relevant facts
not disputed by the parties and which, if properly considered, would justify a
different conclusion; and (8) when the findings of fact of the Court of Appeals
are premised on the absence of evidence and are contradicted by the
evidence on record.20
Except with respect to the first ground advanced by the petitioner which will
be discussed later, none of the above exceptions obtain in this case. Hence,
we find no cogent reason to disturb the findings of the RTC and affirmed by
the Court of Appeals that petitioner was negligent in the construction of
respondent’s house and thus liable for breach of contract.
Respondent not entitled to actual damages for want of evidentiary proof
Petitioner further argues that the appellate court erred in affirming the RTC’s
award of actual damages for want of evidentiary foundation. He maintains
that actual damages must be proved with reasonable degree of certainty. In
the case at bench, petitioner argues that the trial and the appellate courts
awarded the amounts of ₱100,000.00 and ₱200,000.00 as actual damages
based merely on the testimonies of respondent and her witness.
We agree. Article 2199 of the Civil Code provides that "one is entitled to an
adequate compensation only for such pecuniary loss suffered by him as he
has duly proved." In Ong v. Court of Appeals,21 we held that "(a)ctual damages
are such compensation or damages for an injury that will put the injured party
in the position in which he had been before he was injured. They pertain to
such injuries or losses that are actually sustained and susceptible of
measurement." To be recoverable, actual damages must not only be capable
of proof, but must actually be proved with reasonable degree of certainty.
We cannot simply rely on speculation, conjecture or guesswork in
determining the amount of damages. Thus, it was held that before actual
damages can be awarded, there must be competent proof of the actual
amount of loss, and credence can be given only to claims which are duly
supported by receipts.22
Here, as correctly pointed out by petitioner, respondent did not present
documentary proof to support the claimed necessary expenses for the repair
and completion of the house. In awarding the amounts of ₱100,000.00 and
₱200,000.00, the RTC and the Court of Appeals merely relied on the
testimonies of the respondent and her witness. Thus:
As to the award of ₱100,000.00 as cost of repair and ₱200,000.00 as the
amount necessary to complete the house, the Court finds the same to be in
the nature of actual damages. It is settled that actual damages must be
supported by best evidence available x x x. In the case at bar, the Court finds
that the testimony of the plaintiff-appellant in this regard is supported by the
testimony of Romeo dela Cruz, a realtor, who inspected the structure after it
remained unfinished. Said testimonies are sufficient to establish the claim. x
xx
Respondent entitled to temperate damages in lieu of actual damages
Nonetheless, in the absence of competent proof on the amount of actual
damages suffered, a party is entitled to temperate damages. Articles 2216,
2224 and 2225 of the Civil Code provide:
Art. 2216. No proof of pecuniary loss is necessary in order that moral,
nominal, temperate, liquidated or exemplary damages may be adjudicated.
The assessment of such damages, except liquidated ones, is left to the
discretion of the court, according to the circumstances of each case.
Art. 2224. Temperate or moderate damages, which are more than nominal
but less than compensatory damages, may be recovered when the court finds
that some pecuniary loss has been suffered but its amount can not, from the
nature of the case, be proved with certainty.
Art. 2225. Temperate damages must be reasonable under the circumstances.
Temperate or moderate damages may be recovered when some pecuniary
loss has been suffered but its amount cannot, from the nature of the case, be
proved with certainty.23 The amount thereof is usually left to the discretion
of the courts but the same should be reasonable, bearing in mind that
temperate damages should be more than nominal but less than
compensatory. 24

There is no doubt that respondent sustained damages due to the breach

committed by the petitioner. The transfer of the venue of the wedding, the
repair of the substandard work, and the completion of the house necessarily
entailed expenses. However, as earlier discussed, respondent failed to
present competent proof of the exact amount of such pecuniary loss. To our
mind, and in view of the circumstances obtaining in this case, an award of
temperate damages equivalent to 20% of the original contract price of
₱500,000.00, or ₱100,000.00 (which, incidentally, is equivalent to 1/3 of the
total amount claimed as actual damages), is just and reasonable.

WHEREFORE, the instant petition is PARTIALLY GRANTED. The Decision of

the Court of Appeals dated April 29, 2004 in CA-G.R. CV No. 70757
is AFFIRMED with modification that the award of actual damages is deleted
and, in lieu thereof, petitioner is ordered to pay respondent temperate
damages in the amount of ₱100,000.00.

SO ORDERED.
EQUITABLE PCI BANK, INC vs APURILLO
G.R. No. 168746 November 5, 2009
EQUITABLE PCI BANK, INC., Petitioner,
vs.
HON. SALVADOR Y. APURILLO in his capacity as Presiding Judge, Regional
Trial Court of Tacloban City, Branch 8, and YKS REALTY DEVELOPMENT,
INC., Respondents.
DECISION
PERALTA, J.:
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 June 27, 2005, of the Court
of Appeals (CA) in CA-G.R. SP No. 85484, dismissing the petition.
The factual and procedural antecedents are as follows:
YKS Realty Development, Inc. was a client of Philippine Commercial
International Bank (PCIB) and Equitable Banking Corporation (EBC), the
predecessors of herein petitioner Equitable PCI Bank, Inc. In their commercial
transactions, PCIB and EBC granted YKS a series of loans and credit facilities
secured by real estate mortgages.
The EBC Account
Through its transactions with EBC, YKS was granted a series of credit lines by
the former. The entire line was secured by a Real Estate Mortgage on two
properties covered by Transfer Certificates of Title (TCT) Nos. T-22461 and T-
22460 owned by YKS situated in Tacloban City. The credit line was initially in
the amount of ₱4,000,000.00,2but as a result of several amendments to the
real estate mortgage, the initial loan consideration of ₱4,000,000.00
ballooned to ₱53,000,000.00.3 YKS also alleged that EBC made its officers sign
a blank surety agreement making it appear that the said corporate officers
made themselves liable to the extent of ₱85,000,000.00.4
By June 29, 1998, through Promissory Note (PN) Nos. BD-98-084,5 BD-98-
086,6 BD-98-0937 and BD-98-097,8EBC partially released the total amount of
₱10,400,000.00 from the said credit line of ₱53,000,000.00.9
On March 12, 2001, EBC demanded YKS to pay its outstanding obligations,
but the latter failed to heed the demand.
On May 23, 2001, EBC filed before the Office of the Clerk of Court, of the
Regional Trial Court (RTC) of Tacloban City, an extrajudicial petition for the
sale of the mortgaged properties in order to satisfy the mortgage
indebtedness in the amount of ₱10,400,000.00, exclusive of interests,
penalties, and other charges,10 docketed as EJF No. 1399.
On May 31, 2001, Sheriff Leonardo G. Aguilar, issued a Notice of Extra-Judicial
Sale,11 setting the auction sale of the subject properties in the morning of
June 29, 2001.
The PCIB Account
On August 13, 1997, YKS obtained a dollar denominated loan from PCIB in the
amount of US$2,500,000.00, evidenced by PN No. 095/97-344.12 However,
while the loan was booked as a dollar denomination loan, it was actually
converted to peso and was released to YKS in peso at the prevailing currency
exchange rate of ₱26.00 to a dollar, more or less, or in the amount of
₱65,000,000.00, more or less.13
The credit line/loan accommodation with PCIB was secured by real estate
mortgages over the properties of YKS in Tacloban City covered by TCT Nos. T-
22457, T-22458, T-22459, T-22266, T-23066, T-23145, T-26055, T-26056, T-
22697, T-42170, and T-16659.14 In one of the promissory notes executed by
YKS, PN No. 366-00756-98,15 dated December 24, 1998, it appeared that the
total obligation of YKS was ₱140,967,120.36. It also stated therein that the
purpose of the loan was for "working capital" and that it would mature six
years after date or on December 17, 2004.
On the same day, December 24, 1998, PCIB credited the amount of
₱103,240,277.90 to YKS’ account as proceeds of the loan under "PN No.
756/98."16 At the same time, PCIB debited the amount of $2,633,680.55 from
YKS’ account as payment of the loan principal and interest for the converted
dollar denominated loan under PN No. 095/97-344.17
On January 23, 2001, PCIB sent YKS a letter18 demanding the latter to pay its
total obligation, which the former pegged at ₱162,295,233.54, exclusive of
interest, penalty, and other charges. PCIB also warned YKS that its failure to
heed the demand would result in the filing of appropriate actions against it,
including the foreclosure of the mortgaged properties.
In a letter19 received by PCIB’s counsel on May 8, 2001, YKS protested the
principal amount of the loan and reiterated its previous request for a
breakdown of the amount, but PCIB ignored the request.
On May 23, 2001, petitioner filed a Petition for Sale20 before the Office of the
Executive Judge, RTC, Tacloban City, praying that the mortgaged properties
be sold thru extrajudicial foreclosure proceedings to the highest bidder, in
the manner and form prescribed by law.
On May 25, 2001, Sheriff Luis G. Copuaco issued a Sheriff’s Notice of
Extrajudicial Foreclosure Sale21 setting the public auction of the mortgaged
properties in the morning of June 29, 2001 at the RTC, Branch 7, Bulwagan ng
Katarungan, Tacloban City.
Thus, on June 19, 2001, as a result of the filing of the two petitions for sale,
YKS filed before the RTC a Complaint22for Declaratory Relief, Annulment or
Declaration of Nullity of Foreclosure, Application for Foreclosure, Notice of
Foreclosure Sale, Documents, Interest, Etc., Release of Mortgages, Injunction,
and Damages, later docketed as Civil Case No. 2001-06-93.
YKS alleged therein, among other things, that the two petitions for sale are
defective, since they do not specify the correct amount of the claims. The
petitions also include amounts that were not covered by the real estate
mortgages, among which are the quantified penalties which were not
mentioned in the mortgages. YKS added that the promissory notes should not
be allowed to be the bases for the enforcement of payment through
extrajudicial foreclosure since their validity are sill in question. YKS pointed
out that the EBC credit line that was extended to it was for the amount of
₱53,000,000.00, however, in its petition for sale, the availments for the said
credit line was only ₱10,400,000.00. Accordingly, the entire property cannot
be foreclosed to satisfy the indebtedness of only ₱10,400,000.00.
YKS also insisted that PN No. 366-00756-98, which was the basis of PCIB’s
petition for sale is null and void and lacks consideration, or at the very least,
is erroneously bloated. In addition, the said promissory note has not yet
matured at the time the petition for sale was filed, considering that it would
mature only on December 17, 2004; thus, the debt is not yet due and
demandable. YKS claimed that its corporate officers were induced to sign
blank surety agreements which were later on filled in by petitioner to reflect
erroneous loan amounts. Moreover, the amounts appearing in the
promissory notes are different from the one claimed by petitioner in its
petition for sale.
To buttress its application for temporary restraining order and writ of
preliminary injunction, YKS posited that the continuance of the questioned
acts of petitioner despite its claim that there were no valid obligations and no
valid basis for extrajudicial foreclosure proceedings is a clear and wanton
violation of its rights and would effectively render any favorable judgment of
the court ineffectual if the same were not granted pending determination of
the main action.
Ultimately, YKS prayed, among other things, that judgment be rendered
declaring the two petitions for sale and notices of extrajudicial sale void;
declaring the promissory notes that were used as basis for the petition void
and without valid consideration; ordering the release of the subject
properties from their respective real estate mortgages; declaring that there
is no legal default with respect to PN No. 366-00756-98 because the said
promissory note was to mature only on December 17, 2004; declaring the
bank’s act of making the properties liable beyond the individual assigned loan
values void; directing the bank to specify the extent of its claims against each
of the properties using the assigned value; ordering the bank to make an
accounting, summary and computation of its actual releases and the
payments made by it for the purpose of determining the true and correct
principal amount and the total of whatever obligations it may have with the
bank; and that a temporary restraining order and subsequently a preliminary
injunction be issued enjoining EBC and PCIB from committing or proceeding
pendente lite with the posting of notices of sale, conduct foreclosure sales,
execute certificate of sales and its subsequent registration with the register
of deeds, execution of deeds of final sale, and disturbing the status quo ante
litem.
On June 25, 2001, the RTC heard YKS’ application for temporary restraining
order. After hearing the respective arguments of the parties and weighing the
pros and cons in issuing the same, the RTC issued a temporary restraining
order on June 27, 2001.23 In the meantime, the hearing for the application of
the writ of preliminary injunction was set for July 13, 2001. On the said
hearing date, the parties jointly manifested that they will just be submitting
position papers together with the other necessary documents to abbreviate
the proceedings.
On December 3, 2001, after the parties have submitted their respective
pleadings, the RTC issued a Resolution24granting YKS’ application for a writ of
preliminary injunction, the dispositive portion of which reads:
WHEREFORE, premises considered, plaintiff[’s] prayer for the issuance of a
Writ of Preliminary Injunction is hereby given Due Course and Granted and
the defendants, their agents, representatives or any persons or entities acting
in their behalf are hereby directed to maintain the status quo ante litem and
to cease and desist from posting or publishing any notice of sale with respect
to properties subject of this case, conducting any foreclosure sale, executing
any Certificate of Sale, registering the same with the Register of Deeds,
executing any Deed of Final Sale and/or other consolidation document,
paying any capital gains, documentary and other transfer taxes or any other
act that shall disturb the status quo ante litem until further order of this
Court. This Writ of Preliminary Injunction shall become effective and
operative upon posting by the plaintiff of the necessary bond in the sum of
₱3,000,000.00.
SO ORDERED.25
In granting the writ, the RTC ratiocinated that it was not equitable and just
for petitioner to foreclose and sell the two properties that were mortgaged
to EBC for its credit line availments of only ₱10,400,000.00 out of the
₱53,000,000.00. As for the PCIB loan, the RTC opined that the same was not
yet due and demandable since it was stipulated on Promissory Note No. 366-
00756-98 that the obligation will be satisfied via a one time payment, single
payment, on December 17, 2004.
Petitioner filed a motion for reconsideration, but it was denied in the
Resolution26 dated May 20, 2004. In denying the motion, the RTC noted that
there are certain ambiguities in the PCIB promissory note that need to be
resolved. In addition, the discrepancies between the promissory note, the
credit memo, and the demand letter are too substantial for the RTC to ignore.
Aggrieved, petitioner sought recourse before the CA via a petition for
certiorari under Rule 65 of the Rules of Court, docketed as CA-G.R. SP No.
85484,27 wherein it prayed for the nullification of the resolutions of the RTC
granting the writ of preliminary injunction and denying its motion for
reconsideration.
Petitioner claimed that the RTC committed grave abuse of discretion
amounting to lack or excess of jurisdiction when it granted the writ of
preliminary injunction despite the absence of a clear and convincing right on
the part of YKS and despite the absence of any showing of grave and
irreparable injury.28
On June 27, 2005, the CA rendered a Decision29 denying the petition for lack
of merit and ordered the RTC to proceed with the trial of the main case on its
merits. The decretal portion of the Decision reads:
WHEREFORE, premises considered, the petition for certiorari is DENIED for
lack of merit. The court a quo is ordered to proceed with the trial on the
merits of the main case. In the meantime, the preliminary injunction issued
shall remain in force until the merits of the main case are resolved.
SO ORDERED.30
Hence, the petition assigning the following errors:
I.
The honorable court of appeals committed a serious and reversible error
when it upheld the finding of the trial court that private respondent is entitled
to the writ of preliminary injunction.31
II.
the honorable court of appeals erred in holding that private respondent has
a right to be protected by the injuNctive writ by reason of the dispute in the
amount of the principal obligation.32
Petitioner argues that since YKS is a delinquent debtor, it had all the right to
foreclose the mortgaged properties. Petitioner contends that it had a choice
between two remedies, i.e., foreclose the mortgage or to file an ordinary suit
for collection. Since it opted to foreclose the mortgage, it was improper on
the part of the RTC to enjoin such legitimate exercise of its option in order to
satisfy the obligations owing to it. In light of the undisputed fact that YKS
defaulted in paying its obligation, the bank was justified in foreclosing the
property and such valid act cannot be enjoined by the RTC.
Petitioner insists that YKS’ right to enjoin the foreclosure of the mortgages is
not clear and convincing, as it will not be deprived of its absolute ownership
over the mortgaged property since it may exercise its right of redemption
within one year after its sale. Petitioner adds that YKS failed to show that it
would suffer grave and irreparable injury if the foreclosure sale was not
enjoined. Moreover, petitioner maintains that YKS has no right to be
protected by the injunctive writ based on the discrepancies in the amount of
the principal obligation.
On its part, YKS contends that there was no grave abuse of discretion on the
part of the CA in issuing the injunctive writ. The CA correctly affirmed the RTC
because it saw that there was a need to maintain the status quo ante while
the case is being tried and heard to prevent one party from unilaterally
adjudicating the case in its favor without trial on the merits and to prevent
the case and whatever decision thereon to be rendered moot and academic.
YKS also maintains that the sampling of evidence adduced during the hearing
and determination by the trial court of the propriety of issuing a writ of
preliminary injunction would show that the issuance thereof was proper and
was not attended by grave abuse of discretion.
The petition is bereft of merit.
The only issue that needs to be determined in the case at bar is whether or
not the RTC acted with grave abuse of discretion in issuing the writ of
preliminary injunction enjoining the foreclosure and public auction of YKS’
property during the proceedings and pending determination of the main
cause of action for annulment of foreclosure in Civil Case No. 2001-06-93.
Section 3, Rule 58 of the Rules of Court provides that:
SEC. 3. Grounds for issuance of preliminary injunctions. — A preliminary
injunction may be granted when it is established:
(a) That the applicant is entitled to the relief demanded, and the whole or
part of such relief consists in restraining the commission or continuance of
the act or acts complained of, or in requiring the performance of an act or
acts, either for a limited period or perpetually;
(b) That the commission, continuance or non-performance of the act or acts
complained of during the litigation would probably work injustice to the
applicant; or
(c) That a party, court, agency or a person is doing, threatening, or is
attempting to do, or is procuring or suffering to be done, some act or acts
probably in violation of the rights of the applicant respecting the subject of
the action or proceeding, and tending to render the judgment ineffectual.
As such, a writ of preliminary injunction may be issued only upon clear
showing of an actual existing right to be protected during the pendency of
the principal action. The twin requirements of a valid injunction are the
existence of a right and its actual or threatened violations. Thus, to be entitled
to an injunctive writ, the right to be protected and the violation against that
right must be shown.33 Moreover, the rule is well entrenched that the
issuance of the writ of preliminary injunction as an ancillary or preventive
remedy to secure the right of a party in a pending case rests upon the sound
discretion of the trial court.34 However, if the court commits grave abuse of
its discretion in the issuance of the writ of preliminary injunction, such that
the act amounts to excess or lack of jurisdiction, the same may be nullified
through a writ of certiorari or prohibition.35 Such grave abuse of discretion in
the issuance of writs of preliminary injunction implies a capricious and
whimsical exercise of judgment that is equivalent to lack of jurisdiction or
whether the power is exercised in an arbitrary or despotic manner by reason
of passion, prejudice or personal aversion amounting to an evasion of positive
duty or to a virtual refusal to perform the duty enjoined, or to act at all in
contemplation of law. For the extraordinary writ of certiorari to lie, there
must be a capricious, arbitrary and whimsical exercise of power.36
A Petition for Certiorari, under Rule 65 of the Rules of Court, is intended for
the correction of errors of jurisdiction only or grave abuse of discretion
amounting to lack or excess of jurisdiction. Its principal office is only to keep
the inferior court within the parameters of its jurisdiction or to prevent it
from committing such a grave abuse of discretion amounting to lack or excess
of jurisdiction.37 It may issue only when the following requirements are
alleged in the petition and established: (1) the writ is directed against a
tribunal, a board or any officer exercising judicial or quasi-judicial functions;
(2) such tribunal, board or officer has acted without or in excess of
jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction; and (3) there is no appeal or any plain, speedy and adequate
remedy in the ordinary course of law.38 Excess of jurisdiction as distinguished
from absence of jurisdiction means that an act, though within the general
power of a tribunal, board or officer is not authorized, and invalid with
respect to the particular proceeding, because the conditions which alone
authorize the exercise of the general power in respect of it are wanting.
Without jurisdiction means lack or want of legal power, right or authority to
hear and determine a cause or causes, considered either in general or with
reference to a particular matter. It means lack of power to exercise
authority.39
In the case at bar, this Court agrees with the conclusion of the CA that the
RTC committed no grave abuse of discretion in granting YKS’ plea for
injunctive relief.
In the exercise of its discretion, the trial court found all the requisites for the
issuance of an injunctive writ to be attendant. First, it was well established
that YKS had a clear and unmistakable right over the mortgaged properties.
Evidently, as owner of the subject properties that stand to be foreclosed, YKS
is entitled to the possession and protection thereof when the threat to its
foreclosure was apparent even before the respective rights of the parties are
determined and the issues threshed out in the main action before the RTC
are resolved.1avvphi1
Second, there clearly exists an urgent and paramount necessity to prevent
serious injury on the part of YKS. As aptly concluded by the RTC in the
Resolution denying petitioner’s motion for reconsideration:
With regards to the first, it will be recalled that in 1997, plaintiff was granted
a credit line of Php53,000,000.00. This line was secured by a Real Estate
Mortgage on two properties owned by the plaintiff located in Tacloban City
covered by TCT Nos. 22460 and 22461. Out of this credit line, plaintiff availed
of Php10,400,000.00. The question that came to the mind of the Court is that,
it is not righteous, just and equitable for the defendant to foreclose and sell
the two properties for the availment of Php10,400,000.00 out of this line for
Php53,000,000.00. Defendant contends otherwise and cited two Articles of
the Civil Code, to wit:
Article 2089 of the Civil Code is hereunder quoted:
xxxx
Article 2126 of the Civil Code is likewise hereunder quoted:
xxxx
With regards to Article 2089, the case at bench does not fall within the ambit
of said Article. The same covers a situation wherein the mortgage debt or
credit has passed on to several heirs and not all the heirs/debtors have paid
the entire mortgage debt or vice-versa. The same is not true in the case at
bench. Neither the debt [n]or credit has been passed on to anyone. To go
along with the stand of the defendant would, therefore, undoubtedly and
inevitably result in unjust enrichment, which the Court can’t allow.
As regards Article 2126, this Court noted that there has been no transfer of
possession of the mortgaged property. The mortgaged properties are, in fact,
still in the possession of the plaintiff and this Article cannot [be] construed on
such a manner as to cause what the law does not allow.
As regards the second issue/point, this Court took a long hard look at the
subject Promissory Note and what is in there, typewritten into the space
indicating maturity is 12.17.2004. This Court likewise noted in the Disclosure
Statement under the heading Mode of Payment, it is stated that "Single
Payment on: 12.17.2004.["] It is, therefore, clear and there can be no mistake
about the maturity date as well as the mode of payment.
xxxx
This Court also noted the variance in the amounts being demanded by the
defendant from the plaintiff. The Promissory Note speaks of the sum of
Php140,967,120.36. Its Credit Memo speaks of Php103,240,277.90. That is a
discrepancy of Php37,726,842.36. The Demand Letter speaks of
Php162,295,233.54. It shall mean a discrepancy of Php59,054,955.64. These writ. After a careful scrutiny of the attendant circumstances, We find no
discrepancies are too substantial for this Court to ignore. reason for reversing the assailed decision of the CA and questioned
resolutions of the RTC granting injunctive relief to YKS.
It is, therefore, clear that only after a trial on the merits can the true amount
be determined and the foreclosure proceedings will have to wait until the WHEREFORE, premises considered, the petition is DENIED. The Decision of
presentation of the evidence on the merits.40 the Court of Appeals in CA-G.R. SP No. 85484, dated June 27, 2005, is
AFFIRMED.
To be sure, to allow the foreclosure proceedings to continue even before
determination of the issues that were brought to the RTC would place YKS in SO ORDERED.
an oppressively unjust situation where it would be tied up in litigation for the
recovery of its properties should the RTC later conclude that YKS is entitled
to the reliefs prayed for in the main action.

A writ of preliminary injunction is generally based solely on initial and

incomplete evidence. The evidence submitted during the hearing on an
application for a writ of preliminary injunction is not conclusive or complete
for only a "sampling" is needed to give the trial court an idea of the
justification for the preliminary injunction pending the decision of the case
on the merits. As such, the findings of fact and opinion of a court when issuing
the writ of preliminary injunction are interlocutory in nature and made even
before the trial on the merits is commenced or terminated. There are vital
facts that have yet to be presented during the trial which may not be obtained
or presented during the hearing on the application for the injunctive writ. The
trial court needs to conduct substantial proceedings in order to put the main
controversy to rest.41

The sole object of a preliminary injunction is to maintain the status quo until
the merits can be heard. A preliminary injunction is an order granted at any
stage of an action prior to judgment of final order, requiring a party, court,
agency, or person to refrain from a particular act or acts. It is a preservative
remedy to ensure the protection of a party’s substantive rights or interests
pending the final judgment on the principal action. A plea for an injunctive
writ lies upon the existence of a claimed emergency or extraordinary
situation which should be avoided for, otherwise, the outcome of a litigation
would be useless as far as the party applying for the writ is concerned.42

This Court finds no cogent reason to deviate from the factual findings and
conclusion of law of the trial court and the appellate court. Evidently, there
exists in the case at bar a pressing necessity for the issuance of an injunctive
NAZARENO, ET AL vs CITY OF DUMAGUETE
G.R. No. 181559 October 2, 2009
LEAH M. NAZARENO, CARLO M. CUAL, ROGELIO B. CLAMONTE, FLORECITA
M. LLOSA, ROGELIO S. VILLARUBIA, RICARDO M. GONZALES, JR., ROSSEL
MARIE G. GUTIERREZ, NICANOR F. VILLAROSA, JR., MARIE SUE F. CUAL,
MIRAMICHI MAJELLA B. MARIOT, ALMA F. RAMIREZ, ANTOLIN D. ZAMAR,
JR., MARIO S. ALILING, TEODULO SALVORO, JR., PHILIP JANSON
ALTAMARINO, ANTONIETTA PADURA, ADOLFO R. CORNELIA, IAN RYAN
PATULA, WILLIAM TANOY, VICTOR ARBAS, JEANITH CUAL, BRAULIO
SAYSON, DAWN M. VILLAROSA, AGUSTIN A. RENDOQUE, ENRIQUETA
TUMONGHA, LIONEL P. BANOGON, ROSALITO VERGANTINOS, MARIO T.
CUAL, JR., ELAINE MAY TUMONGHA, NORMAN F. VILLAROSA, RICARDO C.
PATULA, RACHEL BANAGUA, RODOLFO A. CALUGCUGAN, PERGENTINO
CUAL, BERNARD J. OZOA, ROGER JOHN AROMIN, CHERYL E. NOCETE,
MARIVIC SANCHEZ, CRISPIN DURAN, REBECO LINGCONG, ANNA LEE
ESTRABELA, MELCHOR B. MAQUILING, RAUL MOLAS, OSCAR KINIKITO,
DARWIN B. CONEJOS, ROMEL CUAL, ROQUETA AMOR, DISODADO LAJATO,
PAUL PINO, LITO PINERO, RODULFO ZOSA, JR. and JORGE
ARBOLADO, Petitioners,
vs.
CITY OF DUMAGUETE, represented by CITY MAYOR AGUSTIN PERDICES,
DOMINADOR DUMALAG, JR., ERLINDA TUMONGHA, JOSEPHINE MAE
FLORES AND ARACELI CAMPOS, Respondents.
DECISION
DEL CASTILLO, J.:
The integrity and reliability of our civil service is, perhaps, never more sorely
tested than in the impassioned demagoguery of elections. Amidst the
struggle of personalities, ideologies, and platforms, the vigor and resilience
of a professional civil service can only be preserved where our laws ensure
that partisanship plays no part in the appointing process. Consequently, we
affirm the validity of a regulation issued by the Civil Service Commission (CSC
or the Commission) intended to ensure that appointments and promotions in
the civil service are made solely on the basis of qualifications, instead of
political loyalties or patronage.
This Petition for Review on Certiorari filed under Rule 45 of the Rules of Court
seeks to reverse the Decision1 of the Court of Appeals dated August 28, 2007
and its Resolution2 dated January 11, 2008 in CA-G.R. CEB-SP No. 00665. The
case stemmed from CSC Field Office’s invalidation of petitioners’
appointments as employees of the City of Dumaguete, which was affirmed by
the CSC Regional Office, by the Commission en banc and by the Court of
Appeals.
Legal and Factual Backgrounds
Accreditation of Dumaguete City by the Civil Service Commission
On October 25, 1999, pursuant to the Commission’s Accreditation Program,
the CSC issued Resolution No. 992411,3 which granted the City Government
of Dumaguete the authority to take final action on all its appointments,
subject to, inter alia, the following conditions:
1. That the exercise of said authority shall be subject to Civil Service Law, rules
and regulations and within the limits and restrictions of the implementing
guidelines of the CSC Accreditation Program as amended (MC No. 27, s.
1994);
xxxx
5. That appointments issued under this authority shall be subject to monthly
monitoring by the [Civil Service Field Office] CSFO concerned;
xxxx
9. That appointments found in the course of monthly monitoring to have
been issued and acted upon in violation of pertinent rules, standards, and
regulations shall immediately be invalidated by the Civil Service Regional
Office (CSRO), upon recommendation by the CSFO.
Appointments made by outgoing Mayor Remollo
Then Dumaguete City Mayor Felipe Antonio B. Remollo sought re-election in
the May 14, 2001 elections, but lost to respondent Mayor Agustin R. Perdices.
Thereafter, on June 5, 7, and 11, 2001, outgoing Mayor Remollo promoted 15
city hall employees, and regularized another 74 city hall employees, including
the herein 52 petitioners.
On July 2, 2001, Mayor Perdices publicly announced at the flag raising
ceremony at the Dumaguete City Hall grounds that he would not honor the
appointments made by former Mayor Remollo. On the same day, he
instructed the City Administrator, respondent Dominador Dumalag, Jr., to
direct respondent City Assistant Treasurer Erlinda C. Tumongha (now
deceased), to refrain from making any cash disbursements for payments of
petitioners' salary differentials based on their new positions.
The Petition for Mandamus before the Regional Trial Court of Dumaguete City
Thus, on August 1, 2001, petitioners filed a Petition for Mandamus with
Injunction and Damages with Prayer for a Temporary Restraining Order
against the City of Dumaguete, represented by respondent city mayor
Perdices and city officers Dumalag, Tumongha, Josephine Mae Flores, and
Araceli Campos. The petition was docketed as Civil Case No. 13013, and
raffled to Branch 41 of the Regional Trial Court of Dumaguete City. Petitioners
sought the issuance of a writ of preliminary injunction to enjoin respondents
from taking any action or issuing any orders nullifying their appointments.
In a Decision4 dated March 27, 2007, the Regional Trial Court dismissed the
petition; petitioners’ Motion for Reconsideration was also denied in an
Order5 dated April 26, 2007. The issues involved in Civil Case No. 13013 have
twice been elevated to and eventually resolved by the Court in G.R. Nos.
1777956 and 168484.7
Revocation of Appointments by the Civil Service Commission Field Office
Relative to this main case, on August 1, 2001, the CSC Field Office in
Dumaguete City, through Director II Fabio R. Abucejo, revoked and
invalidated the appointments of the petitioners (the August 1, 2001 Order)
based of the following findings:
1. There were a total of 15 promotional appointments and 74 original
appointments issued as reflected in the submitted [Report of Personnel
Actions] ROPA for the month of June 2001.
2. There was only one (1) en banc meeting of the City Personnel Selection
Board (PSB) held on 5 June 2001 to consider the number of appointments
thus issued and there was no other call for a PSB meeting certified to by the
City [Human Resource Management Officer] HRMO.
3. There were no minutes available to show the deliberations of the PSB of
the 89 appointments listed in the ROPA as certified by the City HRMO.
4. There were no PSB statements certifying that there was actual screening
and evaluation done on all candidates for each position.
5. The appointing officer of the 89 appointments was an outgoing local official
who lost during the 14 May 2001 elections for City Mayor of Dumaguete City.
6. The 89 appointments were all issued after the elections and when the new
city mayor was about to assume office.8
Director Abucejo invalidated the appointments as the same were done in
violation of CSC Resolution No. 010988 dated June 4, 2001, the pertinent
portions of which provide:
WHEREAS, the May 14, 2001 national and local elections have just concluded
and the Commission anticipates controversies that would arise involving
appointments issued by outgoing local chief executives immediately before
or after the elections;
WHEREAS, the Commission observed the tendency of some outgoing local
chief executives to issue appointments even after the elections, especially
when their successors have already been proclaimed.
WHEREAS, the practice of some outgoing local chief executives causes
animosities between the outgoing and incoming officials and the people who
are immediately affected and are made to suffer the consequences thereof
are the ordinary civil servants, and eventually, to a large extent, their
constituents themselves;
WHEREAS, one of the reasons behind the prohibition in issuing appointments
or hiring new employees during the prohibited period as provided for in CSC
Memorandum Circular No. 7, series of 2001, is to prevent the occurrence of
the foregoing, among others;9
WHEREAS, local elective officials whose terms of office are about to expire, c) There is a need to fill up the vacancy immediately in order not to prejudice
are deemed as "caretaker" administrators who are duty bound to prepare for public service and/or endanger public safety;
the smooth and orderly transfer of power and authority to the incoming local
d) That the appointment is not one of those mass appointments issued after
chief executives;
the elections.
WHEREAS, under Section 15, Article VII of the Constitution, the President or
4. The term "mass appointments" refers to those issued in bulk or in large
Acting President is prohibited from making appointments two (2) months
number after the elections by an outgoing local chief executive and there is
immediately before the next presidential elections and up to the end of his
no apparent need for their immediate issuance.
term, except temporary appointments to executive positions when continued
vacancies therein will prejudice public service or endanger public safety; On September 4, 2001, petitioners filed a Motion for Reconsideration of the
August 1, 2001 Order before the CSC Region VII Office in Cebu. The motion
WHEREAS, while there is no equivalent provision in the Local Government
was, however, denied on the ground that it should have been filed before the
Code of 1991 (Republic Act 7160) or in the Civil Service Law (Book V of
office of Director Abucejo in Dumaguete City. Thereafter, on October 31,
Executive Order No. 292) of the abovestated prohibition, the rationale
2001, petitioners asked the CSC Region VII Office in Cebu to treat their
against the prohibition on the issuance of "midnight appointments" by the
previous Motion for Reconsideration as their appeal.1avvphi1
President is applicable to appointments extended by outgoing local chief
executives immediately before and/or after the elections; On February 14, 2002, the CSC Region VII Office affirmed the August 1, 2001
Order. Subsequently, an Appeal to the Commission en banc was filed through
xxxx
registered mail by 52 of the original 89 appointees, the petitioners herein,
NOW THEREFORE, the Commission, pursuant to its constitutional mandate as namely:
the control personnel agency of the government, hereby issues and adopts
the following guidelines: Name Former Position New Position

xxxx

3. All appointments, whether original, transfer, reemployment, 1. Leah M. Nazareno Legal Researcher Asst. Dept. Head
reappointment, promotion or demotion, except in cases of renewal and
reinstatement, regardless of status, which are issued AFTER the elections, 2. Carlo M. Cual Legislative Staff Legislative
regardless of their dates of effectivity and/or date of receipt by the Officer I Officer III
Commission, including its Regional or Field Offices, of said appointments or
the Report of Personnel Actions (ROPA) as the case may be, shall be 3. Rogelio B. Clamonte Public Services Supply Officer IV
disapproved unless the following requisites concur relative to their issuance:
4. Florecita Llosa Supply Officer I Records Officer II
a) The appointment has gone through the regular screening by the Personnel
Selection Board (PSB) before the prohibited period on the issuance of
5. Rogelio S. Villarubia Agriculturist II Agriculturist III
appointments as shown by the PSB report or minutes of its meeting;

b) That the appointee is qualified; 6. Rossel Marie G. Gutierrez Casual/Plantilla Supervising

Environmental
 Management 22. Dawn Villarosa Casual/Plantilla Clerk I
Specialist
23. Agustin Rendoque Casual/Plantilla Utility Worker I
7. Nicanor F. Villarosa, Jr. Casual/Plantilla Dentist II 5-Jun-01
24. Enriqueta Tumongha Casual/Plantilla Utility Worker II
8. Marie Sue Cual Casual/Plantilla Social Welfare Officer 7-Jun-01
I 25. Lionel Banogon Casual/Plantilla Clerk II

9. Miramichi Majella B. Mariot Casual/Plantilla Records Officer II 7-Jun-01

26. Rosalito Vergantinos Casual/Plantilla Pest Control Wo
II
10. Alma F. Ramirez Casual/Plantilla Clerk IV 7-Jun-01
27. Mario Cual, Jr. Casual/Plantilla Utility Foreman
11. Antolin D. Zamar, Jr. Casual/Plantilla Metro Aide II 11-Jun-01
28. Elaine Tumongha Casual/Plantilla Registration Offic
12. Mario S. Aliling Casual/Plantilla Driver II 5-Jun-01
29. Norman Villarosa Casual/Plantilla Utility Worker I
13. Teodulo Salvoro, Jr. Casual/Plantilla Metro Aide II 5-Jun-01
30. Ricardo C. Patula Casual/Plantilla Revenue Collec
14. Philip Janson Altamarino Casual/Plantilla Clerk I 5-Jun-01 Clerk I

15. Antonieta Padura Casual/Plantilla Metro Aide II 11-Jun-01

31. Rachel Banagua Casual/Plantilla Utility Worker I

16. Adolfo Cornelia Casual/Plantilla Metro Aide II 11-Jun-01

32. Rodolfo Calugcugan Job Order Driver I

17. Ian Ryan Patula Casual/Plantilla Metro Aide II 7-Jun-01

33. Pergentino Cual Job Order Metro Aide II

18. William Tanoy Casual/Plantilla Metro Aide II 5-Jun-01

34. Bernard Ozoa Job Order Utility Worker I

19. Victor Arbas Casual/Plantilla Public Services 7-Jun-01

35. Roger J. Aromin Job Order Utility Worker I
Foreman
36. Cheryl Nocete Job Order Utility Worker I
20. Jeanith Cual Casual/Plantilla Utility Worker II 5-Jun-01
37. Marivic Sanchez Job Order Utility Worker I
21. Braulio Sayson Casual/Plantilla Mechanical Plant 7-Jun-01
Supervisor 38. Crispin Duran Job Order Metro Aide II
 39. Rebeco Lingcong Job Order Metro Aide II the ground that these were mass appointments made by an outgoing local
5-Jun-01
chief executive.10 The Commission explained:
40. Anna Lee Estrabela Job Order Cash Clerk III 5-Jun-01behind the prohibition in CSC Resolution No. 01-0988 is not
The rationale
hard to comprehend. The prohibition is designed to discourage losing
41. Melchor Maquiling Job Order Engineer I 7-Jun-01
candidates from extending appointments to their protégés or from giving
their constituents "promised" positions (CSC Resolution No. 97-0317 dated
42. Raul Molas Job Order Construction and 7-Jun-01
January 17, 1997, Re: Roldan B. Casinillo). Moreover, the same is intended to
Maintenance prevent the outgoing local chief executive from hurriedly issuing
Foreman appointments which would subvert the policies of the incoming leadership.
Thus, any means that would directly or indirectly circumvent the purposes for
43. Oscar Kinikito Job Order Electrician II 7-Jun-01
which said Resolution was promulgated should not be allowed, particularly
when the appointments were issued by the appointing authority who lost in
44. Darwin Conejos Job Order Engineering Aidesaid election.
7-Jun-01
Petitioners filed a Motion for Reconsideration which was denied by the
45. Romel Cual Job Order Metro Aide II 11-Jun-01
Commission on April 11, 2005, through CSC Resolution No. 050473.

46. Roqueta Amor Job Order Dental Aide Petitioners then filed a petition for review before the Court of Appeals, which
5-Jun-01
was docketed as CA-G.R. CEB-SP No. 00665. On August 28, 2007, the Court of
47. Diosdado Lajato Job Order Appeals5-Jun-01
Pest Control Worker denied the appeal and affirmed CSC Resolution No. 040932 dated
II August 23, 2004 and CSC Resolution No. 050473 dated April 11, 2005,
ratiocinating that:
48. Paul Pino Job Order Utility Worker II The spirit
5-Jun-01
behind CSC Resolution No. 010988 is evident from its preamble. It
was issued to thwart the nefarious practice by outgoing local chief executives
49. Lito Piñero Job Order Metro Aide II 11-Jun-01
in making appointments before, during, and/or after the regular local
elections for ulterior partisan motives. Said practice being analogous to
50. Rodulfo Zosa, Jr. Job Order Metro Aide II 11-Jun-01
"midnight appointments" by the President or Acting President, the CSC then
promulgated Resolution No. 010988, to suppress the mischief and evils
51. Jorge Arbolado Job Order Traffic Aide I 5-Jun-01
attributed to "mass appointments" made by local chief executives.

Petitioners’ Motion for Reconsideration was denied by the Court of Appeals

52. Ricardo M. Gonzales, Jr. OIC-General Asst. Dept. Head I 5-Jun-01
in a Resolution dated January 11, 2008.
Services Officer
The Parties’ Arguments
Ruling of the CSC en banc and the Court of Appeals
Before us, petitioners maintain that CSC Resolution No. 010988 is invalid
On August 23, 2004, the CSC en banc issued Resolution No. 040932 denying because the Commission is without authority to issue regulations prohibiting
petitioners' appeal, and affirming the invalidation of their appointments on mass appointments at the local government level. Petitioners cite De Rama
v. Court of Appeals11 which held that Section 15, Article VII of the Constitution
is only applicable to the President or Acting President. They claim that
outgoing or defeated local appointing authorities are authorized to make
appointments of qualified individuals until their last day in office, and that not
all mass appointments are invalid. Finally, petitioners claim that because
Dumaguete City had been granted authority to take "final action" on all
appointments, the Commission did not have any authority to disapprove the
appointments made by outgoing mayor Remollo.
In their Comment dated May 15, 2008,12 respondents argue that petitioners’
appointments violated civil service rules and regulations other than CSC
Resolution No. 010988. Respondents also assert that the Commission is
authorized to invalidate the petitioners’ appointments, because the CSC
accreditation program carried with it the caveat that "said exercise of
authority shall be subject to Civil Service law, rules and regulations." Finally,
respondents claim that petitioners were guilty of forum shopping because the
issues in this case and in G.R. No. 177795 are the same.
Our Ruling
We find that the Civil Service Commission has the authority to issue CSC
Resolution No. 010988 and that the invalidation of petitioners’ appointments
was warranted. Consequently, we affirm the Decision of the Court of Appeals
dated August 28, 2007 and its Resolution dated January 11, 2008 in CA-G.R.
CEB-SP No. 00665.
The CSC has the authority to establish rules to promote efficiency in the civil
service
The Commission, as the central personnel agency of the government,13 has
statutory authority to establish rules and regulations to promote efficiency
and professionalism in the civil service. Presidential Decree No. 807,14 or the
Civil Service Decree of the Philippines, provides for the powers of the
Commission, including the power to issue rules and regulations and to review
appointments:
Section 9: Powers and functions of the Commission – The Commission shall
administer the Civil Service and shall have the following powers and
functions:
xxxx
(b) Prescribe, amend, and enforce suitable rules and regulations for carrying
into effect the provisions of this Decree x x x
(c) Promulgate policies, standards, and guidelines for the Civil Service and
adopt plans and programs to promote economical, efficient, and effective
personnel administration in the government;
xxxx
(h) Approve all appointments, whether original or promotional, to positions
in the civil service, except those of presidential appointees, members of the
armed forces of the Philippines, police forces, firemen, and jailguards, and
disapprove those where the appointees do not possess the appropriate
eligibility or required qualifications; (Emphasis supplied)
Executive Order No. 292, or the Administrative Code of 1987, also provides:
Section 12: Powers and Functions – The Commission shall have the following
powers and functions:
xxxx
(2) prescribe, amend, and enforce rules and regulations for carrying into
effect the provisions of the Civil Service Law and other pertinent laws;
(3) promulgate policies, standards, and guidelines for the Civil Service and
adopt plans and programs to promote economical, efficient, and effective
personnel administration in the government;
(4) take appropriate action on all appointments and other personnel matters
in the Civil Service including extension of Service beyond retirement age;
(5) inspect and audit the personnel actions and programs of the departments,
agencies, bureaus, offices, local government units, and other
instrumentalities of the government, including government owned and
controlled corporations. (emphasis supplied)
Clearly, the above-cited statutory provisions authorize the Commission to
"prescribe, amend, and enforce" rules to cover the civil service. The legislative
standards to be observed and respected in the exercise of such delegated
authority are set out in the statutes, to wit: to promote "economical,
efficient, and effective personnel administration."
The Reasons behind CSC Resolution No. 010988
We also find that there was substantial reason behind the issuance of CSC
Resolution No. 010988. It is true that there is no constitutional prohibition
against the issuance of "mass appointments" by defeated local government
officials prior to the expiration of their terms. Clearly, this is not the same as
a "midnight appointment," proscribed by the Constitution, which refers to
those appointments made within two months immediately prior to the next
presidential election.15 As we ruled in De Rama v. Court of Appeals:16
The records reveal that when the petitioner brought the matter of recalling
the appointments of the fourteen (14) private respondents before the CSC,
the only reason he cited to justify his action was that these were midnight
appointments that are forbidden under Article VII, Section 15 of the
Constitution. However, the CSC ruled, and correctly so, that the said
prohibition applies only to presidential appointments. In truth and in fact,
there is no law that prohibits local elective officials from making
appointments during the last days of his or her tenure.
However, even while affirming De Rama, we explained in Quirog v.
Aumentado,17 that:
We, however, hasten to add that the aforementioned ruling does not mean
that the raison d' etre behind the prohibition against midnight appointments
may not be applied to those made by chief executives of local government
units, as here. Indeed, the prohibition is precisely designed to discourage,
nay, even preclude, losing candidates from issuing appointments merely for
partisan purposes thereby depriving the incoming administration of the
opportunity to make the corresponding appointments in line with its new
policies. (Emphasis supplied)
Quirog also involved the disapproval of an appointment for non-compliance
with CSC Resolution No. 010988. However, we found that Quirog’s
appointment was made on June 1, 2001, or three days prior to the issuance
of CSC Resolution No. 010988. As such, we ruled that the retroactive
application of the law was not warranted.
In Sales v. Carreon, Jr.,18 we had occasion to discuss the reasons behind the
prohibition by the Commission of mass appointments after the elections.
Sales involved the issuance of 83 appointments made by then Dapitan City
Mayor Joseph Cedrick O. Ruiz in his last month of office (on June 1, 18, and
27, 2001), which the newly elected Mayor, Rodolfo H. Carreon, subsequently
revoked, on the ground that these violated CSC Resolution No. 010988 in
relation to CSC Memorandum Circular No. 7, Series of 2001, imposing a ban
on issuing appointments in the civil service during the election period. In
Sales, we declared:
This case is a typical example of the practice of outgoing local chief executives
to issue "midnight" appointments, especially after their successors have been
proclaimed. It does not only cause animosities between the outgoing and the
incoming officials, but also affects efficiency in local governance. Those
appointed tend to devote their time and energy in defending their
appointments instead of attending to their functions.19
It is not difficult to see the reasons behind the prohibition on appointments
before and after the elections. Appointments are banned prior to the
elections to ensure that partisan loyalties will not be a factor in the
appointment process, and to prevent incumbents from gaining any undue
advantage during the elections. To this end, appointments within a certain
period of time are proscribed by the Omnibus Election Code and related
issuances.20 After the elections, appointments by defeated candidates are
prohibited, except under the circumstances mentioned in CSC Resolution No.
010988, to avoid animosities between outgoing and incoming officials, to
allow the incoming administration a free hand in implementing its policies,
and to ensure that appointments and promotions are not used as a tool for
political patronage or as a reward for services rendered to the outgoing local
officials.
Not all Mass Appointments are Prohibited
Indeed, not all appointments issued after the elections by defeated officials
are invalid. CSC Resolution No. 010988 does not purport to nullify all "mass
appointments." However, it must be shown that the appointments have
undergone the regular screening process, that the appointee is qualified, that
there is a need to fill up the vacancy immediately, and that the appointments
are not in bulk. In Nazareno v. Dumaguete,21 we explained:
CSC Resolution No. 010988 does not totally proscribe the local chief executive
from making any appointments immediately before and after elections. The
same Resolution provides that the validity of an appointment issued
immediately before and after elections by an outgoing local chief executive is
to be determined on the basis of the nature, character, and merit of the
individual appointment and the particular circumstances surrounding the
same.
Corollarily, we held in Sales,22 that:
x x x [e]ach appointment must be judged on the basis of the nature, character,
and merits of the individual appointment and the circumstances surrounding
the same. It is only when the appointments were made en masse by the
outgoing administration and shown to have been made through hurried
maneuvers and under circumstances departing from good faith, morality, and
propriety that this Court has struck down "midnight" appointments.
In the instant case, Mayor Remollo issued the 89 original and promotional
appointments on three separate dates, but within a ten-day period, in the
same month that he left office.23 Further, the Commission’s audit found
violations of CSC rules and regulations that justified the disapproval of the
appointments. In this regard, CSC Memorandum Circular No. 40, otherwise
known as the Revised Rules on Appointments and Other Personnel Actions,
provides:
Section 1 – Appointments submitted to the CSC office concerned should meet
the requirements listed hereunder. Non-compliance with such requirements
shall be grounds for disapproval of said appointments:
xxxx
(h) Personnel Selection Board (PSB) Evaluation/Screening. Appointees should
be screened and evaluated by the PSB, if applicable. As proof thereof, a
certification signed by the Chairman of the Board at the back of the
appointment or alternatively, a copy of the proceedings/ minutes of the
Board’s deliberation shall be submitted together with the appointment. The
issuance of the appointment shall not be earlier than the date of the final
screening/deliberation of the PSB.
Here, there was only one en banc meeting of the city PSB to consider the
appointments, without any evidence that there were any deliberations on the
qualifications of the petitioners, or any indication that there was an urgent
need for the immediate issuance of such appointments. The absence of
evidence showing careful consideration of the merits of each appointment,
and the timing and the number of appointments, militate against petitioners’
cause. On the contrary, the prevailing circumstances in this case indicate that
the appointments were hurriedly issued by the outgoing administration.
The Accreditation of Dumaguete City did not remove the CSC’s authority to
review appointments
We find that the authority granted by CSC Resolution No. 992411 to the City
Government of Dumaguete to "take final action" on all its appointments did
not deprive the Commission of its authority and duty to review appointments.
Indeed, Resolution No. 992411 states that such exercise of authority shall be
"subject to civil service law, rules and regulations" and that appointments in
violation of pertinent rules "shall immediately be invalidated."
Moreover, Section 20, Rule VI of the Omnibus Rules Implementing Book V of
Executive Order No. 292 provides that notwithstanding the initial approval of
an appointment, the same may be recalled for "[v]iolation of other existing
Civil Service laws, rules and regulations." The CSC is empowered to take
appropriate action on all appointments and other personnel actions and that
such power "includes the authority to recall an appointment initially
approved in disregard of applicable provisions of Civil Service law and
regulations."24
Petitioners have not engaged in forum shopping
The essence of forum-shopping is the filing of multiple suits involving the
same parties for the same cause of action, either simultaneously or
successively, for the purpose of obtaining a favorable judgment.25 Forum-
shopping has been defined as the act of a party against whom an adverse
judgment has been rendered in one forum, seeking and possibly getting a
favorable opinion in another forum, other than by appeal or the special civil
action of certiorari, or the institution of two or more actions or proceedings
grounded on the same cause on the supposition that one or the other court
would make a favorable disposition.26
Although the factual antecedents of the cases brought before this Court are
the same, they involve different issues. The petition for Mandamus with
Injunction and Damages, docketed as Civil Case No. 13013, and raised before
this Court as G.R. No. 177795, challenged respondents’ refusal to recognize
petitioners’ appointments and to pay petitioners’ salaries, salary
adjustments, and other emoluments. The petition only entailed the
applications for the issuance of a writ of mandamus and for the award of
damages. The present case docketed as G.R. No. 181559, on the other hand,
involves the merits of petitioners’ appeal from the invalidation and
revocation of their appointments by the CSC-Field Office, which was affirmed
by the CSC-Regional Office, CSC en banc, and the Court of Appeals.

In any event, this issue had already been settled in our Decision of June 19,
2009 in G.R. No. 177795, which found petitioners not guilty of forum
shopping, to wit:

True, that the [Petition in G.R. No. 177795] and the one in G.R. No. 181559
are interrelated, but they are not necessarily the same for this Court to
adjudge that the filing of both by petitioners constitutes forum shopping. In
G.R. No. 181559, the Court will resolve whether or not the petitioners’
appointments are valid. [In G.R. No. 177795], petitioners are claiming a right
to the salaries, salary adjustments and other emoluments during the
pendency of the administrative cases, regardless of how the CSC decided the
validity of their appointments.

WHEREFORE, the petition is DENIED for lack of merit. The Court of Appeals’
Decision in CA-G.R. CEB-SP No. 00665 dated August 28, 2007 affirming CSC
Resolution No. 040932 dated August 23, 2004 and CSC Resolution No. 050473
dated April 11, 2005, and its Resolution dated January 11, 2008 denying the
Motion for Reconsideration are AFFIRMED.

SO ORDERED.