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INTRODUCTION

PUBLIC ESTATES AUTHORITY, petitioner, vs. JESUS S. YUJUICO and AUGUSTO Y. CARPIO, respondents.
DECISION
VITUG, J.:
The instant petition for review, with a prayer for the issuance of a temporary restraining order and/or writ of preliminary injunction,
seeks the reversal of the 13th September 1999 decision and 19th October 1999 resolution of the Court of Appeals, both issued in CA-
G.R. SP No. 50855, entitled Public Estates Authority vs. Hon. Raul E. De Leon, in his capacity as Presiding Judge, Regional Trial Court,
National Capital Judicial Region, Branch 258, Paraaque City and Jesus S. Yujuico and Augusto Carpio.
The relevant antecedents:
On 24 July 1996, private respondents filed with the Regional Trial Court of Paraaque City, a complaint, docketed Civil Case No. 96-
0317, for the Removal of Cloud and Annulment of Title with Damages against petitioner. Respondent Yujuico averred being the
registered owner of Lot 1 of the subject area along Roxas Boulevard, Paraaque City, with an area of 10,000 square meters, covered by
Transfer Certificate of Title (TCT) No. 446386, dated 07 June 1974, of the Registry of Deeds for the Province of Rizal. Respondent
Carpio, in his case, himself maintained to be the registered owner of Lot 2 with an area of 7,343 square meters, covered by TCT No.
44265, dated 16 June 1976, of the same registry. The two lots were originally consolidated in one title registered in the name of one
Fermina Castro under Original Certificate of Title (OCT) No. 10215, dated 31 May 1974, of the Registry of Deeds for the province.
Sometime in 1989, petitioner Public Estates Authority (PEA) obtained ownership of various parcels of land along Manila Bay for the
purpose of constructing the Manila-Cavite Coastal Road. It was issued OCT No. Sp 02 on 13 January 1989. Petitioner likewise
acquired ownership of some other parcels of land along the Manila Bay Coast covered by TCT No. 7310 and TCT No. 19346 portions
of which were subsequently sold by it to the Manila Bay Development Corporation (MBDC). The MBDC, in turn, leased portions of
the aforesaid lots to Uniwide Holdings, Inc. Petitioner proceeded to carve out the path of the Coastal Road. Private respondents
claimed that a subsequent verification survey commissioned by them showed that the coastal road directly overlapped their
property and that a portion of the area sold by petitioner to the MBDC was also owned by them (private respondents). Private
respondents contended that the titles issued in the name of petitioner and the MBDC, being then invalid, ineffective, or voidable,
should be nullified and set aside.
In its answer, petitioner denied that the Coastal Road had overlapped the property of private respondents, stating that the area
covered by the infrastructure was granted to it by the government through a Special Patent and that the title to the subject area was
issued in its name on 13 January 1989 (for OCT No. SP 02) and on 04 April 1988 (for TCT No. 7310). Petitioner assailed the title of
private respondents predecessor-in-interest, Fermina Castro, claiming that the latter acquired her title to the subject land in 1974
when the same was yet under water and therefore still then part of the public domain.
After the issues were joined, and during the pendency of the proceedings, petitioner, through its former General Manager, Atty.
Arsenio B. Yulo, Jr., asked the Office of the Government Corporate Counsel (OGCC) to make an in-depth study on the validity of the
titles of private respondents, the possible reversion of the property to the government, and the question of the correct position of
Tie-Point T-12-A of the PEA property sold to MBDC shown in the PEA Survey Plan. In an opinion, dated 13 October 1997, the OGCC
upheld the validity of the titles of private respondents and expressed that there was no legal ground for filing reversion proceedings.
There was, according to the OGCC, a mispositioning of the PEA survey reference point by about 88 meters westward based on the
documentary evidence submitted to the court, resulting in the overlap of the PEA and the Yujuico property. The OGCC recommended
that petitioner should instead negotiate an amicable settlement with private respondents. Upon request of Atty. Yulo, the Office of
the Solicitor General (OSG) also gave an opinion, dated 22 December 1997, to the effect that, premised on the matters on record,
there was no sufficient basis for the government to institute an action to annul OCT No. 10215 in the name of Fermina Castro and
the derivative titles of private respondents.
Petitioner created a special committee of three PEA board directors composed of Atty. Nestor Kalaw, as Chairman, and Gregorio Fider
and Edgardo de Leon, as members, to study the matter of a possible settlement of the case and to submit its recommendation. In
due time, the committee recommended an amicable settlement of Civil Case No. 96-0317 and submitted a proposed compromise
agreement which the PEA Board approved on 17 April 1998.
Following a series of negotiations, a compromise agreement was concluded on 15 May 1998 by then PEA General Manager Atty.
Arsenio B. Yulo, Jr., assisted by the OGCC, and by Benedicto Yujuico, attorney-in-fact of private respondents, assisted by counsel Atty.
Angel Cruz. The compromise agreement contained, among other things, two major provisions, i.e., -
(a) that because PEA is not in a position to settle by cash payment, it was agreed that private respondents property with a combined
area of 1.7343 hectares covered by TCT No. 446386 and TCT No. 44265 shall be exchanged with PEA property to be taken from PEAs
property described as CBP-1A, shown on the Sketch Plan attached as Annex A of the Compromise Agreement, and that all taxes and
registration expenses for the property to be conveyed under the exchange shall be for the account of the conveying party; and
(b) that private respondents were given an Option to purchase an additional 7.6 hectares from said PEA property CBP-1A within a
period of three years from the date of the approval by the Court of the Compromise Agreement at the price based on the market
value as determined by PEA on the date of the exercise of the Option.
The compromise was approved by the trial court in its resolution of 18 May 1998.
On 17 June 1998, pursuant to the compromise, the parties executed a Deed of Exchange of Real Property with a sketch plan showing
where the PEA property with an area of 1.4007 hectares to be conveyed to private respondents (in 3 Lots) would be taken in
exchange for private respondents property with a combined area of 1.7343 hectares.
On 31 July 1998, the incumbent PEA General Manager, Carlos P. Doble, informed the Office of the Solicitor General that the new PEA
board and management had reviewed the compromise agreement and decided to defer and hold in abeyance its implementation in
view of the letter, dated 27 July 1998, of the former PEA General Manager, Atty. Arsenio Yulo, Jr., to the effect that the compromise
agreement which he signed did not reflect a condition required by the previous PEA Board, i.e., the approval by the Office of the
President.
On 14 September 1998, the new management of PEA filed a petition for relief from the resolution, dated 18 May 1998, of the trial
court which approved the compromise agreement on the ground of mistake and excusable negligence consisting of inadvertence on
the part of former General Manager Yulo in the signing of the compromise agreement without the requisite approval of the Office of
the President. Private respondents opposed the petition and prayed for its dismissal in that (a) it was filed beyond the reglementary
period provided under Section 3, Rule 38, of the 1997 Rules of Civil Procedure, and (b) the allegation of mistake and excusable
negligence was a sham because it was through and upon the recommendation of a special committee of three PEA directors and
assisted by the OGCC, as well as guided by the legal opinions of both the OGCC and the OSG, that PEA entered into and approved the
compromise agreement.
The petition for relief was dismissed by the trial court on 06 November 1998 on the ground that it was filed out of time and that the
allegation of mistake and excusable negligence had no valid basis. Petitioner filed a motion for reconsideration of the 06th November
1998 order of the trial court but its motion was denied on 07 January 1999.
Petitioner elevated the case to the Court of Appeals via a petition for certiorari but the petition was dismissed by the appellate court
on 13 September 1999 for petitioners failure to pay the required docket fees and for lack of merit. The appellate court agreed with
the findings of the trial court that the alleged inadvertence on the part of former PEA General Manager in signing the compromise
agreement on the belief that everything was in order could hardly be considered the mistake or excusable negligence contemplated
by the rules of civil procedure sufficient to support a petition for relief from judgment. It further ruled that the petition for relief filed
on 14 September 1998 came much too late considering that the resolution approving the compromise agreement was issued by the
trial court on 18 May 1998 and Civil Case No. 96-0317 was dismissed on 03 July 1998. Petitioners motion for reconsideration was
denied by the Court of Appeals on 19 October 1999.
Hence, the instant petition.
Petitioner raises the following grounds for allowance of the petition:

I.THE COURT OF APPEALS COMMITTED SERIOUS ERROR OF LAW AND ACTED WITH GRAVE ABUSE OF DISCRETION IN HOLDING THAT
PETITIONER IS NOT EXEMPT FROM THE PAYMENT OF DOCKET AND OTHER LEGAL FEES IN THE INSTANT CASE DESPITE THE FACT THAT
IT WAS SUED BY RESPONDENTS NOT FOR ANY PECUNIARY ACTIVITY BUT IN RELATION TO CERTAIN RECLAIMED PARCELS OF LAND
REGISTERED AND OWNED BY PETITIONER UNDENIABLY FOR AND ON BEHALF OF THE NATIONAL GOVERNMENT.
II.THE COURT OF APPEALS COMMITTED SERIOUS ERROR OF LAW AND ACTED WITH GRAVE ABUSE OF DISCRETION IN BARRING
PETITIONER, THROUGH PROCEDURAL TECHNICALITIES, FROM SEEKING EQUITABLE AND JUDICIAL RELIEFS WHEN IT HELD THAT THE
PETITION FOR RELIEF FILED A QUO, DESPITE THE PECULIAR CIRCUMSTANCES OF THE INSTANT CASE, WAS FILED OUT OF TIME.
III.THE COURT OF APPEALS COMMITTED SERIOUS ERROR OF LAW AND ACTED WITH GRAVE ABUSE OF DISCRETION IN AVOIDING AND
EVADING, BASED ON A TECHNICAL AND/OR PROCEDURAL GROUND, THE ISSUE OF FRAUD.
Petitioner admits that it has been paying docket fees in filing court petitions but asserts that since it is being sued not in relation to
any pecuniary activity but as a government entity holding reclaimed parcels of land for and on behalf of the National Government
pursuant to the purpose and objective of its creation, it should be exempt from such fees conformably with Section 19, Rule 141, of
the Revised Rules of Court. Petitioner claims that fraud has attended the execution of the compromise agreement, adding that the
unexplained deletion of the condition of prior approval by the Office of the President constitutes extrinsic fraud which has prevented
it from having a trial or from presenting its case in court.
In refutation of the above assignment of errors private respondents contend that petitioner as an incorporated agency of the
government is liable and not exempt from the payment of docket fees. Respondents argue that the distinction made by petitioner
with respect to its being sued not in relation to any pecuniary activity but as a government entity owning reclaimed parcels of land
for and on behalf of the National Government is frivolous as not being based on any provision of the PEA Charter. Respondents aver
that petitioner, in fact, appears to concede that its petition for relief has been filed out of time. In any case, respondents submit,
there is absolutely no extrinsic fraud perpetrated upon the petitioner and that the appellate court has properly disregarded this
allegation as having been raised for the first time on appeal.
Petitioner has raised a valid point in its first assignment of error.
In both original and appealed cases, the court can be tasked to take cognizance over such cases only upon the payment of the
prescribed docket fees.[1] In this regard, Section 1 and Section 19, Rule 141, of the Revised Rules of Court provide:
Sec. 1. Payment of Fees. - Upon the filing of the pleading or other application which initiates an action or proceeding, the fees
prescribed therefor shall be paid in full.
Sec. 19. Government Exempt. The Republic of the Philippines, its agencies and instrumentalities, are exempt from paying the legal
fees provided in this Rule. Local governments and government-owned or controlled corporations with or without independent
charters are not exempt from paying such fees."
Section 2, paragraph 10, of the Administrative Code of 1987 defines instrumentality as an agency of the National Government, not
integrated within the department framework, vested with special functions or jurisdiction by law, endowed with some if not all
corporate powers, administering special funds, and enjoying operational autonomy, usually through a charter. The term, under the
Code, includes regulatory agencies, chartered institutions and government-owned or controlled corporations.
Petitioner is a creation of Presidential Decree No. 1084, dated 04 February 1977, as a government corporation wholly owned by the
Government. It has been empowered to exercise the right of eminent domain in the name of the Republic of the Philippines. In the
acquisition of real estate by condemnation proceedings, the title to such real estate is to be taken in the name of the Republic of the
Philippines; thereupon, such real estate shall be entrusted to the Authority as the agent of the Republic of the Philippines.[2]
Although vested with personality separate and distinct from the government, petitioner is not thereby divorced from its being an
agent or instrumentality of the government within the purview of Section 19, Rule 141, of the Revised Rules of Court. Petitioner, in
having been charged with the construction of the Manila-Cavite Coastal Road, exercises a governmental function, as so distinguished
from a mere proprietary interest, and it is in relation thereto that it has here been sued. In Iron Steel Authority vs. Court of Appeals,
[3] the Court has observed that certain agencies or instrumentalities of the National Government are cast in corporate form, that is
to say, incorporated agencies or instrumentalities, at times with and at other times without capital stock, and correspondingly vested
with a juridical personality distinct from the personality of the Republic.
At all events, while a court may refused to entertain a suit for non-payment of docket fees, such failure does not preclude it,
however, from taking cognizance of the case as circumstances may so warrant or when the ends of justice would be best served if the
case were to be given due course. Verily, the payment of fees is by no means a mere technicality of law or procedure.[4] It is also an
indispensable step in the perfection of an appeal.[5] While it is mandatory on the litigant, the court, however, is not necessarily left
without any alternative but to dismiss the appeal for non-payment of docket fees. Thus, the failure to pay the appeal docketing fee
confers a discretionary authority, not mandatory charge, on the part of the court to dismiss an appeal. This discretion must, of
course, be exercised soundly, wisely and prudently, and with great deal of circumspection[6] in accordance with the tenets of fair
play, never capriciously, and always with a view to substance.[7]
Similarly, the Court has had occasions to suspend its own rules, or to except a particular case from its operation, whenever the
purposes of justice require it.[8] Strong compelling reasons, such as serving the ends of justice and preventing a miscarriage thereof,
can warrant a suspension of the rules.[9] While there is a crying need to unclog court dockets, on the one hand, there is, on the
other hand, an incomparable demand for resolving disputes fairly and equitably.[10]
The Court, in fine, holds that petitioner, as and when it sues or is sued in the exercise of a governmental function, could come within
the category of an exempt agency of government under the Rules.
The Court now addresses the issue of whether or not the petition for relief has been filed with the trial court within the
reglementary period prescribed therefor.

Section 3, Rule 38, of the 1997 Rules of Civil Procedure provides that a verified petition for relief must be filed within sixty (60) days
after the petitioner learns of the judgment, final order, or other proceeding to be set aside and not more than six (6) months after
such judgment or final order has been entered or such proceeding has been taken. It must be accompanied with affidavits showing
the fraud, accident, mistake, or excusable negligence relied upon, and the facts constituting petitioners good and substantial cause of
action or defense.

In the instant case, the trial court issued the order approving the compromise agreement on 18 May 1998. Consequentially, two
hearings were held in both of which instances petitioner was represented by counsel. The first was on 01 June 1998 when petitioners
co-defendant, Manila Bay Development Corporation (MBDC), through Atty. William Chua, openly manifested that it was no longer
pursuing its counterclaim against private respondents and its cross-claim against petitioner because of the approval of the
compromise agreement. On 17 June 1998, the parties executed a Deed of Exchange of Real Properties pursuant to the compromise.
The second hearing took place on 02 July 1998, where the counsel for private respondents similarly manifested that they were
withdrawing all claims against Uniwide and MBDC. Thus, the trial court, in its order dated 03 July 1998, dismissed with prejudice all
the claims by the plaintiffs and defendants against each other. This narration was neither denied nor refuted by petitioner.
Surprisingly, petitioner, while reiterating in its own Memorandum the same sequence of events, would now argue, however, that its
incumbent management was not aware that prior to 15 July 1998, its previous counsel was already aware of the existence of the
18th May 1998 resolution of the trial court, indicating parenthetically, that indeed the petition for relief was filed beyond the sixty-
day period allowed therefor. It would not be right to allow a mere change of management of PEA to defeat the operation of the Rules
on reglementary period.
Having thus concluded, the Court may not freely take on the third issued raised by petitioner.
Significantly, one other substantive matter brought up during the oral argument of the case is that the property subject matter of the
case was still under water[11] when titled, in the name of Fermina Castro and when it was thereafter conveyed to private
respondents; however, this issue, yet unventilated and a subject beyond the limited coverage of PEAs charter, is not appropriate for
consideration and determination, nor can it be peremptorily adjudged, by the Court in this instance. In resolving this petition, the
Court does not thus foreclose the right of the Republic of the Philippines itself from pursuing any proper recourse in such separate
proceedings as it may deem warranted.
WHEREFORE, the instant petition is DENIED, and the temporary restraining order previously issued is accordingly lifted. No costs.
SO ORDERED.
GENERAL PRICIPLES
nature of remedial law
FREDESVINDO S. ALVERO, petitioner, vs.M.L. DE LA ROSA, Judge of First Instance of Manila, JOSE R. VICTORIANO, and MARGARITA
VILLARICA, respondents.
This is an original petition for certiorari filed in this court.
The record shows that, on June 25, 1945, respondent Jose R. Victoriano had filed a complaint, in the Court of First Instance of the
City of Manila, against petitioner Fredesvindo S. Alvero and one Margarita Villarica, alleging two causes of action, to wit, (1) to
declare in force the contract of sale, made on October 1, 1940, between said Jose R. Victoriano and Margarita Villarica, of two (2)
parcels of land in the Manotoc subdivision, Balintawak, in the barrio of Calaanan, municipality of Caloocan, Province of Rizal, with a
combined area of 480 square meters, which land was subsequently sold by said Villarica, in favor of petitioner Fredesvindo S. Alvero,
on December 31, 1944, for the sum of P100,000 in Japanese military notes; and (2) to declare said subsequent sale null and void.
On July 7, 1945, Margarita Villarica filed an answer to said complaint, expressly admitting having sold said land to Fresdesvindo S.
Alvero, for P100,000, in December, 1944, due to the imperative necessity of raising funds with which to provide for herself and
family, and that she did not remember the previous sale; at the same time, offering to repurchase said land from Fredesvindo S.
Alvero in the sum of P5,000, but that the latter refused to accept the offer.
On July 13, 1945, Fredesvindo S. Alvero, in answering said complaint, denied the allegations made therein, and claimed exclusive
ownership of the land in question, and at the same time set up a counterclaim and crossclaim in his answer, demanding from Jose R.
Victoriano a P200-monthly rent on said property, beginning from February, 1945, plus P2,000 as damages.
On July 21, 1945, Jose R. Victoriano filed an answer to said counterclaim, denying Fredesvindo S. Alvero's alleged ownership over said
land, and the other allegations contained in Alvero's answer.
After the trial of the case before the Hon. Mariano L. de la Rosa, Judge of the Court of First Instance of the City of Manila, one of the
respondents in this case, on November 16, 1945, said respondent judge rendered his decision, in which it was declared that the two
(2) parcels of land in question, with a combined area of 480 square meters had been sold by Margarita Villarica to Jose R. Victoriano,
since October 1, 1940, for the sum of P6,000, on the condition that the purchaser should make a down payment of P1,700, and a
monthly payment of P76.86 in 120 equal monthly installments; that Jose R. Victoriano continued making said monthly payments
until December, 1941, but that owing to the war-time conditions then existing, Margarita Villarica agreed verbally to suspend such
payments until the restoration of peace; that immediately after said sale of said land to him, Jose R. Victoriano took possession
thereof and made improvements thereon to the amount of P800, and continued occupying said property until December, 1944,
when he abandoned the same to go to evacuation places, but returned thereto in February, 1945; that Margarita Villarica, having
forgotten the sale of said land to Jose R. Victoriano, sold the same for P100,000 in Japanese military notes, on December 31, 1944, to
Fredesvindo S. Alvero, but afterwards offered to repurchase said property from him, for the sum of P8,000 in genuine Philippine
currency, after liberation; that Fredesvindo S. Alvero presented the deed of sale, executed in his favor, to the Register of Deeds of the
City of Manila, on January 3, 1945, and took possession of said property in December, 1944, but afterwards found Jose R. Victoriano
in the premises in February, 1945; that in the contract of sale executed by Margarita Villarica, in favor of Jose R. Victoriano, it was
agreed that, upon failure of the purchaser to make payments of three (3) successive mothly installments, the vendor would be free
to sell the property again, forfeiting the payments made, except in the case of force majeure; that there was really a verbal
agreement between Margarita Villarica and Jose Victoriano, made in February, 1942, for the suspension of the payment of the
monthly installments until the restoration of peace; and that although Jose R. Victoriano had presented the deed of sale, executed in
his favor, to the Register of Deeds, in Pasig, Rizal, like Fredesvindo S. Alvero, he had also failed to secure the transfer of title to his
name. And considering that Jose R. Victoriano's document was older than that of Fredesvindo S. Alvero, and that he had taken
possession of said property, since October 1, 1940, the respondent judge rendered his decision in favor of Jose R. Victoriano,
adjudging to him the title over the property in question, including all the improvements existing thereon, and dismissed the
counterclaim.
On November 28, 1945, Fredesvindo S. Alvero was notified of said decision; and on December 27, 1945, he filed a petition for
reconsideration and new trial, which was denied on January 3, 1946; and of said order he was notified on January 7, 1946.
On January 8, 1946, Fredesvindo S. Alvero filed his notice of appeal and record on appeal simultaneously in the lower court, without
filing the P60-appeal bond.
On January 14, 1946, Jose R. Victoriano filed a petition to dismiss the appeal, and at the same time, asked for the execution of the
judgment.
On January 15, 1946, Fredesvindo S. Alvero filed an opposition to said motion to dismiss, alleging that on the very same day, January
15, 1946, said appeal bond for P60 had been actually filed, and allege as an excuse, for not filing the said appeal bond, in due time,
the illness of his lawyer's wife, who died on January 10, 1946, and buried the following day.
On January 17, 1946, the respondent judge, Hon. Mariano L. de la Rosa, ordered the dismissal of the appeal, declaring that, although
the notice of appeal and record on appeal had been filed in due time, the P60-appeal bond was filed too late.
On January 23, 1946, Fredesvindo S. Alvero filed a petition for the reconsideration of the said order dated January 17, 1946,
dismissing his appeal; and said petition for reconsideration was denied on January 29, 1946. Hence, this petition for certiorari.
On February 11, 1946, the respondents filed their answer to the petition for certiorari, alleging (1) that said petition is defective in
form as well as in substance; (2) that there has been no excusable negligence, on the part of the petitioner, or grave abuse of
discretion on the part of the respondent judge, in the instant case.
As already stated, the decision rendered by the respondent judge, Hon. Mariano L. de la Rosa, was dated November 16, 1945, of
which counsel for Fredesvindo S. Alvero was notified on November 28, 1945; that his motion for reconsideration and new trial was
filed on December 27, 1945, and denied on January 3, 1946, and that said counsel for Alvero was notified of said order on January 7,
1946; and that he filed his notice of appeal and record on appeal the following day, to wit, January 8, 1946, and that the P60-appeal
bond was filed only on January 15, 1946.
According to the computation erroneously made by the court, the last day for filing and perfecting the appeal, in this case, was
January 8, 1946, or which date, Fredesvindo S. Alvero should have filed his (1) notice of appeal, (2) record on appeal, and (3) appeal
bond. But the P60-appeal bond was filed only on January 15, 1946.
Failure to perfect the appeal, within the time prescribed by the rules of court, will cause the judgment to become final, and the
certification of the record on appeal thereafter, cannot restore the jurisdiction which has been lost. (Roman Catholic Bishop of
Tuguegarao vs. Director of Lands, 34 Phil., 623; Estate of Cordoba and Zarate vs. Alabado, 34 Phil., 920; and Bermudez vs. Director of
Lands, 36 Phil., 774.)
The period within which the record on appeal and appeal bond should be perfected and filed may, however, be extended by order of
the court, upon application made, prior to the expiration of the original period. (Layda vs. Legaspi, 39 Phil., 83.)
Rules of courts, promulgated by authority of law, have the force and effect of law; and rules of court prescribing the time within
which certain acts must be done, or certain proceedings taken, are considered absolutely indispensable to the prevention of
needless delays and to the orderly and speedy discharge of judicial business. (Shioji vs. Harvey, 43 Phil., 333.)
Strict compliance with the rules of court has been held mandatory and imperative, so that failure to pay the docket fee in the
Supreme Court, within the period fixed for that purpose, will cause the dismissal of the appeal. (Salaveria vs. Albindo, 39Phil., 922.)
In the same manner, on failure of the appellant in a civil case to serve his brief, within the time prescribed by said rules, on motion of
the appellee and notice to the appellant, or on its own motion, the court may dismiss the appeal. (Shioji vs. Harvey, 43 Phil., 333.)
Counsel for the petitioner Fredesvindo Alvero alleges as an excuse, for his failure to perfect and file his appeal, in due time, the illness
of his wife, which ended in her death on January 10, 1946, and by which he was greatly affected.
How little, indeed, does one realize that in life he lives in the midst of death; and that every that passes in a step nearer towards
eternity. Yet, notwithstanding the inexorable laws of human destiny, every mortal fears death, and such fear is worse than death
itself. That is perhaps the reason why those feeling its approach, in their last moments, want to be surrounded by the ones dearest to
their heart, to hear from them words of tenderness and eternal truth, and thus receive as balm their love and the cheering influence
of the traditional faith, and the consolation of religious hope.
The virtuous and loving wife is the peculiar gift of heaven, and Mother is the name for God in the innocent lips and hearts of adoring
children. "She looketh well to the ways of her household, and eateth not the bread of idleness." "And her daughters arise up and call
her blessed." And when she dies in the bosom of God, her children find solace in the contemplation of her eternal bliss, as mirrored
in her tranquil beauty.
It is not, therefore, difficult to understand the state of mind of the attorney, and his intense devotion and ardent affection towards his
dying wife.
Unfortunately, counsel for petitioner has created a difficult situation. In his motion for reconsideration and new trial, dated
December 27, 1945, he did not point out specifically the findings or conclusions in the judgment, are not supported by the evidence
or which are contrary to law, making express reference to the pertinent evidence or legal provisions, as expressly required by Rule 37,
section 2, paragraph (c) of the Rules of Court. Motions of that kind have been considered as motions pro forma intended merely to
delay the proceeding, and, as such, they cannot and will not interrupt or suspend the period of time for the perfection of the appeal.
(Valdez vs. Jugo, 74 Phil., 49, and Reyes vs. Court of Appeals and Bautista, 74 Phil., 235.) Hence, the period for perfecting herein
petitioner's appeal commenced from November 28, 1945, when he was notified of the judgment rendered in the case, and expired
on December 28, 1945; and, therefore, his notice of appeal and record on appeal filed on January 8, 1946, were filed out of time, and
much more so his appeal bond, which was only filed on January 15, 1946.
It is futile to speak of hospitals, doctors and nurses to minister alone to the needs of the sick and the dying, who are dearest to us,
for our reasoning powers are of little avail when sorrow or despair rages within.
But human laws are inflexible and no personal consideration should stand in the way of performing a legal duty.
The attorney for petitioner Fredesvindo S. Alvero could have asked for an extension of time, within which to file and perfect his
appeal, in the court below; but he had failed to do so, and he must bear the consequences of his act. A strict observance of the rules
of court, which have been considered indispensable to the prevention of needless delays and to the orderly and speedy dispatch of
judicial business, is an imperative necessity.
It may not be amiss to state in this connection that no irreparable damage has been caused to the petitioner Fredesvindo S. Alvero,
as Margarita Villarica, the vendor to the two, of the land in question, has shown readiness to repair the damage done.
No showing having been made that there had been merely excusable negligece, on the part of the attorney for petitioner
Fredesvindo S. Alvero, and that there had been gave abuse of sound judicial discretion, on the part of the respondent judge, the
petition for certiorari filed in this case, is, therefore, hereby dismissed, without costs. So ordered.

DOUGLAS F. ANAMA, Petitioner, vs.PHILIPPINE SAVINGS BANK, SPOUSES SATURNINA BARIA &TOMAS CO and THE REGISTER OF
DEEDS, METRO MANILA, DISTRICT II, Respondents.
This is a petition for review under Rule 45 assailing the March 31, 2008 Decision1 of the Court of Appeals (CA) and its February 27,
2009 Resolution,2 in CA G.R. No. SP-94771, which affirmed the November 25, 2005 Order of the Regional Trial Court, Branch 167,
Pasig City (RTC), granting the motion for issuance of a writ of execution of respondents.
The Facts
The factual and procedural backgrounds of this case were succinctly recited by the CA in its decision as follows:
Sometime in 1973, the Petitioner, Douglas F. Anama (Anama), and the Respondent, Philippine Savings Bank (PSB), entered into a
"Contract to Buy," on installment basis, the real property owned and covered by Transfer Certificate of Title (TCT) No. 301276 in the
latter’s name. However, Anama defaulted in paying his obligations thereunder, thus, PSB rescinded the said contract and title to the
property remained with the latter. Subsequently, the property was sold by PSB to the Spouses Saturnina Baria and Tomas Co (Co
Spouses) who, after paying the purchase price in full, caused the registration of the same in their names and were, thus, issued TCT
No. 14239.
Resultantly, Anama filed before the Respondent Court a complaint for declaration of nullity of the deed of sale, cancellation of
transfer certificate of title, and specific performance with damages against PSB, the Co Spouses, and the Register of Deeds of Metro
Manila, District II.
On August 21, 1991 and after trial on the merits, the Respondent Court dismissed Anama’s complaint and upheld the validity of the
sale between PSB and the Co Spouses. Undaunted, Anama appealed, at first, to this Court, and after failing to obtain a favorable
decision, to the Supreme Court.
On January 29, 2004, the Supreme Court rendered judgment denying Anama’s petition and sustaining the validity of the sale
between PSB and the Co Spouses. Its decision became final and executory on July 12, 2004. Pursuant thereto, the Co Spouses moved
for execution, which was granted by the Respondent Court per its Order, dated November 25, 2005.
Aggrieved, Anama twice moved for the reconsideration of the Respondent Court’s November 25, 2005 Order arguing that the Co
Spouses’ motion for execution is fatally defective. He averred that the Spouses’ motion was pro forma because it lacked the required
affidavit of service and has a defective notice of hearing, hence, a mere scrap of paper. The Respondent Court, however, denied
Anama’s motion(s) for reconsideration.
Dissatisfied, the petitioner questioned the RTC Order before the CA for taking judicial cognizance of the motion for execution filed by
spouses Tomas Co and Saturnina Baria (Spouses Co) which was (1) not in accord with Section 4 and Section 15 of the Rules of Court
because it was without a notice of hearing addressed to the parties; and (2) not in accord with Section 6, Rule 15 in conjunction with
Section 13, Rule 13 of the Rules of Court because it lacks the mandatory affidavit of service.
On March 31, 2008, the CA rendered a decision dismissing the petition. It reasoned out, among others, that the issue on the validity
of the deed of sale between respondents, Philippine Savings Bank (PSB) and the Spouses Co, had long been laid to rest considering
that the January 29, 2004 Decision of this Court became final and executory on July 12, 2004. Hence, execution was already a matter
of right on the part of the respondents and the RTC had the ministerial duty to issue a writ of execution enforcing a final and
executory decision.
The CA also stated that although a notice of hearing and affidavit of service in a motion are mandatory requirements, the Spouses
Co’s motion for execution of a final and executory judgment could be acted upon by the RTC ex parte, and therefore, excused from
the mandatory requirements of Sections 4, 5 and 6 of Rule 15 of the Rules of Court.
The CA was of the view that petitioner was not denied due process because he was properly notified of the motion for execution of
the Spouses Co. It stated that the act of the Spouses Co in resorting to personal delivery in serving their motion for execution did not
render the motion pro forma. It refused to apply a rigid application of the rules because it would result in a manifest failure of justice
considering that petitioner’s position was nothing but an obvious dilatory tactic designed to prevent the final disposition of Civil Case
No. 44940.
Not satisfied with the CA’s unfavorable disposition, petitioner filed this petition praying for the reversal thereof presenting the
following
ARGUMENTS:
THE RESPONDENT APPELLATE COURT DID NOT TAKE INTO CONSIDERATION THE CLEAR TEACHING OF THE HONORABLE COURT WITH
REGARD TO THE REQUISITE NOTICE OF HEARING – IT SHOULD BE ADDRESSED TO THE PARTIES NOT TO THE CLERK OF COURT, THE
LATEST (THEN) BEING GARCIA V. SANDIGANBAYAN, G.R. NO. 167103, AUGUST 31, 2006, 500 SCRA 361; DE JESUS V. JUDGE DILAG,
A.M. NO. RTJ-05-1921, SEPTEMBER 30, 2005, 471 SCRA 176; LAND BANK OF THE PHILIPPINES V. NATIVIDAD, G.R. NO. 127198, MAY
16, 2005, 458 SCRA 441; ATTY. JULIUS NERI V. JUDGE JESUS S. DE LA PEÑA, A.M NO. RTJ-05-1896, APRIL 29, 2005, 457 SCRA 538; AND
ALVAREZ V. DIAZ, A.M. NO. MTJ-00-1283, MARCH 3, 2004, 424 SCRA 213;
THE RESPONDENT APPELLATE COURT DID NOT TAKE INTO CONSIDERATION THE CLEAR TEACHING OF THE HONORABLE COURT WITH
REGARD TO THE REQUISITE AFFIDAVIT OF SERVICE – IT SHOULD BE IN THE PROPER FORM AS PRESCRIBED IN THE RULES AND IT
SHOULD BE ATTACHED TO THE MOTION, THE LATEST (THEN) BEING ELLO V. COURT OF APPEALS, G.R. NO. 141255, JUNE 21, 2005, 460
SCRA 406; LOPEZ DELA ROSA DEVELOPMENT CORPORATION V. COURT OF APPEALS, G.R. NO. 148470, APRIL 29, 2005, 457 SCRA 614;
ALVAREZ V. DIAZ, A.M. NO. MTJ-00-1283, MARCH 3, 2004, 424 SCRA 213; EL REYNO HOMES, INC. V. ERNESTO ONG, 397 SCRA 563;
CRUZ V. COURT OF APPEALS, 388 SCRA 72, 80-81; AND MERIS V. OFILADA, 293 SCRA 606;
THE RESPONDENT APPELLATE COURT DID NOT TAKE APPROPRIATE ACTION ON THE "FRAUD PERPETRATED UPON THE COURT" BY
RESPONDENT-SPOUSES AND THEIR LEAD COUNSEL.
SINCE THE RESPONDENT APPELLATE COURT REFUSED TO TAKE INTO CONSIDERATION THE RESPONDENT BANK’S ACTION – THAT OF:
ENGAGING IN A DAGDAG-BAWAS (LEGALLY "INTERCALATION") OPERATION OF A PORTION OF THE TRANSCRIPT OF STENOGRAPHIC
NOTES (TSN), OCTOBER 12, 1984, OF THE REGIONAL TRIAL COURT, BRANCH 167, PASIG CITY, IN CIVIL CASE NO. 44940, PAGES 54-55,
AND
PRESENTING IT IN ITS APPELLEE’S BRIEF (IN THE OWNERSHIP CASE, CA-G.R. NO. CV-42663, LIKEWISE, BEFORE THE RESPONDENT
APPELLATE COURT) BY CITING IT ON PAGE 14 OF SAID BRIEF, AS IMPLIEDLY COMING FROM THE TSN OF THE TRIAL COURT.
THINKING THAT THEIR FALSIFIED APPELLEE’S BRIEF WAS MATERIAL IN SAID CA-G.R. NO. CV-42663.
IT COULD NOT RULE THAT THE SAME HAS BROUGHT ABOUT A CRUCIAL MATERIAL CHANGE IN THE SITUATION OF THE PARTIES
WHICH MAKES EXECUTION INEQUITABLE (PUNCIA V. GERONA, 252 SCRA 424, 430-431), OR, IN THE WORDS OF DEVELOPMENT BANK
OF RIZAL V. CA, G.R. NO. 75964, DECEMBER 1, 1987, 156 SCRA 84, 90, "THERE EXISTS A COMPELLING REASON FOR STAYING THE
EXECUTION OF JUDGMENT."
Basically, petitioner argues that the respondents failed to substantially comply with the rule on notice and hearing when they filed
their motion for the issuance of a writ of execution with the RTC. He claims that the notice of hearing in the motion for execution
filed by the Spouses Co was a mere scrap of paper because it was addressed to the Clerk of Court and not to the parties. Thus, the
motion for execution did not contain the required proof of service to the adverse party. He adds that the Spouses Co and their
counsel deliberately "misserved" the copy of their motion for execution, thus, committing fraud upon the trial court.
Additionally, he claims that PSB falsified its appellee’s brief by engaging in a "dagdag-bawas" ("intercalation") operation in pages 54
to 55 of the TSN, dated October 12, 1984.
Position of the Spouses Co
The Spouses Co counter that the petition should be dismissed outright for raising both questions of facts and law in violation of
Section 1, Rule 45 of the Rules of Court. The Spouses Co aver that petitioner attempts to resurrect the issue that PSB cheated him in
their transaction and that the RTC committed a "dagdag-bawas." According to the Spouses Co, these issues had long been threshed
out by this Court.
At any rate, they assert that they have substantially complied with the requirements of notice and hearing provided under Sections 4
and 5 of Rule 15 and Section 13, Rule 13 of the Rules of Court. Contrary to petitioner’s allegations, a copy of the motion for the
issuance of a writ of execution was given to petitioner through his principal counsel, the Quasha Law Offices. At that time, the said
law office had not formally withdrawn its appearance as counsel for petitioner. Spouses Co argue that what they sought to be
executed was the final judgment of the RTC duly affirmed by the CA and this Court, thus, putting the issues on the merits to rest. The
issuance of a writ of execution then becomes a matter of right and the court’s duty to issue the writ becomes ministerial.
Position of respondent PSB

PSB argues that the decision rendered by the RTC in Civil Case No. 44940 entitled "Douglas F. Anama v. Philippine Savings Bank, et.
al."3 had long become final and executory as shown by the Entry of Judgment made by the Court on July 12, 2004. The finality of the
said decision entitles the respondents, by law, to the issuance of a writ of execution. PSB laments that petitioner relies more on
technicalities to frustrate the ends of justice and to delay the enforcement of a final and executory decision.

As to the principal issue, PSB points out that the notice of hearing appended to the motion for execution filed by the Spouses Co
substantially complied with the requirements of the Rules since petitioner’s then counsel of record was duly notified and furnished a
copy of the questioned motion for execution. Also, the motion for execution filed by the Spouses Co was served upon and personally
received by said counsel.
The Court’s Ruling
The Court agrees with the Spouses Co that petitioner’s allegations on the "dagdag-bawas operation of the Transcript of Stenographic
Notes," the "fraud perpetuated upon the Court by said spouses and their lead counsel," the "ownership," and "falsification" had long
been laid to rest in the case of "Douglas F. Anama v. Philippine Savings Bank, et. al."4 For said reason, the Court cannot review those
final pronouncements. To do so would violate the rules as it would open a final judgment to another reconsideration which is a
prohibited procedure.
On the subject procedural question, the Court finds no compelling reason to stay the execution of the judgment because the Spouses
Co complied with the notice and hearing requirements under Sections 4, 5 and 6 of Rule 15. Said sections, as amended, provide:
SECTION 4. Hearing of motion. – Except for motions which the court may act upon without prejudicing the rights of the adverse
party, every written motion shall be set for hearing by the applicant.
Every written motion required to be heard and the notice of the hearing thereof shall be served in such a manner as to ensure its
receipt by the other party at least three (3) days before the date of hearing, unless the court for good cause sets the hearing on
shorter notice.
SECTION 5. Notice of hearing. – The notice of hearing shall be addressed to all parties concerned, and shall specify the time and date
of the hearing which must not be later than ten (10) days after the filing of the motion.
SECTION 6. Proof of service necessary. – No written motion set for hearing shall be acted upon by the court without proof of service
thereof.
Pertinently, Section 13 of Rule 13 of the 1997 Rules of Civil Procedure, as amended, provides:
SEC. 13. Proof of service. – Proof of personal service shall consist of a written admission of the party served, or the official return of
the server, or the affidavit of the party serving, containing a full statement of the date, place, and manner of service. If the service is
by ordinary mail, proof thereof shall consist of an affidavit of the person mailing of facts showing compliance with section 7 of this
Rule. If service is made by registered mail, proof shall be made by such affidavit and the registry receipt issued by the mailing office.
The registry return card shall be filed immediately upon its receipt by the sender, or in lieu thereof the unclaimed letter together with
the certified or sworn copy of the notice given by the postmaster to the addressee.

Elementary is the rule that every motion must contain the mandatory requirements of notice and hearing and that there must be
proof of service thereof. The Court has consistently held that a motion that fails to comply with the above requirements is considered
a worthless piece of paper which should not be acted upon. The rule, however, is not absolute. There are motions that can be acted
upon by the court ex parte if these would not cause prejudice to the other party. They are not strictly covered by the rigid
requirement of the rules on notice and hearing of motions.
The motion for execution of the Spouses Co is such kind of motion. It cannot be denied that the judgment sought to be executed in
this case had already become final and executory. As such, the Spouses Co have every right to the issuance of a writ of execution and
the RTC has the ministerial duty to enforce the same. This right on the part of the Spouses Co and duty on the part of the RTC are
based on Section 1 and Section 2 of Rule 39 of the 1997 Revised Rules of Civil Procedure provides, as follows:
Section 1. Execution upon judgments or final orders. – Execution shall issue as a matter of right, on motion, upon a judgment or
order that disposes of the action or proceeding upon the expiration of the period to appeal therefrom if no appeal has been duly
perfected.
If the appeal has been duly perfected and finally resolved, the execution may forthwith be applied for in the court of origin, on
motion of the judgment obligee, submitting therewith certified true copies of the judgment or judgments or final order or orders
sought to be enforced and of the entry thereof, with notice to the adverse party.
The appellate court may, on motion in the same case, when the interest of justice so requires, direct the court of origin to issue the
writ of execution.
SEC. 2. Discretionary execution.—
(a) Execution of a judgment or final order pending appeal.— On motion of the prevailing party with notice to the adverse party filed
in the trial court while it has jurisdiction over the case and is in possession of either the original record or the record on appeal, as
the case may be, at the time of the filing of such motion, said court may, in its discretion, order execution of a judgment or final order
even before the expiration of the period to appeal.
After the trial court has lost jurisdiction, the motion for execution pending appeal may be filed in the appellate court.
Discretionary execution may only issue upon good reasons to be stated in a special order after due hearing.
(b) Execution of several, separate or partial judgments.—A several, separate or partial judgment may be executed under the same
terms and conditions as execution of a judgment or final order pending appeal. (2a) [Emphases and underscoring supplied]
As can be gleaned therefrom, under Paragraph 1 of Section 1 of Rule 39 of the 1997 Revised Rules of Civil Procedure, the Spouses Co
can have their motion for execution executed as a matter of right without the needed notice and hearing requirement to petitioner.
This is in contrast to the provision of Paragraph 2 of Section 1 and Section 2 where there must be notice to the adverse party. In the
case of Far Eastern Surety and Insurance Company, Inc. v. Virginia D. Vda. De Hernandez,5 it was written:
It is evident that Section 1 of Rule 39 of the Revised Rules of Court does not prescribe that a copy of the motion for the execution of
a final and executory judgment be served on the defeated party, like litigated motions such as a motion to dismiss (Section 3, Rule
16), or motion for new trial (Section 2, Rule 37), or a motion for execution of judgment pending appeal (Section 2, Rule 39), in all of
which instances a written notice thereof is required to be served by the movant on the adverse party in order to afford the latter an
opportunity to resist the application.
It is not disputed that the judgment sought to be executed in the case at bar had already become final and executory. It is
fundamental that the prevailing party in a litigation may, at any time within five (5) years after the entry thereof, have a writ of
execution issued for its enforcement and the court not only has the power and authority to order its execution but it is its ministerial
duty to do so. It has also been held that the court cannot refuse to issue a writ of execution upon a final and executory judgment, or
quash it, or order its stay, for, as a general rule, the parties will not be allowed, after final judgment, to object to the execution by
raising new issues of fact or of law, except when there had been a change in the situation of the parties which makes such execution
inequitable or when it appears that the controversy has ever been submitted to the judgment of the court; or when it appears that
the writ of execution has been improvidently issued, or that it is defective in substance, or is issued against the wrong party, or that
judgment debt has been paid or otherwise satisfied; or when the writ has been issued without authority. Defendant-appellant has
not shown that she falls in any of the situations afore-mentioned. Ordinarily, an order of execution of a final judgment is not
appealable. Otherwise, as was said by this Court in Molina v. de la Riva, a case could never end. Once a court renders a final
judgment, all the issues between or among the parties before it are deemed resolved and its judicial function as regards any matter
related to the controversy litigated comes to an end. The execution of its judgment is purely a ministerial phase of adjudication. The
nature of its duty to see to it that the claim of the prevailing party is fully satisfied from the properties of the loser is generally
ministerial.
In Pamintuan v. Muñoz, We ruled that once a judgment becomes final and executory, the prevailing party can have it executed as a
matter of right, and the judgment debtor need not be given advance notice of the application for execution.
Also of the same stature is the rule that once a judgment becomes final and executory, the prevailing party can have it executed as a
matter of right and the granting of execution becomes a ministerial duty of the court. Otherwise stated, once sought by the
prevailing party, execution of a final judgment will just follow as a matter of course. Hence, the judgment debtor need not be given
advance notice of the application for execution nor he afforded prior hearing.
Absence of such advance notice to the judgment debtor does not constitute an infringement of the constitutional guarantee of due
process.
However, the established rules of our system of jurisprudence do not require that a defendant who has been granted an opportunity
to be heard and has had his day in court should, after a judgment has been rendered against him, have a further notice and hearing
before supplemental proceedings are taken to reach his property in satisfaction of the judgment. Thus, in the absence of a statutory
requirement, it is not essential that he be given notice before the issuance of an execution against his tangible property; after the
rendition of the judgment he must take "notice of what will follow," no further notice being "necessary to advance justice."
[Emphases and underscoring supplied]

Likewise, in the case of Leonardo Lim De Mesa v. Hon. Court of Appeals,6 it was stated:

In the present case, the decision ordering partition and the rendition of accounting had already become final and executory. The
execution thereof thus became a matter of right on the part of the plaintiffs, herein private respondents, and is a mandatory and
ministerial duty on the part of the court. Once a judgment becomes final and executory, the prevailing party can have it executed as
a matter of right, and the judgment debtor need not be given advance notice of the application for execution nor be afforded prior
hearings thereon.

On the bases of the foregoing considerations, therefore, the Court of Appeals acted correctly in holding that the failure to serve a
copy of the motion for execution on petitioner is not a fatal defect. In fact, there was no necessity for such service. [Emphases and
underscoring supplied]

At any rate, it is not true that the petitioner was not notified of the motion for execution of the Spouses Co. The records clearly show
that the motion for execution was duly served upon, and received by, petitioner’s counsel-of-record, the Quasha Ancheta Pena
Nolasco Law Offices, as evidenced by a "signed stamped received mark" appearing on said pleading.7 The records are bereft of proof
showing any written denial from petitioner’s counsel of its valid receipt on behalf of its client. Neither is there proof that the Quasha
Ancheta Pena Nolasco Law Offices has formally withdrawn its appearance as petitioner’s counsel-of-record. Considering that there is
enough proof shown on record of personal delivery in serving the subject motion for execution, there was a valid compliance with
the Rules, thus, no persuasive reason to stay the execution of the subject final and executory judgment.
Moreover, this Court takes note that petitioner was particularly silent on the ruling of the CA that he was notified, through his
counsel, of the motion for execution of the Spouses Co when he filed a motion for reconsideration of the RTC’s order dated June 28,
2005, holding in abeyance said motion pending the resolution of petitioner’s pleading filed before this Court. He did not dispute the
ruling of the CA either that the alleged defect in the Spouses Co’s motion was cured when his new counsel was served a copy of said
motion for reconsideration of the RTC’s June 28, 2005 Order.8
The three-day notice rule is not absolute. A liberal construction of the procedural rules is proper where the lapse in the literal
observance of a rule of procedure has not prejudiced the adverse party and has not deprived the court of its authority. Indeed,
Section 6, Rule 1 of the Rules of Court provides that the Rules should be liberally construed in order to promote their objective of
securing a just, speedy and inexpensive disposition of every action and proceeding. Rules of procedure are tools designed to facilitate
the attainment of justice, and courts must avoid their strict and rigid application which would result in technicalities that tend to
frustrate rather than promote substantial justice.
In Somera Vda. De Navarro v. Navarro, the Court held that there was substantial compliance of the rule on notice of motions even if
the first notice was irregular because no prejudice was caused the adverse party since the motion was not considered and resolved
until after several postponements of which the parties were duly notified.
Likewise, in Jehan Shipping Corporation v. National Food Authority, the Court held that despite the lack of notice of hearing in a
Motion for Reconsideration, there was substantial compliance with the requirements of due process where the adverse party
actually had the opportunity to be heard and had filed pleadings in opposition to the motion. The Court held:
This Court has indeed held time and again, that under Sections 4 and 5 of Rule 15 of the Rules of Court, mandatory is the
requirement in a motion, which is rendered defective by failure to comply with the requirement. As a rule, a motion without a notice
of hearing is considered pro forma and does not affect the reglementary period for the appeal or the filing of the requisite pleading.
As an integral component of the procedural due process, the three-day notice required by the Rules is not intended for the benefit of
the movant. Rather, the requirement is for the purpose of avoiding surprises that may be sprung upon the adverse party, who must
be given time to study and meet the arguments in the motion before a resolution of the court. Principles of natural justice demand
that the right of a party should not be affected without giving it an opportunity to be heard.
The test is the presence of opportunity to be heard, as well as to have time to study the motion and meaningfully oppose or
controvert the grounds upon which it is based.9 [Emphases and underscoring supplied]
Likewise, in the case of KKK Foundation, Inc. v. Hon. Adelina Calderon-Bargas,10 this Court stated:
Anent the second issue, we have consistently held that a motion which does not meet the requirements of Sections 4 and 5 of Rule
15 of the Rules of Court is considered a worthless piece of paper, which the Clerk of Court has no right to receive and the trial court
has no authority to act upon. Service of a copy of a motion containing a notice of the time and the place of hearing of that motion is
a mandatory requirement, and the failure of movants to comply with these requirements renders their motions fatally defective.
However, there are exceptions to the strict application of this rule. These exceptions are: (1) where a rigid application will result in a
manifest failure or miscarriage of justice especially if a party successfully shows that the alleged defect in the questioned final and
executory judgment is not apparent on its face or from the recitals contained therein; (2) where the interest of substantial justice will
be served; (3) where the resolution of the motion is addressed solely to the sound and judicious discretion of the court; and (4)
where the injustice to the adverse party is not commensurate with the degree of his thoughtlessness in not complying with the
procedure prescribed.
A notice of hearing is an integral component of procedural due process to afford the adverse parties a chance to be heard before a
motion is resolved by the court. Through such notice, the adverse party is given time to study and answer the arguments in the
motion. Records show that while Angeles’s Motion for Issuance of Writ of Execution contained a notice of hearing, it did not
particularly state the date and time of the hearing. However, we still find that petitioner was not denied procedural due process.
Upon receiving the Motion for Issuance of Writ of Execution, the trial court issued an Order dated September 9, 2002 giving
petitioner ten (10) days to file its comment. The trial court ruled on the motion only after the reglementary period to file comment
lapsed. Clearly, petitioner was given time to study and comment on the motion for which reason, the very purpose of a notice of
hearing had been achieved.
The notice requirement is not a ritual to be followed blindly.1âwphi1 Procedural due process is not based solely on a mechanical and
literal application that renders any deviation inexorably fatal. Instead, procedural rules are liberally construed to promote their
objective and to assist in obtaining a just, speedy and inexpensive determination of any action and proceeding. [Emphases supplied]
At any rate, it is undisputed that the August 21, 1991 RTC Decision11 in Civil Case No. 44940 is already final and executory. Once a
judgment becomes final and executory, all the issues between the parties are deemed resolved and laid to rest. All that remains is
the execution of the decision which is a matter of right. The prevailing party is entitled to a writ of execution, the issuance of which is
the trial court’s ministerial duty.12
The Court agrees with the respondents that petitioner mainly relies on mere technicalities to frustrate the ends of justice and further
delay the execution process and enforcement of the RTC Decision that has been affirmed by the CA and this Court. The record shows
that the case has been dragging on for almost 30 years since petitioner filed an action for annulment of sale in 1982. From the time
the Spouses Co bought the house from PSB in 1978, they have yet to set foot on the subject house and lot.
To remand the case back to the lower court would further prolong the agony of the Spouses Co. The Court should not allow this to
happen. The Spouses Co should not be prevented from enjoying the fruits of the final judgment in their favor. In another protracted
case, the Court wrote:
As a final note, it bears to point out that this case has been dragging for more than 15 years and the execution of this Court’s
judgment in PEA v. CA has been delayed for almost ten years now simply because De Leon filed a frivolous appeal against the RTC’s
order of execution based on arguments that cannot hold water. As a consequence, PEA is prevented from enjoying the fruits of the
final judgment in its favor. The Court agrees with the Office of the Solicitor General in its contention that every litigation must come
to an end once a judgment becomes final, executory and unappealable. Just as a losing party has the right to file an appeal within the
prescribed period, the winning party also has the correlative right to enjoy the finality of the resolution of his case by the execution
and satisfaction of the judgment, which is the "life of the law." To frustrate it by dilatory schemes on the part of the losing party is to
frustrate all the efforts, time and expenditure of the courts. It is in the interest of justice that this Court should write finis to this
litigation.13
WHEREFORE, the petition is DENIED.
SO ORDERED.
Liberal construction of procedural rules
MARIA CONSOLACION RIVERA-PASCUAL, Petitioner, vs.SPOUSES MARILYN LIM and GEORGE LIM and the REGISTRY OF DEEDS OF
VALENZUELA CITY, Respondents.
This is a petition for review on certiorari assailing the Resolutions dated October 15, 20091 and March 11, 20102 of the Court of
Appeals (CA) in CA-G.R. SP No. 109265.
The facts leading to the filing of this petition are undisputed.
Subject of the present controversy is a parcel of land with an approximate area of 4.4 hectares and located at Bignay, Valenzuela City.
The property is covered by Transfer Certificate of Title (TCT) No. V-73892, registered in the names of George and Marilyn Lim
(Spouses Lim).
On September 8, 2004, Maria Consolacion Rivera-Pascual (Consolacion) filed before the Office of the Regional Agrarian Reform
Adjudicator (RARAD) for Region IV-A a petition to be recognized as a tenant of a property located at Bignay, Valenzuela City against
Danilo Deato (Deato). At that time, the property, which has an approximate area of 4.4 hectares, was covered by TCT No. 24759
under Deato’s name. During the pendency of the petition, Deato sold the property to Spouses Lim. The sale was registered on
December 21, 2004 leading to the issuance of TCT No. V-73892 in favor of Spouses Lim. Considering this development, Consolacion
filed a motion on March 3, 2005 to implead Spouses Lim as respondents.3
The petition, which was docketed as DARAB Case No. R-0400-0012-04, was granted byRegional Adjudicator Conchita C. Miñas (RA
Miñas) in a Decision4 dated December 2, 2005, the dispositive portion of which states
WHEREFORE, premises considered, judgment is hereby rendered:
1) Declaring that petitioner is the tenant of the subject landholding by succession from her deceased father;
2) Declaring respondents spouses George and Marilyn Lim to have subrogated to the rights and substituted to the obligation of
spouses Danilo and Divina Deato;
3) Ordering the respondents and all persons claiming rights under them to maintain petitioner in peaceful possession and cultivation
of the agricultural land subject hereof;
4) Declaring petitioner to have the right to exercise the right of redemption of the subject parcel of agricultural land pursuant to
Section 12 of RA 3844 as amended; and
5) Dismissing the petition against Louie Cruz, Fire Force Agency and Danny Boy Rivera for having no proximate tenurial relationship
with the petitioner hence beyond the jurisdictional ambit of this Office.
SO ORDERED.5
On July 7, 2006, the foregoing decision became final.6
Upon Consolacion’s motion for execution filed on January 7, 2008, RA Miñas issued a writ of execution on January 8, 2008.7
On January 21, 2008, Consolacion filed a petition against Spouses Lim and the Registrar of Deeds of Valenzuela City praying for the
issuance of an order directing Spouses Lim to accept the amount of ₱ 10,000,000.00 which she undertook to tender during the initial
hearing, declaring the property redeemed, and cancelling TCT No. V-73892.8 Consolacion consigned with the RARAD the amount of
₱ 10,000,000.00 on March 3, 2008.9
Consolacion’s petition, which was docketed as DARAB Case No. R-0400-001-08, was given due course by RA Miñas in a Decision10
dated June 2, 2008, the dispositive portion of which states:
WHEREFORE, foregoing premises considered, judgment is hereby rendered:
1. As prayed for, declaring that the landholding subject of the petition as lawfully redeemed;
2. Ordering respondent spouses to accept and withdraw the amount of the redemption price consigned with this Office which was
deposited for safekeeping indicated in Manager’s Check No. 0000004518 issued by Allied Bank in the name of Spouses Marilyn and
George Lim and/or DAR Adjudication Board Region IV-A in the amount of ten (10) million pesos;
3. Upon acceptance and the withdrawal of the redemption price as ordered in paragraph 2 hereof, ordering respondent spouses to
execute a Deed of Redemption in favor of petitioner;
4. In case of refusal and/or failure of respondent spouses to execute the Deed of Redemption as ordered above, the Regional Clerk of
the Board is hereby ordered to execute a Deed of Redemption in the name of the petitioner; and
5. Directing the Register of Deeds for Valenzuela City to cause the cancellation of TCT No. V-73892 registered in the name of
respondent spouses Marilyn and George Lim and a new one issued in the name of petitioner upon presentment of the Deed of
Redemption.
SO ORDERED.11
On appeal, the Department of Agrarian Reform Adjudication Board (DARAB) issued a Decision12 on February 18, 2009 reversing RA
Miñas Decision dated June 2, 2008. Specifically:
WHEREFORE, in view of the foregoing, the appealed Decision dated 02 June 2008 is hereby REVERSED and SET ASIDE. A new
judgment is hereby rendered:
1. DECLARING the landholding to be not lawfully redeemed;
2. DECLARING petitioner-appellee not a bona fide tenant of the subject landholding;
3. DECLARING that petitioner-appellee cannot redeem the subject parcel registered in the names of the respondents-appellants;
4. ORDERING the respondents-appellants to be maintained in peaceful possession of the subject landholding; and
5. DIRECTING the Clerk of the Board of the Regional Agrarian Reform Adjudicator of Region IV-A to return the Manager’s Check No.
0000004518 issued by Allied Bank in the name of Spouses Marilyn and George Lim and/or DAR Adjudication Board Region IV-A in the
amount of Ten Million pesos to herein petitioner-appellee.
SO ORDERED.13
On April 13, 2009, Consolacion moved for reconsideration,14 which the DARAB denied in a Resolution15 dated June 8, 2009 for
being filed out of time.

SECTION 12 Rule X of the 2003 DARAB Rules provides that a Motion for Reconsideration shall be filed within fifteen (15) days from
receipt of notice of the order, resolution, or decision of the Board or Adjudicator. Records show that both the petitioner-appellee and
her counsel received a copy of the Decision dated 18 February 2009 on 27 February 2009 and that Legal Officer Nancy Geocada, the
alleged new counsel of the herein petitioner-appellee, filed the Motion for Reconsideration only on 13 April 2009, clearly the Motion
for Reconsideration was filed beyond the fifteen (15) days (sic) reglementary period thus the herein Decision has already become
final and executory. x x x.16

On June 25, 2009, Consolacion filed a petition for review under Rule 43 of the Rules of Court with the CA.17

On July 1, 2009, the CA resolved to require Consolacion’s counsel to submit within five (5) days from notice his Mandatory Continuing
Legal Education (MCLE) Certificate of Compliance or Exemption and an amended Verification and Certification Against Non-Forum-
Shopping.18 Apparently, Consolacion’s counsel failed to indicate in the petition his MCLE Certificate of Compliance or Exemption
Number as required under Bar Matter No. 1922. Also, the jurat of Consolacion’s verification and certification against non-forum-
shopping failed to indicate any competent evidence of Consolacion’s identity apart from her community tax certificate.

Considering the failure of Consolacion and her counsel to comply, the CA issued a Resolution19 on October 15, 2009 dismissing the
petition.

On July 7, 2009, the counsel for the petitioner received the above-mentioned Resolution. However, the counsel for the petitioner
failed to comply with the said Resolution which was due on July 19, 2009.

For failure of the counsel for the petitioner to comply with the Resolution dated July 1, 2009, despite receipt of the notice thereof,
the petition is hereby DISMISSED.

SO ORDERED.20
Consolacion moved for reconsideration but this was denied by the CA in a Resolution21 dated March 11, 2010.

Consolacion is, before this Court, claiming that the CA’s summary dismissal of her petition on technical grounds is
unwarranted.1âwphi1 Consolacion invoked substantial justice against the CA’s strict application of the rule requiring her counsel to
note his MCLE Compliance or Exemption Certificate Number and the rule rendering the jurat of her verification and certification on
non-forum-shopping defective in the absence of the details of any one of her current identification document issued by an official
agency bearing her photograph and signature. That there was merit in her petition and that she complied, albeit belatedly as her
counsel’s MCLE Compliance Certificate Number was indicated and a verification and certificate on non-forum-shopping with a proper
jurat was attached to her motion for reconsideration, should have sufficed for the CA to reverse the dismissal of her petition and
decide the same on its merits. Consolacion alleged that procedural rules or technicalities are designed to facilitate the attainment of
justice and their rigid application should be avoided if this would frustrate rather than promote substantial justice.

The Court finds no merit in the petition. The Court sees no reversible error committed by the CA in dismissing Consolacion’s petition
before it on the ground of petitioner’s unexplained failure to comply with basic procedural requirements attendant to the filing of a
petition for review under Rule 43 of the Rules of Court. Notably, Consolacion and her counsel remained obstinate despite the
opportunity afforded to them by the CA to rectify their lapses. While there was compliance, this took place, however, after the CA
had ordered the dismissal of Consolacion’s petition and without reasonable cause proffered to justify its belatedness. Consolacion
and her counsel claimed inadvertence and negligence but they did not explain the circumstances thereof. Absent valid and
compelling reasons, the requested leniency and liberality in the observance of procedural rules appears to be an afterthought,
hence, cannot be granted. The CA saw no compelling need meriting the relaxation of the rules. Neither does this Court see any.

The Court is aware of the exceptional cases where technicalities were liberally construed. However, in these cases, outright dismissal
is rendered unjust by the presence of a satisfactory and persuasive explanation. The parties therein who prayed for liberal
interpretation were able to hurdle that heavy burden of proving that they deserve an exceptional treatment. It was never the Court’s
intent "to forge a bastion for erring litigants to violate the rules with impunity."22
This Court will not condone a cavalier attitude towards procedural rules. It is the duty of every member of the bar to comply with
these rules. They are not at liberty to seek exceptions should they fail to observe these rules and rationalize their omission by harking
on liberal construction.
While it IS the negligence of Consolacion's counsel that led to this unfortunate result, she is bound by such.
WHEREFORE, premises considered, the petition is DISMISSED. The Resolutions dated October 15, 2009 and March 11, 2010 of the
Court of Appeals in CA-G.R. SP No. 109265 are AFFIRMED.

Costs against the petitioner.

SO ORDERED.
felix martos v new san jose builders
MENDOZA, J.:
Questioned in this Petition for Review is the July 31, 2009 Decision1 of the Court of Appeals (CA) and its June 17, 2010 Resolution,2
which reversed and set aside the July 30, 2008 Decision3 and October 28, 2008, Resolution4 of the National Labor Relations
Commission (NLRC); and reinstated the May 23, 2003 Decision5 of the Labor Arbiter (LA). The dispositive portion of the CA Decision
reads:

WHEREFORE, decision is hereby rendered, as follows:

1. Declaring the complainant Felix Martos was illegally dismissed and ordering respondent New San Jose Builders, Inc. to pay him his
separation pay, backwages, salary differentials, 13th month pay, service incentive leave pay, and attorney’s fees in the total amount
of TWO HUNDRED SIXTY THOUSAND SIX HUNDRED SIXTY ONE PESOS and 50/1000 (P260, 661.50).

The awards for separation pay, backwages and the corresponding attorney’s fees are subject to further computation until the
decision in this case becomes final and executory; and

2. Dismissing the complaints/claim of the other complainants without prejudice.

SO ORDERED.6

The Facts

The factual and procedural antecedents were succinctly summarized by the CA as follows:

New San Jose Builders, Inc. (hereafter petitioner) is a domestic corporation duly organized and existing under the laws of the
Philippines and is engaged in the construction of road, bridges, buildings, and low cost houses primarily for the government. One of
the projects of petitioner is the San Jose Plains Project (hereafter SJPP), located in Montalban, Rizal. SJPP, which is also known as the
"Erap City" calls for the construction of low cost housing, which are being turned over to the National Housing Authority to be
awarded to deserving poor families.
Private respondents alleged that, on various dates, petitioner hired them on different positions, hereunder specified:
Sometime in 2000, petitioner was constrained to slow down and suspend most of the works on the SJPP project due to lack of funds
of the National Housing Authority. Thus, the workers were informed that many of them [would] be laid off and the rest would be
reassigned to other projects. Juan Villaber, Terso Garay, Rowell Batta, Pastor Pantig, Rafael Villa, and Melvin Garay were laid off.
While on the other hand, Felix Martos, Ariel Dominguez, Greg Bisonia, Allan Caballera, Orlando Limos, Mandy Mamalateo, Eric
Castrence, Anthony Molina, and Roy Silva were among those who were retained and were issued new appointment papers to their
respective assignments, indicating therein that they are project employees. However, they refused to sign the appointment papers as
project employees and subsequently refused to continue to work.

On different dates, three (3) Complaints for Illegal Dismissal and for money claims were filed before the NLRC against petitioner and
Jose Acuzar, by private respondents who claimed to be the former employees of petitioner, to wit:

1. Complaint dated March 11, 2002, entitled "Felix Martos, et al. vs. NSJBI", docketed as NLRC-NCR Case No. 03-01639-2002;

2. Complaint dated July 9, 2002, entitled "Jimmy Campana, et al. vs. NSJBI," docketed as NLRC-NCR Case No. 07-04969-2002;

3. Complaint dated July 4, 2002, entitled "Greg Bisonia, et al. vs. NSJBI", docketed as NLRC-NCR Case No. 07-02888-2002.

Petitioner denies that private respondents were illegally dismissed, and alleged that they were project employees, whose
employments were automatically terminated upon completion of the project for which they were hired. On the other hand, private
respondents claim that petitioner hired them as regular employees, continuously and without interruption, until their dismissal on
February 28, 2002.

Subsequently, the three Complaints were consolidated and assigned to Labor Arbiter Facundo Leda.7

Ruling of the Labor Arbiter

As earlier stated, on May 23, 2003, the LA handed down a decision declaring, among others, that petitioner Felix Martos (Martos)
was illegally dismissed and entitled to separation pay, backwages and other monetary benefits; and dismissing, without prejudice,
the complaints/claims of the other complainants (petitioners).

Ruling of The NLRC

Both parties appealed the LA decision to the NLRC. Petitioners appealed that part which dismissed all the complaints, without
prejudice, except that of Martos. On the other hand, New San Jose Builders, Inc. (respondent) appealed that part which held that
Martos was its regular employee and that he was illegally dismissed.

On July 30, 2008, the NLRC resolved the appeal by dismissing the one filed by respondent and partially granting that of the other
petitioners. The dispositive portion of the NLRC decision reads as follows:

WHEREFORE, premises considered, respondent’s appeal is DISMISSED for lack of merit. The appeal of the complainants is, however,
PARTIALLY GRANTED by modifying the 23 May 2003 Decision of the Labor Arbiter Facundo L. Leda, in that, respondents are ordered
to reinstate all the complainants to their former positions, without loss of seniority rights and with full backwages, counted from the
time their compensation was withheld from them until actual reinstatement.

Respondents are likewise ordered to pay complainants their salary differentials, service incentive leave pay, and 13th month pay,
using, as basis, the computation made on the claims of complainant Felix Martos.

In all other aspects, the Decision is AFFIRMED.

SO ORDERED.8

Ruling Of The CA

After the denial of its motion for reconsideration, respondent filed before the CA a petition for certiorari under Rule 65 of the 1997
Rules of Civil Procedure, as amended, raising the following issues:

I) The public respondent has committed grave abuse of discretion in holding that the private respondents were regular employees
and, thus, have been illegally dismissed.

II) The public respondent has committed grave abuse of discretion in reviving the complaints of the other private respondents
despite their failure to verify the same.

III) The public respondent has committed grave abuse of discretion when it upheld the findings of the Labor Arbiter granting relief in
favor of those supposed complainants who did not even render service to the petitioner and, hence, are not on its payroll.
On July 31, 2009, the CA rendered a decision reversing and setting aside the July 30, 2008 Decision and the October 28, 2008
Resolution of the NLRC and reinstating the May 23, 2003 Decision of the LA. The dispositive portion of the CA decision reads:

WHEREFORE, premises considered, the present petition is hereby GRANTED. Accordingly, the assailed Resolution dated October 28,
2008 of public respondent National Labor Relations Commission is REVERSED and SET ASIDE, and the Decision dated May 23, 2003 of
Labor Arbiter Facundo L. Leda, is hereby ordered reinstated.

SO ORDERED.9

The CA explained that the NLRC committed grave abuse of discretion in reviving the complaints of petitioners despite their failure to
verify the same. Out of the 102 complainants, only Martos verified the position paper and his counsel never offered any explanation
for his failure to secure the verification of the others. The CA also held that the NLRC gravely abused its discretion when it took
cognizance of petitioners’ appeal because Rule 41, Section 1(h) of the 1997 Rules of Civil Procedure, as amended, which is
suppletory, provides that no appeal may be taken from an order dismissing an action without prejudice.

Nevertheless, the CA stated that the factual circumstances of Martos’ employment and his dismissal from work could not equally
apply to petitioners because they were not similarly situated. The NLRC did not even bother to look at the evidence on record and
inappropriately granted monetary awards to petitioners who had either denied having filed a case or withdrawn the case against
respondent. According to the CA, the position papers should have covered only those claims and causes of action raised in the
complaint excluding those that might have been amicably settled.

With respect to Martos, the CA ruled that he was a regular employee of respondent and his termination was illegal. It explained that
Martos should have been considered a regular employee because there was no indication that he was merely a project employee
when he was hired. To show otherwise, respondent should have presented his employment contract for the alleged specific project
and the successive employment contracts for the different projects or phases for which he was hired. In the absence of such
document, he could not be considered such an employee because his work was necessary and desirable to the respondent’s usual
business and that he was not required to sign any employment contract fixing a definite period or duration of his engagement. Thus,
Martos already attained the status of a regular employee. Moreover, the CA noted that respondent did not report the termination of
Martos’ supposed project employment to the Department of Labor and Employment (DOLE), as required under Department Order
No. 19.

Being a regular employee, the CA concluded that he was constructively dismissed when he was asked to sign a new appointment
paper indicating therein that he was a project employee and that his appointment would be co-terminus with the project.

Not in conformity with the CA decision, petitioners filed this petition anchored on the following

ASSIGNMENT OF ERRORS
A.WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS AND THE LABOR ARBITER BELOW GRAVELY ERRED IN DISMISSING THE
COMPLAINTS OF THE NINETY NINE (99) PETITIONERS DUE TO FAILURE OF THE LATTER TO VERIFY THEIR POSITION PAPER WHEN,
OBVIOUSLY, SUCH TECHNICALITY SHOULD NOT HAVE BEEN RESORTED TO BY THEM AS IT WILL DEPRIVE THESE PETITIONERS OF THEIR
PROPERTY RIGHT TO WORK.

B.WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS AND THE LABOR ARBITER BELOW GRAVELY ERRED IN NOT ORDERING
THE REINSTATEMENT OF PETITIONER MARTOS AND THE OTHER 99 PETITIONERS WHEN, OBVIOUSLY, AND AS FOUND BY THEM, THE
DISMISSAL OF MARTOS IS ILLEGAL WHICH WOULD WARRANT HIS REINSTATEMENT AND THE GRANT TO HIM OF FULL BACKWAGES
AND OTHER EMPLOYEES’ BENEFITS.

C.WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT ORDERING THE RESPONDENTS TO PAY THE
PETITIONERS ACTUAL, MORAL AND EXEMPLARY DAMAGES.

Position of Petitioners

Petitioners basically argue that the CA was wrong in affirming the dismissal of their complaints due to their failure to verify their
position paper. They insist that the lack of verification of a position paper is only a formal and not a jurisdictional defect. Hence, it
was not fatal to their cause of action considering that the CA could have required them to submit the needed verification.

The CA overlooked the fact that all of them verified their complaints by declaring under oath relevant and material facts such as their
names, addresses, employment status, salary rates, facts, causes of action, and reliefs common to all of them. The information
supplied in their complaints is sufficient to prove their status of employment and entitlement of their monetary claims. In the
adjudication of labor cases, the adherence to stringent technical rules may be relaxed in the interest of the working man. Moreover,
respondent failed to adduce evidence of payment of their money claims.

Finally, petitioners argue that they and Martos were similarly situated. The award of separation pay instead of reinstatement to an
illegally dismissed employee was improper because the strained relations between the parties was not clearly established. Moreover,
they are entitled to actual, moral and exemplary damages for respondent’s illegal act of violating labor standard laws, the minimum
wage law and the 13th month pay law.
Position of Respondents

On the other hand, respondent principally counters that the CA and the LA 1) did not err in dismissing the complaints of the 88
petitioners who failed to verify their position paper, without prejudice; 2) correctly ruled that Martos and the 88 petitioners
concerned were not entitled to reinstatement; and 3) correctly ruled that petitioners were not entitled to an award of actual, moral
and exemplary damages.

Petitioners have the propensity to disregard the mandatory provisions of the 2005 Revised Rules of Procedure of the NLRC (NLRC
Rules) which require the parties to submit simultaneously their verified position papers with supporting documents and affidavits. In
the proceedings before the LA, the complaints of the 99 workers were dismissed because they failed to verify or affix their signatures
to the position paper filed with the LA.

While it is true that the NLRC Rules must be liberally construed and that the NLRC is not bound by the technicalities of law and
procedure, it should not be the first to arbitrarily disregard specific provisions of the rules which are precisely intended to assist the
parties in obtaining just, expeditious and inexpensive settlement of labor disputes. It was only Felix Martos who verified their
position paper and their memorandum of appeal. It was only he alone who was vigilant in looking after his interest and enforcing his
rights. Petitioners should be considered to have waived their rights and interests in the case for their consistent neglect and passive
attitude.

Moreover, Martos was never authorized by any of his fellow complainants through a special power of attorney or other document in
the proceedings to represent them before the LA and the NLRC. His acts and verifications were made only in his own personal
capacity and did not bind or benefit petitioners. There is only one logical reason why a majority of them failed to verify their position
paper, their appeal and now their petition: they were not in any way employees of the respondent. They were total strangers to the
respondent. They even refused to identify themselves during the proceedings by their failure to appear thereat. Hence, it is too late
for the others to participate in the fruits, if any, of this litigation.

Finally, the reinstatement being sought by Martos and the others was no longer practicable because of the strained relation between
the parties. Petitioners can no longer question this fact. This issue was never raised or taken up on appeal before the NLRC. It was
only when the petitioners lost in the appeal in the CA that they first raised the issue of strained relation. Moreover, no proof of actual
damages was presented by the petitioners. There is no clear and convincing evidence on record showing that the termination of an
employee’s services had been carried out in an arbitrary, capricious or malicious manner.

The Court’s Ruling

The Court is basically asked to resolve two (2) issues: 1 whether or not the CA was correct in dismissing the complaints filed by those
petitioners who failed to verify their position papers; and 2 whether or not Martos should be reinstated.

Regarding the first issue, the Court agrees with the respondent.

Sections 4 and 5 of Rule 7 of the 1997 Rules of Civil Procedure provide:

SEC. 4. Verification. – Except when otherwise specifically required by law or rule, pleadings need not be under oath, verified or
accompanied by affidavit.

A pleading is verified by an affidavit that the affiant has read the pleadings and that the allegations therein are true and correct of his
personal knowledge or based on authentic records.

A pleading required to be verified which contains a verification based on "information and belief" or upon "knowledge, information
and belief" or lacks a proper verification, shall be treated as an unsigned pleading.

SEC. 5. Certification against forum shopping. – The plaintiff or principal party shall certify under oath in the complaint or other
initiatory pleading asserting a claim for relief, or in a sworn certification annexed thereto and simultaneously filed therewith:

(a) that he has not theretofore commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-
judicial agency and, to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such other pending
action or claim, a complete statement of the present status thereof; and (c) if he should thereafter learn that the same or similar
action or claim has been filed or is pending, he shall report that fact within five (5) days therefrom to the court wherein his aforesaid
complaint or initiatory pleading has been filed.

Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or other initiatory
pleading but shall be cause for the dismissal of the case without prejudice, unless otherwise provided, upon motion and after
hearing. The submission of a false certification or non-compliance with any of the undertakings therein shall constitute indirect
contempt of court, without prejudice to the corresponding administrative and criminal actions. If the acts of the party or his counsel
clearly constitute willful and deliberate forum shopping, the same shall be ground for summary dismissal with prejudice and shall
constitute direct contempt, as well as a cause for administrative sanctions. x x x. [Emphases supplied]
The verification requirement is significant, as it is intended to secure an assurance that the allegations in the pleading are true and
correct and not the product of the imagination or a matter of speculation, and that the pleading is filed in good faith.10 Verification is
deemed substantially complied with when, as in this case, one who has ample knowledge to swear to the truth of the allegations in
the complaint or petition signs the verification, and when matters alleged in the petition have been made in good faith or are true
and correct.11

The absence of a proper verification is cause to treat the pleading as unsigned and dismissible.12

The lone signature of Martos would have been sufficient if he was authorized by his co-petitioners to sign for them. Unfortunately,
petitioners failed to adduce proof that he was so authorized. The complaints of the other parties in the case of Nellie Vda. De
Formoso v. v. PNB13 suffered a similar fate. Thus:

Admittedly, among the seven (7) petitioners mentioned, only Malcaba signed the verification and certification of non-forum shopping
in the subject petition. There was no proof that Malcaba was authorized by his co-petitioners to sign for them. There was no special
power of attorney shown by the Formosos authorizing Malcaba as their attorney-in-fact in filing a petition for review on certiorari.
Neither could the petitioners give at least a reasonable explanation as to why only he signed the verification and certification of non-
forum shopping.

The liberal construction of the rules may be invoked in situations where there may be some excusable formal deficiency or error in a
pleading, provided that the same does not subvert the essence of the proceeding and it at least connotes a reasonable attempt at
compliance with the rules. Besides, fundamental is the precept that rules of procedure are meant not to thwart but to facilitate the
attainment of justice; hence, their rigid application may, for deserving reasons, be subordinated by the need for an apt dispensation
of substantial justice in the normal course. They ought to be relaxed when there is subsequent or even substantial compliance,
consistent with the policy of liberality espoused by Rule 1, Section 6.14 Not being inflexible, the rule on verification allows for such
liberality.15

Considering that the dismissal of the other complaints by the LA was without prejudice, the other complainants should have taken
the necessary steps to rectify their procedural mistake after the decision of the LA was rendered. They should have corrected this
procedural flaw by immediately filing another complaint with the correct verification this time. Surprisingly, they did not even
attempt to correct this technical blunder. Worse, they committed the same procedural error when they filed their appeal16 with the
NLRC.

Under the circumstances, the Court agrees with the CA that the dismissal of the other complaints were brought about by the own
negligence and passive attitude of the complainants themselves. In Formoso, the Court further wrote:

The petitioners were given a chance by the CA to comply with the Rules when they filed their motion for reconsideration, but they
refused to do so. Despite the opportunity given to them to make all of them sign the verification and certification of non-forum
shopping, they still failed to comply. Thus, the CA was constrained to deny their motion and affirm the earlier resolution.

The Court can only do so much for them.

Most probably, as the list17 submitted is not complete with the information as to when each started and when each was dismissed
there must be some truth in the claim of respondent that those complainants who failed to affix their signatures in the verification
were either not employees of respondent at all or they simply refused to prosecute their complaints. In its position paper,18
respondent alleged that, aside from the four (4) complainants who withdrew their complaints, only 17 out of the more or less 104
complainants appeared on its records as its former project employees or at least known by it to have worked in one of its
construction projects. From the sworn statements executed by Felix Yortas,19 Marvin Batta,20

Lito Bantillo,21 Gavino Felix Nicolas,22 and Romeo Pangacian Martos,23 they already withdrew their complaints against respondent.
Their status and cause of action not being clear and proven, it is just not right that these complaints be considered as similarly
situated as Martos and entitled to the same benefits.

As to Martos, the Court agrees that the reinstatement being sought by him was no longer practicable because of strained relation
between the parties. Indeed, he can no longer question this fact. This issue was never raised or taken up on appeal before the MLRC.
It was only after he lost the appeal in the CA that he raised it.

Thus, the Court deems it fair to award separation pay in lieu of reinstatement.1âwphi1 In addition to his separation pay. Martos is
also entitled to payment of full backwages, 13th month pay, service incentive leave pay, and attorney’s fees.

The accepted doctrine is that separation pay may avail in lieu of reinstatement if reinstatement is no longer practical or in the best
interest of the parties. Separation pay in lieu of reinstatement may likewise be awarded if the employee decides not to be reinstated.

Under the doctrine of stained relations, the payment of separation pay is considered an acceptable alternative to reinstatement
when the latter opinion is no longer desirable or viable. On one hand, such payment liberates the employee from what could be
highly oppressive work environment. On the other hand, it release the employer from the grossly unpalatable obligation of
maintaining in its employ a worker it could no longer trust.24

WHEREFORE, the petition is DENIED.

SO ORDERED.
concepts of remedial or procedural law
panay railways inc v ramon javellana
SERENO, J.:

The present Petition stems from the dismissal by the Regional Trial Court (RTC) of Iloilo City of a Notice of Appeal for petitioner’s
failure to pay the corresponding docket fees.

The facts are as follows:

On 20 April 1982, petitioner Panay Railways Inc., a government-owned and controlled corporation, executed a Real Estate Mortgage
Contract covering several parcels of lands, including Lot No. 6153, in favor of Traders Royal Bank (TRB) to secure ₱ 20 million worth of
loan and credit accommodations. Petitioner excluded certain portions of Lot No. 6153: that already sold to Shell Co., Inc. referred to
as 6153-B, a road referred to as 6153-C, and a squatter area known as 6153-D.1

Petitioner failed to pay its obligations to TRB, prompting the bank to extra-judicially foreclose the mortgaged properties including Lot
No. 6153. On 20 January 1986, a Certificate of Sale was issued in favor of the bank as the highest bidder and purchaser.
Consequently, the sale of Lot No. 6153 was registered with the Register of Deeds on 28 January 1986 and annotated at the back of
the transfer certificates of title (TCT) covering the mortgaged properties.

Thereafter, TRB caused the consolidation of the title in its name on the basis of a Deed of Sale and an Affidavit of Consolidation after
petitioner failed to exercise the right to redeem the properties. The corresponding TCTs were subsequently issued in the name of the
bank.

On 12 February 1990, TRB filed a Petition for Writ of Possession against petitioner. During the proceedings, petitioner, through its
duly authorized manager and officer-in-charge and with the assistance of counsel, filed a Manifestation and Motion to Withdraw
Motion for Suspension of the Petition for the issuance of a writ of possession.2 The pertinent portions of the Manifestation and
Motion state:

3. That after going over the records of this case and the case of Traders Royal Bank vs. Panay Railway, Inc., Civil Case No. 18280, PRI is
irrevocably withdrawing its Motion for Suspension referred to in paragraph 1 above, and its Motion for Reconsideration referred in
paragraph 2 above and will accept and abide by the September 21, 1990 Order denying the Motion For Suspension;

4. That PRI recognizes and acknowledges petitioner (TRB) to be the registered owner of Lot 1-A; Lot 3834; Lot 6153; Lot 6158; Lot
6159, and Lot 5 covered by TCT No. T-84233; T-84234; T-84235; T-84236; T-84237, T-84238 and T-45724 respectively, free of liens and
encumbrances, except that portion sold to Shell Co. found in Lot 5. That Petitioner (TRB) as registered owner is entitled to peaceful
ownership and immediate physical possession of said real properties.

5. That PRI further acknowledges that the Provincial Sheriff validly foreclosed the Real Estate Mortgage erected by PRI due to failure
to pay the loan of ₱ 20,000,000.00. That TRB was the purchaser of these lots mentioned in paragraph 4 above at Sheriff’s Auction
Sale as evidenced by the Certificate of Sale dated January 20, 1986 and the Certificates of Titles issued to Petitioner;

6. That PRI further manifests that it has no past, present or future opposition to the grant of the Writ of Possession to TRB over the
parcels of land mentioned in paragraph 4 above and subject of this Petition and even assuming "arguendo" that it has, PRI
irrevocably waives the same. That PRI will even assist TRB in securing possession of said properties as witness against squatters,
illegal occupants, and all other possible claimants;

7. That upon execution hereof, PRI voluntarily surrenders physical possession and control of the premises of these lots to TRB, its
successors or its assigns, together with all the buildings, warehouses, offices, and all other permanent improvements constructed
thereon and will attest to the title and possession of petitioner over said real properties. (Emphasis supplied)

TCT No. T-84235 mentioned in the quoted portion above is Lot No. 6153, which is under dispute.

It was only in 1994 that petitioner realized that the extrajudicial foreclosure included some excluded properties in the mortgage
contract. Thus, on 19 August 1994, it filed a Complaint for Partial Annulment of Contract to Sell and Deed of Absolute Sale with
Addendum; Cancellation of Title No. T-89624; and Declaration of Ownership of Real Property with Reconveyance plus Damages.3

It then filed an Amended Complaint4 on 1 January 1995 and again filed a Second Amended Complaint5 on 8 December 1995.

Meanwhile, respondents filed their respective Motions to Dismiss on these grounds: (1) petitioner had no legal capacity to sue; (2)
there was a waiver, an abandonment and an extinguishment of petitioner’s claim or demand; (3) petitioner failed to state a cause of
action; and (4) an indispensable party, namely TRB, was not impleaded.
On 18 July 1997, the RTC issued an Order6 granting the Motion to Dismiss of respondents. It held that the Manifestation and Motion
filed by petitioner was a judicial admission of TRB’s ownership of the disputed properties. The trial court pointed out that the
Manifestation was executed by petitioner’s duly authorized representative with the assistance of counsel. This admission thus
operated as a waiver barring petitioner from claiming otherwise.

On 11 August 1997, petitioner filed a Notice of Appeal without paying the necessary docket fees. Immediately thereafter,
respondents filed a Motion to Dismiss Appeal on the ground of nonpayment of docket fees.

In its Opposition,7 petitioner alleged that its counsel was not yet familiar with the revisions of the Rules of Court that became
effective only on 1 July 1997. Its representative was likewise not informed by the court personnel that docket fees needed to be paid
upon the filing of the Notice of Appeal. Furthermore, it contended that the requirement for the payment of docket fees was not
mandatory. It therefore asked the RTC for a liberal interpretation of the procedural rules on appeals.

On 29 September 1997, the RTC issued an Order8 dismissing the appeal citing Sec. 4 of Rule 419 of the Revised Rules of Court.

Petitioner thereafter moved for a reconsideration of the Order10 alleging that the trial court lost jurisdiction over the case after the
former had filed the Notice of Appeal. Petitioner also alleged that the court erred in failing to relax procedural rules for the sake of
substantial justice.

On 25 November 1997, the RTC denied the Motion.11

On 28 January 1998, petitioner filed with the Court of Appeals (CA) a Petition for Certiorari and Mandamus under Rule 65 alleging
that the RTC had no jurisdiction to dismiss the Notice of Appeal, and that the trial court had acted with grave abuse of discretion
when it strictly applied procedural rules.

On 29 November 2000, the CA rendered its Decision12 on the Petition. It held that while the failure of petitioner to pay the docket
and other lawful fees within the reglementary period was a ground for the dismissal of the appeal pursuant to Sec. 1 of Rule 50 of
the Revised Rules of Court, the jurisdiction to do so belonged to the CA and not the trial court. Thus, appellate court ruled that the
RTC committed grave abuse of discretion in dismissing the appeal and set aside the latter’s assailed Order dated 29 September 1997.

Thereafter, respondents filed their respective Motions for Reconsideration.

It appears that prior to the promulgation of the CA’s Decision, this Court issued Administrative Matter (A.M.) No. 00-2-10-SC which
took effect on 1 May 2000, amending Rule 4, Sec. 7 and Sec. 13 of Rule 41 of the 1997 Revised Rules of Court. The circular expressly
provided that trial courts may, motu proprio or upon motion, dismiss an appeal for being filed out of time or for nonpayment of
docket and other lawful fees within the reglementary period. Subsequently, Circular No. 48-200013 was issued on 29 August 2000
and was addressed to all lower courts.

By virtue of the amendment to Sec. 41, the CA upheld the questioned Orders of the trial court by issuing the assailed Amended
Decision14 in the present Petition granting respondents’ Motion for Reconsideration.

The CA’s action prompted petitioner to file a Motion for Reconsideration alleging that SC Circular No. 48-2000 should not be given
retroactive effect. It also alleged that the CA should consider the case as exceptionally meritorious. Petitioner’s counsel, Atty. Rexes V.
Alejano, explained that he was yet to familiarize himself with the Revised Rules of Court, which became effective a little over a month
before he filed the Notice of Appeal. He was thus not aware that the nonpayment of docket fees might lead to the dismissal of the
case.

On 30 May 2002, the CA issued the assailed Resolution15 denying petitioner’s Motion for Reconsideration.

Hence, this Petition.

Petitioner alleges that the CA erred in sustaining the RTC’s dismissal of the Notice of Appeal. Petitioner contends that the CA had
exclusive jurisdiction to dismiss the Notice of Appeal at the time of filing. Alternatively, petitioner argues that while the appeal was
dismissible for failure to pay docket fees, substantial justice demands that procedural rules be relaxed in this case.

The Petition has no merit.

Statutes and rules regulating the procedure of courts are considered applicable to actions pending and unresolved at the time of
their passage. Procedural laws and rules are retroactive in that sense and to that extent. The effect of procedural statutes and rules
on the rights of a litigant may not preclude their retroactive application to pending actions. This retroactive application does not
violate any right of a person adversely affected. Neither is it constitutionally objectionable. The reason is that, as a general rule, no
vested right may attach to or arise from procedural laws and rules. It has been held that "a person has no vested right in any
particular remedy, and a litigant cannot insist on the application to the trial of his case, whether civil or criminal, of any other than
the existing rules of procedure."16 More so when, as in this case, petitioner admits that it was not able to pay the docket fees on
time. Clearly, there were no substantive rights to speak of when the RTC dismissed the Notice of Appeal.
The argument that the CA had the exclusive jurisdiction to dismiss the appeal has no merit.1âwphi1 When this Court accordingly
amended Sec. 13 of Rule 41 through A.M. No. 00-2-10-SC, the RTC’s dismissal of the action may be considered to have had the
imprimatur of the Court. Thus, the CA committed no reversible error when it sustained the dismissal of the appeal, taking note of its
directive on the matter prior to the promulgation of its Decision.

As early as 1932, in Lazaro v. Endencia,17 we have held that the payment of the full amount of the docket fees is an indispensable
step for the perfection of an appeal. The Court acquires jurisdiction over any case only upon the payment of the prescribed docket
fees.18

Moreover, the right to appeal is not a natural right and is not part of due process. It is merely a statutory privilege, which may be
exercised only in accordance with the law.19

We have repeatedly stated that the term "substantial justice" is not a magic wand that would automatically compel this Court to
suspend procedural rules. Procedural rules are not to be belittled or dismissed simply because their non-observance may result in
prejudice to a party’s substantive rights. Like all other rules, they are required to be followed, except only for the most persuasive of
reasons when they may be relaxed to relieve litigants of an injustice not commensurate with the degree of their thoughtlessness in
not complying with the procedure prescribed.20

We cannot consider counsel’s failure to familiarize himself with the Revised Rules of Court as a persuasive reason to relax the
application of the Rules. It is well-settled that the negligence of counsel binds the client. This principle is based on the rule that any
act performed by lawyers within the scope of their general or implied authority is regarded as an act of the client. Consequently, the
mistake or negligence of the counsel of petitioner may result in the rendition of an unfavorable judgment against it.21

WHEREFORE, in view of the foregoing, the Petition is DENIED for lack of merit.

SO ORDERED.
substantive law vis a vis remedial law
bustoa v lucero
TUASON, J.:

The petitioner herein, an accused in a criminal case, filed a motion with the Court of First Instance of Pampanga after he had been
bound over to that court for trial, praying that the record of the case be remanded to the justice of the peace court of Masantol, the
court of origin, in order that the petitioner might cross-examine the complainant and her witnesses in connection with their
testimony, on the strength of which warrant was issued for the arrest of the accused. The motion was denied and that denial is the
subject matter of this proceeding.

According to the memorandum submitted by the petitioner's attorney to the Court of First Instance in support of his motion, the
accused, assisted by counsel, appeared at the preliminary investigation. In that investigation, the justice of the peace informed him of
the charges and asked him if he pleaded guilty or not guilty, upon which he entered the plea of not guilty. "Then his counsel moved
that the complainant present her evidence so that she and her witnesses could be examined and cross-examined in the manner and
form provided by law." The fiscal and the private prosecutor objected, invoking section 11 of rule 108, and the objection was
sustained. "In view thereof, the accused's counsel announced his intention to renounce his right to present evidence," and the justice
of the peace forwarded the case to the court of first instance.

Leaving aside the question whether the accused, after renouncing his right to present evidence, and by reason of that waiver he was
committed to the corresponding court for trial, is estopped, we are of the opinion that the respondent judge did not act in excess of
his jurisdiction or in abuse of discretion in refusing to grant the accused's motion to return the record for the purpose set out therein.
In Dequito and Saling Buhay vs. Arellano, G.R. No. L-1336, recently promulgated, in which case the respondent justice of the peace
had allowed the accused, over the complaint's objection, to recall the complainant and her witnesses at the preliminary investigation
so that they might be cross-examined, we sustained the justice of the peace's order. We said that section 11 of Rule 108 does not
curtail the sound discretion of the justice of the peace on the matter. We said that "while section 11 of Rule 108 defines the bounds
of the defendant's right in the preliminary investigation, there is nothing in it or any other law restricting the authority, inherent in a
court of justice, to pursue a course of action reasonably calculated to bring out the truth."

But we made it clear that the "defendant can not, as a matter of right, compel the complaint and his witnesses to repeat in his
presence what they had said at the preliminary examination before the issuance of the order of arrest." We called attention to the
fact that "the constitutional right of an accused to be confronted by the witnesses against him does not apply to preliminary
hearings' nor will the absence of a preliminary examination be an infringement of his right to confront witnesses." As a matter of
fact, preliminary investigation may be done away with entirely without infringing the constitutional right of an accused under the due
process clause to a fair trial.

The foregoing decision was rendered by a divided court. The minority went farther than the majority and denied even any discretion
on the part of the justice of the peace or judge holding the preliminary investigation to compel the complainant and his witnesses to
testify anew.
Upon the foregoing considerations, the present petition is dismissed with costs against the petitioner.

Moran, C.J., Paras, Pablo, Bengzon, and Briones, JJ., concur.

Separate Opinions
FERIA, J., dissenting:

I am sorry to dissent from the decision.

The petitioner in the present case appeared at the preliminary investigation before the Justice of the Peace of Masantol, Pampanga,
and after being informed of the criminal charges against him and asked if he pleaded guilty or not guilty, pleaded not guilty. "Then
the counsel for the petitioner moved that the complainant present her evidence so that her witnesses could be examined and cross-
examined in the manner and form provided by law." The fiscal and the private prosecutor objected to petitioner's motion invoking
section 11, Rule 108, and the objection was sustained. In view thereof, the accused refused to present his evidence, and the case was
forwarded to the Court of First Instance of Pampanga.

The counsel for the accused petitioner filed a motion with the Court of First Instance praying that the record of the case be
remanded to the justice of the peace of Masantol, in order that the petitioner might cross-examine the complainant and her
witnesses in connection with their testimony. The motion was denied, and for that reason the present special civil action of
mandamus was instituted.

It is evident that the refusal or waiver of the petitioner to present his evidence during the investigation in the justice of the peace,
was not a waiver of his alleged right to be confronted with and cross-examine the witnesses for the prosecution, that is, of the
preliminary investigation provided for in General Order No. 58 and Act No. 194, to which he claims to be entitled, as shown by the
fact that, as soon as the case was forwarded to the Court of First Instance, counsel for the petitioner filed a motion with said court to
remand the case to the Justice of the Peace of Masantol ordering the latter to make said preliminary investigation. His motion having
been denied, the petitioner has filed the present action in which he squarely attacks the validity of the provision of section 11, Rule
108, on the ground that it deprives him of the right to be confronted with and cross-examine the witnesses for the prosecution,
contrary to the provision of section 13, Article VIII, of the Constitution.

In the case of Dequito and Saling Buhay vs. Arellano, No. L-1336, we did not discuss and decide the question of validity or
constitutionality of said section 11 in connection with section 1 of Rule 108, because that question was not raised therein, and we
merely construed the provisions on preliminary investigation or Rule 108. In said case the writer of this dissenting opinion said:

It may not be amiss to state that, modesty aside, the writer of this dissenting opinion, then a practising attorney, was the one who
prepared the draft of the Rules of Court relating to criminal procedure, and the provisions on preliminary investigation in the draft
were the same as those of the old law, which gave the defendant the right to be confronted with and to cross-examine the witnesses
for the prosecution. But the Supreme Court approved and adopted in toto the draft, except the part referring to preliminary
investigation which it modified, by suppressing said right and enacting, in its stead, the provisions of section 11 of Rule 108 in its
present form. I prefer the old to the new procedure. But I can not subscribe to the majority decision, which is a judicial legislation
and makes the exercise of the right of a defendant to be confronted, with and cross-examine the witnesses against him, to depend
entirely upon the whim or caprice of a judge or officer conducting the preliminary investigation.

But now the question of the validity of said section 11, Rule 108, is squarely presented to this Court for decision, we have perforce to
pass upon it.

Section 13, Article VIII, of the Constitution prescribes that "the Supreme Court shall have power to promulgate rules concerning
pleading, practice and procedure in all courts, but said rules shall not diminish, increase or modify substantive rights." The
constitution added the last part of the above-quoted constitutional precept in order to emphasize that the Supreme Court is not
empowered, and therefore can not enact or promulgate substantive laws or rules, for it is obvious that rules which diminish, increase
or modify substantive rights, are substantive and not adjective laws or rules concerning pleading, practice and procedure.

It does not require an elaborate arguments to show that the right granted by law upon a defendant to be confronted with and cross-
examine the witnesses for the prosecuted in preliminary investigation as well as in the trial of the case is a substantive right. It is
based on human experience, according to which a person is not prone to tell a lie against another in his presence, knowing fully well
that the latter may easily contradict him, and that the credibility of a person or veracity of his testimony may be efficaciously tested
by a cross-examination. It is substantive right because by exercising it, an accused person may show, even if he has no evidence in his
favor, that the testimonies of the witnesses for the prosecution are not sufficient to indicate that there is a probability that a crime
has been committed and he is guilty thereof, and therefore the accused is entitled to be released and not committed to prison, and
thus avoid an open and public accusation of crime, the trouble, expense, and anxiety of a public trial, and the corresponding anxiety
or moral suffering which a criminal prosecution always entails.

This right is not a constitutional but a statutory right granted by law to an accused outside of the City of Manila because of the usual
delay in the final disposition of criminal cases in provinces. The law does not grant such right to a person charged with offenses
triable by the Court of First Instance in the City of Manila, because of the promptness, actual or presumptive, with which criminal
cases are tried and disposed of in the Court of First Instance of said city. But this right, though not a constitutional one, can not be
modified, abridged, or diminished by the Supreme Court, by virtue of the rule making power conferred upon this Court by the
Constitution.

Since the provisions of section 11 of Rule 108 as construed by this Court in several cases, (in which the question of constitutionality
or validity of said section had not been squarely raised) do away with the defendant's right under discussion, it follows that said
section 11 diminishes the substantive right of the defendant in criminal case, and this Court has no power or authority to promulgate
it and therefore is null and void.

The fact that the majority of this Court has ruled in the above cited case of Dequito and Saling Buhay vs. Arellano, that the inferior or
justice of the peace courts have discretion to grant a defendant's request to have the witnesses for the prosecution recalled to testify
again in the presence of the defendant and be cross-examined by the latter, does not validate said provision; because to make the
exercise of an absolute right discretionary or dependent upon the will or discretion of the court or officer making the preliminary
investigation, is evidently to diminish or modify it.

Petition is therefore granted.

PERFECTO, J., dissenting:

In our concurring and dissenting opinion in the case of Dequito and Saling Buhay vs. Arellano, No. L-1336, we said:

In our opinion, section 11 of Rule 108 must be read, interpreted, and applied in a way that will not contravene the constitutional
provision guaranteeing to all accused the right "to meet the witnesses face to face." (Section 1 [17], Article III.)

Consequently, at the preliminary hearing contemplated by said reglementary section, the defendant is entitled as a matter of
fundamental right to her the testimony of the witnesses for the prosecution and to cross-examine them.

Although in such preliminary hearing the accused cannot finally be convicted, he is liable to endure the ordeal eloquently depicted in
the decision, and the constitutional guarantee protects defendants, not only from the jeopardy of being finally convicted and
punished, but also from the physical, mental and moral sufferings that may unjustly be visited upon him in any one of the stages of
the criminal process instituted against him. He must be afforded the opportunities to have the charges against him quashed, not only
at the final hearing, but also at the preliminary investigation, if by confronting the witnesses for the prosecution he can convince the
court that the charges are groundless. There is no justice in compelling him to undergo the troubles of a final hearing if at the
preliminary hearing the case can be terminated in his favor. Otherwise, the preliminary investigation or hearing will be an empty
gesture that should not have a place within the framework of dignified and solemn judicial proceedings.

On the strength of the above quoted opinion the opinion should be granted and so we vote.

Petition dismissed.

RESOLUTION

March 8, 1949

TUASON, J.:

This cause is now before us on a motion for reconsideration.

In the decision sought to be reconsidered, we said, citing Dequito and Saling Buhay vs. Arellano, G.R. No. L-1336: "The constitutional
right of an accused to be confronted by the witnesses against him does not apply to preliminary hearings; nor will the absence of a
preliminary examination be an infringement of his right to confront witness. As a matter of fact, preliminary investigation may be
done away with entirely without infringing the constitutional right of an accused under the due process clause to a fair trial." We
took this ruling to be ample enough to dispose the constitutional question pleaded in the application for certiorari. Heeding the
wishes of the petitioner, we shall enlarge upon the subject.

It is contended that section 11 of Rule 108 of the Rules of Court 1 infringes section 13, Article VIII, of the Constitution. 2 It is said that
the rule in question deals with substantive matters and impairs substantive rights.

We can not agree with this view. We are of the opinion that section 11 of Rule 108, like its predecessors, is an adjective law and not a
substantive law or substantive right. Substantive law creates substantive rights and the two terms in this respect may be said to be
synonymous. Substantive rights is a term which includes those rights which one enjoys under the legal system prior to the
disturbance of normal relations. (60 C.J., 980.) Substantive law is that part of the law which creates, defines and regulates rights, or
which regulates the rights and duties which give rise to a cause of action; that part of the law which courts are established to
administer; as opposed to adjective or remedial law, which prescribes the method of enforcing rights or obtains redress for their
invasion. (36 C. J., 27; 52 C. J. S., 1026.)

As applied to criminal law, substantive law is that which declares what acts are crimes and prescribes the punishment for committing
them, as distinguished from the procedural law which provides or regulates the steps by which one who commits a crime is to be
punished. (22 C. J. S., 49.) Preliminary investigation is eminently and essentially remedial; it is the first step taken in a criminal
prosecution.

As a rule of evidence, section 11 of Rule 108 is also procedural. Evidence — which is the "the mode and manner of proving the
competent facts and circumstances on which a party relies to establish the fact in dispute in judicial proceedings" — is identified with
and forms part of the method by which, in private law, rights are enforced and redress obtained, and, in criminal law, a law
transgressor is punished. Criminal procedure refers to pleading, evidence and practice. (State vs. Capaci, 154 So., 419; 179 La., 462.)
the entire rules of evidence have been incorporated into the Rules of Court. We can not tear down section 11 of Rule 108 on
constitutional grounds without throwing out the whole code of evidence embodied in these Rules.

In Beazell vs. Ohio, 269 U. S., 167, 70 Law. ed., 216, the United States Supreme Court said:

Expressions are to be found in earlier judicial opinions to the effect that the constitutional limitation may be transgressed by
alterations in the rules of evidence or procedure. See Calder vs. Bull, 3 Dall. 386, 390, 1 L. ed., 648, 650; Cummings vs. Missouri, 4
Wall. 277, 326, 18 L. ed., 356, 364; Kring vs. Missouri, 107 U. S. 221, 228, 232, 27 L. ed., 507, 508, 510, 2 Ct. Rep., 443. And there may
be procedural changes which operate to deny to the accused a defense available under the laws in force at the time of the
commission of his offense, or which otherwise affect him in such a harsh and arbitrary manner as to fall within the constitutional
prohibition. Kring vs. Missouri, 107 U. S., 221, 27 L. ed., 507, 2 Sup. Ct. Rep., 443; Thompson vs. Utah, 170 U. S., 343, 42 L. ed., 1061,
18 Sup. Ct. Rep., 620. But it is not well settled that statutory changes in the mode of trial or the rules of evidence, which do not
deprive the accused of a defense and which operate only in a limited and unsubstantial manner to his disadvantage, are not
prohibited. A statute which, after indictment, enlarges the class of persons who may be witnesses at the trial, by removing the
disqualification of persons convicted of felony, is not an ex post facto law. Hopt vs. Utah, 110 U. S., 575, 28 L. ed., 263, 4 Sup. Ct. Rep.,
202, 4 Am. Crim. Rep. 417. Nor is a statute which changes the rules of evidence after the indictment so as to render admissible
against the accused evidence previously held inadmissible, Thompson vs. Missouri, 171 U. S., 380, 43 L. ed., 204, 18 Sup. Ct. Rep.,
922; or which changes the place of trial, Gut. vs. Minnesota, 9 Wall. 35, 19 L. ed., 573; or which abolishes a court for hearing criminal
appeals, creating a new one in its stead. See Duncan vs. Missouri, 152 U. S., 377, 382, 38 L. ed., 485, 487, 14 sup. Ct. Rep., 570.

Tested by this standard, we do not believe that the curtailment of the right of an accused in a preliminary investigation to cross-
examine the witnesses who had given evidence for his arrest is of such importance as to offend against the constitutional inhibition.
As we have said in the beginning, preliminary investigation is not an essential part of due process of law. It may be suppressed
entirely, and if this may be done, mere restriction of the privilege formerly enjoyed thereunder can not be held to fall within the
constitutional prohibition.

While section 11 of Rule 108 denies to the defendant the right to cross-examine witnesses in a preliminary investigation, his right to
present his witnesses remains unaffected, and his constitutional right to be informed of the charges against him both at such
investigation and at the trial is unchanged. In the latter stage of the proceedings, the only stage where the guaranty of due process
comes into play, he still enjoys to the full extent the right to be confronted by and to cross-examine the witnesses against him. The
degree of importance of a preliminary investigation to an accused may be gauged by the fact that this formality is frequently waived.

The distinction between "remedy" and "substantive right" is incapable of exact definition. The difference is somewhat a question of
degree. (Dexter vs. Edmands, 89 F., 467; Beazell vs. Ohio, supra.) It is difficult to draw a line in any particular case beyond which
legislative power over remedy and procedure can pass without touching upon the substantive rights of parties affected, as it is
impossible to fix that boundary by general condition. (State vs. Pavelick, 279 P., 1102.) This being so, it is inevitable that the Supreme
Court in making rules should step on substantive rights, and the Constitution must be presumed to tolerate if not to expect such
incursion as does not affect the accused in a harsh and arbitrary manner or deprive him of a defense, but operates only in a limited
and unsubstantial manner to his disadvantage. For the Court's power is not merely to compile, revise or codify the rules of procedure
existing at the time of the Constitution's approval. This power is "to promulgate rules concerning pleading, practice, and procedure in
all courts," which is a power to adopt a general, complete and comprehensive system of procedure, adding new and different rules
without regard to their source and discarding old ones.

The motion is denied.


hierarchy of courts
audi ag v mejia
SANDOVAL-GUTIERREZ, J.:

Before us for resolution is the instant Petition for Certiorari under Rule 65 of the 1997 Rules of Civil Procedure, as amended, alleging
that respondent Executive Judge Jules A. Mejia of the Regional Trial Court (RTC), Alaminos City (Pangasinan) acted with grave abuse
of discretion in issuing the Orders dated March 29 and July 6, 2005 in Civil Case No. A-3010, entitled "Auto Prominence Corporation
and Proton Pilipinas Corporation, Plaintiffs, v. Audi AG, Defendant."

The petition alleges that Audi AG, petitioner, is a non-resident foreign company engaged in the manufacture of "Audi" brand cars. It is
organized and existing under the laws of the Federal Republic of Germany, with principal office at I/VO-3, 85045 Ingolstadt, Germany.
It is not licensed to do business in the Philippines but is suing on an isolated transaction.1

Auto Prominence Corporation and Proton Pilipinas Corporation (Proton), respondents, are corporations duly organized and existing
under Philippine laws engaged in the business of assembling, buying, selling, distributing, importing, marketing, and servicing of
motor vehicles. They have a common principal office at Barangay Alos, Alaminos City.

On March 21, 2005, respondents filed with the RTC, Alaminos City a complaint for specific performance and injunction (with
application for a temporary restraining order [TRO] and preliminary injunction) against petitioner Audi AG, docketed as Civil Case No.
A-3010. The complaint alleges inter alia that on August 1, 1996, petitioner appointed respondent Proton as its sole assembler and
distributor of Audi cars in the Philippines under an Assembly Agreement and a Distributorship Agreement; that respondent Proton
was induced to open, promote, develop and sell Audi brand cars in the Philippines upon petitioner's representations that it
(respondent Proton) will be the exclusive assembler and distributor of Audi cars and local parts manufacturer for export purposes,
for a period of 12 months and, thereafter, for an indefinite period upon the establishment of the assembly and distributorship
network; that respondent Proton, relying upon petitioner's representations, was enticed to: (a) borrow money to establish the
assembly plant and building for petitioner; (b) buy tools and equipment for its assembly plant and distributorship; (c) spend for its
showrooms and offices; and (d) pay its license fees, technical brochure and other expenses; that it turned out that petitioner did not
include the Philippines in its ASEAN Assembly Strategy program, but only Malaysia, thus frustrating respondent Proton's assembly
preparations; that with evident bad faith, petitioner has been negotiating for the transfer of the distributorship of the Audi cars to a
third party; and that both respondents were surprised when they received from petitioner a letter dated September 27, 2004
terminating the assembly and the distributorship agreements for reasons which to them are unjustified. Thus, the complaint prays
that petitioner be ordered to comply with the exclusive assembly and distributorship agreements; and that, pending the
determination of the merits of the case, a TRO and a writ of preliminary injunction be issued ordering petitioner, its representative,
or any person claiming rights under it, to maintain the status quo ante, and restrain them from doing any act contrary to the parties'
existing agreements.

After the complaint was filed, respondent Executive Judge Jules A. Mejia issued an Order (a) directing that summons and a copy of
the complaint be served upon petitioner through extra-territorial service; and (b) setting on March 29, 2005 the hearing of the
application for TRO.

On March 29, 2005, after conducting a hearing wherein respondents presented two witnesses, respondent Executive Judge issued
the Order in question directing the issuance of a TRO effective for twenty (20) days, enjoining petitioner from terminating the
contracts executed by the parties, and directing it or any person claiming rights under it, to maintain the status quo ante. The raffle of
the case was set on April 8, 2005 at two o'clock in the afternoon.

Hence, the instant petition.

Petitioner contends that respondent Executive Judge's March 29, 2005 Order granting a TRO for twenty (20) days was "issued in a
capricious, arbitrary, and whimsical manner constituting grave abuse of discretion, amounting to lack or excess of jurisdiction"
because (a) the Order violates the second paragraph of Section 5, Rule 58 of the 1997 Rules of Civil Procedure, as amended; and (b)
it was issued even before Civil Case No. A-3010 was raffled to a ponente.

Meanwhile, petitioner filed with the trial court an Urgent Motion for Voluntary Inhibition of respondent Executive Judge. But the
motion was denied in an Order dated July 6, 2005, prompting petitioner to file a supplemental petition2 praying for the nullification
of this Order.

In their Opposition3 and Comment,4 respondents pray that the petition be dismissed for lack of merit. Specifically, they alleged that
the petition suffers from the following defects: (1) it was filed in the absence of a motion for reconsideration of the assailed Order;
(2) petitioner failed to observe the doctrine of hierarchy of courts; (3) the certification against forum shopping is defective as it was
executed by counsel for petitioner, not by the latter's officers; and (4) the issue raised against the challenged Order of March 29,
2005 had become moot and academic.

The respondents are correct.

Indeed, we cannot ignore the fatal defects in the petition.

First, petitioner failed to file with the trial court the requisite motion for reconsideration of the challenged Order before resorting to
the instant recourse. The well-established rule is that a motion for reconsideration is an indispensable condition before an aggrieved
party can resort to the special civil action for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, as amended.5 Thus,
petitioner should have first filed with the trial court a motion for reconsideration, as such special civil action may be resorted to only
when "there is no appeal, nor any plain, speedy, and adequate remedy
in the ordinary course of law."6 Such indispensable requirement may, in well recognized instances, be glossed over to prevent a
miscarriage of justice, or when the need for relief is extremely urgent and certiorari is the only adequate and speedy remedy
available.7 Petitioner failed to show sufficient justification for its failure to comply with the requirement.

We cannot accept petitioner's submission that a motion for reconsideration "is unnecessary" as its petition raises a question of law
and that the assailed Order is a patent nullity. Petitioner may not arrogate unto itself the determination of whether a motion for
reconsideration is necessary or not.8 Its submission runs counter to the purpose of the rule that a motion for reconsideration would
afford the erring court or agency an opportunity to rectify the error/s it may have committed without the intervention of a higher
court.9 Such motion is not only an expeditious remedy of an aggrieved party but also obviates an improvident and unnecessary
recourse to appellate proceedings.10

Second, petitioner, by filing directly with this Court its petition, has ignored the established rule on hierarchy of courts. It must be
stressed that the Court of Appeals and the Supreme Court have original concurrent jurisdiction over petitions for certiorari. The rule
on hierarchy of courts determines the venue of appeals.11 Such rule is necessary to prevent inordinate demands upon the Court's
precious time and attention which are better devoted to matters within its exclusive jurisdiction, and to prevent further overcrowding
of the Court's docket.12 Thus, petitioner should have filed with the Court of Appeals its petition, not directly with this
Court.chanrobles virtual law library While such rule may be relaxed for special and important reasons clearly and specifically set out
in the petition, however, in the instant case, petitioner failed to discharge that burden.ςηαñrοblεš νιr†υαl lαω lιbrαrblεš νιr†υαl lαω lιbrαrš νιr†υαl lαω lιbrαrr†υαl lαω lιbrαrυαl lαω lιr†υαl lαω lιbrαrbrαrÿ

Once again, we stress that the rules of procedure exist for a noble purpose, and to disregard such rules in the guise of liberal
construction would be to defeat such purpose. Procedural rules are not to be disdained as mere technicalities. They may not be
ignored to suit the convenience of a party. Adjective law ensures the effective enforcement of substantive rights through the orderly
and speedy administration of justice. Rules are not intended to hamper litigants or complicate litigation. But they help provide for a
vital system of justice where suitors may be heard following judicial procedure and in the correct forum. Public order and our system
of justice are well served by a conscientious observance by the parties of the procedural rules.13

WHEREFORE, the instant petition is DISMISSED. Costs against petitioner.

SO ORDERED.
applied the exp. to hierarchy of courts- transcendental importance
united claimants association of Near v national electrification administration
The Case
This is an original action for Injunction to restrain and/or prevent the implementation of Resolution Nos. 46 and 59, dated July 10,
2003 and September 3, 2003, respectively, otherwise known as the National Electrification Administration (NEA) Termination Pay
Plan, issued by respondent NEA Board of Administrators (NEA Board).
The Facts
Petitioners are former employees of NEA who were terminated from their employment with the implementation of the assailed
resolutions.

Respondent NEA is a government-owned and/or controlled corporation created in accordance with Presidential Decree No. (PD) 269
issued on August 6, 1973. Under PD 269, Section 5(a)(5), the NEA Board is empowered to organize or reorganize NEAs staffing
structure, as follows:

Section 5. National Electrification Administration; Board of Administrators; Administrator.


(a) For the purpose of administering the provisions of this Decree, there is hereby established a public corporation to be known as
the National Electrification Administration. All of the powers of the corporation shall be vested in and exercised by a Board of
Administrators, which shall be composed of a Chairman and four (4) members, one of whom shall be the Administrator as ex-officio
member. The Chairman and the three other members shall be appointed by the President of the Philippines to serve for a term of six
years. x x x
xxxx
The Board shall, without limiting the generality of the foregoing, have the following specific powers and duties.
1. To implement the provisions and purposes of this Decree;
xxxx
5. To establish policies and guidelines for employment on the basis of merit, technical competence and moral character, and, upon
the recommendation of the Administrator to organize or reorganize NEAs staffing structure, to fix the salaries of personnel and to
define their powers and duties. (Emphasis supplied.)
Thereafter, in order to enhance and accelerate the electrification of the whole country, including the privatization of the National
Power Corporation, Republic Act No. (RA) 9136, otherwise known as the Electric Power Industry Reform Act of 2001 (EPIRA Law), was
enacted, taking effect on June 26, 2001. The law imposed upon NEA additional mandates in relation to the promotion of the role of
rural electric cooperatives to achieve national electrification. Correlatively, Sec. 3 of the law provides:
Section 3. Scope. - This Act shall provide a framework for the restructuring of the electric power industry, including the privatization
of the assets of NPC, the transition to the desired competitive structure, and the definition of the responsibilities of the various
government agencies and private entities. (Emphasis supplied.)
Sec. 77 of RA 9136 also provides:
Section 77. Implementing Rules and Regulations. - The DOE shall, in consultation with the electric power industry participants and
end-users, promulgate the Implementing Rules and Regulations (IRR) of this Act within six (6) months from the effectivity of this Act,
subject to the approval by the Power Commission.
Thus, the Rules and Regulations to implement RA 9136 were issued on February 27, 2002. Under Sec. 3(b)(ii), Rule 33 of the Rules
and Regulations, all the NEA employees and officers are considered terminated and the 965 plantilla positions of NEA vacant, to wit:
Section 3. Separation and Other Benefits.
(a) x x x
(b) The following shall govern the application of Section 3(a) of this Rule:
xxxx
(ii) With respect to NEA officials and employees, they shall be considered legally terminated and shall be entitled to the benefits or
separation pay provided in Section 3(a) herein when a restructuring of NEA is implemented pursuant to a law enacted by Congress or
pursuant to Section 5(a)(5) of Presidential Decree No. 269. (Emphasis supplied.)
Meanwhile, on August 28, 2002, former President Gloria Macapagal- Arroyo issued Executive Order No. 119 directing the NEA Board
to submit a reorganization plan. Thus, the NEA Board issued the assailed resolutions.
On September 17, 2003, the Department of Budget and Management approved the NEA Termination Pay Plan.
Thereafter, the NEA implemented an early retirement program denominated as the Early Leavers Program, giving incentives to those
who availed of it and left NEA before the effectivity of the reorganization plan. The other employees of NEA were terminated
effective December 31, 2003.
Hence, We have this petition.

The Issues

Petitioners raise the following issues:

1. The NEA Board has no power to terminate all the NEA employees;

2. Executive Order No. 119 did not grant the NEA Board the power to terminate all NEA employees; and

3. Resolution Nos. 46 and 59 were carried out in bad faith.

On the other hand, respondents argue in their Comment dated August 20, 2009 that:

1. The Court has no jurisdiction over the petition;

2. Injunction is improper in this case given that the assailed resolutions of the NEA Board have long been implemented; and

3. The assailed NEA Board resolutions were issued in good faith.

The Courts Ruling

This petition must be dismissed.

The procedural issues raised by respondents shall first be discussed.

This Court Has Jurisdiction over the Case

Respondents essentially argue that petitioners violated the principle of hierarchy of courts, pursuant to which the instant petition
should have been filed with the Regional Trial Court first rather than with this Court directly.

We explained the principle of hierarchy of courts in Mendoza v. Villas,[1] stating:

In Chamber of Real Estate and Builders Associations, Inc. (CREBA) v. Secretary of Agrarian Reform, a petition for certiorari filed under
Rule 65 was dismissed for having been filed directly with the Court, violating the principle of hierarchy of courts, to wit:
Primarily, although this Court, the 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. In Heirs of Bertuldo Hinog v. Melicor, citing People v. Cuaresma, this Court made the
following pronouncements:

This Courts 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 Courts 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 Courts time and attention which are better
devoted to those matters within its exclusive jurisdiction, and to prevent further over-crowding of the Courts docket. (Emphasis
supplied.)

Evidently, the instant petition should have been filed with the RTC. However, as an exception to this general rule, the principle of
hierarchy of courts may be set aside for special and important reasons. Such reason exists in the instant case involving as it does the
employment of the entire plantilla of NEA, more than 700 employees all told, who were effectively dismissed from employment in
one swift stroke. This to the mind of the Court entails its attention.

Moreover, the Court has made a similar ruling in National Power Corporation Drivers and Mechanics Association (NPC-DAMA) v.
National Power Corporation (NPC).[2] In that case, the NPC-DAMA also filed a petition for injunction directly with this Court assailing
NPC Board Resolution Nos. 2002-124 and 2002-125, both dated November 18, 2002, directing the termination of all employees of
the NPC on January 31, 2003. Despite such apparent disregard of the principle of hierarchy of courts, the petition was given due
course. We perceive no compelling reason to treat the instant case differently.

The Remedy of Injunction Is still Available

Respondents allege that the remedy of injunction is no longer available to petitioners inasmuch as the assailed NEA Board
resolutions have long been implemented.

Taking respondents above posture as an argument on the untenability of the petition on the ground of mootness, petitioners
contend that the principle of mootness is subject to exceptions, such as when the case is of transcendental importance.

In Funa v. Executive Secretary,[3] the Court passed upon the seeming moot issue of the appointment of Maria Elena H. Bautista
(Bautista) as Officer-in-Charge (OIC) of the Maritime Industry Authority (MARINA) while concurrently serving as Undersecretary of
the Department of Transportation and Communications. There, even though Bautista later on was appointed as Administrator of
MARINA, the Court ruled that the case was an exception to the principle of mootness and that the remedy of injunction was still
available, explaining thus:
A moot and academic case is one that ceases to present a justiciable controversy by virtue of supervening events, so that a
declaration thereon would be of no practical use or value. Generally, courts decline jurisdiction over such case or dismiss it on ground
of mootness. However, as we held in Public Interest Center, Inc. v. Elma, supervening events, whether intended or accidental, cannot
prevent the Court from rendering a decision if there is a grave violation of the Constitution. Even in cases where supervening events
had made the cases moot, this Court did not hesitate to resolve the legal or constitutional issues raised to formulate controlling
principles to guide the bench, bar, and public.

As a rule, the writ of prohibition will not lie to enjoin acts already done. However, as an exception to the rule on mootness, courts
will decide a question otherwise moot if it is capable of repetition yet evading review. (Emphasis supplied.)

Similarly, in the instant case, while the assailed resolutions of the NEA Board may have long been implemented, such acts of the NEA
Board may well be repeated by other government agencies in the reorganization of their offices. Petitioners have not lost their
remedy of injunction.

The Power to Reorganize Includes the Power to Terminate

The meat of the controversy in the instant case is the issue of whether the NEA Board had the power to pass Resolution Nos. 46 and
59 terminating all of its employees.

This must be answered in the affirmative.

Under Rule 33, Section 3(b)(ii) of the Implementing Rules and Regulations of the EPIRA Law, all NEA employees shall be considered
legally terminated with the implementation of a reorganization program pursuant to a law enacted by Congress or pursuant to Sec.
5(a)(5) of PD 269 through which the reorganization was carried out, viz:

Section 5. National Electrification Administration; Board of Administrators; Administrator.

(a) For the purpose of administering the provisions of this Decree, there is hereby established a public corporation to be known as
the National Electrification Administration. x x x

xxxx

The Board shall, without limiting the generality of the foregoing, have the following specific powers and duties.

xxxx

5. To establish policies and guidelines for employment on the basis of merit, technical competence and moral character, and, upon
the recommendation of the Administrator to organize or reorganize NEAs staffing structure, to fix the salaries of personnel and to
define their powers and duties. (Emphasis supplied.)
Thus, petitioners argue that the power granted unto the NEA Board to organize or reorganize does not include the power to
terminate employees but only to reduce NEAs manpower complement.

Such contention is erroneous.

In Betoy v. The Board of Directors, National Power Corporation,[4] the Court upheld the dismissal of all the employees of the NPC
pursuant to the EPIRA Law. In ruling that the power of reorganization includes the power of removal, the Court explained:

[R]eorganization involves the reduction of personnel, consolidation of offices, or abolition thereof by reason of economy or
redundancy of functions. It could result in the loss of ones position through removal or abolition of an office. However, for a
reorganization for the purpose of economy or to make the bureaucracy more efficient to be valid, it must pass the test of good faith;
otherwise, it is void ab initio. (Emphasis supplied.)

Evidently, the termination of all the employees of NEA was within the NEA Boards powers and may not successfully be impugned
absent proof of bad faith.

Petitioners Failed to Prove that the NEA Board Acted in Bad Faith

Next, petitioners challenge the reorganization claiming bad faith on the part of the NEA Board.

Congress itself laid down the indicators of bad faith in the reorganization of government offices in Sec. 2 of RA 6656, an Act to
Protect the Security of Tenure of Civil Service Officers and Employees in the Implementation of Government Reorganization, to wit:

Section 2. No officer or employee in the career service shall be removed except for a valid cause and after due notice and hearing. A
valid cause for removal exists when, pursuant to a bona fide reorganization, a position has been abolished or rendered redundant or
there is a need to merge, divide, or consolidate positions in order to meet the exigencies of the service, or other lawful causes
allowed by the Civil Service Law. The existence of any or some of the following circumstances may be considered as evidence of bad
faith in the removals made as a result of reorganization, giving rise to a claim for reinstatement or reappointment by an aggrieved
party:

(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 other 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 reclassification of offices in the department or agency concerned and the reclassified offices perform
substantially the same function as the original offices;
(e) Where the removal violates the order of separation provided in Section 3 hereof. (Emphasis supplied.)

It must be noted that the burden of proving bad faith rests on the one alleging it. As the Court ruled in Culili v. Eastern
Telecommunications, Inc.,[5] According to jurisprudence, basic is the principle that good faith is presumed and he who alleges bad
faith has the duty to prove the same. Moreover, in Spouses Palada v. Solidbank Corporation,[6] the Court stated, Allegations of bad
faith and fraud must be proved by clear and convincing evidence.

Here, petitioners have failed to discharge such burden of proof.

In alleging bad faith, petitioners cite RA 6656, particularly its Sec. 2, subparagraphs (b) and (c). Petitioners have the burden to show
that: (1) the abolished offices were replaced by substantially the same units performing the same functions; and (2) incumbents are
replaced by less qualified personnel.

Petitioners failed to prove such facts. Mere allegations without hard evidence cannot be considered as clear and convincing proof.

Next, petitioners state that the NEA Board should not have abolished all the offices of NEA and instead made a selective termination
of its employees while retaining the other employees.

Petitioners argue that for the reorganization to be valid, it is necessary to only abolish the offices or terminate the employees that
would not be retained and the retention of the employees that were tasked to carry out the continuing mandate of NEA. Petitioners
argue in their Memorandum dated July 27, 2010:

A valid reorganization, pursued in good faith, would have resulted to: (1) the abolition of old positions in the NEAs table of
organization that pertain to the granting of franchises and rate fixing functions as these were all abolished by Congress (2) the
creation of new positions that pertain to the additional mandates of the EPIRA Law and (3) maintaining the old positions that were
not affected by the EPIRA Law.

The Court already had the occasion to pass upon the validity of the similar reorganization in the NPC. In the aforecited case of Betoy,
[7] the Court upheld the policy of the Executive to terminate all the employees of the office before rehiring those necessary for its
operation. We ruled in Betoy that such policy is not tainted with bad faith:

It is undisputed that NPC was in financial distress and the solution found by Congress was to pursue a policy towards its privatization.
The privatization of NPC necessarily demanded the restructuring of its operations. To carry out the purpose, there was a need to
terminate employees and re-hire some depending on the manpower requirements of the privatized companies. The privatization and
restructuring of the NPC was, therefore, done in good faith as its primary purpose was for economy and to make the bureaucracy
more efficient. (Emphasis supplied.)

Evidently, the fact that the NEA Board resorted to terminating all the incumbent employees of NPC and, later on, rehiring some of
them, cannot, on that ground alone, vitiate the bona fides of the reorganization.

WHEREFORE, the instant petition is hereby DISMISSED. Resolution Nos. 46 and 59, dated July 10, 2003 and September 3, 2003,
respectively, issued by the NEA Board of Directors are hereby UPHELD.

No costs.
SO ORDERED.
comelec v quijano
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 injunction; (3) Grant the prayer for the
reduction of the preliminary prohibitory injunction bond from P20,000,000.00 to P10,000,000.00; (4) Clarify its Resolution dated
December 19, 2001 to the extent that the writ of preliminary prohibitory injunction will also enjoin Respondents, their agents,
successors and assigns from disregarding the contract for the VRIS Project between Petitioner and Respondent COMELEC; (5) deny
Petitioners motion to declare Respondents in default.

"Accordingly, let a writ of preliminary mandatory injunction issue directing all respondent Commissioners to immediately resume
negotiations to formalize the execution of the contract with Petitioner for the VRIS Project upon petitioners posting of a bond,
separate from the above bond for the writ of preliminary prohibitory injunction, in the amount of P20,000,000.00, which bond shall
answer for whatever damages that may be sustained by reason of the issuance of the said writ, if it turns out that Petitioner is not
entitled thereto.

"SO ORDERED."[18]

Hence, the instant petition for certiorari filed by the Office of the Solicitor General (OSG) in behalf of then COMELEC Chairman
Alfredo L. Benipayo and Commissioners Resurreccion Z. Borra and Florentino A. Tuason, Jr..

Petitioners contend that: (1) a petition for mandamus and prohibition does not lie to enforce contractual obligations, hence,
PHOTOKINAs proper recourse before the Regional Trial Court should have been an action for specific performance; (2) respondent
judge, by issuing the injunctive writs, already assumed that the VRIS Project was lawfully awarded by the COMELEC to PHOTOKINA,
and that there is a valid perfected contract between them, thus, manifesting her prejudgment; and (3) injunctive writs should not be
issued when an action for damages can adequately compensate for the injuries. Petitioners pray that the two assailed Resolutions be
nullified and Special Civil Action No. Q-01-45405 be dismissed outright.[19]

On February 21, 2002, the majority of the COMELEC Commissioners -- Luzviminda G. Tancangco, Rufino S.B. Javier, Ralph C. Lantion
and Mehol K. Sadain filed with this Court a Manifestation[20] that the Chairman and the two Commissioners who filed the instant
Petition acted without authority from the COMELEC en banc to take such action.

PHOTOKINA filed a Comment with Motion to Dismiss,[21] the present petition, on two procedural grounds. First, the petition violates
the doctrine of hierarchy of courts. And second, the OSG has no authority and/or standing to file the petition considering that the
petitioners have not been authorized by the COMELEC en banc to take such action. Without the concurrence of at least a majority of
the members of the COMELEC, neither petitioners nor the OSG could file the petition in behalf of the COMELEC.
In refutation of petitioners arguments, PHOTOKINA contends that mandamus is an appropriate remedy since what is involved in
Special Civil Action No. Q-01-45405 is the performance of a ministerial duty. Citing Isada vs. Bocar,[22] PHOTOKINA maintains that
mandamus may be availed of by private parties to compel public officers to act on a contract entered into pursuant to law. In its
Supplemental Comment,[23] PHOTOKINA invites the Courts attention to Metropolitan Manila Development Authority vs. Jancom
Environmental Corporation[24]whereby the winning bidder was afforded every right to seek enforcement of its perfected contract
with the government.

The petition is impressed with merit.

Initially, we must resolve the procedural roadblocks.

PHOTOKINA alleges that the OSG has no standing to file the present petition since its legal position is contrary to that espoused by
the majority of the COMELEC Commissioners. This is a leap to a non-sequitur conclusion. The OSG is an independent office. Its hands
are not shackled to the cause of its client agency. In the discharge of its task, the primordial concern of the OSG is to see to it that the
best interest of the government is upheld.[25] This is regardless of the fact that what it perceived as the best interest of the
government runs counter to its client agencys position.[26] Endowed with a broad perspective that spans the legal interest of
virtually the entire government officialdom, the OSG may transcend the parochial concerns of a particular client agency and instead,
promote and protect the public 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?

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 in Province of Pangasinan vs.
Reparation Commission,[36] Aprueba vs. Ganzon,[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 and not when it is doubtful.[44] 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 as our 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 have withdrawn 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.
GENERAL PROVISIONS
PAYMENT OF DOCKET FEES
manchester development corp v CA
GANCAYCO, J.:

Acting on the motion for reconsideration of the resolution of the Second Division of January 28,1987 and another motion to refer the
case to and to be heard in oral argument by the Court En Banc filed by petitioners, the motion to refer the case to the Court en banc
is granted but the motion to set the case for oral argument is denied.

Petitioners in support of their contention that the filing fee must be assessed on the basis of the amended complaint cite the case of
Magaspi vs. Ramolete. 1 They contend that the Court of Appeals erred in that the filing fee should be levied by considering the
amount of damages sought in the original complaint.

The environmental facts of said case differ from the present in that —

1. The Magaspi case was an action for recovery of ownership and possession of a parcel of land with damages.2 While the
present case is an action for torts and damages and specific performance with prayer for temporary restraining order, etc.3

2. In the Magaspi case, the prayer in the complaint seeks not only the annulment of title of the defendant to the property,
the declaration of ownership and delivery of possession thereof to plaintiffs but also asks for the payment of actual moral, exemplary
damages and attorney's fees arising therefrom in the amounts specified therein. 4 However, in the present case, the prayer is for the
issuance of a writ of preliminary prohibitory injunction during the pendency of the action against the defendants' announced
forfeiture of the sum of P3 Million paid by the plaintiffs for the property in question, to attach such property of defendants that
maybe sufficient to satisfy any judgment that maybe rendered, and after hearing, to order defendants to execute a contract of
purchase and sale of the subject property and annul defendants' illegal forfeiture of the money of plaintiff, ordering defendants
jointly and severally to pay plaintiff actual, compensatory and exemplary damages as well as 25% of said amounts as maybe proved
during the trial as attorney's fees and declaring the tender of payment of the purchase price of plaintiff valid and producing the effect
of payment and to make the injunction permanent. The amount of damages sought is not specified in the prayer although the body
of the complaint alleges the total amount of over P78 Million as damages suffered by plaintiff.5
3. Upon the filing of the complaint there was an honest difference of opinion as to the nature of the action in the Magaspi case. The
complaint was considered as primarily an action for recovery of ownership and possession of a parcel of land. The damages stated
were treated as merely to the main cause of action. Thus, the docket fee of only P60.00 and P10.00 for the sheriff's fee were paid. 6

In the present case there can be no such honest difference of opinion. As maybe gleaned from the allegations of the complaint as
well as the designation thereof, it is both an action for damages and specific performance. The docket fee paid upon filing of
complaint in the amount only of P410.00 by considering the action to be merely one for specific performance where the amount
involved is not capable of pecuniary estimation is obviously erroneous. Although the total amount of damages sought is not stated in
the prayer of the complaint yet it is spelled out in the body of the complaint totalling in the amount of P78,750,000.00 which should
be the basis of assessment of the filing fee.

4. When this under-re assessment of the filing fee in this case was brought to the attention of this Court together with
similar other cases an investigation was immediately ordered by the Court. Meanwhile plaintiff through another counsel with leave
of court filed an amended complaint on September 12, 1985 for the inclusion of Philips Wire and Cable Corporation as co-plaintiff
and by emanating any mention of the amount of damages in the body of the complaint. The prayer in the original complaint was
maintained. After this Court issued an order on October 15, 1985 ordering the re- assessment of the docket fee in the present case
and other cases that were investigated, on November 12, 1985 the trial court directed plaintiffs to rectify the amended complaint by
stating the amounts which they are asking for. It was only then that plaintiffs specified the amount of damages in the body of the
complaint in the reduced amount of P10,000,000.00. 7 Still no amount of damages were specified in the prayer. Said amended
complaint was admitted.

On the other hand, in the Magaspi case, the trial court ordered the plaintiffs to pay the amount of P3,104.00 as filing fee covering the
damages alleged in the original complaint as it did not consider the damages to be merely an or incidental to the action for recovery
of ownership and possession of real property. 8 An amended complaint was filed by plaintiff with leave of court to include the
government of the Republic as defendant and reducing the amount of damages, and attorney's fees prayed for to P100,000.00. Said
amended complaint was also admitted. 9

In the Magaspi case, the action was considered not only one for recovery of ownership but also for damages, so that the filing fee for
the damages should be the basis of assessment. Although the payment of the docketing fee of P60.00 was found to be insufficient,
nevertheless, it was held that since the payment was the result of an "honest difference of opinion as to the correct amount to be
paid as docket fee" the court "had acquired jurisdiction over the case and the proceedings thereafter had were proper and regular."
10 Hence, as the amended complaint superseded the original complaint, the allegations of damages in the amended complaint
should be the basis of the computation of the filing fee. 11

In the present case no such honest difference of opinion was possible as the allegations of the complaint, the designation and the
prayer show clearly that it is an action for damages and specific performance. The docketing fee should be assessed by considering
the amount of damages as alleged in the original complaint.

As reiterated in the Magaspi case the rule is well-settled "that a case is deemed filed only upon payment of the docket fee regardless
of the actual date of filing in court . 12 Thus, in the present case the trial court did not acquire jurisdiction over the case by the
payment of only P410.00 as docket fee. Neither can the amendment of the complaint thereby vest jurisdiction upon the Court. 13
For an legal purposes there is no such original complaint that was duly filed which could be amended. Consequently, the order
admitting the amended complaint and all subsequent proceedings and actions taken by the trial court are null and void.

The Court of Appeals therefore, aptly ruled in the present case that the basis of assessment of the docket fee should be the amount
of damages sought in the original complaint and not in the amended complaint.

The Court cannot close this case without making the observation that it frowns at the practice of counsel who filed the original
complaint in this case of omitting any specification of the amount of damages in the prayer although the amount of over P78 million
is alleged in the body of the complaint. This is clearly intended for no other purpose than to evade the payment of the correct filing
fees if not to mislead the docket clerk in the assessment of the filing fee. This fraudulent practice was compounded when, even as
this Court had taken cognizance of the anomaly and ordered an investigation, petitioner through another counsel filed an amended
complaint, deleting all mention of the amount of damages being asked for in the body of the complaint. It was only when in
obedience to the order of this Court of October 18, 1985, the trial court directed that the amount of damages be specified in the
amended complaint, that petitioners' counsel wrote the damages sought in the much reduced amount of P10,000,000.00 in the body
of the complaint but not in the prayer thereof. The design to avoid payment of the required docket fee is obvious.

The Court serves warning that it will take drastic action upon a repetition of this unethical practice.

To put a stop to this irregularity, henceforth all complaints, petitions, answers and other similar pleadings should specify the amount
of damages being prayed for not only in the body of the pleading but also in the prayer, and said damages shall be considered in the
assessment of the filing fees in any case. Any pleading that fails to comply with this requirement shall not bib accepted nor admitted,
or shall otherwise be expunged from the record.

The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. An amendment of the complaint
or similar pleading will not thereby vest jurisdiction in the Court, much less the payment of the docket fee based on the amounts
sought in the amended pleading. The ruling in the Magaspi case 14 in so far as it is inconsistent with this pronouncement is
overturned and reversed.

WHEREFORE, the motion for reconsideration is denied for lack of merit.

SO ORDERED.
sun insurance office ltd v asuncion
GANCAYCO, J.:

Again the Court is asked to resolve the issue of whether or not a court acquires jurisdiction over a case when the correct and proper
docket fee has not been paid.

On February 28, 1984, petitioner Sun Insurance Office, Ltd. (SIOL for brevity) filed a complaint with the Regional Trial Court of Makati,
Metro Manila for the consignation of a premium refund on a fire insurance policy with a prayer for the judicial declaration of its
nullity against private respondent Manuel Uy Po Tiong. Private respondent as declared in default for failure to file the required
answer within the reglementary period.

On the other hand, on March 28, 1984, private respondent filed a complaint in the Regional Trial Court of Quezon City for the refund
of premiums and the issuance of a writ of preliminary attachment which was docketed as Civil Case No. Q-41177, initially against
petitioner SIOL, and thereafter including E.B. Philipps and D.J. Warby as additional defendants. The complaint sought, among others,
the payment of actual, compensatory, moral, exemplary and liquidated damages, attorney's fees, expenses of litigation and costs of
the suit. Although the prayer in the complaint did not quantify the amount of damages sought said amount may be inferred from the
body of the complaint to be about Fifty Million Pesos (P50,000,000.00).

Only the amount of P210.00 was paid by private respondent as docket fee which prompted petitioners' counsel to raise his objection.
Said objection was disregarded by respondent Judge Jose P. Castro who was then presiding over said case. Upon the order of this
Court, the records of said case together with twenty-two other cases assigned to different branches of the Regional Trial Court of
Quezon City which were under investigation for under-assessment of docket fees were transmitted to this Court. The Court
thereafter returned the said records to the trial court with the directive that they be re-raffled to the other judges in Quezon City, to
the exclusion of Judge Castro. Civil Case No. Q-41177 was re-raffled to Branch 104, a sala which was then vacant.

On October 15, 1985, the Court en banc issued a Resolution in Administrative Case No. 85-10-8752-RTC directing the judges in said
cases to reassess the docket fees and that in case of deficiency, to order its payment. The Resolution also requires all clerks of court
to issue certificates of re-assessment of docket fees. All litigants were likewise required to specify in their pleadings the amount
sought to be recovered in their complaints.

On December 16, 1985, Judge Antonio P. Solano, to whose sala Civil Case No. Q-41177 was temporarily assigned, issuedan order to
the Clerk of Court instructing him to issue a certificate of assessment of the docket fee paid by private respondent and, in case of
deficiency, to include the same in said certificate.

On January 7, 1984, to forestall a default, a cautionary answer was filed by petitioners. On August 30,1984, an amended complaint
was filed by private respondent including the two additional defendants aforestated.

Judge Maximiano C. Asuncion, to whom Civil Case No. Q41177 was thereafter assigned, after his assumption into office on January
16, 1986, issued a Supplemental Order requiring the parties in the case to comment on the Clerk of Court's letter-report signifying
her difficulty in complying with the Resolution of this Court of October 15, 1985 since the pleadings filed by private respondent did
not indicate the exact amount sought to be recovered. On January 23, 1986, private respondent filed a "Compliance" and a "Re-
Amended Complaint" stating therein a claim of "not less than Pl0,000,000. 00 as actual compensatory damages" in the prayer. In the
body of the said second amended complaint however, private respondent alleges actual and compensatory damages and attorney's
fees in the total amount of about P44,601,623.70.

On January 24, 1986, Judge Asuncion issued another Order admitting the second amended complaint and stating therein that the
same constituted proper compliance with the Resolution of this Court and that a copy thereof should be furnished the Clerk of Court
for the reassessment of the docket fees. The reassessment by the Clerk of Court based on private respondent's claim of "not less
than P10,000,000.00 as actual and compensatory damages" amounted to P39,786.00 as docket fee. This was subsequently paid by
private respondent.

Petitioners then filed a petition for certiorari with the Court of Appeals questioning the said order of Judie Asuncion dated January
24, 1986.

On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim of P20,000,000.00 as d.qmages so
the total claim amounts to about P64,601,623.70. On October 16, 1986, or some seven months after filing the supplemental
complaint, the private respondent paid the additional docket fee of P80,396.00.1

On August 13, 1987, the Court of Appeals rendered a decision ruling, among others, as follows:
WHEREFORE, judgment is hereby rendered:

1. Denying due course to the petition in CA-G.R. SP No. 1, 09715 insofar as it seeks annulment of the order

(a) denying petitioners' motion to dismiss the complaint, as amended, and

(b) granting the writ of preliminary attachment, but giving due course to the portion thereof questioning the reassessment of
the docketing fee, and requiring the Honorable respondent Court to reassess the docketing fee to be paid by private respondent on
the basis of the amount of P25,401,707.00. 2

Hence, the instant petition.

During the pendency of this petition and in conformity with the said judgment of respondent court, private respondent paid the
additional docket fee of P62,432.90 on April 28, 1988. 3

The main thrust of the petition is that the Court of Appeals erred in not finding that the lower court did not acquire jurisdiction over
Civil Case No. Q-41177 on the ground of nonpayment of the correct and proper docket fee. Petitioners allege that while it may be
true that private respondent had paid the amount of P182,824.90 as docket fee as herein-above related, and considering that the
total amount sought to be recovered in the amended and supplemental complaint is P64,601,623.70 the docket fee that should be
paid by private respondent is P257,810.49, more or less. Not having paid the same, petitioners contend that the complaint should be
dismissed and all incidents arising therefrom should be annulled. In support of their theory, petitioners cite the latest ruling of the
Court in Manchester Development Corporation vs. CA, 4 as follows:

The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. An amendment of the complaint
or similar pleading will not thereby vest jurisdiction in the Court, much less the payment of the docket fee based on the amounts
sought in the amended pleading. The ruling in the Magaspi Case in so far as it is inconsistent with this pronouncement is overturned
and reversed.

On the other hand, private respondent claims that the ruling in Manchester cannot apply retroactively to Civil Case No. Q41177 for at
the time said civil case was filed in court there was no such Manchester ruling as yet. Further, private respondent avers that what is
applicable is the ruling of this Court in Magaspi v. Ramolete, 5 wherein this Court held that the trial court acquired jurisdiction over
the case even if the docket fee paid was insufficient.

The contention that Manchester cannot apply retroactively to this case is untenable. Statutes regulating the procedure of the courts
will be construed as applicable to actions pending and undetermined at the time of their passage. Procedural laws are retrospective
in that sense and to that extent. 6

In Lazaro vs. Endencia and Andres, 7 this Court held that the payment of the full amount of the docket fee is an indispensable step
for the perfection of an appeal. In a forcible entry and detainer case before the justice of the peace court of Manaoag, Pangasinan,
after notice of a judgment dismissing the case, the plaintiff filed a notice of appeal with said court but he deposited only P8.00 for
the docket fee, instead of P16.00 as required, within the reglementary period of appeal of five (5) days after receiving notice of
judgment. Plaintiff deposited the additional P8.00 to complete the amount of the docket fee only fourteen (14) days later. On the
basis of these facts, this court held that the Court of First Instance did notacquire jurisdiction to hear and determine the appeal as
the appeal was not thereby perfected.

In Lee vs. Republic, 8 the petitioner filed a verified declaration of intention to become a Filipino citizen by sending it through
registered mail to the Office of the Solicitor General in 1953 but the required filing fee was paid only in 1956, barely 5V2 months
prior to the filing of the petition for citizenship. This Court ruled that the declaration was not filed in accordance with the legal
requirement that such declaration should be filed at least one year before the filing of the petition for citizenship. Citing Lazaro, this
Court concluded that the filing of petitioner's declaration of intention on October 23, 1953 produced no legal effect until the required
filing fee was paid on May 23, 1956.

In Malimit vs. Degamo, 9 the same principles enunciated in Lazaro and Lee were applied. It was an original petition for quo warranto
contesting the right to office of proclaimed candidates which was mailed, addressed to the clerk of the Court of First Instance, within
the one-week period after the proclamation as provided therefor by law.10 However, the required docket fees were paid only after
the expiration of said period. Consequently, this Court held that the date of such payment must be deemed to be the real date of
filing of aforesaid petition and not the date when it was mailed.

Again, in Garica vs, Vasquez, 11 this Court reiterated the rule that the docket fee must be paid before a court will act on a petition or
complaint. However, we also held that said rule is not applicable when petitioner seeks the probate of several wills of the same
decedent as he is not required to file a separate action for each will but instead he may have other wills probated in the same special
proceeding then pending before the same court.

Then in Magaspi, 12 this Court reiterated the ruling in Malimit and Lee that a case is deemed filed only upon payment of the docket
fee regardless of the actual date of its filing in court. Said case involved a complaint for recovery of ownership and possession of a
parcel of land with damages filed in the Court of First Instance of Cebu. Upon the payment of P60.00 for the docket fee and P10.00
for the sheriffs fee, the complaint was docketed as Civil Case No. R-11882. The prayer of the complaint sought that the Transfer
Certificate of Title issued in the name of the defendant be declared as null and void. It was also prayed that plaintiff be declared as
owner thereof to whom the proper title should be issued, and that defendant be made to pay monthly rentals of P3,500.00 from
June 2, 1948 up to the time the property is delivered to plaintiff, P500,000.00 as moral damages, attorney's fees in the amount of
P250,000.00, the costs of the action and exemplary damages in the amount of P500,000.00.

The defendant then filed a motion to compel the plaintiff to pay the correct amount of the docket fee to which an opposition was
filed by the plaintiff alleging that the action was for the recovery of a parcel of land so the docket fee must be based on its assessed
value and that the amount of P60.00 was the correct docketing fee. The trial court ordered the plaintiff to pay P3,104.00 as filing fee.

The plaintiff then filed a motion to admit the amended complaint to include the Republic as the defendant. In the prayer of the
amended complaint the exemplary damages earlier sought was eliminated. The amended prayer merely sought moral damages as
the court may determine, attorney's fees of P100,000.00 and the costs of the action. The defendant filed an opposition to the
amended complaint. The opposition notwithstanding, the amended complaint was admitted by the trial court. The trial court
reiterated its order for the payment of the additional docket fee which plaintiff assailed and then challenged before this Court.
Plaintiff alleged that he paid the total docket fee in the amount of P60.00 and that if he has to pay the additional fee it must be based
on the amended complaint.

The question posed, therefore, was whether or not the plaintiff may be considered to have filed the case even if the docketing fee
paid was not sufficient. In Magaspi, We reiterated the rule that the case was deemed filed only upon the payment of the correct
amount for the docket fee regardless of the actual date of the filing of the complaint; that there was an honest difference of opinion
as to the correct amount to be paid as docket fee in that as the action appears to be one for the recovery of property the docket fee
of P60.00 was correct; and that as the action is also one, for damages, We upheld the assessment of the additional docket fee based
on the damages alleged in the amended complaint as against the assessment of the trial court which was based on the damages
alleged in the original complaint.

However, as aforecited, this Court overturned Magaspi in Manchester. Manchester involves an action for torts and damages and
specific performance with a prayer for the issuance of a temporary restraining order, etc. The prayer in said case is for the issuance of
a writ of preliminary prohibitory injunction during the pendency of the action against the defendants' announced forfeiture of the
sum of P3 Million paid by the plaintiffs for the property in question, the attachment of such property of defendants that may be
sufficient to satisfy any judgment that may be rendered, and, after hearing, the issuance of an order requiring defendants to execute
a contract of purchase and sale of the subject property and annul defendants' illegal forfeiture of the money of plaintiff. It was also
prayed that the defendants be made to pay the plaintiff jointly and severally, actual, compensatory and exemplary damages as well
as 25% of said amounts as may be proved during the trial for attorney's fees. The plaintiff also asked the trial court to declare the
tender of payment of the purchase price of plaintiff valid and sufficient for purposes of payment, and to make the injunction
permanent. The amount of damages sought is not specified in the prayer although the body of the complaint alleges the total
amount of over P78 Millon allegedly suffered by plaintiff.

Upon the filing of the complaint, the plaintiff paid the amount of only P410.00 for the docket fee based on the nature of the action
for specific performance where the amount involved is not capable of pecuniary estimation. However, it was obvious from the
allegations of the complaint as well as its designation that the action was one for damages and specific performance. Thus, this court
held the plaintiff must be assessed the correct docket fee computed against the amount of damages of about P78 Million, although
the same was not spelled out in the prayer of the complaint.

Meanwhile, plaintiff through another counsel, with leave of court, filed an amended complaint on September 12, 1985 by the
inclusion of another co-plaintiff and eliminating any mention of the amount of damages in the body of the complaint. The prayer in
the original complaint was maintained.

On October 15, 1985, this Court ordered the re-assessment of the docket fee in the said case and other cases that were investigated.
On November 12, 1985, the trial court directed the plaintiff to rectify the amended complaint by stating the amounts which they
were asking for. This plaintiff did as instructed. In the body of the complaint the amount of damages alleged was reduced to
P10,000,000.00 but still no amount of damages was specified in the prayer. Said amended complaint was admitted.

Applying the principle in Magaspi that "the case is deemed filed only upon payment of the docket fee regardless of the actual date of
filing in court," this Court held that the trial court did not acquire jurisdiction over the case by payment of only P410.00 for the
docket fee. Neither can the amendment of the complaint thereby vest jurisdiction upon the Court. For all legal purposes there was
no such original complaint duly filed which could be amended. Consequently, the order admitting the amended complaint and all
subsequent proceedings and actions taken by the trial court were declared null and void.13

The present case, as above discussed, is among the several cases of under-assessment of docket fee which were investigated by this
Court together with Manchester. The facts and circumstances of this case are similar to Manchester. In the body of the original
complaint, the total amount of damages sought amounted to about P50 Million. In the prayer, the amount of damages asked for was
not stated. The action was for the refund of the premium and the issuance of the writ of preliminary attachment with damages. The
amount of only P210.00 was paid for the docket fee. On January 23, 1986, private respondent filed an amended complaint wherein
in the prayer it is asked that he be awarded no less than P10,000,000.00 as actual and exemplary damages but in the body of the
complaint the amount of his pecuniary claim is approximately P44,601,623.70. Said amended complaint was admitted and the
private respondent was reassessed the additional docket fee of P39,786.00 based on his prayer of not less than P10,000,000.00 in
damages, which he paid.

On April 24, 1986, private respondent filed a supplemental complaint alleging an additional claim of P20,000,000.00 in damages so
that his total claim is approximately P64,601,620.70. On October 16, 1986, private respondent paid an additional docket fee of
P80,396.00. After the promulgation of the decision of the respondent court on August 31, 1987 wherein private respondent was
ordered to be reassessed for additional docket fee, and during the pendency of this petition, and after the promulgation of
Manchester, on April 28, 1988, private respondent paid an additional docket fee of P62,132.92. Although private respondent appears
to have paid a total amount of P182,824.90 for the docket fee considering the total amount of his claim in the amended and
supplemental complaint amounting to about P64,601,620.70, petitioner insists that private respondent must pay a docket fee of
P257,810.49.

The principle in Manchester could very well be applied in the present case. The pattern and the intent to defraud the government of
the docket fee due it is obvious not only in the filing of the original complaint but also in the filing of the second amended complaint.

However, in Manchester, petitioner did not pay any additional docket fee until] the case was decided by this Court on May 7, 1987.
Thus, in Manchester, due to the fraud committed on the government, this Court held that the court a quo did not acquire jurisdiction
over the case and that the amended complaint could not have been admitted inasmuch as the original complaint was null and void.

In the present case, a more liberal interpretation of the rules is called for considering that, unlike Manchester, private respondent
demonstrated his willingness to abide by the rules by paying the additional docket fees as required. The promulgation of the decision
in Manchester must have had that sobering influence on private respondent who thus paid the additional docket fee as ordered by
the respondent court. It triggered his change of stance by manifesting his willingness to pay such additional docket fee as may be
ordered.

Nevertheless, petitioners contend that the docket fee that was paid is still insufficient considering the total amount of the claim. This
is a matter which the clerk of court of the lower court and/or his duly authorized docket clerk or clerk in-charge should determine
and, thereafter, if any amount is found due, he must require the private respondent to pay the same.

Thus, the Court rules as follows:

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.

WHEREFORE, the petition is DISMISSED for lack of merit. The Clerk of Court of the court a quo is hereby instructed to reassess and
determine the additional filing fee that should be paid by private respondent considering the total amount of the claim sought in the
original complaint and the supplemental complaint as may be gleaned from the allegations and the prayer thereof and to require
private respondent to pay the deficiency, if any, without pronouncement as to costs.

SO ORDERED
NO PAYMENT OF DOCKET FEES FOR MONEY CLAIM
sheker v estate of sheker
AUSTRIA-MARTINEZ, J.:

This resolves the Petition for Review on Certiorari seeking the reversal of the Order1 of the Regional Trial Court of Iligan City, Branch
6 (RTC) dated January 15, 2003 and its Omnibus Order dated April 9, 2003.

The undisputed facts are as follows.

The RTC admitted to probate the holographic will of Alice O. Sheker and thereafter issued an order for all the creditors to file their
respective claims against the estate. In compliance therewith, petitioner filed on October 7, 2002 a contingent claim for agent's
commission due him amounting to approximately ₱206,250.00 in the event of the sale of certain parcels of land belonging to the
estate, and the amount of ₱275,000.00, as reimbursement for expenses incurred and/or to be incurred by petitioner in the course of
negotiating the sale of said realties.
The executrix of the Estate of Alice O. Sheker (respondent) moved for the dismissal of said money claim against the estate on the
grounds that (1) the requisite docket fee, as prescribed in Section 7(a), Rule 141 of the Rules of Court, had not been paid; (2)
petitioner failed to attach a certification against non-forum shopping; and (3) petitioner failed to attach a written explanation why the
money claim was not filed and served personally.

On January 15, 2003, the RTC issued the assailed Order dismissing without prejudice the money claim based on the grounds
advanced by respondent. Petitioner's motion for reconsideration was denied per Omnibus Order dated April 9, 2003.

Petitioner then filed the present petition for review on certiorari, raising the following questions:

(a) must a contingent claim filed in the probate proceeding contain a certification against non-forum shopping, failing which such
claim should be dismissed?

(b) must a contingent claim filed against an estate in a probate proceeding be dismissed for failing to pay the docket fees at the time
of its filing thereat?

(c) must a contingent claim filed in a probate proceeding be dismissed because of its failure to contain a written explanation on the
service and filing by registered mail?2

Petitioner maintains that the RTC erred in strictly applying to a probate proceeding the rules requiring a certification of non-forum
shopping, a written explanation for non-personal filing, and the payment of docket fees upon filing of the claim. He insists that
Section 2, Rule 72 of the Rules of Court provides that rules in ordinary actions are applicable to special proceedings only in a
suppletory manner.

The Court gave due course to the petition for review on certiorari although directly filed with this Court, pursuant to Section 2(c),
Rule 41 of the Rules of Court.3

The petition is imbued with merit.

However, it must be emphasized that petitioner's contention that rules in ordinary actions are only supplementary to rules in special
proceedings is not entirely correct.

Section 2, Rule 72, Part II of the same Rules of Court provides:

Sec. 2. Applicability of rules of Civil Actions. - In the absence of special provisions, the rules provided for in ordinary actions shall be,
as far as practicable, applicable in special proceedings.

Stated differently, special provisions under Part II of the Rules of Court govern special proceedings; but in the absence of special
provisions, the rules provided for in Part I of the Rules governing ordinary civil actions shall be applicable to special proceedings, as
far as practicable.

The word "practicable" is defined as: possible to practice or perform; capable of being put into practice, done or accomplished.4 This
means that in the absence of special provisions, rules in ordinary actions may be applied in special proceedings as much as possible
and where doing so would not pose an obstacle to said proceedings. Nowhere in the Rules of Court does it categorically say that
rules in ordinary actions are inapplicable or merely suppletory to special proceedings. Provisions of the Rules of Court requiring a
certification of non-forum shopping for complaints and initiatory pleadings, a written explanation for non-personal service and filing,
and the payment of filing fees for money claims against an estate would not in any way obstruct probate proceedings, thus, they are
applicable to special proceedings such as the settlement of the estate of a deceased person as in the present case.

Thus, the principal question in the present case is: did the RTC err in dismissing petitioner's contingent money claim against
respondent estate for failure of petitioner to attach to his motion a certification against non-forum shopping?

The Court rules in the affirmative.

The certification of non-forum shopping is required only for complaints and other initiatory pleadings. The RTC erred in ruling that a
contingent money claim against the estate of a decedent is an initiatory pleading. In the present case, the whole probate proceeding
was initiated upon the filing of the petition for allowance of the decedent's will. Under Sections 1 and 5, Rule 86 of the Rules of
Court, after granting letters of testamentary or of administration, all persons having money claims against the decedent are
mandated to file or notify the court and the estate administrator of their respective money claims; otherwise, they would be barred,
subject to certain exceptions.5

Such being the case, a money claim against an estate is more akin to a motion for creditors' claims to be recognized and taken into
consideration in the proper disposition of the properties of the estate. In Arquiza v. Court of Appeals,6 the Court explained thus:

x x x The office of a motion is not to initiate new litigation, but to bring a material but incidental matter arising in the progress of the
case in which the motion is filed. A motion is not an independent right or remedy, but is confined to incidental matters in the
progress of a cause. It relates to some question that is collateral to the main object of the action and is connected with and
dependent upon the principal remedy.7 (Emphasis supplied)

A money claim is only an incidental matter in the main action for the settlement of the decedent's estate; more so if the claim is
contingent since the claimant cannot even institute a separate action for a mere contingent claim. Hence, herein petitioner's
contingent money claim, not being an initiatory pleading, does not require a certification against non-forum shopping.

On the issue of filing fees, the Court ruled in Pascual v. Court of Appeals,8 that the trial court has jurisdiction to act on a money claim
(attorney's fees) against an estate for services rendered by a lawyer to the administratrix to assist her in fulfilling her duties to the
estate even without payment of separate docket fees because the filing fees shall constitute a lien on the judgment pursuant to
Section 2, Rule 141 of the Rules of Court, or the trial court may order the payment of such filing fees within a reasonable time.9 After
all, the trial court had already assumed jurisdiction over the action for settlement of the estate. Clearly, therefore, non-payment of
filing fees for a money claim against the estate is not one of the grounds for dismissing a money claim against the estate.

With regard to the requirement of a written explanation, Maceda v. De Guzman Vda. de Macatangay10 is squarely in point. Therein,
the Court held thus:

In Solar Team Entertainment, Inc. v. Ricafort, this Court, passing upon Section 11 of Rule 13 of the Rules of Court, held that a court
has the discretion to consider a pleading or paper as not filed if said rule is not complied with.

Personal service and filing are preferred for obvious reasons. Plainly, such should expedite action or resolution on a pleading, motion
or other paper; and conversely, minimize, if not eliminate, delays likely to be incurred if service or filing is done by mail, considering
the inefficiency of the postal service. Likewise, personal service will do away with the practice of some lawyers who, wanting to
appear clever, resort to the following less than ethical practices: (1) serving or filing pleadings by mail to catch opposing counsel off-
guard, thus leaving the latter with little or no time to prepare, for instance, responsive pleadings or an opposition; or (2) upon
receiving notice from the post office that the registered mail containing the pleading of or other paper from the adverse party may
be claimed, unduly procrastinating before claiming the parcel, or, worse, not claiming it at all, thereby causing undue delay in the
disposition of such pleading or other papers.

If only to underscore the mandatory nature of this innovation to our set of adjective rules requiring personal service whenever
practicable, Section 11 of Rule 13 then gives the court the discretion to consider a pleading or paper as not filed if the other modes
of service or filing were not resorted to and no written explanation was made as to why personal service was not done in the first
place. The exercise of discretion must, necessarily consider the practicability of personal service, for Section 11 itself begins with the
clause "whenever practicable".

We thus take this opportunity to clarify that under Section 11, Rule 13 of the 1997 Rules of Civil Procedure, personal service and
filing is the general rule, and resort to other modes of service and filing, the exception. Henceforth, whenever personal service or
filing is practicable, in the light of the circumstances of time, place and person, personal service or filing is mandatory. Only when
personal service or filing is not practicable may resort to other modes be had, which must then be accompanied by a written
explanation as to why personal service or filing was not practicable to begin with. In adjudging the plausibility of an explanation, a
court shall likewise consider the importance of the subject matter of the case or the issues involved therein, and the prima facie
merit of the pleading sought to be expunged for violation of Section 11. (Emphasis and italics supplied)

In Musa v. Amor, this Court, on noting the impracticality of personal service, exercised its discretion and liberally applied Section 11
of Rule 13:

"As [Section 11, Rule 13 of the Rules of Court] requires, service and filing of pleadings must be done personally whenever
practicable. The court notes that in the present case, personal service would not be practicable. Considering the distance between
the Court of Appeals and Donsol, Sorsogon where the petition was posted, clearly, service by registered mail [sic] would have
entailed considerable time, effort and expense. A written explanation why service was not done personally might have been
superfluous. In any case, as the rule is so worded with the use of "may", signifying permissiveness, a violation thereof gives the court
discretion whether or not to consider the paper as not filed. While it is true that procedural rules are necessary to secure an orderly
and speedy administration of justice, rigid application of Section 11, Rule 13 may be relaxed in this case in the interest of substantial
justice. (Emphasis and italics supplied)1âwphi1

In the case at bar, the address of respondent’s counsel is Lopez, Quezon, while petitioner Sonia’s counsel’s is Lucena City. Lopez,
Quezon is 83 kilometers away from Lucena City. Such distance makes personal service impracticable. As in Musa v. Amor, a written
explanation why service was not done personally "might have been superfluous."

As this Court held in Tan v. Court of Appeals, liberal construction of a rule of procedure has been allowed where, among other cases,
"the injustice to the adverse party is not commensurate with the degree of his thoughtlessness in not complying with the procedure
prescribed."11 (Emphasis supplied)

In the present case, petitioner holds office in Salcedo Village, Makati City, while counsel for respondent and the RTC which rendered
the assailed orders are both in Iligan City. The lower court should have taken judicial notice of the great distance between said cities
and realized that it is indeed not practicable to serve and file the money claim personally. Thus, following Medina v. Court of
Appeals,12 the failure of petitioner to submit a written explanation why service has not been done personally, may be considered as
superfluous and the RTC should have exercised its discretion under Section 11, Rule 13, not to dismiss the money claim of petitioner,
in the interest of substantial justice.

The ruling spirit of the probate law is the speedy settlement of estates of deceased persons for the benefit of creditors and those
entitled to residue by way of inheritance or legacy after the debts and expenses of administration have been paid.13 The ultimate
purpose for the rule on money claims was further explained in Union Bank of the Phil. v. Santibañez,14 thus:

The filing of a money claim against the decedent’s estate in the probate court is mandatory. As we held in the vintage case of Py Eng
Chong v. Herrera:

x x x This requirement is for the purpose of protecting the estate of the deceased by informing the executor or administrator of the
claims against it, thus enabling him to examine each claim and to determine whether it is a proper one which should be allowed. The
plain and obvious design of the rule is the speedy settlement of the affairs of the deceased and the early delivery of the property to
the distributees, legatees, or heirs. The law strictly requires the prompt presentation and disposition of the claims against the
decedent's estate in order to settle the affairs of the estate as soon as possible, pay off its debts and distribute the residue.15
(Emphasis supplied)

The RTC should have relaxed and liberally construed the procedural rule on the requirement of a written explanation for non-
personal service, again in the interest of substantial justice.

WHEREFORE, the petition is GRANTED. The Orders of the Regional Trial Court of Iligan City, Branch 6 dated January 15, 2003 and April
9, 2003, respectively, are REVERSED and SET ASIDE. The Regional Trial Court of Iligan City, Branch 6, is hereby DIRECTED to give due
course and take appropriate action on petitioner's money claim in accordance with Rule 82 of the Rules of Court.

No pronouncement as to costs.

SO ORDERED.
WHEN DOCKET FEES ARE NOT NEEDED
original development and construction corp v ca
ORIGINAL DEVELOPMENT AND CONSTRUCTION CORPORATION, petitioner,
vs.
HON. COURT OF APPEALS and HOME INSURANCE AND GUARANTY CORPORATION, respondents.

K.V. Faylona & Associates and Jose V. Marcella for petitioner.

The Government Corporate Counsel for private respondent.

PARAS, J.:

Assailed in this petition for certiorari is the decision * of the Court of Appeals dated dated July 31, 1990 in CA G.R. SP No. 18462
entitled "Home Insurance and Guaranty Corporation v. Hon. Adriano R.. Osorio and Original Development and Construction
Corporation" ordering that the complaint in Civil Case No. 3020-V-89 be expunged from the record and declaring the orders dated
June 1 and 29, 1989 of the court a quo as null and void for having been issued without jurisdiction.

The factual background of the case appears undisputed, to wit:

On December 19, 1988, herein petitioner Original Development and Construction Corporation (ODECOR for brevity) filed a complaint
for breach of contract and damages against private respondent Home Insurance and Guaranty Corporation (HIGC for short), National
Home Mortgage Finance Corporation (NHMFC for short) and Caloocan City Public School Teachers Association (CCPSTA for brevity).
The case was docketed as Civil Case No. 3020-V-89 and assigned to Branch 171 of the Regional Trial Court in Valenzuela, Metro
Manila.

The questioned allegations in the body of the complaint, among others, are as follows:

16. The organization, as earlier stated, of the Third District Public School Teachers Homeowners Association, under the
sponsorship and patronage of HIGC, unjustly deprived ODECOR of not less than 10,000 committed buyers, and as a consequence
suffered a big financial loss;

17. As part of its scheme to destroy the viability of ODECOR's Housing project, HIGC maliciously and unreasonably; (a)
delayed action on ODECOR's request for the issuance of Certificate of Completion of houses which have already been completed; (b)
froze ODECOR's requests for "take-out" appraisals of the value of its houses and lots, instead, approved very low appraisal values; (c)
refused to allow ODECOR to construct smaller and cheaper house and lot packages, and unreasonably required ODECOR to secure
prior clearance from the National Home Mortgage Finance Corp. before it (HIGC) will allow ODECOR to construct smaller packages;
and (d) delayed countersigning the checks, which were issued by ODECOR to pay the suppliers of construction materials used in the
project, which delay resulted in the pilferage of valuable construction materials and (e) delayed action of ODECOR's labor payrolls,
thus, demoralizing the employees of the ODECOR;

xxx xxx xxx

19. HIGC's aforementioned acts not only resulted in ODECOR's financial crises and/or reversals, but also brought about almost
the total loss of its market; and such loss of market renders HIGC liable for the actual and consequential damages suffered by
ODECOR;

20. In order to prevent the total collapse of the Doña Helen Subdivision project, to rescue ODECOR from its financial straits,
and to enable the ODECOR to continue its distressed operations, ODECOR's President, for the account of ODECOR, had to secure
personal loans from sympathetic friends, in which loans ODECOR bound itself to pay monthly a high rate of interest; and accordingly,
the principal and the interests should be charged to or considered as a liability of the HIGC, by way of reparation for actual and
consequential damages, to ODECOR;

xxx xxx xxx

24. Notwithstanding insistent demands by ODECOR, NHMFC has delivered to the former, is staggered and delayed
installments in a period of five (5) years, the amount of P5,366,727.80 only, which malicious delays have caused ODECOR to incur
unnecessary expenses in the form of interests on its loans, unexpected administrative and operational requirements, which interest
payments and other expenses could have been avoided had the National Home Mortgage Finance Corporation promptly paid over to
ODECOR the moneys which it (NHMFC) had guaranteed to pay;

25. Notwithstanding ODECOR's repeated demands on NHMFC for the latter to effect payment and delivery to it of the
remaining balance of the originating banks' transmitted loan proceed in the amount of P2,272,193.10 which amount represents the
`take out' proceeds of twenty-two (22) House and lot buyers, NHMFC has maliciously refused or rejected such demands; and this
malicious non-payment aggravated the financial difficulties and the deterioration of ODECOR and forced it to curtail its development
operations and to abandon its program to construct 10,000 units;

26. NHMFC's aforestated unjust, if not illegal, acts subject NHMFC to liability to pay ODECOR for actual, consequential and
exemplary damages for the losses and injuries which were sustained by it (plaintiff);

27. ODECOR, as a result of the aforedescribed illegal and unlawful acts committed by the several defendants, and to protect
its financial interests, good name and reputation, and to recover its huge losses, has been needlessly compelled to file this action in
Court, and for this purpose, had to engage the professional services of a reputable law counsel for which it agreed to pay 25% of its
total money claims as attorney's fees excluding trial honorarium of P3,000.00 per hearing.

xxx xxx xxx

(Emphasis supplied)

The prayer states:

WHEREFORE, the plaintiff to this Honorable Court respectfully prays that judgment be rendered:

1. Adjudging all the defendants guilty of breach of contracts and/or bad faith and/or unfair business practice and,
accordingly, liable for their unlawful acts which sabotaged and ruined the financial resources and housing development enterprise of
the plaintiff;

2. Adjudging all the defendants, solidarily liable to compensate the plaintiff for actual, consequential, exemplary and moral
damages, the amount of which will be proved at the trial;

3. Requiring National Home Mortgage Finance Corporation to deliver and/or to pay to the plaintiff the amount of
P2,272,193.10 which sum is due and payable to the plaintiff and is in its possession and custody;

4. Declaring the defendants liable to the plaintiff for attorney's fees and other expenses of litigation and the costs of this
suit; and

5. Granting to the plaintiff such other reliefs and remedies which are just and equitable in the premises. (Emphasis supplied)

Simultaneous with the filing of the said complaint, ODECOR paid the following: P4,344.00 under O.R. No. 1772201-H; P4,344.00
under O.R. No. 007830; and P86.00; based on the one numerical figure appearing in the complaint as P2,272,193.10 for alleged "loan
take out proceeds" which the other defendant NHMFC allegedly failed to remit to ODECOR. The rest appears to be an unspecified
amount of damages which the trial court could not assess (Rollo, p. 71).
On March 4, 1989, HIGC filed a motion to dismiss on the ground that the court did not acquire jurisdiction due to non-payment of
the proper docket fees, citing the case of Manchester Development Corporation vs. Court of Appeals (149 SCRA 56 [1987]). NHMFC,
on the other hand, filed its answer while CCPSTA was declared in default (Petition, Rollo, pp. 6-7). The court, in its order dated June 1,
1989 denied the motion to dismiss and directed the Clerk of Court in this wise:

... to issue the Certificate of Reassessment of the proper docket fee to include in the Certificate the deficiency, if any. In case the
payment is insufficient, plaintiff must pay the deficiency within Five (5) days from receipt of the certificate of reassessment to the
Clerk of Court.

In the event that the judgment awards claim not specified in the complaint or such claim left for determination by the court as
proved at the trial, the additional filing fee therefor shall constitute a lien in the judgment and the Clerk of Court or her duly
authorized deputy will enforce said liens and after assessment to collect the additional fee.

xxx xxx xxx

SO ORDERED. (Annex "D" of the Petition, Rollo, p. 37).

Pursuant to the above order, the Clerk of Court filed an Ex-Parte motion dated June 6, 1989 (Rollo, pp. 38-39) stating that she has
already issued the required certificate of reassessment but the deficiency could not be included therein because the claim for
attorney's fee manifested in the body of the complaint was not reiterated in the prayer. Hence, the docket fees paid by ODECOR did
not include the demand for attorney's fees. The Clerk of Court, therefore, moved that the complaint be amended accordingly. This
prompted HIGC to move for a reconsideration of the aforecited order of the court, praying that the complaint be dismissed or in the
alternative, to amend ODECOR's complaint to reflect the specific amount of damages both in the body as well as in the prayer (Rollo,
p. 43). But the same was denied in the subsequent order dated June 29, 1989. ODECOR thereafter filed its amended complaint dated
July 6, 1989 containing substantially all its allegations in the first complaint except that it specified its claim for attorney's fees as
equivalent to 25% of the total monthly liability and other expenses of litigation and costs of the suit. Such amended complaint was
admitted by the court on July 11, 1989. HIGC then filed its answer thereto, but after the issues had been joined and the case had
been set for pre-trial conference, HIGC filed a petition for certiorari with the appellate court questioning the jurisdiction of the lower
court over the case on the same ground of failure to pay the proper docket fees. The appellate court, in turn, restrained the lower
court from taking further cognizance of the case and on July 31, 1990, rendered its decision, the dispositive portion of which reads:

In view of the foregoing, We find and so hold that the respondent court did not acquire jurisdiction over Civil Case No. 3020-V-89.
The complaint in the said Civil Case is ordered expunged from the record and the orders dated June 1 and 29, 1989 having been
issued without jurisdiction, are declared null and void.

SO ORDERED. (Decision of the Court of Appeals, Rollo, p. 19).

ODECOR moved for a reconsideration of this decision but later withdrew the same and filed instead the present petition.

The issue now at hand is whether the court acquires jurisdiction over a case even if the complaint does not specify the amount of
damages.

The petition is devoid of merit.

ODECOR's first complaint as well as its amended complaint vaguely asserted its claim for actual, consequential, exemplary and moral
damages, "the amount of which will be proved at the trial" and the demand for attorney's fees as "equivalent to 25% of the total
monetary liability and other expenses of litigation and costs of this suit". Such terms are certainly not definite enough to support the
computation of the proper docket fees. While it is not required that the exact amounts be stated, the plaintiff must ascertain, in his
estimation, the sums he wants and the sums required to determine the amount of such docket and other fees. Thus, it is evident that
the complaint did not state enough facts and sums to enable the Clerk of Court of the lower court to compute the docket fees
payable and left to the judge "mere guesswork" as to these amounts, which is fatal. (Spouses Belen Gregorio v. The Honorable Judge
Zosimo Z. Angeles, et al., G.R. No. 85847, December 21, 1989, 180 SCRA 490). The intent to defraud the government appears
obvious, not only in the filing of the original complaint but also in the filing of the amended complaint.

In any event, the requirement in Circular No. 7 that complaints, petitions, answers, and similar pleadings should specify the amount
of damages being prayed for not only in the body of the pleadings but also in the prayer has not been altered (Tacay v. RTC of Tagum,
Davao del Norte, 180 SCRA 443-444 [1989]).

What has been revised is the rule that subsequent amendment of the complaint or similar pleading will not thereby vest jurisdiction
on the Court, much less the payment of the docket fee based on the amount sought in the amended pleading. The trial court now is
authorized to allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary
period (Ibid).

Thus, where a complaint purely for money or damages did not specify the amounts being claimed, the Court may allow amendment
of the pleading and payment of the proper fees or where the pleading specified the amount of every claim but the fees paid are
insufficient, the defect may be cured and the Court may take cognizance of the action by payment of the proper fees provided that in
both cases, prescription has not set in the meantime. Similarly where the action involves real property and a related claim for
damages and the prescribed fees for an action involving real property have been paid but the amounts of the unrelated damages are
unspecified, the Court undeniably has jurisdiction over the action on the real property but may not have acquired jurisdiction over
the accompanying claim for damages. Accordingly, the Court may expunge the claims for damages or allow the amendment of the
complaint so as to allege the precise amount of each item of damages within the prescriptive period (Ibid.).

Coming back to the case at bar, it is readily evident that none of the foregoing requisites was complied with.

Petitioners invoke the liberal interpretation of the rules as enumerated by this Court in the case of Sun Insurance Office, Ltd. (SIOL) v.
Asuncion 170 SCRA 284-285 [1989] which is not, however, applicable as in said case, private respondent amended his complaint
several times, stating the amount claimed and paying each time the required docket fees. While it is true that eventually the docket
fees paid are still insufficient, he nevertheless manifested his willingness to pay such additional docket fee as may be ordered.

The same is not true in the case at bar where in line with the foregoing pronouncements, the trial court allowed the amendment of
the complaint for the determination of the fees, but such amendment did not, however, in anyway help in specifying the amount of
damages claimed. At most, the demand for attorney's fees was stated as 25% of the total monetary liability, another unspecified
amount which cannot be the basis of computation.

As to awards of claims not specified in the pleadings — this Court had already clarified that they refer only to damages arising after
the filing of the complaint or similar pleading, to which the additional filing fee shall constitute a lien on the judgment. The amount
of any claim for damages, therefore, arising on or before the filing of the complaint or any pleading, should be specified. The
exception contemplated as to claims not specified or to claims although specified are left for the determination of the court is limited
only to any damages that may arise after the filing of the complaint or similar pleading for then it will not be possible for the claimant
to specify nor speculate as to the amount thereof (Tacay v. RTC of Tagum, supra; Ayala Corporation, et al. v. The Honorable Job
Maddayag, et al., G.R. No. 88421, 181 SCRA 687 [1990]) (Emphasis supplied).

PREMISES CONSIDERED, the petition is hereby DISMISSED and the decision appealed from is AFFIRMED.

SO ORDERED.
RULE 2 CAUSE OF ACTION
relucio v lopez
The Case

The case is a petition for review on certiorari[1] seeking to set aside the decision[2] of the Court of Appeals that denied a petition for
certiorari assailing the trial courts order denying petitioners motion to dismiss the case against her inclusion as party defendant
therein.

The Facts

The facts, as found by the Court of Appeals, are as follows:

On September 15, 1993, herein private respondent Angelina Mejia Lopez (plaintiff below) filed a petition for APPOINTMENT AS SOLE
ADMINISTRATRIX OF CONJUGAL PARTNERSHIP OF PROPERTIES, FORFEITURE, ETC., against defendant Alberto Lopez and petitioner
Imelda Relucio, docketed as Spec. Proc. M-3630, in the Regional Trial Court of Makati, Branch 141. In the petition, private-respondent
alleged that sometime in 1968, defendant Lopez, who is legally married to the private respondent, abandoned the latter and their
four legitimate children; that he arrogated unto himself full and exclusive control and administration of the conjugal properties,
spending and using the same for his sole gain and benefit to the total exclusion of the private respondent and their four children;
that defendant Lopez, after abandoning his family, maintained an illicit relationship and cohabited with herein petitioner since 1976.

It was further alleged that defendant Lopez and petitioner Relucio, during their period of cohabitation since 1976, have amassed a
fortune consisting mainly of stockholdings in Lopez-owned or controlled corporations, residential, agricultural, commercial lots,
houses, apartments and buildings, cars and other motor vehicles, bank accounts and jewelry. These properties, which are in the
names of defendant Lopez and petitioner Relucio singly or jointly or their dummies and proxies, have been acquired principally if not
solely through the actual contribution of money, property and industry of defendant Lopez with minimal, if not nil, actual
contribution from petitioner Relucio.

In order to avoid defendant Lopez obligations as a father and husband, he excluded the private respondent and their four children
from sharing or benefiting from the conjugal properties and the income or fruits there from. As such, defendant Lopez either did not
place them in his name or otherwise removed, transferred, stashed away or concealed them from the private-respondent. He placed
substantial portions of these conjugal properties in the name of petitioner Relucio.

It was also averred that in the past twenty five years since defendant Lopez abandoned the private-respondent, he has sold, disposed
of, alienated, transferred, assigned, canceled, removed or stashed away properties, assets and income belonging to the conjugal
partnership with the private-respondent and either spent the proceeds thereof for his sole benefit and that of petitioner Relucio and
their two illegitimate children or permanently and fraudulently placed them beyond the reach of the private-respondent and their
four children.
On December 8, 1993, a Motion to Dismiss the Petition was filed by herein petitioner on the ground that private respondent has no
cause of action against her.

An Order dated February 10, 1994 was issued by herein respondent Judge denying petitioner Relucios Motion to Dismiss on the
ground that she is impleaded as a necessary or indispensable party because some of the subject properties are registered in her
name and defendant Lopez, or solely in her name.

Subsequently thereafter, petitioner Relucio filed a Motion for Reconsideration to the Order of the respondent Judge dated February
10, 1994 but the same was likewise denied in the Order dated May 31, 1994.[3]

On June 21, 1994, petitioner filed with the Court of Appeals a petition for certiorari assailing the trial courts denial of her motion to
dismiss.[4]

On May 31, 1996, the Court of Appeals promulgated a decision denying the petition.[5] On June 26, 1996, petitioner filed a motion
for reconsideration.[6] However, on April 6, 1999, the Court of Appeals denied petitioners motion for reconsideration.[7]

Hence, this appeal.[8]

The Issues

1. Whether respondents petition for appointment as sole administratrix of the conjugal property, accounting, etc. against her
husband Alberto J. Lopez established a cause of action against petitioner.

2. Whether petitioners inclusion as party defendant is essential in the proceedings for a complete adjudication of the controversy.[9]

The Courts Ruling

We grant the petition. We resolve the issues in seriatim.

First issue: whether a cause of action exists against petitioner in the proceedings below. A cause of action is an act or omission of one
party the defendant in violation of the legal right of the other.[10] The elements of a cause of action are:

(1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created;

(2) an obligation on the part of the named defendant to respect or not to violate such right; and

(3) an act or omission on the part of such defendant in violation of the right of the plaintiff or constituting a breach of the obligation
of the defendant to the plaintiff for which the latter may maintain an action for recovery of damages.[11]

A cause of action is sufficient if a valid judgment may be rendered thereon if the alleged facts were admitted or proved.[12]

In order to sustain a motion to dismiss for lack of cause of action, the complaint must show that the claim for relief does not exist,
rather than that a claim has been merely defectively stated or is ambiguous, indefinite or uncertain.[13]

Hence, to determine the sufficiency of the cause of action alleged in Special Proceedings M-3630, we assay its allegations.

In Part Two on the Nature of [the] Complaint, respondent Angelina Mejia Lopez summarized the causes of action alleged in the
complaint below.

The complaint is by an aggrieved wife against her husband.

Nowhere in the allegations does it appear that relief is sought against petitioner. Respondents causes of action were all against her
husband.

The first cause of action is for judicial appointment of respondent as administratrix of the conjugal partnership or absolute
community property arising from her marriage to Alberto J. Lopez. Petitioner is a complete stranger to this cause of action. Article
128 of the Family Code refers only to spouses, to wit:

If a spouse without just cause abandons the other or fails to comply with his or her obligations to the family, the aggrieved spouse
may petition the court for receivership, for judicial separation of property, or for authority to be the sole administrator of the
conjugal partnership property xxx

The administration of the property of the marriage is entirely between them, to the exclusion of all other persons. Respondent
alleges that Alberto J. Lopez is her husband. Therefore, her first cause of action is against Alberto J. Lopez. There is no right-duty
relation between petitioner and respondent that can possibly support a cause of action. In fact, none of the three elements of a
cause of action exists.

The second cause of action is for an accounting by respondent husband.[14] The accounting of conjugal partnership arises from or is
an incident of marriage.

Petitioner has nothing to do with the marriage between respondent Alberto J. Lopez. Hence, no cause of action can exist against
petitioner on this ground.

Respondents alternative cause of action is for forfeiture of Alberto J. Lopez share in the co-owned property acquired during his illicit
relationship and cohabitation with [petitioner][15] and for the dissolution of the conjugal partnership of gains between him [Alberto
J. Lopez] and the [respondent].

The third cause of action is essentially for forfeiture of Alberto J. Lopez share in property co-owned by him and petitioner. It does not
involve the issue of validity of the co-ownership between Alberto J. Lopez and petitioner. The issue is whether there is basis in law to
forfeit Alberto J. Lopez share, if any there be, in property co-owned by him with petitioner.

Respondents asserted right to forfeit extends to Alberto J. Lopez share alone. Failure of Alberto J. Lopez to surrender such share,
assuming the trial court finds in respondents favor, results in a breach of an obligation to respondent and gives rise to a cause of
action.[16] Such cause of action, however, pertains to Alberto J. Lopez, not petitioner.

The respondent also sought support. Support cannot be compelled from a stranger.

The action in Special Proceedings M-3630 is, to use respondent Angelina M. Lopez own words, one by an aggrieved wife against her
husband.[17] References to petitioner in the common and specific allegations of fact in the complaint are merely incidental, to set
forth facts and circumstances that prove the causes of action alleged against Alberto J. Lopez.

Finally, as to the moral damages, respondents claim for moral damages is against Alberto J. Lopez, not petitioner.

To sustain a cause of action for moral damages, the complaint must have the character of an action for interference with marital or
family relations under the Civil Code.

A real party in interest is one who stands to be benefited or injured by the judgment of the suit.[18] In this case, petitioner would not
be affected by any judgment in Special Proceedings M-3630.

If petitioner is not a real party in interest, she cannot be an indispensable party. An indispensable party is one without whom there
can be no final determination of an action.[19] Petitioners participation in Special Proceedings M-3630 is not indispensable.
Certainly, the trial court can issue a judgment ordering Alberto J. Lopez to make an accounting of his conjugal partnership with
respondent, and give support to respondent and their children, and dissolve Alberto J. Lopez conjugal partnership with respondent,
and forfeit Alberto J. Lopez share in property co-owned by him and petitioner. Such judgment would be perfectly valid and
enforceable against Alberto J. Lopez.

Nor can petitioner be a necessary party in Special Proceedings M-3630. A necessary party as one who is not indispensable but who
ought to be joined as party if complete relief is to be accorded those already parties, or for a complete determination or settlement
of the claim subject of the action.[20] In the context of her petition in the lower court, respondent would be accorded complete
relief if Alberto J. Lopez were ordered to account for his alleged conjugal partnership property with respondent, give support to
respondent and her children, turn over his share in the co-ownership with petitioner and dissolve his conjugal partnership or
absolute community property with respondent.

The Judgment

WHEREFORE, the Court GRANTS the petition and REVERSES the decision of the Court of Appeals.[21] The Court DISMISSES Special
Proceedings M-3630 of the Regional Trial Court, Makati, Branch 141 as against petitioner.

No costs.

SO ORDERED.
banayos v susana realty inc
ANTONIO, J:

In this petition for certiorari and Prohibition with Preliminary Injunction, the Court holds that on the basis of the allegations of the
complaint in Civil Case No. 7373, 1 the aforesaid case could not be one of forcible entry or unlawful detainer within the exclusive
competence of the municipal court, but an accion publiciana which is for the recovery of the right to possess and is a plenary action
within the jurisdictional competence of respondent court.

The following facts may be gleaned from the records of this petition: The Susana Realty, Inc. (plaintiff in the court a quo as the
registered owner of two (2) parcels of land situated at Mandaluyong, Rizal, covered by Transfer Certificates of Title Nos. 28350 and
28351, sought the recovery of the possession of its properties, thus:

3. That PLAINTIFF is the registered owner of two (20) parcels of land situated at Mandaluyong, Rizal, and more particularly
described as follows:

4. That DEFENDANTS, without the knowledge, much less the consent of herein PLAINTIFF, by means of strategy and stealth,
entered the aforesaid premises, built their respective houses thereon and occupied the said lots for at least three (3) years prior to
this date and are still occupying the same up to the present, * * *

5. That the PLAINTIFF, upon learning of DEFENDANTS' unlawful and illegal occupancy of its above-described lots,
immediately, thru letters sent to each and everyone of them demanded that they vacate the respective portions of the lots they are
occupying, and remove therefrom any and all structures which they may have built thereon, but defendants have ignored plaintiff's
demands and have failed and refused, and still fail and refuse to vacate the premises they are occupying, up to the present;

6. That the plaintiff intends to utilize these lots in the furtherance of its corporate purposes in order that they may yield a
fair income, however, due to the presence of the defendants thereon and their continued refusal to vacate the premises, herein
plaintiff has not been able to utilize said lots, to the great damage and prejudice of herein plaintiff;

The plaintiff further alleged that as a result of the illegal occupancy, it has lost income conservatively estimated at about P27,600.00
per annum. Consequently, plaintiff prayed for judgment ordering defendants (petitioners) to (1) vacate the premises and remove
therefrom whatever structures they may have built thereon, and, if they refuse to do so, ordering the Provincial Sheriff of Rizal to
forcibly eject them and demolish the aforesaid structures, at the expense of petitioners; (2) pay damages to respondent corporation
in the amount of P0.50 per month per square meter of the respective portions occupied by them, from the date of the filing of the
complaint to the date the land is completely vacated; and (3) pay the costs of suit.

For filing their answer with counterclaim several years out of time, petitioners were declared in default. Their answer with
counterclaim was stricken from the records on January 19, 1968. Respondent corporation was ordered to present its evidence
against the defendants.

On July 9, 1968, respondent court rendered judgment ordering defendants (petitioners) to vacate the premises and remove
whatever improvements they may have constructed thereon, and to pay back rentals from October 1, 1959 to June 30, 1968, within
a period of thirty (30) days from the date of receipt of a copy of the decision. On August 14, 1968, petitioners filed an urgent ex parte
motion for extension of time to appeal. On August 21, 1968, petitioners filed their notice of appeal, appeal bond and record on
appeal. A motion to fix supersedeas bond was also filed by petitioners, respondent corporation having, on August 1, 1968, filed an ex
parte motion for execution of the judgment on the ground that said judgment is immediately executory under Section 8, Rule 70 of
the Rules of Court, and the said motion having been granted by respondent court on August 13, 1968. On August 23, 1968,
petitioners' motion for extension of time to appeal was denied. On September 5, 1968, respondent corporation filed a motion to
dismiss petitioners' appeal, but said motion is still presently unresolved. On September 4, 1968, the writ of execution prayed for was
issued commanding the Provincial Sheriff of Rizal to eject the petitioners from the premises and to remove therefrom the
improvements they have introduced therein and to levy execution upon their properties to satisfy the judgment for the back rentals.
Petitioners filed a motion for reconsideration, dated August 27, 1968, alleging that the order of August 13, 1968, granting the motion
for immediate execution "modifies, amends and alters the decision of July 9, 1968 which ordered expressly that the same was
executory only 30 days after receipt of copy thereof." On September 14, 1968, respondent court issued an order staying the
execution of the decision until after the pending incidents in the case shall have been resolved.

A Motion to Set Aside Judgment and/or to Dismiss, dated September 24, 1968, was likewise filed by petitioners, on the ground that,
the case being one for ejectment, respondent corporation committed a fatal error in not alleging thereof by petitioners by means of
stealth, and, furthermore, again considering that this is an ejectment case, respondent Court of First Instance had no jurisdiction
over the same. An Opposition thereto was filed by respondent corporation on October 1, 1968. On the same date, a motion for
demolition was filed by the respondent corporation but the resolution thereof was deferred by respondent court. Petitioners' motion
of September 24, 1968 was denied by respondent court for lack of merit on March 11, 1969.

In the instant petition, it is alleged:

38. That while it is true that whenever the allegations of a complaint fail to plead a complete case of forcible entry and
detainer, the same is under the jurisdiction of the Court of First Instance (Tenorio vs. Gomba, 81 Phil. 54), such ruling is not
controlling in this case because the complaint at bar alleges "stealth and strategy" as the causes of dispossession but said complaint
does not contain any specific allegation as to when was the precise date the demand to vacate was made. * * * 2

and that "the allegations in the complaint to the effect that the defendants, thru strategy, and stealth, occupied the premises for at
least three (3) years before the filing of said complaint did not convert the case into an accion publiciana inasmuch as mere
occupation is not illegal per se for the same may be tolerated." 3

On the strength of the foregoing allegations, petitioners pray that this Court render judgment declaring respondent court to be
without jurisdiction over Civil Case No. 7373 and nullifying all the proceedings taken thereunder, and in the interim to restrain the
respondent court and the Provincial Sheriff from enforcing the writ of execution issued therein.
On June 26, 1970, this Court issued a writ of preliminary injunction restraining respondent court from issuing the special order of
demolition prayed for.

The issue presented in the case at bar is—whether Civil Case No. 7373 is a forcible entry case, within the jurisdiction of the inferior
courts, or an accion publiciana, within the jurisdiction of respondent Court of First Instance.

The general rule is that what determines the jurisdiction of a particular court is the nature of the action pleaded as appearing from
the allegations in the complaint. The averments therein and the character of the relief sought are the ones to be consulted. 4

The complaint in the court below alleges that defendants, by means of stealth and without the knowledge and consent of plaintiff-
corporation, took possession of the premises in question, built their houses thereon, and occupied the same for a period of three (3)
years prior to the filing of the complaint. It appears that the allegation of stealth was what prompted petitioners to label the action
as one for forcible entry and insist that jurisdiction over the same property pertains to the inferior courts. There is however, no
allegation of plaintiff's prior physical possession.

We have consistently held that a complaint for forcible entry, as distinguished from that of unlawful detainer, in order to vest
jurisdiction upon the inferior court, must allege plaintiff's prior physical possession of the property, as well as the fact that he was
deprived of such possession by any of the means provided in Section 1, Rule 70 of the Rules of Court, namely: force, intimidation,
threats, strategy and stealth, "for if the dispossession did not take place by any of these means, the courts of first instance, not the
municipal courts, have jurisdiction." 5

We deem it advisable, at this point, to reiterate the essential differences between three kinds of actions for the recovery of
possession of real property, namely: (1) the summary action for forcible entry and unlawful detainer; (2) the accion publiciana and
(3) the accion de revindicacion.

The action for forcible entry may be brought where dispossession of real property had taken place by any of the means provided for
in Section 1 of Rule 70 of the Revised Rules of Court, and in the case of unlawful detainer, where the possession is withheld after the
expiration or termination of the right to hold possession, by virtue of any contract express or implied. These two actions must be
filed within one (1) year after such unlawful deprivation or withholding of possession with the municipal or city court. These actions
in their essence are mere quieting processes by virtue of which a party in possession of land may not be, by force, dispossessed of
that land, the law restoring to him such possession in a summary manner, until the right of ownership can be tried in due course of
law. They are, therefore, intended to provide an expeditious means of protecting actual possession or right to possession of property.
The aforesaid Rule 70 does not, however, cover all of the cases of dispossession of lands. Thus, "whenever the owner is dispossessed
by any other means than those mentioned he may maintain his action in the Court of First Instance, and it is not necessary for him to
wait until the expiration of twelve months before commencing an action to be repossessed or declared to be owner of the land." 6
Courts of First Instance have jurisdiction over actions to recover possession of real property illegally detained, together with rents
due and damages, even though one (1) year has not expired from the beginning of such illegal detention, provided the question of
ownership of such property is also involved. In other words, if the party illegally dispossessed desires to raise the question of illegal
dispossession as well as that of the ownership over the property, he may commence such action in the Court of First Instance
immediately or at any time after such illegal dispossession. If he decides to raise the question of illegal dispossession only, and the
action is filed more than one (1) year after such deprivation or withholding of possession, then the Court of First Instance will have
original jurisdiction over the case. 7 The former is an accion de revindicacion which seeks the recovery of ownership as well as
possession, while the latter refers to an accion publiciana which is the recovery of the right to possess and is a plenary action in an
ordinary proceeding in the Court of First Instance. 8

This case, having been filed more than one (1) year after private respondent's deprivation of possession, is, therefore, actually an
accion publiciana. 9

In connection with the question raised by petitioners on the property of the writ of execution issued by respondent court, it appears
that there is a pending motion filed by petitioners for the reconsideration of the order granting the same, and that execution had
been stayed by respondent court. Inasmuch as the motion is still unresolved, the same cannot be reviewed in this petition for
certiorari. Moreover, whether or not petitioner shall be permitted to appeal the decision in Civil Case No. 7373 is still under
consideration by respondent court, as there is a pending motion filed by respondent corporation to dismiss appeal for having been
riled out of time.

WHEREFORE, the instant petition is hereby dismissed, and the writ of preliminary injunction issued by this Court on June 26, 1970 is
hereby dissolved. No special pronouncement as to costs.
multi-realty development corp v makati tuscany condominium corp
CALLEJO, SR., J.:

Before this Court is a petition for review on certiorari of the Decision1 of the Court of Appeals in CA-G.R. CV No. 44696 dismissing the
appeal of Multi-Realty Development Corporation on the ground of prescription.

Multi-Realty is a domestic corporation engaged in the real estate business, and the construction and development of condominiums.
It developed, among others, the Ritz Towers Condominium, and the former Galeria de Magallanes, both built in the Municipality
(now city) of Makati.

In the 1970s, Multi-Realty constructed a 26-storey condominium at the corner of Ayala Avenue and Fonda Street in Makati City,
known as the Makati Tuscany Condominium Building (Makati Tuscany, for short). The building was one of the Philippines’ first
condominium projects, making it necessary for Multi-Realty and the government agencies concerned with the project, to improve
and formulate rules and regulations governing the project as construction progressed.

Makati Tuscany consisted of 160 condominium units, with 156 units from the 2nd to the 25th floors, and 4 penthouse units in the
26th floor. Two hundred seventy (270) parking slots were built therein for apportionment among its unit owners. One hundred sixty-
four (164) of the parking slots were so allotted, with each unit at the 2nd to the 25th floors being allotted one (1) parking slot each,
and each penthouse unit with two slots. Eight (8) other parking slots, found on the ground floor of the Makati Tuscany were
designated as guest parking slots, while the remaining 98 were to be retained by Multi-Realty for sale to unit owners who would
want to have additional slots.

According to Multi-Realty, the intention to allocate only 8 parking slots to the Makati Tuscany’s common areas was reflected in its
color-coded ground floor plan, upper basement plan and lower basement plan prepared by its architect, C.D. Arguelles and
Associates. These plans, which depict common areas as yellow zones and areas reserved for unit owners as red zones, clearly show
that, of the 270 parkings slots, 262 were designated red zones, and only 8 first-floor parking slots were designated yellow zones or
common areas.

Pursuant to Republic Act No. 4726, otherwise known as the Condominium Act, the Makati Tuscany Condominium Corporation
(MATUSCO) was organized and established to manage the condominium units.

In 1975, Multi-Realty executed a Master Deed and Declaration of Restrictions2 (Master Deed, for short) of the Makati Tuscany.
Sections 5 and 7 provide:

SEC. 5. Accessories to Units. – To be considered as part of each unit and reserved for the exclusive use of its owner are the balconies
adjacent thereto and the parking lot or lots which are to be assigned to each unit.

xxxx

SEC. 7. The Common Areas. – The common elements or areas of the Makati Tuscany shall comprise of all the parts of the project
other than the units, including without limitation the following:

xxxx

(d) All driveways, playgrounds, garden areas and PARKING AREAS OTHER THAN THOSE ASSIGNED TO EACH UNIT UNDER SEC. 5
ABOVE;3

The Master Deed was filed with the Register of Deeds in 1977. Multi-Realty executed a Deed of Transfer in favor of MATUSCO over
these common areas. However, the Master Deed and the Deed of Transfer did not reflect or specify the ownership of the 98 parking
slots. Nevertheless, Multi-Realty sold 26 of them in 1977 to 1986 to condominium unit buyers who needed additional parking slots.
MATUSCO did not object, and certificates of title were later issued by the Register of Deeds in favor of the buyers. MATUSCO issued
Certificates of Management covering the condominium units and parking slots which Multi-Realty had sold.

At a meeting of MATUSCO’s Board of Directors on March 13, 1979, a resolution was approved, authorizing its President, Jovencio
Cinco, to negotiate terms under which MATUSCO would buy 36 of the unallocated parking slots from Multi-Realty. During another
meeting of the Board of Directors on June 14, 1979, Cinco informed the Board members of Multi-Realty’s proposal to sell all of the
unassigned parking lots at a discounted price of P15,000.00 per lot, or some 50% lower than the then prevailing price of P33,000.00
each. The Board agreed to hold in abeyance any decision on the matter to enable all its members to ponder upon the matter.

In the meantime, the fair market value of the unallocated parking slots reached P250,000.00 each, or a total of P18,000,000.00 for
the 72 slots.

In September 1989, Multi-Realty, through its President, Henry Sy, who was also a member of the Board of Directors of MATUSCO,
requested that two Multi-Realty executives be allowed to park their cars in two of Makati Tuscany’s remaining 72 unallocated parking
slots. In a letter, through its counsel, MATUSCO denied the request, asserting, for the first time, that the remaining unallocated
parking slots were common areas owned by it. In another letter, MATUSCO offered, by way of goodwill gesture, to allow Multi-Realty
to use two unallocated parking slots, which offer was rejected by the latter.

On April 26, 1990, Multi-Realty, as plaintiff, filed a complaint, docketed as Civil Case No. 90-1110, against MATUSCO, as defendant, for
Damages and/or Reformation of Instrument with prayer for temporary restraining order and/or preliminary injunction. The case was
raffled to Branch 59 of the Makati RTC.

Multi-Realty alleged therein that it had retained ownership of the 98 unassigned parking slots. Considering, however, that Makati
Tuscany was one of its first condominium projects in the Philippines, this was not specified in Section 7(d) of the Master Deed since
the documentation and the terms and conditions therein were all of first impression. It was further alleged that the mistake was
discovered for the first time when MATUSCO rejected its request to allow its (Multi-Realty’s) executives to park their cars in two of
the unassigned parking lots.

In its Answer with counterclaim, MATUSCO alleged that Multi-Realty had no cause of action against it for reformation of their
contract. By its own admission, Multi-Realty sold various parking slots to third parties despite its knowledge that the parking areas,
other than those mentioned in Sec. 5 of the Master Deed, belonged to MATUSCO. MATUSCO prayed that judgment be rendered in its
favor dismissing the complaint; and, on its counterclaim, to order the plaintiff to render an accounting of the proceeds of the sale of
the parking slots other than those described in Sec. 5 of the Master Deed; to pay actual damages equivalent to the present market
value of the parking areas other than those described in Sec. 5 of the Master Deed, amounting to no less than P250,000.00 per slot
plus reasonable rentals thereon at no less than P400.00 per slot per month from date of sale until payment by plaintiff to defendant
of the market value of these parking areas.

After trial, the RTC rendered a decision, the dispositive portion of which reads:

Premises considered, this case is dismissed. Defendant’s counterclaim is, likewise, dismissed, the same not being compulsory and no
filing fee having been paid. Plaintiff is, however, ordered to pay defendant attorney’s fees in the amount of P50,000.00.

Cost against plaintiff.

SO ORDERED.4

The trial court ruled that Multi-Realty failed to prove any ground for the reformation of its agreement with MATUSCO relative to the
ownership of the common areas. There is no evidence on record to prove that the defendant acted fraudulently or inequitably to the
prejudice of the plaintiff, and the latter was estopped, by deed, from claiming that it owned the common areas. It also held that the
defendant was not estopped from assailing plaintiff’s ownership over the disputed parking slots.

Multi-Realty appealed the decision to the CA via a petition under Rule 41 of the Rules of Court, contending that:

THE TRIAL COURT ERRED IN DISMISSING THE COMPLAINT AND DISALLOWING THE PLAINTIFF-APPELLANT FROM REFORMING THE
MASTER DEED BECAUSE:

THERE IS VALID GROUND FOR REFORMATION OF THE MASTER DEED SINCE THE MASTER DEED DID NOT REFLECT THE TRUE
INTENTION OF THE PARTIES REGARDING THE OWNERSHIP OF THE EXTRA NINETY-EIGHT PARKING [SLOTS] DUE TO MISTAKE.

II

THE REGISTRATION OF THE MASTER DEED WITH THE REGISTER OF DEEDS DID NOT MAKE PLAINTIFF-APPELLANT GUILTY OF ESTOPPEL
BY DEED.

III

THE TRIAL COURT ERRED IN FINDING THAT DEFENDANT-APPELLEE IS NOT ESTOPPED FROM QUESTIONING THE OWNERSHIP OF
PLAINTIFF-APPELLANT OVER THE DISPUTED PARKING LOTS.5

In support of its appeal, Multi-Realty reiterated its contentions in the trial court, insisting that it had adduced evidence to prove all
the requisites for the reformation of Section 7(d) of the Master Deed under Article 1359 of the New Civil Code. It was never its
intention to designate the 98 unassigned parking slots as common areas, and, as shown by the evidence on record, this was known
to MATUSCO. Under Article 1364 of the New Civil Code, an instrument may be reformed if, due to lack of skill on the part of the
drafter, the deed fails to express the true agreement or intention of the parties therein. Since MATUSCO knew that it (Multi-Realty)
owned the 98 parking slots when the Master Deed was executed, its registration did not make Multi-Realty guilty of estoppel by
deed. In fact, MATUSCO failed to object to the sale of some of the parking slots to third parties. It was also pointed out that Multi-
Realty remained in possession thereof.

Multi-Realty further claimed that the trial court erred in not declaring that MATUSCO was estopped from assailing the ownership
over the parking slots, as it not only conformed to the sale of some of the unassigned parking slots but likewise failed to assail the
ownership thereon for a period of 11 years. It insisted that the sale of the said parking slots was made in accord with law, morals and
public order, and that MATUSCO’s claim of ownership of the unassigned parking slots was merely an afterthought.

MATUSCO, for its part, appealed the trial court’s dismissal of its counterclaim.

On Multi-Realty’s appeal, MATUSCO countered that the 270 parking slots were to be apportioned as follows:

1 parking lot for each ordinary unit - 156


2 parking lots for each of the 4 Penthouse Apartment Units - 8
of the remaining 106 parking lots, 34 parking lots were designated and allocated as part of "common areas" which would be
allocated purely for visitors, while the remaining 72 units would become part of the Condominium Corporation’s income-earning
"common areas" - 106
----
2706
====
It was further averred that Multi-Realty, through Henry Sy, executed the Master Deed in July 1975 and the Deed of Transfer in 1977,
in which the ownership of the common areas was unconditionally transferred to MATUSCO; Multi-Realty sold 26 of the 34 parking
slots in bad faith, which had been allocated purposely for visitors of unit owners, amounting to millions of pesos; the action for
reformation has no legal basis because the transfer of the 106 unassigned parking slots which form part of the common areas is
contrary to Section 167 of the Condominium Act.

MATUSCO further pointed out that the unassigned parking slots could be transferred only by the affirmative votes of all the members
of Multi-Realty, and that the Master Deed and the Deed of Transfer were prepared by the latter with the assistance of its renowned
lawyers. If there was a mistake in the drafting of the Master Deed in 1975, the deed should have been corrected in 1977 upon the
execution of the Deed of Transfer. With the social and economic status of Henry Sy, Multi-Realty’s President, it is incredible that the
Master Deed and the Deed of Transfer failed to reflect the true agreement of the parties. MATUSCO went on to state that Multi-
Realty failed to adduce a preponderance of evidence to prove the essential requirements for reformation of the questioned
documents. Even if there was a mistake in drafting the deeds, reformation could not be given due course absent evidence that
defendant-appellee acted fraudulently or inequitably.

On its claim of ownership over the unassigned parking slots, MATUSCO averred that it is not estopped to do so because the sales
thereof were illegal, and it had no knowledge that Multi-Realty had been selling the same. Having acted fraudulently and illegally,
Multi-Realty cannot invoke estoppel against it.

On the RTC decision dismissing its counterclaim, MATUSCO averred that said decision is erroneous, as it had adduced evidence to
prove its entitlement to said counterclaim.

In reply, Multi-Realty averred that MATUSCO’s counterclaim had already prescribed because it was filed only in 1990, long after the
period therefor had elapsed in 1981.

On August 21, 2000, the CA rendered its decision dismissing Multi-Realty’s appeal on the ground that its action below had already
prescribed. The dispositive portion of the decision reads:

WHEREFORE, foregoing premises considered, the appeal having no merit in fact and in law, is hereby ORDERED DISMISSED, and the
judgment of the trial court is MODIFIED by deleting the award of attorney’s fees not having been justified but AFFIRMED as to its
Order dismissing both the main complaint of plaintiff-appellant and the counterclaim of defendant-appellant. With costs against both
parties.8

The appellate court ruled that it was justified in dismissing Multi-Realty’s appeal on the ground of prescription as it was clothed with
ample authority to review the lower court’s rulings even those not assigned as errors on appeal, especially if the consideration of the
matter is necessary to arrive at a just decision of the case, and to avoid dispensing "piecemeal justice." The CA cited the rulings of
this Court in Servicewide Specialists, Inc. v. Court of Appeals,9 and Dinio v. Laguesma.10

Multi-Realty filed a motion for reconsideration of the decision, contending that:

THIS HONORABLE COURT VIOLATED SECTION 8 OF RULE 51 OF THE RULES OF COURT TO MRDC’S SUBSTANTIAL AND UNFAIR
PREJUDICE BY RESOLVING MRDC’S APPEAL ON THE GROUND OF PRESCRIPTION, EVEN THOUGH NEITHER PARTY HAD ASSIGNED OR
ARGUED AS AN ERROR THE TRIAL COURT’S FAILURE TO DISMISS THE ACTION FILED BY MRDC BELOW AS PRESCRIBED.

THIS HONORABLE COURT ERRED IN COUNTING THE RUNNING OF THE PRESCRIPTIVE PERIOD FROM THE DATE OF EXECUTION OF THE
MASTER DEED IN 1975, BECAUSE UNDER ARTICLE 1150 OF THE CIVIL CODE, AND THE SUPREME COURT’S DECISIONS IN TORMON VS.
CUTANDA, AND VELUZ VS. VELUZ, MRDC’S PERIOD TO FILE A SUIT FOR REFORMATION ONLY BEGAN RUNNING IN 1989, AFTER
DEFENDANT-APPELLANT MAKATI TUSCANY CONDOMINIUM CORPORATION’S REPUDIATION OF THE PARTIES’ TRUE AGREEMENT
GAVE RISE TO MRDC’S RIGHT OF ACTION.11

Multi-Realty further averred that the appellate court misapplied Rule 51, Section 8 of the 1997 Rules of Court as well as the ruling of
this Court in the Servicewide Specialists case. It pointed out that, when it filed its Brief, as appellee, Rule 51, Section 7 of the 1964
Rules of Court was still in effect, under which an error which does not affect the jurisdiction over the subject matter will not be
considered unless stated in the assignment of error and properly assigned in the Brief, as the court may pass upon plain and clerical
errors only. Multi-Realty insisted that the parties did not raise the issue of whether its action had already prescribed when it filed its
complaint in their pleadings below and in the respondent’s Brief. It claimed that it was deprived of its right to due process when the
appellate court denied its appeal based on a ruling of this Court under the 1997 Rules of Civil Procedure. It insisted that the ruling of
this Court in Servicewide Specialist, Inc. was promulgated when the 1997 Rules of Civil Procedure was in effect.
On January 18, 2001, the CA issued a Resolution denying Multi-Realty’s motion for reconsideration. The appellate court cited the
ruling of this Court in Rosello-Bentir v. Hon. Leanda,12 to support its ruling that the action of petitioner had already prescribed when
it was filed with the RTC. Multi-Realty received its copy of said Order of denial on January 29, 2001.

Multi-Realty, now petitioner, filed the instant petition for review on certiorari, alleging that:

THE HONORABLE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE IN A MANNER INCONSISTENT WITH LAW, AND
DEPARTED WITH UNFAIRLY PREJUDICIAL EFFECT FROM THE USUAL COURSE OF JUDICIAL PROCEEDINGS LAID DOWN IN SECTION 8 OF
RULE 51 OF THE RULES OF COURT WHEN IT DISMISSED MULTI-REALTY’S "APPEAL" ON THE BASIS OF PRESCRIPTION, EVEN THOUGH
NEITHER PARTY RAISED [NOR] DISCUSSED THE TRIAL COURT’S FAILURE TO ENFORCE THE ALLEGEDLY APPLICABLE TIME BAR AS AN
ERROR IN THEIR BRIEFS.

THE HONORABLE COURT OF APPEALS DECIDED A MATTER OF SUBSTANCE IN A MANNER PROBABLY NOT IN ACCORD WITH ARTICLE
1150 OF THE CIVIL CODE, WHEN IT DISREGARDED THIS HONORABLE COURT’S RULINGS IN TORMON V. CUTANDA AND VELUZ V.
VELUZ, AND RULED THAT THE PRESCRIPTIVE PERIOD APPLICABLE TO AN ACTION FOR REFORMATION BEGINS TO RUN FROM THE
DATE THE INSTRUMENT TO BE REFORMED IS EXECUTED, RATHER THAN FROM THE DATE ON WHICH THE TRUE AGREEMENT THE
REFORMATION IS MEANT TO EXPRESS IS VIOLATED.

THE HONORABLE COURT OF APPEALS OVERLOOKED RELEVANT FACTS SUSTAINING A DECISION ALLOWING REFORMATION OF THE
MASTER DEED WHEN IT FAILED TO REVERSE THE TRIAL COURT’S DECISION AND FIND THAT MATUSCO’S CONSISTENT RECOGNITION
OF, AND PARTICIPATION IN, THE SALES OF UNALLOCATED PARKING SLOTS MADE BY MULTI-REALTY, AND ITS EFFORTS TO BUY THE
UNALLOCATED PARKING SLOTS FROM MULTI-REALTY, ESTOP IT FROM ASSERTING TITLE TO THE UNALLOCATED PARKING SLOTS.13

The Court is to resolve two issues: (1) whether the CA erred in dismissing petitioner’s appeal on the ground of prescription; and (2)
whether petitioner’s action had already prescribed when it was filed in 1990.

On the issue of prescription, petitioner asserts that under Article 1150 in relation to Article 1144 of the New Civil Code, its action for
reformation of the Master Deed accrued only in 1989, when respondent, by overt acts, made known its intention not to abide by
their true agreement; since the complaint below was filed in 1990, the action was filed within the prescriptive period therefor.
Petitioner cites the rulings of this Court in Tormon v. Cutanda,14 Veluz v. Veluz,15 and Español v. Chairman, Philippine Veterans
Administration16 to bolster its claim.

In its comment on the petition, respondent avers that, as held by this Court in Rosello-Bentir v. Hon. Leanda,17 the prescriptive
period for the petitioner to file its complaint commenced in 1975, upon the execution of the Master Deed in its favor. Considering
that the action was filed only in 1990, the same, by then, had already prescribed.

On the first issue, we sustain petitioner’s contention that the CA erred in dismissing its appeal solely on its finding that when
petitioner filed its complaint below in 1990, the action had already prescribed. It bears stressing that in respondent’s answer to
petitioner’s complaint, prescription was not alleged as an affirmative defense. Respondent did not raise the issue throughout the
proceedings in the RTC. Indeed, the trial court did not base its ruling on the prescription of petitioner’s action; neither was this
matter assigned by respondent as an error of the RTC in its brief as defendant-appellant in the CA.

Settled is the rule that no questions will be entertained on appeal unless they have been raised below. Points of law, theories, issues
and arguments not adequately brought to the attention of the lower court need not be considered by the reviewing court as they
cannot be raised for the first time on appeal. Basic considerations of due process impel this rule.18

Truly, under Section 7, Rule 51 of the 1964 Rules of Court, no error which does not affect the jurisdiction over the subject matter will
be considered unless stated in the assignment of errors and properly argued in the brief, save as the Court, at its option, may pass
upon plain errors not specified, and clerical errors. Even at that time, the appellate court was clothed with ample authority to review
matters even if not assigned as errors in their appeal if it finds that their consideration is necessary in arriving at a just decision of the
case.19 It had ample authority to review and resolve matters not assigned and specified as errors by either of the parties on appeal if
it found that the matter was essential and indispensable in order to arrive at a just decision of the case. It has broad discretionary
power, in the resolution of a controversy, to take into consideration matters on record unless the parties fail to submit to the court
specific questions for determination. Where the issues already raised also rest on other issues not specifically presented, as long as
the latter issues bear relevance and close relation to the former and as long as they arise from matters on record, the appellate court
has authority to include them in its discussion of the controversy as well as to pass upon them. In brief, in those cases wherein
questions not particularly raised by the parties surface as necessary for the complete adjudication of the rights and obligations of the
parties and such questions fall within the issues already framed by the parties, the interests of justice dictate that the court consider
and resolve them.20

When the appeals of the petitioner and that of the respondent were submitted to the CA for decision, the 1997 Rules of Civil
Procedure was already in effect. Section 8, Rule 51 of said Rules, reads:

SEC. 8. Questions that may be decided. – No error which does not affect the jurisdiction over the subject matter or the validity of the
judgment appealed from or the proceedings therein will be considered unless stated in the assignment of errors, or closely related to
or dependent on an assigned error and properly argued in the brief, save as the court may pass upon plain errors and clerical errors.
This provision was taken from the former rule with the addition of errors affecting the validity of the judgment or closely related to
or dependent on an assigned error.21 The authority of the appellate court to resolve issues not raised in the briefs of the parties is
even broader.

Nevertheless, given the factual backdrop of the case, it was inappropriate for the CA, motu proprio, to delve into and resolve the
issue of whether petitioner’s action had already prescribed. The appellate court should have proceeded to resolve petitioner’s appeal
on its merits instead of dismissing the same on a ground not raised by the parties in the RTC and even in their pleadings in the CA.

Even if we sustain the ruling of the CA that it acted in accordance with the Rules of Court in considering prescription in denying
petitioner’s appeal, we find and so rule that it erred in holding that petitioner’s action had already prescribed when it was filed in the
RTC on April 26, 1990.

Prescription is rightly regarded as a statute of repose whose object is to suppress fraudulent and stale claims from springing up at
great distances of time and surprising the parties or their representatives when the facts have become obscure from the lapse of
time or the defective memory or death or removal of witnesses. The essence of the statute of limitations is to prevent fraudulent
claims arising from unwarranted length of time and not to defeat actions asserted on the honest belief that they were sufficiently
submitted for judicial determination.22 Our laws do not favor property rights hanging in the air, uncertain, over a long span of
time.23

Article 1144 of the New Civil Code provides that an action upon a written contract must be brought within ten (10) years from the
time the right of action accrues:

Art. 1144. The following actions must be brought within ten years from the time the right of action accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;

(3) Upon a judgment.

In relation thereto, Article 1150 of the New Civil Code provides that the time for prescription of all actions, when there is no special
provision which ordains otherwise, shall be counted from the day they may be brought. It is the legal possibility of bringing the action
that determines the starting point for the computation of the period of prescription.24

The term "right of action" is the right to commence and maintain an action. In the law of pleadings, right of action is distinguished
from a cause of action in that the former is a remedial right belonging to some persons while the latter is a formal statement of the
operational facts that give rise to such remedial right. The former is a matter of right and depends on the substantive law while the
latter is a matter of statute and is governed by the law of procedure. The right of action springs from the cause of action, but does
not accrue until all the facts which constitute the cause of action have occurred.25

A cause of action must always consist of two elements: (1) the plaintiff’s primary right and the defendant’s corresponding primary
duty, whatever may be the subject to which they relate – person, character, property or contract; and (2) the delict or wrongful act or
omission of the defendant, by which the primary right and duty have been violated.26

To determine when all the facts which constitute a cause of action for reformation of an instrument may be brought and when the
right of the petitioner to file such action accrues, the second paragraph of Section 1, Rule 63, must be considered because an action
for the reformation of an instrument may be brought under said Rule:

SECTION 1. Who may file petition. – Any person interested under a deed, will, contract or other written instrument, whose rights are
affected by a statute, executive order or regulation, ordinance, or any other governmental regulation may, before breach or violation
thereof, bring an action in the appropriate Regional Trial Court to determine any question of construction or validity arising, and for a
declaration of his rights or duties, thereunder.

An action for the reformation of an instrument, to quiet title to real property or remove clouds therefrom, or to consolidate
ownership under Article 1607 of the Civil Code, may be brought under this Rule (emphasis supplied).

Such a petition is a special civil action determinative of the rights of the parties to the case. It is permitted on the theory that courts
should be allowed to act, not only when harm is actually done and rights jeopardized by physical wrongs or physical attack upon
existing legal relations, but also when challenge, refusal, dispute or denial thereof is made amounting to a live controversy. The
uncertainty and insecurity which may thereby be avoided may hamper or disturb the freedom of the parties to transact business or
to make improvements on their property rights. A situation is thus created when a judicial declaration may serve to prevent a dispute
from ripening into violence or destruction.27

The concept and meaning of the term cause of action in proceedings for declaratory relief, vis-à-vis an ordinary civil action, is
broadened. It is not, as in ordinary civil action, the wrong or delict by which the plaintiff’s rights are violated, but it is extended to a
mere denial, refusal or challenge raising at least an uncertainty or insecurity which is injurious to plaintiff’s rights.28

For a petition for declaratory relief to prosper, the following conditions sine qua non must concur: (1) there must be a justiciable
controversy; (2) the controversy must be between persons whose interests are adverse; (3) the party seeking declaratory relief must
have a legal interest in the controversy; and (4) the issue involved must be ripe for judicial determination.29

To controvert is to dispute; to deny, to oppose or contest; to take issue on.30 The controversy must be definite and concrete,
touching on the legal relations of the parties having adverse legal interests. It must be a real and substantial controversy admitting of
specific relief through a decree of a conclusive character as distinguished from an opinion advising what the law would be upon a
hypothetical state of facts.31

The fact that the plaintiff’s desires are thwarted by its own doubts, or by the fears of others, does not confer a cause of action. No
defendant has wronged the plaintiff or has threatened to do so.32 However, the doubt becomes a justiciable controversy when it is
translated into a claim of right which is actually contested.33 As explained by this Court, a dispute between the parties is justiciable
when there is an active antagonistic assertion of a legal right on one side and a denial thereof on the other, concerning a real, not
merely a theoretical question or issue.34

In sum, one has a right of action to file a complaint/petition for reformation of an instrument when his legal right is denied,
challenged or refused by another; or when there is an antagonistic assertion of his legal right and the denial thereof by another
concerning a real question or issue; when there is a real, definitive and substantive controversy between the parties touching on
their legal relations having adverse legal interests. This may occur shortly after the execution of the instrument or much later.35

A party to an instrument is under no obligation to seek a reformation of an instrument while he is unaware that any opposition will
be made to carry out the actual agreement.36 The statute of limitations does not begin to run against an equitable cause of action
for the reformation of an instrument because of mistake until the mistake has been discovered or ought to have been discovered.37
The mere recording of a deed does not charge the grantor with constructive notice of a mistake therein, but is to be considered with
other facts and circumstances in determining whether the grantor be charged with notice actual or constructive.38

In State ex rel. Pierce County v. King County,39 the appellate court ruled that:

In equitable actions for reformation on the ground of mistake the rule on the question of when the period of limitation or laches
commences to run is as stated by this Court in State v. Lorenz, 22 Wash. 289, 60 P. 644, 647:

* * * that the statute did not begin to run against the right of appellant to reform the deed [because of a mistake therein] until the
assertion on the part of respondents of their adverse claim.

In Chebalgoity v. Branum, 16 Wash.2d 251, 133 P.2d 288, 290, we said:

‘Nor is his right to maintain it [an action for reformation grounded on mistake] impaired by lapse of time, for the bar of the statue of
limitations does not begin to run until the assertion of an adverse claim against the party seeking reformation.’

The rule is also stated in 53 C.J. 1003, reformation of instruments, as follows:

‘[§ 155] C. Time for Bringing Action. An action to reform an instrument may be brought as soon as the cause of action accrues. * * *
On the other hand, a party to an instrument is under no obligation to seek its correction before his cause of action is finally vested or
while he is unaware that any opposition will be made in carrying out the actual agreement, where for a long time the rights and
duties of the parties are the same under the writing and under the terms which it is alleged were intended, and the failure to take
any action toward reformation until his right vests or opposition is manifest does not prejudice his suit.’40

In this case, before petitioner became aware of respondent’s denial of its right under their true contract, petitioner could not be
expected to file an action for the reformation of the Master Deed. As Justice Jose BL Reyes, ratiocinated in Tormon v. Cutanda:41

It follows that appellant’s cause of action arose only when the appellees made known their intention, by overt acts, not to abide by
the true agreement; and the allegations of the complaint establish that this happened when the appellees executed the affidavit of
consolidation of the title allegedly acquired by appellees under the fictitious pacto de retro sale. It was then, and only then, that the
appellant’s cause of action arose to enforce the true contract and have the apparent one reformed or disregarded, and the period of
extinctive prescription began to run against her. Since the consolidation affidavit was allegedly made only in September 1960, and
the complaint was filed in Court the following November 1960, just two months afterward, the action of appellant had not
prescribed.42

The Court’s ruling in the Tormon case was reiterated in Veluz v. Veluz.43

In the more recent case of Naga Telephone Co., Inc. v. Court of Appeals,44 the Court made the following declaration:

Article 1144 of the New Civil Code provides, inter alia, that an action upon a written contract must be brought within ten (10) years
from the time the right of action accrues. Clearly, the ten (10) years period is to be reckoned from the time the right of action accrues
which is not necessarily the date of execution of the contract. As correctly ruled by respondent court, private respondent’s right of
action arose "sometime during the latter part of 1982 or in 1983 when according to Atty. Luis General, Jr. x x x, he was asked by
(private respondent’s) Board of Directors to study said contract as it already appeared disadvantageous to (private respondent) (p.
31, tsn, May 8, 1989). Private respondent’s cause of action to ask for reformation of said contract should thus be considered to have
arisen only in 1982 or 1983, and from 1982 to January 2, 1989 when the complaint in this case was filed, ten (10) years had not yet
elapsed.45

This ruling was reiterated in Pilipinas Shell Petroleum Corporation v. John Bordman Ltd. of Iloilo, Inc., 46 where the Court declared
that the cause of action of respondent therein arose upon its discovery of the short deliveries with certainty, since prior thereto, it
had no indication that it was not getting what it was paying for. The Court declared that before then, there was yet no issue to speak
of, and as such, respondent could not have brought an action against petitioner. It was stressed that "it was only after the discovery
of the short deliveries that respondent got into position to bring an action for specific performance." Thus, the Court declared that
the action was brought within the prescriptive period.47

In the present case, petitioner executed the Master Deed in 1975. However, petitioner had no doubt about its ownership of the
unassigned parking lots, and even sold some of them. Respondent did not even object to these sales, and even offered to buy some
of the parking slots. Respondent assailed petitioner’s ownership only in 1989 and claimed ownership of the unassigned parking slots,
and it was then that petitioner discovered the error in the Master Deed; the dispute over the ownership of the parking slots
thereafter ensued. It was only then that petitioner’s cause of action for a reformation of the Master Deed accrued. Since petitioner
filed its complaint in 1990, the prescriptive period had not yet elapsed.

The CA erred in relying on the ruling of this Court in Rosello-Bentir v. Hon. Leanda.48 In that case, the Leyte Gulf Traders, Inc. leased a
parcel of land owned by Yolando Rosello-Bentir. The lease agreement was entered into on May 5, 1968 and was for a period of 20
years. The parties therein agreed, inter alia, that:

"4. IMPROVEMENT. The lessee shall have the right to erect on the leased premises any building or structure that it may desire
without the consent or approval of the Lessor x x x provided that any improvements existing at the termination of the lease shall
remain as the property of the Lessor without right to reimbursement to the Lessee of the cost or value thereof."49

On May 5, 1989, the lessor Rosello-Bentir sold the property and the corporation questioned the sale, alleging that they had a verbal
agreement that the lessor has the right to equal the offers of prospective buyers of the property. It insisted, however, that the said
agreement was inadvertently omitted in the contract. On May 15, 1992, the corporation filed a complaint for reformation of
instrument, specific performance, annulment of conditional sale and damages with a prayer for a writ of preliminary injunction,
alleging that the contract of lease failed to reflect the true agreement of the parties.

In his answer to the complaint, the lessor alleged that the corporation was guilty of laches for not bringing the case for reformation
of the lease contract within the prescriptive period of 10 years from its execution. On December 15, 1995, the trial court issued an
Order dismissing the complaint on the ground that the action had already prescribed. Plaintiff filed a motion for the reconsideration
of the Order and, on May 10, 1996, the trial court granted the motion and set aside its Order, this time, declaring that its Order dated
December 15, 1995 dismissing the complaint was "premature and precipitate" and denied the corporation its right to due process.
The trial court declared that, aside from plaintiff’s cause of action for reformation of lease contract, plaintiff had other causes of
action such as specific performance, annulment of conditional sale and damages, which must first be resolved before the trial on the
merits of its case.

On appeal to the CA, the lessor alleged that the RTC committed grave abuse of discretion amounting to excess or lack of jurisdiction
in setting aside the December 15, 1995 Order of the RTC. For its part, the CA rendered judgment dismissing the petition for certiorari
on its finding that the complaint had not yet prescribed when it was filed in the court below. The CA declared that the prescriptive
period for the action for reformation of the lease contract should be reckoned not from the execution of the contract of lease in
1968, but from the date of the four-year extension of the lease contract after it expired in 1988. According to the CA, the extended
period of the lease was an "implied new lease" within the contemplation of Article 1670 of the New Civil Code under which
provision, the other terms of the original contract were deemed revived in the implied new lease.

However, we reversed this CA decision and declared that the action for reformation of the lease contract was inappropriate because
petitioner had already breached the deed.50 Even supposing that the four-year extended lease could be considered as an implied
new lease under Article 1670 of the New Civil Code, the "other terms" contemplated therein were only those terms which are
germane to the lessee’s right of continued enjoyment of the leased property. We concluded that the prescriptive period of 10 years,
as provided for in Article 1144 of the Civil Code, applies by operation of law and not by the will of the parties, and that, therefore, the
right of action for reformation accrues from the date of the execution of the contract of lease in 1968.

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. CV No. 44696 is SET
ASIDE. The Court of Appeals is directed to resolve petitioner’s appeal with reasonable dispatch. No costs.

ORDERED

juana complex homeowners association v fil-estate land inc


MENDOZA, J.:

Before the Court are two (2) consolidated petitions assailing the July 31, 2001 Decision[1] and February 21, 2002 Resolution[2] of the
Court of Appeals (CA) in CA-G.R. SP No. 60543, which annulled and set aside the March 3, 1999 Order[3] of the Regional Trial Court,
Branch 25, Bian, Laguna (RTC), granting the application for the issuance of a writ of preliminary injunction, and upheld the June 16,
2000 Omnibus Order[4] denying the motion to dismiss.

The Facts:

On January 20, 1999, Juana Complex I Homeowners Association, Inc. (JCHA), together with individual residents of Juana Complex I
and other neighboring subdivisions (collectively referred as JCHA, et. al.), instituted a complaint[5] for damages, in its own behalf and
as a class suit representing the regular commuters and motorists of Juana Complex I and neighboring subdivisions who were
deprived of the use of La Paz Road, against Fil-Estate Land, Inc. (Fil-Estate), Fil-estate Ecocentrum Corporation (FEEC), La Paz Housing
& Development Corporation (La Paz), and Warbird Security Agency and their respective officers (collectively referred as Fil-Estate, et
al.).

The complaint alleged that JCHA, et al. were regular commuters and motorists who constantly travelled towards the direction of
Manila and Calamba; that they used the entry and exit toll gates of South Luzon Expressway (SLEX) by passing through right-of-way
public road known as La Paz Road; that they had been using La Paz Road for more than ten (10) years; that in August 1998, Fil-estate
excavated, broke and deliberately ruined La Paz Road that led to SLEX so JCHA, et al. would not be able to pass through the said road;
that La Paz Road was restored by the residents to make it passable but Fil-estate excavated the road again; that JCHA reported the
matter to the Municipal Government and the Office of the Municipal Engineer but the latter failed to repair the road to make it
passable and safe to motorists and pedestrians; that the act of Fil-estate in excavating La Paz Road caused damage, prejudice,
inconvenience, annoyance, and loss of precious hours to them, to the commuters and motorists because traffic was re-routed to
narrow streets that caused terrible traffic congestion and hazard; and that its permanent closure would not only prejudice their right
to free and unhampered use of the property but would also cause great damage and irreparable injury.

Accordingly, JCHA, et al. also prayed for the immediate issuance of a Temporary Restraining Order (TRO) or a writ of preliminary
injunction (WPI) to enjoin Fil-Estate, et al. from stopping and intimidating them in their use of La Paz Road.

On February 10, 1999, a TRO was issued ordering Fil-Estate, et al, for a period of twenty (20) days, to stop preventing, coercing,
intimidating or harassing the commuters and motorists from using the La Paz Road. [6]

Subsequently, the RTC conducted several hearings to determine the propriety of the issuance of a WPI.

On February 26, 1999, Fil-Estate, et al. filed a motion to dismiss[7] arguing that the complaint failed to state a cause of action and
that it was improperly filed as a class suit. On March 5, 1999, JCHA, et al. filed their comment[8] on the motion to dismiss to which
respondents filed a reply.[9]

On March 3, 1999, the RTC issued an Order [10] granting the WPI and required JCHA, et al. to post a bond.

On March 19, 1999, Fil-Estate, et al. filed a motion for reconsideration[11] arguing, among others, that JCHA, et al. failed to satisfy
the requirements for the issuance of a WPI. On March 23, 1999, JCHA, et al. filed their opposition to the motion.[12]
The RTC then issued its June 16, 2000 Omnibus Order, denying both the motion to dismiss and the motion for reconsideration filed
by Fil-Estate, et al.

Not satisfied, Fil-Estate, et al. filed a petition for certiorari and prohibition before the CA to annul (1) the Order dated March 3, 1999
and (2) the Omnibus Order dated June 16, 2000. They contended that the complaint failed to state a cause of action and that it was
improperly filed as a class suit. With regard to the issuance of the WPI, the defendants averred that JCHA, et al. failed to show that
they had a clear and unmistakable right to the use of La Paz Road; and further claimed that La Paz Road was a torrens registered
private road and there was neither a voluntary nor legal easement constituted over it.[13]

On July 31, 2001, the CA rendered the decision partially granting the petition, the dispositive portion of which reads:

WHEREFORE, the petition is hereby partially GRANTED. The Order dated March 3, 1999 granting the writ of preliminary injunction is
hereby ANNULLED and SET ASIDE but the portion of the Omnibus Order dated June 16, 2000 denying the motion to dismiss is
upheld.

SO ORDERED.[14]

The CA ruled that the complaint sufficiently stated a cause of action when JCHA, et al. alleged in their complaint that they had been
using La Paz Road for more than ten (10) years and that their right was violated when Fil-Estate closed and excavated the road. It
sustained the RTC ruling that the complaint was properly filed as a class suit as it was shown that the case was of common interest
and that the individuals sought to be represented were so numerous that it was impractical to include all of them as parties. The CA,
however, annulled the WPI for failure of JCHA, et al. to prove their clear and present right over La Paz Road. The CA ordered the
remand of the case to the RTC for a full-blown trial on the merits.

Hence, these petitions for review.

In G.R. No. 152272, JCHA, et al. come to this Court, raising the following issues:

(A)

THE HONORABLE COURT OF APPEALS, IN HOLDING THAT A FULL-BLOWN TRIAL ON THE MERITS IS REQUIRED TO DETERMINE THE
NATURE OF THE LA PAZ ROAD, HAD DEPARTED FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS AS TO CALL
FOR AN EXERCISE OF THE POWER OF SUPERVISION.

(B)

THE HONORABLE COURT OF APPEALS, IN HOLDING THAT THE PETITIONERS FAILED TO SATISFY THE REQUIREMENTS FOR THE
ISSUANCE OF A WRIT OF PRELIMINARY INJUNCTION, HAD DECIDED NOT IN ACCORD WITH LAW AND WITH THE APPLICABLE
DECISIONS OF THE SUPREME COURT.[15]
In G.R. No. 152397, on the other hand, Fil-Estate, et al. anchor their petition on the following issues:

I.

The Court of Appeals declaration that respondents Complaint states a cause of action is contrary to existing law and jurisprudence.

II.

The Court of Appeals pronouncement that respondents complaint was properly filed as a class suit is contrary to existing law and
jurisprudence.

III.

The Court of Appeals conclusion that full blown trial on the merits is required to determine the nature of the La Paz Road is contrary
to existing laws and jurisprudence.[16]

JCHA, et al. concur with the CA that the complaint sufficiently stated a cause of action. They, however, disagree with the CAs
pronouncement that a full-blown trial on the merits was necessary. They claim that during the hearing on the application of the writ
of injunction, they had sufficiently proven that La Paz Road was a public road and that commuters and motorists of their neighboring
villages had used this road as their means of access to the San Agustin Church, Colegio De San Agustin and to SLEX in going to Metro
Manila and to Southern Tagalog particularly during the rush hours when traffic at Carmona Entry/Exit and Susana Heights Entry/Exit
was at its worst.

JCHA, et al. argue that La Paz Road has attained the status and character of a public road or burdened by an apparent easement of
public right of way. They point out that La Paz Road is the widest road in the neighborhood used by motorists in going to Halang Road
and in entering the SLEX-Halang toll gate and that there is no other road as wide as La Paz Road existing in the vicinity. For residents
of San Pedro, Laguna, the shortest, convenient and safe route towards SLEX Halang is along Rosario Avenue joining La Paz Road.

Finally, JCHA, et al. argue that the CA erred when it voided the WPI because the public nature of La Paz Road had been sufficiently
proven and, as residents of San Pedro and Bian, Laguna, their right to use La Paz Road is undeniable.

In their Memorandum,[17] Fil-Estate, et al. explain that La Paz Road is included in the parcels of land covered by Transfer Certificates
of Title (TCT) Nos. T-120008, T-90321 and T-90607, all registered in the name of La Paz. The purpose of constructing La Paz Road was
to provide a passageway for La Paz to its intended projects to the south, one of which was the Juana Complex I. When Juana Complex
I was completed, La Paz donated the open spaces, drainage, canal, and lighting facilities inside the Juana Complex I to the
Municipality of Bian. The streets within the subdivisions were then converted to public roads and were opened for use of the general
public. The La Paz Road, not being part of the Juana Complex I, was excluded from the donation. Subsequently, La Paz became a
shareholder of FEEC, a consortium formed to develop several real properties in Bian, Laguna, known as Ecocentrum Project. In
exchange for shares of stock, La Paz contributed some of its real properties to the Municipality of Bian, including the properties
constituting La Paz Road, to form part of the Ecocentrum Project.

Fil-Estate, et al. agree with the CA that the annulment of the WPI was proper since JCHA, et al. failed to prove that they have a clear
right over La Paz Road. Fil-Estate, et al. assert that JCHA, et al. failed to prove the existence of a right of way or a right to pass over La
Paz Road and that the closure of the said road constituted an injury to such right. According to them, La Paz Road is a torrens
registered private road and there is neither a voluntary nor legal easement constituted over it. They claim that La Paz Road is a
private property registered under the name of La Paz and the beneficial ownership thereof was transferred to FEEC when La Paz
joined the consortium for the Ecocentrum Project.
Fil-Estate, et al., however, insist that the complaint did not sufficiently contain the ultimate facts to show a cause of action. They aver
the bare allegation that one is entitled to something is an allegation of a conclusion which adds nothing to the pleading.

They likewise argue that the complaint was improperly filed as a class suit for it failed to show that JCHA, et al. and the commuters
and motorists they are representing have a well-defined community of interest over La Paz Road. They claim that the excavation of La
Paz Road would not necessarily give rise to a common right or cause of action for JCHA, et al. against them since each of them has a
separate and distinct purpose and each may be affected differently than the others.

The Courts Ruling

The issues for the Courts resolution are: (1) whether or not the complaint states a cause of action; (2) whether the complaint has
been properly filed as a class suit; and (2) whether or not a WPI is warranted.

Section 2, Rule 2 of the Rules of Court defines a cause of action as an act or omission by which a party violates the right of another. A
complaint states a cause of action when it contains three (3) essential elements of a cause of action, namely:

(1) the legal right of the plaintiff,

(2) the correlative obligation of the defendant, and

(3) the act or omission of the defendant in violation of said legal right.[18]

The question of whether the complaint states a cause of action is determined by its averments regarding the acts committed by the
defendant.[19] Thus, it must contain a concise statement of the ultimate or essential facts constituting the plaintiffs cause of action.
[20] To be taken into account are only the material allegations in the complaint; extraneous facts and circumstances or other matters
aliunde are not considered.[21]

The test of sufficiency of facts alleged in the complaint as constituting a cause of action is whether or not admitting the facts alleged,
the court could render a valid verdict in accordance with the prayer of said complaint.[22] Stated differently, if the allegations in the
complaint furnish sufficient basis by which the complaint can be maintained, the same should not be dismissed regardless of the
defense that may be asserted by the defendant.[23]

In the present case, the Court finds the allegations in the complaint sufficient to establish a cause of action. First, JCHA, et al.s
averments in the complaint show a demandable right over La Paz Road. These are: (1) their right to use the road on the basis of their
allegation that they had been using the road for more than 10 years; and (2) an easement of a right of way has been constituted over
the said roads. There is no other road as wide as La Paz Road existing in the vicinity and it is the shortest, convenient and safe route
towards SLEX Halang that the commuters and motorists may use. Second, there is an alleged violation of such right committed by Fil-
Estate, et al. when they excavated the road and prevented the commuters and motorists from using the same. Third, JCHA, et al.
consequently suffered injury and that a valid judgment could have been rendered in accordance with the relief sought therein.

With respect to the issue that the case was improperly instituted as a class suit, the Court finds the opposition without merit.

Section 12, Rule 3 of the Rules of Court defines a class suit, as follows:

Sec. 12. Class suit. When the subject matter of the controversy is one of common or general interest to many persons so numerous
that it is impracticable to join all as parties, a number of them which the court finds to be sufficiently numerous and representative
as to fully protect the interests of all concerned may sue or defend for the benefit of all. Any party in interest shall have the right to
intervene to protect his individual interest.
The necessary elements for the maintenance of a class suit are: 1) the subject matter of controversy is one of common or general
interest to many persons; 2) the parties affected are so numerous that it is impracticable to bring them all to court; and 3) the parties
bringing the class suit are sufficiently numerous or representative of the class and can fully protect the interests of all concerned.[24]

In this case, the suit is clearly one that benefits all commuters and motorists who use La Paz Road. As succinctly stated by the CA:

The subject matter of the instant case, i.e., the closure and excavation of the La Paz Road, is initially shown to be of common or
general interest to many persons. The records reveal that numerous individuals have filed manifestations with the lower court,
conveying their intention to join private respondents in the suit and claiming that they are similarly situated with private respondents
for they were also prejudiced by the acts of petitioners in closing and excavating the La Paz Road. Moreover, the individuals sought to
be represented by private respondents in the suit are so numerous that it is impracticable to join them all as parties and be named
individually as plaintiffs in the complaint. These individuals claim to be residents of various barangays in Bian, Laguna and other
barangays in San Pedro, Laguna.

Anent the issue on the propriety of the WPI, Section 3, Rule 58 of the Rules of Court lays down the rules for the issuance thereof.
Thus:

(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 acts complained of, or in 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, or agency or a person is doing, threatening, or 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.

A writ of preliminary injunction is available to prevent a threatened or continuous irremediable injury to parties before their claims
can be thoroughly studied and adjudicated.[25] The requisites for its issuance are: (1) the existence of a clear and unmistakable right
that must be protected; and (2) an urgent and paramount necessity for the writ to prevent serious damage.[26] For the writ to issue,
the right sought to be protected must be a present right, a legal right which must be shown to be clear and positive.[27] This means
that the persons applying for the writ must show that they have an ostensible right to the final relief prayed for in their complaint.
[28]

In the case at bench, JCHA, et al. failed to establish a prima facie proof of violation of their right to justify the issuance of a WPI. Their
right to the use of La Paz Road is disputable since they have no clear legal right therein. As correctly ruled by the CA:

Here, contrary to the ruling of respondent Judge, private respondents failed to prove as yet that they have a clear and unmistakable
right over the La Paz Road which was sought to be protected by the injunctive writ. They merely anchor their purported right over
the La Paz Road on the bare allegation that they have been using the same as public road right-of-way for more than ten years. A
mere allegation does not meet the standard of proof that would warrant the issuance of the injunctive writ. Failure to establish the
existence of a clear right which should be judicially protected through the writ of injunction is a sufficient ground for denying the
injunction.
Consequently, the case should be further heard by the RTC so that the parties can fully prove their respective positions on the issues.

Due process considerations dictate that the assailed injunctive writ is not a judgment on the merits but merely an order for the grant
of a provisional and ancillary remedy to preserve the status quo until the merits of the case can be heard. The hearing on the
application for issuance of a writ of preliminary injunction is separate and distinct from the trial on the merits of the main case. [29]
The evidence submitted during the hearing of the incident 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.[30] 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.[31] Moreover, the quantum of evidence required for one is different from that for the other.[32]

WHEREFORE, the petitions are DENIED. Accordingly, the July 31, 2001 Decision and February 21, 2002 Resolution of the Court of
Appeals in CA-G.R. SP No. 60543 are AFFIRMED.

SO ORDERED.

RULE 14 SUMMONS
LAUS V CA

G.R. No. 101256. March 8, 1993.

SPOUSES PEPITO AND LORETO LAUS, petitioners, vs. HON. COURT OF APPEALS, HON. SALVADOR C. CEGUERA, in his capacity as
Presiding Judge of the Regional Trial Court of Quezon City, Branch 82; NILO SM. CABANG, in his capacity as Deputy Sheriff of Quezon
City and CONSUELO P. TORRES, respondents.

Alberto E. Venturanza for petitioners.

Leonardo Byron R. Perez, Jr. for private respondent.

SYLLABUS

1. REMEDIAL LAW; CIVIL PROCEDURE; JURISDICTION; HOW JURISDICTION OVER PERSON OF DEFENDANT ACQUIRED; EFFECT
OF INVALID SERVICE OF SUMMONS; CASE AT BAR. — The focal issue is whether or not the trial court acquired jurisdiction over the
persons of the petitioners by virtue of the substituted service of summons effected by Deputy Sheriff Cruz. Since the petitioners did
not voluntarily submit to the jurisdiction of the trial court, proper service of summons became imperative. If the service effected in
the case at bar was, as claimed by the petitioners, invalid, the trial court acquired no jurisdiction over their persons. In such an
instance, the order of default, judgment by default and writ of execution issued by the trial court would be null and void. . . . Since
the substituted service of summons in this case was not validly effected, the trial court did not acquire jurisdiction over the persons
of the petitioners. The order of default, the judgment by default, the writ of execution issued by it, as well as the auction sale of the
petitioners' properties levied on execution are, therefore, all null and void.

2. ID.; ID.; SUMMONS; PERSONAL SERVICE; GENERAL RULE; SUBSTITUTED SERVICE NATURE THEREOF; PHRASE "WITHIN A
REASONABLE TIME" CONSTRUED. — The general rule in this jurisdiction is that summons must be personally served; pursuant to
Section 7, Rule 14 of the Revised Rules of Court, such personal service is to be accomplished by "handing a copy thereof to the
defendant in person, or, if he refuses to receive it, by tendering it to him." However, if this mode of service cannot be effected within
a reasonable time, substituted service may be resorted to under Section 8 of the same Rule. Section 8 provides: "SEC. 8. Substituted
Service. — If the defendant cannot be served within a reasonable time as provided in the preceding section, service may be effected
(a) by leaving copies of the summons at the defendant's dwelling house or residence with some person of suitable age and discretion
then residing therein, or (b) by leaving the copies at defendant's office or regular place of business with some competent person in
charge thereof." This provision is a reproduction of Section 8, Rule 7 of the 1940 Rules of Court except that inter alia, "promptly" in
the latter was changed to "within a reasonable time" in the former. "Within a reasonable time" contemplates a period of time longer
than that demarcated by the word "prompt," and presupposes that a prior attempt at personal service, within a justifiable time
frame as would be necessary to bring the defendant within the jurisdiction of the court, had failed. Since substituted service is in
derogation of the common law and is extraordinary in character, it must be used only as prescribed and in the circumstances
authorized by statute. Statutes prescribing modes other than personal service of summons must be strictly complied with to give the
court jurisdiction, and such compliance must appear affirmatively in the return.

3. ID.; ID.; ID.; HOW IMPOSSIBILITY OF PROMPT PERSONAL SERVICE SHOWN; CASE AT BAR. — In Keister vs. Navarro, this
Court described how the impossibility of personal service should be shown: "Impossibility of prompt service should be shown by
stating the efforts made to find the defendant personally and the fact that such efforts failed. This statement should be made in the
proof of service (I Moran, Comments on the Rules of Court, 1970 Ed., p. 444). This is necessary because substituted service is in
derogation of the usual method of service. It has been held that this method of service is `in derogation of the common law; it is a
method extraordinary in character, and hence may be used only as prescribed and in the circumstances authorized by statute.' . . .
(72 C.J.S. 1053)." A perusal of the sheriff's return in the case at bar readily reveals that it does not (a) indicate the impossibility of
service of summons within a reasonable time, (b) specify the efforts exerted to locate the petitioners and (c) state that it was served
on a person of sufficient age and discretion residing therein. The fact of the matter is that as disclosed in his testimony taken in
connection with the motion for reconsideration, and the affidavit he prepared in conjunction with such hearing. Deputy Sheriff Cruz
resorted to a substituted service on his first — and only — attempt to effect a personal service. Upon being informed that the
petitioners were not around at that time, he immediately resorted to a substituted service through Josephine Areola, a person
whose age he did not even know or attempt to discover. He did not even inquire about the whereabouts of the petitioners, the time
they were expected to return home, the hours of the day they could be contacted at their house or the location of their offices, if
any, in order that he could faithfully comply with the requirement of personal service.

4. ID.; ID.; ID.; SERVICE OF SUMMONS MAY BE MADE AT NIGHT, DURING THE DAY, ON A SUNDAY OR A HOLIDAY; REASON
THEREFOR; CASE AT BAR. — It is all too obvious that no earnest efforts were exerted by Deputy Sheriff Cruz to effect the personal
service of summons. His testimony thus attests to an undue, if not indecent, haste to serve the summons at the first attempt without
making sure that personal service was, by then and even thereafter, an impossibility because either the petitioners had left for a
foreign country or an unknown destination with not definite date of returning within a reasonable period or had gone into hiding to
avoid service of any process from the courts. If he had only made the inquiries suggested above, he could have returned in the
evening of 10 October 1989 or on any of the succeeding days — including the following Saturday and Sunday. Service of summons
may be made at night as well as during the day, or even on a Sunday or holiday because of its ministerial character.

5. ID.; ID.; MOTION TO DISMISS ON GROUND OF LACK OF JURISDICTION OVER DEFENDANT'S PERSON; PERIOD FOR FILING
DOES NOT COMMENCE TO RUN UNTIL DEFENDANT VOLUNTARILY SUBMITS TO COURT'S JURISDICTION; REASON THEREFOR; CASE AT
BAR. — Some further comments, en passant, on the ratiocination of the respondent Court are in order. It is not accurate for the latter
to have said that the petitioners' motion to dismiss was not filed seasonably because it was filed beyond the reglementary period
provided in the Revised Rules of Court. Such a conclusion would doubtless be correct if there was a valid service of summons. If,
however, a defendant has not been properly summoned, the period to file a motion to dismiss for lack of jurisdiction over his person
does not commence to run until he voluntarily submits to the jurisdiction of the court, since the court has no jurisdiction to
adjudicate the controversy as to him until such time. In this case, petitioners did not voluntarily submit to the jurisdiction of the trial
court. Consequently, the period to file a responsive pleading did not even commence to run.

6. ID.; SPECIAL CIVIL ACTIONS; CERTIORARI; WHEN INTERLOCUTORY ORDER MAY BE THE SUBJECT THEREOF; CASE AT BAR. —
Nor are We persuaded by the respondent Court's declaration that even if the motion to dismiss had been filed on time, the trial
court's order denying the same, being interlocutory, still cannot be the subject of a petition for certiorari. To be sure, this rule admits
of an exception, as when the trial court clearly acted outside of its jurisdiction or with grave abuse of discretion in denying the
motion to dismiss. This is exactly what happened in the case while it was pending before the trial court; the denial of the motion to
dismiss was based solely on the ground that a judgment by default had already been entered. Certainly, this does not constitute a
valid ground for the denial because the motion raises a fundamental and prejudicial issue affecting the validity of the decision by
default.

7. ID.; EVIDENCE DISPUTABLE PRESUMPTIONS; PRESUMPTION OF REGULARITY IN PERFORMANCE OF OFFICIAL FUNCTIONS;


DOES NOT APPLY WHERE SHERIFF'S RETURN IS PATENTLY DEFECTIVE. — Finally, respondent Court's reliance on the presumption of
regularity in the performance of official functions is misplaced. We have held that such a presumption does not apply where it is
patent that the sheriff's return is defective.

8. ID.; VOID JUDGMENT CAN NEVER BECOME FINAL AND EXECUTORY; ACTION TO DECLARE NULLITY OF VOID JUDGMENT
IMPRESCRIPTIBLE; CASE AT BAR. — Equally unmeritorious is the respondent Court's statement that the failure of the petitioners to
appeal from the judgment by default rendered such judgment final and unassailable. In the first place, it is axiomatic that a void
judgment can never become final and executory and may even be assailed or impugned at any time. An action to declare the nullity
of a void judgment does not prescribe. Secondly, the motion to dismiss in this case was filed before the petitioners received a copy of
the decision by default. Since the said motion is based on the lack of jurisdiction over the persons of the petitioners which, if true —
in fact, We have found it to be so — would result in the nullification not only of the default order but of the decision as well, then for
all legal intents and purposes, the latter was covered by the motion. This was precisely the orientation of the trial court when it
allowed the parties to submit evidence to support the motion to reconsider the Order of 5 March 1990 denying the motion to
dismiss. It would certainly not have gone that far if it thought otherwise for by then, the decision had already become final.

DECISION

DAVIDE, JR., J p:

Petitioners seek the review and reversal of the 30 May 1991 Decision 1 of respondent Court of Appeals in CA-G.R. SP No. 22232 2
and the 30 July 1991 Resolution denying their motion to reconsider the said decision. The challenged decision dismissed, for lack of
merit, their petition for certiorari, prohibition and injunction to annul the Orders dated 5 March 1990 and 9 July 1990 of Branch 82 of
the Regional Trial Court (RTC) of Quezon City in Civil Case No. Q-89-3327 which, respectively, declared them in default and denied
their motion to reconsider such declaration.
The antecedents of this case are not controverted.

On 24 August 1989, private respondent Consuelo P. Torres filed against "Loredo (sic) Alfaro-Laus and John Doe" a complaint,
docketed as Civil Case No. Q-89-3327, for the collection of a sum of money. The defendants in the said case are the petitioners in the
instant petition. The complaint alleges that petitioner Loreto Alfaro-Laus executed a promissory note in favor of the private
respondent under which the former undertook to pay the latter the amount of Sixty-Six Thousand Pesos (P66,000.00) after three (3)
months from the date thereof. Upon maturity of the said promissory note, however, only Eleven Thousand Pesos (P11,000.00) was
paid; despite the receipt of a demand letter from the private respondent, petitioners made no further payments. Thus, the former
filed the aforementioned complaint praying for the payment of the unpaid balance of P55,000.00 "plus interest at the rate of ten per
cent (10%), compounded monthly beginning February 21, 1989, and twenty-five per cent (25%) of the entire amount due for and as
attorney's fees, such being in accordance with the terms and conditions set forth in the promissory note." 3

On 10 October 1989, Deputy Sheriff Romero S. Cruz proceeded to the petitioners' address at 122 Molave Park Subdivision,
Parañaque, Metro Manila to serve the summons and a copy of the complaint. Failing to serve the summons personally upon the
petitioners after waiting for ten (10) minutes, he resorted to a substituted service through one Josephine Areola, who purportedly
represented herself to be the maid of the said petitioners. 4 On the same date, Deputy Sheriff Cruz executed and filed a return 5
which reads:

"Respectfully returned to the REGIONAL TRIAL COURT Branch 82, QUEZON CITY, the attached original copy of the summons issued in
connection with Civil Case No. 89-3327 entitled CONSUELO P. TORRES versus LOREDO (sic) LAUS & JOHN DOE with the information
that duplicate copy of the same together with the complaint and its annexes was duly served upon defendant Loredo (sic) Laus of
122 Molave Park Subd. Parañaque M. M. thru JOSEPHINE AREOLA, maid of Loredo Daus (sic) of same address, received as evidenced
by her signature appearing thereon."

The petitioners did not file any answer. Consequently, upon motion of the private respondent, the trial court 6 issued on 29
December 1989 an order declaring the former in default and setting the ex parte presentation of the private respondent's evidence
for 16 January 1990. 7 The petitioners claim that they received this 29 December 1989 Order only on 22 January 1990.

On 24 January 1990, the trial court rendered a judgment by default against the petitioners; it ordered the latter "[T]o pay the plaintiff
(private respondent) the amount of FIFTY-FIVE Thousand Pesos (P55,000.00) at the rate of ten per cent (10%), compounded monthly
beginning February 21, 1989 up to the present; and . . . [T]o pay attorney's fees equivalent to twenty-five percent (25%) of the entire
amount due" to the private respondent. 8

On 2 February 1990, before receiving a copy of the 22 January 1990 decision, petitioners, by way of a special appearance, filed a
motion to dismiss the case for lack of jurisdiction over their persons. They allege that the service of summons was ineffective
because it was not indicated in the return that the sheriff had first exerted efforts to serve the same personally before resorting to
substituted service. 9

In its Order of 5 March 1990, the trial court denied the motion to dismiss for lack of merit on the ground that it had already rendered
a judgment by default on 24 January 1990. 10 Petitioners received a copy of this order on 24 March 1990. In the meantime, the trial
court issued a writ of execution.

On 30 March 1990, public respondent Deputy Sheriff Nilo Cabang, pursuant to a writ of execution issued by the trial court, levied
upon petitioners' properties consisting of a 1983 Mitsubishi Galant Sedan and a men's ring.

On 3 April 1990, petitioners filed a motion to reconsider the Order of 5 March 1990; 11 they reiterated therein the contention that
the trial court did not acquire jurisdiction over their persons because of the defective service of summons, and further aver that:

"Josephine Areola, the person who supposedly received the summons is not even known to the defendants. It turned out from their
investigation that said Josephine Areola was just a guest of one of their maid (sic) who stayed for only about a week. Furthermore
Josephine Areola was just a child of about ten to eleven years old and would not be expected to know what to do with the
documents handed to her. With all due respect it would not be fair for the defendant if the summons would be served upon the
defendants through a person who is not of sufficient age and discretion at the time the summons was served, and a transcient (sic) at
that." 12

A hearing on the motion for reconsideration was held and the parties presented evidence on the issue of service of summons.
Petitioner Loreto Alfaro-Laus testified that Josephine Areola, who was 11 to 12 years old at that time, was just a guest of her maid
and thus stayed in the house for a week. Private respondent, on the other hand, presented evidence to show that Josephine had
been staying in the petitioners' house since July 1990 for she was the person who received the demand letter sent to the petitioners
on 3 July 1989. 13 Deputy Sheriff Cruz also took the witness stand, identified the affidavit he executed on 27 April 1990 14 and
further asserted that he found no one in the house of the petitioners when he arrived on 10 October 1989; he claimed that he
waited for ten (10) minutes. Thereupon, two (2) women arrived; the said women told him, upon his inquiry, that the petitioners were
not around. He then served the summons through one of them, Josephine Areola. 15

In its Order of 9 July 1990, 16 the trial court denied the petitioners' motion for reconsideration and held that there was a proper
service of summons because contrary to Loreto Alfaro-Laus' statement that Areola was a guest of their maid for a week, it was
proven that Areola was in fact the very person who, on 3 July 1989, received the demand letter sent by the private respondent.

On 17 July 1990, petitioners filed with the Court of Appeals a petition for certiorari, prohibition and injunction with application for a
restraining order 17 to set aside the trial court's Orders of 5 March 1990 and 9 July 1990, and to dismiss Civil Case No. Q-89-3327.
The petition was docketed as CA-G.R. SP No. 22232. Petitioners insisted therein that the trial court committed grave abuse of
discretion and a grave error in denying their motion to dismiss and the motion to reconsider said denial despite the lack of
jurisdiction over their persons. They likewise challenged the denial of such motion to dismiss which was based solely on the ground
that a judgment by default had already been rendered. 18

On 30 May 1991, the respondent Court of Appeals promulgated its decision 19 denying the petition for lack of merit. It made the
following disqualifications:

" . . . it was the defendants-petitioners who erred in filing a motion to dismiss at that late stage of the proceedings. A motion to
dismiss on the ground that the Court has no jurisdiction over the person of the defendants is proper only when made within the
reglementary period for filing a responsive pleading and before such responsive pleading is filed (Rule 16, Sec. 1[a]). In this case, the
defendants-petitioners' motion to dismiss was filed five (5) months after the complaint was filed and only after a default judgment
had already been rendered by the respondent Court. Thus, it was rather too late in the day for the defendants-petitioners' motion to
dismiss to be considered by the respondent Court. In the proper exercise of its sound judicial discretion, the respondent Court did
not err in denying the motion to dismiss on the ground that a judgment by default had already been rendered.

Besides, even if the motion to dismiss was filed on time, and yet, was still denied by the respondent Court, the order of the court
denying the motion to dismiss is interlocutory and cannot be the subject of a petition for certiorari, such as this instant petition
(National Investment and Development Corp. vs. Aquino, 163 SCRA 153). The denial of a motion to dismiss cannot be questioned in a
petition for certiorari, which is an extra-ordinary writ that is not allowed as a substitute for ordinary appeal (Tan vs. Intermediate
Appellate Court, 164 SCRA 130).

Be that as it may, the defendants-petitioners had other remedies available to them, but which they failed to avail of. In a long line of
cases decided by the Supreme Court, it has been repeatedly provided that the remedies of a defaulted defendant are:

(a) The defendant in default may, at any time after discovery thereof and before judgment, file a motion, under oath, to set
aside the order of default on the ground that his failure to answer was due to fraud, accident, mistake, excusable negligence, and
that he has a meritorious defense;

(b) If the judgment has already been rendered when the defendant discovered the default, but before the same has become
final and executory, he may file a Motion for New Trial under Section 1[a] of Rule 37;

(c) If the defendant discovered the default after the judgment has become final and executory, he may file a petition for relief
under Sec. 2 of Rule 38; and

(d) He may also appeal from the judgment rendered against him as contrary to the evidence or to law, even if no petition to
set aside the order of default has been presented by him (Sec. 2, Rule 41). (Lina vs. Court of Appeals, 135 SCRA 637; Tiburcio vs.
Castro, 161 SCRA 583).

As it is, the defendants-petitioners failed, after they received notice of the order declaring them in default and before the default
judgment was rendered, to file a motion, under oath, to set aside the order of default on the ground that they failed to file a timely
answer due to fraud, accident, mistake, or excusable negligence, and showing (sic) that they had a meritorious defense.

The other applicable remedy which they failed to employ is the remedy of appeal from the judgment rendered against them as
contrary to the evidence or the law, even in the absence of a motion/petition to set aside the order of default. This instant petition
for certiorari cannot be a substitute for the remedy of appeal, which the defendants-petitioners did not pursue, as they must first
exhaust the remedies available to them (Lina vs. Court of Appeals, supra.). That the judgment by default had already become final
and is about to be executed is the result of the defendants-petitioners' failure to file a timely appeal. As such, the default judgment
may no longer be challenged (Tiburcio vs. Castro, supra.)

Lastly, We find that the respondent Court was liberal enough in hearing the defendants-petitioners' motion for reconsideration of the
denial of their motion to dismiss. As the pivotal issue therein, the defendant-petitioners were given their day in court to prove that
the service of summons to them was both improper and invalid. After weighing the evidence and testimonies of the parties and
other persons involved, the respondent Court ruled that there was valid service of summons. We find no compelling reason to rule
otherwise.

There is such a presumption of regularity in the performance of official functions by the sheriff, and it was up to the defendants-
petitioners to convince the respondent Court that there was, indeed, invalid service of summons. This they failed to do. They could
not substantiate their claim that Josephine Areola was a child of 10 to 11 years who would not know what to do with the court
documents received by her. The defendants-petitioners' contention that Josephine Areola stayed with them for only a few days
backfired when the private respondent presented documentary evidence to show that Josephine Areola was already residing in the
defendants-petitioners' house at least three (3) months before the summons was served. No other proof was presented by the
defendants-petitioners to bolster their allegations apart from their self-serving, and sometimes conflicting, testimonies. Thus, We
find no error or grave abuse of discretion on the part of the respondent Court in denying the defendants-petitioners' motion for
reconsideration." 20

Meanwhile, on 13 June 1991, respondent sheriff Nilo Cabang sold at a public auction the levied men's ring - on oval diamond set in
yellow gold — to the private respondent for P140,000.00, and the Galant car to Atty. Leonardo Perez, Jr., counsel for the latter, for
P180,000.00. Both were the highest bidders. 21

Their motion for the reconsideration of the aforesaid decision having been denied in the respondent Court's Resolution of 30 July
1991, 22 petitioners availed of this recourse under Rule 45 of the Revised Rules of Court and raise the following issues:

"1. WHETHER OR NOT THE COURT A QUO ACQUIRED JURISDICTION OVER THE REASONS OF THE PETITIONERS BY VIRTUE OF
THE SUBSTITUTED SERVICE OF SUMMONS EFFECTED BY DEPUTY SHERIFF ROMEO CRUZ;

2. WHETHER OR NOT THE REMEDY OF CERTIORARI CAN BE AVAILED OF BY A PARTY IMPROVIDENTLY DECLARED IN DEFAULT
TO CHALLENGE THE ORDER OF DEFAULT AND THE SUBSEQUENT JUDGMENT BY DEFAULT." 23

On 10 February 1992, after the filing of the private respondent's comment and the petitioners' reply thereto, We resolved to give due
course to the petition and required the parties to file their respective memoranda which they subsequently complied with.

We find merit in this petition.

The focal issue is whether or not the trial court acquired jurisdiction over the persons of the petitioners by virtue of the substituted
service of summons effected by Deputy Sheriff Cruz. Since the petitioners did not voluntarily submit to the jurisdiction of the trial
court, proper service of summons became imperative. If the service effected in the case at bar was, as claimed by the petitioners,
invalid, the trial court acquired no jurisdiction over their persons. 24 In such an instance, the order of default, judgment by default
and writ of execution issued by the trial court would be null and void. 25

The general rule in this jurisdiction is that summons must be personally served; pursuant to Section 7, Rule 14 of the Revised Rules of
Court, such personal service is to be accomplished by "handing a copy thereof to the defendant in person, or, if he refuses to receive
it, by tendering it to him." However, if this mode of service cannot be effected within a reasonable time, substituted service may be
resorted to under Section 8 of the same Rule. Section 8 provides:

"SECTION 8. Substituted Service. — If the defendant cannot be served within a reasonable time as provided in the
preceding section, service may be effected (a) by leaving copies of the summons at the defendant's dwelling house or residence with
some person of suitable age and discretion then residing therein, or (b) by leaving the copies at defendant's office or regular place of
business with some competent person in charge thereof."

This provision is a reproduction of Section 8, Rule 7 of the 1940 Rules of Court except that inter alia, "promptly" in the latter was
changed to "within a reasonable time" in the former. "Within a reasonable time" contemplates a period of time longer than that
demarcated by the word "prompt," and presupposes that a prior attempt at personal service, within a justifiable time frame as would
be necessary to bring the defendant within the jurisdiction of the court, had failed. 26 Since substituted service is in derogation of
the common law and is extraordinary in character, it must be used only as prescribed and in the circumstances authorized by statute.
27 Statutes prescribing modes other than personal service of summons must be strictly complied with to give the court jurisdiction,
and such compliance must appear affirmatively in the return. 28

In Keister vs. Navarro, 29 this Court described how the impossibility of personal service should be shown:

"Impossibility of prompt service should be shown by stating the efforts made to find the defendant personally and the fact that such
efforts failed. This statement should be made in the proof of service (I Moran, Comments on the Rules of Court, 1970 Ed., p. 444).
This is necessary because substituted service is in derogation of the usual method of service. It has been held that this method of
service is 'in derogation of the common law; it is a method extraordinary in character, and hence may be used only as prescribed and
in the circumstances authorized by statute.' . . . (72 C.J.S. 1053)."

Emphasizing the need for strict compliance with the requirements of substituted service, this Court issued Administrative Circular
No. 59, the pertinent portions of which read as follows:

"SUBJECT: Service of Summons.

Delays in court proceedings have been caused by faulty and erroneous implementation of Section 8, Rule 14, Rules of Court on
Substituted Service of Summons.

The Trial Judges of all lower courts, as well as the Clerks of Court in their capacity as Ex-Officio Sheriffs together with the Deputy
Sheriffs are reminded of the provision of Section 8, Rule 14, Rules of Court on substituted service as follows:
xxx xxx xxx

The manner of effecting substituted service as prescribed in Venturanza v. Court of Appeals, 156 SCRA 305, must be strictly complied
with, thus:

'The substituted service should be availed only when the defendant cannot be served promptly in person. Impossibility of prompt
service should be shown by stating the efforts made to find the defendant personally and the failure of such efforts. The statement
should be made in the proof of service. This is necessary because substituted service is in derogation of the usual method of service.

Substituted service is a method extraordinary in character, and hence may be used only as prescribed in the circumstances
authorized by statute. Thus, the statutory requirements of substituted service must be followed strictly, faithfully, and any
substituted service other than that authorized by the statute is considered ineffective.'

For immediate compliance."

A perusal of the sheriff's return in the case at bar readily reveals that it does not (a) indicate the impossibility of service of summons
within a reasonable time, (b) specify the efforts exerted to locate the petitioners and (c) state that it was served on a person of
sufficient age and discretion residing therein. The fact of the matter is that as disclosed in his testimony taken in connection with the
motion for reconsideration, and the affidavit he prepared in conjunction with such hearing. Deputy Sheriff Cruz resorted to a
substituted service on his first — and only — attempt to effect a personal service. Upon being informed that the petitioners were not
around at that time, he immediately resorted to a substituted service through Josephine Areola, a person whose age he did not even
know or attempt to discover. He did not even inquire about the whereabouts of the petitioners, the time they were expected to
return home, the hours of the day they could be contacted at their house or the location of their offices, if any, in order that he could
faithfully comply with the requirement of personal service. Thus, he declared and admitted:

"Q In this case, you went to the residence of the defendant once as you stated on paragraph 3 30 on October 10, 1989?

A Yes, sir.

Q And you did not wait the (sic) defendant to come because according to you in paragraph 4, you were informed that the
defendant was not around, is that correct?

A According to the maid.

Q So upon being informed that the defendant was not around you served the summons, according to paragraph 4 to one
Josephine Ariola, is that correct?

A Yes, sir.

Q In other words, you relied on the information given to you by somebody that the defendant was not around?

A: I waited there for around ten (10) minutes and then two (2) women arrived in the tricycle and I waited them (sic) to get
inside and I asked them if Mr. and Mrs. Laus will be coming.

Q And they answered they were not around at that time?

A Yes, sir.

Q So, you immediately served the summons upon the persons arriving (sic)?

A Yes, sir.

Q And who were these persons who arrived?

A Josephine Ariola.

Q And who is her companion?

A I did not ask anymore?

xxx xxx xxx

Q Who is older, is this Josephine Ariola or her companion?

A Josephine Ariola, she was the one who signed the summons.
Q Did you ask her age?

A I did not ask anymore because she look already (sic) of sufficient age.

Q That's your conclusion?

A Yes because she was the maid there and she was the older one." 31

As it turns out, the unrebutted evidence for the petitioners establishes that Areola (or Ariola) was only 11 to 12 years old at the time
substituted service was attempted. 32

It is all too obvious that no earnest efforts were exerted by Deputy Sheriff Cruz to effect the personal service of summons. His
testimony thus attests to an undue, if not indecent, haste to serve the summons at the first attempt without making sure that
personal service was, by then and even thereafter, an impossibility because either the petitioners had left for a foreign country or an
unknown destination with not definite date of returning within a reasonable period or had gone into hiding to avoid service of any
process from the courts. If he had only made the inquiries suggested above, he could have returned in the evening of 10 October
1989 or on any of the succeeding days — including the following Saturday and Sunday. Service of summons may be made at night as
well as during the day, or even on a Sunday or holiday because of its ministerial character. 33

Since the substituted service of summons in this case was not validly effected, the trial court did not acquire jurisdiction over the
persons of the petitioners. The order of default, the judgment by default, the writ of execution issued by it, as well as the auction
sale of the petitioners' properties levied on execution are, therefore, all null and void.

There is more in this case which further unmasks the nullity of the decision of the trial court. Both parties agree that the petitioners
were the defendants in Civil Case No. Q-89-3327. However, petitioner Loreto Alfaro-Laus is erroneously mentioned in the complaint
as Loredo. On the other hand, petitioner Pepito Laus, the husband of Loreto, is merely designated as JOHN DOE. The latter was
impleaded as a co-defendant presumably on the theory that the liability sought to be enforced is a conjugal partnership liability. In
short, Loreto's husband was sued as an indispensable party; it is clear that the trial court treated him as such when in its decision,
ordered the defendants, not just Loreto, to pay the adjudged amounts.

The sheriff's return of service indisputably discloses that no summons was even attempted to be served on petitioner Pepito Laus.
Sheriff Cruz unequivocally states therein that the "duplicate copy of the same together with the complaint and its annexes was duly
served upon defendant Loredo (sic) Laus of 122 Molave Park Subd. Parañaque M. M. thru JOSEPHINE AREOLA, maid of Loredo Daus
(sic) of same address, . . . ." 34

Neither Deputy Sheriff Cruz nor the private respondent had volunteered additional information to the effect that at some other time,
summons was in fact served on Pepito Laus. Accordingly, the trial court never acquired jurisdiction over his person. And yet, while it
concedes in its 29 December 1989 Order that the substituted service of summons was valid only for Loreto, it declared the
defendants — and not only her — in default. The court could have easily avoided this misdoing if it only examined the records before
issuing the order. On this score alone, the judgment by default is fatally flawed.

There is still another fact which betrays the trial court's unusual haste in rendering the judgment by default. In the dispositive portion
of the decision, the defendants were ordered, inter alia:

"1. To pay the plaintiff the amount of FIFTY-FIVE Thousand Pesos (P55,000.00) at the rate of ten per cent (10%), compounded
monthly beginning February 21, 1989 up to the present;" 35

While this rate of ten per cent (10%) could only refer to the imposable interest, the court failed to state whether its application shall
be on a monthly or yearly basis. The body of the decision, however, speaks of ten per cent (10%) interest PER MONTH; 36 this seems
to have been the basis relied on by respondent sheriff Cabang in computing for the petitioners' alleged liability for purposes of
execution. 37 This award of interest — in effect amounting to one hundred twenty per cent (120%) per annum — and the additional
twenty-five per cent (25%) of the total amount due ordered paid as attorney's fees, are unreasonable and unconscionable.

Since the trial court's default order and judgment by default are null and void, the respondent Court gravely erred in affirming them.

Some further comments, en passant, on the ratiocination of the respondent Court are in order. It is not accurate for the latter to have
said that the petitioners' motion to dismiss was not filed seasonably because it was filed beyond the reglementary period provided in
the Revised Rules of Court. Such a conclusion would doubtless be correct if there was a valid service of summons. If, however, a
defendant has not been properly summoned, the period to file a motion to dismiss for lack of jurisdiction over his person does not
commence to run until he voluntarily submits to the jurisdiction of the court, since the court has no jurisdiction to adjudicate the
controversy as to him until such time. 38 In this case, petitioners did not voluntarily submit to the jurisdiction of the trial court.
Consequently, the period to file a responsive pleading did not even commence to run.

Nor are We persuaded by the respondent Court's declaration that even if the motion to dismiss had been filed on time, the trial
court's order denying the same, being interlocutory, still cannot be the subject of a petition for certiorari. To be sure, this rule admits
of an exception, as when the trial court clearly acted outside of its jurisdiction or with grave abuse of discretion in denying the
motion to dismiss. 39 This is exactly what happened in the case while it was pending before the trial court; the denial of the motion
to dismiss was based solely on the ground that a judgment by default had already been entered. Certainly, this does not constitute a
valid ground for the denial because the motion raises a fundamental and prejudicial issue affecting the validity of the decision by
default.

Equally unmeritorious is the respondent Court's statement that the failure of the petitioners to appeal from the judgment by default
rendered such judgment final and unassailable. In the first place, it is axiomatic that a void judgment can never become final and
executory and may even be assailed or impugned at any time. 40 An action to declare the nullity of a void judgment does not
prescribe. 41 Secondly, the motion to dismiss in this case was filed before the petitioners received a copy of the decision by default.
Since the said motion is based on the lack of jurisdiction over the persons of the petitioners which, if true — in fact, We have found it
to be so — would result in the nullification not only of the default order but of the decision as well, then for all legal intents and
purposes, the latter was covered by the motion. This was precisely the orientation of the trial court when it allowed the parties to
submit evidence to support the motion to reconsider the Order of 5 March 1990 denying the motion to dismiss. It would certainly
not have gone that far if it thought otherwise for by then, the decision had already become final.

Its suggestion that the petitioners should have filed a motion to set aside the order of default on the ground that they had failed to
file the answer on grounds of fraud, accident, mistake or excusable negligence or a motion for new trial or a petition for relief from
judgment, is untenable for it begs the question. Besides, as shown above, petitioners' failure to file the answer was not based on any
of these grounds, but stood on the void service of summons.

Finally, respondent Court's reliance on the presumption of regularity in the performance of official functions is misplaced. We have
held that such a presumption does not apply where it is patent that the sheriff's return is defective. 42

WHEREFORE, the Decision of the respondent Court of Appeals of 30 May 1991 and the Resolution dated 30 July 1991 in CA-G.R. SP
No. 22232 are hereby REVERSED and SET ASIDE. The Order of Branch 82 of the Regional Trial Court of Quezon City of 29 December
1989 (Civil Case No. Q-89-3327) declaring petitioners in default, its Decision of 24 January 1990, Orders of 5 March 1990 and 9 July
1990 and the writ of execution issued therein, as well as all proceedings had pursuant to the writ of execution, are declared NULL
and VOID. The case is hereby remanded to the court of origin for further proceedings which shall include the valid service of
summons.

SO ORDERED.

umandap v sabio

GONZAGA-REYES, J.:

Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking the reversal of the June 7, 1999 Decision
of the Court of Appeals[1] in CA-G.R. SP No. 51294 and the September 30, 1999 Resolution denying the motion to reconsider said
decision. The challenged decision dismissed, for lack of merit, the petition for certiorari, to annul the Resolutions dated October 2,
1998 and January 18, 1999 of the Regional Trial Court of Misamis Oriental (Branch 23) in Civil Case No. 97-559 which, respectively,
denied the motion to set aside judgment by default and quash writ of execution; and denied the motion for reconsideration.

The facts are summarized by the Court of Appeals in this wise:

"In August, 1997, private respondent Domingo Estomo filed against petitioner Joel Umandap an action for damages based on breach
of contract. On February 3, 1998, Process Server Marmolejo effected substituted service of the summons and copy of the Complaint
upon petitioner, by leaving a copy thereof at petitioner's home and office address to a certain Joseph David who refused to receive
and acknowledge the same (Officer's Return, Rollo, p. 27).

Petitioner failed to file his Answer and, on motion of private respondent, was declared in default. Thereafter, private respondent was
allowed to adduce his evidence ex parte. On May 8, 1998, the trial court rendered a judgment against petitioner, the dispositive
portion of which reads:

"WHEREFORE, premises above-considered and pursuant to applicable law on the matter and plaintiff having proven by
preponderance of evidence his right to the relief prayed for, judgment is hereby rendered in favor of the plaintiff and against the
defendant Joel R. Umandap holding the latter liable to plaintiff and ordering the defendant to pay to the plaintiff:

"1. The amount of P304,393.25 representing the unremitted collections from MORESCO/NEA received by defendant;

2. The amount of P200,000.00 as reimbursement of interest incurred and paid by plaintiff to finish the contracted project;

"3. P50,000.00 as moral damages;

"4. P75,000.00 as attorney's fees;

"5. Litigation expenses of P5,547.00; and


"6. Cost of this suit.

"SO ORDERED."

(Rollo, p. 33).

On July 8, 1998, a Writ of Execution was issued and petitioner's deposit and receivables were garnished. On August 3, 1998,
petitioner filed a Motion to Set Aside Judgment by Default and Quash Writ of Execution which respondent Court denied in an Order
dated October 2, 1998. Petitioner's motion for reconsideration was likewise denied in the Courts order of January 18, 1999. xxx.[2]

Aggrieved, petitioner filed with the Court of Appeals a Petition for Certiorari under Rule 65 of the Rules of Court assailing the
resolutions of the trial court dated October 2, 1998 and January 18, 1999.

Petitioner argued before the Court of Appeals that the trial court never acquired jurisdiction over his person because there has been
no valid service of summons; that the substituted service of summons was improper and invalid since the process server's return
failed to show on its face the impossibility of personal service.

In dismissing the petition, the Court of Appeals found that the process server's Return is "valid and regular on its face, and readily
reveals that earnest efforts were exerted to find the defendant personally but such efforts failed." The Court of Appeals also held that
the "return is clothed with the mantle of presumption of regularity under Section 3[m], Rule 131 of the New Rules on Evidence; and
that said presumption is not overcome by petitioner's unsubstantiated and self-serving assertion that the process server went to his
home and office address only once."

Hence, this recourse to this Court.

In his Memorandum, petitioner raises the following issues:

1. Whether or not the substituted service of summons made on petitioner through Joseph David on February 3, 1998 was valid and
regular.

2. On the assumption that the service of summons made on petitioner was valid, whether or not the Court of Appeals acted in
accord with law and the applicable decisions of this Court when it refused to set aside the default judgment rendered against
petitioner in Civil Case No. 97-559 (RTC-Misamis oriental, Branch 23; Cagayan de Oro City) and giving the latter a chance to present
his evidence therein so as to rebut or even defeat private respondent's claim.[3]

The main issue in this petition is whether or not petitioner was served valid summons so as to bring him within the jurisdiction of the
court.

There can be no dispute that service of summons upon the defendant is necessary in order that a court may acquire jurisdiction over
his person. Any judgment without such service in the absence of a valid waiver is null and void.[4]

Pursuant to Section 6, Rule 14 of the Revised Rules of Court, the general rule in this jurisdiction is that summons must be served
personally on the defendant, it reads:

"SEC. 6. Service in person on defendant. - Whenever practicable, the summons shall be served by handing a copy thereof to the
defendant in person, or, if he refuses to receive and sign for it, by tendering it to him."

However, when the defendant cannot be served personally within a reasonable time after efforts to locate him have failed,
substituted service may be made. Section 7, Rule 14 of the Revised Rules of Court reads:

"SEC. 7. Substituted Service. - If, for justifiable causes, the defendant cannot be served within a reasonable time as provided in the
preceding section, service may be effected (a) by leaving copies of the summons at the defendant's residence with some person of
suitable age and discretion then residing therein, or (b) by leaving the copies at defendant's office or regular place of business with
some competent person in charge thereof."

In fine, the two modes for effecting substituted service of summons are: (a) by leaving copies of the summons at the defendant's
residence with some person of suitable age and discretion; and (b) by leaving copies at defendant's office or regular place of business
with some competent person in charge thereof. Among these two modes of substituted service, the sheriff or the process server may
choose that which will more likely insure the effectiveness of the service.[5]

In Venturanza vs. Court of Appeals,[6] this Court described how the impossibility of personal service should be shown:

"The substituted service should be availed only when the defendant cannot be served promptly in person. Impossibility of prompt
service should be shown by stating the efforts made to find the defendant personally and the failure of such efforts. The statement
should be made in the proof of service. This is necessary because substituted service is in derogation of the usual method of service.
Substituted service is a method extraordinary in character, and hence may be used only as prescribed in the circumstances
authorized by statute. Thus, the statutory requirements of substituted service must be followed strictly, faithfully, and any
substituted service other than that authorized by the statute is considered ineffective."

The proof of service alluded to is the return required by Section 4 of Rule 14 which reads:

"SEC. 4. Return. - When the service has been completed, the server shall, within five (5) days therefrom, serve a copy of the return,
personally or by registered mail, to the plaintiff's counsel, and shall return the summons to the clerk who issued it, accompanied by
proof of service."

Central to the instant controversy is the process server's return which petitioner relies upon to show the invalidity of the substituted
service of summons. He points to the following alleged defects: (1) it does not state the efforts exerted or the alleged occasions on
which attempts were made to personally serve the summons upon petitioner; (2) it does not state that Joseph David, to whom the
process server left or tendered the summons and a copy of the complaint was a person of suitable age and discretion then residing
therein or a competent person in charge of petitioner's residence or office; and, (3) it is not entitled to the presumption of regularity
since there is no compliance with the rules on substituted service.

We find petitioner's contentions to be devoid of merit.

The process server's return reads in full:

OFFICER'S RETURN

"THIS IS TO CERTIFY, that on the 3rd day of February 1998, undersigned served copy of the summon with the copy of the complaint
and its annexes, upon the defendant Joel R. Umandap Jofel Construction, at No. 14-3rd St., New Manila, Quezon City by
leaving/tendering the copy to Joseph David receiving of said office, but he refused to sign in receipt of the copy.

That despite efforts exerted to serve said process personally upon the defendant on several occasions the same proved futile, for the
reason that herein defendant was not around, thus substituted service was made in accordance with the provision of Section 8, Rule
14 of the Revised Rules of Court, and that this return is now being submitted to the Court of origin with the information DULY
SERVED.

Quezon City, Metro Manila, February 13, 1998.

FOR THE EX-OFFICIO SHERIFF

RUCIO C. MARMOLEJO

RTC/Process Server"

We are inclined to uphold the view of the Court of Appeals that the presumption of regularity in the performance of official functions
holds in this case. Indeed, in the absence of contrary evidence, a presumption exists that a sheriff has regularly performed his official
duty.[7] To overcome the presumption arising from the sheriffs certificate, the evidence must be clear and convincing.[8]

In the instant case, no proof of irregularity in the process server's return was presented by petitioner. On the contrary, a perusal of
the process server's return in the instant case shows compliance with the requirements of substituted service in accordance with the
requirements set forth in Laus vs. Court of Appeals,[9] enumerated as follows: (a) indicate the impossibility of service of summons
within a reasonable time, (b) specify the efforts exerted to locate the petitioners and (c) state that it was served on a person of
sufficient age and discretion residing therein.

First. The return indicates the location or address of the defendant where the summons was served. Second. It indicates the efforts
and/or prior attempts at personal service made by the process server and that such attempts had proved futile, prompting the latter
to resort to substituted service. Third. It indicates that summons was left or tendered to Joseph David "receiving of said office."

As it turns out, petitioner's allegation that the process server went to his home and office address only once is, as correctly pointed
out by the Court of Appeals, "unsubstantiated and self-serving assertion of the petitioner." We have no reason to disbelieve or
disregard the statement in the return that personal service of summons was attempted on several occasions. It is likewise not denied
that the address stated therein, No. 14-3rd St., New Manila, Quezon City, is both the residence and office address of petitioner at the
time the summons was served. Thus, the place of service is not in issue. Significantly, petitioner admitted receipt by Joseph David,
nephew of his wife, of the summons and the complaint.[10] He claims; however, that his nephew misplaced the same and ultimately
failed to inform defendant thereof. The return indicates that Joseph David was the "receiving of said office", which sufficiently
conveys that he was a person of sufficient age and discretion residing therein, tasked as he is to receive for the office. In any event,
petitioner never alleged in any of his pleadings filed before the lower and appellate courts, and even in this Court, that Joseph David
was incompetent to receive the summons and a copy of the complaint and that he was not a resident therein. The presumption that
the process server left or tendered the summons upon a person of sufficient age and discretion stands unrebutted.
In light of these facts, the appellate court's reliance on the process server's return that summons upon petitioner through Joseph
David was validly served in consonance with the principle of presumption in favor of regularity of performance of official functions of
a public officer rests on a firm basis. The requirements of substituted service as emphasized in the Laus case[11] were all complied
with.

Finally, petitioner's argument that assuming the summons was validly served the Court of Appeals should have nevertheless set aside
the default judgment rendered against him invoking the liberal construction of the rules is clearly untenable. Liberal construction of
the Rules may be invoked in situations wherein there may be some excusable formal deficiency or error in a pleading, provided that
the same does not subvert the essence of the proceeding and connotes at least a reasonable attempt at compliance with the Rules.
[12] In the instant case, we agree with the trial court's observations of petitioner's resort to technicalities in an apparent attempt to
frustrate the ends of justice. We quote:

"In the case at bar, defendant never rebutted the fact that they received copies of the summons and its annexes but rather
questioned the process in which summons was served by the sheriff. Certificate of service of summons by the sheriff is prima facie
evidence of the facts set out in such certificate and to overcome the presumption arising from the sheriff's return, the evidence must
be clear and convincing. But petitioner failed to overcome this presumption. (Ramon Orosa, et al., vs. CA, et al., G. R. No. 118698,
September 3, 1996). Besides, respondent judge had the right to rely on the sheriff's return because there is the presumption of
regularity in the performance of their duties. (Claridad vs. Santos, January 27, 1998; Sec. 39m) Rule 131 of the Rules of Court).

Defendant Umandap could hardly feign ignorance of the existence of this instant case considering the fact that he received a copy of
order of this Court under date March 18, 1998 declaring him in default as evidenced by the Return and attached to the records of
this case dated March 27, 1998. Likewise, defendant received a copy of the judgment of this Court Order dated May 8, 1998 as
evidenced by Registry Return Slip dated May 29, 1998 attached to the records of this case. Isn't this a case of a person who feigned to
be asleep but who is really awake?

Defendant Umandap in his affidavit of merit admitted that Joseph David (the person to whom RTC Process Server Marmolejo gave
the summons) was his wife's nephew. Defendant never rebutted the fact that he received a copy of the judgment of this Court
through a certain Bobby Santiago, the Auditor of his company.

It is very clear that defendant Umandap is guilty of laches for failure to seasonably act on those lawful Order he received from this
Court. It was only when his receivables were garnished that defendant filed these motions. This Court cannot help but conclude that
all the allegations made by defendant as to the regularity of service of notice are feeble and desperate attempts to prevent the
garnishment of his funds. Based on existing fact and jurisprudence on the matter, they hardly deserve any consideration by the
Court.[13]

Considering that petitioner received a copy of the Order dated March 18, 1998 declaring him in default on March 27, 1998 and a
copy of the judgment dated May 8, 1998 on May 29, 1998, as evidenced by registry return receipts, he could have protected his
rights by availing himself of several avenues of redress, including, filing a motion to set aside the order of default in accordance with
Sec. 3 (b), Rule 9 of the Rules of Court; or he could have taken an ordinary appeal to the Court of Appeals in accordance with Sec. 2
(a), Rule 41 of the Rules of Court questioning the judgment of the trial court.

WHEREFORE, the petition is hereby DENIED and the assailed Decision of the Court of Appeals is AFFIRMED.

SO ORDERED.

samartino v raon 383 scra 664

YNARES-SANTIAGO, J.:

Respondents Leonor Bernardo-Raon and Agustin G. Crisostomo are the surviving sister and spouse, respectively, of the late Filomena
Bernardo-Crisostomo, who passed away on May 17, 1994. Among the properties left by the deceased was her one-half share in a
parcel of land in Noveleta, Cavite, registered under Transfer Certificate of Title No. T- 131898 in the name of co-owners Lido Beach
Corporation and Filomena Bernardo.

On January 25, 1996, respondents instituted against petitioner Regalado P. Samartino a complaint for ejectment, docketed as Civil
Case No. 744 of the Municipal Trial Court of Noveleta, Cavite.[1] They alleged that during the lifetime of Filomena Bernardo, she
leased her share in the property to petitioner for a period of five years counted from 1986; that the said lease expired and was not
extended thereafter; and that petitioner refused to vacate the property despite demands therefor.

Summons was served on Roberto Samartino, brother of petitioner.[2] At the time of service of summons at petitioners house, he was
not at home as he was then confined at the National Bureau of Investigation Treatment and Rehabilitation Center (NBI-TRC), Tagaytay
City since January 19, 1996, where he was undergoing treatment and rehabilitation for drug dependency. Thus, on February 2, 1996,
a liaison officer of the NBI-TRC appeared before the trial court with a certification that petitioner will be unable to comply with the
directive to answer the complaint within the reglementary period, inasmuch as it will take six months for him to complete the
rehabilitation program and before he can be recommended for discharge by the Rehabilitation Committee.[3]
The trial court, despite the written certification from NBI-TRC, granted respondents motion to declare petitioner in default and
ordered them to present evidence ex-parte. On March 21, 1996, the trial court rendered judgment in favor of respondents as
follows:

FROM THE FOREGOING CONSIDERATIONS, judgment is hereby rendered in favor of the plaintiffs and against the defendant ordering
the latter and other person/s claiming rights under him:

1. To vacate immediately the land in question after the finality of the decision.

2. For the defendant to pay the plaintiffs the sum of P5,000.00 monthly from January, 1992 up to the time he surrenders the
premises considered as damages for the use of the subject land.

3. For the defendant to pay the plaintiffs P 10,000.00 as and for attorneys fees with an additional P800.00 as appearance fees.

4. To pay the plaintiffs P 100.00 as filing fee.

SO ORDERED.[4]

After learning of the adverse decision against him, petitioners counsel filed with the Regional Trial Court of Cavite City, Branch 16, a
motion to set aside judgment. The motion was treated as an appeal and docketed as Civil Case No. N-6281. On July 18, 1996, the RTC
affirmed the decision of the MTC.[5]

The aforesaid decision became final. Accordingly, the court of origin issued on September 17, 1996 a writ of execution.[6] Petitioner
was given a grace period of one month within which to vacate the premises. His real property situated in Noveleta, Cavite, covered
by Transfer Certificate of Title No. T-283572, was levied and sold at public auction to respondents in full satisfaction of the monetary
award.[7]

On November 25, 1996, petitioner filed with the Regional Trial Court of Cavite City, a petition for relief from judgment, docketed as
Civil Case No. N-6393.[8] In support thereof, petitioner submitted an affidavit of merit,[9] alleging in fine that the parcel of land from
which he was being evicted had been sold to him by Filomena Bernardo-Crisostomo, as evidenced by the Deed of Absolute Sale
dated December 13, 1988.[10]

The following day, November 26, 1996, the RTC issued an Order dismissing the petition for relief from judgment.[11] Petitioners
Motion for Reconsideration was denied on December 12, 1996. A second Motion for Reconsideration was likewise denied on January
14, 1997.[12] On the same day, a writ of demolition was issued commanding the sheriff to remove the building and improvements
made by petitioner on the subject premises and to deliver the possession thereof to respondents.[13]

Petitioner thus filed a petition for certiorari with the Court of Appeals, docketed as CA-G.R. SP No. 432O2.[14] On August 29, 1997,
the Court of Appeals dismissed the petition.[15] Petitioners Motion for Reconsideration was denied on November 14, 1997.[16]
Hence this petition for review.

The petition is impressed with merit.

In actions in personam, summons on the defendant must be served by handing a copy thereof to the defendant in person, or, if he
refuses to receive it, by tendering it to him. If efforts to serve the summons personally to defendant is impossible, service may be
effected by leaving copies of the summons at the defendants dwelling house or residence with some person of suitable age and
discretion residing therein, or by leaving the copies at the defendants office or regular place of business with some competent
person in charge thereof. Otherwise stated, service of summons upon the defendant shall be by personal service first and only when
the defendant cannot be promptly served in person will substituted service be availed of.[17]

Rule 14 of the 1997 Rules of Civil Procedure clearly provides:

Sec. 6. Service in person on defendant. - Whenever practicable, the summons shall be served by handing a copy thereof to the
defendant in person, or, if he refuses to receive and sign for it, by tendering it to him.

Sec. 7. Substituted service. - If, for justifiable causes, the defendant cannot be served within a reasonable time as provided in the
preceding section, service may be effected (a) by leaving copies of the summons at the defendants residence with some person of
suitable age and discretion then residing therein, or (b) by leaving the copies at defendants office or regular place of business with
some competent person in charge thereof.

We have long held that the impossibility of personal service justifying availment of substituted service should be explained in the
proof of service; why efforts exerted towards personal service failed. The pertinent facts and circumstances attendant to the service
of summons must be stated in the proof of service or Officers Return; otherwise, the substituted service cannot be upheld. It is only
under exceptional terms that the circumstances warranting substituted service of summons may be proved by evidence aliunde. It
bears stressing that since service of summons, especially for actions in personam, is essential for the acquisition of jurisdiction over
the person of the defendant, the resort to a substituted service must be duly justified. Failure to do so would invalidate all
subsequent proceedings on jurisdictional grounds.[18]

In this connection, Supreme Court Administrative Circular No. 59 was issued on November 19, 1989 to stress the importance of strict
compliance with the requisites for a valid substituted service, to wit:

Delays in court proceedings have been caused by faulty and erroneous implementation of Section 8, Rule 14, Rules of Court on
Substituted Service of Summons.

The Trial Judges of all lower courts, as well as the Clerks of Court in their capacity as Ex-Officio Sheriffs together with the Deputy
Sheriffs are reminded of the provision of Section 8, Rule 14, Rules of Court on substituted service as follows:

xxx xxx xxx

The manner of effecting substituted service as prescribed in Venturanza vs. Court of Appeals, 156 SCRA 305, must be strictly
complied with, thus:

The substituted service should be availed only when the defendant cannot be served promptly in person. Impossibility of prompt
service should be shown by stating the efforts made to find the defendant personally and the failure of such efforts. The statement
should be made in the proof of service. This is necessary because substituted service is in derogation of the usual method of service.

Substituted service is a method extraordinary in character, and hence may be used only as prescribed in the circumstances
authorized by statute. Thus, the statutory requirements of substituted service must be followed strictly, faithfully and any substituted
service other than authorized by the statute is considered ineffective.

For immediate compliance.

In the case at bar, the sheriffs Return of Summons simply states:

This is to certify that on this date: 26th day of January I have caused the service of summons, together with the attached complaint
and its annexes issued in the above entitled case upon defendant REGALADO SAMARTINO thru ROBERTO SAMARTINO, Brother of the
defendant acknowledge receipt of said court processes by affixing his signature at the lower left portion of the original summons
hereto attached.

WHEREFORE, the attached original summons is hereby respectfully returned to the court of origin duly served for information and
record purposes.

Noveleta, Cavite, February 9, 1996.[19]

Clearly, the above return failed to show the reason why personal service could not be made. It failed to state that prompt and
personal service on the defendant was rendered impossible. It was not shown that efforts were made to find the defendant
personally and that said efforts failed; hence the resort to substituted service. As stated above, these requirements are indispensable
because substituted service is in derogation of the usual method of service. It is an extraordinary method since it seeks to bind the
defendant to the consequences of a suit even though notice of such action is served not upon him but upon another whom law
could only presume would notify him of the pending proceedings. For this reason, failure to faithfully, strictly, and fully comply with
the requirements of substituted service renders said service ineffective.[20]

Furthermore, nowhere in the return of summons or in the records of this case is it shown that petitioners brother, on whom
substituted service of summons was effected, was a person of suitable age and discretion residing at petitioners residence.

There being no valid substituted service of summons, the trial court did not acquire jurisdiction over the person of petitioner. It
should be emphasized that the service of summons is not only required to give the court jurisdiction over the person of the
defendant, but also to afford the latter an opportunity to be heard on the claim made against him. Thus, compliance with the rules
regarding the service of summons is as much an issue of due process as of jurisdiction. The essence of due process is to be found in
the reasonable opportunity to be heard and submit any evidence one may have in support of his defense. It is elementary that
before a person can be deprived of his property, he should first be informed of the claim against him and the theory on which such
claim is premised.[21]

By reason of the ineffective service of summons, petitioner was not duly apprised of the action against him. Consequently, he was
prevented from answering the claims against him. He was not given a chance to be heard on his defenses. What made matters worse
was that the trial court had actual knowledge that petitioner was then indisposed and unable to file his answer to the complaint, as
he was then confined at the NBI-TRC. The trial courts failure to give petitioner a reasonable opportunity to file his answer violated his
right to due process. Perforce, the judgment rendered against petitioner is nugatory and without effect.

The trial court should not have been too rash in declaring petitioner in default, considering it had actual notice of valid reasons that
prevented him from answering. Well-settled is the rule that courts should be liberal in setting aside orders of default for default
judgments are frowned upon, unless in cases where it clearly appears that the reopening of the case is intended for delay. The
issuance of orders of default should be the exception rather than the rule, to be allowed only in clear cases of obstinate refusal by
the defendant to comply with the orders of the trial court.[22]

Suits should as much as possible be decided on the merits and not on technicalities. In this regard, we have often admonished courts
to be liberal in setting aside orders of default as default judgments are frowned upon and not looked upon with favor for they may
amount to a positive and considerable injustice to the defendant and the possibility of such serious consequences necessitates a
careful examination of the grounds upon which the defendant asks that it be set aside. Since rules of procedure are mere tools
designed to facilitate the attainment of justice, it is well recognized that this Court is empowered to suspend its operation, or except
a particular case from its operation, when the rigid application thereof tends to frustrate rather than promote the ends of justice. We
are not unmindful of the fact that during the pendency of the instant petition, the trial court has rendered judgment against
petitioners. However, being the court of last resort, we deem it in the best interest that liberality and relaxation of the Rules be
extended to petitioners by setting aside the order of default issued by the trial court and the consequent default judgment;
otherwise, great injustice would result if petitioners are not afforded an opportunity to prove their claims.[23]

In addition, the Regional Trial Court committed reversible error in dismissing the petition for relief from judgment for having been
filed out of time. According to the Regional Trial Court, the petition for relief, filed on November 25, 1996, was late because
petitioner had actual knowledge of the judgment in the ejectment case since March 1996. The period within which to file a petition
for relief should have been reckoned from the date petitioner learned of the judgment of the Regional Trial Court. It should not have
been counted from the date of the Municipal Trial Courts decision because, precisely, petitioner appealed the same. It was the
Regional Trial Courts decision that became final and, hence, was the proper subject of the petition for relief from judgment. It is
axiomatic that a petition for relief is only available against a final and executory judgment.[24]

Section 3, Rule 38, of the 1997 Rules of Civil Procedure provides that a verified petition for relief must be filed within sixty (60) days
after the petitioner learns of the judgment, final order, or other proceeding to be set aside and not more than six (6) months after
such judgment or final order has been entered or such proceeding has been taken. It must be accompanied with affidavits showing
the fraud, accident, mistake, or excusable negligence relied upon, and the facts constituting petitioners good and substantial cause of
action or defense.[25]

It is not clear from the records of the case at bar when petitioner learned of the decision of the Regional Trial Court affirming the
judgment of the Municipal Trial Court. What appears is that the said decision became final only on August 15, 1996, and must have
been entered sometime thereafter. Hence, the petition for relief filed on November 25, 1996 was well within the six-month period
prescribed by the Rules.

Finally, the records show that petitioner raised a meritorious defense in his affidavit of merit. He alleged therein that the property
from which he was being ejected had been sold to him by its registered owner. Ownership is a valid defense in unlawful detainer
cases. While possession is the main issue in ejectment, it is also one of the essential attributes of ownership. It follows that an owner
of real property is entitled to possession of the same. Petitioner can, therefore, properly plead his right of possession to defeat that
of respondents. Indeed, an owner who cannot exercise the seven "juses or attributes of ownership - the right to possess, to use and
enjoy, to abuse or consume, to accessories, to dispose or alienate, to recover or vindicate and to the fruits - is a crippled owner.[26]

All told, the Municipal Trial Court of Noveleta and the Regional Trial Court of Cavite City did not have jurisdiction over the person of
petitioner. Hence, all proceedings had as regards petitioner were null and void. Necessarily, the enforcement of the writ of execution
as well as the sale at public auction of petitioners real property to satisfy the void judgment must also be declared of no legal effect.

There is a real need to resolve the issue of ownership over the premises in order to determine who, as between petitioner and
respondents, has a better right to possess the property in dispute. This can only be done in the proper proceeding before the trial
court wherein petitioner will be afforded every right to present evidence in his behalf.

WHEREFORE, in view of the foregoing, the petition is GRANTED. The decision of the Court of Appeals in CA-G.R. SP No. 43202 is
REVERSED and SET ASIDE. This case is REMANDED to the Municipal Trial Court of Noveleta, Cavite, which is directed to continue
proceedings in Civil Case No. 744 by affording petitioner Regalado P. Samartino a chance to file his answer and present evidence in
his defense, and thereafter to hear and decide the case. The Writ of Execution dated September 17, 1996, the Writ of Demolition
dated January 14, 1997, and the certificate of sale over Transfer Certificate of Title No. T-283572, as well as all acts and deeds
incidental to the judgment in Civil Case No. 744, are declared NULL AND VOID.

SO ORDERED.

manotoc v ca - reasonble time

VELASCO, JR., J.:

The courts jurisdiction over a defendant is founded on a valid service of summons. Without a valid service, the court cannot acquire
jurisdiction over the defendant, unless the defendant voluntarily submits to it. The defendant must be properly apprised of a pending
action against him and assured of the opportunity to present his defenses to the suit. Proper service of summons is used to protect
ones right to due process.

The Case

This Petition for Review on Certiorari[1] under Rule 45 presents the core issue whether there was a valid substituted service of
summons on petitioner for the trial court to acquire jurisdiction. Petitioner Manotoc claims the court a quo should have annulled the
proceedings in the trial court for want of jurisdiction due to irregular and ineffective service of summons.

The Facts

Petitioner is the defendant in Civil Case No. 63337 entitled Agapita Trajano, pro se, and on behalf of the Estate of Archimedes Trajano
v. Imelda Imee R. Marcos-Manotoc[2] for Filing, Recognition and/or Enforcement of Foreign Judgment. Respondent Trajano seeks the
enforcement of a foreign courts judgment rendered on May 1, 1991 by the United States District Court of Honolulu, Hawaii, United
States of America, in a case entitled Agapita Trajano, et al. v. Imee Marcos-Manotoc a.k.a. Imee Marcos, Civil Case No. 86-0207 for
wrongful death of deceased Archimedes Trajano committed by military intelligence officials of the Philippines allegedly under the
command, direction, authority, supervision, tolerance, sufferance and/or influence of defendant Manotoc, pursuant to the provisions
of Rule 39 of the then Revised Rules of Court.

Based on paragraph two of the Complaint, the trial court issued a Summons[3] on July 6, 1993 addressed to petitioner at Alexandra
Condominium Corporation or Alexandra Homes, E2 Room 104, at No. 29 Meralco Avenue, Pasig City.

On July 15, 1993, the Summons and a copy of the Complaint were allegedly served upon (Mr.) Macky de la Cruz, an alleged caretaker
of petitioner at the condominium unit mentioned earlier.[4] When petitioner failed to file her Answer, the trial court declared her in
default through an Order[5] dated October 13, 1993.

On October 19, 1993, petitioner, by special appearance of counsel, filed a Motion to Dismiss[6] on the ground of lack of jurisdiction
of the trial court over her person due to an invalid substituted service of summons. The grounds to support the motion were: (1) the
address of defendant indicated in the Complaint (Alexandra Homes) was not her dwelling, residence, or regular place of business as
provided in Section 8, Rule 14 of the Rules of Court; (2) the party (de la Cruz), who was found in the unit, was neither a
representative, employee, nor a resident of the place; (3) the procedure prescribed by the Rules on personal and substituted service
of summons was ignored; (4) defendant was a resident of Singapore; and (5) whatever judgment rendered in this case would be
ineffective and futile.

During the hearing on the Motion to Dismiss, petitioner Manotoc presented Carlos Gonzales, who testified that he saw defendant
Manotoc as a visitor in Alexandra Homes only two times. He also identified the Certification of Renato A. de Leon, which stated that
Unit E-2104 was owned by Queens Park Realty, Inc.; and at the time the Certification was issued, the unit was not being leased by
anyone. Petitioner also presented her Philippine passport and the Disembarkation/Embarkation Card[7] issued by the Immigration
Service of Singapore to show that she was a resident of Singapore. She claimed that the person referred to in plaintiffs Exhibits A to
EEEE as Mrs. Manotoc may not even be her, but the mother of Tommy Manotoc, and granting that she was the one referred to in
said exhibits, only 27 out of 109 entries referred to Mrs. Manotoc. Hence, the infrequent number of times she allegedly entered
Alexandra Homes did not at all establish plaintiffs position that she was a resident of said place.

On the other hand, Agapita Trajano, for plaintiffs estate, presented Robert Swift, lead counsel for plaintiffs in the Estate of Ferdinand
Marcos Human Rights Litigation, who testified that he participated in the deposition taking of Ferdinand R. Marcos, Jr.; and he
confirmed that Mr. Marcos, Jr. testified that petitioners residence was at the Alexandra Apartment, Greenhills.[8] In addition, the
entries[9] in the logbook of Alexandra Homes from August 4, 1992 to August 2, 1993, listing the name of petitioner Manotoc and the
Sheriffs Return,[10] were adduced in evidence.
On October 11, 1994, the trial court rejected Manotocs Motion to Dismiss on the strength of its findings that her residence, for
purposes of the Complaint, was Alexandra Homes, Unit E-2104, No. 29 Meralco Avenue, Pasig, Metro Manila, based on the
documentary evidence of respondent Trajano. The trial court relied on the presumption that the sheriffs substituted service was
made in the regular performance of official duty, and such presumption stood in the absence of proof to the contrary. [11]

On December 21, 1994, the trial court discarded Manotocs plea for reconsideration for lack of merit.[12]

Undaunted, Manotoc filed a Petition for Certiorari and Prohibition[13] before the Court of Appeals (CA) on January 20, 1995,
docketed as CA-G.R. SP No. 36214 seeking the annulment of the October 11, 1994 and December 21, 1994 Orders of Judge Aurelio C.
Trampe.

Ruling of the Court of Appeals

On March 17, 1997, the CA rendered the assailed Decision,[14] dismissing the Petition for Certiorari and Prohibition. The court a quo
adopted the findings of the trial court that petitioners residence was at Alexandra Homes, Unit E-2104, at No. 29 Meralco Avenue,
Pasig, Metro Manila, which was also the residence of her husband, as shown by the testimony of Atty. Robert Swift and the Returns
of the registered mails sent to petitioner. It ruled that the Disembarkation/Embarkation Card and the Certification dated September
17, 1993 issued by Renato A. De Leon, Assistant Property Administrator of Alexandra Homes, were hearsay, and that said
Certification did not refer to July 1993the month when the substituted service was effected.

In the same Decision, the CA also rejected petitioners Philippine passport as proof of her residency in Singapore as it merely showed
the dates of her departure from and arrival in the Philippines without presenting the boilerplates last two (2) inside pages where
petitioners residence was indicated. The CA considered the withholding of those pages as suppression of evidence. Thus, according
to the CA, the trial court had acquired jurisdiction over petitioner as there was a valid substituted service pursuant to Section 8, Rule
14 of the old Revised Rules of Court.

On April 2, 1997, petitioner filed a Motion for Reconsideration[15] which was denied by the CA in its Resolution[16] dated October 8,
1997.

Hence, petitioner has come before the Court for review on certiorari.

The Issues

Petitioner raises the following assignment of errors for the Courts consideration:

I. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR IN RENDERING THE DECISION AND RESOLUTION IN QUESTION
(ANNEXES A AND B) IN DEFIANCE OF LAW AND JURISPRUDENCE IN RULING THAT THE TRIAL COURT ACQUIRED JURISDICTION OVER
THE PERSON OF THE PETITIONER THROUGH A SUBSTITUTED SERVICE OF SUMMONS IN ACCORDANCE WITH SECTION 8, RULE 14 OF
THE REVISED RULES OF COURT.
II. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR WHEN IT RULED THAT THERE WAS A VALID SERVICE OF
SUMMONS ON AN ALLEGED CARETAKER OF PETITIONERS RESIDENCE IN COMPLETE DEFIANCE OF THE RULING IN CASTILLO VS. CFI OF
BULACAN, BR. IV, G.R. NO. L-55869, FEBRUARY 20, 1984, 127 SCRA 632 WHICH DEFINES THE PROPRIETY OF SUCH SERVICE UPON
MERE OVERSEERS OF PREMISES WHERE A PARTY SUPPOSEDLY RESIDES.

III. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR IN CONCLUDING THAT THE RESIDENCE OF THE HUSBAND IS
ALSO THE RESIDENCE OF HIS WIFE CONTRARY TO THE RULING IN THE BANK OF THE PHILIPPINE ISLANDS VS. DE COSTER, G.R. NO.
23181, MARCH 16, 1925, 47 PHIL. 594.

IV. RESPONDENT COURT OF APPEALS COMMITTED [A] SERIOUS ERROR IN FAILING TO APPLY THE RULE ON EXTRA-TERRITORIAL
SERVICE OF SUMMONS UNDER SECTIONS 17 AND 18, RULE 14 OF THE REVISED RULES OF COURT.[17]

The assigned errors bring to the fore the crux of the disagreementthe validity of the substituted service of summons for the trial
court to acquire jurisdiction over petitioner.

The Courts Ruling

We GRANT the petition.

Acquisition of Jurisdiction

Jurisdiction over the defendant is acquired either upon a valid service of summons or the defendants voluntary appearance in court.
When the defendant does not voluntarily submit to the courts jurisdiction or when there is no valid service of summons, any
judgment of the court which has no jurisdiction over the person of the defendant is null and void.[18] In an action strictly in
personam, personal service on the defendant is the preferred mode of service, that is, by handing a copy of the summons to the
defendant in person. If defendant, for excusable reasons, cannot be served with the summons within a reasonable period, then
substituted service can be resorted to. While substituted service of summons is permitted, it is extraordinary in character and in
derogation of the usual method of service.[19] Hence, it must faithfully and strictly comply with the prescribed requirements and
circumstances authorized by the rules. Indeed, compliance with the rules regarding the service of summons is as much important as
the issue of due process as of jurisdiction.[20]

Requirements for Substituted Service

Section 8 of Rule 14 of the old Revised Rules of Court which applies to this case provides:

SEC. 8. [21] Substituted service. If the defendant cannot be served within a reasonable time as provided in the preceding section
[personal service on defendant], service may be effected (a) by leaving copies of the summons at the defendants residence with
some person of suitable age and discretion then residing therein, or (b) by leaving the copies at defendants office or regular place of
business with some competent person in charge thereof.

We can break down this section into the following requirements to effect a valid substituted service:
(1) Impossibility of Prompt Personal Service

The party relying on substituted service or the sheriff must show that defendant cannot be served promptly or there is impossibility
of prompt service.[22] Section 8, Rule 14 provides that the plaintiff or the sheriff is given a reasonable time to serve the summons to
the defendant in person, but no specific time frame is mentioned. Reasonable time is defined as so much time as is necessary under
the circumstances for a reasonably prudent and diligent man to do, conveniently, what the contract or duty requires that should be
done, having a regard for the rights and possibility of loss, if any[,] to the other party.[23] Under the Rules, the service of summons
has no set period. However, when the court, clerk of court, or the plaintiff asks the sheriff to make the return of the summons and
the latter submits the return of summons, then the validity of the summons lapses. The plaintiff may then ask for an alias summons if
the service of summons has failed.[24] What then is a reasonable time for the sheriff to effect a personal service in order to
demonstrate impossibility of prompt service? To the plaintiff, reasonable time means no more than seven (7) days since an
expeditious processing of a complaint is what a plaintiff wants. To the sheriff, reasonable time means 15 to 30 days because at the
end of the month, it is a practice for the branch clerk of court to require the sheriff to submit a return of the summons assigned to
the sheriff for service. The Sheriffs Return provides data to the Clerk of Court, which the clerk uses in the Monthly Report of Cases to
be submitted to the Office of the Court Administrator within the first ten (10) days of the succeeding month. Thus, one month from
the issuance of summons can be considered reasonable time with regard to personal service on the defendant.

Sheriffs are asked to discharge their duties on the service of summons with due care, utmost diligence, and reasonable promptness
and speed so as not to prejudice the expeditious dispensation of justice. Thus, they are enjoined to try their best efforts to
accomplish personal service on defendant. On the other hand, since the defendant is expected to try to avoid and evade service of
summons, the sheriff must be resourceful, persevering, canny, and diligent in serving the process on the defendant. For substituted
service of summons to be available, there must be several attempts by the sheriff to personally serve the summons within a
reasonable period [of one month] which eventually resulted in failure to prove impossibility of prompt service. Several attempts
means at least three (3) tries, preferably on at least two different dates. In addition, the sheriff must cite why such efforts were
unsuccessful. It is only then that impossibility of service can be confirmed or accepted.

(2) Specific Details in the Return

The sheriff must describe in the Return of Summons the facts and circumstances surrounding the attempted personal service.[25]
The efforts made to find the defendant and the reasons behind the failure must be clearly narrated in detail in the Return. The date
and time of the attempts on personal service, the inquiries made to locate the defendant, the name/s of the occupants of the alleged
residence or house of defendant and all other acts done, though futile, to serve the summons on defendant must be specified in the
Return to justify substituted service. The form on Sheriffs Return of Summons on Substituted Service prescribed in the Handbook for
Sheriffs published by the Philippine Judicial Academy requires a narration of the efforts made to find the defendant personally and
the fact of failure.[26] Supreme Court Administrative Circular No. 5 dated November 9, 1989 requires that impossibility of prompt
service should be shown by stating the efforts made to find the defendant personally and the failure of such efforts, which should be
made in the proof of service.

(3) A Person of Suitable Age and Discretion

If the substituted service will be effected at defendants house or residence, it should be left with a person of suitable age and
discretion then residing therein.[27] A person of suitable age and discretion is one who has attained the age of full legal capacity (18
years old) and is considered to have enough discernment to understand the importance of a summons. Discretion is defined as the
ability to make decisions which represent a responsible choice and for which an understanding of what is lawful, right or wise may be
presupposed.[28] Thus, to be of sufficient discretion, such person must know how to read and understand English to comprehend
the import of the summons, and fully realize the need to deliver the summons and complaint to the defendant at the earliest
possible time for the person to take appropriate action. Thus, the person must have the relation of confidence to the defendant,
ensuring that the latter would receive or at least be notified of the receipt of the summons. The sheriff must therefore determine if
the person found in the alleged dwelling or residence of defendant is of legal age, what the recipients relationship with the
defendant is, and whether said person comprehends the significance of the receipt of the summons and his duty to immediately
deliver it to the defendant or at least notify the defendant of said receipt of summons. These matters must be clearly and specifically
described in the Return of Summons.
(4) A Competent Person in Charge

If the substituted service will be done at defendants office or regular place of business, then it should be served on a competent
person in charge of the place. Thus, the person on whom the substituted service will be made must be the one managing the office
or business of defendant, such as the president or manager; and such individual must have sufficient knowledge to understand the
obligation of the defendant in the summons, its importance, and the prejudicial effects arising from inaction on the summons. Again,
these details must be contained in the Return.

Invalid Substituted Service in the Case at Bar

Let us examine the full text of the Sheriffs Return, which reads:

THIS IS TO CERTIFY that on many occasions several attempts were made to serve the summons with complaint and annexes issued by
this Honorable Court in the above entitled case, personally upon the defendant IMELDA IMEE MARCOS-MANOTOC located at
Alexandra Condominium Corpration [sic] or Alexandra Homes E-2 Room 104 No. 29 Merlaco [sic] Ave., Pasig, Metro-Manila at
reasonable hours of the day but to no avail for the reason that said defendant is usually out of her place and/or residence or
premises. That on the 15th day of July, 1993, substituted service of summons was resorted to in accordance with the Rules of Court
in the Philippines leaving copy of said summons with complaint and annexes thru [sic] (Mr) Macky de la Cruz, caretaker of the said
defendant, according to (Ms) Lyn Jacinto, Receptionist and Telephone Operator of the said building, a person of suitable age and
discretion, living with the said defendant at the given address who acknowledged the receipt thereof of said processes but he
refused to sign (emphases supplied).

WHEREFORE, said summons is hereby returned to this Honorable Court of origin, duly served for its record and information.

Pasig, Metro-Manila July 15, 1993.[29]

A meticulous scrutiny of the aforementioned Return readily reveals the absence of material data on the serious efforts to serve the
Summons on petitioner Manotoc in person. There is no clear valid reason cited in the Return why those efforts proved inadequate, to
reach the conclusion that personal service has become impossible or unattainable outside the generally couched phrases of on many
occasions several attempts were made to serve the summons x x x personally, at reasonable hours during the day, and to no avail for
the reason that the said defendant is usually out of her place and/or residence or premises. Wanting in detailed information, the
Return deviates from the rulingin Domagas v. Jensen[30] and other related cases[31]that the pertinent facts and circumstances on
the efforts exerted to serve the summons personally must be narrated in the Return. It cannot be determined how many times, on
what specific dates, and at what hours of the day the attempts were made. Given the fact that the substituted service of summons
may be assailed, as in the present case, by a Motion to Dismiss, it is imperative that the pertinent facts and circumstances
surrounding the service of summons be described with more particularity in the Return or Certificate of Service.

Besides, apart from the allegation of petitioners address in the Complaint, it has not been shown that respondent Trajano or Sheriff
Caelas, who served such summons, exerted extraordinary efforts to locate petitioner. Certainly, the second paragraph of the
Complaint only states that respondents were informed, and so [they] allege about the address and whereabouts of petitioner. Before
resorting to substituted service, a plaintiff must demonstrate an effort in good faith to locate the defendant through more direct
means.[32] More so, in the case in hand, when the alleged petitioners residence or house is doubtful or has not been clearly
ascertained, it would have been better for personal service to have been pursued persistently.

In the case Umandap v. Sabio, Jr.,[33] it may be true that the Court held that a Sheriffs Return, which states that despite efforts
exerted to serve said process personally upon the defendant on several occasions the same proved futile, conforms to the
requirements of valid substituted service. However, in view of the numerous claims of irregularities in substituted service which have
spawned the filing of a great number of unnecessary special civil actions of certiorari and appeals to higher courts, resulting in
prolonged litigation and wasteful legal expenses, the Court rules in the case at bar that the narration of the efforts made to find the
defendant and the fact of failure written in broad and imprecise words will not suffice. The facts and circumstances should be stated
with more particularity and detail on the number of attempts made at personal service, dates and times of the attempts, inquiries to
locate defendant, names of occupants of the alleged residence, and the reasons for failure should be included in the Return to
satisfactorily show the efforts undertaken. That such efforts were made to personally serve summons on defendant, and those
resulted in failure, would prove impossibility of prompt personal service.

Moreover, to allow sheriffs to describe the facts and circumstances in inexact terms would encourage routine performance of their
precise duties relating to substituted servicefor it would be quite easy to shroud or conceal carelessness or laxity in such broad terms.
Lastly, considering that monies and properties worth millions may be lost by a defendant because of an irregular or void substituted
service, it is but only fair that the Sheriffs Return should clearly and convincingly show the impracticability or hopelessness of
personal service.

Granting that such a general description be considered adequate, there is still a serious nonconformity from the requirement that
the summons must be left with a person of suitable age and discretion residing in defendants house or residence. Thus, there are
two (2) requirements under the Rules: (1) recipient must be a person of suitable age and discretion; and (2) recipient must reside in
the house or residence of defendant. Both requirements were not met. In this case, the Sheriffs Return lacks information as to
residence, age, and discretion of Mr. Macky de la Cruz, aside from the sheriffs general assertion that de la Cruz is the resident
caretaker of petitioner as pointed out by a certain Ms. Lyn Jacinto, alleged receptionist and telephone operator of Alexandra Homes.
It is doubtful if Mr. de la Cruz is residing with petitioner Manotoc in the condominium unit considering that a married woman of her
stature in society would unlikely hire a male caretaker to reside in her dwelling. With the petitioners allegation that Macky de la Cruz
is not her employee, servant, or representative, it is necessary to have additional information in the Return of Summons. Besides, Mr.
Macky de la Cruzs refusal to sign the Receipt for the summons is a strong indication that he did not have the necessary relation of
confidence with petitioner. To protect petitioners right to due process by being accorded proper notice of a case against her, the
substituted service of summons must be shown to clearly comply with the rules.

It has been stated and restated that substituted service of summons must faithfully and strictly comply with the prescribed
requirements and in the circumstances authorized by the rules. [34]

Even American case law likewise stresses the principle of strict compliance with statute or rule on substituted service, thus:

The procedure prescribed by a statute or rule for substituted or constructive service must be strictly pursued.[35] There must be
strict compliance with the requirements of statutes authorizing substituted or constructive service.[36]

Where, by the local law, substituted or constructive service is in certain situations authorized in the place of personal service when
the latter is inconvenient or impossible, a strict and literal compliance with the provisions of the law must be shown in order to
support the judgment based on such substituted or constructive service.[37] Jurisdiction is not to be assumed and exercised on the
general ground that the subject matter of the suit is within the power of the court. The inquiry must be as to whether the requisites
of the statute have been complied with, and such compliance must appear on the record.[38] The fact that the defendant had actual
knowledge of attempted service does not render the service effectual if in fact the process was not served in accordance with the
requirements of the statute.[39]

Based on the above principles, respondent Trajano failed to demonstrate that there was strict compliance with the requirements of
the then Section 8, Rule 14 (now Section 7, Rule 14 of the 1997 Rules of Civil Procedure).

Due to non-compliance with the prerequisites for valid substituted service, the proceedings held before the trial court perforce must
be annulled.
The court a quo heavily relied on the presumption of regularity in the performance of official duty. It reasons out that [t]he certificate
of service by the proper officer is prima facie evidence of the facts set out herein, and to overcome the presumption arising from said
certificate, the evidence must be clear and convincing.[40]

The Court acknowledges that this ruling is still a valid doctrine. However, for the presumption to apply, the Sheriffs Return must show
that serious efforts or attempts were exerted to personally serve the summons and that said efforts failed. These facts must be
specifically narrated in the Return. To reiterate, it must clearly show that the substituted service must be made on a person of
suitable age and discretion living in the dwelling or residence of defendant. Otherwise, the Return is flawed and the presumption
cannot be availed of. As previously explained, the Return of Sheriff Caelas did not comply with the stringent requirements of Rule 14,
Section 8 on substituted service.

In the case of Venturanza v. Court of Appeals,[41] it was held that x x x the presumption of regularity in the performance of official
functions by the sheriff is not applicable in this case where it is patent that the sheriffs return is defective (emphasis supplied). While
the Sheriffs Return in the Venturanza case had no statement on the effort or attempt to personally serve the summons, the Return of
Sheriff Caelas in the case at bar merely described the efforts or attempts in general terms lacking in details as required by the ruling
in the case of Domagas v. Jensen and other cases. It is as if Caelas Return did not mention any effort to accomplish personal service.
Thus, the substituted service is void.

On the issue whether petitioner Manotoc is a resident of Alexandra Homes, Unit E-2104, at No. 29 Meralco Avenue, Pasig City, our
findings that the substituted service is void has rendered the matter moot and academic. Even assuming that Alexandra Homes Room
104 is her actual residence, such fact would not make an irregular and void substituted service valid and effective.

IN VIEW OF THE FOREGOING, this Petition for Review is hereby GRANTED and the assailed March 17, 1997 Decision and October 8,
1997 Resolution of the Court of Appeals and the October 11, 1994 and December 21, 1994 Orders of the Regional Trial Court,
National Capital Judicial Region, Pasig City, Branch 163 are hereby REVERSED and SET ASIDE. No costs.

SO ORDERED.

ucpb v ongpin
MENDOZA, J.:

This is a petition for review on certiorari of the decision, dated December 27, 2000, of the Court of Appeals,[1] setting aside the
orders, dated April 19, 1999 and October 13, 1999, of the Regional Trial Court, Branch 133, Makati City in Civil Case No. 95-1594
entitled United Coconut Planters Bank v. Roberto V. Ongpin.

The facts are as follows:

On November 17, 1994, Philippine Apparel, Inc. (PAI) entered into a credit agreement with petitioner United Coconut Planters Bank
for a case-to-case credit line in the amount of US$500,000.00. Respondent Roberto V. Ongpin, then controlling stockholder of PAI,
signed as surety, binding himself jointly and severally liable with PAI for the same amount. PAI availed of the credit line by drawing on
short-term loans and opening letters of credit for the importation of goods, which amounted to US$650,986.34 or P16,526,653.00.
[2]

As PAI failed to pay its obligations, petitioner filed a complaint against respondent Ongpin with the Regional Trial Court, Branch 133,
Makati to enforce his obligation as surety of PAI. Petitioner sought the issuance of a writ of preliminary attachment on the following
grounds: (1) respondent, in fraud of creditors, had transferred residence to Hongkong; (2) his obligation was not covered by any
collateral; and (3) PAI and its officers, including respondent, with intent to defraud, did not disclose the fact that the Bureau of
Customs had claims against PAI for unpaid customs duties and taxes in the amount of P284,010,387.00, which fact could have
affected petitioners decision whether to grant the loan to PAI.

On November 10, 1995, the trial court issued an order granting petitioners prayer for the issuance of a writ of preliminary
attachment. On November 16, 1995, a writ of attachment and a notice of garnishment were issued by the trial court, addressed to
the president and corporate secretary of the Dominion Asian Equities garnishing 8,315,600 shares of stock belonging to respondent.
[3]

On November 21, 1995, respondent, making a special appearance through counsel, moved to dismiss the complaint and to quash the
writ of attachment and garnishment on the ground that the trial court had no jurisdiction over the person of respondent, the
summons prepared on October 30, 1995 having been unserved as of November 17, 1995. The trial court denied the urgent motion as
well as respondents subsequent motion for reconsideration.[4]

On May 24, 1996, respondent filed a petition for certiorari in the Court of Appeals assailing the orders of the trial court. During the
pendency of the petition, on May 27, 1996, petitioner filed with the trial court a Motion for Leave to Serve Summons Through
Publication. Its motion was granted, but the publication was held in abeyance on October 2, 1996. On the same date, petitioner
entered into an agreement with TODAY for the publication of the summons on October 4, 11, and 18, 1996. Petitioner received the
trial courts order at the close of office hours on October 3, 1996. Attempts to prevent the publication by requesting the trial court
through telephone to inform the newspaper publisher of its order and informing the newspaper itself of the same proved futile, as
nobody in the court was contacted by petitioner while the telephone lines of the newspaper were busy. As a result, TODAY published
the summons on October 4, 1996. It was only on October 8, 1996 that petitioner was able to inform the newspaper of the October 2,
1996 order and to request the latter to hold in abeyance further publication of the summons.[5]

On February 27, 1997, the Court of Appeals promulgated its decision, the dispositive portion of which states:

THE FOREGOING CONSIDERED, the issuance of a Writ of Attachment together with the Notice of Garnishment is hereby validated:
but the implementation of the Writ of Attachment/Garnishment is prohibited until after the Court shall have acquired jurisdiction
over the person of the petitioner, either through voluntary appearance or service of summons.

SO ORDERED.[6]

On March 19, 1997, petitioner filed a motion for reconsideration with the appeals court insofar as it held that the trial court had no
jurisdiction on the person of petitioner and for this reason suspended implementation of the writ of attachment/garnishment.
However, the Court of Appeals denied petitioners motion.

On August 1, 1997, petitioner filed a petition for certiorari with this Court. Again, during the pendency of the case, petitioner filed
with the trial court on August 15, 1997 another Motion to Serve Summons through Publication with Leave of Court. In the meantime,
on August 27, 1997, this Court issued a resolution dismissing petitioners petition for review on certiorari for failure of petitioner to
comply with procedural requirements.[7]

On November 27, 1997, Deputy Sheriff Glenn B. Parra, together with Atty. Rodulfo Baculi, Jr., representative of petitioner, went to the
PILTEL office at the Bankers Center Building, Ayala Avenue, Makati City to serve summons on respondent, who was then the
chairman of the board of PILTEL and was expected to attend a board meeting on that day. Upon arrival, they asked the receptionist,
Arlene Cuenco, if respondent would attend the meeting. Cuenco conferred with Anne V. Morallo, executive secretary of the president
of PILTEL, who then called respondents office at the BA Lepanto Building, Paseo de Roxas Ave., Makati City. Morallo was informed
that respondent was not going to attend the meeting. Nevertheless, Sheriff Parra and Atty. Baculi waited until 11:30 a. m. They
proceeded to respondents office at the BA Lepanto Building when respondent failed to appear at the board meeting. The security
guard at BA Lepanto told them that respondent was holding office at the 14th floor, but when they reached the said floor, they were
told by a member of the Internal Security Personnel that respondent was not known at that place.

In the afternoon of the same day, Sheriff Parra returned to the PILTEL office to serve the summons on respondent. There, he met for
the first time Anne V. Morallo, who told him that she was authorized to receive court processes for and on behalf of respondent even
though the latter was not holding office in the building. Morallo was so advised by Atty. Joseph Santiago, Chief of the Legal
Department of PILTEL. Thus, Sheriff Parra served the summons on Morallo who received it accordingly. However, when Morallo tried
to forward the court process to respondent, the latters lawyer, Atty. David S. Narvasa, refused to receive it.[8]

After serving summons through Morallo, Sheriff Parra then implemented the writ of attachment by serving notices of garnishment
on the following: (1) Stock Transfer Office - FEBTC; (2) Professional Stock Transfer; (3) Stock Transfer Services; (4) The Corporate
Secretary, Belle Corp., Tagaytay Highlands; and (5) International Exchange Bank, Head Office and all branches thereof.[9]

On December 4, 1997, respondent filed with the trial court an Urgent Omnibus Motion: (a) to Dismiss; (b) for Prohibition of the
Implementation of the Writ of Attachment dated 16 November 1995; (c) for Quashal of the Notice of Garnishment dated 27
November 1997; and (d) for Release of Properties attached thereby. On April 19, 1999, the trial court denied respondents motion for
lack of merit. Respondents motion for reconsideration was likewise denied on October 13, 1999.

Consequently, respondent filed a petition for certiorari with application for a Temporary Restraining Order and Writ of Preliminary
Injunction in the Court of Appeals. The Court of Appeals promulgated its decision on December 27, 2000, annulling and setting aside
the orders of the trial court, dated April 19, 1999 and October 13, 1999, on the ground that PILTEL was not the regular place of
business of respondent and that, even if it was, Morallo could not be considered a competent person in charge of respondents office,
as she was the executive secretary of the president of PILTEL and not of respondent. Hence, this petition for review under Rule 45 of
the Revised Rules of Civil Procedure.[10]

Petitioner makes the following assignment of errors:

THE COURT OF APPEALS ERRED IN ANNULLING THE ORDERS OF THE TRIAL COURT DATED 19 APRIL 1999 AND 13 OCTOBER 1999
BECAUSE:

I. RESPONDENT ONGPIN, AFTER FIVE LONG YEARS OF SPECIAL APPEARANCE, SHOULD BE DEEMED TO HAVE VOLUNTARILY SUBJECTED
HIMSELF TO THE JURISDICTION OF THE TRIAL COURT.

II. THE SUBSTITUTED SERVICE OF SUMMONS ON RESPONDENT ONGPIN ON 27 NOVEMBER 1997 WAS VALID, CONSIDERING THAT:

A. RESPONDENT ONGPIN, AT THE TIME OF SUBSTITUTED SERVICE OF SUMMONS, WAS CHAIRMAN OF THE BOARD OF DIRECTORS OF
PILTEL WHOSE OFFICES SHOULD BE CONSIDERED HIS REGULAR PLACE OF BUSINESS.

B. MS. ANNE V. MORALLO, THE EXECUTIVE SECRETARY OF THE PRESIDENT OF PILTEL WAS NOT ONLY AUTHORIZED TO RECEIVE
SUMMONS AND COURT PROCESSES ON BEHALF OF RESPONDENT ONGPIN, BUT WAS ALSO A COMPETENT PERSON TO RECEIVE
SUMMONS.

C. THE ONLY REASON WHY MS. ANNE V. MORALLO DID NOT TRANSMIT THE SUMMONS TO RESPONDENT ONGPIN WAS THAT
RESPONDENT ONGPINS COUNSEL, ALSO THE LEGAL COUNSEL OF PILTEL, ADVISED HER TO KEEP IT.

This assignment of errors boils down to the following questions: (1) whether or not respondent Ongpins continuous special
appearances before the court for five years may be deemed voluntary appearance as contemplated by the Revised Rules on Civil
Procedure on acquisition of jurisdiction over the person of defendant; and (2) whether or not the substituted service of summons on
Anne V. Morallo, executive secretary of the president of PILTEL, was valid.

First. Petitioner maintains that the trial court had already acquired jurisdiction over the person of respondent Ongpin by virtue of the
numerous appearances by his counsel and respondents undeniable knowledge of the complaint against him.

This contention has no merit. A party who makes a special appearance in court challenging the jurisdiction of said court based on the
ground, e. g., invalidity of the service of summons, cannot be considered to have submitted himself to the jurisdiction of the court.
[11] In fact, in La Naval Drug Corp. vs. Court of Appeals,[12] this Court ruled that even the assertion of affirmative defenses aside
from lack of jurisdiction over the person of the defendant cannot be considered a waiver of the defense of lack of jurisdiction over
such person.

In the present case, although respondent had indeed filed numerous pleadings, these pleadings were precisely for the purpose of
contesting the jurisdiction of the court over the person of respondent on the ground that there was no valid service of summons on
him. It would be absurd to hold that respondent, by making such appearance, thereby submitted himself to the jurisdiction of the
court.

Petitioner cites the ruling in Macapagal v. Court of Appeals[13] for its contention that the feigned unawareness of a defendant is
equivalent to voluntary appearance. The facts of Macapagal are, however, different from the facts of this case. In that case, this Court
considered the petitioner to have been validly served summons based on its findings that summons was served on the legal counsel
of the two corporations and its officers and directors. Petitioners defense that at the time of the service of summons he was no
longer connected with both corporations, having resigned from them before such service, was dismissed by this Court as flimsy. The
finding of this Court on the feigned unawareness of petitioner was based on the fact that Philfinances woes were widely publicized.
This, together with counsels authority to receive service of summons on behalf of petitioner, was the basis for this Courts ruling that
jurisdiction over the person of the latter had already been acquired by the trial court.

In contrast, summons in this case was served on the executive secretary of the president of PILTEL, a company which is not a party to
the present action. Respondent Ongpin, through counsel, entered numerous special appearances in court precisely to question the
courts jurisdiction over his person either due to failure to serve summons or to an invalid service of summons on him. Jurisdiction
cannot be acquired over the person of respondent even if he knows of the case against him unless he is validly served with
summons.[14]

Second. Petitioner contends that the Court of Appeals erred in ruling that (1) substituted service of summons at the PILTEL office
where respondent sits as chairman of the board is invalid as the PILTEL office is not his regular place of business; and (2) Anne V.
Morallo, the executive secretary of PILTELs president, was not authorized to receive the summons on behalf of respondent Ongpin as
she was not his executive secretary but that of the presidents.

We think no error was incurred by the Court of Appeals in this ruling. Rule 14, 7 of the 1997 Revised Rules of Civil Procedure provides
that if, for justifiable causes, personal service cannot be effected on defendant, service may be effected (a) by leaving copies of the
summons at the defendants residence with some person of suitable age and discretion residing therein, or (b) by leaving the copies
at defendants office or regular place of business with some competent person in charge thereof.[15] The word office or the phrase
regular place of business refers to the office or place of business of the defendant at the time of service. The rule specifically
designates the persons to whom copies of the process should be left. In Mapa vs. Court of Appeals,[16] substituted service of
summons in a person claiming to be authorized to receive service of summons in behalf of the corporation was held to be invalid as
far as jurisdiction over the person of the chairman of the board was concerned inasmuch as he was not holding office in the
corporation but in his residence. Thus, it does not necessarily follow that the regular place of business of a chairman of the board of
directors is the same as the address of the corporation as it is possible for him to hold office elsewhere.
In the case at bar, the corporation (PILTEL), where substituted summons was served and of which respondent was the chairman of
the board, was not even a party to the present suit. Respondent was sued in his personal capacity as surety for PAI. Even from the
initial inquiries made by the sheriff and petitioners representative in the office of PILTEL, it was evident that respondent was not
holding office there. Indeed, Morallo, executive secretary of the PILTEL, had to call respondents secretary at the BA Lepanto Building,
Paseo de Roxas, to find out whether he was attending the board meeting to be held on that day. Thus, the process server already
knew that respondent was not holding office at the PILTEL office but somewhere else.

As the PILTEL office is not respondents regular place of business, it cannot therefore be said that Anne V. Morallo, the person who
received the service of summons in behalf of respondent, was authorized to receive service of process on behalf of respondent.

Third. It is not clear whether respondent could be personally served with summons because he had transferred residence to
Hongkong. Thus in its complaint, petitioner alleged that respondents address was either at ATA Capital Corporation, 3404 1 Exchange
Square, #8 Connaught Place, Central Hongkong or South China Morning, Post Center #22 Tai Fat Street, Taipo Industrial Estate, Taipo,
New Territories, Hongkong. But later, it tried to personally serve summons on respondent at the PILTEL office, where he served as
chairman of the board of directors. When respondent failed to attend the meeting, the process server proceeded to the BA Lepanto
Building, Paseo de Roxas, Makati City, where, as the process server learned from Morallo, respondent was allegedly holding office.

Under the Rules, if a defendant is a non-resident and his property in the Philippines had been attached, service may, by leave of
court, be effected outside the Philippines or by publication in a newspaper of general circulation.[17] In the same manner, if the
whereabouts of the defendant is unknown and cannot be ascertained by diligent inquiry, service may, by leave of court, likewise be
effected by publication in a newspaper of general circulation.[18] In this case, the plaintiff must show that the address of defendant
is unknown and cannot be ascertained by diligent inquiry.[19]

It is clear that petitioner is not without remedy under the Revised Rules of Civil Procedure to enforce the writ of attachment through
a valid service of summons. If, indeed, respondent is no longer a resident of the Philippines, petitioner still can, by leave of court,
serve summons by publication, as it in fact tried to do. The records show that petitioner attempted to serve summons by publication,
but later abandoned its effort and for some reason attempted personal service instead.

If, on the other hand, respondent is a resident and petitioner cannot determine the correct address of respondent, petitioner only
needs to show that respondents address is unknown and cannot be ascertained by diligent inquiry. Upon compliance with this
requirement, it can validly serve summons by publication in a newspaper of general circulation.

Petitioner cannot fall back on allegations of knowledge of respondent to avoid complying with the standards and guidelines set by
the Rules. What we said in Oate v. Abrogar[20]bears repeating in this case:

... More important than the need for insuring success in the enforcement of the writ is the need for affirming a principle on that most
fundamental of all requisites the jurisdiction of the court issuing attachment over the person of the defendant. It may be that the
same result would follow from requiring that a new writ be served all over again. The symbolic significance of such an act, however,
is that it would affirm our commitment to the rule of law.

WHEREFORE, the decision of the Court of Appeals is affirmed. No pronouncement as to costs.

SO ORDERED.

domagas vs jensen- residence is not synonymous with domicile in relation to service of summons

CALLEJO, SR., J.:

This is a petition for review on certiorari, under Rule 45 of the Rules of Court, of the Decision[1] of the Court of Appeals (CA) in CA-
G.R. CV No. 73995, which affirmed the Decision[2] of the Regional Trial Court (RTC) of Dagupan City, Branch 44, in Civil Case No.
2000-0244-D, which declared null and void the decision of the Municipal Trial Court (MTC) of Calasiao, Pangasinan in Civil Case No.
879.[3]

The antecedent facts follow.

On February 19, 1999, petitioner Filomena Domagas filed a complaint for forcible entry against respondent Vivian Jensen before the
MTC of Calasiao, Pangasinan. The petitioner alleged in her complaint that she was the registered owner of a parcel of land covered
by Original Certificate of Title (OCT) No. P-30980, situated in Barangay Buenlag, Calasiao, Pangasinan, and with an area of 827 square
meters. On January 9, 1999 the respondent, by means of force, strategy and stealth, gained entry into the petitioners property by
excavating a portion thereof and thereafter constructing a fence thereon. As such, the petitioner was deprived of a 68-square meter
portion of her property along the boundary line. The petitioner prayed that, after due proceedings, judgment be rendered in her
favor, thus:

3. And, after trial, judgment be rendered:


a) DECLARING the writ of Preliminary Mandatory Injunction and Writ of Preliminary Injunction permanent;

b) ORDERING defendant, his representatives, agents and persons acting under her, to vacate the portion of the property of the
plaintiff occupied by them and to desist from entering, excavating and constructing in the said property of the plaintiff described in
paragraph 2 hereof and/or from disturbing the peaceful ownership and possession of the plaintiff over the said land, pending the
final resolution of the instant action;

c) ORDERING defendant to pay reasonable rental at FIVE THOUSAND (P5,000.00) PESOS per month from January 9, 1999 up to the
time she finally vacates and removes all constructions made by her in the property of the plaintiff and up to the time she finally
restores the said property in the condition before her illegal entry, excavation and construction in the property of the plaintiff;

d) ORDERING defendant to pay actual damages in the amount of TWENTY THOUSAND (P20,000.00) PESOS; moral damages in the
amount of TWENTY THOUSAND (P20,000.00) PESOS; attorneys fees of THIRTY THOUSAND (P30,000.00) PESOS in retainers fee and
ONE THOUSAND FIVE HUNDRED (P1,500.00) PESOS per court appearance fee; exemplary damages in the amount of TWENTY
THOUSAND (P20,000.00) PESOS, and, costs.

Plaintiff further prays for other reliefs and remedies just and equitable in the premises.[4]

The case was docketed as Civil Case No. 879. The summons and the complaint were not served on the respondent because the latter
was apparently out of the country. This was relayed to the Sheriff by her (the respondents) brother, Oscar Layno, who was then in the
respondents house at No. 572 Barangay Buenlag, Calasiao, Pangasinan. The Sheriff left the summons and complaint with Oscar
Layno, who received the same.[5]

Nonetheless, on May 17, 1999, the court rendered judgment ordering the respondent and all persons occupying the property for and
in the latters behalf to vacate the disputed area and to pay monthly rentals therefor, including actual damages, attorneys fees, and
exemplary damages. The fallo of the decision reads:

1) Ordering the defendant, her representatives, agents and persons acting under her, to vacate the 68-square meters which she
encroached upon;

2) Ordering the defendant to pay a monthly rental of P1,000.00 to the plaintiff;

3) To pay plaintiff actual damages of P20,000.00; attorneys fees of P15,000.00 and exemplary damages in the amount of P20,000.00
plus the costs.

SO ORDERED.[6]

The respondent failed to appeal the decision. Consequently, a writ of execution was issued on September 27, 1999.

On August 16, 2000, the respondent filed a complaint against the petitioner before the RTC of Dagupan City for the annulment of the
decision of the MTC in Civil Case No. 879, on the ground that due to the Sheriffs failure to serve the complaint and summons on her
because she was in Oslo, Norway, the MTC never acquired jurisdiction over her person. The respondent alleged therein that the
service of the complaint and summons through substituted service on her brother, Oscar Layno, was improper because of the
following: (a) when the complaint in Civil Case No. 879 was filed, she was not a resident of Barangay Buenlag, Calasiao, Pangasinan,
but of Oslo, Norway, and although she owned the house where Oscar Layno received the summons and the complaint, she had then
leased it to Eduardo Gonzales; (b) she was in Oslo, Norway, at the time the summons and the complaint were served; (c) her brother,
Oscar Layno, was merely visiting her house in Barangay Buenlag and was not a resident nor an occupant thereof when he received
the complaint and summons; and (d) Oscar Layno was never authorized to receive the summons and the complaint for and in her
behalf.[7]

The respondent further alleged that the MTC had no jurisdiction over the subject matter of the complaint in Civil Case No. 879
because the petitioner, the plaintiff therein, failed to show prior possession of the property. She further claimed that the alleged
forcible entry was simply based on the result of the survey conducted by Geodetic Engineer Leonardo de Vera showing that the
property of the respondent encroached on that of the petitioner.

The respondent filed a Manifestation dated August 31, 2000, and appended thereto the following: (a) a copy[8] of her passport
showing that she left the country on February 17, 1999; (b) a copy[9] of the Contract of Lease dated November 24, 1997, executed by
her and Eduardo D. Gonzales over her house for a period of three (3) years or until November 24, 2000; (c) her affidavit[10] stating,
inter alia, that she owned the house at Barangay Buenlag, Calasiao, Pangasinan, which she leased to Eduardo Gonzales; that she was
married to Jarl Jensen, a citizen of Norway, on August 23, 1987 and had resided in Norway with her husband since 1993; that she
arrived in the Philippines on December 31, 1998, but left on February 17, 1999; she returned to the Philippines on July 30, 2000 and
learned, only then, of the complaint against her and the decision of the MTC in Civil Case No. 879; her brother Oscar Layno was not a
resident of the house at Barangay Buenlag; and that she never received the complaint and summons in said case; (d) the affidavit[11]
of Oscar Layno declaring that sometime in April 1999, he was in the respondents house to collect rentals from Eduardo Gonzales;
that the Sheriff arrived and served him with a copy of the summons and the complaint in Civil Case No. 879; and that he never
informed the respondent of his receipt of the said summons and complaint; (e) an affidavit[12] of Eduardo Gonzales stating that he
leased the house of the respondent and resided thereat; the respondent was not a resident of the said house although he (Gonzales)
allowed the respondent to occupy a room therein whenever she returned to the Philippines as a balikbayan; and that Oscar Layno
was not residing therein but only collected the rentals.

In her answer to the complaint, the petitioner alleged that the respondent was a resident of Barangay Buenlag, Calasiao, Pangasinan
and was the owner of the subject premises where Oscar Layno was when the Sheriff served the summons and complaint; that the
service of the complaint and summons by substituted service on the respondent, the defendant in Civil Case No. 879, was proper
since her brother Oscar Layno, a resident and registered voter of Barangay. Buenlag, Calasiao, Pangasinan, received the complaint
and summons for and in her behalf.

The petitioner appended the following to her answer: (a) a copy[13] of the Deed of Absolute Sale executed by Jose Layno in her
favor, dated August 26, 1992, showing that the respondent was a resident of Barangay Buenlag, Calasiao, Pangasinan; (b) a Real
Estate Mortgage[14] executed by the respondent, dated February 9, 1999 showing that she was a resident of Barangay Buenlag,
Calasiao, Pangasinan; (c) the Joint Affidavit[15] of Vicenta Peralta and Orlando Macalanda, both residents of Barangay Buenlag,
Calasiao, Pangasinan, declaring that the respondent and her brother Oscar Layno were their neighbors; that the respondent and her
brother had been residents of Barangay Buenlag since their childhood; that although the respondent left the country on several
occasions, she returned to the Philippines and resided in her house at No. 572 located in the said barangay; and (d) the Voters
Registration Record[16] of Oscar Layno, approved on June 15, 1997.

After due proceedings, the trial court rendered a decision in favor of the respondent. The dispositive portion reads:

WHEREFORE, judgment is rendered in favor of plaintiff Vivian Layno Jensen and against defendant Filomena Domagas, as follows:

1. The Decision of the Municipal Trial Court of Calasiao, Pangasinan in Civil Case No. 879, entitled Filomena Domagas versus Vivian
Layno Jensen is declared null and void, for lack of jurisdiction over the person of the plaintiff and the subject matter.

2. Defendant Filomena Domagas is ordered to pay plaintiff, the following:

a.) Actual damages, representing litigation expenses in the amount of P50,000.00;

b.) Attorneys fees in the amount of P50,000.00;

c.) Moral Damages in the amount of P50,000.00;

d.) Exemplary Damages in the amount of P50,000.00; and

e.) Costs of suit.

SO ORDERED.[17]

The trial court declared that there was no valid service of the complaint and summons on the respondent, the defendant in Civil Case
No. 879, considering that she left the Philippines on February 17, 1999 for Oslo, Norway, and her brother Oscar Layno was never
authorized to receive the said complaint and summons for and in her behalf.

The petitioner appealed the decision to the CA which, on May 6, 2003, rendered judgment affirming the appealed decision with
modifications. The CA ruled that the complaint in Civil Case No. 879 was one for ejectment, which is an action quasi in rem. The
appellate court ruled that since the defendant therein was temporarily out of the country, the summons and the complaint should
have been served via extraterritorial service under Section 15 in relation to Section 16, Rule 14 of the Rules of Court, which likewise
requires prior leave of court. Considering that there was no prior leave of court and none of the modes of service prescribed by the
Rules of Court was followed by the petitioner, the CA concluded that there was really no valid service of summons and complaint
upon the respondent, the defendant in Civil Case No. 879.

Hence, the present petition.

The petitioner assails the decision of the CA, alleging that the appellate court erred in holding that the respondents complaint for
ejectment is an action quasi in rem. The petitioner insists that the complaint for forcible entry is an action in personam; therefore,
substituted service of the summons and complaint on the respondent, in accordance with Section 7, Rule 14 of the Rules of Court, is
valid. The petitioner, likewise, asserts that Oscar Layno is a resident and a registered voter of Barangay Buenlag, Calasiao, Pangasinan;
hence, the service of the complaint and summons on the respondent through him is valid.

The respondent, on the other hand, asserts that the action for forcible entry filed against her was an action quasi in rem, and that
the applicable provision of the Rules of Court is Section 15 of Rule 14, which calls for extraterritorial service of summons.

The sole issue is whether or not there was a valid service of the summons and complaint in Civil Case No. 879 on the respondent
herein who was the defendant in the said case. The resolution of the matter is anchored on the issue of whether or not the action of
the petitioner in the MTC against the respondent herein is an action in personam or quasi in rem.
The ruling of the CA that the petitioners complaint for forcible entry of the petitioner against the respondent in Civil Case No. 879 is
an action quasi in rem, is erroneous. The action of the petitioner for forcible entry is a real action and one in personam.

The settled rule is that the aim and object of an action determine its character.[18] Whether a proceeding is in rem, or in personam,
or quasi in rem for that matter, is determined by its nature and purpose, and by these only.[19] A proceeding in personam is a
proceeding to enforce personal rights and obligations brought against the person and is based on the jurisdiction of the person,
although it may involve his right to, or the exercise of ownership of, specific property, or seek to compel him to control or dispose of
it in accordance with the mandate of the court.[20] The purpose of a proceeding in personam is to impose, through the judgment of
a court, some responsibility or liability directly upon the person of the defendant.[21] Of this character are suits to compel a
defendant to specifically perform some act or actions to fasten a pecuniary liability on him.[22] An action in personam is said to be
one which has for its object a judgment against the person, as distinguished from a judgment against the propriety to determine its
state. It has been held that an action in personam is a proceeding to enforce personal rights or obligations; such action is brought
against the person. As far as suits for injunctive relief are concerned, it is well-settled that it is an injunctive act in personam.[23] In
Combs v. Combs,[24] the appellate court held that proceedings to enforce personal rights and obligations and in which personal
judgments are rendered adjusting the rights and obligations between the affected parties is in personam. Actions for recovery of real
property are in personam.[25]

On the other hand, a proceeding quasi in rem is one brought against persons seeking to subject the property of such persons to the
discharge of the claims assailed.[26] In an action quasi in rem, an individual is named as defendant and the purpose of the
proceeding is to subject his interests therein to the obligation or loan burdening the property.[27] Actions quasi in rem deal with the
status, ownership or liability of a particular property but which are intended to operate on these questions only as between the
particular parties to the proceedings and not to ascertain or cut off the rights or interests of all possible claimants. The judgments
therein are binding only upon the parties who joined in the action.[28]

Section 1, Rule 70 of the Rules of Court provides:

Section 1. Who may institute proceedings, and when. - Subject to the provisions of the next succeeding section, a person deprived of
the possession of any land or building in force, intimidation, threat, strategy, or stealth, or a lessor, vendor, vendee, or other person
against whom the possession of any land or building is unlawfully withheld after the expiration or termination of the right to hold
possession by virtue of any contract, express or implied, or the legal representatives or assigns of any such lessor, vendor, vendee, or
other person, may, at any time within one (1) year after such unlawful deprivation or withholding of possession, bring an action in
the proper Municipal Trial Court against the person or persons unlawfully withholding or depriving of possession, or any person or
persons claiming under them, for the restitution of such possession, together with damages and costs.

Under Section 15, Rule 70 of the said Rule, the plaintiff may be granted a writ of preliminary prohibition or mandatory injunction:

Sec. 15. Preliminary Injunction. The court may grant preliminary injunction, in accordance with the provisions of Rule 58 hereof, to
prevent the defendant from committing further acts of dispossession against the plaintiff.

A possessor deprived of his possession through forcible entry or unlawful detainer may, within five (5) days from the filing of the
complaint, present a motion in the action for forcible entry or unlawful detainer for the issuance of a writ of preliminary mandatory
injunction to restore him in his possession. The court shall decide the motion within thirty (30) days from the filing thereof.

If, after due proceedings, the trial court finds for the plaintiff, it shall then render judgment in his or her favor, thus:

Sec. 17. Judgment. If, after trial, the court finds that the allegations of the complaint are true, it shall render judgment in favor of the
plaintiff for the restitution of the premises, the sum justly due as arrears of rent or as reasonable compensation for the use and
occupation of the premises, attorneys fees and costs. If it finds that said allegations are not true, it shall render judgment for the
defendant to recover his costs. If a counterclaim is established, the court shall render judgment for the sum found in arrears from
either party and award costs as justice requires.

From the aforementioned provisions of the Rules of Court and by its very nature and purpose, an action for unlawful detainer or
forcible entry is a real action and in personam because the plaintiff seeks to enforce a personal obligation or liability on the
defendant under Article 539 of the New Civil Code,[29] for the latter to vacate the property subject of the action, restore physical
possession thereof to the plaintiff, and pay actual damages by way of reasonable compensation for his use or occupation of the
property.[30]

As gleaned from the averments of the petitioners complaint in the MTC, she sought a writ of a preliminary injunction from the MTC
and prayed that the said writ be made permanent. Under its decision, the MTC ordered the defendant therein (the respondent in
this case), to vacate the property and pay a monthly rental of P1,000.00 to the plaintiff therein (the petitioner in this case).

On the issue of whether the respondent was validly served with the summons and complaint by the Sheriff on April 5, 1999, the
petitioner asserts that since her action of forcible entry against the respondent in Civil Case No. 879 was in personam, summons may
be served on the respondent, by substituted service, through her brother, Oscar Layno, in accordance with Section 7, Rule 14 of the
Rules of Court. The petitioner avers that Oscar Layno, a person of suitable age and discretion, was residing in the house of the
respondent on April 5, 1999. She avers that the fact that the house was leased to and occupied by Eduardo Gonzales was of no
moment. Moreover, the Sheriff is presumed to have performed his duty of properly serving the summons on the respondent by
substituted service.

The contention of the petitioner has no merit.

In Asiavest Limited v. Court of Appeals,[31] the Court had the occasion to state:

In an action in personam, jurisdiction over the person of the defendant is necessary for the court to validly try and decide the case.
Jurisdiction over the person of a resident defendant who does not voluntarily appear in court can be acquired by personal service of
summons as provided under Section 7, Rule 14 of the Rules of Court. If he cannot be personally served with summons within a
reasonable time, substituted service may be made in accordance with Section 8 of said Rule. If he is temporarily out of the country,
any of the following modes of service may be resorted to: (a) substituted service set forth in Section 8; (2) personal service outside
the country, with leave of court; (3) service by publication, also with leave of court; or (4) any other manner the court may deem
sufficient.[32]

Thus, any judgment of the court which has no jurisdiction over the person of the defendant is null and void.[33]

In the present case, the records show that the respondent, before and after his marriage to Jarl Jensen on August 23, 1987, remained
a resident of Barangay Buenlag, Calasiao, Pangasinan. This can be gleaned from the Deed of Absolute Sale dated August 26, 1992 in
which she declared that she was a resident of said barangay. Moreover, in the Real Estate Mortgage Contract dated February 9, 1999,
ten days before the complaint in Civil Case No. 879 was filed, the petitioner categorically stated that she was a Filipino and a resident
of Barangay Buenlag, Calasiao, Pangasinan. Considering that the respondent was in Oslo, Norway, having left the Philippines on
February 17, 1999, the summons and complaint in Civil Case No. 879 may only be validly served on her through substituted service
under Section 7, Rule 14 of the Rules of Court, which reads:

SEC. 7. Substituted service. If, for justifiable causes, the defendant cannot be served within a reasonable time as provided in the
preceding section, service may be effected (a) by leaving copies of the summons at the defendants residence with some person of
suitable age and discretion then residing therein, or (b) by leaving the copies at defendants office or regular place of business with
some competent person in charge thereof.

Strict compliance with the mode of service is required in order that the court may acquire jurisdiction over the person of the
defendant.[34] The statutory requirement of substituted service must be followed faithfully and strictly and any substituted service
other than that authorized by the statute is rendered ineffective.[35] As the Court held in Hamilton v. Levy:[36]

The pertinent facts and circumstances attendant to the service of summons must be stated in the proof of service or Officers Return;
otherwise, any substituted service made in lieu of personal service cannot be upheld. This is necessary because substituted service is
in derogation of the usual method of service. It is a method extraordinary in character and hence may be used only as prescribed and
in the circumstances authorized by statute. Here, no such explanation was made. Failure to faithfully, strictly, and fully comply with
the requirements of substituted service renders said service ineffective.[37]

In Keister v. Narcereo,[38] the Court held that the term dwelling house or residence are generally held to refer to the time of service;
hence, it is not sufficient to leave the summons at the formers dwelling house, residence or place of abode, as the case may be.
Dwelling house or residence refers to the place where the person named in the summons is living at the time when the service is
made, even though he may be temporarily out of the country at the time. It is, thus, the service of the summons intended for the
defendant that must be left with the person of suitable age and discretion residing in the house of the defendant. Compliance with
the rules regarding the service of summons is as much important as the issue of due process as of jurisdiction.[39]

The Return of Service filed by Sheriff Eduardo J. Abulencia on the service of summons reads:

Respectfully returned to the court of origin the herein summons and enclosures in the above-entitled case, the undersigned caused
the service on April 5, 1999.

Defendant Vivian Layno Jensen is out of the country as per information from her brother Oscar Layno, however, copy of summons
and enclosures was received by her brother Oscar Layno on April 5, 1999 as evidenced by his signature appearing in the original
summons.

Calasiao, Pangasinan, April 6, 1999.

(Sgd.)

EDUARDO J. ABULENCIA

Junior Process Server[40]

As gleaned from the said return, there is no showing that as of April 5, 1999, the house where the Sheriff found Oscar Layno was the
latters residence or that of the respondent herein. Neither is there any showing that the Sheriff tried to ascertain where the
residence of the respondent was on the said date. It turned out that the occupant of the house was a lessor, Eduardo Gonzales, and
that Oscar Layno was in the premises only to collect the rentals from him. The service of the summons on a person at a place where
he was a visitor is not considered to have been left at the residence or place or abode, where he has another place at which he
ordinarily stays and to which he intends to return.[41]

The Voters Registration Record of Oscar Layno dated June 15, 1997 wherein he declared that he was a resident of No. 572 Barangay
Buenlag, Calasiao, Pangasinan, as well as the Joint Affidavit of Vicenta Peralta and Orlando Macasalda cannot prevail over the
Contract of Lease the respondent had executed in favor of Eduardo Gonzales showing that the latter had resided and occupied the
house of the respondent as lessee since November 24, 1997, and the affidavit of Eduardo Gonzales that Oscar Layno was not residing
in the said house on April 5, 1999.

In sum, then, the respondent was not validly served with summons and the complaint in Civil Case No. 879 on April 5, 1999, by
substituted service. Hence, the MTC failed to acquire jurisdiction over the person of the respondent; as such, the decision of the MTC
in Civil Case No. 879 is null and void.

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for lack of merit. No costs.

SO ORDERED.

SECTION 11
e. b villarosa &partner co.,ltd v judge benito

GONZAGA-REYES, J.:

Before this Court is a petition for certiorari and prohibition with prayer for the issuance of a temporary restraining order and/or writ
of preliminary injunction seeking to annul and set aside the Orders dated August 5, 1998 and November 20, 1998 of the public
respondent Judge Herminio I. Benito of the Regional Trial Court of Makati City, Branch 132 and praying that the public respondent
court be ordered to desist from further proceeding with Civil Case No. 98-824.

Petitioner E.B. Villarosa & Partner Co., Ltd. is a limited partnership with principal office address at 102 Juan Luna St., Davao City and
with branch offices at 2492 Bay View Drive, Tambo, Paraaque, Metro Manila and Kolambog, Lapasan, Cagayan de Oro City. Petitioner
and private respondent executed a Deed of Sale with Development Agreement wherein the former agreed to develop certain parcels
of land located at Barrio Carmen, Cagayan de Oro belonging to the latter into a housing subdivision for the construction of low cost
housing units. They further agreed that in case of litigation regarding any dispute arising therefrom, the venue shall be in the proper
courts of Makati.

On April 3, 1998, private respondent, as plaintiff, filed a Complaint for Breach of Contract and Damages against petitioner, as
defendant, before the Regional Trial Court of Makati allegedly for failure of the latter to comply with its contractual obligation in that,
other than a few unfinished low cost houses, there were no substantial developments therein.[1]

Summons, together with the complaint, were served upon the defendant, through its Branch Manager Engr. Wendell Sabulbero at
the stated address at Kolambog, Lapasan, Cagayan de Oro City[2] but the Sheriffs Return of Service[3] stated that the summons was
duly served upon defendant E. B. Villarosa & Partner Co., Ltd. thru its Branch Manager Engr. WENDELL SALBULBERO on May 5, 1998
at their new office Villa Gonzalo, Nazareth, Cagayan de Oro City, and evidenced by the signature on the face of the original copy of
the summons.

On June 9, 1998, defendant filed a Special Appearance with Motion to Dismiss[4]alleging that on May 6, 1998, summons intended for
defendant was served upon Engr. Wendell Sabulbero, an employee of defendant at its branch office at Cagayan de Oro City.
Defendant prayed for the dismissal of the complaint on the ground of improper service of summons and for lack of jurisdiction over
the person of the defendant. Defendant contends that the trial court did not acquire jurisdiction over its person since the summons
was improperly served upon its employee in its branch office at Cagayan de Oro City who is not one of those persons named in
Section 11, Rule 14 of the 1997 Rules of Civil Procedure upon whom service of summons may be made.

Meanwhile, on June 10, 1998, plaintiff filed a Motion to Declare Defendant in Default[5] alleging that defendant has failed to file an
Answer despite its receipt allegedly on May 5, 1998 of the summons and the complaint, as shown in the Sheriffs Return.

On June 22, 1998, plaintiff filed an Opposition to Defendants Motion to Dismiss[6] alleging that the records show that defendant,
through its branch manager, Engr. Wendell Sabulbero actually received the summons and the complaint on May 8, 1998 as evidenced
by the signature appearing on the copy of the summons and not on May 5, 1998 as stated in the Sheriffs Return nor on May 6, 1998
as stated in the motion to dismiss; that defendant has transferred its office from Kolambog, Lapasan, Cagayan de Oro to its new
office address at Villa Gonzalo, Nazareth, Cagayan de Oro; and that the purpose of the rule is to bring home to the corporation notice
of the filing of the action.

On August 5, 1998, the trial court issued an Order[7] denying defendants Motion to Dismiss as well as plaintiffs Motion to Declare
Defendant in Default. Defendant was given ten (10) days within which to file a responsive pleading. The trial court stated that since
the summons and copy of the complaint were in fact received by the corporation through its branch manager Wendell Sabulbero,
there was substantial compliance with the rule on service of summons and consequently, it validly acquired jurisdiction over the
person of the defendant.

On August 19, 1998, defendant, by Special Appearance, filed a Motion for Reconsideration[8] alleging that Section 11, Rule 14 of the
new Rules did not liberalize but, on the contrary, restricted the service of summons on persons enumerated therein; and that the
new provision is very specific and clear in that the word manager was changed to general manager, secretary to corporate secretary,
and excluding therefrom agent and director.

On August 27, 1998, plaintiff filed an Opposition to defendants Motion for Reconsideration[9] alleging that defendants branch
manager did bring home to the defendant-corporation the notice of the filing of the action and by virtue of which a motion to
dismiss was filed; and that it was one (1) month after receipt of the summons and the complaint that defendant chose to file a
motion to dismiss.

On September 4, 1998, defendant, by Special Appearance, filed a Reply[10] contending that the changes in the new rules are
substantial and not just general semantics.

Defendants Motion for Reconsideration was denied in the Order dated November 20, 1998.[11]

Hence, the present petition alleging that respondent court gravely abused its discretion tantamount to lack or in excess of jurisdiction
in denying petitioners motions to dismiss and for reconsideration, despite the fact that the trial court did not acquire jurisdiction over
the person of petitioner because the summons intended for it was improperly served. Petitioner invokes Section 11 of Rule 14 of the
1997 Rules of Civil Procedure.

Private respondent filed its Comment to the petition citing the cases of Kanlaon Construction Enterprises Co., Inc. vs. NLRC[12]
wherein it was held that service upon a construction project manager is valid and in Gesulgon vs. NLRC[13] which held that a
corporation is bound by the service of summons upon its assistant manager.

The only issue for resolution is whether or not the trial court acquired jurisdiction over the person of petitioner upon service of
summons on its Branch Manager.

When the complaint was filed by Petitioner on April 3, 1998, the 1997 Rules of Civil Procedure was already in force.[14]

Section 11, Rule 14 of the 1997 Rules of Civil Procedure provides that:

When the defendant is a corporation, partnership or association organized under the laws of the Philippines with a juridical
personality, service may be made on the president, managing partner, general manager, corporate secretary, treasurer, or in-house
counsel. (underscoring supplied).

This provision revised the former Section 13, Rule 14 of the Rules of Court which provided that:

SEC. 13. Service upon private domestic corporation or partnership. If the defendant is a corporation organized under the laws of the
Philippines or a partnership duly registered, service may be made on the president, manager, secretary, cashier, agent, or any of its
directors. (underscoring supplied).

Petitioner contends that the enumeration of persons to whom summons may be served is restricted, limited and exclusive following
the rule on statutory construction expressio unios est exclusio alterius and argues that if the Rules of Court Revision Committee
intended to liberalize the rule on service of summons, it could have easily done so by clear and concise language.

We agree with petitioner.

Earlier cases have uphold service of summons upon a construction project manager[15]; a corporations assistant manager[16];
ordinary clerk of a corporation[17]; private secretary of corporate executives[18]; retained counsel[19]; officials who had charge or
control of the operations of the corporation, like the assistant general manager[20]; or the corporations Chief Finance and
Administrative Officer[21]. In these cases, these persons were considered as agent within the contemplation of the old rule.[22]
Notably, under the new Rules, service of summons upon an agent of the corporation is no longer authorized.

The cases cited by private respondent are therefore not in point.

In the Kanlaon case, this Court ruled that under the NLRC Rules of Procedure, summons on the respondent shall be served personally
or by registered mail on the party himself; if the party is represented by counsel or any other authorized representative or agent,
summons shall be served on such person. In said case, summons was served on one Engr. Estacio who managed and supervised the
construction project in Iligan City (although the principal address of the corporation is in Quezon City) and supervised the work of the
employees. It was held that as manager, he had sufficient responsibility and discretion to realize the importance of the legal papers
served on him and to relay the same to the president or other responsible officer of petitioner such that summons for petitioner was
validly served on him as agent and authorized representative of petitioner. Also in the Gesulgon case cited by private respondent, the
summons was received by the clerk in the office of the Assistant Manager (at principal office address) and under Section 13 of Rule
14 (old rule), summons may be made upon the clerk who is regarded as agent within the contemplation of the rule.

The designation of persons or officers who are authorized to accept summons for a domestic corporation or partnership is now
limited and more clearly specified in Section 11, Rule 14 of the 1997 Rules of Civil Procedure. The rule now states general manager
instead of only manager; corporate secretary instead of secretary; and treasurer instead of cashier. The phrase agent, or any of its
directors is conspicuously deleted in the new rule.

The particular revision under Section 11 of Rule 14 was explained by retired Supreme Court Justice Florenz Regalado, thus:[23]

x x x the then Sec. 13 of this Rule allowed service upon a defendant corporation to be made on the president, manager, secretary,
cashier, agent or any of its directors. The aforesaid terms were obviously ambiguous and susceptible of broad and sometimes illogical
interpretations, especially the word agent of the corporation. The Filoil case, involving the litigation lawyer of the corporation who
precisely appeared to challenge the validity of service of summons but whose very appearance for that purpose was seized upon to
validate the defective service, is an illustration of the need for this revised section with limited scope and specific terminology. Thus
the absurd result in the Filoil case necessitated the amendment permitting service only on the in-house counsel of the corporation
who is in effect an employee of the corporation, as distinguished from an independent practitioner. (underscoring supplied)

Retired Justice Oscar Herrera, who is also a consultant of the Rules of Court Revision Committee, stated that (T)he rule must be
strictly observed. Service must be made to one named in (the) statute x x x.[24]

It should be noted that even prior to the effectivity of the 1997 Rules of Civil Procedure, strict compliance with the rules has been
enjoined. In the case of Delta Motor Sales Corporation vs. Mangosing,[25] the Court held:

A strict compliance with the mode of service is necessary to confer jurisdiction of the court over a corporation. The officer upon
whom service is made must be one who is named in the statute; otherwise the service is insufficient. x x x.

The purpose is to render it reasonably certain that the corporation will receive prompt and proper notice in an action against it or to
insure that the summons be served on a representative so integrated with the corporation that such person will know what to do
with the legal papers served on him. In other words, to bring home to the corporation notice of the filing of the action. x x x.

The liberal construction rule cannot be invoked and utilized as a substitute for the plain legal requirements as to the manner in which
summons should be served on a domestic corporation. x x x. (underscoring supplied).

Service of summons upon persons other than those mentioned in Section 13 of Rule 14 (old rule) has been held as improper.[26]
Even under the old rule, service upon a general manager of a firms branch office has been held as improper as summons should have
been served at the firms principal office. In First Integrated Bonding & Ins. Co., Inc. vs. Dizon,[27] it was held that the service of
summons on the general manager of the insurance firms Cebu branch was improper; default order could have been obviated had the
summons been served at the firms principal office.

And in the case of Solar Team Entertainment, Inc. vs. Hon. Helen Bautista Ricafort, et al.[28] the Court succinctly clarified that, for the
guidance of the Bench and Bar, strictest compliance with Section 11 of Rule 13 of the 1997 Rules of Civil Procedure (on Priorities in
modes of service and filing) is mandated and the Court cannot rule otherwise, lest we allow circumvention of the innovation by the
1997 Rules in order to obviate delay in the administration of justice.

Accordingly, we rule that the service of summons upon the branch manager of petitioner at its branch office at Cagayan de Oro,
instead of upon the general manager at its principal office at Davao City is improper. Consequently, the trial court did not acquire
jurisdiction over the person of the petitioner.

The fact that defendant filed a belated motion to dismiss did not operate to confer jurisdiction upon its person. There is no question
that the defendants voluntary appearance in the action is equivalent to service of summons.[29] Before, the rule was that a party
may challenge the jurisdiction of the court over his person by making a special appearance through a motion to dismiss and if in the
same motion, the movant raised other grounds or invoked affirmative relief which necessarily involves the exercise of the jurisdiction
of the court, the party is deemed to have submitted himself to the jurisdiction of the court.[30] This doctrine has been abandoned in
the case of La Naval Drug Corporation vs. Court of Appeals, et al.,[31] which became the basis of the adoption of a new provision in
the former Section 23, which is now Section 20 of Rule 14 of the 1997 Rules. Section 20 now provides that the inclusion in a motion
to dismiss of other grounds aside from lack of jurisdiction over the person of the defendant shall not be deemed a voluntary
appearance. The emplacement of this rule clearly underscores the purpose to enforce strict enforcement of the rules on summons.
Accordingly, the filing of a motion to dismiss, whether or not belatedly filed by the defendant, his authorized agent or attorney,
precisely objecting to the jurisdiction of the court over the person of the defendant can by no means be deemed a submission to the
jurisdiction of the court. There being no proper service of summons, the trial court cannot take cognizance of a case for lack of
jurisdiction over the person of the defendant. Any proceeding undertaken by the trial court will consequently be null and void.[32]

WHEREFORE, the petition is hereby GRANTED. The assailed Orders of the public respondent trial court are ANNULLED and SET ASIDE.
The public respondent Regional Trial Court of Makati, Branch 132 is declared without jurisdiction to take cognizance of Civil Case No.
98-824, and all its orders and issuances in connection therewith are hereby ANNULLED and SET ASIDE.
SO ORDERED.

BPI V SPOUSES SANTIAGO

CHICO-NAZARIO, J.:

Before this Court is a Petition for Review on Certiorari filed by petitioner Bank of the Philippine Islands (BPI) seeking to reverse and
set aside the Decision[1] of the Court of Appeals dated 3 March 2005 and its Resolution[2] dated 28 July 2005 affirming the Order[3]
of the Regional Trial Court (RTC) of Santa Cruz, Laguna, Branch 91, dated 20 March 2003 enjoining the extrajudicial foreclosure sale of
a parcel of land covered by Transfer Certificate of Title (TCT) No. T-131382 registered under the name of Spouses Ireneo and Liwanag
Santiago. The dispositive portion of the Court of Appeals Decision reads:

WHEREFORE, premises considered, the petition is DISMISSED. The assailed orders dated March 20, 2003 and August 25, 2003 of the
respondent court in Civil Case No. SC-4259 are hereby AFFIRMED.

Petitioner BPI is a banking institution duly organized and existing as such under the Philippine laws.

Private respondent Centrogen, Inc. (Centrogen) is a domestic corporation engaged in pharmaceutical business, duly organized and
existing as such under the Philippine laws and represented in this act by its President, Edwin Santiago, son of private respondents
Spouses Ireneo M. Santiago and Liwanag P. Santiago.

On several occasions, private respondent Centrogen obtained loans from Far East Bank and Trust Company (FEBTC) in different
amounts, the total of which reached the sum P4,650,000.00, as evidenced by promissory notes executed by Edwin Santiago.

As a security for a fraction of the loan obligation, Ireneo M. Santiago executed a Real Estate Mortgage over a parcel of land covered
by TCT No. T-131382 registered under his name and located at Sta Cruz, Laguna, with an area of 2,166 square meters (subject
property).[4] The mortgage secured the principal loan in the amount of P490,000.00. Later on, the same property secured another
loan obligation in the amount of P1,504,280.00.[5]

Subsequently, however, Centrogen incurred default and therefore the loan obligation became due and demandable.

Meanwhile, FEBTC merged with the BPI with the latter as the surviving corporation. As a result, BPI assumed all the rights, privileges
and obligations of FEBTC.

On 13 December 2002, BPI filed an Extra-Judicial Foreclosure of Real Estate Mortgage[6] over the subject property before the RTC of
Sta. Cruz, Laguna. In order to validly effect the foreclosure, a Notice of Sale was issued by the Provincial Sheriff on 21 January 2003.
On the same day, the Spouses Santiago were served with the copy of the Notice of Sale.

Upon receipt of the Notice of Sale, the Spouses Santiago and Centrogen filed a Complaint seeking the issuance of a Temporary
Restraining Order and Preliminary and Final Injunction and in the alternative, for the annulment of the Real Estate Mortgage with
BPI.
The complaint alleged that the initial loan obligation in the amount of P490,000.00, including interest thereon was fully paid as
evidenced by Union Bank Check No. 0363020895 dated 20 December 2001 in the amount of P648,521.51 with BPI as payee. Such
payment notwithstanding, the amount was still included in the amount of computation of the arrears as shown by the document of
Extra-Judicial Foreclosure of Real Estate Mortgage filed by the latter.

In addition, the Spouses Santiago and Centrogen asseverated that the original loan agreement was for the amount of Five Million
Pesos. Such amount will be supposedly utilized to finance the squalene project of the company. However, after the amount of Two
Million Pesos was released and was accordingly used in funding the erection of the structural details of the project, FEBTC, in gross
violation of the agreement, did not release the balance of Three Million Pesos that will supposedly finance the purchase of
machineries and equipment necessary for the operation. As a result, the squalene project failed and the company groped for funds
to pay its loan obligations.

On 27 February 2003, BPI was summoned to file and serve its Answer to the Complaint filed by Spouses Santiago and Centrogen. On
the same day, the Sheriff served a copy of the summons to the Branch Manager of BPI Sta. Cruz, Laguna Branch, as evidenced by the
Sheriffs Return,[7] which reads:

SHERIFFS RETURN

Respectfully returned the original summons and order dated February 2003 with the information that on February 27, 2003 the
undersigned served the copy of summons together with the corresponding copy of complaint and its Annexes and order dated
February 27, 2003, to defendants (sic) Bank of the Philippine Islands (BPI) thru the manager Ms. Glona Ramos at Sta. Cruz Laguna
Branch, at Sta. Cruz, Laguna, to defendant Sheriff Marcial Opinion at the Office of the Provincial Sheriff of Laguna, R.T.C. (sic) Sta.
Cruz, Laguna as shown by their signatures on the original summons and order.

Instead of filing an Answer, BPI filed a Motion to Dismiss[8] the complaint on the ground of lack of jurisdiction over the person of the
defendant and other procedural infirmities attendant to the filing of the complaint. In its Motion to Dismiss, BPI claimed that the
Branch Manager of its Sta. Cruz, Laguna Branch, was not one of those authorized by Section 11, Rule 14 of the Revised Rules of
Court[9] to receive summons on behalf of the corporation. The summons served upon its Branch Manager, therefore, did not bind
the corporation. In addition, it was alleged that the complaint filed by the Spouses Santiago and Centrogen lacked a Certificate of
Non-Forum Shopping[10] and was therefore dismissible. Finally, BPI underscored that the person who verified the complaint was not
duly authorized by Centrogens Board of Directors to institute the present action as required by Section 23 of the Corporation Code.
[11]

In an Order[12] dated 28 February 2003, the RTC denied the Motion to Dismiss and emphasized that the nature of the case merited
its removal from the purview of Section 11, Rule 14 of the Revised Rules of Court. Based on the provisions of Section 5, Rule 58 of
the Revised Rules of Court,[13] the RTC declared that the instant Order is still valid and binding despite non-compliance with the
provisions of Section 11, Rule 14 of the same Rules. The dispositive portion of the Order reads:

WHEREFORE, premises considered, the motion to dismiss is hereby denied because of the presence of extreme urgency wherein the
Court has jurisdiction to act on the TRO despite lack of proper service of summons. Let the instant case be called for summary
hearing on plaintiffs application for temporary restraining order.

After summary hearing on the Spouses Santiago and Centrogens application for Temporary Restraining Order, the RTC, on 28
February 2003, issued an Order[14] enjoining the Provincial Sheriff from proceeding with the extra-judicial foreclosure sale of the
subject property until the propriety of granting a preliminary injunction is ascertained. The decretal portion of the said Order reads:
Wherefore, premises considered, the Court orders that pending the resolution of the plaintiffs prayer for preliminary injunction:

1. The Defendant Provincial Sheriff, his deputies, employees, and agents are enjoined from proceeding with the threatened extra-
judicial foreclosure sale (to be conducted today) of the parcel of land owned by plaintiffs Spouses Ireneo M. Santiago and Liwanag P.
Santiago located in (sic) Brgy. Sto. Angel Norte, Sta. Cruz, Laguna.

2. The application for a preliminary injunction is hereby set for hearing on March 10, 2003 at 1:30 pm. Further, the plaintiffs are
hereby ordered to immediately file a bond amounting to One Hundred Thousand Pesos (P100,000.00) to answer for damages that
Defendant Bank may sustain if the court should finally decide that the plaintiffs are not entitled thereto.

On 6 March 2003, the RTC ordered the service of new summons to BPI in accordance with the provisions of the Revised Rules of
Court. The aforesaid Order reads:

To avoid further argument as regards the proper service of summons to Defendant Bank, the Branch Clerk of Court is hereby directed
to issue another summons and serve copy of the same together with the complaint and its annexes to any of the officers of the
Defendant Bank as provided by the rules of civil procedure.[15]

In compliance with the aforesaid Order, the Branch Clerk of Court caused the issuance of a new summons on 7 March 2003, a copy of
which was served upon the Office of the Corporate Secretary of the BPI on 11 March 2003, as evidenced by the Sheriffs Return,[16]
which reads:

Sheriffs Return

This is to Certify that on March 11, 2003 the undersigned caused the service of summons together with the copy of complaint and its
annexes to defendant Bank of the Philippine Islands (BPI) and receive (sic) by the Office of the Corporate Secretary dated March 11,
2003 at the BPI Building Ayala Avenue, Makati City.

On 20 March 2003, the RTC issued an Order granting the application for the issuance of a Writ of Preliminary Injunction filed by the
Spouses Santiago and Centrogen. It enjoined the extra-judicial foreclosure sale of the subject property pending resolution of the
main action for Annulment of Real Estate Mortgage or until further orders of the trial court. In issuing the Writ of Preliminary
Injunction, it rationalized that to allow the foreclosure without hearing the main case would work injustice to the complainant and
since Spouses Santiago and Centrogen claimed that the first loan in the amount of P490,000.00 secured by the property subject of
the extra-judicial sale had long been paid by Centrogen through a Union Bank Check No. 0363020895 presented as evidence. The
dispositive part of the Order reads:

Wherefore, premises considered, the Court orders that pending the resolution of the main action for the annulment of the real
estate mortgage, etc., and /or order from this Court:

1. The Defendant Provincial Sheriff, his deputies, employees, and agents are enjoined from proceeding with the threatened extra-
judicial foreclosure sale of the parcel of land covered by TCT No. T-131382 owned by Plaintiffs Spouses Ireneo M. Santiago and
Liwanag P. Santiago located in Brgy. Sto. Angel, Sta. Cruz, Laguna.

2. The bond in the amount of One Hundred Thousand (P100,000.00) Pesos ordered by the Court to be posted by the plaintiffs to
answer for damages that defendant bank may sustain if the court should finally decide that the plaintiffs are entitled thereto still
stands.

The Motion for Reconsideration filed by BPI was denied by the RTC in its Order[17] dated 25 August 2003.

Aggrieved, BPI filed a Petition for Certiorari before the Court of Appeals seeking the reversal of the adverse Orders of the RTC.

On 3 March 2005, the Court of Appeals rendered a Decision[18] affirming the assailed Orders of the RTC and dismissing the Petition
for Certiorari filed by BPI. The Court of Appeals declared that jurisdiction was acquired upon the service of new summons. Before the
assailed Orders were therefore issued, the RTC properly acquired jurisdiction over the person of BPI.

Undaunted, BPI filed this instant Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court. For our resolution are
the following issues:

I.

WHETHER OR NOT THE RTC ACQUIRED JURISDICTION OVER THE PERSON OF BPI WHEN THE ORIGINAL SUMMONS WAS SERVED
UPON THE BRANCH MANAGER OF ITS STA. CRUZ, LAGUNA BRANCH.

II.

WHETHER OR NOT THE RTC COMMITTED A GRAVE ABUSE OF DISCRETION IN ISSUING THE WRIT OF PRELIMINARY INJUNCTION.

BPI vehemently insists that the court a quo did not acquire jurisdiction over its person and consequently, the Order issued by the
RTC, permanently enjoining the foreclosure sale, was therefore void and does not bind BPI.

We are not persuaded.

The pertinent provision of the Revised Rules of Court provides:

Sec. 11, Rule 14. Service upon domestic private juridical entity When the defendant is a corporation, partnership or association
organized under the laws of the Philippines with a juridical personality service may be made on the president, managing partner,
general manager, corporate secretary, treasurer or in-house counsel.
Basic is the rule that a strict compliance with the mode of service is necessary to confer jurisdiction of the court over a corporation.
The officer upon whom service is made must be one who is named in the statute; otherwise, the service is insufficient.[19] The
purpose is to render it reasonably certain that the corporation will receive prompt and proper notice in an action against it or to
insure that the summons be served on a representative so integrated with the corporation that such person will know what to do
with the legal papers served on him.

Applying the aforestated principle in the case at bar, we rule that the service of summons on BPIs Branch Manager did not bind the
corporation for the branch manager is not included in the enumeration of the statute of the persons upon whom service of summons
can be validly made in behalf of the corporation. Such service is therefore void and ineffectual.

However, upon the issuance and the proper service of new summons on 11 March 2003, before the Writ of Preliminary Injunction
was issued on 20 March 2003, whatever defect attended the service of the original summons, was promptly and accordingly cured.

It bears stressing, that on 7 March 2003, the Branch Clerk of Court issued a new summons which was properly served upon BPIs
Corporate Secretary on 11 March 2003, as evidenced by the Sheriffs Return.

The subsequent service of summons was neither disputed nor was it mentioned by BPI except in a fleeting narration of facts and
therefore enjoys the presumption that official duty has been regularly performed.[20] The Process Servers Certificate of Service of
Summons is a prima facie evidence of facts set out in that certificate.[21]

Inarguably, before the Order granting the application for Writ of Preliminary Injunction was issued, the RTC already acquired
jurisdiction over the person of BPI by virtue of the new summons validly served on the Corporate Secretary. The fact that the original
summons was invalidly served is of no moment since jurisdiction over BPI was subsequently acquired by the service of a new
summons.

In the case of The Philippine American Life and General Insurance Company v. Brevea,[22] we ruled:

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 against him should be dismissed. An alias summons can be actually served on said defendant.

xxxx

x x x It is not pertinent whether the summons is designated as an original or an alias summons as long as it has adequately served its
purpose. What is essential is that the summons complies with the requirements under the Rules of Court and it has been duly served
on the defendant together with the prevailing complaint. x x x Moreover, the second summons was technically not an alias summons
but more of a new summons on the amended complaint. It was not a continuation of the first summons considering that it
particularly referred to the amended complaint and not to the original complaint. (Emphases supplied.)

BPIs lamentation, at every turn, on the invalidity of the service of summons made on the Branch Manager and its deliberate neglect
to acknowledge the fact that a new summons was accordingly served on its Corporate Secretary, is an attempt in futility to mislead
this Court into believing that the court a quo never acquired jurisdiction over the case and thus the issuance of the Writ of
Preliminary Injunction was invalid.

We are not drawn into petitioners sophistry.

In the case of G&G Trading Corporation v. Court of Appeals,[23] this Court made the following pronouncements:

Although it may be true that the service of summons was made on a person not authorized to receive the same in behalf of the
petitioner, nevertheless since it appears that the summons and complaint were in fact received by the corporation through its said
clerk, the Court finds that there was substantial compliance with the rule on service of summons. x x x The need for speedy justice
must prevail over a technicality.

In explaining the test on the validity of service of summons, Justice Florenz Regalado[24] stressed that substantial justice must take
precedence over technicality and thus stated:

The ultimate test on the validity and sufficiency on service of summons is whether the same and the attachments thereto where
ultimately received by the corporation under such circumstances that no undue prejudice is sustained by it from the procedural lapse
and it was afforded full opportunity to present its responsive pleadings. This is but in accord with the entrenched rule that the ends
of substantial justice should not be subordinated to technicalities and, for which purpose, each case should be examined within the
factual milieu peculiar to it.

Prescinding from the above, we deem it best to underscore that there is no hard and fast rule pertaining to the manner of service of
summons. Rather, substantial justice demands that every case should be viewed in light of the peculiar circumstances attendant to
each.

In any event, as it is glaringly evident from the records of the case that jurisdiction over the person of the defendant was validly
acquired by the court by the valid service of a new summons before the writ of preliminary injunction was issued and guided by
jurisprudential pronouncements heretofore adverted to, we hold that the proceedings attendant to the issuance of the writ of
preliminary injunction were regular.

Having settled this issue necessitates us to look into the propriety of the issuance of the Writ of Preliminary Injunction.

BPI asserts that the RTC gravely abused its discretion in granting the Spouses Santiago and Centrogens application for the Writ of
Preliminary Injunction in the absence of showing that the latter have a clear legal right sought to be protected.

Again, we do not agree.

An injunction is a preservative remedy for the protection of ones substantive right or interest; it is not a cause of action by itself but
merely a provisional remedy, an adjunct to the main suit.[25] The purpose of injunction is to prevent threatened or continuous
irremediable injury to some of the parties before their claims can be thoroughly studied and educated. Its sole aim is to preserve the
status quo until the merits of the case is heard fully.[26]

The issuance of the writ of preliminary injunction as an ancillary or preventive remedy to secure the rights of a party in a pending
case is entirely within the discretion of the court taking cognizance of the case, the only limitation being that the discretion should be
exercised based upon the grounds and in a manner provided by law. Before a writ of preliminary injunction may be issued, the
following requisites must be complied with: (1) a right in esse or a clear or unmistakable right to be protected; (2) violation of that
right; and (3) that there is an urgent and permanent act and urgent necessity for the writ to prevent serious damage.[27]

Verily, the aforestated requisites for the issuance of the Writ of Preliminary Injunction have been fully complied with. The right of
Spouses Santiago over the property clearly exists since they are the registered owners thereof, and the existence of a Real Estate
Mortgage does not undermine the right of the absolute owner over the property. The violation of such right is manifest in the
threatened foreclosure proceedings commenced by BPI amidst the claim that the principal obligation has been fully paid. Finally, to
allow the foreclosure of the subject property without first calibrating the evidence of opposing parties pertaining to the action for
the annulment of mortgage would cause irreparable damage to the registered owner.

The right of BPI to foreclose the subject property is under dispute upon the claim interposed by the Spouses Santiago and Centrogen
that payments for the loan secured by the property subject to the threatened foreclosure proceedings were already made. To
support their assertions, Spouses Santiago and Centrogen presented as evidence Union Bank Check No. 0363020895 dated 20
December 2001 in the amount of P648,521.51, with BPI as payee. From this, we can deduce that the right of BPI to foreclose the
subject property is questionable. We cannot therefore allow the foreclosure of the Real Estate Mortgage to proceed without first
setting the main case for hearing so that based on the evidence presented by the parties, the trial court can determine who between
them has the better right over the subject property. To rule otherwise would cause a grave irreparable damage to the Spouses
Santiago and Centrogen.

Parenthetically, this petition affords us the opportunity to once again reiterate the rule that the issuance of the writ of preliminary
injunction rests entirely within the discretion of the court and generally not interfered with except in case of manifest abuse. The
assessment and evaluation of evidence in the issuance of the writ of preliminary injunction involve finding of facts ordinarily left to
the trial court for its conclusive determination.[28]

In Toyota Motor Phils. Corp. Workers Association v. Court of Appeals,[29] citing Ubanes, Jr. v. Court of Appeals,[30] we made the
following declaration:

[T]he matter of the issuance of writ of a preliminary injunction is addressed to the sound discretion of the trial court, unless the court
commits a grave abuse of discretion. 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. x x x.

In the case at bar, after summary hearing and evaluation of evidence presented by both contending parties, the RTC ruled that justice
would be better served if status quo is preserved until the final determination of the merits of the case, to wit:

For purposes of preliminary injunction, between the evidence presented by [the spouses Santiago and Centrogen] and [BPI], the
evidence of the former carries more weight. The evidence of [the spouses Santiago and Centrogen] established that to allow extra-
judicial foreclosure without hearing the main action for the annulment of mortgage would probably work injustice to the plaintiffs
and would probably violate their rights over the subject lot.
Furthermore, this case involves complicated issues that must be resolved first before altering the status quo. The issue of payment
and non-payment of the loan and the issue of breach of the second loan directly affect the rights of the plaintiffs over the subject lot.
Hence, the last actual, peaceable, uncontested status of the parties before the controversy must be preserved.

The unyielding posture of BPI that its right to foreclose the subject property was violated since it is permanently barred from
proceeding with the auction sale is patently erroneous. The RTC, in the exercise of its discretion merely intended to preserve the
status quo while the principal action for the annulment of mortgage is heard with the end view that no irreversible damage may be
caused to the opposing parties. We find nothing whimsical, arbitrary or capricious in the exercise of the RTC of its discretion.

WHEREFORE, IN VIEW OF THE FOREGOING, the instant petition is DENIED. The Decision dated 3 March 2005, and the Resolution
dated 28 July 2005, rendered by the Court of Appeals in CA-G.R. SP No. 80643, are hereby AFFIRMED. Costs against petitioner.

SO ORDERED.

SECTION 15

VALMONTE V CA

MENDOZA, J.:

Petitioner Lourdes A. Valmonte is a foreign resident. The question is whether in an action for partition filed against her and her
husband, who is also her attorney, summons intended for her may be served on her husband, who has a law office in the Philippines.
The Regional Trial Court of Manila, Branch 48, said no and refused to declare Lourdes A. Valmonte in default, but the Court of
Appeals said yes. Hence this petition for review on certiorari.

The facts of the case are as follows:

Petitioners Lourdes A. Valmonte and Alfredo D. Valmonte are husband and wife. They are both residents of 90222 Carkeek Drive
South Seattle, Washington, U.S.A. Petitioner Alfredo D. Valmonte, who is a member of the Philippine bar, however, practices his
profession in the Philippines, commuting for this purpose between his residence in the state of Washington and Manila, where he
holds office at S-304 Gedisco Centre, 1564 A. Mabini, Ermita, Manila.

On March 9, 1992, private respondent Rosita Dimalanta, who is the sister of petitioner Lourdes A. Valmonte, filed a complaint for
partition of real property and accounting of rentals against petitioners Lourdes A. Valmonte and Alfredo D. Valmonte before the
Regional Trial Court of Manila, Branch 48. The subject of the action is a three-door apartment located in Paco, Manila.

In her Complaint, private respondent alleged:

The plaintiff is of legal age, a widow and is at present a resident of 14823 Conway Road, Chesterfield, Missouri, U.S.A., while the
defendants are spouses, of legal age and at present residents of 90222 Carkeek Drive, South Seattle, Washington, U.S.A., but, for
purposes of this complaint may be served with summons at Gedisco Center, Unit 304, 1564 A. Mabini St., Ermita, Manila where
defendant Alfredo D. Valmonte as defendant Lourdes Arreola Valmontes spouse holds office and where he can be found.

Apparently, the foregoing averments were made on the basis of a letter previously sent by petitioner Lourdes A. Valmonte to private
respondents counsel

in which, in regard to the partition of the property in question, she referred private respondents counsel to her husband as the party
to whom all communications intended for her should be sent. The letter reads:

July 4, 1991

Dear Atty. Balgos:

This is in response to your letter, dated 20 June 1991, which I received on 3 July 1991. Please address all communications to my
lawyer, Atty. Alfredo D. Valmonte, whose address, telephone and fax numbers appear below.

c/o Prime Marine

Gedisco Center, Unit 304

1564 A. Mabini, Ermita


Metro Manila

Telephone: 521-1736

Fax: 21-2095

Service of summons was then made upon petitioner Alfredo D. Valmonte, who at the time, was at his office in Manila. Petitioner
Alfredo D. Valmonte accepted the summons, insofar as he was concerned, but refused to accept the summons for his wife, Lourdes
A. Valmonte, on the ground that he was not authorized to accept the process on her behalf. Accordingly the process server left
without leaving a copy of the summons and complaint for petitioner Lourdes A. Valmonte.

Petitioner Alfredo D. Valmonte thereafter filed his Answer with Counterclaim. Petitioner Lourdes A. Valmonte, however, did not file
her Answer. For this reason private respondent moved to declare her in default. Petitioner Alfredo D. Valmonte entered a special
appearance in behalf of his wife and opposed the private respondents motion.

In its Order dated July 3, 1992, the trial court, denied private respondents motion to declare petitioner Lourdes A. Valmonte in
default. A motion for reconsideration was similarly denied on September 23, 1992. Whereupon, private respondent filed a petition
for certiorari, prohibition and mandamus with the Court of Appeals.

On December 29, 1992, the Court of Appeals rendered a decision granting the petition and declaring Lourdes A. Valmonte in default.
A copy of the appellate courts decision was received by petitioner Alfredo D. Valmonte on January 15, 1993 at his Manila office and
on January 21, 1993 in Seattle, Washington. Hence, this petition.

The issue at bar is whether in light of the facts set forth above, petitioner Lourdes A. Valmonte was validly served with summons. In
holding that she had been, the Court of Appeals stated:[1]

[I]n her above-quoted reply, Mrs. Valmonte clearly and unequivocally directed the aforementioned counsel of Dimalanta to address
all communications (evidently referring to her controversy with her sister Mrs. Dimalanta over the Paco property, now the subject of
the instant case) to her lawyer who happens also to be her husband. Such directive was made without any qualification just as was
her choice/designation of her husband Atty. Valmonte as her lawyer likewise made without any qualification or reservation. Any
disclaimer therefore on the part of Atty. Valmonte as to his being his wifes attorney (at least with regard to the dispute vis-a-vis [sic]
the Paco property) would appear to be feeble or trifling, if not incredible.

This view is bolstered by Atty. Valmontes subsequent alleged special appearance made on behalf of his wife. Whereas Mrs. Valmonte
had manifestly authorized her husband to serve as her lawyer relative to her dispute with her sister over the Paco property and to
receive all communications regarding the same and subsequently to appear on her behalf by way of a so-called special appearance,
she would nonetheless now insist that the same husband would nonetheless had absolutely no authority to receive summons on her
behalf. In effect, she is asserting that representation by her lawyer (who is also her husband) as far as the Paco property controversy
is concerned, should only be made by him when such representation would be favorable to her but not otherwise. It would obviously
be inequitable for this Court to allow private respondent Lourdes A. Valmonte to hold that her husband has the authority to
represent her when an advantage is to be obtained by her and to deny such authority when it would turn out to be her disadvantage.
If this be allowed, Our Rules of Court, instead of being an instrument to promote justice would be made use of to thwart or frustrate
the same.

xxx xxx xxx

Turning to another point, it would not do for Us to overlook the fact that the disputed summons was served not upon just an
ordinary lawyer of private respondent Lourdes A. Valmonte, but upon her lawyer husband. But that is not all, the same
lawyer/husband happens to be also her co-defendant in the instant case which involves real property which, according to her
lawyer/husband/ co-defendant, belongs to the conjugal partnership of the defendants (the spouses Valmonte). It is highly
inconceivable and certainly it would be contrary to human nature for the lawyer/husband/co-defendant to keep to himself the fact
that they (the spouses Valmonte) had been sued with regard to a property which he claims to be conjugal. Parenthetically, there is
nothing in the records of the case before Us regarding any manifestation by private respondent Lourdes A. Valmonte about her lack
of knowledge about the case instituted against her and her lawyer/husband/co-defendant by her sister Rosita.

PREMISES CONSIDERED, the instant petition for certiorari, prohibition and mandamus is given due course. This Court hereby Resolves
to nullify the orders of the court a quo dated July 3, 1992 and September 23, 1992 and further declares private respondent Lourdes
Arreola Valmonte as having been properly served with summons.

Petitioners assail the aforequoted decision, alleging that the Court of Appeals erred (1) in refusing to apply the provisions of Rule 14,
17 of the Revised Rules of Court and applying instead Rule 14, 8 when the fact is that petitioner Lourdes A. Valmonte is a nonresident
defendant; and (2) because even if Rule 14, 8 is the applicable provision, there was no valid substituted service as there was no strict
compliance with the requirement by leaving a copy of the summons and complaint with petitioner Alfredo D. Valmonte. Private
respondent, upon the other hand, asserts that petitioners are invoking a technicality and that strict adherence to the rules would
only result in a useless ceremony.
We hold that there was no valid service of process on Lourdes A. Valmonte.

To provide perspective, it will be helpful to determine first the nature of the action filed against petitioners Lourdes A. Valmonte and
Alfredo D. Valmonte by private respondent, whether it is an action in personam, in rem or quasi in rem. This is because the rules on
service of summons embodied in Rule 14 apply according to whether an action is one or the other of these actions.

In an action in personam, personal service of summons or, if this is not possible and he cannot be personally served, substituted
service, as provided in Rule 14, 7-8[2] is essential for the acquisition by the court of jurisdiction over the person of a defendant who
does not voluntarily submit himself to the authority of the court.[3] If defendant cannot be served with summons because he is
temporarily abroad, but otherwise he is a Philippine resident, service of summons may, by leave of court, be made by publication.[4]
Otherwise stated, a resident defendant in an action in personam, who cannot be personally served with summons, may be
summoned either by means of substituted service in accordance with Rule 14, 8 or by publication as provided in 17 and 18 of the
same Rule.[5]

In all of these cases, it should be noted, defendant must be a resident of the Philippines, otherwise an action in personam cannot be
brought because jurisdiction over his person is essential to make a binding decision.

On the other hand, if the action is in rem or quasi in rem, jurisdiction over the person of the defendant is not essential for giving the
court jurisdiction so long as the court acquires jurisdiction over the res. If the defendant is a nonresident and he is not found in the
country, summons may be served extraterritorially in accordance with Rule 14, 17, which provides:

17. Extraterritorial service. - When the defendant does not reside and is not found in the Philippines and the action affects the
personal status of the plaintiff or relates to, or the subject of which is, property within the Philippines, in which the defendant has or
claims a lien or interest, actual or contingent, or in which the relief demanded consists, wholly or in part, in excluding the defendant
from any interest therein, or the property of the defendant has been attached within the Philippines, service may, by leave of court,
be effected out of the Philippines by personal service as under Section 7; or by publication in a newspaper of general circulation in
such places and for such time as the court may order, in which case a copy of the summons and order of the court shall be sent by
registered mail to the last known address of the defendant, or in any other manner the court may deem sufficient. Any order
granting such leave shall specify a reasonable time, which shall not be less than sixty (60) days after notice, within which the
defendant must answer.

In such cases, what gives the court jurisdiction in an action in rem or quasi in rem is that it has jurisdiction over the res, i.e. the
personal status of the plaintiff who is domiciled in the Philippines or the property litigated or attached. Service of summons in the
manner provided in 17 is not for the purpose of vesting it with jurisdiction but for complying with the requirements of fair play or
due process, so that he will be informed of the pendency of the action against him and the possibility that property in the Philippines
belonging to him or in which he has an interest may be subjected to a judgment in favor of the plaintiff and he can thereby take steps
to protect his interest if he is so minded.[6]

Applying the foregoing rules to the case at bar, private respondents action, which is for partition and accounting under Rule 69, is in
the nature of an action quasi in rem. Such an action is essentially for the purpose of affecting the defendants interest in a specific
property and not to render a judgment against him. As explained in the leading case of Banco Espaol Filipino v. Palanca :[7]

[An action quasi in rem is] an action which while not strictly speaking an action in rem partakes of that nature and is substantially
such. . . . The action quasi in rem differs from the true action in rem in the circumstance that in the former an individual is named as
defendant and the purpose of the proceeding is to subject his interest therein to the obligation or lien burdening the property. All
proceedings having for their sole object the sale or other disposition of the property of the defendant, whether by attachment,
foreclosure, or other form of remedy, are in a general way thus designated. The judgment entered in these proceedings is conclusive
only between the parties.

As petitioner Lourdes A. Valmonte is a nonresident who is not found in the Philippines, service of summons on her must be in
accordance with Rule 14, 17. Such service, to be effective outside the Philippines, must be made either (1) by personal service; (2) by
publication in a newspaper of general circulation in such places and for such time as the court may order, in which case a copy of the
summons and order of the court should be sent by registered mail to the last known address of the defendant; or (3) in any other
manner which the court may deem sufficient.

Since in the case at bar, the service of summons upon petitioner Lourdes A. Valmonte was not done by means of any of the first two
modes, the question is whether the service on her attorney, petitioner Alfredo D. Valmonte, can be justified under the third mode,
namely, in any . . . manner the court may deem sufficient.

We hold it cannot. This mode of service, like the first two, must be made outside the Philippines, such as through the Philippine
Embassy in the foreign country where the defendant resides.[8] Moreover, there are several reasons why the service of summons on
Atty. Alfredo D. Valmonte cannot be considered a valid service of summons on petitioner Lourdes A. Valmonte. In the first place,
service of summons on petitioner Alfredo D. Valmonte was not made upon the order of the court as required by Rule 14, 17 and
certainly was not a mode deemed sufficient by the court which in fact refused to consider the service to be valid and on that basis
declare petitioner Lourdes A. Valmonte in default for her failure to file an answer.
In the second place, service in the attempted manner on petitioner was not made upon prior leave of the trial court as required also
in Rule 14, 17. As provided in 19, such leave must be applied for by motion in writing, supported by affidavit of the plaintiff or some
person on his behalf and setting forth the grounds for the application.

Finally, and most importantly, because there was no order granting such leave, petitioner Lourdes A. Valmonte was not given ample
time to file her Answer which, according to the rules, shall be not less than sixty (60) days after notice. It must be noted that the
period to file an Answer in an action against a resident defendant differs from the period given in an action filed against a
nonresident defendant who is not found in the Philippines. In the former, the period is fifteen (15) days from service of summons,
while in the latter, it is at least sixty (60) days from notice.

Strict compliance with these requirements alone can assure observance of due process. That is why in one case,[9] although the
Court considered publication in the Philippines of the summons (against the contention that it should be made in the foreign state
where defendant was residing) sufficient, nonetheless the service was considered insufficient because no copy of the summons was
sent to the last known correct address in the Philippines.

Private respondent cites the ruling in De Leon v. Hontanosas, 67 SCRA 458,462-463 (1975), in which it was held that service of
summons upon the defendants husband was binding on her. But the ruling in that case is justified because summons were served
upon defendants husband in their conjugal home in Cebu City and the wife was only temporarily absent, having gone to Dumaguete
City for a vacation. The action was for collection of a sum of money. In accordance with Rule 14, 8, substituted service could be made
on any person of sufficient discretion in the dwelling place of the defendant, and certainly defendants husband, who was there, was
competent to receive the summons on her behalf. In any event, it appears that defendant in that case submitted to the jurisdiction of
the court by instructing her husband to move for the dissolution of the writ of attachment issued in that case.

On the other hand, in the case of Gemperle v. Schenker,[10] it was held that service on the wife of a nonresident defendant was
found sufficient because the defendant had appointed his wife as his attorney-in-fact. It was held that although defendant Paul
Schenker was a Swiss citizen and resident of Switzerland, service of summons upon his wife Helen Schenker who was in the
Philippines was sufficient because she was her husbands representative and attorney-in-fact in a civil case, which he had earlier filed
against William Gemperle. In fact Gemperles action was for damages arising from allegedly derogatory statements contained in the
complaint filed in the first case. As this Court said, i]n other words, Mrs. Schenker had authority to sue, and had actually sued, on
behalf of her husband, so that she was, also, empowered to represent him in suits filed against him, particularly in a case, like the
one at bar, which is a consequence of the action brought by her on his behalf.[11] Indeed, if instead of filing an independent action
Gemperle filed a counterclaim in the action brought by Mr. Schenker against him, there would have been no doubt that the trial
court could have acquired jurisdiction over Mr. Schenker through his agent and attorney-in-fact, Mrs. Schenker.

In contrast, in the case at bar, petitioner Lourdes A. Valmonte did not appoint her husband as her attorney-in-fact. Although she
wrote private respondent s attorney that all communications intended for her should be addressed to her husband who is also her
lawyer at the latters address in Manila, no power of attorney to receive summons for her can be inferred therefrom. In fact the letter
was written seven months before the filing of this case below, and it appears that it was written in connection with the negotiations
between her and her sister, respondent Rosita Dimalanta, concerning the partition of the property in question. As is usual in
negotiations of this kind, the exchange of correspondence was carried on by counsel for the parties. But the authority given to
petitioners husband in these negotiations certainly cannot be construed as also including an authority to represent her in any
litigation.

For the foregoing reasons, we hold that there was no valid service on petitioner Lourdes A. Valmonte in this case.

WHEREFORE, the decision appealed from is REVERSED and the orders dated July 3, 1992 and September 23, 1992 of the Regional
Trial Court of Manila, Branch 48 are REINSTATED.

SO ORDERED.

GEMPERLE V SCHENKER

CONCEPCION, C. J.:

Appeal, taken by plaintiff, William F. Gemperle, from a decision of the Court of First Instance of Rizal dismissing this case for lack of
jurisdiction over the person of defendant Paul Schenker and for want of cause of action against his wife and co-defendant, Helen
Schenker said Paul Schenker "being in no position to be joined with her as party defendant, because he is beyond the reach of the
magistracy of the Philippine courts."

The record shows that sometime in 1952, Paul Schenker-hereinafter referred to as Schenker — acting through his wife and attorney-
in-fact, Helen Schenker — herein-after referred to as Mrs. Schenker — filed with the Court of First Instance of Rizal, a complaint —
which was docketed as Civil Case No. Q-2796 thereof — against herein plaintiff William F. Gemperle, for the enforcement of
Schenker's allegedly initial subscription to the shares of stock of the Philippines-Swiss Trading Co., Inc. and the exercise of his alleged
pre-emptive rights to the then unissued original capital stock of said corporation and the increase thereof, as well as for an
accounting and damages. Alleging that, in connection with said complaint, Mrs. Schenker had caused to be published some
allegations thereof and other matters, which were impertinent, irrelevant and immaterial to said case No. Q-2796, aside from being
false and derogatory to the reputation, good name and credit of Gemperle, "with the only purpose of attacking" his" honesty,
integrity and reputation" and of bringing him "into public hatred, discredit, disrepute and contempt as a man and a businessman",
Gemperle commenced the present action against the Schenkers for the recovery of P300,000 as damages, P30,000 as attorney's fees,
and costs, in addition to praying for a judgment ordering Mrs. Schenker "to retract in writing the said defamatory expressions". In
due course, thereafter, the lower court, rendered the decision above referred to. A reconsiderating thereof having been denied,
Gemperle interposed the present appeal.

The first question for determination therein is whether or not the lower court had acquired jurisdiction over the person of Schenker.
Admittedly, he, a Swiss citizen, residing in Zurich, Switzerland, has not been actually served with summons in the Philippines,
although the summons address to him and Mrs. Schenker had been served personally upon her in the Philippines. It is urged by
plaintiff that jurisdiction over the person of Schenker has been secured through voluntary appearance on his part, he not having
made a special appearance to assail the jurisdiction over his person, and an answer having been filed in this case, stating that "the
defendants, by counsel, answering the plaintiff's complaint, respectfully aver", which is allegedly a general appearance amounting to
a submission to the jurisdiction of the court, confirmed, according to plaintiff, by a P225,000 counterclaim for damages set up in said
answer; but this counterclaim was set up by Mrs. Schenker alone, not including her husband. Moreover, said answer contained
several affirmative defenses, one of which was lack of jurisdiction over the person of Schenker, thus negating the alleged waiver of
this defense. Nevertheless, We hold that the lower court had acquired jurisdiction over said defendant, through service of the
summons addressed to him upon Mrs. Schenker, it appearing from said answer that she is the representative and attorney-in-fact of
her husband aforementioned civil case No. Q-2796, which apparently was filed at her behest, in her aforementioned representative
capacity. In other words, Mrs. Schenker had authority to sue, and had actually sued on behalf of her husband, so that she was, also,
empowered to represent him in suits filed against him, particularly in a case, like the of the one at bar, which is consequence of the
action brought by her on his behalf.

Inasmuch as the alleged absence of a cause of action against Mrs. Schenker is premised upon the alleged lack of jurisdiction over the
person of Schenker, which cannot be sustained, it follows that the conclusion drawn therefore from is, likewise, untenable.

Wherefore, the decision appealed from should be, is hereby, reversed, and the case remanded to the lower court for proceedings,
with the costs of this instance defendants-appellees. It is so ordered.

section 16

montalban v maximo

SANCHEZ, J.:

Chronologically, following are the events that spawned the present case:

August 15, 1958. Plaintiffs commenced suit1 against Fr. Gerardo Maximo who, according to the complaint, was residing at the
parish church at Concepcion, Malabon, Rizal. Plaintiffs' cause of action for damages sprang from a motor vehicle accident which
occurred at Padre Faura St., Manila, on December 16, 1957. Paul Hershell Montalban, son of plaintiffs, suffered injuries.

August 15, 1958. On this same day that the complaint was filed, summons was served on defendant Fr. Gerardo Maximo at the
parish church of Concepcion, Malabon, Rizal, through Fr. Arsenio Bautista — a priest in the same parish church.

August 23, 1958. Fr. Arsenio Bautista sent a letter (dated August 21) to Macario M. Ofilada, Clerk of Court of the Court of First
Instance of Manila, informing him that defendant Fr. Gerardo Maximo left for Europe on August 7, and "will be back on the first week
of November." Actually, Fr. Maximo returned from abroad "about the second week of October, 1958"2

September 20, 1958. The lower court declared defendant in default, on plaintiffs' motion of September 13, 1958.

June 8, 1959. Upon plaintiffs' evidence, the court rendered judgment sentencing defendant to:

1. Pay plaintiff Paul Hershell Montalban the amount of P10,000.00 as actual damages for loss of his spleen;

2. Pay plaintiff Paul Hershell Montalban the amount of P10,000.00 for loss or impairment of earning capacity, talents and physical
strength;

3. Pay plaintiff Paul Hershell Montalban the amount of P5,000.00 as moral damages;

4. Pay plaintiffs Pablo C. Montalban and Regina Barretto the amount of P5,000.00 as moral damages;

5. Pay plaintiffs the amount of P1,000.00 as exemplary damages; and

6. Pay plaintiffs attorney's fees [in] the amount of P3,000.00 and the cost of litigation.

December 16, 1959. Plaintiffs themselves wrote defendant Fr. Gerardo Maximo, at the Malabon Catholic Church, informing the
latter of the lower court's decision, giving the data: "Re Civil Case No. 37202 (in which the foregoing judgment was rendered)
Montalban vs. Maximo," quoting therein the dispositive part of the decision just transcribed, requesting prompt compliance
therewith and suggesting that he communicate with or personally see their lawyer, Jose W. Diokno, at the latter's address, 332
Regina Building, Escolta, Manila.

December 20, 1959. Defendant, through his legal counsel, Dr. Nicanor T. Santos, answered the foregoing letter expressing regret
that he could not comply with plaintiffs' request, because he (defendant) was not aware of the said civil case, and that, in the
criminal action arising out of the same incident, said defendant was acquitted by the Municipal Court of Manila.3

January 14, 1960. Deputy Sheriff Liberato C. Manalo of Rizal notified defendant of the issuance of the writ of execution dated
January 7, 1960, and demanded payment of the amount set forth therein. The Sheriff's return to the writ shows that in response to
such demand, defendant alleged that he was then "financially hard up"4 and that the Sheriff found no property that could be subject
to execution.

January 30, 1962. An alias writ of execution was issued. Copy thereof was received by defendant on February 9, 1962.

February 1, 1962. The Deputy Sheriff attached and levied on a residential house located in Caloocan City and purportedly
belonging to defendant.

February 20, 1962. Two years and two months after defendant admittedly learned of the lower court's decision from counsel
for plaintiffs herein, said defendant, by counsel, filed a verified motion in the same case praying for the annulment of the entire
proceedings. His ground is this: Summons was not duly served upon him "as provided under Sec. 7, Rule 7 of the Rules of Court;"5
accordingly, the lower court "did not acquire jurisdiction over his person"; and "the trial and decision by default" are "null and
void."6

March 3, 1962. The court denied this motion.

March 24, 1962. Defendant's move to reconsider was rejected by the court.

Hence, this appeal from the orders of March 3 and March 24, 1962, duly certified to this Court by the Court of
Appeals.1äwphï1.ñët

September 2, 1965. After the case was submitted for decision, defendant's lawyer informed this Court of the death of
defendant on August 1, 1965.

October 18, 1967. Following extensive efforts to have the deceased defendant substituted by any of his heirs or the executor or
administrator of his estate, which were to no avail, this Court appointed the Clerk of Court of the Court of First Instance of Manila,
representative of the deceased defendant.

1. A question of transcendental importance which necessarily involves an inquiry into procedural due process is whether
summons in a suit in personam against a resident of the Philippines temporarily absent therefrom may be validly effected by
substituted service under Section 8, Rule 14, (formerly Section 8, Rule 7) of the Rules of Court. A head-on collision of views becomes
inevitable considering the diametrically opposing positions taken by plaintiffs, on the one hand, and defendant, on the other. For,
plaintiffs make the point that even with defendant temporarily abroad, substituted service is valid under Section 8 by leaving a copy
of the summons "at the defendant's dwelling house or residence with some person of suitable age and discretion then residing
therein."

Plaintiffs argue that if the ordinary method prescribed by the rules that is, personal service under Section 7, Rule 14, is not
feasible, then the substituted service in Section 8 aforesaid comes into play. Section 8 says:

Sec. 8. Substituted service. — If the defendant cannot be served within a reasonable time as provided in the preceding section,
service may be effected (a) by leaving copies of the summons at the defendant's dwelling house or residence with some person of
suitable age and discretion then residing therein, or (b) by leaving the copies at defendant's office or regular place of business with
some competent person in charge thereof.

Upon the other hand, defendant advances the theory that in a situation like the present, where defendant was temporarily
abroad, the sole and exclusive method of service of summons in a case in personam is that set forth in Section 18, Rule 14 of the
Rules (formerly Section 18, Rule 7), which reads:

Sec. 18. Residents temporarily out of the Philippines. — When an action is commenced against a defendant who ordinarily
resides within the Philippines, but who is temporarily out of it, service may, by leave of court, be effected out of the Philippines, as
under the preceding section.7

Section 17 referred to in Section 18 (Section 17, Rule 7 in the old Rules) in turn states:

Sec. 17. Extraterritorial service. — When the defendant does not reside and is not found in the Philippines and the action
affects the personal status of the plaintiff or relates to, or the subject of which is, property within the Philippines, in which the
defendant has or claims a lien or interest, actual or contingent, or in which the relief demanded consists, wholly or in part, in
excluding the defendant from any interest therein, or the property of the defendant has been attached within the Philippines, service
may, by leave of court, be effected out of the Philippines by personal service as under section 7; or by publication in a newspaper of
general circulation in such places and for such time as the court may order, in which case a copy of the summons and order of the
court shall be sent by registered mail to the last known address of the defendant, or in any other manner the court may deem
sufficient. Any order granting such leave shall specify a reasonable time which shall not be less than sixty (60) days after notice,
within which the defendant must answer.

Historically, in its common-law origin, the jurisdiction of courts to render judgments in personam was grounded on their de
facto power over defendant's person. Jurisdiction was based on the power to seize and imprison defendant.8 If a defendant was
absent from the territory, the fact that he was a citizen would not enable the court's officers to seize him and service could not
represent this power.9 Hence, his presence within the territorial jurisdiction was a prerequisite to the rendition of a judgment
personally binding against him. Anglo-American law then emphasized the power concept of jurisdiction.10

Continental law, however, was somewhat different. It had two fundamental principles of Roman origin: 1) in suits in personam
and those relating to movables, courts of the domicile of the defendant have general jurisdiction — actor rei forum sequitur, and (2)
in actions concerning immovables, the courts of the situs have exclusive jurisdiction.11

In the development of the law, the variance between Anglo-American law and continental law became "less and less clear-cut"
because "American law has had to yield to the increasing necessity of enlarging more and more the catalogue of forums available to
the plaintiff."12

Thus it is, that American cases forged the doctrine, now long recognized, that domiciliaries of a state, though temporarily out of
its territorial jurisdiction, are always amenable to suits in personam therein.13 And this precept is the foundation for the American
rule that declares substituted service binding on absent residents. The leading case Milliken vs. Meyer,14 furnishes the rationale:

. . . the authority of a state over one of its citizens is not terminated by the mere fact of his absence from the state. The state
which accords him privileges and affords protection to him and his property by virtue of his domicile may also exact reciprocal duties.
"Enjoyment of the privileges of residence within the state, and the attendant right to invoke the protection of its laws, are
inseparable" from the various incidences of state citizenship. . . . The responsibilities of that citizenship arise out of the relationship
to the state which domicile creates. That relationship is not dissolved by mere absence from the state. The attendant duties, like the
rights and privileges incident to domicile, are not dependent on continuous presence in the state. One such incident of domicile is
amenability to suit within the state even during sojourns without the state, where the state has provided and employed a reasonable
method for apprising such an absent party of the proceedings against him.

There should be no doubt, therefore, that in suits in personam, courts have jurisdiction over residents temporarily out of the
country.

This brings us to the question of procedural due process. Substituted service such as one contemplated in Section 8 upon a
temporarily absent resident, it has been held, is wholly adequate to meet the requirements of due process.15 The constitutional
requirement of due process exacts that the service be such as may be reasonably expected to give the notice desired. Once the
service provided by the rules reasonably accomplishes that end, the requirement of justice is answered; the traditional notions of fair
play are satisfied; due process is served.

In American jurisprudence, whether a defendant be in another state under the federal system or is abroad in Europe,16
substituted service is still considered to be valid.17 The language in Milliken vs. Meyer, supra, is expressive: "Its adequacy so far as
due process is concerned is dependent on whether or not the form of substituted service provided for such cases and employed is
reasonably calculated to give him actual notice of the proceedings and an opportunity to be heard. If it is, then traditional notions of
fair play and substantial justice (McDonald vs. Mabee, supra) implicit in due process are satisfied."18

When the framers of our Rules adapted Section 8, it is to be implied that they intended to give the provision the same meaning
shaped out by the jurisprudence of the jurisdiction from whence it was patterned. Section 8 is to be viewed in the same context it is
understood in the American legal system. The word "defendant" in that provision is to be construed as including any resident of this
country. By comparative construction, Section 8 is to be applied to all resident defendants — without distinction as to whether he is
physically present in this country or not.

Chief Justice Moran shares this view. Commenting on Section 18, Rule 14, he states: "Since the defendant is residing in the
Philippines, jurisdiction over his person may be acquired by Philippine courts by substituted service of summons under section 8. But
extra-territorial service is allowed also by leave of court according to the above provision [Section 18]."19 Justice Martin regards the
word "residence" in Section 8 as "the place where the person named in the summons is living at the time when the service is made,
even though he may be temporarily out of the state at the time."20

This construction is but fair. It is in accord with substantial justice. The burden on a plaintiff is not to be enlarged with a
restrictive construction as desired by defendant here. Under the rules, a plaintiff, in the initial stage of suit, is merely required to
know the defendant's "dwelling house or residence" or his "office or regular place of business" — and no more. He is not asked to
investigate where a resident defendant actually is at the precise moment of filing suit. Once defendant's dwelling house or residence
or office or regular place of business is known, he can expect valid service of summons to be made on "some person of suitable age
and discretion then residing" in defendant's dwelling house or residence, or on "some competent person in charge" of his office or
regular place of business. By the terms of the law, plaintiff is not even duty-bound to see to it that the person upon whom service
was actually made delivers the summons to defendant or inform him about it. The law presumes that for him.

It is immaterial then that defendant does not in fact receive actual notice. This will not affect the validity of the service.21
Accordingly, the defendant may be charged by a judgment in personam as a result of legal proceedings upon a method of service
which is not personal, "which in fact may not become actual notice to him," and which may be accomplished in his lawful absence
from the country.22 For, the rules do not require that papers be served on defendant personally or a showing that the papers were
delivered to defendant by the person with whom they were left.23

Reasons for the views just expressed are not wanting. A man temporarily absent from this country leaves a definite place of
residence, a dwelling where he lives, a local base, so to speak, to which any inquiry about him may be directed and where he is
bound to return. Where one temporarily absents himself, he leaves his affairs in the hands of one who may be reasonably expected
to act in his place and stead; to do all that is necessary to protect his interests; and to communicate with him from time to time any
incident of importance that may affect him or his business or his affairs. It is usual for such a man to leave at his home or with his
business associates information as to where he may be contacted in the event a question that affects him crops up. If he does not do
what is expected of him, and a case comes up in court against him, he cannot in justice raise his voice and say that he is not subject
to the processes of our courts. He cannot stop a suit from being filed against him upon a claim that he cannot be summoned at his
dwelling house or residence or his office or regular place of business.

Not that he cannot be reached within a reasonable time to enable him to contest a suit against him. There are now advanced
facilities of communication. Long distance telephone calls and cablegrams make it easy for one he left behind to communicate with
him.

In the light of the foregoing, we find ourselves unwilling to concede that substituted service provided in Section 8 may be
down-graded as an ineffective means to bring temporarily absent residents within the reach of our courts.

As we go back to the case at hand, there is the temporarily absent defendant who was a parish priest. Summons upon him was
served upon Fr. Bautista who lived in the same convent where defendant resided. Fr. Bautista, we must assume, is a responsible
person. Service upon him is effective.

2. The view we take of this case sweeps away defendant's argument that Section 18 is the sole provision that governs summons
upon a defendant temporarily absent in an action in personam, as here. Indeed, defendant's posture strikes at the very language
employed by this reglementary provision cited by him. The word "may" — in the statement in Section 8 that "service may, by leave of
court, be effected out of the Philippines," as under Section 17 — will not support the deduction, without more, that Section 18 is the
only provision controlling in this case. On the contrary, the phraseology of the rule is a recognition of the fact that substituted service
— out of the Philippines — under Section 17 is but one of the modes of effective service to bring a defendant in court. And upon the
basic concepts under which our rules governing processes operate, the normal method of service of summons on one temporarily
absent is by substituted service set forth in Section 8. And this, because personal service outside the country and service by
publication are not ordinary means of summoning defendants.

In practical terms, we perceive that — in suits in personam — the more circuitous procedure delineated in Sections 17 and 18 is
resorted to by a plaintiff if defendant's dwelling house or residence or place of business in this country is not known; or, if known,
service upon him cannot be had thereat upon the terms of Section 8. Here, since personal service is impossible, resort to substituted
service becomes a necessity. A comparison between the service in Section 8 and that in Sections 17 and 18 is beside the point. They
both provide for substituted service. Anyway, as Goodrich observed: "[I]f a substitute is to be made where an actual personal service
is impossible, 'the best is none too good'."24

3. The judgment has long since become final. It enjoys the presumption of regularity. It is, unless stricken down, entitled to
respect. Non quieta movere. Because "[p]ublic policy and sound practice demand that, at the risk of occasional errors, judgments of
courts should become final at some definite date fixed by law."25

The norm of conduct observed by defendant would not, we believe, tilt the scales of justice in his favor. We go to the
background facts. Logic and common sense tell us that Fr. Bautista who received the summons and who took interest in the case
must have informed defendant one way or another of the suit, at the latest upon his return in October, 1958. By then there was still
time for him to move to set aside the default order of September 20, 1958. Defendant did not move. It is well to remember also that
judgment by default was not rendered against defendant until June 8, 1959, or almost nine (9) months after the default order was
issued. Again, defendant did nothing. According to defendant, he learned of that judgment on December 20, 1959. The full impact of
the judgment totalling P34,000.00 must have by then left an indelible mark in his mind. A judgment of a court of justice is no piddling
matter. It should not be trifled with. Especially so when the amount is big, as it is here. That same day — December 20 — his attorney
took a hand on the matter, wrote back plaintiffs refusing payment of the claim. The first writ of execution was served on defendant
on January 14, 1960. That time he did not pay, because according to the Sheriff's return, defendant then stated that he was
"financially hard up."
Defendant did not bestir himself until February 20, 1962, i.e., not less than to years and two months after he learned — by his
own admission — of the judgment. And, that was shortly after levy was made on his house in Caloocan. It is in this actual
environment that then CFI Judge Magno Gatmaitan, in his order of March 24, 1962, correctly observed that "the Court once again
believes that this solution (denial of the motion to reconsider the appealed order) is just because of the apparent intentional inaction
of defendant since 20 December, 1959."

Indeed, it was not right that defendant should have supinely sat on the decision, and deliberately disregarded the import
thereof. Neither was it correct for him to have waited so long, slept on his rights, and only put plaintiffs to task when his own
property was threatened because of the levy and execution thereon.

The decision below may not thus be annulled. Plaintiffs may not be compelled to file a fresh suit. Because, prejudice to
plaintiffs, which could have been avoided by defendant, will become a reality. The additional expense, trouble and anxiety need not
be essayed. The accident took place on December 16, 1957. The lower court's decision made mention of two eye witnesses and two
doctors of medicine who testified as to injuries. To bring back those witnesses to court becomes a serious problem. Plaintiffs will
have to search for them and if found, they may not be able to present to the court a narrative as accurately as they had done before.
Time has an unfortunate tendency of obliterating occurrences from a witness' memory. Recollections are apt to be blurred. Human
memory can even be treacherous. Lapse of time may also carry with it dissipation of other evidence. Surely, there is great validity to
the statement that the march of time is truth in flight.26 These, in broad outlines, give life to the salutary policy on which laches is
founded.

WHEREFORE, the orders appealed from dated March 3, 1962 and March 24, 1962 are hereby affirmed.1äwphï1.ñët

Costs against defendant-appellant. So ordered.

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