G.R. No. 75919 May 7, 1987 totalling in the amount of P78,750,000.

00 which should be the

MANCHESTER DEVELOPMENT CORPORATION, basis of assessment of the filing fee.
ET AL., petitioners, 4. When this under-re assessment of the filing fee in this case
vs. COURT OF APPEALS, CITY LAND was brought to the attention of this Court together with similar
DEVELOPMENT CORPORATION, STEPHEN other cases an investigation was immediately ordered by the
ROXAS, ANDREW LUISON, GRACE LUISON and Court. Meanwhile plaintiff through another counsel with leave
JOSE DE MAISIP, respondents. of court filed an amended complaint on September 12, 1985
R E S O L U T I O N GANCAYCO, J.: for the inclusion of Philips Wire and Cable Corporation as co-
Acting on the motion for reconsideration of the resolution of plaintiff and by emanating any mention of the amount of
the Second Division of January 28,1987 and another motion damages in the body of the complaint. The prayer in the
to refer the case to and to be heard in oral argument by the original complaint was maintained. After this Court issued an
Court En Banc filed by petitioners, the motion to refer the case order on October 15, 1985 ordering the re- assessment of the
to the Court en banc is granted but the motion to set the case docket fee in the present case and other cases that were
for oral argument is denied. investigated, on November 12, 1985 the trial court directed
Petitioners in support of their contention that the filing fee plaintiffs to rectify the amended complaint by stating the
must be assessed on the basis of the amended complaint cite amounts which they are asking for. It was only then that
the case of Magaspi vs. Ramolete. 1 They contend that the plaintiffs specified the amount of damages in the body of the
Court of Appeals erred in that the filing fee should be levied complaint in the reduced amount of P10,000,000.00. 7 Still no
by considering the amount of damages sought in the original amount of damages were specified in the prayer. Said
complaint. amended complaint was admitted.
The environmental facts of said case differ from the present in On the other hand, in the Magaspi case, the trial court ordered
that — the plaintiffs to pay the amount of P3,104.00 as filing fee
1. The Magaspi case was an action for recovery of ownership covering the damages alleged in the original complaint as it
and possession of a parcel of land with damages.2While the did not consider the damages to be merely an or incidental to
present case is an action for torts and damages and specific the action8 for recovery of ownership and possession of real
performance with prayer for temporary restraining order, etc.3 property. An amended complaint was filed by plaintiff with
leave of court to include the government of the Republic as
2. In the Magaspi case, the prayer in the complaint seeks not defendant and reducing the amount of damages, and attorney's
only the annulment of title of the defendant to the property, the fees prayed for to P100,000.00. Said amended complaint was
declaration of ownership and delivery of possession thereof to also admitted. 9
plaintiffs but also asks for the payment of actual moral,
exemplary damages and attorney's fees arising therefrom in In the Magaspi case, the action was considered not only one
the amounts specified therein. 4However, in the present case, for recovery of ownership but also for damages, so that the
the prayer is for the issuance of a writ of preliminary filing fee for the damages should be the basis of assessment.
prohibitory injunction during the pendency of the action Although the payment of the docketing fee of P60.00 was
against the defendants' announced forfeiture of the sum of P3 found to be insufficient, nevertheless, it was held that since the
Million paid by the plaintiffs for the property in question, to payment was the result of an "honest difference of opinion as
attach such property of defendants that maybe sufficient to to the correct amount to be paid as docket fee" the court "had
satisfy any judgment that maybe rendered, and after hearing, acquired jurisdiction over the case and the proceedings
to order defendants to execute a contract of purchase and sale thereafter had were proper and regular." 10 Hence, as the
of the subject property and annul defendants' illegal forfeiture amended complaint superseded the original complaint, the
of the money of plaintiff, ordering defendants jointly and allegations of damages in the amended complaint should be
severally to pay plaintiff actual, compensatory and exemplary the basis of the computation of the filing fee. 11
damages as well as 25% of said amounts as maybe proved In the present case no such honest difference of opinion was
during the trial as attorney's fees and declaring the tender of possible as the allegations of the complaint, the designation
payment of the purchase price of plaintiff valid and producing and the prayer show clearly that it is an action for damages and
the effect of payment and to make the injunction permanent. specific performance. The docketing fee should be assessed by
The amount of damages sought is not specified in the prayer considering the amount of damages as alleged in the original
although the body of the complaint alleges the total amount of complaint.
over P78 Million as damages suffered by plaintiff.5 As reiterated in the Magaspi case the rule is well-settled "that
3. Upon the filing of the complaint there was an honest a case is deemed filed only upon payment of the docket fee
difference of opinion as to the nature of the action in the regardless of the actual date of filing in court . 12 Thus, in the
Magaspi case. The complaint was considered as primarily an present case the trial court did not acquire jurisdiction over the
action for recovery of ownership and possession of a parcel of case by the payment of only P410.00 as docket fee. Neither
land. The damages stated were treated as merely to the main can the amendment of the complaint thereby vest jurisdiction
cause of action. Thus, the docket fee of only P60.00 and upon the Court. 13 For an legal purposes there is no such
P10.00 for the sheriff's fee were paid. 6 original complaint that was duly filed which could be amended.
In the present case there can be no such honest difference of Consequently, the order admitting the amended complaint and
opinion. As maybe gleaned from the allegations of the all subsequent proceedings and actions taken by the trial court
complaint as well as the designation thereof, it is both an are null and void.
action for damages and specific performance. The docket fee The Court of Appeals therefore, aptly ruled in the present case
paid upon filing of complaint in the amount only of P410.00 that the basis of assessment of the docket fee should be the
by considering the action to be merely one for specific amount of damages sought in the original complaint and not
performance where the amount involved is not capable of in the amended complaint.
pecuniary estimation is obviously erroneous. Although the The Court cannot close this case without making the
total amount of damages sought is not stated in the prayer of observation that it frowns at the practice of counsel who filed
the complaint yet it is spelled out in the body of the complaint the original complaint in this case of omitting any
specification of the amount of damages in the prayer although Although the prayer in the complaint did not quantify the
the amount of over P78 million is alleged in the body of the amount of damages sought said amount may be inferred from
complaint. This is clearly intended for no other purpose than the body of the complaint to be about Fifty Million Pesos
to evade the payment of the correct filing fees if not to mislead (P50,000,000.00).
the docket clerk in the assessment of the filing fee. This Only the amount of P210.00 was paid by private respondent
fraudulent practice was compounded when, even as this Court as docket fee which prompted petitioners' counsel to raise his
had taken cognizance of the anomaly and ordered an objection. Said objection was disregarded by respondent
investigation, petitioner through another counsel filed an Judge Jose P. Castro who was then presiding over said case.
amended complaint, deleting all mention of the amount of Upon the order of this Court, the records of said case together
damages being asked for in the body of the complaint. It was with twenty-two other cases assigned to different branches of
only when in obedience to the order of this Court of October the Regional Trial Court of Quezon City which were under
18, 1985, the trial court directed that the amount of damages investigation for under-assessment of docket fees were
be specified in the amended complaint, that petitioners' transmitted to this Court. The Court thereafter returned the
counsel wrote the damages sought in the much reduced said records to the trial court with the directive that they be re-
amount of P10,000,000.00 in the body of the complaint but not raffled to the other judges in Quezon City, to the exclusion of
in the prayer thereof. The design to avoid payment of the Judge Castro. Civil Case No. Q-41177 was re-raffled to
required docket fee is obvious. Branch 104, a sala which was then vacant.
The Court serves warning that it will take drastic action upon On October 15, 1985, the Court en banc issued a Resolution
a repetition of this unethical practice. in Administrative Case No. 85-10-8752-RTC directing the
To put a stop to this irregularity, henceforth all complaints, judges in said cases to reassess the docket fees and that in case
petitions, answers and other similar pleadings should specify of deficiency, to order its payment. The Resolution also
the amount of damages being prayed for not only in the body requires all clerks of court to issue certificates of re-
of the pleading but also in the prayer, and said damages shall assessment of docket fees. All litigants were likewise required
be considered in the assessment of the filing fees in any case. to specify in their pleadings the amount sought to be recovered
Any pleading that fails to comply with this requirement shall in their complaints.
not bib accepted nor admitted, or shall otherwise be expunged On December 16, 1985, Judge Antonio P. Solano, to whose
from the record. sala Civil Case No. Q-41177 was temporarily assigned,
The Court acquires jurisdiction over any case only upon the issuedan order to the Clerk of Court instructing him to issue a
payment of the prescribed docket fee. An amendment of the certificate of assessment of the docket fee paid by private
complaint or similar pleading will not thereby vest jurisdiction respondent and, in case of deficiency, to include the same in
in the Court, much less the payment of the docket fee based on said certificate.
the amounts sought in the amended pleading. The ruling in the On January 7, 1984, to forestall a default, a cautionary answer
Magaspi case 14 in so far as it is inconsistent with this was filed by petitioners. On August 30,1984, an amended
pronouncement is overturned and reversed. WHEREFORE, complaint was filed by private respondent including the two
the motion for reconsideration is denied for lack of merit. additional defendants aforestated.
SO ORDERED. 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
G.R. Nos. 79937-38 February 13, 1989 requiring the parties in the case to comment on the Clerk of
SUN INSURANCE OFFICE, LTD., (SIOL), E.B. Court's letter-report signifying her difficulty in complying
PHILIPPS and D.J. WARBY, petitioners, with the Resolution of this Court of October 15, 1985 since the
vs. pleadings filed by private respondent did not indicate the exact
HON. MAXIMIANO C. ASUNCION, Presiding Judge, amount sought to be recovered. On January 23, 1986, private
Branch 104, Regional Trial Court, Quezon City and respondent filed a "Compliance" and a "Re-Amended
MANUEL CHUA UY PO TIONG, respondents. Complaint" stating therein a claim of "not less than
GANCAYCO, J.: Pl0,000,000. 00 as actual compensatory damages" in the
Again the Court is asked to resolve the issue of whether or not prayer. In the body of the said second amended complaint
a court acquires jurisdiction over a case when the correct and however, private respondent alleges actual and compensatory
proper docket fee has not been paid. damages and attorney's fees in the total amount of about
P44,601,623.70.
On February 28, 1984, petitioner Sun Insurance Office, Ltd.
(SIOL for brevity) filed a complaint with the Regional Trial On January 24, 1986, Judge Asuncion issued another Order
Court of Makati, Metro Manila for the consignation of a admitting the second amended complaint and stating therein
premium refund on a fire insurance policy with a prayer for that the same constituted proper compliance with the
the judicial declaration of its nullity against private respondent Resolution of this Court and that a copy thereof should be
Manuel Uy Po Tiong. Private respondent as declared in default furnished the Clerk of Court for the reassessment of the docket
for failure to file the required answer within the reglementary fees. The reassessment by the Clerk of Court based on private
period. respondent's claim of "not less than P10,000,000.00 as actual
and compensatory damages" amounted to P39,786.00 as
On the other hand, on March 28, 1984, private respondent filed docket fee. This was subsequently paid by private respondent.
a complaint in the Regional Trial Court of Quezon City for the
refund of premiums and the issuance of a writ of preliminary Petitioners then filed a petition for certiorari with the Court of
attachment which was docketed as Civil Case No. Q-41177, Appeals questioning the said order of Judie Asuncion dated
initially against petitioner SIOL, and thereafter including E.B. January 24, 1986.
Philipps and D.J. Warby as additional defendants. The On April 24, 1986, private respondent filed a supplemental
complaint sought, among others, the payment of actual, complaint alleging an additional claim of P20,000,000.00 as
compensatory, moral, exemplary and liquidated damages, d.qmages so the total claim amounts to about P64,601,623.70.
attorney's fees, expenses of litigation and costs of the suit. On October 16, 1986, or some seven months after filing the
supplemental complaint, the private respondent paid the the case, the plaintiff filed a notice of appeal with said court
additional docket fee of P80,396.00.1 but he deposited only P8.00 for the docket fee, instead of
On August 13, 1987, the Court of Appeals rendered a decision P16.00 as required, within the reglementary period of appeal
ruling, among others, as follows: of five (5) days after receiving notice of judgment. Plaintiff
deposited the additional P8.00 to complete the amount of the
WHEREFORE, judgment is hereby rendered: docket fee only fourteen (14) days later. On the basis of these
1. Denying due course to the petition in CA- facts, this court held that the Court of First Instance did
G.R. SP No. 1, 09715 insofar as it seeks notacquire jurisdiction to hear and determine the appeal as the
annulment of the order appeal was not thereby perfected.
(a) denying petitioners' motion to dismiss the In Lee vs. Republic, 8 the petitioner filed a verified declaration
complaint, as amended, and of intention to become a Filipino citizen by sending it through
(b) granting the writ of preliminary registered mail to the Office of the Solicitor General in 1953
attachment, but giving due course to the but the required filing fee was paid only in 1956, barely 5V2
portion thereof questioning the reassessment months prior to the filing of the petition for citizenship. This
of the docketing fee, and requiring the Court ruled that the declaration was not filed in accordance
Honorable respondent Court to reassess the with the legal requirement that such declaration should be filed
docketing fee to be paid by private respondent at least one year before the filing of the petition for citizenship.
on the basis of the amount of Citing Lazaro, this Court concluded that the filing of
P25,401,707.00. 2 petitioner's declaration of intention on October 23, 1953
produced no legal effect until the required filing fee was paid
Hence, the instant petition. on May 23, 1956.
During the pendency of this petition and in conformity with In Malimit vs. Degamo, 9 the same principles enunciated in
the said judgment of respondent court, private respondent paid Lazaro and Lee were applied. It was an original petition
the additional docket fee of P62,432.90 on April 28, 1988. 3 for quo warranto contesting the right to office of proclaimed
The main thrust of the petition is that the Court of Appeals candidates which was mailed, addressed to the clerk of the
erred in not finding that the lower court did not acquire Court of First Instance, within the one-week period after the
jurisdiction over Civil Case No. Q-41177 on the ground of proclamation as provided therefor by law.10However, the
nonpayment of the correct and proper docket fee. Petitioners required docket fees were paid only after the expiration of said
allege that while it may be true that private respondent had period. Consequently, this Court held that the date of such
paid the amount of P182,824.90 as docket fee as herein-above payment must be deemed to be the real date of filing of
related, and considering that the total amount sought to be aforesaid petition and not the date when it was mailed.
recovered in the amended and supplemental complaint is Again, in Garica vs, Vasquez, 11 this Court reiterated the rule
P64,601,623.70 the docket fee that should be paid by private that the docket fee must be paid before a court will act on a
respondent is P257,810.49, more or less. Not having paid the petition or complaint. However, we also held that said rule is
same, petitioners contend that the complaint should be not applicable when petitioner seeks the probate of several
dismissed and all incidents arising therefrom should be wills of the same decedent as he is not required to file a
annulled. In support of their theory, petitioners cite the latest separate action for each will but instead he may have other
ruling of the Court in Manchester Development Corporation wills probated in the same special proceeding then pending
vs. CA, 4 as follows: before the same court.
The Court acquires jurisdiction over any case Then in Magaspi, 12 this Court reiterated the ruling
only upon the payment of the prescribed in Malimit and Lee that a case is deemed filed only upon
docket fee. An amendment of the complaint payment of the docket fee regardless of the actual date of its
or similar pleading will not thereby vest filing in court. Said case involved a complaint for recovery of
jurisdiction in the Court, much less the ownership and possession of a parcel of land with damages
payment of the docket fee based on the filed in the Court of First Instance of Cebu. Upon the payment
amounts sought in the amended pleading. The of P60.00 for the docket fee and P10.00 for the sheriffs fee,
ruling in the Magaspi Case in so far as it is the complaint was docketed as Civil Case No. R-11882. The
inconsistent with this pronouncement is prayer of the complaint sought that the Transfer Certificate of
overturned and reversed. Title issued in the name of the defendant be declared as null
On the other hand, private respondent claims that the ruling and void. It was also prayed that plaintiff be declared as owner
in Manchester cannot apply retroactively to Civil Case No. thereof to whom the proper title should be issued, and that
Q41177 for at the time said civil case was filed in court there defendant be made to pay monthly rentals of P3,500.00 from
was no such Manchester ruling as yet. Further, private June 2, 1948 up to the time the property is delivered to plaintiff,
respondent avers that what is applicable is the ruling of P500,000.00 as moral damages, attorney's fees in the amount
this Court in Magaspi v. Ramolete, 5 wherein this Court held of P250,000.00, the costs of the action and exemplary damages
that the trial court acquired jurisdiction over the case even if in the amount of P500,000.00.
the docket fee paid was insufficient. The defendant then filed a motion to compel the plaintiff to
The contention that Manchester cannot apply retroactively to pay the correct amount of the docket fee to which an
this case is untenable. Statutes regulating the procedure of the opposition was filed by the plaintiff alleging that the action
courts will be construed as applicable to actions pending and was for the recovery of a parcel of land so the docket fee must
undetermined at the time of their passage. Procedural laws are be based on its assessed value and that the amount of P60.00
retrospective in that sense and to that extent. 6 was the correct docketing fee. The trial court ordered the
In Lazaro vs. Endencia and Andres, 7 this Court held that the plaintiff to pay P3,104.00 as filing fee.
payment of the full amount of the docket fee is an The plaintiff then filed a motion to admit the amended
indispensable step for the perfection of an appeal. In a forcible complaint to include the Republic as the defendant. In the
entry and detainer case before the justice of the peace court of prayer of the amended complaint the exemplary damages
Manaoag, Pangasinan, after notice of a judgment dismissing earlier sought was eliminated. The amended prayer merely
sought moral damages as the court may determine, attorney's amounts which they were asking for. This plaintiff did as
fees of P100,000.00 and the costs of the action. The defendant instructed. In the body of the complaint the amount of
filed an opposition to the amended complaint. The opposition damages alleged was reduced to P10,000,000.00 but still no
notwithstanding, the amended complaint was admitted by the amount of damages was specified in the prayer. Said amended
trial court. The trial court reiterated its order for the payment complaint was admitted.
of the additional docket fee which plaintiff assailed and then Applying the principle in Magaspi that "the case is deemed
challenged before this Court. Plaintiff alleged that he paid the filed only upon payment of the docket fee regardless of the
total docket fee in the amount of P60.00 and that if he has to actual date of filing in court," this Court held that the trial court
pay the additional fee it must be based on the amended did not acquire jurisdiction over the case by payment of only
complaint. P410.00 for the docket fee. Neither can the amendment of the
The question posed, therefore, was whether or not the plaintiff complaint thereby vest jurisdiction upon the Court. For all
may be considered to have filed the case even if the docketing legal purposes there was no such original complaint duly filed
fee paid was not sufficient. In Magaspi, We reiterated the rule which could be amended. Consequently, the order admitting
that the case was deemed filed only upon the payment of the the amended complaint and all subsequent proceedings and
correct amount for the docket fee regardless of the actual date actions taken by the trial court were declared null and void.13
of the filing of the complaint; that there was an honest The present case, as above discussed, is among the several
difference of opinion as to the correct amount to be paid as cases of under-assessment of docket fee which were
docket fee in that as the action appears to be one for the investigated by this Court together with Manchester. The facts
recovery of property the docket fee of P60.00 was correct; and and circumstances of this case are similar to Manchester. In
that as the action is also one, for damages, We upheld the the body of the original complaint, the total amount of
assessment of the additional docket fee based on the damages damages sought amounted to about P50 Million. In the prayer,
alleged in the amended complaint as against the assessment of the amount of damages asked for was not stated. The action
the trial court which was based on the damages alleged in the was for the refund of the premium and the issuance of the writ
original complaint. of preliminary attachment with damages. The amount of only
However, as aforecited, this CourtP210.00 was paid for the docket fee. On January 23, 1986,
overturned Magaspi in Manchester. Manchester involves an private respondent filed an amended complaint wherein in the
action for torts and damages and specific performance with a prayer it is asked that he be awarded no less than
prayer for the issuance of a temporary restraining order, etc. P10,000,000.00 as actual and exemplary damages but in the
The prayer in said case is for the issuance of a writ of body of the complaint the amount of his pecuniary claim is
preliminary prohibitory injunction during the pendency of the approximately P44,601,623.70. Said amended complaint was
action against the defendants' announced forfeiture of the sum admitted and the private respondent was reassessed the
of P3 Million paid by the plaintiffs for the property in question,
additional docket fee of P39,786.00 based on his prayer of not
the attachment of such property of defendants that may be less than P10,000,000.00 in damages, which he paid.
sufficient to satisfy any judgment that may be rendered, and, On April 24, 1986, private respondent filed a supplemental
after hearing, the issuance of an order requiring defendants to complaint alleging an additional claim of P20,000,000.00 in
execute a contract of purchase and sale of the subject property damages so that his total claim is approximately
and annul defendants' illegal forfeiture of the money of P64,601,620.70. On October 16, 1986, private respondent paid
plaintiff. It was also prayed that the defendants be made to pay an additional docket fee of P80,396.00. After the promulgation
the plaintiff jointly and severally, actual, compensatory and of the decision of the respondent court on August 31, 1987
exemplary damages as well as 25% of said amounts as may be wherein private respondent was ordered to be reassessed for
proved during the trial for attorney's fees. The plaintiff also additional docket fee, and during the pendency of this petition,
asked the trial court to declare the tender of payment of the and after the promulgation of Manchester, on April 28, 1988,
purchase price of plaintiff valid and sufficient for purposes of private respondent paid an additional docket fee of P62,132.92.
payment, and to make the injunction permanent. The amount Although private respondent appears to have paid a total
of damages sought is not specified in the prayer although the amount of P182,824.90 for the docket fee considering the total
body of the complaint alleges the total amount of over P78 amount of his claim in the amended and supplemental
Millon allegedly suffered by plaintiff. complaint amounting to about P64,601,620.70, petitioner
Upon the filing of the complaint, the plaintiff paid the amount insists that private respondent must pay a docket fee of
of only P410.00 for the docket fee based on the nature of the P257,810.49.
action for specific performance where the amount involved is The principle in Manchester could very well be applied in the
not capable of pecuniary estimation. However, it was obvious present case. The pattern and the intent to defraud the
from the allegations of the complaint as well as its designation government of the docket fee due it is obvious not only in the
that the action was one for damages and specific performance. filing of the original complaint but also in the filing of the
Thus, this court held the plaintiff must be assessed the correct second amended complaint.
docket fee computed against the amount of damages of about
P78 Million, although the same was not spelled out in the However, in Manchester, petitioner did not pay any additional
prayer of the complaint. docket fee until] the case was decided by this Court on May 7,
1987. Thus, in Manchester, due to the fraud committed on the
Meanwhile, plaintiff through another counsel, with leave of government, this Court held that the court a quo did not
court, filed an amended complaint on September 12, 1985 by acquire jurisdiction over the case and that the amended
the inclusion of another co-plaintiff and eliminating any complaint could not have been admitted inasmuch as the
mention of the amount of damages in the body of the original complaint was null and void.
complaint. The prayer in the original complaint was
maintained. In the present case, a more liberal interpretation of the rules is
called for considering that, unlike Manchester, private
On October 15, 1985, this Court ordered the re-assessment of respondent demonstrated his willingness to abide by the rules
the docket fee in the said case and other cases that were by paying the additional docket fees as required. The
investigated. On November 12, 1985, the trial court directed promulgation of the decision in Manchester must have had that
the plaintiff to rectify the amended complaint by stating the sobering influence on private respondent who thus paid the
additional docket fee as ordered by the respondent court. It rescission of a contract of sale of two (2) parcels of
triggered his change of stance by manifesting his willingness land against petitioners, praying for the following reliefs:
to pay such additional docket fee as may be ordered. 1. Ordering the nullification or rescission of the Contract of
Nevertheless, petitioners contend that the docket fee that was Conditional Sale (Supplementary Agreement) for having
paid is still insufficient considering the total amount of the violated the rights of plaintiffs (private respondents)
claim. This is a matter which the clerk of court of the lower guaranteed to them under Article 886 of the Civil Code and/or
court and/or his duly authorized docket clerk or clerk in- violation of the terms and conditions of the said contract.
charge should determine and, thereafter, if any amount is 2. Declaring void ab initio the Deed of Absolute Sale for being
found due, he must require the private respondent to pay the absolutely simulated; and
same. 3. Ordering defendants (petitioners) to pay plaintiffs (private
respondents) attorneys fees in the amount of P100,000.00.
Thus, the Court rules as follows: Other reliefs and remedies as are just and equitable in the
1. It is not simply the filing of the complaint or appropriate premises are also prayed for.[1]
initiatory pleading, but the payment of the prescribed docket Upon the filing of the complaint, the clerk of court required
fee, that vests a trial court with jurisdiction over the subject private respondents to pay docket and legal fees in the total
matter or nature of the action. Where the filing of the initiatory amount of P610.00, broken down as follows:
pleading is not accompanied by payment of the docket fee, the P450.00 - Docket fee for the Judicial Development Fund
court may allow payment of the fee within a reasonable time under Official Receipt No. 1877773
but in no case beyond the applicable prescriptive or 150.00 - Docket fee for the General Fund under Official
reglementary period. Receipt No. 6834215
2. The same rule applies to permissive counterclaims, third 10.00 - for[2]the Legal Research Fund under Official Receipt No.
party claims and similar pleadings, which shall not be 6834450.
considered filed until and unless the filing fee prescribed On September 26, 1991, petitioners moved for the
therefor is paid. The court may also allow payment of said fee dismissal of the complaint on the ground that the trial court did
within a reasonable time but also in no case beyond its not acquire jurisdiction over the case by reason of private
applicable prescriptive or reglementary period. respondents nonpayment of the correct amount of docket fees.
Petitioners contended that in addition to the fees already paid
3. Where the trial court acquires jurisdiction over a claim by based on the claim for P100,000.00 for attorneys fees, private
the filing of the appropriate pleading and payment of the respondents should have paid docket fees in the amount
prescribed filing fee but, subsequently, the judgment awards a of P21,640.00, based on the alleged value of the two (2)
claim not specified in the pleading, or if specified the same has parcels of land subject matter of the contract of sale sought to
been left for determination by the court, the additional filing be annulled.[3]
fee therefor shall constitute a lien on the judgment. It shall be On September 30, 1991, private respondents filed
the responsibility of the Clerk of Court or his duly authorized opposition to the motion to dismiss, arguing that outright
deputy to enforce said lien and assess and collect the additional dismissal of their complaint was not warranted on the basis of
fee. the alleged nonpayment of the correct amount of docket fees,
WHEREFORE, the petition is DISMISSED for lack of merit. considering that the amount paid by them was that assessed by
The Clerk of Court of the court a quo is hereby instructed to the clerk of court.[4] On October 9, 1991, petitioners filed a
reassess and determine the additional filing fee that should be reply to which private respondents filed, on October 17, 1991,
paid by private respondent considering the total amount of the a rejoinder.
claim sought in the original complaint and the supplemental On October 21, 1991, the trial court[5] denied petitioners
complaint as may be gleaned from the allegations and the motion to dismiss but required private respondents to pay the
prayer thereof and to require private respondent to pay the amount of docket fees based on the estimated value of the
deficiency, if any, without pronouncement as to costs. parcels of land in litigation as stated in the complaint.
SO ORDERED. Private respondents filed a motion for reconsideration but
their motion was denied by the trial court. They therefore,
brought the matter to the Court of Appeals which, on February
[G.R. No. 104796. March 6, 1998]
26, 1992, rendered a decision[6] annulling the orders of the trial
SPOUSES ROSALINA S. DE LEON and ALEJANDRO L.
court. The appellate court held that an action for rescission or
DE LEON, petitioners, vs. THE COURT OF
annulment of contract is not susceptible of pecuniary
APPEALS, GLICERIO MA. ELAYDA II,
estimation and, therefore, the docket fees should not be based
FEDERICO ELAYDA and DANILO
on the value of the real property, subject matter of the contract
ELAYDA, respondents.
sought to be annulled or rescinded. Petitioners moved for
DECISION
reconsideration, but their motion was denied in a resolution
MENDOZA, J.:
dated March 25, 1992 of the appellate court. Hence, this
The question for decision is whether in assessing the
petition for review on certiorari.
docket fees to be paid for the filing of an action for annulment
Rule 141 of the Rules of Court provides:
or rescission of a contract of sale, the value of the real property,
SEC. 7. Clerks of Regional Trial Courts. - (a) For filing an
subject matter of the contract, should be used as basis, or
action or a permissive counter-claim or money claim against
whether the action should be considered as one which is not
an estate not based on judgment, or for filing with leave of
capable of pecuniary estimation and therefore the fee charged
court a third-party, fourth-party, etc. complaint, or a complaint
should be a flat rate of P400.00 as provided in Rule 141, 7(b)(1)
in intervention, and for all clerical services in the same, if the
of the Rules of Court. The trial court held the fees should be
total-sum claimed, exclusive of interest, or the stated value of
based on the value of the property, but the Court of Appeals
the property in litigation, is:
reversed and held that the flat rate should be charged. Hence
1. Not more than P20,000.00 .............P120.00
this petition for review on certiorari.
2. More than P20,000.00 but less than
The facts are as follows:
P40,000.00 ......................... 150.00
On August 8, 1991, private respondents filed in the Regional
3. P40,000.00 or more but less than
Trial Court of Quezon City a complaint for annulment or
P60,000.00 ......................... 200.00
4. P60,000.00 or more but less than
P80,000.00 ... ...................... 250.00
5. P80,000.00 or more but less than
P100,000.00 ........................... 400.00
6. P100,000.00 or more but less than
P150,000.00 ........................... 600.00
7. For each P1,000.00 in excess of
P150,000.00 ............................. 5.00
(b) For filing:
1. Actions where the value of the subject
matter cannot be estimated ............. P400.00
2. Special civil actions except judicial
foreclosure of mortgage which shall be
governed by paragraph (a) above .... 400.00
3. All other actions not involving
property........................... 400.00
In a real action, the assessed value of the property, or if there
is none, the estimated value thereof shall be alleged by the
claimant and shall be the basis in computing the fees.
(emphasis added)
Petitioners argue that an action for annulment or
rescission of a contract of sale of real property is a real action
and, therefore, the amount of the docket fees to be paid by
private respondent should be based either on the assessed
value of the property, subject matter of the action, or its
estimated value as alleged in the complaint, pursuant to the
last paragraph of 7(b) of Rule 141, as amended by the
Resolution of the Court dated September 12, 1990. Since
private respondents alleged that the land, in which they
claimed an interest as heirs, had been sold for P4,378,000.00
to petitioners, this amount should be considered the estimated
value of the land for the purpose of determining the docket
fees.
On the other hand, private respondents counter that an
action for annulment or rescission of a contract of sale of real
property is incapable of pecuniary estimation and, so, the
docket fees should be the fixed amount of P400.00 in Rule 141,
7(b)(1). In support of their argument, they cite the cases
of Lapitan v. Scandia, Inc.[7] and Bautista v.
[8]
Lim. In Lapitan this Court, in an opinion by Justice J.B.L.
Reyes, held:
A review of the jurisprudence of this Court indicates that in
determining whether an action is one the subject matter of
which is not capable of pecuniary estimation, this Court has
adopted the criterion of first ascertaining the nature of the
principal action or remedy sought. If it is primarily for the
recovery of a sum of money, the claim is considered capable
of pecuniary estimation, and whether jurisdiction is in the
municipal courts or in the courts of first instance would depend
on the amount of the claim. However, where the basic issue is
something other than the right to recover a sum of money, or
where the money claim is purely incidental to, or a
consequence of, the principal relief sought, like in suits to have
the defendant perform his part of the contract (specific
performance) and in actions for support, or for annulment of a
judgment or to foreclose a mortgage, this Court has considered
such actions as cases where the subject of the litigation may
not be estimated in terms of money, and are
cognizable exclusively by courts of first instance. The
rationale of the rule is plainly that the second class cases,
besides the determination of damages, demand an inquiry into
other factors which the law has deemed to be more within the
competence of courts of first instance, which were the lowest
courts of record at the time that the first organic laws of the
Judiciary were enacted allocating jurisdiction (Act 136 of the
Philippine Commission of June 11, 1901).
Actions for specific performance of contracts have been
expressly pronounced to be exclusively cognizable by courts
of first instance: De Jesus vs. Judge Garcia, L-26816, February
28, 1967; Manufacturers Distributors, Inc. vs. Yu Siu Liong,
L-21285, April 29, 1966. And no cogent reason appears, and
none is here advanced by the parties, why an action for
rescission (or resolution) should be differently treated, a
rescission being a counterpart, so to speak, of specific
performance. In both cases, the court would certainly have to
undertake an investigation into facts that would justify one act
or the other. No award for damages may be had in an action
for rescission without first conducting an inquiry into matters
which would justify the setting aside of a contract, in the same
manner that courts of first instance would have to make
findings of fact and law in actions not capable of pecuniary
estimation expressly held to be so by this Court, arising from
issues like those raised in Arroz v. Alojado, et al., L-22153,
March 31, 1967 (the legality or illegality of the conveyance
sought for and the determination of the validity of the money
deposit made); De Ursua v. Pelayo, L-13285, April 18, 1950
(validity of a judgment); Bunayog v. Tunas, L-12707,
December 23, 1959 (validity of a mortgage); Baito v.
Sarmiento, L-13105, August 25, 1960 (the relations of the
parties, the right to support created by the relation, etc., in
actions for support); De Rivera, et al. v. Halili, L-15159,
September 30, 1963 (the validity or nullity of documents upon
which claims are predicated). Issues of the same nature may
be raised by a party against whom an action for rescission has
been brought, or by the plaintiff himself. It is, therefore,
difficult to see why a prayer for damages in an action for
rescission should be taken as the basis for concluding such
action as one capable of pecuniary estimation a prayer which
must be included in the main action if plaintiff is to be
compensated for what he may have suffered as a result of the
breach committed by defendant, and not later on precluded
from recovering damages by the rule against splitting a cause
of action and discouraging multiplicity of suits.
Conformably with this discussion of actions where the
value of the case cannot be estimated, the Court in Bautista v.
Lim, held that an action for rescission of contract is one which
cannot be estimated and therefore the docket fee for its filing
should be the flat amount of P200.00 as then fixed in the
former Rule 141, 5(10). Said this Court:
We hold that Judge Dalisay did not err in considering Civil
Case No. V-144 as basically one for rescission or annulment
of contract which is not susceptible of pecuniary estimation (1
Morans Comments on the Rules of Court, 1970 Ed, p. 55;
Lapitan vs. Scandia, Inc., L-24668, July 31, 1968, 24 SCRA
479, 481-483).
Consequently, the fee for docketing it is P200, an amount
already paid by plaintiff, now respondent Matilda Lim. (She
should pay also the two pesos legal research fund fee, if she
has not paid it, as required in Section 4 of Republic Act No.
3870, the charter of the U.P. Law Center).
Thus, although eventually the result may be the recovery
of land, it is the nature of the action as one for rescission of
contract which is controlling. The Court of Appeals correctly
applied these cases to the present one. As it said:
We would like to add the observations that since the action of
petitioners [private respondents] against private respondents
[petitioners] is solely for annulment or rescission which is not
susceptible of pecuniary estimation, the action should not be
confused and equated with the value of the property subject of
the transaction; that by the very nature of the case, the
allegations, and specific prayer in the complaint, sans any
prayer for recovery of money and/or value of the transaction,
or for actual or compensatory damages, the assessment and
collection of the legal fees should not be intertwined with the
 merits of the case and/or what may be its end result; and that Eventually, respondent filed with the trial court an
to sustain private respondents [petitioners] position on what Urgent Ex Parte Motion For Authority To Litigate As
the respondent court may decide after all, then the assessment Indigent Plaintiff.
should be deferred and finally assessed only after the court had
finally decided the case, which cannot be done because the On October 28, 1998, the trial court issued an Order, the
rules require that filing fees should be based on what is alleged pertinent portions of which read:
and prayed for in the face of the complaint and paid upon the
filing of the complaint.WHEREFORE, the decision of The Court hereby allows the plaintiff to litigate as pauper
the Court of Appeals is AFFIRMED.SO ORDERED. there being sufficient showing that he is an indigent. He does
not own any real property in the City of Manila or elsewhere.
TOKIO MARINE MALAYAN INSURANCE COMPANY G.R. The Court therefore directs the Clerk of Court to accept the
No. 150107
INCORPORATED, ALMA PEALOSA, KIMIO HOSAKA, complaint for filing without payment of filing fees computed
SUMITOMI NISHIDA, TERESITA H. QUIAMBAO and as SIX HUNDRED FIFTEEN THOUSAND SIX HUNDRED
ANTONIO B. LAPID, SEVENTY TWO AND EIGHTY-THREE CENTAVOS
Petitioners, (P615,672.83) which amount, however, shall constitute a lien
upon any judgment to be rendered in favor of the plaintiff.
- versus -
On December 11, 1998, petitioners filed their separate
motions to dismiss the complaint.
JORGE VALDEZ,
Respondent.x ------------------------------------------ x On December 17, 1998, respondent manifested before the
TOKIO MARINE MALAYAN INSURANCE COMPANY trial court that he filed various criminal complaints against
INCORPORATED and TERESITA H. QUIAMBAO, petitioners with the Office of the City Prosecutor of Makati
Petitioners, City.
G.R. No. 150108 January 28, 2008
On January 20, 1999, the trial court issued an Order[2] denying
- versus - petitioners motions to dismiss. They then filed motions for
reconsideration, but they were likewise denied.

JORGE VALDEZ, On March 12, 1999, petitioners filed their Answer Ad

Respondent. Cautelam in Civil Case No. 98-91356.

x ------------------------------------------------------------------------------------------
On May 24,x 1999, petitioners filed a petition
for certiorari with prayer for a temporary restraining
order and preliminary injunction with the Court of Appeals
assailing the Order of the trial court dated January 20,
1999 denying their motions to dismiss, docketed as CA-G.R.
SP No. 52914.
For our resolution are two (2) consolidated petitions for
review on certiorari under Rule 45 of the 1997 Rules of Civil On October 15, 1999, the Court of Appeals issued a
Procedure, as amended, seeking to reverse the Decision[1] of Resolution directing the issuance of a writ of preliminary
the Court of Appeals dated September 13, 2001 in the injunction restraining the trial court from conducting further
consolidated cases CA-G.R. SP No. 52914 and CA-G.R. SP proceedings in Civil Case No. 98-91356 during the pendency
No. 56579. of CA-G.R. SP No. 52914.

Tokio Marine Malayan Insurance Company Incorporated

(Tokio Marine), petitioner in these cases, is a domestic
corporation engaged in the insurance business. The individual
petitioners are its corporate officers, except Antonio B. Lapid,
one of Tokio Marines consultants.
Jorge Valdez, respondent in these cases, was a former unit
manager of Tokio Marine pursuant to a Unit Management
Contract entered into between them on August 16, 1977.
On October 15, 1998, respondent filed with the Regional Trial
Court, Branch 35, Manila a complaint for damages against
petitioners, docketed as Civil Case No. 98-91356. He alleged
therein that petitioners violated the terms of the Unit
Management Contract by refusing to pay him, among others,
his commissions, and bonuses. Respondent prayed for the
following reliefs: a) actual damages in the total amount
of P71,866,205.67 and the corresponding interests; b) moral
damages of P10,000,000.00; c) exemplary damages
amounting to P10,000,000.00; d) attorneys fees
corresponding to 30% of the said amounts; and e) costs of the
suit.
Then on December 7, 1999, respondent filed with the Court
of Appeals an Urgent Notice of Taking of Deposition Upon
Oral Examination of Private Respondent Jorge Valdez For
Purposes of the Above-Captioned Pending Case And For
Such Other Legal Purposes As May Be Warranted By
Existing Law and Jurisprudence. It appears that respondent
was already 75 years old and sickly.
On December 13, 1999, petitioners filed with the Court of
Appeals a petition to cite respondent in contempt of court,
docketed as CA-G.R. SP No. 56579. Petitioners alleged
therein that in filing with the appellate court an urgent notice
of taking his deposition, respondent violated the preliminary
injunction issued by the said court.
Subsequently, CA-G.R. SP No. 56579 was consolidated with
CA-G.R. SP No. 52914.
On December 14, 1999, the deposition of respondent
was taken by Atty. Alberto A. Aguja, a Notary Public
for Manila. On the same date, he filed with the Court of
Appeals respondents deposition.
On September 13, 2001, the Court of Appeals rendered its
Decision in the consolidated cases CA-G.R. SP No. 52914 and
CA-G.R. SP No. 56579 dismissing the petitions and lifting
and dissolving the writ of preliminary injunction previously
issued, thus:
WHEREFORE, for lack of merit, the consolidated petitions
filed by the petitioners are hereby DISMISSED. The writ of
preliminary injunction dated October 18, 1999 issued by this
Court enjoining further proceedings in Civil Case No. 98-
91356, pending before the Regional Trial Court of Manila,
Branch 35 is hereby LIFTED and DISSOLVED.
SO ORDERED.
Hence, the instant consolidated petitions.
Petitioners contend that the Court of Appeals erred:
(1) in denying their motion to dismiss respondents complaint
in Civil Case No. 98-91356 for nonpayment of docket fees;
(2) for not finding that respondent engaged in forum
shopping; and (3) in not declaring that he is guilty of contempt
of court.
On the first issue, it is hornbook law that courts acquire
jurisdiction over any case only upon payment of the
prescribed docket fee.[3] As we held in Magaspi v.
Ramolete,[4] the correct docket fees must be paid before courts
can act on a petition or complaint. The exception to the rule
on payment of docket fees is provided in Section 21, Rule 3
of the 1997 Rules of Civil Procedure, as amended, thus:
SEC. 21. Indigent party. A party may be authorized to litigate
his action, claim or defense as an indigent if the court, upon
an ex parte application and hearing, is satisfied that the party
is one who has no money or property sufficient and available
for food, shelter and basic necessities for himself and his
family.
Such authority shall include an exemption from payment of
docket and other lawful fees and of transcripts of stenographic
notes which the court may order to be furnished him. The
amount of the docket and other lawful fees which the indigent
was exempted from paying shall be a lien on any judgment
rendered in the case favorable to the indigent, unless the court
otherwise provides.
Any adverse party may contest the grant of such authority at
any time before judgment is rendered by the trial court. If the
court should determine after hearing that the party declared as
an indigent is in fact a person with sufficient income or
property, the proper docket and other lawful fees shall be
assessed and collected by the clerk of court. If payment is not
made within the time fixed by the court, execution shall issue
or the payment thereof, without prejudice to such other
sanctions as the court may impose.
The guidelines for determining whether a party
qualifies as an indigent litigant are provided for in Section 19,
Rule 141,[5] of the Revised Rules of Court, which reads:
SEC. 19. Indigent litigants exempt from payment of legal fees.
INDIGENT LITIGANT (A) WHOSE GROSS INCOME
AND THAT OF THEIR IMMEDIATE FAMILY DO NOT
EXCEED AN AMOUNT DOUBLE THE MONTHLY
MINIMUM WAGE OF AN EMPLOYEE AND (B) WHO
DO NOT OWN REAL PROPERTY WITH A FAIR
MARKET VALUE AS STATED IN THE CURRENT TAX
DECLARATION OF MORE THAN THREE HUNDRED
THOUSAND PESOS (P300,000.00) SHALL BE EXEMPT
FROM THE PAYMENT OF LEGAL FEES.
The legal fees shall be a lien on any judgment rendered in the
case favorable to the indigent unless the court otherwise
provides.
To be entitled to the exemption herein provided, the litigant
shall execute an affidavit that he and his immediate family do
not earn a gross income abovementioned nor they own any
real property with the fair value aforementioned, supported by
an affidavit of a disinterested person attesting to the truth of
the litigants affidavit. The current tax declaration, if any, shall
be attached to the litigants affidavit.
Any falsity in the affidavit of the litigant or disinterested
person shall be sufficient cause to dismiss the complaint or
action or to strike out the pleading of that party, without
prejudice to whatever criminal liability may have been
incurred.
For purposes of a suit in forma pauperis, an indigent litigant
is not really a pauper, but is properly a person who is an
indigent although not a public charge, meaning that he has no
property or income sufficient for his support aside from his
labor, even if he is self-supporting when able to work and in
employment.[6] The term immediate family includes those
members of the same household who are bound together by
ties of relationship but does not include those who are living
apart from the particular household of which the individual is
a member.[7]
In the instant cases, petitioners maintain that respondents ex
parte motion to litigate as an indigent is defective since it was
not accompanied or supported by the affidavits of his children,
the immediate members of his family. The argument lacks
merit. Section 19 clearly states that it is the litigant alone
who shall execute the affidavit. The Rule does not require
that all members of the litigants immediate family must
likewise execute sworn statements in support of the
petition. Expressio unius est exclusio alterius.
Petitioners next argue that respondents ex parte motion is not
supported by sufficient evidence to show his indigent
status.[8] Suffice it to state that this Court is, first and foremost,
a court of law. It is not its function to analyze and weigh all
over again the evidence or premises supportive of factual
determination.[9] Thus, petitioners cannot now ask us to
review the evidence anew.
Anent the second issue, petitioners insist that respondent
committed forum shopping when he failed to report to the trial
court that he filed criminal cases against petitioners with the
Office of the City Prosecutor of Makati City.
Gatmaytan v. Court of Appeals[10] describes forum
shopping as the act of a litigant who repetitively availed of
several judicial remedies in different courts, simultaneously
or successively, all substantially founded on the same
transactions and the same essential facts and circumstances,
and all raising substantially the same issues either pending in,
or already resolved adversely by some other courtto increase
his chances of obtaining a favorable decision if not in one
court, then in another. Differently put, it is the filing of
multiple suits involving the same parties for the same cause
of action, either simultaneously or successively, for the
purpose of obtaining a favorable judgment.[11]
The rationale against forum shopping is that a party
should not be allowed to pursue simultaneous remedies in two
different courts as it constitutes abuse of court processes,
which tends to degrade the administration of justice, wreaks
havoc upon orderly judicial procedure, and adds to the
congestion of the heavily burdened dockets of the courts.[12]
Section 5, Rule 7 of the 1997 Rules of Civil
Procedure, as amended, provides:
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 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 requirement
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 (a)
actions. If the acts of the party or his counsel clearly constitute
willful and deliberate forum shopping, the same shall be (b)
ground for summary dismissal with prejudice and shall
constitute direct contempt, as well as a cause for
administrative sanctions.
Respondents Certificate of Non-Forum Shopping
attached to the
complaint in Civil Case No. 98-91356 reads: (c)
FURTHER, that he has not heretofore commenced
any other action or proceeding involving the same issues (d)in
the Supreme Court, the Court of Appeals, or any other tribunal
or agency, except the criminal case for SWINDLING (e)
(ESTAFA) under Art. 315, paragraph 1 (b) and for
FALSIFICATION BY PRIVATE INDIVIDUALS OF (f)
PRIVATE DOCUMENTS under Art. 172, paragraph 2 of the (g)
Revised Penal Code to be filed before the Makati Prosecutors
Office, criminal case for violation of the Insurance Code of
the Philippines to be filed before the Makati Prosecutors
Office, and the administrative case for violation of the
Insurance Code Commission; that to the best of his knowledge
no such other action is pending in the Supreme Court and
Court of Appeals.
We agree with the Court of Appeals that the
foregoing certification is a substantial compliance with
Section 5 of Rule 7. Moreover, it should be recalled that
respondent manifested before the trial court on December 16,
1998 that he actually filed criminal cases against petitioners
with the Office of the City Prosecutor of Makati City.
On the final issue, petitioners claim that the
deposition of respondent taken on December 14,
1999 violated the injunction issued by the Court of Appeals
on October 15, 1999. Such act, petitioners assert, is
tantamount to indirect contempt of court.
Contempt of court is a defiance of the authority, justice or
dignity of the court: such conduct as tends to bring the
authority and administration of the law into disrespect or to
interfere with or prejudice parties litigants or their witnesses
during litigation.[13] Succinctly, it is the despising of the
authority, justice, or dignity of the court.[14] Rule 71
provides for two forms of contumacious acts direct and
indirect.
Indirect contempt refers to contumacious acts perpetrated
outside of the sitting of the court and may include misbehavior
of an officer of a court in the performance of his official duties
or in his official transactions, disobedience of or resistance to
a lawful writ, process, order, judgment, or command of a
court, or injunction granted by a court or a judge, any abuse
or any unlawful interference with the process or proceedings
of a court not constituting direct contempt, or any improper
conduct tending directly or indirectly to impede, obstruct or
degrade the administration of justice.[15] It is governed by
Section 3, Rule 71 of the 1997 Rules of Civil Procedure, as
amended, which provides:
SEC. 3. Indirect contempt to be punished after charge and
hearing. After a charge in writing has been filed and an
opportunity given to the respondent to comment thereon
within such period as may be fixed by the court and to be
heard by himself or by counsel, a person guilty of any of the
following acts may be punished for indirect contempt:
Misbehavior of an officer of court in the performance of his
official duties or in his official transactions;
Disobedience of or resistance to a lawful writ, process,
order, or judgment of a court, including the act of a person
who, after being dispossessed or rejected from any real
property by the judgment or process of any court of competent
jurisdiction, enters or attempts or induces another to enter into
or upon such real property, for the purpose of executing acts
of ownership or possession, or in any manner disturbs the
possession given to the person adjudged to be entitled thereto;
Any abuse of or any unlawful interference with the process
or proceeding of a court not constituting direct contempt
under Section 1 of this Rule;
Any improper conduct tending directly or indirectly to
impede, obstruct, or degrade the administration of justice;
Assuming to be an attorney or an officer of a court and
acting as such without authority;
Failure to obey a subpoena duly served;
The rescue, or attempted rescue, of any person or property
in the custody of an officer by virtue of an order or process of
a court held by him.
But nothing in this section shall be so construed as to
prevent the court from issuing process to bring the respondent
into court, or from holding him in custody pending such
proceedings.
Before one may be convicted of indirect contempt, there must
be compliance with the following requisites: (a) a charge in
writing to be filed; (b) an opportunity for respondent to
comment thereon within such period as may be fixed by the
court; and (c) an opportunity to be heard by himself or by
counsel.[16] Records show that these requirements were
complied with.
The Court of Appeals, in CA-G.R. SP No. 56579,
dismissed the charge for indirect contempt, holding that
respondents deposition was done in good faith, thus:
It should be emphasized that what triggered the
holding of private respondents deposition last December 14,
1999 was the use by the petitioners of the June 09 and 28,
 1999 depositions when at that time no orders were issued by Factual Antecedents
Us enjoining any proceedings below. The use of the
petitioners of June 09 and 28 depositions have been Respondent Eiji Yanagisawa (Eiji), a Japanese national, and Evelyn
vigorously objected to by the private respondent, contending F. Castaeda (Evelyn), a Filipina, contracted marriage on July 12,
that there was a misunderstanding created when the private 1989 in the City Hall of Manila.[4]
respondent was cross-examined by the counsel for the
petitioners, and in his honest belief to clarify such On August 23, 1995, Evelyn purchased a 152 square-meter
misunderstanding in the previous depositions, townhouse unit located at Bo. Sto. Nio, Paraaque, Metro
the December 14, 1999 deposition was taken. Manila (Paraaque townhouse unit).[5] The Registry of Deeds for
Paraaque issued Transfer Certificate of Title (TCT) No. 99791 to
We see no reason to depart from the foregoing Evelyn P. Castaeda, Filipino, married to Ejie Yanagisawa, Japanese
findings by the appellate court. Moreover, the taking of citizen[,] both of legal age.[6]
respondents deposition is not a part of the court proceedings
in Civil Case No. 98-91356, hence, not covered by the writ of In 1996, Eiji filed a complaint for the declaration of nullity of his
injunction issued by the Court of Appeals. Let it be stressed at marriage with Evelyn on the ground of bigamy (nullity of marriage
this point that we have always abided by the dogma that courts case). The complaint, docketed as Civil Case No. 96-776, was
must exercise their contempt powers sparingly. raffled to Branch 149 of the Regional Trial Court of Makati (Makati
In sum, we rule that the Court of Appeals did not RTC). During the pendency of the case, Eiji filed a Motion for the
err in dismissing the petitions in CA-G.R. SP No. 52914 and Issuance of a Restraining Order against Evelyn and an Application
CA-G.R. SP No. 56579. WHEREFORE, we DENY the for a Writ of a Preliminary Injunction. He asked that Evelyn be
petitions. The challenged Decision of the Court of Appeals in enjoined from disposing or encumbering all of the properties
CA-G.R. SP No. 52914 and CA-G.R. SP No. registered in her name.
56579is AFFIRMED. Costs against petitioners.
SO ORDERED. At the hearing on the said motion, Evelyn and her lawyer voluntarily
undertook not to dispose of the properties registered in her name
during the pendency of the case, thus rendering Eijis application and
PACIFIC ACE G.R. No. 175303 motion moot. On the basis of said commitment, the Makati RTC
FINANCE LTD. rendered the following Order dated October 2, 1996:
(PAFIN),
Petitioner, ORDER
In view of the commitment made in open court
by Atty. Lupo Leyva, counsel for the defendant
[Evelyn], together with his client, the defendant
in this case, that the properties registered in the
- versus - name of the defendant would not be disposed of,
alienated or encumbered in any manner during the
pendency of this petition, the Motion for the
Issuance of a Restraining Order and Application
for a Writ of a Preliminary Injunction scheduled
EIJI* Promulgated: today is hereby considered moot and academic.
YANAGISAWA,
Respondent. April 11, 2012 SO ORDERED.[7] (Emphasis supplied.)
x-----------------------------------------------
--------------------x
The above Order was annotated on the title of the Paraaque
townhouse unit or TCT No. 99791, thus:
DECISION
Entry No. 8729 Order issued by Hon. Josefina
DEL CASTILLO, J.:
Guevara Salonga, Judge, RTC, Branch 149,
Makati City, ordering the defendant in Civil
An undertaking not to dispose of a property pending litigation, made
Case No. 96-776 entitled Eiji Yanagisawa,
in open court and embodied in a court order, and duly annotated on
Plaintiff-versus-Evelyn Castaeda Yanagisawa,
the title of the said property, creates a right in favor of the person
that the properties registered in the name of the
relying thereon. The latter may seek the annulment of actions that
defendant would not be disposed of, alienated
are done in violation of such undertaking.
or encumbered in any manner during the
pendency of the petition, the Motion for the
Before us is a Petition for Review[1] of the August 1, 2006
Issuance of a Restraining Order and Application
Decision[2] of the Court of Appeals (CA) in CA-G.R. CV No. 78944,
for a Writ of Preliminary Injunction is hereby
which held:
considered moot and academic.
WHEREFORE, the Decision dated April 20,
Date of Instrument October 2, 1996
2003 of the RTC, Branch 258, Paraaque City, is
Date of Inscription March 17, 1997 11:21
hereby ANNULLED and SET ASIDE and a
a.m.[8] (Emphasis supplied.)
new one entered annulling the Real Estate
Mortgage executed on August 25, 1998 in favor
of defendant Pacific Ace Finance Ltd.
Sometime in March 1997, Evelyn obtained a loan of P500,000.00
[3] from petitioner Pacific Ace Finance Ltd. (PAFIN).[9] To secure the
SO ORDERED.
loan, Evelyn executed on August 25, 1998 a real estate mortgage
(REM)[10]in favor of PAFIN over the Paraaque townhouse unit Eiji also emphasized that Evelyn had made a commitment to him
covered by TCT No. 99791. The instrument was submitted to the and to the Makati RTC that she would not dispose of, alienate, or
Register of Deeds of Paraaque City for annotation on the same encumber the properties registered in her name while the case was
date.[11] pending. This commitment incapacitates Evelyn from entering into
the REM contract.
At the time of the mortgage, Eijis appeal in the nullity of marriage
case was pending before the CA.[12] The Makati RTC had dissolved Court of Appeals Decision[25]
Eiji and Evelyns marriage,[13] and had ordered the liquidation of their
registered properties, including the Paraaque townhouse unit, with The CA found merit in Eijis appeal.
its proceeds to be divided between the parties.[14] The Decision of the
Makati RTC did not lift or dissolve its October 2, 1996 Order on The CA noted that the Makati RTC ruled on Eijis and Evelyns
Evelyns commitment not to dispose of or encumber the properties ownership rights over the properties that were acquired during their
registered in her name. marriage, including the Paraaque townhouse unit. It was determined
therein that the registered properties should be sold at public auction
Eiji learned of the REM upon its annotation on TCT No. and the proceeds thereof to be divided between Eiji and Evelyn.[26]
99791. Deeming the mortgage as a violation of the Makati RTCs
October 2, 1996 Order, Eiji filed a complaint for the annulment of Contrary to this ruling, the Paraaque RTC ruled that Eiji has no
REM (annulment of mortgage case) against Evelyn and ownership rights over the Paraaque townhouse unit in light of the
PAFIN.[15] The complaint, docketed as Civil Case No. 98-0431, was constitutional prohibition on foreign ownership of lands and that the
raffled to Branch 258 of the Regional Trial Court of Paraaque City subject property is Evelyns exclusive property.[27]
(Paraaque RTC).
The appellate court determined that the Paraaque RTCs Decision
For its defense, PAFIN denied prior knowledge of the October 2, was improper because it violated the doctrine of non-
1996 Order against Evelyn. It admitted, however, that it did not interference. Courts of equal jurisdiction, such as regional trial courts,
conduct any verification of the title with the Registry of Deeds of have no appellate jurisdiction over each other.[28] For this reason,
Paraaque City because x x x Evelyn was a good, friendly and trusted the CA annulled and set aside the Paraaque RTCs
neighbor.[16] PAFIN maintained that Eiji has no personality to seek decision to dismiss Eijis complaint.[29]
the annulment of the REM because a foreign national cannot own
real properties located within the Philippines.[17] The CA then proceeded to resolve Eijis complaint.[30] The CA noted
that Eiji anchored his complaint upon Evelyns violation of her
Evelyn also denied having knowledge of the October 2, 1996 commitment to the Makati RTC and to Eiji that she would not
Order.[18] Evelyn asserted that she paid for the property with her own dispose of, alienate, or encumber the properties registered in her
funds[19] and that she has exclusive ownership thereof. [20] name, including the Paraaque townhouse unit. This commitment
created a right in favor of Eiji to rely thereon and a correlative
Paraaque Regional Trial Court Decision[21] obligation on Evelyns part not to encumber the Paraaque townhouse
unit. Since Evelyns commitment was annotated on TCT No. 99791,
The Paraaque RTC determined that the only issue before it is all those who deal with the said property are charged with notice of
whether x x x [Eiji] has a cause of action against the defendants and the burdens on the property and its registered owner.[31]
x x x is entitled to the reliefs prayed for despite the fact that he is not
the registered owner of the property being a Japanese national.[22] On the basis of Evelyns commitment and its annotation on TCT No.
99791, the CA determined that Eiji has a cause of action to annul the
The Paraaque RTC explained that Eiji, as a foreign national, cannot REM contract. Evelyn was aware of her legal impediment to
possibly own the mortgaged property. Without ownership, or any encumber and dispose of the Paraaque townhouse unit. Meanwhile,
other law or contract binding the defendants to him, Eiji has no cause PAFIN displayed a wanton disregard of ordinary prudence when it
of action that may be asserted against them.[23] Thus, the Paraaque admitted not conducting any verification of the title whatsoever. The
RTC dismissed Eijis complaint: CA determined that PAFIN was a mortgagee in bad faith.[32]

WHEREFORE, premises considered, for failure Thus, the CA annulled the REM executed by Evelyn in favor of
of the plaintiff to state a cause of action against PAFIN.
defendants, EVELYN CASTAEDA
YANAGISAWA and Pacific Ace Finance Ltd. The parties to the annulled mortgage filed separate motions for
(PAFIN), this case is DISMISSED. reconsideration on August 22, 2006,[33] which were both denied for
lack of merit by the appellate court in its November 7, 2006
The counterclaim and cross-claim are Resolution.[34]
likewise DISMISSED.
PAFIN filed this petition for review.
SO ORDERED.[24]
Petitioners Arguments

Eiji appealed the trial courts decision arguing that the trial court erred
in holding that his inability to own real estate property in the
Philippines deprives him of all interest in the mortgaged property,
which was bought with his money. He added that the Makati RTC
has even recognized his contribution in the purchase of the property
by its declaration that he is entitled to half of the proceeds that would
be obtained from its sale.
Petitioner seeks a reversal of the CA Decision, which allegedly
affirmed the
Makati RTC ruling that Eiji is a co-owner of the mortgaged
property. PAFIN insists that the CA sustained a violation of the
constitution with its declaration that an alien can have an interest in
real property located in the Philippines.[35]
Petitioner also seeks the reinstatement of the Paraaque RTCs
Decision dated April 20, 2003[36] and prays that this Court render a
decision that Eiji cannot have ownership rights over the mortgaged
property and that Evelyn enjoys exclusive ownership thereof. As the
sole owner, Evelyn can validly mortgage the same to PAFIN
without need of Eijis consent. Corollarily, Eiji has no cause of action
to seek the REMs annulment.[37]
Respondents Arguments
Respondent argues that he has an interest to have the REM annulled
on two grounds: First, Evelyn made a commitment in open court that
she will not encumber the Paraaque townhouse unit during the
pendency of the case. Second, the Makati RTCs decision declared
that he is entitled to share in the proceeds of the Paraaque townhouse
unit.[38]
Respondent also insists that petitioner is in bad faith for entering into
the mortgage contract with Evelyn despite the annotation on TCT
No. 99791 that Evelyn committed herself not to encumber the
same.[39]
Issues
It has been held that "even in cases of concurrent
jurisdiction, it is, also, axiomatic that the court first
acquiring jurisdiction excludes the other courts."
In addition, it is a familiar principle that when a
court of competent jurisdiction acquires
jurisdiction over the subject matter of a case, its
authority continues, subject only to the appellate
authority, until the matter is finally and completely
disposed of, and that no court of co-ordinate
authority is at liberty to interfere with its action.
This doctrine is applicable to civil cases, to
criminal prosecutions, and to courts-martial. The
principle is essential to the proper and orderly
administration of the laws; and while its
observance might be required on the grounds of
judicial comity and courtesy, it does not rest upon
such considerations exclusively, but is enforced to
prevent unseemly, expensive, and dangerous
conflicts of jurisdiction and of the process.[44]

Petitioner raises the following issues:[40] Petitioner maintains that it was imperative for the Paraaque RTC to
rule on the ownership issue because it was essential for the
1. Whether a real property in the Philippines can be part of the determination of the validity of the REM.[45]
community property of a Filipina and her foreigner spouse;
The Court disagrees. A review of the complaint shows that Eiji did
2. Whether a real property registered solely in the name of the not claim ownership of the Paraaque townhouse unit or his right to
Filipina wife is paraphernal or conjugal; consent to the REM as his bases for seeking its annulment. Instead,
Eiji invoked his right to rely on Evelyns commitment not to dispose
3. Who is entitled to the real property mentioned above when the of or encumber the property (as confirmed in the October 2, 1996
marriage is declared void? Order of the Makati RTC), and the annotation of the said
commitment on TCT No. 99791.
4. Whether the Paraaque RTC can rule on the issue of ownership,
even as the same issue was already ruled upon by the Makati RTC It was Evelyn and PAFIN that raised Eijis incapacity to own real
and is pending appeal in the CA. property as their defense to the suit. They maintained that Eiji, as an
alien incapacitated to own real estate in the Philippines, need not
Our Ruling consent to the REM contract for its validity. But this argument is
beside the point and is not a proper defense to the right asserted by
The petition has no merit. Eiji. This defense does not negate Eijis right to rely on the October
2, 1996 Order of the Makati RTC and to hold third persons, who deal
Contrary to petitioners stance, the CA did not make any disposition with the registered property, to the annotations entered on the
as to who between Eiji and Evelyn owns the Paraaque townhouse title. Thus, the RTC erred in dismissing the complaint based on this
unit. It simply ruled that the Makati RTC had acquired jurisdiction defense.
over the said question and should not have been interfered with by
the Paraaque RTC. The CA only clarified that it was improper for Petitioner did not question the rest of the appellate courts ruling,
the Paraaque RTC to have reviewed the ruling of a co-equal court. which held that Evelyn and PAFIN executed the REM in complete
disregard and violation of the October 2, 1996 Order of the Makati
The Court agrees with the CA. The issue of ownership and RTC and the annotation on TCT No. 99791. It did not dispute the
liquidation of properties acquired during the cohabitation of Eiji and legal effect of the October 2, 1996 Order on Evelyns capacity to
Evelyn has been submitted for the resolution of the Makati RTC, and encumber the Paraaque townhouse unit nor the CAs finding that
is pending[41]appeal before the CA. The doctrine of judicial stability petitioner is a mortgagee in bad faith.
or non-interference dictates that the assumption by the Makati RTC
over the issue operates as an insurmountable barrier to the The October 2, 1996 Order, embodying Evelyns commitment not to
subsequent assumption by the Paraaque RTC.[42] By insisting on dispose of or encumber the property, is akin to an injunction order
ruling on the same issue, the Paraaque RTC effectively interfered against the disposition or encumbrance of the property.
with the Makati RTCs resolution of the issue and created the Jurisprudence holds that all acts done in violation of a standing
possibility of conflicting decisions. Cojuangco v. injunction order are voidable as to the party enjoined and third parties
Villegas states: The various branches of the [regional trial courts] who are not in good faith.[46] The party, in whose favor the injunction
[43]

of a province or city, having as they have the same or equal authority is issued, has a cause of action to seek the annulment of the offending
and exercising as they do concurrent and coordinate jurisdiction, actions.[47] The following is instructive:
should not, cannot and are not permitted to interfere with their
respective cases, much less with their orders or judgments. A An injunction or restraining order must be obeyed
contrary rule would obviously lead to confusion and seriously while it remains in full force and effect until the
hamper the administration of justice. The matter is further explained injunction or restraining order has been set aside,
thus: vacated, or modified by the court which granted it,
or until the order or decree awarding it has been
reversed on appeal. The injuction must be obeyed
 irrespective of the ultimate validity of the order, meters; that on March 6, 1995, without her knowledge and
and no matter how unreasonable and unjust the consent, her children executed a deed of extrajudicial partition
injunction may be in its terms.[48] and waiver of the estate of her husband wherein all the heirs,
including Lucia, agreed to allot the two parcels to Rico
Ballesteros (Rico); that, still, without her knowledge and
In view of the foregoing discussion, we find no need to discuss the consent, Rico mortgaged Parcel B of the estate in favor of
other issues raised by the petitioner. RBCI which mortgage was being foreclosed for failure to
settle the loan secured by the lot; and that Lucia was occupying
WHEREFORE, premises considered, the Petition is DENIED for Parcel B and had no other place to live. She prayed that the
lack of merit. The August 1, 2006 Decision of the Court of Appeals deed of extrajudicial partition and waiver, and the subsequent
in CA-G.R. CV No. 78944 is AFFIRMED. mortgage in favor of RBCI be declared null and void having
been executed without her knowledge and consent. She also
SO ORDERED. prayed for damages.

In its Answer, RBCI claimed that in 1979, Lucia sold one of

the two parcels to Rico which represented her share in the
LUCIA G.R. estate of her husband. The extrajudicial partition, waiver and
BARRAMEDA No. 176260 mortgage were all executed with the knowledge and consent
VDA. DE of Lucia although she was not able to sign the document.
BALLESTEROS, RBCI further claimed that Parcel B had already been
Petitioner, foreclosed way back in 1999 which fact was known to Lucia
through the auctioning notary public. Attorneys fees were
Promulgated: pleaded as counterclaim.

- versus - November The case was then set for pre-trial conference. During the pre-
24, 2010 trial, RBCIs counsel filed a motion to withdraw after being
informed that Philippine Deposit Insurance
RURAL BANK OF Corporation (PDIC) would handle the case as RBCI had
CANAMAN already been closed and placed under the receivership of the
INC., represented by PDIC. Consequently, on February 4, 2002, the lawyers of
its Liquidator, THE PDIC took over the case of RBCI.
PHILIPPINE
DEPOSIT On May 9, 2003, RBCI, through PDIC, filed a motion to
INSURANCE dismiss on the ground that the RTC-Iriga has no jurisdiction
CORPORATION, over the subject matter of the action. RBCI stated that pursuant
Respondent. to Section 30, Republic Act No. 7653 (RA No.
X ----------------------------------------------------------------------- 7653), otherwise known as the New Central Bank Act, the
--------------- X RTC-Makati, already constituted itself, per its Order dated
August 10, 2001, as the liquidation court to assist PDIC in
DECISION undertaking the liquidation of RBCI. Thus, the subject matter
of Civil Case No. IR-3128 fell within the exclusive
jurisdiction of such liquidation court. Lucia opposed the
MENDOZA, J.: motion.

On July 29, 2003, the RTC-Iriga issued an

This is a petition for review on certiorari under Rule order[2] granting the Motion to Dismiss, to wit:
45 of the Revised Rules of Civil Procedure assailing the
August 15, 2006 Decision[1] of the Court of Appeals (CA) in
CA-G.R. No. 82711, modifying the decision of the Regional
Trial Court of Iriga City, Branch 36 (RTC-Iriga), in Civil Case
No. IR-3128, by ordering the consolidation of the said civil
case with Special Proceeding Case No. M-5290 (liquidation
case) before the Regional Trial Court of Makati City, Branch
59 (RTC-Makati).
It appears from the records that on March 17, 2000,
petitioner Lucia Barrameda Vda. De Ballesteros (Lucia) filed
a complaint for Annulment of Deed of Extrajudicial Partition,
Deed of Mortgage and Damages with prayer for Preliminary
Injunction against her children, Roy, Rito, Amy, Arabel, Rico,
Abe, Ponce Rex and Adden, all surnamed Ballesteros, and the
Rural Bank of Canaman, Inc., Baao Branch (RBCI) before the
RTC-Iriga. The case was docketed as Civil Case No. IR-3128.
This resolves the Motion to Dismiss
filed by the defendant Rural Bank of
Canaman, Inc., premised on the ground that
this court has no jurisdiction over the subject
matter of the action. This issue of jurisdiction
was raised in view of the pronouncement of
the Supreme Court in Ong v. C.A. 253 SCRA
105 and in the case of Hernandez v. Rural
Bank of Lucena, Inc., G.R. No. L-29791
dated January 10, 1978, wherein it was held
that the liquidation court shall have
jurisdiction to adjudicate all claims against
the bank whether they be against assets of the
insolvent bank, for Specific Performance,
Breach of Contract, Damages or whatever.

In her complaint, Lucia alleged that her deceased husband, It is in view of this jurisprudential
Eugenio, left two (2) parcels of land located in San Nicolas, pronouncement made by no less than the
Baao, Camarines Sur, each with an area of 357 square Supreme Court, that this case is, as far as
 defendant Rural Bank of Canaman Inc., is
concerned, hereby ordered DISMISSED
without prejudice on the part of the plaintiff
to ventilate their claim before the Liquidation
Court now, RTC Branch 59, Makati City.
SO ORDERED.
Not in conformity, Lucia appealed the RTC ruling to the CA
on the ground that the RTC-Iriga erred in dismissing the case
because it had jurisdiction over Civil Case No. IR-3128 under
the rule on adherence of jurisdiction.
On August 15, 2006, the CA rendered the questioned decision
ordering the consolidation of Civil Case No. IR-3128 and the
liquidation case pending before RTC-Makati. The appellate
court ratiocinated thus:
The consolidation is desirable in order to
prevent confusion, to avoid multiplicity of
suits and to save unnecessary cost and
expense. Needless to add, this procedure is
well in accord with the principle that the rules
of procedure shall be liberally construed in
order to promote their object and to assist the
parties in obtaining just, speedy and
inexpensive determination of every action
and proceeding (Vallacar Transit, Inc. v. Yap,
126 SCRA 500 [1983]; Suntay v. Aguiluz, 209
SCRA 500 [1992] citing Ramos v. Ebarle,
182 SCRA 245 [1990]). It would be more in
keeping with the demands of equity if the
cases are simply ordered
consolidated. Pursuant to Section 2, Rule 1,
Revised Rules of Court, the rules on
consolidation should be liberally construed to
achieve the object of the parties in obtaining
just, speedy and inexpensive determination of
their cases (Allied Banking Corporation v.
Court of Appeals, 259 SCRA 371 [1996]).
The dispositive portion of the decision reads:
IN VIEW OF ALL THE
FOREGOING, the appealed decision is
hereby MODIFIED, in such a way that the
dismissal of this case (Civil Case No. IR-3128)
is set aside and in lieu thereof another one is
entered ordering the consolidation of said
case with the liquidation case docketed as
Special Proceeding No. M-5290 before
Branch 59 of
the Regional Trial Court of Makati City,
entitled In Re: Assistance in the Judicial
Liquidation of Rural Bank of Canaman,
Camarines Sur, Inc., Philippine Deposit
Corporation, Petitioner. No pronouncement
as to cost.
SO ORDERED.[3]
Lucia filed a motion for reconsideration[4] but it was jurisdiction to continue trying Civil Case No. IR-3128 until its
denied by the CA in its Resolution dated December 14, 2006.[5] final disposition, evidently falls out from a strained
Hence, the present petition for review on certiorari interpretation of the law and jurisprudence. She contends that:
anchored on the following
GROUNDS
(I)
THE COURT OF APPEALS ERRED IN
NOT FINDING THAT
THE REGIONAL TRIAL COURT OF IR
IGA CITY, BRANCH 36 IS VESTED
WITH JURISDICTION TO CONTINUE
TRYING AND ULTIMATELY DECIDE
CIVIL CASE NO. IR-3128.
(II)
THE COURT OF APPEALS ERRED
AND GRAVELY ABUSED ITS
DISCRETION IN ORDERING THE
CONSOLIDATION OF CIVIL CASE NO.
IR-3128 WITH THE LIQUIDATION
CASE DOCKETED AS SPECIAL
PROCEEDINGS NO. M-5290 BEFORE
BRANCH 59 OF
THE REGIONAL TRIAL COURT OF M
AKATI CITY.[6]
Given the foregoing arguments, the Court finds that the core
issue to be resolved in this petition involves a determination
of whether a liquidation court can take cognizance of a case
wherein the main cause of action is not a simple money claim
against a bank ordered closed, placed under receivership of the
PDIC, and undergoing a liquidation proceeding.
Lucia contends that the RTC-Iriga is vested with
jurisdiction over Civil Case No. 3128, the constitution of the
liquidation court notwithstanding. According to her, the case
was filed before the RTC-Iriga on March 17, 2000 at the time
RBCI was still doing business or before the defendant bank
was placed under receivership of PDIC in January 2001.
She further argues that the consolidation of the two
cases is improper. Her case, which is for annulment of deed of
partition and waiver, deed of mortgage and damages, cannot
be legally brought before the RTC-Makati with the liquidation
case considering that her cause of action against RBCI is not
a simple claim arising out of a creditor-debtor relationship, but
one which involves her rights and interest over a certain
property irregularly acquired by RBCI. Neither is she a
creditor of the bank, as only the creditors of the insolvent bank
are allowed to file and ventilate claims before the liquidator,
pursuant to the August 10, 2001 Order of the RTC-Makati
which granted the petition for assistance in the liquidation of
RBCI.
In its Comment,[7] PDIC, as liquidator of RBCI,
counters that the consolidation of Civil Case No. 3128 with
the liquidation proceeding is proper. It posits that the
liquidation court of RBCI, having been established, shall have
exclusive jurisdiction over all claims against the said bank.
After due consideration, the Court finds the petition
devoid of merit.
Lucias argument, that the RTC-Iriga is vested with
 Since the RTC-Iriga has already
obtained jurisdiction over the case it should
continue exercising such jurisdiction until the
final termination of the case. The jurisdiction
of a court once attached cannot be ousted by
subsequent happenings or events, although of
a character which would have prevented
jurisdiction from attaching in the first
instance, and the Court retains jurisdiction
until it finally disposes of the case (Aruego Jr.
v. Court of Appeals, 254 SCRA 711).
When a court has already obtained
and is exercising jurisdiction over a
controversy, its jurisdiction to proceed to final
determination of the case is not affected by a
new legislation transferring jurisdiction over
such proceedings to another tribunal.
(Alindao v. Joson, 264 SCRA 211). Once
jurisdiction is vested, the same is retained up
to the end of the litigation (Bernate v. Court
of Appeals, 263 SCRA 323).[8]
The afore-quoted cases, cited by Lucia to bolster the
plea for the continuance of her case, find no application in the
case at bench.
Indeed, the Court recognizes the doctrine on
adherence of jurisdiction. Lucia, however, must be reminded
that such principle is not without exceptions. It is well to quote
the ruling of the CA on this matter, thus:
This Court is not unmindful nor
unaware of the doctrine on the adherence of
jurisdiction. However, the rule on adherence
of jurisdiction is not absolute and has
exceptions. One of the exceptions is that
when the change in jurisdiction is curative in
character (Garcia v. Martinez, 90 SCRA 331
[1979]; Calderon, Sr. v. Court of Appeals,
100 SCRA 459 [1980]; Atlas Fertilizer
Corporation v. Navarro, 149 SCRA 432
[1987]; Abad v. RTC of Manila, Br. Lll, 154
SCRA 664 [1987]).
For sure, Section 30, R.A. 7653 is
curative in character when it declared that the
liquidation court shall have jurisdiction in the
same proceedings to assist in the adjudication
of the disputed claims against the Bank. The
interpretation of this Section (formerly
Section 29, R.A. 265) becomes more obvious
in the light of its intent. In Manalo v. Court of
Appeals (366 SCRA 752, [2001]), the
Supreme Court says:
xxx The requirement
that all claims against the
bank be pursued in the
liquidation proceedings filed
by the Central Bank is
intended to prevent
multiplicity of actions
against the insolvent bank
and designed to establish due
process and orderliness in the
liquidation of the bank, to
obviate the proliferation of
litigations and to avoid
injustice and arbitrariness
(citing Ong v. CA, 253
SCRA 105 [1996]). The
lawmaking body
contemplated that for
convenience, only one court,
if possible, should pass upon
the claims against the
insolvent bank and that the
liquidation court should
assist the Superintendents of
Banks and regulate his
operations (citing Central
Bank of the Philippines, et al.
v. CA, et al., 163 SCRA 482
[1988]).[9]
As regards Lucias contention that jurisdiction already attached
when Civil Case No. IR-3128 was filed with, and jurisdiction
obtained by, the RTC-Iriga prior to the filing of the liquidation
case before the RTC-Makati, her stance fails to persuade this
Court. In refuting this assertion, respondent PDIC cited the
case of Lipana v. Development Bank of Rizal[10] where it was
held that the time of the filing of the complaint is
immaterial, viz:
It is the contention of petitioners,
however, that the placing under receivership
of Respondent Bank long after the filing of
the complaint removed it from the doctrine in
the said Morfe Case.
This contention is untenable. The
time of the filing of the complaint is
immaterial. It is the execution that will
obviously prejudice the other depositors and
creditors. Moreover, as stated in the said
Morfe case, the effect of the judgment is only
to fix the amount of the debt, and not to give
priority over other depositors and creditors.
The cited Morfe case[11] held that after the Monetary
Board has declared that a bank is insolvent and has ordered it
to cease operations, the Board becomes the trustee of its assets
for the equal benefit of all the creditors, including
depositors. The assets of the insolvent banking institution are
held in trust for the equal benefit of all creditors, and after its
insolvency, one cannot obtain an advantage or a preference
over another by an attachment, execution or otherwise.
Thus, to allow Lucias case to proceed independently
of the liquidation case, a possibility of favorable judgment and
execution thereof against the assets of RBCI would not only
prejudice the other creditors and depositors but would defeat
the very purpose for which a liquidation court was constituted
as well.
Anent the second issue, Lucia faults the CA in
directing the consolidation of Civil Case No. IR-3128 with
Special Proceedings No. M-5290. The CA committed no
error. Lucias complaint involving annulment of deed of
mortgage and damages falls within the purview of a disputed
claim in contemplation of Section 30 of R.A. 7653 (The New
Central Bank Act). The jurisdiction should be lodged with the
liquidation court. Section 30 provides:
Sec. 30. Proceedings in Receivership
and Liquidation. - Whenever, upon report of
the head of the supervising or examining
department, the Monetary Board finds that a
bank or quasi-bank:
(a) is unable to pay its liabilities as
they become due in the ordinary course of
business: Provided, That this shall not include
inability to pay caused by extraordinary
demands induced by financial panic in the
banking community;
(b) has insufficient realizable assets,
as determined by the Bangko Sentral, to meet
its liabilities; or
(c) cannot continue in business
without involving probable losses to its
depositors or creditors; or
(d) has wilfully violated a cease and
desist order under Section 37 that has become
final, involving acts or transactions which
amount to fraud or a dissipation of the assets
of the institution; in which cases, the
Monetary Board may summarily and without
need for prior hearing forbid the institution
from doing business in the Philippines and
designate the Philippine Deposit Insurance
Corporation as receiver of the banking
institution.
For a quasi-bank, any person of
recognized competence in banking or finance
may be designated as receiver.
The receiver shall immediately
gather and take charge of all the assets and
liabilities of the institution, administer the
same for the benefit of its creditors, and
exercise the general powers of a receiver
under the Revised Rules of Court but shall not,
with the exception of administrative
expenditures, pay or commit any act that will
involve the transfer or disposition of any asset
of the institution: Provided, That the receiver
may deposit or place the funds of the
institution in non-speculative
investments. The receiver shall determine as
soon as possible, but not later than ninety (90)
days from take over, whether the institution
may be rehabilitated or otherwise placed in
such a condition that it may be permitted to
resume business with safety to its depositors
and creditors and the general
public: Provided, That any determination for
the resumption of business of the institution
shall be subject to prior approval of the
Monetary Board.
If the receiver determines that the
institution cannot be rehabilitated or
permitted to resume business in accordance
with the next preceding paragraph, the
Monetary Board shall notify in writing the
board of directors of its findings and direct the
receiver to proceed with the liquidation of the
institution. The receiver shall:
(1) file ex parte with the proper
regional trial court, and without requirement
of prior notice or any other action, a petition
for assistance in the liquidation of the
institution pursuant to a liquidation plan
adopted by the Philippine Deposit Insurance
Corporation for general application to all
closed banks. In case of quasi-banks, the
liquidation plan shall be adopted by the
Monetary Board. Upon acquiring jurisdiction,
the court shall, upon motion by the receiver
after due notice, adjudicate disputed
claims against the institution, assist the
enforcement of individual liabilities of the
stockholders, directors and officers, and
decide on other issues as may be material to
implement the liquidation plan adopted. The
receiver shall pay the cost of the proceedings
from the assets of the institution.
(2) convert the assets of the
institution to money, dispose of the same to
creditors and other parties, for the purpose of
paying the debts of such institution in
accordance with the rules on concurrence and
preference of credit under the Civil Code of
the Philippines and he may, in the name of the
institution, and with the assistance of counsel
as he may retain, institute such actions as may
be necessary to collect and recover accounts
and assets of, or defend any action against, the
institution. The assets of an institution under
receivership or liquidation shall be deemed
in custodia legis in the hands of the receiver
and shall, from the moment the institution
was placed under such receivership or
liquidation, be exempt from any order of
garnishment, levy, attachment, or execution.
[Emphasis supplied]
xxx
Disputed claims refers to all claims, whether they be
against the assets of the insolvent bank, for specific
performance, breach of contract, damages, or
whatever.[12] Lucias action being a claim against RBCI can
properly be consolidated with the liquidation proceedings
before the RTC-Makati. A liquidation proceeding has been
explained in the case of In Re: Petition For Assistance in the
Liquidation of the Rural Bank of BOKOD (Benguet), Inc. v.
Bureau of Internal Revenue[13] as follows:
A liquidation proceeding is a single
proceeding which consists of a number of
cases properly classified as "claims." It is
basically a two-phased proceeding. The first
phase is concerned with the approval and
disapproval of claims. Upon the approval of
the petition seeking the assistance of the
proper court in the liquidation of a closed
entity, all money claims against the bank are
required to be filed with the liquidation court.
This phase may end with the declaration by
the liquidation court that the claim is not
proper or without basis. On the other hand, it
may also end with the liquidation court
allowing the claim. In the latter case, the
claim shall be classified whether it is
ordinary or preferred, and thereafter
included Liquidator. In either case, the order
allowing or disallowing a particular claim is
final order, and may be appealed by the party
aggrieved thereby.
The second phase involves the
approval by the Court of the distribution plan
prepared by the duly appointed liquidator.
The distribution plan specifies in detail the
total amount available for distribution to
 creditors whose claim were earlier allowed. UNION BANK OF G.R. No.
The Order finally disposes of the issue of THE PHILIPPINES, 160727
how much property is available for disposal. Petitioner,
Moreover, it ushers in the final phase of the
liquidation proceeding - payment of all Promulgated:
allowed claims in accordance with the order
of legal priority and the approved June 26,
distribution plan. - versus - 2007

xxx

A liquidation proceeding is
commenced by the filing of a single petition DANILO L.
by the Solicitor General with a court of CONCEPCION,
competent jurisdiction entitled, "Petition for Respondent.
Assistance in the Liquidation of e.g., Pacific
Banking Corporation. All claims against the
insolvent are required to be filed with the x-----------------------------------------
liquidation court. Although the claims are -----------x
litigated in the same proceeding, the DECISION
treatment is individual. Each claim is heard GARCIA, J.:
separately. And the Order issued relative to
a particular claim applies only to said claim,
leaving the other claims unaffected, as each In this petition for review under Rule 45 of the Rules of
claim is considered separate and distinct Court, petitioner Union Bank of the Philippines (Union
from the others. x x x [Emphasis supplied.] Bank) assails and seeks the setting aside of the
Decision[1] dated July 22, 2003 of the Court of Appeals
It is clear, therefore, that the liquidation court has (CA) in CA-G.R. SP [2]No. 75355, as effectively
jurisdiction over all claims, including that of Lucia against the reiterated in its Resolution of November 7, 2003 denying
insolvent bank. As declared in Miranda v. Philippine Deposit the petitioners motion for reconsideration.
Insurance Corporation,[14] regular courts do not have
jurisdiction over actions filed by claimants against an The records, which include a copy of this Courts Decision
insolvent bank, unless there is a clear showing that the action dated May 19, 1998 in G.R. No. 131729 entitled Union
taken by the BSP, through the Monetary Board, in the closure Bank of the[3] Philippines v. Court of Appeals et al.,
of financial institutions was in excess of jurisdiction, or with respondents, yield the following material facts:
grave abuse of discretion. The same is not obtaining in this
present case. On September 16, 1997, the EYCO Group of
Companies[4] (EYCO or EYCO Group) filed with the
The power and authority of the Monetary Board to Securities [5]and Exchange Commission (SEC)
close banks and liquidate them thereafter when public interest a PETITION for the declaration of suspension of
so requires is an exercise of the police power of the payment, appointment of a rehabilitation
State. Police power, however, is subject to judicial inquiry. It receiver/committee and approval of rehabilitation plan
may not be exercised arbitrarily or unreasonably and could be with an alternative prayer for liquidation and dissolution of
set aside if it is either capricious, discriminatory, whimsical, corporations (Petition for Suspension of Payment,
arbitrary, unjust, or is tantamount to a denial of due process hereinafter). In it, EYCO depicted the Groups composite
and equal protection clauses of the Constitution.[15] corporations as having a combined assets that are more
than enough to pay off all their debts, but nonetheless
In sum, this Court holds that the consolidation is unable to pay them as they fall due. Joining EYCO as co-
proper considering that the liquidation court has jurisdiction petitioners were Eulogio Yutingco and two other
over Lucias action. It would be more in keeping with law and individuals holding controlling interests in the composite
equity if Lucias case is consolidated with the liquidation case corporations (collectively, the Yutingcos).
in order to expeditiously determine whether she is entitled to
recover the property subject of mortgage from RBCI and, if so, Finding the petition, docketed as SEC Case No. 09-97-
how much she is entitled to receive from the remaining assets 5764, to be sufficient in form and substance, the SEC
of the bank. Hearing Panel, by an order of September 19, 1997,
directed the suspension of all actions, claims and
WHEREFORE, the petition is DENIED. proceedings against EYCO, et al. pending before any court,
tribunal, board or office[6] (the Suspension Order). At the
SO ORDERED. same time, the Panel set the petition for hearing.
Meanwhile, a consortium of private banks which had
granted credit facilities to EYCO, among them, Union
Bank, convened to map out their collective collection
options. The formation of a management committee
(ManCom) to represent the creditor banks was agreed upon
in that meeting.

Subsequently, Union Bank decided to break away from the

consortium and, without notifying its members, filed a slew
of civil cases against EYCO, et al. Of relevance is the first,
a complaint for a sum of money instituted on September
23, 1997 before the Regional Trial Court (RTC)
of Makati City, against four (4) members of the EYCO
Group and spouses Eulogio and Bee Kuan Yutingco, as
sureties of the corporate obligations, with application for
preliminary attachment. This complaint,[7] docketed
as Civil Case No. 97-2184, eventually ended up in Branch
148 of the court. The next day, the Makati RTC issued the
desired writ of preliminary attachment,[8] pursuant to which
levy on attachment was annotated on the titles, i.e., TCT
Nos. V-48192[9] and V-48193[10] of the Registry of Deeds
of Valenzuela City, of two parcels of land under the name
of Nikon Plaza, Inc. and EYCO Properties, Inc.,
respectively. Also attached, per herein respondent Danilo
L. Concepcion (Concepcion, for brevity), without denial
from the petitioner, is a parcel of land covered by TCT
No. V-49678 of the same registry allegedly held by the
Yutingcos in trust for Nikon Industrial Corporation.[11]
On October 22, 1997, Union Bank moved, on jurisdictional
ground, for the dismissal of SEC Case No. 09-97-5764. On
the same date, EYCO submitted its rehabilitation plan.
In January 1998, the SEC Hearing Panel appointed the regular SEC en
members of the newly created ManCom for EYCO.
Meanwhile, Union Bank, without awaiting for the SECs ruling SEC AC No. 649.
on its motion to dismiss SEC Case No. 09-97-5764, filed with
the CA a petition for certiorari to nullify what it tagged as the On September 14, 1999, the SEC en banc issued in SEC
precipitate September 19, 1997 SEC suspension order[12] and AC No. 649 an order finding for the consortium, disposing
its creation of the ManCom. In the same petition, docketed as follows:
as CA-G.R. SP No. 45774, Union Bank alleged that the
jurisdiction over the basic petition for declaration of
suspension of payment pertains to the RTC under Act No.
1956, as amended, or the Insolvency Law.
On December 22, 1997, in CA-G.R. SP No. 45774, the CA
rendered judgment declaring Union Bank guilty of forum
shopping and accordingly dismissed its petition
[13]
for certiorari. This Court, in its Decision dated May 19,
1998 in G.R. No. 131729, in turn affirmed that of the CA,
but proceeded further to declare the SEC as possessed of
jurisdiction over EYCOs petition for suspension of
payments filed pursuant to Section 5(d) of Presidential
Decree (P.D.) No. 902-A, but not insofar as the Yutingcos
petition was concerned. With respect to the Yutingcos, the
Court held that the SECs jurisdiction on matters of
suspension of payments is confined only to those initiated
by corporate entities, as the aforecited section does not
allow an individual to file, or join in, the corresponding
petition. In line with the rule on misjoinder of parties, the
Court directed the SEC to drop the individual petitioners
from the petition for suspension of payment.
Conformably with this Courts Decision aforementioned,
the Makati RTC issued, in Civil Case No. 97-2184,
an Order[14] dated August 17, 1998 thereunder indefinitely
suspending the proceedings in that collection suit until
further orders. The fallo of the RTCs order reads:
WHEREFORE, the complaint filed by the
plaintiff [Union Bank] against
defendant-corporation [EYCO 4] is
hereby INDEFINITELY
SUSPENDED until further
Orders from this Court in view of the
existing petition for Suspension of
Payment before the [SEC]. On the other
hand, the defendants motion to dismiss
complaint against the individual-
defendants, namely: Spouses Eulogio
and Bee Kuan Yutingco, is hereby
DENIED for lack of merit.
Consequently, in order to give defendant-Spouses
[Yutingcos] ample time to prepare for
whatever defense they may raise, they
are hereby given a new fifteen (15) days
period from receipt of this Order within
which to file their answer to the
complaint against them.
SO ORDERED. (Words in brackets and emphasis
supplied.)
In a related development, the SEC Hearing Panel, over the
objection of the consortium of EYCOs creditor banks,
approved, on December 18, 1998, the rehabilitation plan
prepared by the Strategies and Alliance Corporation for
EYCO. The consortium lost no time in appealing to the
banc the Hearing Panels
approval order and prayed for the liquidation and
dissolution of EYCO, the appellate recourse docketed as
WHEREFORE, the appeal is, as it is
hereby granted and the Order dated 18
December 1998 is set aside. The Petition
to be Declared in State of Suspension of
Payment is hereby disapproved and the
SAC Plan terminated. Consequently, all
committees, conservator/receivers created
pursuant to said Order are dissolved. xxx
The Commission, likewise, orders the
liquidation and dissolution of the [EYCO
Group]. The case is hereby remanded to
the hearing panel below for that
purpose. xxx (Words in brackets and
emphasis supplied.)
Another en banc order[15] of March 31, 2001 followed,
with the SEC this time appointing
respondent Concepcion to act, vice the dissolved
Liquidation Committee, as EYCO Liquidator.
Among Concepcions first act as such liquidator was to file,
on March 8, 2002, in Civil Case No. 97-2184, a Motion to
Intervene and To Admit Motion to Set Aside Order of
Attachment[16] (Motion to Intervene, for brevity). Three
days later, Concepcion submitted before
[17]
the SEC a Liquidation Plan for the EYCO Group.
After due proceedings, the SEC approved, on April 11,
2002, the Concepcion-submitted Liquidation
Plan.[18] Concepcions motion to intervene, however, met a
different fate. For, by Order[19] of August 8, 2002, the
Makati RTC denied Concepcions motion to intervene in
Civil Case No. 97-2184 on the ground of lack of standing
to intervene, his appointment as Liquidator being,
according to the court, of doubtful validity. The order, in
addition, granted Union Banks earlier motion to declare appointment by the SEC as liquidator of the EYCO Group, his
EYCO in default, and set a date for the ex-parte reception right to intervene predicated as it is on his being such liquidator.
of Union Banks evidence.
It is the petitioners posture, following the Makati RTCs
Concepcion then moved for reconsideration questioning line, that the respondents appointment as liquidator of EYCO
the basis of the denial of his motion to was invalid for lack of jurisdiction on the part of SEC to preside,
intervene. Questioned, too, was the default aspect of the in first place, over EYCOs liquidation and dissolution. Pressing
order, Concepcion arguing in this regard that the collection on, the petitioner states that EYCO is already insolvent and
proceedings were suspended until further Orders from this insolvency proceedings fall under the jurisdiction of regular
Court [20] and the RTC of Makati has yet to issue the courts under the Insolvency Law (Act No. 1956, as amended)
suspension-lifting order. The Makati RTC denied the in relation to the pertinent provision of R.A. No. 8799,
motion on December 16, 2002. otherwise known as the Securities Regulation Code.
We are not persuaded.
Earlier, however, Union Bank presented evidence ex parte, on
the basis of which the Makati RTC rendered, on December 27, As it were, the underlying petition[24] EYCO filed with and
2002, partial judgment[21] ordering EYCO to pay the over which the SEC assumed jurisdiction was one for
bank P400 million plus interests and attorneys fees. declaration of suspension of payment, appointment of a
rehabilitation receiver/committee, approval of
Via a petition for certiorari and prohibition before the rehabilitation plan with alternative prayer for liquidation
CA, Concepcion challenged the RTCs partial judgment and dissolution. That the SEC, along the way, ordained
aforementioned and its earlier order denying the motion to EYCOs liquidation and dissolution did not, without more,
intervene. His recourse was docketed as CA-G.R. SP No. 75355. strip the SEC of jurisdiction over the liquidation process.
The appellate court eventually issued the herein assailed Albeit jurisdiction over a petition to declare a corporation
Decision[22] reversing the Makati RTCs impugned issuances in a state of insolvency strictly lies with regular courts, the
and allowing Concepcion to intervene, thus: SEC possessed, during the period material, ample power
under P.D. No. 902-A,[25] as amended, to declare a
WHEREFORE, foregoing premises corporation insolvent as an incident of and in continuation
considered, the petition is GRANTED. The of its already acquired jurisdiction over the petition to be
assailed orders and partial judgment are declared in the state of suspension of payments in the two
hereby ANNULLED and SET ASIDE. instances provided in Section 5(d) thereof.[26] Said Section
Public respondent [RTC Judge Oscar 5(d)[27] vests the SEC with exclusive and original
Pimentel, Branch 148, Makati City] is jurisdiction over petitions for suspension of payments
ordered to allow petitioner [Concepcion] to which may either be: (a) a simple petition for suspension
intervene in Civil Case No. 97-2184. of payments based on the provisions of the Insolvency
Law, i.e., the petitioning corporation has sufficient assets
SO ORDERED. to cover all its debts, but foresees the impossibility of
Following the denial of its motion for meeting the obligations as they fall due, or (b) a similar
reconsideration,[23] Union Bank has interposed this petition petition filed by an insolvent corporation accompanied by
ascribing to the CA the following errors: a prayer for the creation of a management committee
and/or rehabilitation receiver based on the provisions of
1. In ruling in favor P.D. No. 902-A, as amended by P.D. No. 1758.[28]
of respondent Concepcions right to intervene In the case at bench, EYCOs petition for suspension of
in Civil Case No. 97-2184 pending in the payment was, at bottom, a mix of both situations adverted to
lower court despite his lack of legal interest above. For, while EYCO, in the said petition, alleged being
in the matter in litigation. solvent but illiquid, it nonetheless pleaded for the constitution
of a rehabilitation receiver/committee, with an alternative
2. In ruling in favor of respondent prayer for liquidation, if warranted. Clearly then, the SEC has,
Concepcions right to intervene in said Civil from the start, jurisdiction over EYCOs petition for suspension
Case No. 97-2184 despite his lack of legal of payment, such jurisdiction, following Ching,[29] continuing
personality, his appointment by the SEC as for purposes of liquidation after it (SEC) declared EYCO
liquidator of EYCO being null and void for insolvent. The SEC appeared to be aware of the continuity
lack of jurisdiction; and angle as it even ordered the remand to the SEC Hearing Panel
of SEC Case No. 09-97-5764 for purposes of liquidating and
3. In giving due course to respondent dissolving the EYCO Group.
Concepcions petition for certiorari under Rule
65 of the 1997 Rules of Civil Procedure If the SEC contextually retained jurisdiction over the
despite its being the improper remedy. liquidation of EYCO, is it not but logical then that it has
competence to appoint the respondent or any qualified
individual for that matter as liquidator?
We DENY. And lest it be overlooked, the Court had, in G.R. No. 131729,
already rejected the petitioners thesis about the SECs purported
As the Court distinctly notes, the petitioner does not assail the lack of jurisdiction over EYCOs suspension of payment case
CAs judgment insofar as it nullified the RTCs partial judgment owing to its supervening insolvency. Therein, the Court stated:
or its default order. As thus couched, the petition particularly
sets its sight on that part of the appellate courts We are of course aware of the argument [of]
ruling allowing respondent Concepcion to intervene in Civil petitioner [Union Bank] that the petition of
Case No. 97-2184. Of the three errors assigned, the more [EYCO] should be entirely dismissed and
critical relates to the challenged validity of the respondents taken out of the SECs jurisdiction on account
 of the alleged insolvency of [the latter]. In
this regard, petitioner theorizes that [EYCO
has] already become insolvent when [the
composite corporations] allegedly disposed
of a substantial portion of their properties
hence suspension of payments with the SEC
is not the proper remedy.
Such argument does not persuade us.
Petitioners allegations of [EYCOs]
supposed insolvency are hardly of any
consequence to the assumption of
jurisdiction by the SEC over the nature or
subject matter of the petition for suspension
of payments. Aside from the fact that these
allegations are evidentiary in nature , we
have likewise consistently ruled that what
determines the nature of an action, as well as
which court or body has jurisdiction over it,
are the allegations of the complaint, or a
petition as in this case, and the character of
the relief sought. That the merits of the case
after due proceedings are later found to
veer away from the claims asserted by
EYCO in its petition, as when it is shown
later that it is actually insolvent and may
not be entitled to suspension of payments,
does not divest the SEC at all of its
jurisdiction already acquired as its
inception . (Words in brackets and emphasis
added.)
The Court is certainly aware of the transfer, effected by R.A.
No. 8799, to the RTC of the SECs jurisdiction defined under
Section 5(d) of P.D. No. 902-A.[30] Such transfer, however, did
not, as the petitioner and the RTC posit, divest the SEC of its
jurisdiction over SEC Case No. 09-97-5764, given that it had
already issued, as early as September 19, 1998, the suspension
order after it found the petition for suspension filed
on September 16, 1998 to be sufficient in form and substance.
Subsection 5.2 of R.A. No. 8799 prescribing the jurisdiction
transfer and the rules on transition provides as follows:
5.2. The [Securities and Exchange]
Commissions jurisdiction over all cases
enumerated under Section 5 of [P.D.] No.
902-A is hereby transferred to the
appropriate [RTC]: Provided that the
Supreme Court may designate the [RTC]
branches that shall exercise jurisdiction
over these cases. xxx The Commission
shall retain jurisdiction over pending
suspension of payments/rehabilitation
cases filed as of 30 June 2000 until
finally disposed. (Words in bracket and
emphasis added.)
EYCOs petition for suspension for payment was, for all
intents and purposes, still pending with the SEC as
of June 30, 2000. Accordingly, the SECs jurisdiction
thereon, by the express terms of R.A. No. 8999, still
subsists until [the suspension of payment case and its
incidents are] finally disposed. In the words of the CA:
As held by this Court Section 5.2 of RA
8799 specifically provided that the SEC
shall retain jurisdiction over pending
suspension of payments/rehabilitation
cases filed as of June 30, 2000 until
finally disposed. The records are clear
that the suspension of payment was filed
on September 7, 1998. As such, the
petition is still pending with the SEC as
of the cut-off date set in the rules. xxx[31]
When the law speaks of until finally disposed, the
reference should include the final disposition of the
liquidation and dissolution processes since it is within the
power of the SEC by law,[32] or as incident of or in
continuation of its already acquired jurisdiction over the
petition for suspension of payment,[33] to order the
dissolution/liquidation of a corporation and accordingly
appoint a liquidator. In fine, the continuing exercise of
jurisdiction by the SEC over the liquidation and dissolution
of the EYCO Group is warranted. Once jurisdiction
attaches, the court cannot be ousted from the case by any
subsequent events, such as a new legislation placing such
proceedings under the jurisdiction of another body. The
only recognized exceptions to the rule, which find no sway
in the present case, arise when the statute expressly so
provides or when the statute is clearly intended to apply to
actions pending before its enactment.[34]
Given the above perspective, the Court is at a loss to
understand petitioners challenge against the right of the
respondent to intervene in Civil Case No. 97-2184, on the
postulate that the latter lacks legal interest in the matter in
litigation.
Intervention is a procedure by which a third person, not
originally party to the suit, but claiming an interest in the
subject matter, comes into the case, in order to protect his
right or interpose his claim.[35] Its main purpose is to settle
in one action and by a single judgment all conflicting
claims of or the whole controversy among the persons
involved.[36] To warrant intervention under Rule 19,
Section 1 of the Rules of Court,[37] two requisites must
concur: (a) the movant has a legal interest in the matter in
litigation, and (b) intervention must not unduly delay
or prejudice theadjudication of the rights of the parties, nor
should the claim of the intervenor be capable of being
properly decided in a separate proceeding. The interest,
which entitles one to intervene, must involve the matter in
litigation and of such direct and immediate
character[38] that the intervenor will either gain or lose by
the direct legal operation and effect of the judgment.[39]
Just like the CA, the Court has no doubt about the
respondent, as the duly-appointed liquidator of EYCOs
remaining assets, having a legal interest in the matter
litigated in Civil Case No. 97-2184. This is particularly true
with respect to the parcels of land covered by the writ of
attachment which, in the implementation of the SEC-
approved Liquidation Plan for EYCO, had been conveyed
to the respondent[40] in trust for the benefit of creditors,
EYCOs stockholders and other persons in interest. At the
very least, the respondent, as liquidator-trustee, is so
situated as to be affected by the distribution or disposition
of the attached properties which were under threat of being
levied on execution and sold at public auction. Respondent
would be unfaithful to his trust if he does take a bona
fide effort to intervene in Civil Case No. 97-2184 to thwart
the attempt of the petitioner to collect unpaid loans ahead
of other legitimate creditors similarly situated. Under
the SEC Rules of Procedure on Corporate
Recovery pursuant to which the SEC appointed the
respondent to liquidate the remaining assets of EYCO, the
liquidator is empowered and duty bound to [R]epresent the
debtor in any case filed by or against the debtor in any
tribunal and [B]ring any action on behalf of the debtor to
collect, recover or preserve any of its assets, or to resist or
defend against any claim.[41]
Any suggestion that allowing intervention would unduly
delay the final closure of the collection case cannot be
accepted. Far from unnecessarily prolonging or
complicating the case, the desired intervention, if allowed,
would possibly enable the court in one single action and
judgment to protect the collective interests of the creditors
of the EYCO Group that are seriously threatened by the
imminent exclusion of certain properties from the pool of
assets that should legally, if not ideally, be equitably
distributed among them. Disallowing intervention would
pave the way for the petitioner to seize the proceedings
before the Makati RTC to work entirely in its favor. Such
course of action trifles with the entire liquidation process.
And any decision rendered therein would unlikely be left
undisturbed by other legitimate but unpaid creditors whose
interest in the attached properties can hardly be disputed.
Moreover, the claim of the respondent over the attached
properties could not possibly be better threshed out in a
separate but subsequent proceedings given that he had
already secured titles over them.
The third and last issue turns on the propriety
of certiorari as a recourse to the denial of a motion for
intervention. The correct remedy, according to the
petitioner, is an appeal under Rule 45 of the Rules of Court,
an order denying intervention being final in character, not
merely interlocutory. Petitioner thus faults the CA for
allowing respondent Concepcions petition for certiorari
under Rule 65 of the Rules as a vehicle to impugn the denial
of his motion for intervention. It stresses that the
availability of appeal proscribes recourse to the special
civil action of certiorari.
We are not convinced.
Petitioners statement of the rule on the availability of the
extraordinary writ of certiorari under the premises is
impeccable. So too is its citation of supporting
jurisprudence. Petitioner conveniently forgot, however, to
include in its formulation settled exceptions to and
qualifications of the rule, even as it glossed over another
holding that intervention is merely accessory to the
principal action and, as such, is an interlocutory proceeding
dependent on the case between the original parties.[42]
It is true that certiorari may not be resorted to when appeal
is available as a remedy. However, it is also true that the
Court has allowed the issuance of a writ of certiorari when
appeal does not afford a speedy and adequate remedy in the
ordinary course of law. As in the past, the Court has ruled
that the availability of an appeal does not foreclose
recourse to the ordinary remedies or certiorari or
prohibition where appeal is not adequate, equally
beneficial, expeditious and sufficient.[43] Stated a bit
differently, certiorari may be availed of where an appeal
would be slow, inadequate and insufficient. The
determination as to what exactly constitutes plain, speedy
and adequate remedy rests on judicial discretion and
depends on the particular circumstances of each case.
In the case at bar, the CA did not commit any reversible
error in allowing the petition for certiorari filed by the
respondent. As it were, the respondent was able to convince
the CA of the urgency of his cause and that an appeal from
the denial of the motion for intervention would not
constitute speedy and adequate remedy, thus necessitating
the resort to the extraordinary remedy of certiorari. And in
an instance justifying the invocation of the remedy
of certiorari, it would appear too that the CA found the
RTC to have exercised its judicial authority in an
oppressive manner,[44] so much so that the CA stated the
apt observation that: In the first place, it [RTC] should not
have taken cognizance of the case when it was notified of
the pending petition [for suspension of payments] before
the SEC at the time the complaint was filed.[45]
Certainly not lost on the Court is an obvious reality: the
Makati RTC virtually interfered with and invalidated the
appointment made by the SEC when it has no jurisdiction
over the latter.
WHEREFORE, the instant petition is DENIED and the
impugned Decision and Resolution of the Court of Appeals
dated July 22, 2003 and November 7, 2003, respectively,
are AFFIRMED.
Costs against the petitioner. SO ORDERED.
G.R. No. 206728 November 12, 2014
APO CEMENT CORPORATION, Petitioner,
vs. MINGSON MINING INDUSTRIES
CORPORATION, Respondent.
RESOLUTION
PERLAS-BERNABE,J.:
Assailed in this petition for review on certiorari1 are the
Decision2 dated June 13, 2012 and the Resolution3 dated April
23, 2013 of the Court of Appeals (CA) in CA-G.R. SP No.
100456 which affirmed the Decision4 dated July 31, 2007 of
the Department of Environment and Natural Resources
(DENR) Mines Adjudication Board (MAB) in MAB Case No.
02-96 (POA Case No. CEB-001 ).
The Facts
The instant case arose from a dispute involving the mining
claims known as "Allied 1 and 2" and "Lapulapu 31 and 32"
(subject mining claims) between petitioner Apo Cement
Corporation (Apocemco) and respondent Mingson Mining
Industries Corporation (Mingson).5
For the supposed failure of the old locators to develop and put
to productive use the mineral properties found in the area,
Apocemco submitted a Mineral Production Sharing
Agreement (MPSA) proposal on June 19, 1991 before the
DENR,6 essentially seeking to take over their current holder,
Luvimin Cebu Mining Corporation (Luvimin).7
On August 18, 19928 and March 2, 1993,9 the DENR - Central
Visayas, Region 7 Office(DENR Regional Office) declared
the subject mining claims, among others, abandoned and open
for location to other interested parties,10prompting Luvimin to
file an appeal.11 Similarly, Mingson assailed the
aforementioned declarations on the ground that its own mining
claims, i.e., "Yellow Eagle I to VII," overlapped with the
subject mining claims. Particularly, Mingson averred that its
"Yellow Eagle IV" claim was registered on February 7, 1983
and was found to have overlapped with the "Allied 1 and 2"
claims, while its "Yellow Eagle III" claim was registered on
April 12, 1982 and overlapped with the "Lapulapu 31 and 32"
claims.12
The DENR Proceedings
In an Order13 dated March 1, 1995, the DENR Regional Office
decreed that portions of the subject mining claims be awarded
to Mingson, considering that said claims have encroached its
Yellow Eagle I to VII claims.
However, upon Apocemco’s motion for reconsideration,14 the
DENR Regional Office’s Legal Division issued a
Resolution15 dated September 5, 1995, recommending that the
subject mining claims be awarded, instead, to Apocemco,
subject, however, to the outcome of Luvimin’s appeal. In an
Order16 dated September 20, 1995, the DENR Regional
Director affirmed the foregoing resolution, but subject tothe
review and concurrence of the Mines and Geosciences Bureau
Region 7 - Panel of Arbitrators (POA), considering that
pursuant to Section 21817 of DENR Department
Administrative Order No. (DAO) 95-23, Series of 1995,18 the
POA has been mandated to resolve, among others, disputes
involving rights to mining areas.
In a Decision19 dated May 3, 1996, the POA upheld the
September 5, 1995 Resolution and the September 20, 1995
Order, reiterating the findings therein made, without, however,
requiring the parties to file any pleading or setting the matter
for hearing.
Aggrieved, Mingson appealed20 the POA’s Decision before
the DENR MAB, averring that the said Decision was not
supported by facts and the evidence on record, and that it was
arbitrary and issued with grave abuse of
authority.21Subsequently, in Mingson’s letter22 dated August 8,
1996, it claimed denial of due process.
In a Decision23 dated July 31, 2007, the DENR MAB granted
Mingson’s appeal and thereby reversed and set aside the
POA’s Decision. It found that the POA merely conducted a
review of the case and Mingson, in particular, was not given
an opportunity to be heard, which is repugnant to due
process.24
Dissatisfied, Apocemco elevatedthe matter to the CA.
The CA Ruling
In a Decision25 dated June 13, 2012, the CA dismissed
Apocemco’s appeal and sustained the DENR MAB’s finding
that Mingson was not afforded by the POA its right to due
process, given that none of the applicable procedures found in
DENR DAO 95-23 were followed.26 As an added ground for
dismissal, the CA heldthat Apocemco failed to perfect its
appeal in accordance with the Rules ofCourt, considering that
the DENR MAB was not served a copy of its petition.27
Unconvinced, Apocemco filed a motion for
reconsideration28 which was, however, denied in a
Resolution29 dated April 23, 2013, hence, the petition.
The Issue Before the Court
The primordial issue in this case iswhether or not the CA
correctly ordered the dismissal of Apocemco’s appeal.
The Court's Ruling
The petition is devoid of merit.
Sections 22330 (on preliminary conference), 22431 (on
hearing), and 22732 (on the proceedings before the POA), as
well as Sections 22133 (on due course) and 22234 (on answers)
of DENR DAO95-23, or the Implementing Rules of the
Philippine Mining Act of 1995,35 clearly require that the
parties involved in mining disputes be given the opportunity
to be heard. These rules – which were already in
effect36 during the time the dispute between the parties arose –
flesh out the core requirement of due process; thus, a stark and
unjustified contravention of the same would oust the errant
tribunal of its jurisdiction and, in effect, render its decision null
and void. As explained in PO2 Montoya v. Police Director
Varilla:37
The cardinal precept is that where there is a violation of basic
constitutional rights, courts are ousted from their
jurisdiction.1âwphi1 The violation of a party’s right to due
process raises a serious jurisdictional issue which cannot be
glossed over or disregarded at will. Where the denial of the
fundamental right of due process is apparent, a decision
rendered in disregard of that right is void for lack of
jurisdiction.38 (Emphases supplied)
Here, it has been established thatthe POA proceeded to resolve
the present mining dispute without affording either party any
fair and reasonable opportunity to be heard in violation of the
aforementioned provisions of DENR DAO 95-23. Thus, as
correctly ruled by the DENR MAB and later affirmed by the
CA, Mingson’s due process rights were violated, thereby
rendering the POA’s Decision null and void.
In this relation, the Court finds it apt to clarify that the DENR
MAB did not err in taking cognizance of the due process issue.
While such issue was not assigned as an error in Mingson’s
Appeal39 dated July 27, 1996, the same was squarely raised in
Mingson’s August 8, 1996 letter40 to the DENR MAB. Given
the lack of any formalprocedure on appeals at that time,41 the
DENR MAB cannot be faulted for considering the letter and
the issues raised therein as part of Mingson’s appeal. It must
be added that the DENR MAB is not a court of law but an
administrative body; hence, it is not bound by strict rules of
procedure and evidence, and is allowed to use all reasonable
means to ascertain the facts of each case speedily and
objectively without resort to technical rules,42 as in this case.
Besides, an apparent lack of due process may be raised by a
party at any time since due process is a jurisdictional requisite
that all tribunals, whether administrative or judicial, are duty
bound to observe. In Salva v. Valle,43 the Court pronounced
that "[a]decision rendered without due process is void ab initio
and may be attacked at anytime directly or collaterally by
means of a separate action, or by resisting such decision in any
action or proceeding where it is invoked." The Court sees no
defensible reason as to why this principle should not be herein
applied.
That being said, and considering too Apocemco’s failure to
comply with Sections 5 and 7,44 Rule 43 of the Rules of Court
in the proceedings before the appellate court, the instant
petition is hereby denied and the rulings of the CA are
affirmed.
WHEREFORE, the petition is DENIED. The Decision dated
June 13, 2012 and the Resolution dated April 23, 2013 of the
Court of Appeals in CA-G.R. SP No. 100456 are hereby
AFFIRMED.
SO ORDERED.
G.R. No. 194168 February 13, 2013
LAND BANK OF THE PHILIPPINES, Petitioner,
vs.SPOUSES PLACIDO and CLARA DY
ORILLA, Respondents.
D E C I S I O NPERALTA, J.:
This is a petition for revievv on certiorari assailing the
Decision1 dated April 17, 2009 of the Court of Appeals (CA)
in CA-G.R. CV No. 70071, and the Resolution2 dated
Septernber 30, 2010 denying petitioner's Motion for Partial
Reconsideration.3
The factual and procedural antecedents are undisputed:
Respondents spouses Placido and Clara Orilla (respondents)
were the owners of a parcel of land situated in Bohol,
identified as Lot No. 1, 11-12706, containing an area of
23.3416 hectares and covered by Transfer Certificate of Title
No. 18401. In the latter part of November 1996, the
Department of Agrarian Reform Provincial Agrarian Reform
Office (DARPARO) of Bohol sent respondents a Notice of
Land Valuation and Acquisition dated November 15, 1996
informing them of the compulsory acquisition of 21.1289
hectares of their landholdings pursuant to the Comprehensive
Agrarian Reform Law (Republic Act [RA] 6657) for
₱371,154.99 as compensation based on the valuation made by
petitioner Land Bank of the Philippines (LBP).4
However, respondents rejected the said valuation.
Consequently, a summary hearing was conducted by the
Provincial Department of Agrarian Reform Adjudication
Board (Provincial DARAB) to determine the amount of just
compensation. After the proceedings, the Provincial DARAB
affirmed the valuation made by the petitioner.5
Not content with the decision, respondents filed an action for
the determination of just compensation before the Regional
Trial Court of Tagbilaran City sitting as a Special Agrarian
Court (SAC). The case was docketed as Civil Case No. 6085
and was raffled to Branch 3.
After trial on the merits, the SAC rendered a Decision dated
November 20, 2000, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered fixing the just
compensation of the land of petitioner subject matter of the
instant action at ₱7.00 per square meter, as only prayed for,
which shall earn legal interest from the filing of the complaint
until the same shall have been fully paid. Furthermore,
respondents are hereby ordered to jointly and solidarily
indemnify the petitioners their expenses for attorney’s fee and
contract fee in the conduct of the appraisal of the land by a
duly licensed real estate appraiser Angelo G. Fajardo of which
petitioner shall submit a bill of costs therefor for the approval
of the Court.
SO ORDERED.6
On December 11, 2000, petitioner filed a Notice of Appeal.
Subsequently, on December 15, 2000, respondents filed a
Motion for Execution Pending Appeal, pursuant to Section 2,
Rule 39 of the 1997 Rules of Civil Procedure and the
consolidated cases of Landbank of the Philippines v. Court of
Appeals, et al.7 and Department of Agrarian Reform v. Court
of Appeals, et al.8 Respondents argued that the total amount of
₱1,479,023.00, which is equivalent to ₱7.00 per square meter
for 21.1289 hectares, adjudged by the SAC as just
compensation, could then be withdrawn under the authority of
the aforementioned case.9
On December 21, 2000, the SAC issued an Order granting the
Motion for Execution Pending Appeal, the dispositive of
which reads:
WHEREFORE, the herein motion is granted and the
petitioners are hereby ordered to post bond equivalent to one-
half of the amount due them by virtue of the decision in this
case. The respondent Land Bank of the Philippines, is
therefore, ordered to immediately deposit with any accessible
bank, as may be designated by respondent DAR, in cash or in
any governmental financial instrument the total amount due
the petitionerspouses as may be computed within the
parameters of Sec. 18(1) of RA 6657. Furthermore, pursuant
to the Supreme Court decisions in "Landbank of the
Philippines vs. Court of Appeals, et al." G.R. No. 118712,
promulgated on October 6, 1995 and "Department of
Agrarian Reform vs. Court of Appeals, et al.," G.R. No.
118745, promulgated on October 6, 1995, the petitioners may
withdraw the same for their use and benefit consequent to their
right of ownership thereof.10
On December 25, 2000, respondents filed a Motion for Partial
Reconsideration of the amount of the bond to be posted, but it
was later denied in an Order dated January 11, 2001.11
For its part, petitioner filed a Motion for Reconsideration,
which was likewise denied in an Order dated December 29,
2000.12
On March 13, 2001, petitioner filed with the CA a special civil
action for certiorari and prohibition under Rule 65 of the
Rules of Court with prayer for issuance of a temporary
restraining order and/or preliminary injunction. It questioned
the propriety of the SAC Order granting the execution pending
appeal.13
In its Decision dated July 29, 2002, the CA dismissed the
petition on the ground that the assailed SAC Order dated
December 21, 2000 granting execution pending appeal was
consistent with justice, fairness, and equity, as respondents
had been deprived of the use and possession of their property,
pursuant to RA 6657 and are entitled to be immediately
compensated with the amount as determined by the SAC under
the principle of "prompt payment" of just compensation.
Petitioner filed a Motion for Reconsideration, but it was
denied.14
Petitioner then sought recourse before this Court in a petition
docketed as G.R. No. 157206.1âwphi1 After due proceedings,
this Court rendered a Decision15 dated June 27, 2008,
affirming the decision of the CA. The decretal portion reads:
WHEREFORE, the Decision of the Court of Appeals, dated
July 29, 2002, is AFFIRMED.16
Petitioner filed a Motion for Reconsideration, but was denied
with finality by the Court.
Meanwhile, in CA-G.R. CV No. 70071, the CA rendered a
Decision17 dated April 17, 2009, granting the appeal filed by
the petitioner. The dispositive portion reads:
WHEREFORE, premises considered, the instant appeal is
GRANTED. The assailed decision of the Regional Trial Court
sitting as Special Agrarian Court is hereby SET ASIDE.
This case is REMANDED to the trial court for the proper
determination of just compensation for the land taken.
SO ORDERED.18
The CA held that there was no valid and sufficient legal basis
for the SAC in fixing the just compensation for the subject
property at ₱1,479,023.00. Thus, the CA remanded the case to
the SAC for the proper determination of just compensation.
In disposing the case, the CA also took into consideration the
Motion for Execution Pending Appeal that was granted earlier
by the SAC and affirmed by the CA and this Court, to wit:
Finally, the petitioners-appellees filed a Manifestation for
Early Resolution before this Court revealing that the
petitioners-appellees filed before the SAC a motion for
execution pending appeal which was granted. This Court
affirmed the decision of the SAC. Ultimately, the Supreme
Court affirmed the decision of the Court of Appeals. Therefore,
should the SAC find upon recomputation that the just
compensation previously rendered is bigger than the
recomputed value, the petitioners-appellees are ordered to
return the excess considering that payment may already have
been given by LBP in pursuant to the finality of the motion for
execution pending appeal.19
Unsatisfied, petitioner filed a Motion for Partial
Reconsideration.20 Petitioner argued that when the CA set
aside the valuation of the SAC amounting to ₱1,479,023.00, it
necessarily follows that said amount can no longer be the
subject of an execution pending appeal. Petitioner theorized
that by annulling the SAC decision and, consequently,
remanding the case to the trial court, the latter’s decision was
voided and, therefore, it could no longer be executed.
On September 30, 2010, the CA issued a Resolution21 denying
the motion. The CA held that the issue of the validity of the
writ of execution was already resolved by the Supreme Court
with finality in G.R. No. 157206. That was precisely the
reason why it stated in the decision that "should the SAC find
upon recomputation that the just compensation previously
rendered is bigger than the recomputed value, the petitioners-
appellees are ordered to return the excess, considering that
payment may already have been given by the LBP in pursuant
to the finality of the motion for execution pending appeal."22
Hence, the petition assigning the lone error:
THE HONORABLE COURT OF APPEALS COMMITTED
A SERIOUS ERROR OF LAW IN HOLDING THAT THE
TRIAL COURT’S DECISION, WHICH WAS ANNULLED
AND SET ASIDE, CAN STILL BE THE SUBJECT OF
EXECUTION.23
Petitioner argues that when the CA set aside the valuation of
the SAC, it necessarily means that such valuation can no
longer be the subject of an execution pending appeal. It adds
that the writ of execution ordering the LBP to pay respondents
the amount of ₱1,479,023.00 remains unimplemented as of the
time the CA rendered the decision annulling the aforesaid
valuation.
Petitioner posits that once a decision is annulled or set aside,
it is rendered without legal effect for being a void judgment.
Petitioner maintains that while the issue of the validity of the
writ of execution issued by the SAC had been upheld by this
Court in G.R. No. 157206, the enforcement of the writ had
been rendered moot and academic after the decision of the
SAC was reversed and set aside by the CA.
On their part, respondents contend that having attained finality,
the decision of this Court in G.R. No. 157206 could no longer
be disturbed. Moreover, the reason advanced by the CA in
denying the motion for partial reconsideration was merely an
affirmation of the decision of this Court in the said case.
The petition is without merit.
At the onset, it should be noted that although this Court,
in Land Bank of the Philippines v. Orilla,24 held that the SAC
validly issued the Order granting execution pending appeal in
the exercise of its sound discretion in issuing the same
according to the Rules, still what this Court deemed was
justified in that particular case was the propriety of the
issuance of the said Order and not the amount of monetary
award that respondents were entitled which, in turn,
corresponds to the valuation of the subject property as
determined by the SAC in its Decision. Thus, this Court stated
in the said case that "while this decision does not finally
resolve the propriety of the determination of just
compensation by the SAC in view of the separate appeal on
the matter, we find no grave abuse of discretion on the part of
the SAC Judge in allowing execution pending appeal."25
Anent the present controversy, in its Decision annulling the
SAC valuation, the CA opined:
x x x In granting the award, the SAC merely granted the
amount prayed for by the spouses and did not provide any
computation or explanation on how it arrived at the amount.
There was therefore no valid and sufficient legal basis for the
award.26
The CA, therefore, concluded that there was no sufficient legal
basis for the valuation arrived at by the SAC in the amount of
₱1,479,023.00. In fine, the CA effectively set aside and voided
the Decision of the RTC fixing the amount of just
compensation for the subject property. As correctly argued by
petitioner, being the fruit of a void judgment such amount
cannot be the proper subject of the Order granting the motion
for execution pending appeal issued by the SAC.
A void judgment or order has no legal and binding effect, force
or efficacy for any purpose. In contemplation of law, it is non-
existent. Such judgment or order may be resisted in any action
or proceeding whenever it is involved. It is not even necessary
to take any steps to vacate or avoid a void judgment or final
order; it may simply be ignored.27
In Metropolitan Waterworks & Sewerage System v.
Sison,28 this Court held that:
x x x "A void judgment is not entitled to the respect accorded
to a valid judgment, but may be entirely disregarded or
declared inoperative by any tribunal in which effect is sought
to be given to it. It is attended by none of the consequences of
a valid adjudication. It has no legal or binding effect or
efficacy for any purpose or at any place. It cannot affect,
impair or create rights. It is not entitled to enforcement and is,
ordinarily, no protection to those who seek to enforce. All
proceedings founded on the void judgment are themselves
regarded as invalid. In other words, a void judgment is
regarded as a nullity, and the situation is the same as it would
be if there were no judgments. It, accordingly, leaves the
parties litigants in the same position they were in before the
trial."29
Accordingly, a void judgment is no judgment at all. It cannot
be the source of any right nor of any obligation. All acts
performed pursuant to it and all claims emanating from it have
no legal effect. Hence, it can never become final, and any writ
of execution based on it is void: "x x x it may be said to be a
lawless thing which can be treated as an outlaw and slain at
sight, or ignored wherever and whenever it exhibits its
head."30
As correctly maintained by petitioner, since the valuation
made by the SAC in its Decision dated November 20, 2000
having been annulled by the CA for its lack of sufficient and
legal basis, the void judgment can never be validly executed.
Nevertheless, it must be pointed out that the situation
contemplated by the CA in the assailed Decision was one
wherein payment has already been made by petitioner to the
respondents during the pendency of the appeal. Nowhere in
the disquisition of the CA can it be inferred that it is enjoining
the LBP to enforce the writ of execution in accordance with
the valuation made by the SAC. On the contrary, the CA
respected the finality of the motion for execution pending
appeal should the same have already been enforced. As
pronounced by the CA:
x x x Therefore, should the SAC find upon computation that
the just compensation previously rendered is bigger than the
recomputed value, the petitioners-appellees are ordered to
return the excess considering that payment may already have
been given by LBP in pursuant to the finality of the motion for
execution pending appeal.31
Verily, it appears that the writ of execution pending appeal
remains unimplemented as of the time the CA rendered its
decision annulling the valuation made by the SAC. The
monetary award having emanated from a void valuation, it
follows that the writ of execution pending appeal cannot be
properly implemented. As contemplated by the CA, the
situation would have been different if the writ was already
enforced during the pendency of the appeal, for at that time the
writ could still be validly enforced since the valuation made
by the SAC still stands. Necessarily, as directed by the CA,
any excess amount paid to respondents should be returned to
petitioner.
Nonetheless, the amount of ₱371,154.99 representing the
compensation offered by the petitioner for the land taken, can
still be properly awarded to respondents in accordance
with Land Bank of the Philippines v. Court of Appeals.32In the
said case, the Court allowed the release of the offered
compensation to the landowner pending the determination of
the final valuation of their properties. The Court opined that:
We are not persuaded. As an exercise of police power, the
expropriation of private property under the CARP puts the
landowner, and not the government, in a situation where the
odds are already stacked against his favor. He has no recourse
but to allow it. His only consolation is that he can negotiate for
the amount of compensation to be paid for the expropriated
property. As expected, the landowner will exercise this right
to the hilt, but subject however to the limitation that he can
only be entitled to a "just compensation." Clearly therefore, by
rejecting and disputing the valuation of the DAR, the
landowner is merely exercising his right to seek just
compensation. If we are to affirm the withholding of the
release of the offered compensation despite depriving the
landowner of the possession and use of his property, we are in
effect penalizing the latter for simply exercising a right
afforded to him by law.33
Of course, this is without prejudice to the outcome of the case
which was remanded to the SAC for recomputation of just
compensation. Should the SAC find the said valuation too low
and determine a higher valuation for the subject property,
petitioner should pay respondents the difference. Conversely,
should the SAC determine that the valuation was too high,
respondents should return the excess. To be sure, the concept
of just compensation embraces not only the correct
determination of the amount to be paid to the owners of the
land, but also payment within a reasonable time from its taking.
Without prompt payment, compensation cannot be considered
"just" inasmuch as the property owner is made to suffer the
consequences of being immediately deprived of his land while
being made to wait for a decade or more before actually
receiving the amount necessary to cope with his loss.34
WHEREFORE, subject to the foregoing disquisitions, the
Decision and Resolution of the Court of Appeals, dated April
17, 2009 and September 30, 2010, respectively, in CA-G.R.
CV No. 70071, are AFFIRMED. Petitioner Land Bank of the
Philippines is ORDERED to release the amount
of ₱3 71,154.99 to respondents spouses Placido and Clara
Orilla, without prejudice to the recomputation of the just
compensation for the subject land by the Regional Trial Court.
SO ORDERED.
NILO PADRE, G.R. No. 165423
Petitioner,
- versus -
FRUCTOSA BADILLO,
FEDILA BADILLO,
PRESENTACION
CABALLES,
EDWINA VICARIO (d)
represented by MARY JOY
VICARIO-ORBETA and
NELSON BADILLO, Promulgated:
Respondents. January 19, 2011
x-----------------------------------------------
--------------------x
DECISION
DEL CASTILLO, J.:
A void judgment is no judgment at all. It cannot be the
source of any right nor the creator of any obligation. All acts
performed pursuant to it and all claims emanating from it have no
legal effect.[1]
This petition for review on certiorari assails the Orders the complaint.[8]
dated July 21 and September 20, 2004[2] issued by the Regional Trial
Court (RTC) of Allen, Northern Samar, Branch 23 in Special Civil Although denominated as one for Ownership and Possession, the
Action No. A-927, which affirmed the ruling of the Municipal Trial Badillo family alleged in their complaint in Civil Case No. 104 viz:
Court (MTC) of San Isidro, Northern Samar that it has jurisdiction
to try Civil Case No. 104.
Factual Antecedents
On October 13, 1986, the RTC of Allen, Northern Samar,
Branch 23, rendered judgment[3] in Civil Case No. A-514 for
Ownership and Recovery of Possession with Damages in favor of
therein plaintiffs Fructosa Badillo, Fedila Badillo, Edwina Badillo,
Presentacion Badillo and Nelson Badillo and against therein
defendants, including Consesa Padre. The dispositive portion of the
said Decision reads:
WHEREFORE, on preponderance of evidence,
the Court hereby renders judgment in favor of the
plaintiffs and against the defendants, declaring and
ordering as follows:
1. That the herein plaintiffs are
the lawful owners of the five-sixth (5/6) portion of
Lot No. 4080, Pls-54, registered in Original
Certificate of Title No. 736, more particularly, the
said five-sixth portion is described, delineated
and/or indicated in the Sketch Plan which is now
marked as Exhibit B-1;
2. That the said five-sixth (5/6)
portion which [is] herein adjudged as being owned
by the herein plaintiffs, include the portions of
land presently being occupied by defendants x x x,
Concesa Padre, x x x;
3. Ordering the defendants
mentioned in No. 2 hereof to vacate x x x the lots
respectively occupied by them and restore to [the
herein plaintiffs] the material possessions thereof;
4. Condemning and ordering
each of the same defendants herein above-named
to pay plaintiffs the amount of P100.00 per month,
as monthly rental, starting from January 19, 1980,
until the lots in question shall have been finally
restored to the plaintiffs; and
5. Condemning and ordering the
herein defendants named above to jointly and
severally pay the plaintiffs the amount
of P5,000.00 representing attorneys fees
and P2,000.00 as litigation expenses, and to pay
the costs of suit.
SO ORDERED.[4]
This Decision became final and executory on November 5, 1986.[5]
On December 29, 1997, the Badillo family filed another complaint
against those who occupy their property which included some of the
defendants in Civil Case No. A-514.[6] The case was filed with the
MTC of San Isidro, Northern Samar and was docketed as Civil Case
No. 104.[7] As Consesa Padre had already died in 1989, her heir, Nilo
Padre (Nilo), was impleaded as one of the defendants. While some
of the defendants filed their respective answers, Nilo was one of
those who were declared in default for failure to file their answer to
 4. That plaintiffs are the joint owners of
Lot No. 4080. Pls-54, with a total area of 10,167
square meters, covered by OCT No. 736 in the
name of Eutequio Badillo, deceased husband of
plaintiff Fructosa Badillo and father of the rest of
the other plaintiffs, covered by Tax Declaration
No. 9160 and assessed at P26,940.00;
5. That plaintiffs in Civil Case No. A-514,
entitled Fructosa Badillo versus Celso Castillo, et.
al., were the prevailing parties in the aforesaid case
as evidenced by the hereto attached copy of the
decision rendered by the Regional Trial Court in
the above-entitled case and marked as Annex A
and made integral part of this complaint;
6. That after the judgment in the
above-mentioned case became final, the same
was executed as evidenced by a copy of the writ
of execution hereto attached as Annex B and
made integral part hereof;
7. That despite the service of the writ
of execution and vacating the properties x x x
illegally occupied by the afore-mentioned
defendants, [said defendants] re-entered the
property in 1990 after the execution and
refused to vacate the same [thereby]
reasserting their claims of ownership x x x
despite repeated demands;
8. That all attempts towards a peaceful
settlement of the matter outside of Court to avoid
a civil suit, such as referring the matter of the Brgy.
Captain and the Brgy. Lupon of Brgy.
Alegria, San Isidro, N. Samar were of no avail as
the defendants refused to heed lawful demands of
plaintiffs to x x x vacate the premises[. I]nstead,
defendants claimed ownership of the property in
question [and] refused to vacate the same despite
repeated demands [such] that having lost all
peaceful remedies, plaintiffs were constrained to
file this suit. Certificate to file Action is hereby
attached and marked as Annex C and made
integral part hereof;[9] (Emphasis supplied.)
Ruling of the Municipal Trial Court
[10]
The MTC rendered judgment on July 17, 2003. Interpreting the judgment sought to be revived became final and executory in
suit of the Badillo family as an action to revive the dormant judgment November 1986.
in Civil Case No. A-514, the court recognized the right of the
plaintiffs to finally have such judgment enforced. The MTC The MTC denied the motion for reconsideration.[15] It held that the
disposed of the case as follows:
WHEREFORE, judgment is ordered
reviving the previous judgment of the Regional
Trial Court there being, and still, preponderance of
evidence in favor of plaintiffs, as follows:
1. That the herein plaintiffs are
the lawful owners of the five-sixth (5/6) portion of
Lot No. 4080, Pls-54, registered in Original
Certificate of Title No. 730, more particularly x x
x described, delineated and/or indicated in the
Sketch Plan which is now marked as Exhibit B-1;
2. That the said five-sixth portion
which is herein adjudged as being owne[d] by
herein plaintiffs, includes the portions of land
presently being occupied by defendants Victor
Eulin, Consesa Padre, Celso Castillo, Leo Atiga,
Santos Corollo, Iego Armogela, Salustiano
Millano, Milagros Gile, Pusay Enting, Galeleo
Pilapil, more particularly indicated in Exhibit B-1
and marked as Exhibits B-3, B-4, B-5, B-6, B-7,
B-8, B-9, B-10, B-11, B-12, and B-13,
respectively;
3. Ordering the defendants
mentioned in No. 2, hereof and THOSE
PRESENTLY NAMED AS PARTY-
DEFENDANTS IN THIS REVIVAL OF
JUDGMENT AND THOSE ACTING IN
PRIVITY to vacate from the lots respectively
occupied by them and restore [to] the herein
plaintiff x x x the material possession thereof;
4. Condemning and ordering
each of the same defendants named in the
previous civil case and those NAMED ANEW to
jointly and severally pay the plaintiffs the amount
of P5,000.00, representing attorneys fees,
and P2,000.00 as litigation expenses;
5. CONDEMNING ALL
DEFENDANTS HEREIN TO PAY
EXEMPLARY DAMAGES FOR
OBSTINATELY VIOLATING THE
DECISION OF THE COURT JOINTLY AND
SEVERALLY X X X THE AMOUNT
OF P5,000.00, and to pay the costs of the suit.
SO ORDERED.[11]
Nilo thereafter appeared and moved to reconsider[12] the MTC
judgment. He argued that the MTC is without jurisdiction over the
case, opining that the action for revival of judgment is a real action
and should be filed with the same court, i.e., the RTC, which
rendered the decision sought to be revived. Or,
assuming arguendo that the MTC has jurisdiction over real actions,
it must be noted that the subject property is assessed at P26,940.00,
an amount beyond the P20,000.00 limit for the MTC to have
jurisdiction over real actions, in accordance with Republic Act (RA)
No. 7691.[13] Nilo also contended that the action is dismissible for a)
lack of certificate of non-forum shopping in the complaint and b)
prescription, the complaint for revival of judgment having been filed
beyond the 10-year reglementary period[14] from the time the
case is an action for revival of judgment and not an action for
ownership and possession, which had already long been settled. To
the MTC, the former is a personal action under Section 2, Rule 4 of
the Rules of Court which may be filed, at the election of plaintiffs,
either at the court of the place where they reside or where the
defendants reside. The court found excusable the absence of the
certification against forum shopping, justifying that the action filed
before it is merely a continuation of the previous suit for
ownership. Moreover, the counsel for the Badillo family, a
nonagenarian, may not yet have been familiar with the rule when
Civil Case No. 104 was filed. To it, this mistake should not prejudice
the Badillo family who deserve to possess and enjoy their properties.
Ruling of the Regional Trial Court
By way of a special civil action for certiorari, Nilo elevated the case Petitioners Arguments
to the RTC to question the MTCs jurisdiction,[16] reiterating the same
grounds he had raised before the MTC. The case was docketed as Nilo finds the RTCs adverse ruling as wanting in sufficient
Special Civil Action No. A-927. explanation as to the factual and legal bases for upholding the
MTC. He also highlights the failure of the Badillo family to attach to
On July 21, 2004, however, the RTC dismissed said their complaint a certificate of non-forum shopping. Petitioner also
petition[17] on the ground that it was filed late. Moreover, the RTC argues that the date of mailing of his petition with the RTC is the
upheld the MTCs jurisdiction over the case, affirming the MTCs date of his filing. He stressed that the filing of his petition on March
ratiocination that an action for enforcement of a dormant judgment 1, 2004 was well within the prescriptive period. As the 60th day from
is a personal action, and hence may be filed either at the court of the December 30, 2003 fell on a Saturday, he maintains that the Rules
place where plaintiffs reside or where the defendants reside. of Court allows him to file his petition on the next working day,
which is March 1, 2004, a Monday.
In his Motion for Reconsideration,[18] Nilo contended that his
petition with the RTC was timely filed as shown by the registry As have already been raised in the courts below, Nilo mentions the
receipt dated March 1, 2004,[19] stamped on the mailing envelope he following grounds for the dismissal of the action against him before
used in filing said petition. He argued that this date of mailing is also the MTC:
the date of filing. He also contended that the RTCs Decision was
bereft of any explanation as to why it ruled that the case is a personal a) The MTC lacks jurisdiction. Nilo reiterates that the
action. He further alleged that the RTC failed to discuss the issues of prime objective of the Badillo family in Civil Case No. 104 is to
prescription and non-compliance with the rule against forum recover real property, which makes it a real action. Citing the case
shopping. of Aldeguer v. Gemelo,[21] he contends that this suit must be brought
before the RTC of Allen, Northern Samar. Besides, the assessed
In its Order dated September 20, 2004, the RTC denied the motion value of the land in controversy, i.e., P26,940.00, divests the MTC
for reconsideration. It said: of jurisdiction.

Assuming that the date of posting was March 1,
2004, as shown in the registry
receipts, still the 60-day reglementary period had
already lapsed with December 30, 2003 as the
reckoning period when petitioner received the
December 9, 2003 Order of Hon. Judge Jose A.
Benesisto. With the month of February, 2004
having 29 days, it is now clear that the petition was
filed sixty one (61) days after; hence, there is no
timeliness of the petition to speak of.
Civil Case No. 104 is an ordinary action to enforce
a dormant judgment filed by plaintiffs against
defendants. Being an action for the enforcement
of dormant judgment for damages is a personal
one and should be brought in any province where
the plaintiff or defendant resides, at the option of
the plaintiff. As regards prescription, the present
rule now is, the prescriptive period commences to
run anew from the finality of the revived judgment.
A revived judgment is enforceable again by
motion within five years and thereafter by another
action within ten years from the finality of the
revived judgment. There is, therefore, no
prescription or beyond the statute of limitations to
speak [sic] in the instant case. Petitioners
contention must therefore fail.
It is but proper and legal that the plaintiffs in Civil
Case No. 514 of which they are the prevailing
parties to institute for the enforcement of a
dormant judgment [which right] they have failed
to exercise x x x for more than a decade.Being an
ordinary action to enforce a dormant judgment,
not even testimonial evidence is necessary to
enforce such judgment because the decision had
long obtained its finality.
x x x x[20]
Hence, this petition.
b) Prescription. Nilo claims that the Badillo familys
suit had already lapsed as they allowed 11 years to pass without
resorting to any legal remedy before filing the action for revival of
judgment. Although the Badillo family moved for the issuance of a
writ of execution in Civil Case No. A-514, the same did not interrupt
the running of the period to have the judgment enforced by motion
or by action.
Respondents Arguments
While impliedly acknowledging that Nilo seasonably filed his
petition for certiorari with the RTC, the Badillo family note that he
should have filed an appeal before the RTC. They claim that they
properly filed their case, a personal action, with the MTC of San
Isidro, Northern Samar as they are allowed under Section 2, Rule 4
of the Rules of Court to elect the venue as to where to file their case.
Granting that their action is considered a revival of
judgment, the Badillos claim that they filed their suit within the 10-
year period. They contend that in filing Civil Case No. 104 in
December 1997, the prescriptive period should not be counted from
the finality of judgment in Civil Case No. A-514, but should be
reckoned from August 22, 1989, when the RTC issued an Order that
considered as
abandoned themotion to declare the defendants in default in the con
tempt
proceedings.
Issue
The question that should be settled is whether the RTC correctly
affirmed the MTC ruling that it has jurisdiction over Civil Case No.
104.
Our Ruling
Indeed, [t]he existence and availability of the right of appeal
proscribes a resort to certiorari.[22] The court a quo could have
instead dismissed Nilos petition on the ground that this question
should have been raised by way of an appeal.[23] This rule is subject
to exceptions, such as when the writs issued are null and void or
when the questioned order amounts to an oppressive exercise of
judicial authority.[24] As will be later on discussed, the RTC, although
it ultimately erred in its judgment, was nevertheless correct in
entertaining the special civil action for certiorari. The exceptions we
mentioned apply in the case at bar, as it turns out that petitioners
jurisdictional objection has compelling basis.
Timeliness of the petition for certiorari
The petition for certiorari before the RTC was timely
filed. If the pleading filed was not done personally, the date of
mailing, as stamped on the envelope or the registry receipt, is
considered as the date of filing.[25] By way of registered mail, Nilo
filed his petition for certiorari with the RTC on March 1, 2004, as
indicated in the date stamped on its envelope. From the time Nilo
received on December 30, 2003 the MTCs denial of his motion for
reconsideration, the last day for him to file his petition with the RTC
fell on February 28, 2004, a Saturday. Under the Rules, should the
last day of the period to file a pleading fall on a Saturday, a Sunday,
or a legal holiday, a litigant is allowed to file his or her pleading on
the next working day,[26] which in the case at bar, fell on a
Monday, i.e., March 1, 2004.
Jurisdiction over Civil Case No. 104
We shall now look into the core argument of Nilo anent the
MTCs lack of jurisdiction over the case and the alleged prescription
of the action.
[W]hat determines the nature of the action and which court
has jurisdiction over it are the allegations in the complaint and the
character of the relief sought.[27] In their complaint in Civil Case No.
104, some of the allegations of the Badillo family, which petitioner
never opposed and are thus deemed admitted by him, states:
4. That plaintiffs are the joint owners of
Lot No. 4080. Pls-54, with a total area of 10,167
square meters, covered by OCT No. 736 in the
name of Eutequio Badillo, deceased husband of
plaintiff Fructosa Badillo and father of the rest of
the other plaintiffs, covered by Tax Declaration
No. 9160 and assessed at P26,940.00;
5. That plaintiffs in Civil Case No. A-514,
entitled Fructosa Badillo versus Celso Castillo, et.
al., were the prevailing parties in the aforesaid case
as evidenced by the hereto attached copy of the
decision rendered by the Regional Trial Court in
the above-entitled case and marked as Annex A
and made integral part of this complaint;
6. That after the judgment in the
above-mentioned case became final, the same
was executed as evidenced by a copy of the writ
of execution hereto attached as Annex B and
made integral part hereof;
7. That despite the service of the writ
of execution and vacating the properties x x x
illegally occupied by the afore-mentioned
defendants, the latter re-entered the property
in 1990 after the execution and refused to
vacate the same [thereby] reasserting their
claims of ownership over [the disputed
properties] and refused to vacate the same
despite repeated demands;
8. That all attempts towards a peaceful settlement
of the matter outside of Court to avoid a civil suit,
such as referring the matter of the Brgy. Captain
and the Brgy. Lupon of Brgy. Alegria, San Isidro,
N. Samar were of no avail as the defendants
refused to heed lawful demands of plaintiffs to x x
x vacate the premises[. I]nstead, defendants
claimed ownership of the property in question
refused to vacate the same despite repeated
demands [such] that having lost all peaceful
remedies, plaintiffs were constrained to file this
suit. Certificate to file Action is hereby attached
and marked as Annex C and made integral part
hereof;[28] (Emphasis supplied.)
Under paragraph 6 of their complaint, the Badillos alleged
that judgment in Civil Case No. A-514 had become final and had
been executed. Further, in paragraph 7, they alleged that in 1990, the
defendants re-entered the property and despite repeated demands
they refused to vacate the same. Thus, the Badillos were not at all
seeking a revival of the judgment. In reality, they were asking the
MTC to legally oust the occupants from their lots.
The Badillo family would have been correct in seeking
judicial recourse from the MTC had the case been an action for
ejectment, i.e., one of forcible entry under Rule 70 of the Rules of
Court wherein essential facts constituting forcible entry[29] have been
averred and the suit filed within one year from the time of unlawful
deprivation or withholding of possession, as the MTC has exclusive
original jurisdiction over such suit.[30] However, as the alleged
dispossession occurred in 1990, the one-year period to bring a case
for forcible entry had expired since the Badillos filed their suit only
in December 1997. We thus construe that the remedy they availed
of is the plenary action of accion publiciana, which may be
instituted within 10 years.[31] It is an ordinary civil proceeding to
determine the better right of possession of realty independently of
title. It also refers to an ejectment suit filed after the expiration of one
year from the accrual of the cause of action or from the unlawful
withholding of possession of the realty.[32]
Whether the case filed by the Badillo family is a real or a
personal action is irrelevant. Determining whether an action is real
or personal is for the purpose only of determining venue. In the case
at bar, the question raised concerns jurisdiction, not venue.
Although the Badillo family correctly filed a case
for accion publiciana, they pleaded their case before the wrong
court. In civil cases involving realty or interest therein not within
Metro Manila, the MTC has exclusive original jurisdiction only if
the assessed value of the subject property or interest therein does not
exceed P20,000.00.[33] As the assessed value of the property subject
matter of this case is P26,940.00, and since more than one year had
expired after the dispossession, jurisdiction properly belongs to the
RTC.[34] Hence, the MTC has no judicial authority at all to try the
case in the first place. A decision of the court without jurisdiction is
null and void; hence, it could never logically become final and
executory. Such a judgment may be attacked directly or
collaterally.[35]
Based on the foregoing discussion, it is not anymore
necessary to discuss the issue raised concerning the failure to include
a certification of non-forum shopping.
Although we are compelled to dismiss respondents action
before the MTC, they are nonetheless not precluded from filing the
necessary judicial remedy with the proper court.
WHEREFORE, the petition is GRANTED. The Orders
dated July 21 and September 20, 2004 of the Regional Trial Court
of Allen, Northern Samar, Branch 23 in Special Civil Action No. A-
927 are hereby SET ASIDE. The Municipal Trial Court of San
Isidro, Northern Samar is DIRECTED to dismiss Civil Case No.
104 for lack of jurisdiction.
SO ORDERED.
G.R. No. L-21450 April 15, 1968
SERAFIN TIJAM, ET AL., plaintiffs-appellees,
vs.MAGDALENO SIBONGHANOY alias GAVINO
SIBONGHANOY and LUCIA BAGUIO, defendants,
MANILA SURETY AND FIDELITY CO., INC. (CEBU
BRANCH) bonding company and defendant-appellant.
DIZON, J.:
On July 19, 1948 — barely one month after the effectivity of
Republic Act No. 296 known as the Judiciary Act of 1948 —
the spouses Serafin Tijam and Felicitas Tagalog commenced
Civil Case No. R-660 in the Court of First Instance of Cebu
against the spouses Magdaleno Sibonghanoy and Lucia
Baguio to recover from them the sum of P1,908.00, with legal
interest thereon from the date of the filing of the complaint
until the whole obligation is paid, plus costs. As prayed for in
the complaint, a writ of attachment was issued by the court
against defendants' properties, but the same was soon
dissolved upon the filing of a counter-bond by defendants and
the Manila Surety and Fidelity Co., Inc. hereinafter referred to
as the Surety, on the 31st of the same month.
After being duly served with summons the defendants filed
their answer in which, after making some admissions and
denials of the material averments of the complaint, they
interposed a counterclaim. This counterclaim was answered
by the plaintiffs.
After trial upon the issues thus joined, the Court rendered
judgment in favor of the plaintiffs and, after the same had
become final and executory, upon motion of the latter, the
Court issued a writ of execution against the defendants. The
writ having been returned unsatisfied, the plaintiffs moved for
the issuance of a writ of execution against the Surety's bond
(Rec. on Appeal, pp. 46-49), against which the Surety filed a
written opposition (Id. pp. 49) upon two grounds, namely, (1)
Failure to prosecute and (2) Absence of a demand upon the
Surety for the payment of the amount due under the judgment.
Upon these grounds the Surety prayed the Court not only to
deny the motion for execution against its counter-bond but
also the following affirmative relief : "to relieve the herein
bonding company of its liability, if any, under the bond in
question" (Id. p. 54) The Court denied this motion on the
ground solely that no previous demand had been made on the
Surety for the satisfaction of the judgment. Thereafter the
necessary demand was made, and upon failure of the Surety to
satisfy the judgment, the plaintiffs filed a second motion for
execution against the counterbond. On the date set for the
hearing thereon, the Court, upon motion of the Surety's
counsel, granted the latter a period of five days within which
to answer the motion. Upon its failure to file such answer, the
Court granted the motion for execution and the corresponding
writ was issued.
Subsequently, the Surety moved to quash the writ on the
ground that the same was issued without the required summary
hearing provided for in Section 17 of Rule 59 of the Rules of
Court. As the Court denied the motion, the Surety appealed to
the Court of Appeals from such order of denial and from the
one denying its motion for reconsideration (Id. p. 97). Its
record on appeal was then printed as required by the Rules,
and in due time it filed its brief raising therein no other
question but the ones covered by the following assignment of
errors:
I. That the Honorable Court a quo erred in issuing its
order dated November 2, 1957, by holding the
incident as submitted for resolution, without a
summary hearing and compliance with the other
mandatory requirements provided for in Section 17,
Rule 59 of the Rules of Court.
II. That the Honorable Court a quo erred in ordering
the issuance of execution against the herein bonding
company-appellant.
III. That the Honorable Court a quo erred in denying
the motion to quash the writ of execution filed by the
herein bonding company-appellant as well as its
subsequent motion for reconsideration, and/or in not
quashing or setting aside the writ of execution.
Not one of the assignment of errors — it is obvious — raises
the question of lack of jurisdiction, neither directly nor
indirectly.
Although the appellees failed to file their brief, the Court of
Appeals, on December 11, 1962, decided the case affirming
the orders appealed from.
On January 8, 1963 — five days after the Surety received
notice of the decision, it filed a motion asking for extension of
time within which to file a motion for reconsideration. The
Court of Appeals granted the motion in its resolution of
January 10 of the same year. Two days later the Surety filed a
pleading entitled MOTION TO DISMISS, alleging
substantially that appellees action was filed in the Court of
First Instance of Cebu on July 19, 1948 for the recovery of the
sum of P1,908.00 only; that a month before that date Republic
Act No. 296, otherwise known as the Judiciary Act of 1948,
had already become effective, Section 88 of which placed
within the original exclusive jurisdiction of inferior courts all
civil actions where the value of the subject-matter or the
amount of the demand does not exceed P2,000.00, exclusive
of interest and costs; that the Court of First Instance therefore
had no jurisdiction to try and decide the case. Upon these
premises the Surety's motion prayed the Court of Appeals to
set aside its decision and to dismiss the case. By resolution of
January 16, 1963 the Court of Appeals required the appellees
to answer the motion to dismiss, but they failed to do so.
Whereupon, on May 20 of the same year, the Court resolved
to set aside its decision and to certify the case to Us. The
pertinent portions of its resolution read as follows:
It would indeed appear from the record that the action
at bar, which is a suit for collection of money in the
sum of exactly P1,908.00 exclusive of interest, was
originally instituted in the Court of First Instance of
Cebu on July 19, 1948. But about a month prior to the
filing of the complaint, more specifically on June 17,
1948, the Judiciary Act of 1948 took effect, depriving
the Court of First Instance of original jurisdiction over
cases in which the demand, exclusive of interest, is not
more than P2,000.00. (Secs. 44[c] and 86[b], R.A. No.
296.)
We believe, therefore, that the point raised in
appellant's motion is an important one which merits
serious consideration. As stated, the complaint was
filed on July 19, 1948. This case therefore has been
pending now for almost 15 years, and throughout the
entire proceeding appellant never raised the question
of jurisdiction until after receipt of this Court's
adverse decision.
There are three cases decided by the Honorable
Supreme Court which may be worthy of consideration
in connection with this case, namely: Tyson Tan, et al.
vs. Filipinas Compañia de Seguros, et al., G.R. No. L-
10096, March 23, 1956; Pindangan Agricultural Co.,
Inc. vs. Jose P. Dans, etc., et al., G.R. No. L-14591,
September 26, 1962; and Alfredo Montelibano, et al.
vs. Bacolod-Murcia Milling Co., Inc., G.R. No. L-
15092, September 29, 1962, wherein the Honorable
 Supreme Court frowned upon the 'undesirable
practice' of appellants submitting their case for
decision and then accepting the judgment, if favorable,
but attacking it for lack of jurisdiction when adverse.
Considering, however, that the Supreme Court has the
"exclusive" appellate jurisdiction over "all cases in
which the jurisdiction of any inferior court is in issue"
(See. 1, Par. 3[3], Judiciary Act of 1948, as amended),
we have no choice but to certify, as we hereby do
certify, this case to the Supreme Court.1äwphï1.ñët
ACCORDINGLY, pursuant to Section 31 of the
Judiciary Act of 1948 as amended, let the record of
this case be forwarded to the Supreme Court.
It is an undisputed fact that the action commenced by appellees
in the Court of First Instance of Cebu against the Sibonghanoy
spouses was for the recovery of the sum of P1,908.00 only —
an amount within the original exclusive jurisdiction of inferior
courts in accordance with the provisions of the Judiciary Act
of 1948 which had taken effect about a month prior to the date
when the action was commenced. True also is the rule that
jurisdiction over the subject matter is conferred upon the
courts exclusively by law, and as the lack of it affects the very
authority of the court to take cognizance of the case, the
objection may be raised at any stage of the proceedings.
However, considering the facts and circumstances of the
present case — which shall forthwith be set forth — We are
of the opinion that the Surety is now barred by laches from
invoking this plea at this late hour for the purpose of annuling
everything done heretofore in the case with its active
participation.
As already stated, the action was commenced in the Court of
First Instance of Cebu on July 19, 1948, that is, almostfifteen
years before the Surety filed its motion to dismiss on January
12, 1963 raising the question of lack of jurisdiction for the first
time.
It must be remembered that although the action, originally,
was exclusively against the Sibonghanoy spouses the Surety
became a quasi-party therein since July 31, 1948 when it filed
a counter-bond for the dissolution of the writ of attachment
issued by the court of origin (Record on Appeal, pp. 15-19).
Since then, it acquired certain rights and assumed specific
obligations in connection with the pending case, in accordance
with sections 12 and 17, Rule 57, Rules of Court (Bautista vs.
Joaquin, 46 Phil. 885; Kimpang & Co. vs. Javier, 65 Phil. 170).
Upon the filing of the first motion for execution against the
counter-bond the Surety not only filed a written opposition
thereto praying for its denial but also asked for an
additional affirmative relief — that it be relieved of its liability
under the counter-bond upon the grounds relied upon in
support of its opposition — lack of jurisdiction of the court a
quo not being one of them.
Then, at the hearing on the second motion for execution
against the counter-bond, the Surety appeared, through
counsel, to ask for time within which to file an answer or
opposition thereto. This motion was granted, but instead of
such answer or opposition, the Surety filed the motion to
dismiss mentioned heretofore.
A party may be estopped or barred from raising a question in
different ways and for different reasons. Thus we speak of
estoppel in pais, or estoppel by deed or by record, and of
estoppel by laches.
Laches, in a general sense is failure or neglect, for an
unreasonable and unexplained length of time, to do that which,
by exercising due diligence, could or should have been done
earlier; it is negligence or omission to assert a right within a
reasonable time, warranting a presumption that the party
entitled to assert it either has abandoned it or declined to assert
it.
The doctrine of laches or of "stale demands" is based upon
grounds of public policy which requires, for the peace of
society, the discouragement of stale claims and, unlike the
statute of limitations, is not a mere question of time but is
principally a question of the inequity or unfairness of
permitting a right or claim to be enforced or asserted.
It has been held that a party can not invoke the jurisdiction of
a court to sure affirmative relief against his opponent and, after
obtaining or failing to obtain such relief, repudiate or question
that same jurisdiction (Dean vs. Dean, 136 Or. 694, 86 A.L.R.
79). In the case just cited, by way of explaining the rule, it was
further said that the question whether the court had jurisdiction
either of the subject-matter of the action or of the parties was
not important in such cases because the party is barred from
such conduct not because the judgment or order of the court
is valid and conclusive as an adjudication, but for the reason
that such a practice can not be tolerated — obviously for
reasons of public policy.
Furthermore, it has also been held that after voluntarily
submitting a cause and encountering an adverse decision on
the merits, it is too late for the loser to question the jurisdiction
or power of the court (Pease vs. Rathbun-Jones etc., 243 U.S.
273, 61 L. Ed. 715, 37 S. Ct. 283; St. Louis etc. vs. McBride,
141 U.S. 127, 35 L. Ed. 659). And in Littleton vs. Burgess, 16
Wyo. 58, the Court said that it is not right for a party who has
affirmed and invoked the jurisdiction of a court in a particular
matter to secure an affirmative relief, to afterwards deny that
same jurisdiction to escape a penalty.
Upon this same principle is what We said in the three cases
mentioned in the resolution of the Court of Appeals of May 20,
1963 (supra) — to the effect that we frown upon the
"undesirable practice" of a party submitting his case for
decision and then accepting the judgment, only if favorable,
and attacking it for lack of jurisdiction, when adverse — as
well as in Pindañgan etc. vs. Dans, et al., G.R. L-14591,
September 26, 1962; Montelibano, et al., vs. Bacolod-Murcia
Milling Co., Inc., G.R. L-15092; Young Men Labor Union etc.
vs. The Court of Industrial Relation et al., G.R. L-20307, Feb.
26, 1965, and Mejia vs. Lucas, 100 Phil. p. 277.
The facts of this case show that from the time the Surety
became a quasi-party on July 31, 1948, it could have raised the
question of the lack of jurisdiction of the Court of First
Instance of Cebu to take cognizance of the present action by
reason of the sum of money involved which, according to the
law then in force, was within the original exclusive jurisdiction
of inferior courts. It failed to do so. Instead, at several stages
of the proceedings in the court a quo as well as in the Court of
Appeals, it invoked the jurisdiction of said courts to obtain
affirmative relief and submitted its case for a final adjudication
on the merits. It was only after an adverse decision was
rendered by the Court of Appeals that it finally woke up to
raise the question of jurisdiction. Were we to sanction such
conduct on its part, We would in effect be declaring as useless
all the proceedings had in the present case since it was
commenced on July 19, 1948 and compel the judgment
creditors to go up their Calvary once more. The inequity and
unfairness of this is not only patent but revolting.
Coming now to the merits of the appeal: after going over the
entire record, We have become persuaded that We can do
nothing better than to quote in toto, with approval, the decision
rendered by the Court of Appeals on December 11, 1962 as
follows:
In Civil Case No. R-660 of the Court of First Instance
of Cebu, which was a suit for collection of a sum of
money, a writ of attachment was issued against
defendants' properties. The attachment, however, was
subsequently discharged under Section 12 of Rule 59
upon the filing by defendants of a bond subscribed by
Manila Surety & Fidelity Co., Inc.
After trial, judgment was rendered in favor of
plaintiffs.
The writ of execution against defendants having been
returned totally unsatisfied, plaintiffs moved, under
Section 17 of Rule 59, for issuance of writ of
execution against Manila Surety & Fidelity Co., Inc.
to enforce the obligation of the bond. But the motion
was, upon the surety's opposition, denied on the
ground that there was "no showing that a demand had
been made, by the plaintiffs to the bonding company
for payment of the amount due under the judgment"
(Record on Appeal, p. 60).
Hence, plaintiffs made the necessary demand upon the
surety for satisfaction of the judgment, and upon the
latter's failure to pay the amount due, plaintiffs again
filed a motion dated October 31, 1957, for issuance of
writ of execution against the surety, with notice of
hearing on November 2, 1957. On October 31, 1957,
the surety received copy of said motion and notice of
hearing.
It appears that when the motion was called on
November 2, 1957, the surety's counsel asked that he
be given time within which to answer the motion, and
so an order was issued in open court, as
follows:1äwphï1.ñët
As prayed for, Atty. Jose P. Soberano, Jr.,
counsel for the Manila Surety & Fidelity Co.,
Inc., Cebu Branch, is given until Wednesday,
November 6, 1957, to file his answer to the
motion for the issuance of a writ of execution
dated October 30, 1957 of the plaintiffs, after
which this incident shall be deemed submitted
for resolution.
SO ORDERED.
Given in open court, this 2nd day of
November, 1957, at Cebu City, Philippines.
(Sgd.) JOSE M. MENDOZA
Judge
(Record on Appeal, pp.
64-65, emphasis ours)
Since the surety's counsel failed to file any answer or
objection within the period given him, the court, on
December 7, 1957, issued an order granting plaintiffs'
motion for execution against the surety; and on
December 12, 1957, the corresponding writ of
execution was issued.
On December 24, 1957, the surety filed a motion to
quash the writ of execution on the ground that the
same was "issued without the requirements of Section
17, Rule 59 of the Rules of Court having been
complied with," more specifically, that the same was
issued without the required "summary hearing". This
motion was denied by order of February 10, 1958.
On February 25, 1958, the surety filed a motion for
reconsideration of the above-stated order of denial;
which motion was likewise denied by order of March
26, 1958.
From the above-stated orders of February 10, 1958
and March 26, 1958 — denying the surety's motion to
quash the writ of execution and motion for
reconsideration, respectively — the surety has
interposed the appeal on hand.
The surety insists that the lower court should have
granted its motion to quash the writ of execution
because the same was issued without the summary
hearing required by Section 17 of Rule 59, which
reads;
"Sec. 17. When execution returned
unsatisfied, recovery had upon bond. — If the
execution be returned unsatisfied in whole or
in part, the surety or sureties on any bond
given pursuant to the provisions of this role to
secure the payment of the judgment shall
become finally charged on such bond, and
bound to pay to the plaintiff upon demand the
amount due under the judgment, which
amount may be recovered from such surety or
sureties after notice and summary hearing in
the same action." (Emphasis ours)
Summary hearing is "not intended to be carried on in
the formal manner in which ordinary actions are
prosecuted" (83 C.J.S. 792). It is, rather, a procedure
by which a question is resolved "with dispatch, with
the least possible delay, and in preference to ordinary
legal and regular judicial proceedings" (Ibid, p. 790).
What is essential is that "the defendant is notified or
summoned to appear and is given an opportunity to
hear what is urged upon him, and to interpose a
defense, after which follows an adjudication of the
rights of the parties" (Ibid., pp. 793-794); and as to the
extent and latitude of the hearing, the same will
naturally lie upon the discretion of the court,
depending upon the attending circumstances and the
nature of the incident up for consideration.
In the case at bar, the surety had been notified of the
plaintiffs' motion for execution and of the date when
the same would be submitted for consideration. In fact,
the surety's counsel was present in court when the
motion was called, and it was upon his request that the
court a quo gave him a period of four days within
which to file an answer. Yet he allowed that period to
lapse without filing an answer or objection. The surety
cannot now, therefore, complain that it was deprived
of its day in court.
It is argued that the surety's counsel did not file an
answer to the motion "for the simple reason that all its
defenses can be set up during the hearing of the
motion even if the same are not reduced to writing"
(Appellant's brief, p. 4). There is obviously no merit
in this pretense because, as stated above, the record
will show that when the motion was called, what the
surety's counsel did was to ask that he be allowed and
given time to file an answer. Moreover, it was stated
in the order given in open court upon request of the
surety's counsel that after the four-day period within
which to file an answer, "the incident shall be deemed
submitted for resolution"; and counsel apparently
agreed, as the order was issued upon his instance and
he interposed no objection thereto.
It is also urged that although according to Section 17
of Rule 59, supra, there is no need for a separate
action, there must, however, be a separate judgment
against the surety in order to hold it liable on the bond
(Appellant's Brief, p. 15). Not so, in our opinion. A
bond filed for discharge of attachment is, per Section
12 of Rule 59, "to secure the payment to the plaintiff
of any judgment he may recover in the action," and
stands "in place of the property so released". Hence,
after the judgment for the plaintiff has become
executory and the execution is "returned unsatisfied"
(Sec. 17, Rule 59), as in this case, the liability of the
bond automatically attaches and, in failure of the
surety to satisfy the judgment against the defendant
 despite demand therefor, writ of execution may issue
against the surety to enforce the obligation of the bond.
UPON ALL THE FOREGOING, the orders appealed from are
hereby affirmed, with costs against the appellant Manila
Surety and Fidelity Company, Inc.
G.R. No. 178842
RENE H. IMPERIAL and NIDSLAND RESOURCES
AND DEVELOPMENT CORPORATION, Petitioners,
vs.
HON. EDGAR L. ARMES, Presiding Judge of Branch 4,
Regional Trial Court, 5th Judicial Region, Legazpi City
and ALFONSO B. CRUZ, JR.,, Respondents.
x-----------------------x
G.R. No. 195509
ALFONSO B. CRUZ, Petitioner,
vs.
RENE IMPERIAL and NIDSLAND RESOURCES AND
DEVELOPMENT CORPORATION, Respondents.
DECISION
JARDELEZA, J.:
An action for the annulment of a void judgment, like the
remedy of appeal, is a statutory right. No party may invoke it
unless a law expressly grants the right and identifies the
tribunal which has jurisdiction over this action. While a void
judgment is no judgment at all in legal contemplation, any
action to challenge it must be done through the correct remedy
and filed before the appropriate tribunal. Procedural remedies
and rules of jurisdiction are in place in order to ensure that
litigants are able to employ the proper legal tools to obtain
complete relief from the tribunal fully equipped to grant it.
The Case
Before us are two (2) consolidated petitions for review
on certiorari under Rule 45 of the Rules of Court. The first
petition, docketed as G.R. No. 178842, is filed by Rene H.
Imperial (Imperial) and NIDSLAND Resources and
Development Corporation (NIDSLAND) against Alfonso B.
Cruz, Jr. (Cruz). It seeks the reversal of the resolutions of the
Court of Appeals (CA) dated March 6, 2007 and July 3, 2007,
respectively. The second petition, G.R. No. 195509, filed by
Cruz against Imperial and NIDSLAND, seeks the reversal of
the Decision of the CA dated September 13, 2010.
The Facts
On September 24, 1993, Julian C. Napal (Napal) and Imperial
entered into a Memorandum of Agreement1 to organize a
domestic corporation to be named NIDSLAND. Under the
Memorandum of Agreement, Napal and Imperial agreed to
engage in the real estate business. For his capital contribution
to the corporation, Napal undertook to convey to NIDSLAND
a tract of land consisting of four lots (the Property) covered by
Transfer Certificate of Title (TCT) Nos. 37737, 37738, 37739
and 21026, and to Imperial a two hectare portion of the
Property situated in Taysan, Legazpi City.2 Napal and
Imperial intended to develop this land into a subdivision.
Imperial, on the other hand, as his contribution to NIDSLAND,
committed to perform the following obligations: to settle
Napal's obligation to the Rural Bank of Ligao, Inc., which was
about to foreclose its mortgage on the Property; pay Napal's
tax liabilities to the Bureau of Internal Revenue (BIR) which
encumbered with a tax lien the largest portion of the Property;
fund NIDSLAND's initial operating capital; and provide for
Napal's personal drawings in an amount not exceeding
₱l,200,000.3
While Imperial faithfully complied with his obligations under
the Memorandum of Agreement, Napal failed to convey to
NIDSLAND a certain portion of the Property, in particular Lot
15-C covered by TCT No. 21026 (the Subject Property).4 On
July 24, 1996, Napal sold the Subject Property to Cruz as
evidenced by a Deed of Absolute Sale. 5While the Deed of
Absolute Sale between Napal and Cruz bore the date July 24,
1996, the sale was registered in the Registry of Deeds of
Legazpi City only on August 27, 1996. 6
As Napal continued to refuse to convey the Subject Property
to NIDSLAND under the Memorandum of Agreement,
Imperial filed on July 30, 1996, for himself and in
representation of NIDSLAND, a derivative suit (SEC Petition)
before the Securities and Exchange Commission (SEC).7 This
was filed after the sale to Cruz but before its registration. The
case was docketed as SEC LEO Case No. 96-0004 (SEC
Case).8 On the same day, Imperial also filed a notice of lis
pendens for the SEC Case with the Registry of Deeds of
Legazpi City. This was annotated on TCT No. 210269 as Entry
No. 99956/99957. 10
Since the annotation of the lis pendens occurred after the sale
of the Subject Property to Cruz but before its registration with
the Registry of Deeds, the notice of lis pendens was carried
over to the new TCT No. 4393611 issued in Cruz's
name. 12 Meanwhile, the SEC Case proceeded without the
participation of Cruz who had possession of the new TCT
covering the Subject Property during the continuation of the
hearings.
On August 8, 1997 and during the pendency of the SEC Case,
Imperial and NIDSLAND filed an action for annulment of sale
against Cruz (Annulment of Sale Action) before the Regional
Trial Court, Legazpi City (RTC Legazpi City). This was
docketed as Civil Case No. 9419. 13 On August 14, 1997, the
R TC Legazpi City dismissed the action and held that it should
have been filed in the original case where the decree of
registration was entered. 14Imperial and NIDSLAND elevated
the case to the CA through an appeal. 15 The CA affirmed the
RTC Legazpi City's ruling. 16
On November 10, 1998, SEC Hearing Officer Santer G.
Gonzales (SEC Hearing Officer Gonzales) rendered a
Decision 17 in favor of Imperial and NIDSLAND (SEC
Decision). The Decision declared the Deed of Absolute Sale
between Napal and Cruz void ab initio as the SEC found that
the sale was simulated and was intentionally made to appear
to have been perfected prior to the filing of the notice of lis
pendens. Thus, the SEC ordered the cancellation of the TCT
in the name of Cruz. Further, the SEC directed Napal to
execute the proper deed of conveyance of the Subject Property
in favor of NIDSLAND. The SEC also mandated Napal to
deliver the possession of the Subject Property to
NIDSLAND. 18
Since Napal did not appeal the SEC Decision, it became final
and executory and was enforced on January 13, 1999. As
ordered in the SEC Decision, a Deed of Conveyance 19 was
issued on the same date, transferring the Subject Property to
NIDSLAND. TCT No. 43936 in the name of Cruz was
cancelled and a new TCT No. 49730 was issued in the name
of NIDSLAND on January 19, 1999.20
On February 18, 1999, Napal filed with the CA a Petition for
Annulment of Judgment under Rule 4 7 of the Rules of Court
(Annulment of Judgment Action). This was docketed as CA-
G.R. SP No. 51258.21 Napal sought the nullification of the
SEC Decision as well as the orders and writs issued pursuant
to it. Napal argued that the SEC has no jurisdiction over the
SEC Case as it did not involve any intra-corporate controversy.
On April 15, 1999, Cruz filed in the Annulment of Judgment
Action a Motion to Join as Party-Petitioner.22 In his motion,
Cruz claimed that he is a transferee pendente lite of the
Subject Property.23
The CA promulgated a Decision24 on August 31, 1999
dismissing the Petition for Annulment of Judgment. The CA
explained that Rule 47 of the Rules of Court is not available to
annul the judgment of the SEC. According to the CA, the
proper remedy in this case is a special civil action
for certiorari and prohibition. None of the parties appealed the
CA Decision. Thus, entry of judgment was made on
November 16, 2000.25
On January 22, 2001,26 Cruz filed a pleading denominated as
a "Petition" before RTC Legazpi City (RTC Petition),27which
sought to nullify the SEC Decision. This was docketed as Civil
Case No. SR-09 and raffled to Branch 4 of RTC Legazpi
City.28 In the RTC Petition, Cruz prayed for the following
reliefs:
WHEREFORE, it is respectfully prayed that after hearing,
judgment be rendered as follows:
a) Declaring the Decision dated 10 November 1998 of
respondent Gonzales to be null and void insofar as it affects
the property rights of petitioner to the Subject Property
b) Declaring the Deed of Conveyance dated January 13, 1999
as null and void for having been issued pursuant to an invalid
and void judgment
c) Declaring the cancellation of the TCT No. 43936 of
petitioner, as well as the issuance of TCT No. 49730 (and its
derivatives TCT Nos. 50398, 50399, 50400 and 50401) of
respondent Nidsland, by respondent Register of Deeds of
Legazpi City, to be invalid and illegal.
d) Directing the respondent Register of Deeds of Legazpi City
to duly cancel the TCT Nos. 50398, 50399, 50400 and 50401,
and restore the status of TCT No. 43936 of plaintiff prior to its
cancellation, or otherwise reconvey and/or issue a new title to
the Subject Property in the name of plaintiff,
e) Ordering respondents to solidarily pay to petitioner the
amount of P500,000.00, as and for moral damages.
f) Ordering respondents to solidarily pay attorney's fees in the
amount of P100,000.00, appearance fees and costs of suit.29
Presiding Judge Gregorio A. Consulta, without issuing
summons, dismissed the Petition motu proprio.30He justified
his dismissal on the ground that regional trial courts have no
jurisdiction over the SEC and as such, an action assailing the
decision of the SEC should be brought before the CA. As his
motion for reconsideration of the decision was denied, 31 Cruz
elevated the case to the CA by way of a special civil action
for certiorari. This was docketed as CA G.R. SP No.
65720.32 In a Decision33 dated October 28, 2002, the CA held
that R TC Legazpi City acted with grave abuse of discretion
in dismissing the Petition, and therefore ordered that the case
be remanded to RTC Legazpi City to be given due course.34
In accordance with the Decision of the CA, the RTC Petition
was re-docketed as Civil Case No. 10325 and was reraffled to
Branch 3 of the RTC Legazpi City.35 However, even before
summons could be issued, Presiding Judge Henry B. Basilla
issued an Order36 dated April 15, 2004 dismissing the Petition.
The Order stated that the RTC Petition failed to comply with
the reglementary period and other procedural requirements
under Rule 65 for the proper filing of a special civil action
for certiorari.
However, upon Cruz's motion for reconsideration, Judge
Basilla reversed his ruling in an Order37 dated May 7, 2004.
Thus, RTC Legazpi City summoned Imperial and
NIDSLAND on July 1, 2004.38 On July 30, 2004, Imperial and
NIDSLAND filed a motion to dismiss39 which was denied by
Judge Basilla.40
Imperial and NIDSLAND then failed to file their answer and
were declared in default. 41 Thus, Cruz was allowed to present
evidence ex-parte. Judge Basilla eventually set aside the order
of default upon motion of Imperial and NIDSLAND.42 Judge
Basilla subsequently voluntarily inhibited himself, and the
RTC Petition was reraffled to Branch 4 presided by
Respondent Judge Edgar L. Armes (Respondent Judge
Armes).43
After trial, the parties to the RTC Petition submitted their
respective memoranda. In Imperial and NIDSLAND's
memorandum and supplemental memorandum, they again
sought the dismissal of the RTC Petition on the ground of lack
of jurisdiction. Judge Armes refused the dismissal.44
On August 22, 2006, Imperial and NIDSLAND filed an
Omnibus Motion. This was followed by a Supplemental
Motion filed on September 7, 2006.45 In the two motions,
Imperial and NIDSLAND once again prayed for the dismissal
of the RTC Petition and raised, for the first time, the following
grounds:
1. The failure of herein private respondent CRUZ, as petitioner
in Civil Case No. 10325, to state the required material dates in
his initiatory Petition necessary in order to determine
compliance with the 60-days reglementary period;
2. The failure of herein private respondent CRUZ, as petitioner
in Civil Case No. 10325, to show by any allegation in his
initiatory Petition that there is no appeal or any other plain,
speedy and adequate remedy under the ordinary course of law
against the assailed decision in SEC LEO Case No. 96-0004
to warrant recourse to the extra-ordinary writ of certiorari;
3. The indisputable fact that the Petition in Civil Case No.
10325 was filed by herein private respondent CRUZ far
beyond the 60-days reglementary period allowed under
Section 4 of Rule 65 of the Rules of Court in view of the
admission by said respondent CRUZ in the Motion to Join as
Party-Petitioner that he filed in CA-G.R. SP No. 51258
wherein he expressly admitted having received a copy of the
assailed decision in SEC LEO Case No. 96-0004 in February,
1999; and
4. The decision in SEC LEO Case No. 96-0006, which has
become final and had been fully executed, is binding against
herein private respondent CRUZ, he being a successor-in-
interest pendente lite to the title over the Subject Property, of
therein respondent Napal, pursuant to Section 19 of Rule 3 of
the Rules of Court. 46
Respondent Judge Armes denied the Omnibus Motion and
Supplemental Motion in an Order dated September 21,
2006. 47 According to the Order, the issues raised by Imperial
and NIDSLAND have already been settled by the CA in
the certiorari case filed by Cruz. The Order held that the CA
ruled that the RTC Legazpi City has jurisdiction over the case
and even directed the latter to give due course to the RTC
Petition.
Imperial and NIDSLAND filed a motion for reconsideration
of this RTC Order on October 6, 2006. 48 In this motion,
Imperial and NIDSLAND argued that the ruling of the CA
pertained to an entirely different jurisdictional issue from that
raised in their Omnibus Motion and Supplemental Omnibus
Motion.49 Respondent Judge Armes denied the motion for
reconsideration in an Order50 dated November 23, 2006. This
Order reiterated that the CA's directive that the RTC Legazpi
City give due course to the RTC Petition was unqualified and
unconditional. Further, the Order explained that Imperial and
NIDSLAND's arguments had no merit for the following
reasons:
1. This action is geared to declare the nullity of a void
judgment. In the case of Paluwagan ng Bayan Savings Bank
vs. King, 172 SCRA 60, it was held that an action to declare
the nullity of a void judgment does not prescribe, citing also
Ang Lam vs. Rosillosa and Santiago, 86 Phil. 447-452. This
imprescriptibility of the action places it beyond the ambit of
the 60-day reglementary period under Sec. 4, Rule 65 of the
Revised Rules of Court.
2. The petitioner in this case, not being a party in SEC LEO
Case No. 96-0004, was never officially notified of the assailed
Decision, dated November 10 1998 by the deciding authority
simply because there was no basis therefor. The notice of the
judgment, order or resolution, from which the 60-day period
shall be computed under Sec. 4, Rule 65 of the Rules of Court,
contemplates of an official notice from the deciding authority
and not mere informal information from other sources like
what happened in the case at bar[.] Since the official notice
from the deciding authority in SEC LEO Case No. 96-0004
was not and is not forthcoming because there was no basis
thereof, it follows that the 60-day period aforesaid is not
applicable to the case at bar. 51
FIRST CONSOLIDATED CASE-G.R. NO. 178842
Imperial and NIDSLAND then filed a Petition
for Certiorari and Prohibition52 under Rule 65 of the Rules of
Court before the CA. This petition assailed the validity of
Respondent Judge Armes' Orders dated September 21, 2006
and November 23, 2006. This was docketed as CA-G.R. SP
No. 97823. The CA rendered a Resolution dated March 6,
200753 (First Assailed Resolution) dismissing Imperial and
NIDSLAND's Petition for Certiorari and Prohibition for lack
of merit. Imperial and NIDSLAND filed a motion for
reconsideration which was denied by the CA in a Resolution
dated July 3, 200754 (Second Assailed Resolution).
Hence, on August 2, 2007, Imperial and NIDSLAND filed this
Petition for Review on Certiorari55under Rule 45 of the Rules
of Court seeking a reversal of the two assailed resolutions
(First Petition). In their petition, Imperial and NIDSLAND
argue that the CA erred in affirming the RTC Decision on the
RTC Petition. They argue that the CA should have reversed
the error of the RTC Legazpi City in allowing the filing of the
RTC Petition way beyond the 60-day period for the filing of a
special civil action for certiorari. They stress that the RTC
Petition was filed three and a half years after the finality of the
SEC Decision and two years and three months from the time
Cruz received notice of its promulgation. They argue that
neither the CA nor Cruz was able to present any compelling
reason for the relaxation of the reglementary period.
SECOND CONSOLIDATED CASE-G.R. No. 195509
While the First Petition was pending, RTC Legazpi City
rendered a Decision56 dated March 24, 2009 (RTC Main
Decision). The RTC Legazpi City ruled that SEC Hearing
Officer Gonzales acted with grave abuse of discretion when he
annulled the Deed of Sale of the Subject Property between
Napal and Cruz, ordered the cancellation of Cruz's TCT, and
directed Napal to execute a deed of conveyance in favor of
NIDSLAND. According to the RTC Main Decision, the CA
has already definitively settled the issue of RTC Legazpi City's
jurisdiction over the case. It held that there is no merit in
Imperial and NIDSLAND's contention that the RTC Petition
should have been dismissed for non-compliance with the 60-
day period for the filing of a special civil action
for certiorari and for failure of the R TC Petition to state the
material dates. On the other hand, the RTC Main Decision
found that the SEC had no jurisdiction over Cruz and as such,
in issuing orders affecting his ownership over the Subject
Property, it violated Cruz's right not to be deprived of property
without due process of law. Further, the RTC Main Decision
stated that RTC Legazpi City cannot settle the issue as to the
rightful ownership of the Subject Property in a special civil
action for certiorari. The RTC Main Decision however
affirmed the award of damages in favor of Imperial and
NIDSLAND in the SEC Case. The dispositive portion held-
WHEREFORE, premises considered, judgment is hereby
rendered in favor of the petitioner, as follows:
1. The Decision in SEC-LEO Case No. 96-0004, dated
November 10, 1998, signed by respondent Santer G. Gonzales,
is hereby DECLARED NULL AND VOID ONLY WITH
RESPECT TO PARAGRAPHS 1 AND 2 OF THE
DISPOSITIVE PORTION THEREOF regarding the
annulment of the Deed of Sale of the subject property by Napal
to petitioner Cruz, the cancellation of the title issued pursuant
to the said sale in the name of petitioner Cruz and the directive
to Napal to execute the deed of conveyance in favor of
respondent herein Nidsland as well as the delivery of
possession of the subject property to Nidsland and the
designation of then Clerk of Court Atty. Antonio C. Bagagnan
to execute the proper deed of conveyance in the event ofrefusal
on the part of Napal.
2. The following documents are hereby DECLARED NULL
AND VOID:
a) Deed of Conveyance, dated [January] 13, 1999 issued by
Atty. Antonio C. Bagagnan, Clerk of Court MTCC, Legazpi
City (Exh. "E" and Exh. "11")
b) CT No. 49730 in the name of respondent Nidsland (Exh.
"F" and Exh. "12")
c) TCT No. 50398 in the name of respondent Nidsland (Exh.
"F-1" and Exh. "13")
d) TCT No. 50399 (Exh. "F-2" and Exh. "14")
e) TCT No. 50400 (Exh. "F-3" and Exh. "15")
f) TCT No. 50401 (Exh. "F-4" and Exh. "16")
3. Respondent Register of Deeds of Legazpi City Atty. Danilo
B. Lorena is hereby ordered to cancel the foregoing titles, to
wit: TCT Nos. 49730; 50398; 50399; 50400; and 50401;
4. Respondent Lorena is hereby further ordered to recall or lift
the cancellation of TCT No. 43936 in the name of petitioner
Alfonso Cruz, Jr., covering the subject property.
The parties' claims and counterclaims on their respective
damages are hereby ordered DISMISSED.
SO ORDERED. 57
Aggrieved by the RTC Main Decision, Imperial and
NIDSLAND filed before the CA an appeal under Rule 41 of
the Rules of Court. In a Decision58 dated September 13, 2010
(Second Assailed Decision), the CA reversed the R TC
Decision. The dispositive portion of the Assailed Decision
states-
WHEREFORE, the assailed decision dated March 24, 2009,
issued by the Regional Trial Court, Branch 4, Legazpi City is
hereby REVERSED and SET ASIDE; accordingly, Civil
Case No. 10325 is hereby DISMISSED.
No costs.
SO ORDERED.59
On March 24, 2011, Cruz filed a Petition for Review
on Certiorari60 (Second Petition) challenging the Second
Assailed Decision. Cruz raised the following arguments: first,
Cruz claimed that he is the registered owner of the Subject
Property. He was thus an indispensable party to the SEC Case
and as such, should have been impleaded. Since the SEC Case
was a personal action and he was never impleaded, Cruz
argues that the SEC never acquired jurisdiction over him. Thus,
any decision cannot prejudice his property rights over the
Subject Property. Further, as an indispensable party, any
judgment obtained by Imperial and NIDSLAND in the SEC
Case has no binding effect on Cruz. Second, Cruz also claims
that since the property was already registered in his name, any
deed of conveyance which Napal executed pursuant to the
SEC Decision transfers no rights since Napal no longer had
rights over the Subject Property at the time. Third, Cruz states
that the CA erred when it held that he is already estopped from
challenging the cancellation of his TCT. He explains that he
could not have participated in the SEC Case to protect his
rights. The SEC Case pertained to an intracorporate dispute.
As he was obviously not a stockholder of NIDSLAND, he had
no basis to intervene. He also emphasizes that Imperial and
NIDSLAND never prayed for the cancellation of his TCT in
the SEC Case and thus, had no real reason to interfere until
SEC Hearing Officer Gonzales ruled that his TCT should be
cancelled. Cruz also raises the argument that he could not have
filed a separate action to protect his rights over the property
since Imperial and NIDSLAND had already filed the
Annulment of Sale action against him for the annulment of the
sale and cancellation of his TCT before RTC Legazpi City.
Cruz claims that he actively participated in this case which
attained finality only in 2003. According to Cruz, filing
another case while this case was pending would have
amounted to multiplicity of suits.
We resolve the issues raised in these two consolidated cases.
The Issues
The core issue is whether RTC Legazpi City has jurisdiction
to declare the nullity of the Decision of the SEC. To resolve
this issue, we once again clarify the apparent clash of
jurisdiction between the SEC and the ordinary courts in cases
involving Presidential Decree No. 902-A61 (PD 902-A).
The Ruling of the Court
We rule that that the RTC Petition should have been dismissed
for lack of jurisdiction. We likewise rule that the SEC
Decision was issued with grave abuse of discretion amounting
to an excess of jurisdiction.
Nature of a void judgment
A void judgment is no judgment at all in legal contemplation.
In Canero v. University of the Philippines62we held that-
x x x A void judgment is not entitled to the respect accorded
to a valid judgment, but may be entirely disregarded or
declared inoperative by any tribunal in which effect is sought
to be given to it. It has no legal or binding effect or efficacy
for any purpose or at any place. It cannot affect, impair or
create rights. It is not entitled to enforcement and is, ordinarily,
no protection to those who seek to enforce. In other words, a
void judgment is regarded as a nullity, and the situation is the
same as it would be if there was no judgment. x x x63
A judgment rendered without jurisdiction is a void judgment.
This want of jurisdiction may pertain to lack of jurisdiction
over the subject matter or over the person of one of the parties.
A void judgment may also arise from the tribunal's act
constituting grave abuse of discretion amounting to lack or
excess of jurisdiction. In Yu v. Judge Reyes-Carpio, 64 we
explained-
The term "grave abuse of discretion" has a specific meaning.
An act of a court or tribunal can only be considered as with
grave abuse of discretion when such act is done in a
"capricious or whimsical exercise of judgment as is equivalent
to lack of jurisdiction." x x x [T]he use of a petition
for certiorari is restricted only to "truly extraordinary cases
wherein the act of the lower court or quasi-judicial body is
wholly void" x x x.65
In Guevarra v. Sandiganbayan, Fourth Division,66we further
explained-
x x x However, if the Sandiganbayan acts in excess or lack of
jurisdiction, or with grave abuse of discretion amounting to
excess or lack of jurisdiction in dismissing a criminal case, the
dismissal is null and void. A tribunal acts without jurisdiction
if it does not have the legal power to determine the case; there
is excess of jurisdiction where a tribunal, being clothed with
the power to determine the case, oversteps its authority as
determined by law. A void judgment or order has no legal and
binding effect, force or efficacy for any purpose. In
contemplation of law, it is nonexistent. Such judgment or
order may be resisted in any action or proceeding whenever it
is involved. x x x67
To give flesh to these doctrines, the Rules of Court,
particularly the 1997 Revised Rules on Civil Procedure,
provides for a remedy that may be used to assail a void
judgment on the ground of lack of jurisdiction. Rule 47 of the
Rules of Court states that an action for the annulment of
judgment may be filed before the CA to annul a void judgment
of regional trial courts even after it has become final and
executory. If the ground invoked is lack of jurisdiction, which
we have explained as pertaining to both lack of jurisdiction
over the subject matter and over the person, the action for the
annulment of the judgment may be filed at any time for as long
as estoppel has not yet set in. In cases where a tribunal's action
is tainted with grave abuse of discretion, Rule 65 of the Rules
of Court provides the remedy of a special civil action
for certiorari to nullify the act.
Void judgments may also be collaterally attacked. A collateral
attack is done through an action which asks for a relief other
than the declaration of the nullity of the judgment but requires
such a determination if the issues raised are to be definitively
settled.
Nature of the RTC Petition
The RTC Petition filed by Cruz has been treated by the CA
and the parties as a special civil action for certiorari. The RTC
Petition, however, prays for the nullification of the SEC
Decision and thus purports to be an action for the annulment
of a void judgment. Ascertaining the true nature of the RTC
Petition is crucial as it determines whether Cruz properly
invoked the correct remedy in assailing the SEC Decision.
The nature of an action is determined bythe material
allegations in the complaint and the type of relief prayed
for. 68 We have examined the RTC Petition, and we rule that
contrary to the findings of the lower courts, it is an action for
the annulment of judgment on the ground of lack of
jurisdiction. The meat of the RTC Petition's allegation is that
the SEC declared as void ab initio the sale between Napal and
Cruz without impleading Cruz in the proceedings. The SEC
also had no power to order the transfer of title over the Subject
Property from Cruz to NIDSLAND because Cruz was never
heard in these proceedings. Cruz asserts that the SEC never
acquired jurisdiction over his person. Cruz thus prayed in the
RTC Petition that the SEC Decision be declared null and void.
The RTC Petition clearly captures the material allegations in
a petition for annulment of judgment on the ground of lack of
jurisdiction over the person of one of the parties under Rule 4
7 of the Rules of Court. In sharp contrast, the RTC Petition
makes no allegations that the SEC Decision was rendered with
grave abuse of discretion. It cannot be treated as a special civil
action for certiorari under Rule 65.
The necessary question before us now is whether Cruz
invoked the proper remedy. There have been several attempts
to use an action for annulment of judgment under Rule 4 7 of
the Rules of Court to set aside a void judgment of a quasi-
judicial body. We retrace our jurisprudence on the matter in
order to ascertain if this remedy may be properly invoked. A
review of the relevant cases reveals two interrelated issues.
First, whether this remedy is available to set aside a void
judgment of a quasi-judicial body; and second, which tribunal
has jurisdiction over it.
Jurisdiction over annulment of
judgment of quasi-judicial
bodies
Prior to Batas Pambansa Bilang 129 (BP 129),69 we had the
chance to rule on the question of jurisdiction over the
annulment of judgment of quasi-judicial bodies in BF
Northwest Homeowners Association, Inc. v. Intermediate
Appellate Court. 70 In that case, we held that regional trial
courts can annul the judgment of quasi-judicial bodies which
are of the same rank as courts of first instance. This ruling
established two things: first, an action for the annulment of
judgment is a remedy available against a void judgment of a
quasi-judicial body. Second, regional trial courts had
jurisdiction whenever the quasi-judicial body involved is of
inferior rank.
With the passage of BP 129, this doctrine appears to have been
altered. Section 9(a) of BP 129 expressly vested the CA with
jurisdiction over annulment of judgments of regional trial
courts. Notably, it does not mention jurisdiction over
annulment of judgment of quasi-judicial bodies. In fact, quasi-
judicial bodies are mentioned only in Section 9(3)771 which
provides for the CA's appellate jurisdiction over their
judgments, orders, resolutions and awards.
In 1997, the new rules of civil procedure took effect. These
rules provided, for the first time, a remedy called annulment
of judgment on the ground of extrinsic fraud and lack of
jurisdiction. Rule 47, however, limits its application to
regional trial courts and municipal trial courts.
We had the opportunity to apply these relevant provisions in
the 2000 case of Cole v. Court of Appeals. 72 In this case, we
explained that the CA has no jurisdiction over a petition for
annulment of judgment under Rule 47 against a decision of the
Housing and Land Use Regulatory Board, a quasi-judicial
body. Rule 47 allows a resort to the CA only in instances
where the judgment challenged was rendered by regional trial
courts. This was also the import of our ruling in Elcee Farms,
Inc. v. Semillano73when we held that the CA has no
jurisdiction over the annulment of judgment of the National
Labor Relations Commission.
This was reiterated in the 2005 case Galang v. Court of
Appeals 74 which dealt with decisions rendered by the SEC. In
that case, we categorically ruled that the CA has no
jurisdiction over annulment of a void judgment rendered by
the SEC since Rule 47 of the Rules of Court clearly states that
this jurisdiction only pertains to judgments rendered by
regional trial courts.
Springfield Development Corporation, Inc. v. Presiding Judge,
RTC, Misamis Oriental, Br. 40, Cagayan de Oro
City75summarized our foregoing rulings in determining
whether the CA has jurisdiction to annul a void judgment of
the Department of Agrarian Reform Adjudication Board
(DARAB). This case was a significant development in the then
growing jurisprudence which all merely said that an action to
annul a judgment of a quasi-judicial body cannot be brought
before the CA, and which did not categorically state whether
the action may be filed before any other court.
In Springfield, we explained that regional trial courts have no
jurisdiction to annul judgments of quasi-judicial bodies of
equal rank. It then proceeded to state that the CA also has no
jurisdiction over such an action. Springfield emphasized that
Section 9 of BP 129 and Rule 4 7 of the Rules of Court both
state that the CA has jurisdiction over annulment of judgments
of regional trial courts only. We ruled in this case that the
"silence of B.P. Blg. 129 on the jurisdiction of the CA to annul
judgments or final orders and resolutions of quasi-judicial
bodies like the DARAB indicates its lack of such
authority."76While this case explained that neither the regional
trial courts nor the CA possess jurisdiction over an action to
annul the judgment of quasi-judicial bodies, it did not
categorically state that the remedy itself does not exist in the
first place. Notably, we disposed of this case by remanding the
action filed before us-a special civil action for prohibition- to
the CA because the matter required a determination of facts
which this Court cannot do. We then held that the CA may rule
upon the validity of the judgment by noting that a void
judgment may be collaterally attacked in a proceeding such as
an action for prohibition. 77
The seeming confusion in the string of cases pertaining to the
jurisdiction over petitions for annulment of judgment of quasi-
judicial bodies is clarified when these cases are read in
conjunction with Macalalag v. Ombudsman.78While we
repeated our consistent ruling that Rule 47 of the Rules of
Court only applies to judgments of regional trial
courts, Macalalag also explains that an action for the
annulment of judgment is similar in nature to an appeal-both
are merely statutory. No right exists unless expressly granted
by law. 79 In Macalalag, we implied that the key to
determining whether this remedy may be had and where such
action may be filed is to ascertain whether there is a law
expressly allowing a resort to this action before a particular
tribunal. This then requires an examination of the laws and
rules relevant to a specified quasi-judicial body. While it is
correct that both the regional trial courts and the CA cannot
take cognizance of a petition for annulment of judgment of a
quasi-judicial body under Rule 47 of the Rules of Court, they
may nevertheless do so, if a law categorically provides for
such a remedy and clearly provides them with jurisdiction.
Applying this to the present case, we rule that there is no law
at the time pertinent to this case, which allows the filing of a
petition for annulment of judgment before the regional trial
courts and the CA to set aside a void judgment of the SEC on
the basis of lack of jurisdiction. We hasten to emphasize,
however, that this pertains only to cases filed prior to Republic
Act No. 879980 (RA 8799) which transferred the jurisdiction
over intra-corporate disputes to regional trial courts designated
as commercial courts. As to the latter, Rule 47 clearly applies.
This leads to the conclusion that the RTC Petition is .not the
proper remedy to assail the SEC Decision. Since it is an action
for the annulment of judgment, the R TC Petition cannot
prosper as we have already ruled that this remedy is not
available in this particular case.
However, the error in Cruz's RTC Petition does not
automatically warrant a dismissal of these proceedings. We
rule that the SEC, in nullifying the sale between Napal and
Cruz and in ordering the cancellation of Cruz's TCTs in favor
of NIDSLAND, overstepped its jurisdiction. The SEC
Decision was rendered with grave abuse of discretion.
Grave Abuse of Discretion and
the SEC 's Jurisdiction
In 1976, PD 902-A vested the SEC with the quasi-judicial
power over intra-corporate disputes. While this jurisdiction
was eventually transferred to regional trial courts designated
as special commercial courts by The Securities Regulation
Code in 2000, the SEC had the authority over intra-corporate
disputes at the time relevant to this case.
Through the years that the SEC had quasi-judicial power over
intra-corporate controversies, this Court explained the
delineation of jurisdiction between the trial courts and the SEC.
Our finding in this case that the SEC acted with grave abuse
of discretion is rooted on the proper understanding of the limits
of the jurisdiction of the SEC. We now review this Court's
pertinent rulings on the jurisdiction of the SEC.
Under Section 5 of PD 902-A, the applicable law at the time
the SEC Case was filed, the SEC has original and exclusive
jurisdiction to hear and decide cases involving the following:
(a) Devices or schemes employed by or any acts, of the board
of directors, business associates, its officers or partnership,
amounting to fraud and misrepresentation which may be
detrimental to the interest of the public and/or of the
stockholder, partners, members of associations or
organizations registered with the Commission;
(b) Controversies arising out of intra-corporate or partnership
relations, between and among stockholders, members, or
associates; between any or all of them and the corporation,
partnership or association of which they are stockholders,
members or associates, respectively; and between such
corporation, partnership or association and the state insofar as
it concerns their individual franchise or right to exist as such
entity; and
(c) Controversies in the election or appointments of directors,
trustees, officers or managers; of such corporations,
partnerships or associations
In Union Glass & Container Corporation v. Securities and
Exchange Commission81we said that "the law [PD 902-A]
explicitly specified and delimited its jurisdiction to matters
intrinsically connected with the regulation of corporations,
partnerships and associations and those dealing with the
internal affairs of such corporations, partnerships or
associations."82 We added that in order for the SEC to take
cognizance of a case, the controversy must pertain to any of
the following relationships: (1) between the corporation,
partnership or association and the public; (2) between the
corporation, partnership or association and the state in so far
as its franchise, permit or license to operate is concerned; (3)
between the corporation, partnership or association and its
stockholders, partners, members or officers; and (4) among the
stockholders, partners or associates themselves. 83
This is the relationship test, under which the existence of any
of these relationships vested the SEC with jurisdiction.
In Abejo v. De la Cruz,84we even declared that "an intra-
corporate controversy is one which arises between a
stockholder and the corporation. There is no distinction,
qualification, nor any exemption whatsoever. The provision is
broad and covers all kinds of controversies between
stockholders and corporations."85
Later decisions of this Court, however, have moved away from
this rather simplistic determination of what constitutes an
intra-corporate controversy. In the 1990 case of Viray v. Court
of Appeals, 86 we held, thus:
The establishment of any of the relationships mentioned
in Union will not necessarily always confer jurisdiction over
the dispute on the SEC to the exclusion of the regular courts.
The statement made in one case that the rule admits of no
exceptions or distinctions is not that absolute. The better
policy in determining which body has jurisdiction over a case
would be to consider not only the status or relationship of the
parties but also the nature of the question that is the subject of
their controversy. 87
This is the controversy test. In Lozano v. De los Santos, 88 we
explained that the controversy test requires that the dispute
among the parties be intrinsically connected with the
regulation of the corporation, partnership or
association. 89 In Speed Distribution Corp. v. Court of
Appeals,90we added that "[i]f the nature of the controversy
involves matters that are purely civil in character, necessarily,
the case does not involve an intra-corporate controversy."91
Taking all these holdings together, the issue of whether the
SEC has the power to hear and decide a case depends on two
determinants: (1) the status or relationship of the parties; and
(2) the nature of the question that is the subject of their
controversy.92
The application of these two tests has allowed for the proper
delineation of the seeming overlap in the jurisdiction of the
SEC and the courts.
By way of illustration, in Union Glass we ruled that the action
filed by the dissenting stockholders against their corporation
Pioneer Glass Manufacturing (Pioneer) questioning its dacion
en pago of Pioneer's plant in favor of Union Glass is an intra-
corporate dispute as it clearly pertained to the internal affairs
of the corporation. However, we held that the recovery of the
possession of the plant should have been filed with the trial
court because the SEC possesses no jurisdiction over Union
Glass (the third-party purchaser) because it has no intra-
corporate relationship with any of the parties.
In Embassy Farms, Inc. v. Court of Appeals,93the respondent,
under a memorandum of agreement, undertook to deliver
certain parcels of land and shares of stock of Embassy Farms,
Inc. to the other party in exchange for the latter's payment of a
certain amount. When the other party failed to comply with his
obligation to pay the amount, we held that the conflict arising
between them pertains to their contractual obligations under
the memorandum of agreement. It does not refer to the
enforcement of rights and obligations under the Corporation
Code or the internal or intra-corporate affairs of the
corporation.
In Saura v. Saura, Jr., 94certain stockholders sold a parcel of
land to a corporation without the consent of the other
stockholders. When the latter filed an action for the annulment
of the sale against the purchasing corporation and the selling
stockholders before the trial court, the question of whether the
case is an intra-corporate dispute arose. Applying the two tests,
we found that the case is not intra-corporate. The action was
ultimately directed against a third party even if the selling
stockholders of the corporation were also impleaded.
Further, in Intestate Estate of Alexander T Ty v. Court of
Appeals,95 where a stockholder filed an action against the
estate of another stockholder for the annulment of a sale of
shares which the former claims was simulated for lack of
consideration, we ruled that the jurisdiction properly belongs
to the regional trial court. We explained that "[t]he
determination whether a contract is simulated or not is an issue
that could be resolved by applying pertinent provisions of the
Civil Code, particularly those relative to obligations and
contracts. Disputes concerning the application of the Civil
Code are properly cognizable by courts of general
jurisdiction."96
The development of both the concept and application of
the relationship test and controversy test reveals a growing
emphasis on the delineated jurisdiction between the SEC and
ordinary courts. The delineation is based on the very purpose
for which the SEC was granted quasi-judicial powers in the
first place. Under PD 902-A, the SEC exercised jurisdiction
over intra-corporate controversies precisely because it is a
highly-specialized administrative body in specialized
corporate matters. It follows therefore, that where the
controversy does not call for the use of any technical expertise,
but the application of general laws, the case is cognizable by
the ordinary courts. In Macapalan v. Katalbas-
Moscardon,97we said-
It is true that the trend is towards vesting administrative bodies
like the SEC with the power to adjudicate matters coming
under their particular specialization, to insure a more
knowledgeable solution of the problems submitted to them.
This would also relieve the regular courts of a substantial
number of cases that would otherwise swell their already
clogged dockets. But as expedient as this policy may be, it
should not deprive the courts of justice of their power to decide
ordinary cases in accordance with the general laws that do not
require any particular expertise or training to interpret and
apply. Otherwise, the creeping take-over by the administrative
agencies of the judicial power vested in the courts would
render the judiciary virtually impotent in the discharge of the
duties assigned to it by the Constitution.98
Applying these principles to this case, we rule that the SEC
does not have jurisdiction to order the cancellation of the sale
between Napal and Cruz. It also has no jurisdiction to cancel
Cruz's TCT and order its transfer to NIDSLAND.
To assail the validity of the sale, Imperial and NIDSLAND
sought to prove that the sale to Cruz was simulated. This
involves the application of the law on sales. As we have
already held in Intestate Estate of Alexander T. Ty, the issue
of whether a sale is simulated falls within the jurisdiction of
ordinary civil courts. It does not concern an adjudication of the
rights of Imperial, NIDSLAND and Napal under the
Corporation Code and the internal rules of the corporation.
The resolution of these questions requires the application of an
entire gamut of laws that goes well beyond the expertise of the
SEC.
Meanwhile, the question of whether Cruz's TCT should be
cancelled goes into the proper application of Presidential
Decree No. 152999 and related doctrines. Specifically, there is
a need to take into consideration whether the SEC Petition is
a collateral attack on the certificate of title which goes against
the well-established rule of indefeasibility. The resolution of
this question demands the application of our laws on land title
and deeds, a matter outside the ambit of the SEC's special
competence.
Indeed, our jurisprudence has leaned in favor of recognizing
the jurisdiction of quasi-judicial bodies. However, this
jurisdiction must always be viewed within the context of its
grant. The law vests quasi-judicial powers to administrative
bodies over matters that require their particular competence
and specialized expertise. This grant of jurisdiction is not and
should not be justification to deprive courts of law of their
jurisdiction as determined by law and the Constitution. Courts
of law are the instruments for the adjudication of legal disputes.
In a system of government where courts of law exist alongside
quasi-judicial bodies, the need to harmonize apparent conflicts
in jurisdiction require a determination of whether the matter to
be resolved pertains to a general question of law which
belongs to ordinary courts or whether it refers to a highly
specialized question that can be better resolved by a quasi-
judicial body in accordance with its power vested by law.
In overstepping its jurisdiction, the SEC committed grave
abuse of discretion. Grave abuse of discretion is the capricious
and whimsical exercise of judgment. It is the exercise of a
power in an arbitrary manner. It must be so patent or gross as
to amount to the evasion of a positive duty or to a virtual
refusal to perform a duty enjoined or to act at all in
contemplation of law. In Air Transportation Office v. Court of
Appeals, 100 we explained that grave abuse of discretion exists
when the act is: (1) done contrary to the Constitution, the law
or jurisprudence; or (2) executed whimsically, capriciously or
arbitrarily out of malice, ill will or personal bias. 101
In Thenamaris Philippines Inc. v. Court of Appeals, 102 we
ruled that grave abuse of discretion exists where the assailed
decision of the CA displayed patent errors. In Air
Transportation Office, the patent violation of the Rules of
Court merited a finding that there was grave abuse of
discretion.
In this case, the SEC, in rendering the decision, disregarded
established law and jurisprudence on the jurisdiction of the
SEC. Further, it adjudicated on the rights of Cruz, cancelled
the deed of sale, and took away his property without giving
him the opportunity to be heard. It is a breach of the basic
requirements of due process.
Further, the incorrectness and impracticality of presenting
these issues before the SEC are highlighted by the reliefs
granted by SEC Hearing Officer Gonzales in the SEC Case.
The SEC annulled the deed of sale between Napal and Cruz.
This was based on evidence presented during the SEC Hearing
which consisted of Imperial's testimony that the price that
Cruz paid for the Subject Property was grossly below its value.
While we will not delve into the propriety of the SEC's factual
findings, we note that there appears nothing in the record,
other than Imperial's statements, to support the contention that
the consideration was indeed grossly below the actual value of
the Subject Property. Furthermore, the SEC also found that the
Deed of Sale was antedated to make it appear that it took place
prior to the annotation of the notice of lis pendens. Again, this
was based solely on Imperial's testimony during the SEC
Hearing. We note that there was nothing in the records, other
than Imperial's bare statement, to establish this.
The SEC Decision even went further and ordered the
cancellation of Cruz's TCT. This did not take into
consideration the indefeasibility of a Torrens title. While this
is not a question that we seek to resolve in these consolidated
cases, we emphasize that a proper adjudication of this matter
requires, at the very least, an analysis of the effect of the notice
of lis pendens, the rights of a transferee pendente lite, and the
propriety of a collateral attack on a certificate of title. Clearly,
the SEC is not the appropriate forum to delve into these civil
law concepts.
The SEC also does not possess the expertise to go into the
reception of evidence and the conduct of hearings geared for
the purpose of resolving issues proper for a civil action. The
resolution of a civil action requires preponderance of evidence
as a burden of proof. On the other hand, cases before quasi-
judicial bodies require only substantial evidence. Hence, the
propriety of annulling a sale and cancelling a Torrens title-
which are in the nature of a civil action-on the basis merely of
substantial evidence determined by an administrative body
raises due process concerns.
Effects of a void judgment
When grave abuse of discretion taints a judgment, it becomes
wholly void. It may be challenged by direct action which has
for its object the declaration of the nullity of the judgment. It
may also be set aside through a collateral attack.
Thus, in Guevarra, we allowed the filing of a motion for
reconsideration even if it was made beyond the reglementary
15-day period We based our ruling on the ground that the order
challenged by the motion for reconsideration was issued with
grave abuse of discretion and is null and void. We explained-
Such judgment or order may be resisted in any action or
proceeding whenever it is involved. It is not even necessary to
take any steps to vacate or avoid a void judgment or final order;
it may simply be ignored. 103
Our ruling in Gonzales v. Solid Cement Corporation104is more
unequivocal.1âwphi1 In this case, we found that the CA
committed grave abuse of discretion amounting to lack or
excess of jurisdiction, therefore acting outside the
contemplation of law. Hence, even when the period to assail
the CA decision had already lapsed, we ruled that it did not
become final and immutable. A void judgment never becomes
final. We ruled thus-
The CA's actions outside its jurisdiction cannot produce legal
effects and cannot likewise be perpetuated by a simple
reference to the principle of immutability of final judgment; a
void decision can never become final. "The only exceptions
to the rule on the immutability of final judgments are (1) the
correction of clerical errors, (2) the so-called nunc pro
tunc entries which cause no prejudice to
any party, and (3) void judgments." x x x105
More, our ruling in Banco Español-Filipino v. Palanca106on
the effects of a void judgment has reappeared consistently in
jurisprudence touching upon the matter. In this case, we said
that a void judgment is "a lawless thing, which can be treated
as an outlaw and slain at sight, or ignored wherever and
whenever it exhibits its head."107 In concrete terms, this means
that a void judgment creates no rights and imposes no duties.
Any act performed pursuant to it and any claim emanating
from it have no legal effect. 108 Thus, in Heirs of Mayor
Nemencio Galvez v. Court of Appeals,109we nullified an
auction sale of a land as well as the resulting deed of sale and
transfer certificate of title as they were the offshoot of a writ
of execution carried pursuant to a void judgment.
Hence, because the SEC Decision was issued with grave abuse
of discretion and is therefore void, all acts emanating from it
have no force and effect. Thus, the Deed of Conveyance issued
pursuant to it has no legal effect.
Nevertheless, while the certificates of title issued in the name
of NIDSLAND arose from a void judgment, this Court cannot
nullify them in these proceedings. The indefeasibility of a
Torrens title prevents us from doing so. Further, we are bound
by rules on jurisdiction and the nature of the proceedings
before us.
Our Torrens system serves a very important purpose. As a
general rule, a Torrens certificate of title is conclusive proof
of ownership. Thus, provided that the requirements of law are
met, a certificate of title under the Torrens system of
registration is indefeasible. The value of this rule finds real
meaning when viewed in practical terms. A registration under
the Torrens system confirms that the person whose name
appears as owner of the land is indeed the true owner. Except
for specific circumstances allowed by law, a person who
registers his or her ownership over a piece of land makes his
or her title indefeasible because the law does not allow any
other person to attack or challenge it. Because the title is
indefeasible, third persons interested in the registered land can
simply look at the certificate of title and rely on the
information stated in it. This creates stability in our system of
registration. This rule is so zealously protected that our laws
even prohibit a collateral attack of a void certificate of title.
This is the spirit that infused our ruling in Heirs of Spouses
Benito
Gavina and Juana Euste v. Court of Appeals.110 In this case,
we explained that the general rule that the direct result of a
void contract cannot be valid is inapplicable when the integrity
of the Torrens system is involved. Thus, a void certificate of
title cannot be cancelled in a proceeding not instituted for the
purpose. We further said-
x x x The effect of such outright cancellation will be to impair
public confidence in the certificate of title. The sanctity of the
Torrens system must be preserved; otherwise, everyone
dealing with the property registered under the system will have
to inquire in every instance as to whether the title had been
regularly or irregularly issued, contrary to the evident purpose
of the law. Every person dealing with the registered land may
safely rely on the correctness of the certificate of title issued
therefor and the law will in no way oblige him to go behind
the certificate to determine the condition of the property. 111
We cited this ruling in subsequent cases such as Rabaja Ranch
Development Corporation v. AFP Retirement and Separation
Benefits System, 112 Spouses Chua v. Soriano, 113 and Republic
v. Orfinada, Sr. 114 The stability and reliability of the Torrens
system is so important that we cannot, in this case, undermine
it for the sake of expediency.
Hence, we cannot order the direct cancellation of the
certificates of title issued to NIDSLAND even if they are the
direct result of a void decision. The nullity of the certificates
of title should be threshed out in a petition for cancellation of
title brought before the proper court. 115
Moreover, there are procedural barriers that prevent us from
determining the validity of the certificates of title questioned
in this case. First, we do not have jurisdiction over the
cancellation of certificates of title. Second, the nature of the
action before us bars us from going into the certificates of title
themselves. We emphasize that this case is a petition for
review on certiorari of an action for annulment of judgment
on the ground of lack of jurisdiction. Our ruling is anchored
on the lack of jurisdiction of the SEC to annul the sale to Cruz
and order the cancellation of the certificates of title. In this
Decision, we emphasized that the proper jurisdiction to annul
the sale and to cancel the certificates of title belongs to the
regular courts, in particular, the regional trial courts. We must
thus also respect the rule on jurisdiction and exercise restraint
in this case. The proper action to cancel the void certificates
of title must be brought before the tribunal designated by law
to possess jurisdiction over the matter. The proper party may,
however, use this Decision as it definitively settles that the
certificates of title issued to NIDSLAND arose out of a void
judgment and as such, should have no force and effect. This
Decision is res judicata as to this question.
Further, we also cannot rule on the validity of the sale of the
Subject Property to Cruz as well as Napal's obligation to
Imperial and NIDSLAND under the Memorandum of
Agreement. These matters require the presentation of facts
before the proper forum and through appropriate procedural
remedies. While we endeavor to fully settle legal disputes
brought before us, we must also place premium on the
importance of rules of procedure. Rules of procedure serve to
protect the interests of litigants who seek redress before the
courts. They ensure that litigants plead before the proper
forum that has the necessary expertise and legal tools to fully
resolve a legal problem. They also ensure that litigants employ
the proper remedies that will allow them to successfully obtain
the appropriate relief. With this in mind, litigants must be more
circumspect in invoking the jurisdiction of the various
tribunals and the multiple remedies available to them.
WHEREFORE, the Court of Appeals' Resolution dated
March 6, 2007 in the First Consolidated Case
is REVERSED and SET ASIDE. Further, we rule that
Branch 4, Regional Trial Court, Legazpi City has no
jurisdiction over Cruz's Petition. Thus, the Regional Trial
Court's Decision dated March 24, 2009 is NULLIFIED.
The Court of Appeals' Decision dated September 13, 2010 in
the Second Consolidated Case is also REVERSED and SET
ASIDE. We rule that the Securities and Exchange
Commission's Decision dated November 10, 1998
is VOID. Thus, the Deed of Conveyance dated January 13,
1999 executed in compliance with this Decision
is NULLIFIED. The proper parties can file the appropriate
petition for cancellation of title in the trial court which has
jurisdiction to nullify the certificates of title issued to
NIDSLAND by virtue of the void SEC Decision.
SO ORDERED.
G.R. No. 201607
HON. CESAR D. BUENAFLOR, Petitioner
vs.
JOSE R. RAMIREZ, JR., Respondent
DECISION
BERSAMIN, J.:
The Regional Trial Court (RTC) has no jurisdiction over a case
involving the validity of the termination of employment of an
officer or employee of the Civil Service.
The Case
The petitioner appeals the resolutions promulgated on January
31, 20121 and April 24, 2012,2 whereby the Court of Appeals
(CA) respectively affirmed the dismissal by the RTC, Branch
96, in Quezon City of the petitioner's appeal for having been
filed out of time and denied his motion for reconsideration.
Antecedents
On August 27, 2001, Chairman Eufemio Domingo of the
Presidential Anti-Graft Commission (PAGC) appointed
respondent Jose R. Ramirez, Jr. as Executive Assistant III3 and
concurrently designated him as Assistant Accountant.4 On
September 28, 2001, Chairman Domingo resigned,5 and
petitioner Cesar D. Buenaflor succeeded him. The petitioner
terminated Ramirez as of the same date as Chairman Eugenio's
resignation on the ground that his tenure had expired6 by virtue
of the position of Executive Assistant being personal and
confidential, and, hence, co-terminous with that of the
appointing authority.7
Believing that his appointment had been contractual in nature,
Ramirez sued in the RTC to declare his dismissal null and
void.8 The case, docketed as Civil Case No. 01-4577-8, was
raffled to Branch 96.
Buenaflor, represented by the Office of the Solicitor General
(OSG), filed his answer,9 wherein he contended, among others,
that Ramirez had failed to exhaust administrative remedies
and should have instead filed an administrative complaint in
the Civil Service Commission (CSC).10
Ruling of the RTC
On December 28, 2007, after trial, the RTC rendered judgment
declaring Buenaflor guilty of unlawful termination because he
had not discharged his burden of proving that Ramirez's
employment was coterminous with that of Chairman Domingo,
and ruling in favor of Ramirez, as follows :11
WHEREFORE, judgment is hereby rendered in favor of the
plaintiff and hereby orders the defendant as his personal
liability, to pay plaintiff the following sums, to wit:
1. Php 260,000.00 representing the lost income which he could
have earned if he was to finish his contractual employment as
actual damages;
2. Php 500,000.00 as moral damages;
3. Php 300,000.00 as exemplary damages;
4. Php 100,000.00 for and as attorney's fees; and,
5. Costs of suit.
SO ORDERED.12
Buenaflor seasonably filed his motion for
reconsideration,13 which the RTC denied on September 30,
2008.14
On September 22, 2011, the OSG filed a notice of
appeal,15 explaining therein the apparently belated filing, thus:
xxxx
The defendant timely filed a Motion for Reconsideration of
this Honorable Court's Decision dated December 28, 2001. On
September 30, 2008, this Honorable Court issued an Order
denying defendant's Motion for Reconsideration. The OSG,
however, was able to get a copy of said Order only on
September 15, 2011 when it procured a copy of the Order at
the Regional Trial Court of Quezon City, Branch 96. Attached
herewith as Annex "A" is the Affidavit of Nilo Odilon L.
Palestroque, Chief Administrative Officer of the Civil Cases
Division, OSG Docket Management Service attesting to the
fact that the OSG got hold of the trial court's Order only on
September 15, 2011.
x x x x.
The RTC, finding that the registry return card indicated that
the OSG had received a copy of the decision on October 16,
2006, denied due course to the notice of appeal of Buenaflor,
and altogether dismissed the appeal for having been filed out
of time.16
Decision of the CA
Buenaflor assailed the order of the RTC by petition
for certiorari in the CA, alleging that the RTC thereby gravely
abused its discretion amounting to lack or excess of
jurisdiction.17
On January 31, 2012, however, the CA promulgated the first
assailed resolution dismissing the petition for certiorari on
technical grounds,18 viz.:
Filed pursuant to Rule 65 of the 1977 Revised Rules of Civil
Procedure, the instant petition for certiorariseeks the
nullification and setting aside of the October 11, 2011 Order
issued by public respondent, the Hon. Afable E. Cajigal in his
capacity as Presiding Judge of the Regional Trial Court of
Quezon City, Branch 96, in Civil Case No. Q-01-45778, which
denied petitioner's September 30, 2011 Notice of Appeal.
A perusal of the petition shows the following infirmities which
warrant its outright dismissal.
First, the petition docs not state the date of issue of petitioner's
counsel's Mandatory Continuing Legal Education (MCLE)
Certificate of Compliance, as required under Bar Matter No.
1922, dated June 3, 2008.
Second, petitioner's counsel's PTR number is not current.
Third, the actual addresses of the parties are not stated in the
petition, in violation of Section 3, Rule 46 of the Rules.
WHEREFORE, the petition is DENIED DUE
COURSE and accordingly DISMISSED.
SO ORDERED.
Buenaflor moved for reconsideration, but the CA denied his
motion for reconsideration through the second assailed
resolution promulgated on April 24, 2012,19 stating:
This treats of petitioner's motion for reconsideration of the
Court's January 31, 2012 Resolution which dismissed the
instant petition for certiorari due to a number of procedural
infirmities. Contending that the procedural defects have been
rectified, petitioner now seeks an opportunity to have the case
resolved on its worth.
We deny the motion.
Despite the rectification of its procedural defects, a perusal of
the petition shows that it must fail just the same for lack
of prima facie merit. In certiorari proceedings under Rule 65,
the inquiry is essentially confined to issues of want or excess
of jurisdiction and grave abuse of discretion on the part of
public respondent. A circumspect perusal of this petition
yielded no showing of any grave abuse of discretion on the
part of public respondent judge in issuing the assailed October
11, 2011 Order which dismissed petitioner's September 30,
2011 Notice of Appeal for having been filed way out of time.
Petitioner failed to disprove the records of the RTC which
show that his counsel, the Office of the Solicitor General
(OSG), received the September 30, 2008 Order denying
petitioner's motion for reconsideration on October 16,
2008. Thus petitioner's Notice of Appeal filed 1, 125 days
thereafter is clearly out of time. In the absence of clear and
convincing proof to the contrary, greater credence should be
accorded the RTC as it enjoys the presumption of regularity in
the performance of its official duties.
As to the September 22, 2011 Affidavit of the Chief, Civil
Cases Division, Docket Management Service (DMS) of the
OSG, the same will not save the day for petitioner. In
justifying that copy of the September 30, 2008 Order was
"officially" received only on September 15, 2011, the OSG
essentially relied on the entries in its Docket and document
tracking system without supplementing the same
with periodic inquiries before the RTC. It is the duty of the
party and his counsel to device a system for the receipt of mail
intended for them, and matters internal to the clients and their
counsels, like those narrated in the affidavit, are not the
concern of this Court.
Finally, even conceding that a counsel has the obligation to
inform his client of the material developments in the case, this
obligation is balanced by a complementary duty on the part of
a party-litigant to remain in contact with his lawyer in order to
be informed of the progress of the case, more so that courts are
not duty-bound to warn him against any possible procedural
blunder. Litigants, represented by counsel should not expect
that all they need to do is sit back, relax and await the outcome
of their case. As what is at stake is his interest in the case, it is
the responsibility of petitioner to check its status from time to
time from his counsel or from the court.
WHEREFORE, premises considered, petitioner's motion for
reconsideration is DENIED for lack of merit.
SO ORDERED.
Hence, this appeal by petition for review on certiorari.
Issue
Buenaflor submits the following as the issues for our
consideration, namely:
1. Whether or not the Honorable Court of Appeals, in arriving
[at] its decision and resolution, decided the case in accordance
with law and existing jurisprudence:
 a. considering that findings and admonitions of the
Honorable Court [of Appeals] are at war with the facts
and the law obtaining in this case, thus legally
reversible;
• Considering likewise that the September 30,
2011 Notice of Appeal was timely filed; and
• private respondent Jose Ramirez as
Executive Assistant, a confidential and
conterminous [sic] employees [sic] ended his
term as co-term employee with the resigned
Chairman and was not illegally terminated;
2. Whether or not the Court of Appeals committed grave
abused [sic] of discretion in not declaring that the RTC has no
jurisdiction to hear and decide the instant civil service related
case, which is under the sole jurisdiction of the CSC.20
On his part, Ramirez sustains the dismissal of the appeal upon
the grounds made extant in the assailed resolutions.
Ruling of the Court
Buenaflor submits that it was the CSC, not the RTC, that had
jurisdiction over Ramirez's complaint that involved matters
relative to the Civil Service.
The submission of Buenaflor is upheld.
The jurisdiction of a court over the subject matter of a
particular action is determined by the plaintiffs allegations in
the complaint and the principal relief he seeks in the light of
the law that apportions the jurisdiction of courts.21Accordingly,
we need to peruse the complaint of Ramirez to determine the
issue presented here. The complaint relevantly stated, viz.:
COMPLAINT
(With Provisional Remedy)
Plaintiff, by and through the undersigned counsel, to this
Honorable Court, respectfully alleges that:
xxxx
III
Plaintiff was appointed as Executive Assistant III, on
contractual basis by then Chairman Eufemio Domingo of the
Presidential Commission Against Graft and Corruption,
effective September 3, 2001, x x x
IV
On September 17, 2001, plaintiff was designated as Assistant
Accountant, x x x
V (11) when there are circumstances indicating the urgency of
Since the appointment is contractual and no period was stated,
it is clearly understood that the term is for a period of one (1)
year from September 3, 2001 and subject to renewal, pursuant
to Memorandum Circular No. 38 issued by the Civil Service
Commission.1âwphi1
VI
On or about September 20, 2001, Chairman Eufemio
Domingo resigned as Chairman and the defendant was
appointed as the new Chairman of the Presidential
Commission Against Graft and Corruption
VII
On September 28, 2001, without due process and notice, the
defendant, without cause and with grave abuse of
discretion, capriciously, whimsically and illegally
terminated the services of the plaintiff, in violation of the
Civil Service Commission Memorandum Circular No. 38.
VIII
Plaintiff is a Certified Public Accountant and a First Grade
Civil Service eligible, hence very much qualified for the job.
His appointment is not co-terminus with the term of Chairman
Domingo as can be gleaned from his job description, x x x
IX
The termination of plaintiff’s services is not even
supported by any written notice to the herein plaintiff,
stating therein the reasons for his termination, but was
done in an orthodox manner, by merely preventing the
plaintiff to report for work
xxxx
XI
Finally, on November 23, 2001, copy of a service record
signed by Jose Sonny G. Matala, Executive Director dated
November 20, 2001, was given to the plaintiff embodying the
cause of separation which states"
Co-terminus with Chairman Domingo being personal and
confidential staff x x x x x x."
xxxx
XII
The termination of plaintiff by the defendant is illegal and
violative of due process as plaintiff's appointment as
contractual employee will expire or September 3, 2002 only.
XIII
Defendant, being a lawyer and formerly connected with the
Civil Service Commission, is aware of the law that contractual
employment without a definite period is presumed to be for
one (1) year pursuant to Civil Service Commission
Memorandum Circular No. 38.
xxxx
XVI
The filing of this case in court is not violative of the Rule on
Exhaustion of Administrative Remedies, as there are several
exceptions in the exhaustion of administrative remedies
enunciated by the Supreme Court in the case of Paat vs. Court
of Appeals, 266 SCRA 167, such as:
(1) when there is a violation of due process;
(2) when the issue involved is purely a legal question;
(3) when the administrative action is patently illegal
amounting to lack of excess of jurisdiction;
(4) x x x x x x x x xxx;
(5) when there is irreparable injury;
(6) x x x x x x x x xxx;
(7) when to require exhaustion of remedies would be
unreasonable;
(8) x x x x x x x x xxx;
(9) x x x x x x x x xxx;
(10) when the rule does not provide a plain, speedy and
adequate remedy; and
judicial intervention
XVII
The illegal act or the defendant of terminating plaintiff's
services in violation of the latter's right to security of tenure
and due process has caused plaintiff to suffer moral shock,
anxiety, besmirched reputation, sleepless nights, social
humiliation, embarrassment and similar injuries, thereby
entitling him to recover damages from the defendant in the
amount of no less than ₱500,000.00
xxxx
ALLEGATION IN SUPPORT OF THE PRAYER FOR THE
IMMEDIATE ISSUANCE OF A WRIT OF PRELIMINARY
MANDATORY INJUNCTION
xxxx
XXII
Irreparable injury has been caused and continue to cause
plaintiff, hence, the necessity of a Writ of Preliminary
Mandatory Injunction, ordering the defendant to reinstate
the plaintiff, while this case is being heard
xxxx
PREMISES CONSIDERED, it is respectfully prayed of this
Honorable Court to render judgment in favor of the plaintiff
and against the defendant by:
BEFORE HEARING ON THE MERITS
ORDERING the immediate issuance of a Writ of Preliminary
Mandatory Injunction, COMMANDING the defendant to
reinstate immediately the plaintiff to his previous position
AFTER HEARING ON THE MERITS
1. DECLARING the Preliminary Mandatory Injunction as
PERMANENT;
2. DECLARING the DISMISSAL of the plaintiff as illegal
and violative of plaintiff's right to due process and security
of tenure;
3. x x xx 22
It cannot be disputed that Ramirez's complaint was thereby
challenging the validity of his termination from the service,
and that he thereby wanted the RTC to pry into the
circumstances of the termination. Such challenge was outside
of the RTC's sphere of authority. Instead, it was the CSC that
was vested by law with jurisdiction to do so. Disciplinary
cases and cases involving personnel actions affecting
employees in the Civil Service, like appointment or separation
from the service, are within the exclusive jurisdiction of the
CSC.23 Indeed, the Constitution vests in the CSC the
jurisdiction over all employees of the Government, including
all its branches, subdivisions, instrumentalities, and agencies,
as well as government-owned or controlled corporations with
original charters.24
Ramirez was one such employee. The agency in which he had
been appointed by Chairman Domingo was the P AGC, an
office established by President Macapagal-Arroyo through
Executive Order No. 1225 as an agency under the Office of the
President. His complaint thus came under the jurisdiction of
the CSC. We reiterate that any question regarding the
appointment or separation from the service of a civil servant
was lodged in the CSC as the sole arbiter of controversies
relating to the Civil Service.26 In that regard, Section 12 of
Chapter 1 (General Provisions), Subtitle A (Civil Service
Commission), Title I (Constitutional Commissions) of
the Administrative Code of 1987 (Executive Order No. 292)
relevantly provides:
Section 12. Powers and Functions. - The Commission shall
have the following powers and functions:
xxxx
(5) Render opinion and rulings on all personnel and other
Civil Service matters which shall be binding on all heads
of departments, offices and agencies and which may be
brought to the Supreme Court on certiorari;
xxxx
(11) Hear and decide administrative cases instituted by or
brought before it directly or on appeal, including contested
appointments, and review decisions and actions of its
offices and of the agencies attached to it. Officials and
employees who fail to comply with such decisions, orders,
or rulings shall be liable for contempt of the Commission.
Its decisions, orders, or rulings shall be final and
executory. Such decisions, orders, or rulings may be brought
to the Supreme Court on certiorari by the aggrieved party
within thirty (30) days from receipt of a copy thereof;
xxxx
It is clarified that the CSC has jurisdiction over a case
involving a civil servant if it can be regarded as equivalent to
a labor dispute resoluble under the Labor Code; conversely,
the regular court has jurisdiction if the case can be decided
under the general laws, such as when the case is for the
recovery of private debts, or for the recovery of damages due
to slanderous remarks of the employer, or for malicious
prosecution of the employees.27 The mere fact that the parties
are members of the Civil Service should not remove the
controversy from the general jurisdiction of the courts of
justice and place them under the special jurisdiction of the
CSC.28
Jurisdiction over the subject matter is conferred only by the
Constitution or the law; it cannot be acquired through a waiver;
it cannot be enlarged by the omission of the parties; it cannot
be conferred by the acquiescence of the court.29 Specifically,
Batas Pambansa Blg. 129, as amended, did not vest
jurisdiction in the RTC over matters relating to the Civil
Service. Consequently, the RTC could not arrogate unto itself
the hearing and decision of a subject matter outside of its
jurisdiction.
Buenaflor was entirely justified in raising in his answer the
special and affirmative defense that the RTC was bereft of
jurisdiction to hear and resolve Ramirez's complaint. When a
court has no jurisdiction over the subject matter, the only
power it has is to dismiss the action.30 Upon the filing of the
complaint, the RTC could only have dismissed it for lack of
jurisdiction. Any further actions the RTC took, including
rendering the decision on December 28, 2007, were void and
ineffectual. Verily, the decisions or orders rendered by courts
without or in excess of their jurisdiction are void,31 and cannot
be the source of any right, or the creator of any obligation.32
The void and ineffectual decision of the RTC did not attain
finality despite the supposedly belated appeal by Buenaflor.
As emphasized in Nazareno v. Court of Appeals,33 a void
judgment - being non-existent in legal contemplation - does
not become final and executory even with the belated filing of
an appeal. Moreover, the Court has pronounced in National
Housing Authority v. Commission on Settlement of Land
Problems34 that because a void judgment does not attain
finality, a petition for certiorari to declare its nullity should
not be dismissed for untimeliness.35 Under the circumstances,
the CA should have heard and granted the petition
for certiorari of Buenaflor instead of dismissing it for the
reasons advanced in the assailed resolutions.
WHEREFORE, the Court GRANTS the petition
for certiorari; ANNULS and SETS ASIDE the resolutions
promulgated by the Court of Appeals on January 31, 2012 and
April 24, 2012; DISMISSES Civil Case No. 01-4577-8
entitled Jose R. Ramirez v. Hon. Cesar D.
Buenaflor; and ORDERS the respondent to pay the costs of
suit.
SO ORDERED.
[G.R. No. 146698. September 24, 2002]
PHILIPPINE AIRLINES, petitioner, vs. SPOUSES
SADIC AND AISHA KURANGKING and
SPOUSES ABDUL SAMAD T. DIANALAN AND
MORSHIDA L. DIANALAN, respondents.
DECISION
VITUG, J.:
In April 1997, respondents, all Muslim Filipinos,
returned to Manila from their pilgrimage to the Holy City of
Mecca, Saudi Arabia, on board a Philippines Airlines (PAL)
flight. Respondents claimed that they were unable to retrieve
their checked-in luggages. On 05 January 1998, respondents
filed a complaint with the Regional Trial Court (RTC) of
Marawi City against PAL for breach of contract resulting in
damages due to negligence in the custody of the missing
luggages.
On 02 March 1998, PAL filed its answer invoking,
among its defenses, the limitations under the Warsaw
Convention. On 19 June 1998, before the case could be heard
on pre-trial, PAL, claiming to have suffered serious business
losses due to the Asian economic crisis, followed by a massive
strike by its employees, filed a petition for the approval of a
rehabilitation plan and the appointment of a rehabilitation
receiver before the Securities and Exchange Commission
(SEC). On 23 June 1998, the SEC issued an order granting the
prayer for an appointment of a rehabilitation receiver, and it
constituted a three-man panel to oversee PALs rehabilitation.
On 25 September 1998, the SEC created a management
committee conformably with Section 6(d) of Presidential
Decree (P.D.) 902, as amended, declaring the suspension of all
actions for money claims against PAL pending before any
court, tribunal, board or body. Thereupon, PAL moved for the
suspension of the proceedings before the Marawi City RTC.
On 11 January 1999, the trial court issued an order denying the
motion for suspension of the proceedings on the ground that
the claim of respondents was only yet to be established. PALs
motion for reconsideration was denied by the trial court.
PAL went to the Court of Appeals via a petition
for certiorari. On 16 April 1999, the appellate court dismissed
the petition for the failure of PAL to serve a copy of the
petition on respondents. PAL moved for a reconsideration. In
its resolution, dated 08 October 1999, the appellate court
denied the motion but added that a second motion for
reconsideration before the trial court could still be feasible
inasmuch as the assailed orders of the trial court were merely
interlocutory in nature. Consonantly, PAL filed before the trial
court a motion for leave to file a second motion for
reconsideration. The trial court, however, denied leave of
court to admit the second motion for reconsideration. Again,
PAL filed a motion for reconsideration which sought
reconsideration of the denial of the prayed leave to file a
second motion for reconsideration. In an order, dated 28
December 2000, the trial court denied the motion.
On the thesis that there was no other plain, speedy and
adequate remedy available to it, PAL went to this Court via a
petition for review on certiorari under Rule 45 of the Rules of
Court, raising the question of -
"Whether or not the proceedings before the trial court should
have been suspended after the court was informed that a
rehabilitation receiver was appointed over the petitioner by
the Securities and Exchange Commission under Section 6(c)
of Presidential Decree No. 902-A.[1]
In their comment to the petition, private respondents
posited (a) that the instant petition under Rule 45 would not
lie, the assailed orders of the court a quo being merely
interlocutory; (b) that PAL was already operational and thus
claims and actions against it should no longer be suspended;
(c) that the SEC, not the RTC, should have the prerogative to
determine the necessity of suspending the proceedings; and (d)
that the only claims or actions that could be suspended under
P.D. 902-A were those pending with the SEC.
While a petition for review on certiorari under Rule 45
would ordinarily be inappropriate to assail an interlocutory
order, in the interest, however, of arresting the perpetuation of
an apparent error committed below that could only serve to
unnecessarily burden the parties, the Court has resolved to
ignore the technical flaw and, also, to treat the petition, there
being no other plain, speedy and adequate remedy, as a special
civil action for certiorari. Not much, after all, can be gained if
the Court were to refrain from now making a pronouncement
on an issue so basic as that submitted by the parties.
On 15 December 2000, the Supreme Court, in A.M. No.
00-8-10-SC, adopted the Interim Rules of Procedure on
Corporate Rehabilitation and directed to be transferred from
the SEC to Regional Trial Courts,[2] all petitions for
rehabilitation filed by corporations, partnerships, and
associations under P.D. 902-A in accordance with the
amendatory provisions of Republic Act No. 8799. The rules
require trial courts to issue, among other things, a stay order
in the enforcement of all claims, whether for money or
otherwise, and whether such enforcement is by court action or
otherwise, against the corporation under rehabilitation, its
guarantors and sureties not solidarily liable with it.
Specifically, Section 6, Rule 4, of the Interim Rules of
Procedure On Corporate Rehabilitation, provides:
SEC. 6. Stay Order. - If the court finds the petition to be
sufficient in form and substance, it shall, not later than five (5)
days from the filing of the petition, issue an Order (a)
appointing a Rehabilitation Receiver and fixing his bond; (b)
staying enforcement of all claims, whether for money or
otherwise and whether such enforcement is by court action or
otherwise, against the debtor, its guarantors and sureties not
solidarily liable with the debtor; (c) prohibiting the debtor
from selling, encumbering, transferring, or disposing in any
manner any of its properties except in the ordinary course of
business; (d) prohibiting the debtor from making any payment
of its liabilities outstanding as at the date of filing of the
petition; (e) prohibiting the debtors suppliers of goods or
services from withholding supply of goods and services in the
ordinary course of business for as long as the debtor makes
payments for the services and goods supplied after the
issuance of the stay order; (f) directing the payment in full of
all administrative expenses incurred after the issuance of the
stay order; (g) fixing the initial hearing on the petition not
earlier than forty-five (45) days but not later than sixty (60)
days from the filing thereof; (h) directing the petitioner to
publish the Order in a newspaper of general circulation in the
Philippines once a week for two (2) consecutive weeks; (I)
directing all creditors and all interested parties (including the
Securities and Exchange Commission) to file and serve on the
debtor a verified comment on or opposition to the petition,
with supporting affidavits and documents, not later than ten
(10) days before the date of the initial hearing and putting them
on notice that their failure to do so will bar them from
participating in the proceedings; and (j) directing the creditors
and interested parties to secure from the court copies of the
petition and its annexes within such time as to enable
themselves to file their comment on or opposition to the
petition and to prepare for the initial hearing of the petition.
The stay order is effective from the date of its issuance until
the dismissal of the petition or the termination of the
rehabilitation proceedings.[3]
The interim rules must likewise be read and applied along
with Section 6(c) of P.D. 902-A, as so amended, directing that
upon the appointment of a management committee,
rehabilitation receiver, board or body pursuant to the decree,
all actions for claims against the distressed corporation
pending before any court, tribunal, board or body shall be
suspended accordingly. Paragraph (c) of Section 6 of the law
reads:
Section 6. In order to effectively exercise such jurisdiction, the
Commission shall possess the following powers:
xxx xxx xxx.
c) To appoint one or more receivers of the property, real or
personal, which is the subject of the action pending before the
Commission in accordance with the pertinent provisions of the
Rules of Court in such other cases whenever necessary in order
to preserve the rights of the parties-litigants and/or protect the
interest of the investing public and creditors: x x x Provided,
finally, That upon appointment of a management committee,
the rehabilitation receiver, board or body, pursuant to this
Decree, all actions for claims against corporations,
partnerships, or associations under management or
receivership pending before any court, tribunal, board or body
shall be suspended accordingly.
A claim is said to be a right to payment, whether or
not It is reduced to judgment, liquidated or unliquidated, fixed
or contingent, matured or unmatured, disputed or undisputed,
legal or equitable, and secured or unsecured.[4] In Finasia
Investments and Finance Corporation[5] this Court has defined
the word claim, contemplated in Section 6(c) of P.D. 902-A,
as referring to debts or demands of a pecuniary nature and the
assertion of a right to have money paid as well.
Verily, the claim of private respondents against petitioner
PAL is a money claim for the missing luggages, a financial
demand, that the law requires to be suspended pending the
rehabilitation proceedings.[6]In B.F. Homes, Inc. vs. Court of
Appeals,[7] the Court has ratiocinated:
x x x (T)he reason for suspending actions for claims against
the corporation should not be difficult to discover. it is not
really to enable the management committee or the
rehabilitation receiver to substitute the defendant in any
pending action against it before any court, tribunal, board or
body. Obviously, the real justification is to enable the
management committee or rehabilitation receiver to
effectively exercise its/his powers free from any judicial or
extra-judicial interference that might unduly hinder or prevent
the rescue of the debtor company. To allow such other action
to continue would only add to the burden of the management
committee or rehabilitation receiver, whose time, effort and
resources would be wasted in defending claims against the
corporation instead of being directed toward its restructuring
and rehabilitation.[8]
WHEREFORE, the petition is GRANTED. The assailed
orders of the Regional Trial Court, Branch 9, of Marawi City,
are SET ASIDE. No costs.
SO ORDERED.
Kagawad. Notably, Mayor Enrilo Villas was the incumbent
Mayor of Bulalacao, Oriental Mindoro at the time of
the barangay elections.[4]
After the elections, the Commission on Elections
(COMELEC) proclaimed Mendoza as the duly-
elected Punong Barangay of Balatasan. Thus, the losing
candidate, Thomas Pajanel, filed a petition for quo warranto
with the Municipal Trial Court (MTC) of Mansalay-Bulalacao
which was docketed as Election Case No. 407-B. The MTC
issued a Decision dated February 23, 2008,
disqualifying Mendoza and declaring that Herato was entitled
to succeed him as Punong Barangay with Herato garnering
the highest number of votes as a Barangay
Kagawad. Mendoza appealed the MTC Decision to the
COMELEC.
On February 28, 2008, Villas administered the Oath
of Office to Herato.[5] Then, Villas issued Memorandum No.
2008-03-010 dated March 3, 2008,[6] directing all department
heads of the Municipal Government to act only on documents
signed or authorized by Herato.
Meanwhile, Mendoza sought the advice of the
Department of the Interior and Local Government (DILG) as
to who should exercise the powers of Punong Barangay of
Balatasan given the prevailing controversy.

In a letter dated April 11, 2008,[7] DILG

CONSTANCIO F. MENDOZA G.R. No. 187256 Undersecretary Austere A. Panadero responded to Mendozas
and SANGGUNIANG inquiry informing Villas that Mendoza should occupy the post
BARANGAY OF BALATASAN, of Punong Barangay as there was no Writ of Execution
BULALACAO, Pending Appeal of the MTC Decision dated February 23, 2008.
ORIENTAL MINDORO,
Petitioners, Promulgated: Nevertheless, the Bulalacao Municipal Administrator,
- versus - Edezer Aceron, by the authority of Villas, issued a letter dated
February 23, 2011 April 23, 2008[8] to respondent Marlon de Castro, Manager,
Pinamalayan Branch, Land Bank of the Philippines (LBP),
MAYOR ENRILO VILLAS and requesting that transactions entered into by Mendoza in behalf
BRGY. KAGAWAD LIWANAG of Barangay Bulalacao should not be honored. In the same
HERATO and MARLON DE letter, Aceron dismissed the DILG letter dated April 11, 2008,
CASTRO, Manager, saying that it is merely advisory and not binding on the
Pinamalayan Branch, Land municipal government of Bulalacao and the LBP.
Bank of the Philippines,
Respondents. In response, de Castro issued Villas and Mendoza a
x----------------------------------------------------------------x letter dated April 24, 2008,[9] advising both parties that the
LBP shall not honor any transaction with regard the accounts
RESOLUTION of BarangayBalatasan.
VELASCO, JR., J.:
Thereafter, petitioners filed a Petition dated May 5,
Before this Court is a Petition dated April 7, 2008 for Mandamus with Damages and Prayer for the Writ of
2009[1] filed by Constancio F. Mendoza and Sangguniang Preliminary Mandatory Injunction, docketed as Special Civil
Barangay of Balatasan, Bulalacao, Oriental Mindoro. In the Action No. 08-10 pending with the Regional Trial Court,
Petition, it is prayed that the Court: (1) set aside the Order Branch 43 in Roxas, Oriental Mindoro. Petitioners prayed that
dated February 2, 2009[2] of the Regional Trial Court (RTC), the LBP be directed to release the funds
Branch 43 in Roxas, Oriental Mindoro and its Order dated of Barangay Balatasan to them in order to render necessary,
March 17, 2009[3] denying petitioners motion for basic public services to the inhabitants of the barangay.
reconsideration of the Order dated February 2, 2009; and (2)
direct the RTC to continue with the proceedings in Special Thus, Villas and Herato filed an Answer dated May
Civil Action No. 08-10 entitled Constancio Mendoza v. Mayor
16, 2008 interposing the following affirmative defenses: (1)
Enrilo Villas. that the petition for mandamus was defective, being directed
The factual antecedents of the case are as follows:
against two or more different entities and requiring to perform
different acts; and (2) that Mendoza does not have any clear
In the 2007 barangay elections, Mendoza obtained and legal right for the writ of mandamus.
the highest votes for the position of Punong
Barangay of Barangay Balatasan, Bulalacao, Oriental On the other hand, the LBP also filed its Answer dated
Mindoro, while respondent Liwanag Herato obtained the June 5, 2008, stating that its decision of withholding
highest number of votes for the position of Barangay the barangay funds was a mere act of prudence given the
controversy surrounding the true Punong Barangay of with the Court of Appeals. This
Balatasan while manifesting that it will release the funds to concurrence of jurisdiction is not,
whom the Court directs it to. however, to be taken as according
to parties seeking any of the writs
Thereafter, Villas and Herato filed a Motion to an absolute, unrestrained freedom
Dismiss dated November 7, 2008. In the Motion, a copy of the of choice of the court to which
COMELEC Resolution dated September 8, 2008 in application therefor will be
COMELEC Case No. SPA-07-243-BRGY was attached. This directed. There is after all a
case originated from a disqualification case hierarchy of courts. That hierarchy is
against Mendoza filed with the COMELEC by Senen determinative of the venue of appeals,
Familara before the conduct of the and also serves as a general
2007 barangay elections. In the Resolution, the COMELEC determinant of the appropriate forum
disqualified Mendoza as a candidate for Punong for petitions for the extraordinary
Barangay of Barangay Balatasan in the writs. A becoming regard for that
2007 barangay elections for having already served three (3) judicial hierarchy most certainly
consecutive terms for the same position. In indicates that petitions for the
response, Mendoza presented a Certification dated February issuance of extraordinary writs
27, 2009[10] from the COMELEC which stated that against first level (inferior) courts
COMELEC Case No. SPA-07-243-BRGY is still pending should be filed with the Regional
with the Commission. Trial Court, and those against the
latter, with the Court of Appeals. A
In an attempt to clarify the issues on the direct invocation of the Supreme
matter, Mendoza again sought the opinion of the DILG Courts original jurisdiction to issue
regarding the controversy. Thus, the DILG issued another these writs should be allowed only
letter, denominated as DILG Opinion No. 5, Series of 2009 when there are special and
dated January 2009,[11] reiterating its stance that the MTC important reasons therefor, clearly
Decision dated February 23, 2008 has not yet become final and and specifically set out in the
executory. petition. This is [an] established
policy. It is a policy necessary to
Nevertheless, the RTC issued the assailed order dated prevent inordinate demands upon the
February 2, 2009 dismissing the petition on the strength of the Courts time and attention which are
COMELEC Resolution dated September 8, 2008 better devoted to those matters within
disqualifying Mendozafrom running in the 2007 elections. As its exclusive jurisdiction, and to
stated, petitioners motion for reconsideration of the Order prevent further over-crowding of the
dated February 2, 2009 was denied in an Order dated March Courts docket. (Emphasis supplied.)
17, 2009.
Similarly, there are no special and important reasons
From such orders the petitioners went directly to this that petitioners cite to justify their direct recourse to this Court
Court. under Rule 65.

The instant petition is a direct recourse to this Court On the other hand, direct recourse to this Court has
from the assailed orders of the RTC. Notably, petitioners did been allowed for petitions filed under Rule 45 when only
not cite the rule under the Rules of Court by which the petition questions of law are raised, as in this case. Thus, the Court
was filed. If the petition is to be treated as a petition filed under ruled in Barcenas v. Tomas:[13]
Rule 65 of the Rules of Court, the petition must be dismissed
outright for having been filed prematurely. Section 1 of Rule 45 clearly states
that the following may be appealed to the
In Chamber of Real Estate and Builders Associations, Supreme Court through a petition for review
Inc. (CREBA) v. Secretary of Agrarian Reform,[12] a petition by certiorari: 1) judgments; 2) final orders; or
for certiorari filed under Rule 65 was dismissed for having 3) resolutions of the Court of Appeals, the
been filed directly with the Court, violating the principle of Sandiganbayan, the Regional Trial Court or
hierarchy of courts, to wit: similar courts, whenever authorized by law.
The appeal must involve only questions of
Primarily, although this Court, the law, not of fact.
Court of Appeals and the Regional Trial
Courts have concurrent jurisdiction to issue This Court has, time and time again,
writs of certiorari, prohibition, mandamus, pointed out that it is not a trier of facts; and
quo warranto, habeas corpus and injunction, that, save for a few exceptional instances, its
such concurrence does not give the petitioner function is not to analyze or weigh all over
unrestricted freedom of choice of court forum. again the factual findings of the lower courts.
In Heirs of Bertuldo Hinog v. Melicor, There is a question of law when doubts or
citing People v. Cuaresma, this Court made differences arise as to what law pertains to a
the following pronouncements: certain state of facts, and a question of fact
when the doubt pertains to the truth or falsity
This Courts original of alleged facts.
jurisdiction to issue writs of certiorari
is not exclusive. It is shared by this Under the principle of the hierarchy
Court with Regional Trial Courts and of courts, decisions, final orders or
 resolutions of an MTC should be appealed to
the RTC exercising territorial jurisdiction
over the former. On the other hand, RTC
judgments, final orders or resolutions are
appealable to the CA through either of the
following: an ordinary appeal if the case was
originally decided by the RTC; or a petition
for review under Rule 42, if the case was
decided under the RTC's appellate
jurisdiction.
Nonetheless, a direct recourse to this
Court can be taken for a review of the
decisions, final orders or resolutions of the
RTC, but only on questions of law. Under
Section 5 of Article VIII of the Constitution,
the Supreme Court has the power to
(2) Review, revise, reverse,
modify, or affirm on appeal or
certiorari as the law or the Rules of
Court may provide, final judgments
and orders of lower courts in:
xxxx
(e) All cases in which only an
error or question of law is involved.
This kind of direct appeal to this
Court of RTC judgments, final orders or
resolutions is provided for in Section 2(c) of
Rule 41, which reads:
SEC. 2. Modes of appeal.
xxxx
(c) Appeal by certiorari.In all
cases where only questions of law are
raised or involved, the appeal shall be
to the Supreme Court by petition for
review on certiorari in accordance
with Rule 45.
Procedurally then, petitioners
could have appealed the RTC Decision
affirming the MTC (1) to this Court on
questions of law only; or (2) if there are
factual questions involved, to the CA -- as
they in fact did. Unfortunately for petitioners,
the CA properly dismissed their petition for
review because of serious procedural defects.
This action foreclosed their only available
avenue for the review of the factual findings
of the RTC. (Emphasis supplied.)
Thus, the Court shall exercise liberality and consider
the instant petition as one filed under Rule 45. In Artistica
Ceramica, Inc. v. Ciudad Del Carmen Homeowners
Association, Inc.,[14]citing Republic v. Court of Appeals,[15] the
Court noted that it has the discretion to determine whether a
petition was filed under Rule 45 or 65 of the Rules of Court:
Admittedly, this Court, in accordance
with the liberal spirit pervading the Rules of
Court and in the interest of justice, has the
discretion to treat a petition for certiorari as
having been filed under Rule 45, especially if
filed within the reglementary period for filing
a petition for review.
Nevertheless, even providing that the petition was not
filed prematurely, it must still be dismissed for having become
moot and academic.
In Gunsi, Sr. v. Commissioners, The Commission on
Elections,[16] the Court defined a moot and academic case as
follows:
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
value. As a rule, courts decline jurisdiction
over such case, or dismiss it on ground of
mootness.
With the conduct of the 2010 barangay elections, a
supervening event has transpired that has rendered this case
moot and academic and subject to dismissal. This is because,
as stated inFernandez v. Commission on
[17]
Elections, whatever judgment is reached, the same can no
longer have any practical legal effect or, in the nature of things,
can no longer be enforced. Mendozas term of office has
expired with the conduct of last years local elections. As such,
Special Civil Action No. 08-10, where the assailed Orders
were issued, can no longer prosper. Mendoza no longer has
any legal standing to further pursue the case, rendering the
instant petition moot and academic. WHEREFORE, the
Petition is DENIED.
SO ORDERED.
G.R. No. 174385 February 20, 2013
REPUBLIC OF THE PHILIPPINES, Petitioner,
vs.HON. RAMON S. CAGUIOA, Presiding Judge,
Branch 74, Regional Trial Court, Third Judicial Region,
Olongapo City, META TRANS TRADING
INTERNATIONAL CORPORATION, and HUNDRED
YOUNG SUBIC INTERNATIONAL, INC., Respondents.
D E C I S I O NBRION, J.:
We resolve in this petition for certiorari and prohibition 1 (the
present petition) the challenge to the August 11, 2005 and July
5, 2006 orders2 of respondent Judge Ramon S. Caguioa,
Regional Trial Court (RTC) of Olongapo City, Branch 74, in
Civil Case No. 102-0-05. The August 11, 2005 order granted
the motion to intervene filed by private respondents Metatrans
Trading International Corporation and Hundred Young Subic
International, Inc., while the July 5, 2006 order denied the
motion for reconsideration and the motion to suspend the
proceedings filed by the petitioner Republic of the
Philippines (Republic).
The Factual Antecedents
On March 14, 2005,3 Indigo Distribution Corporation and
thirteen other petitioners (collectively referred to as lower
court petitioners) filed before the respondent judge a petition
for declaratory relief with prayer for temporary restraining
order (TRO) and preliminary mandatory injunction4 against
the Honorable Secretary of Finance, et al. The petition sought
to nullify the implementation of Section 6 of Republic
Act (R.A.) No. 9334, otherwise known as "AN ACT
INCREASING THE EXCISE TAX RATES IMPOSED ON
ALCOHOL AND TOBACCO PRODUCTS, AMENDING
FOR THE PURPOSE SECTIONS 131, 141, 142, 143, 144,
145 AND 288 OF THE NATIONAL INTERNAL REVENUE
CODE OF 1997, AS AMENDED," as unconstitutional.
Section 6 of R.A. No. 9334, in part, reads:
SEC. 6. Section 131 of the National Internal Revenue Code of
1997, as amended, is hereby amended to read as follows:
SEC. 131. Payment of Excise Taxes on Imported Articles. –
(A) Persons Liable. – x x x.
xxxx
The provision of any special or general law to the contrary
notwithstanding, the importation of cigars and cigarettes,
distilled spirits, fermented liquors and wines into the
Philippines, even if destined for tax and duty-free shops,
shall be subject to all applicable taxes, duties, charges,
including excise taxes due thereon. This shall apply to
cigars and cigarettes, distilled spirits, fermented liquors
and wines brought directly into the duly chartered or
legislated freeports of the Subic Special Economic and
Freeport Zone, created under Republic Act No. 7227; the
Cagayan Special Economic Zone and Freeport, created under
Republic Act No. 7922; and the Zamboanga City Special
Economic Zone, created under Republic Act No. 7903, and
such other freeports as may hereafter be established or created
by law: Provided, further, That importations of cigars and
cigarettes, distilled spirits, fermented liquors and wines made
directly by a government- owned and operated duty-free shop,
like the Duty-Free Philippines (DFP), shall be exempted from
all applicable duties only[.] [emphasis ours; italics supplied]
The lower court petitioners are importers and traders duly
licensed to operate inside the Subic Special Economic and
Freeport Zone (SSEFZ).
By way of background, Congress enacted, in 1992, R.A. No.
7227, otherwise known as "The BASES CONVERSION AND
DEVELOPMENT ACT OF 1992," which provided, among
others, for the creation of the SSEFZ, as well as the Subic Bay
Metropolitan Authority (SBMA). Pursuant to this law, the
SBMA granted the lower court petitioners Certificates of
Registration and Tax Exemption. The certificates allowed
them to engage in the business of import and export of general
merchandise (including alcohol and tobacco products) and
uniformly granted them tax exemptions for these importations.
On January 1, 2005, Congress passed R.A. No. 9334. Based
on Section 6 of R.A. No. 9334, the SBMA issued a
Memorandum on February 7, 2005 directing its various
departments to require importers in the SSEFZ to pay the
applicable duties and taxes on their importations of tobacco
and alcohol products before these importations are cleared and
released from the freeport. The memorandum prompted the
lower court petitioners to bring before the RTC their petition
for declaratory relief (Civil Case No. 102-0- 05). The petition
included a prayer for the issuance of a writ of preliminary
injunction and/or a TRO to enjoin the Republic (acting
through the SBMA) from enforcing the challenged
memorandum.
On May 4, 2005,5 the respondent judge granted the lower court
petitioners’ application for preliminary injunction despite the
Republic’s opposition, and on May 11, 2005, he issued the
preliminary injunction.
The Republic filed before this Court a petition
for certiorari and prohibition – docketed in this Court as
G.R. No. 168584 – to annul the respondent judge’s order and
the writ issued pursuant to this order. The petition asked for
the issuance of a TRO and/or a writ of preliminary injunction.
By motion dated July 21, 2005 filed before the lower court,
the Republic asked the respondent judge to suspend the
proceedings pending the resolution of G.R. No. 168584.
On August 5, 2005, the private respondents (in the present
petition now before us) filed before the respondent judge
motions for leave to intervene and to admit complaints-in-
intervention. They also asked in these motions that the
respondent judge extend to them the effects and benefits of his
May 4, 2005 order, in the lower court petitioners’ favor, and
the subsequently issued May 11, 2005 writ of preliminary
mandatory injunction.
Without acting on the Republic’s motion to suspend the
proceedings, the respondent judge granted on August 11, 2005
the private respondents’ motions and complaints-in-
intervention. The respondent judge found the private
respondents to be similarly situated as the lower court
petitioners; they stood, too, to be adversely affected by the
implementation of R.A. No. 9334.
The Republic moved to reconsider6 the respondent judge’s
August 11, 2005 order, arguing that it had been denied due
process because it never received copies of the private
respondents’ motions and complaints-in-intervention.
On July 5, 2006, the respondent judge denied the Republic’s
motion for reconsideration and the previously filed motion to
suspend the proceedings. The respondent judge held that all of
the parties in the case had been duly notified per the records.
To justify the denial of the motion to suspend the proceedings,
the respondent judge pointed to the absence of any restraining
order in G.R. No. 168584. The Republic responded to the
respondent judge’s actions by filing the present petition.
The Petition
The present petition charges that the respondent judge acted
with manifest partiality and with grave abuse of discretion
when he issued his August 11, 2005 and July 5, 2006 orders.
In particular, the Republic contends that the respondent judge
violated its right to due process when he peremptorily allowed
the private respondents’ motions and complaints-in-
intervention and proceeded with their hearing ex parte despite
the absence of any prior notice to it. The Republic maintains
that it never received any notice of hearing, nor any copy of
the questioned motions and complaints-in-intervention.7
Further, the Republic posits that the respondent judge abused
his discretion when he extended to the private respondents the
benefits of the preliminary injunction earlier issued to the
lower court petitioners under the same ₱1,000,000.00 bond the
lower court petitioners posted. The Republic labels this action
as a violation of Section 4, Rule 58 of the Rules of Court,
claiming at the same time that the bond is manifestly
disproportionate to the resulting damage the Republic stood to
incur considering the number of the original and the additional
lower court petitioners.8
Finally, in support of its prayer for the issuance of a TRO
and/or a writ of preliminary injunction, the Republic stresses
that the assailed orders continue to cause it multi-million tax
losses. It justifies its prayer for the respondent judge’s
inhibition by pointing to the latter’s act of continuously
allowing parties to intervene despite the absence of notice and
to the inclusion of non-parties to the original case.
During the pendency of the present petition, the Court en
banc partially granted the Republic’s petition in G.R. No.
168584. By a Decision9 dated October 15, 2007, this Court set
aside and nullified the respondent judge’s order of May 4,
2005 and the subsequent May 11, 2005 writ of preliminary
injunction. On January 15, 2008, the Court denied with finality
the lower court petitioners’ motion for reconsideration.10
The Respondent’s Position
In their defense, the private respondents point to the
procedural defects in the petition, specifically: first, the
petition was filed out of time, arguing that the Republic only
had 53 remaining days to file the petition from notice of the
denial of its motion for reconsideration, maintaining that the
60-day period within which to file the petition is counted from
the notice of the denial of the August 11, 2005 order;
second, the petition did not comply with the rules on proof of
filing and service; third, the Republic failed to properly serve
their counsel of record a copy of the petition; and fourth, the
Republic did not observe the hierarchy of courts in filing the
instant petition.11
The private respondents further contend that the respondent
judge correctly allowed their complaints-in-intervention as the
matter of intervention is addressed to the courts’ discretion; as
noted in the assailed orders, the records show that the notice
of hearing was addressed to all of the parties in the original
case.12
Finally, on the Republic’s prayer for prohibition, the private
respondents maintain that prohibition is improper since this
Court, in G.R. No. 168584, denied the Republic’s prayer for a
writ of prohibition, noting that the respondent judge had been
suspended, pending resolution of this petition.13
The Court’s Ruling
We resolve to PARTLY GRANT the petition.
Relaxation of procedural rules for compelling reasons
We disagree with the private respondents’ procedural
objections.
First, we find that the present petition was filed within the
reglementary period. Contrary to the private respondents’
position, the 60- day period within which to file the petition
for certiorari is counted from the Republic’s receipt of the
July 5, 2006 order denying the latter’s motion for
reconsideration. Section 4, Rule 65 of the Rules of Court is
clear on this point – "In case a motion for reconsideration or
new trial is timely filed, whether such motion is required or
not, the sixty (60) day period shall be counted from notice
of the denial of said motion."14 We find too that the present
petition complied with the rules on proof of filing and service
of the petition. Attached to the petition – in compliance with
Sections 12 and 13, Rule 13 of the Rules of Court – are the
registry receipts and the affidavit of the person who filed and
served the petition by registered mail.
Second, while the principle of hierarchy of courts does indeed
require that recourses should be made to the lower courts
before they are made to the higher courts,15 this principle is not
an absolute rule and admits of exceptions under well-defined
circumstances. In several cases, we have allowed direct
invocation of this Court’s original jurisdiction to issue writs
of certiorari on the ground of special and important reasons
clearly stated in the petition;16when dictated by public welfare
and the advancement of public policy; when demanded by the
broader interest of justice; when the challenged orders were
patent nullities;17 or when analogous exceptional and
compelling circumstances called for and justified our
immediate and direct handling of the case.18
The Republic claims that the respondent judge violated and
continues to violate its right to due process by allowing the
private respondents and several others to intervene in the
case sans notice to the Republic; by extending to them the
benefit of the original injunction without the requisite
injunction bond applicable to them as separate injunction
applicants; and by continuing to suspend the Republic’s right
to collect excise taxes from the private respondents and from
the lower court petitioners, thus adversely affecting the
government’s revenues. To our mind, the demonstrated extent
of the respondent judge’s actions and their effects constitute
special and compelling circumstances calling for our direct
and immediate attention.
Lastly, under our rules of procedure,19 service of the petition
on a party, when that party is represented by a counsel of
record, is a patent nullity and is not binding upon the party
wrongfully served.20 This rule, however, is a procedural
standard that may admit of exceptions when faced with
compelling reasons of substantive justice manifest in the
petition and in the surrounding circumstances of the
case.21 Procedural rules can bow to substantive considerations
through a liberal construction aimed at promoting their
objective of securing a just, speedy and inexpensive
disposition of every action and proceeding.22
The Republic has consistently and repeatedly maintained that
it never received a copy of the motions and complaints-in-
intervention, as evidenced by the certification of the Docket
Division of the Office of the Solicitor General (OSG); it
learned of the private respondents’ presence in this case only
after it received copies of the assailed orders, and it even had
to inquire from the lower court for the private respondents’
addresses. Although their counsels did not formally receive
any copy of the petition, the private respondents themselves
admitted that they received their copy of the present petition.
The records show that the Republic subsequently complied
with the rules on service when, after the private respondents’
comment, the Republic served copies of its reply and
memorandum to the respondents’ counsel of record.
Under these circumstances, we are satisfied with the
Republic’s explanation on why it failed to initially comply
with the rule on service of the present petition; its subsequent
compliance with the rule after being informed of the presence
of counsels of record sufficiently warrants the rule’s relaxed
application.23 The lack of a proper service – unlike the
situation when the Republic was simply confronted with
already-admitted complaints-in-intervention – did not result in
any prejudice; the private respondents themselves were
actually served with, and duly received, their copies of the
present petition, allowing them to comment and to be heard on
the petition.
The Republic was denied due process; the respondent judge
issued the assailed orders with grave abuse of discretion
Due process of law is a constitutionally guaranteed right
reserved to every litigant.1âwphi1 Even the Republic as a
litigant is entitled to this constitutional right, in the same
manner and to the same extent that this right is guaranteed to
private litigants. The essence of due process is the opportunity
to be heard, logically preconditioned on prior notice, before
judgment is rendered.24
A motion for intervention, like any other motion, has to
comply with the mandatory requirements of notice and
hearing, as well as proof of its service,25 save only for those
that the courts can act upon without prejudice to the rights of
the other parties.26 A motion which fails to comply with these
requirements is a worthless piece of paper that cannot and
should not be acted upon.27 The reason for this is plain: a
movant asks the court to take a specific course of action, often
contrary to the interest of the adverse party and which the latter
must then be given the right and opportunity to oppose.28 The
notice of hearing to the adverse party thus directly services the
required due process as it affords the adverse party the
opportunity to properly state his agreement or opposition to
the action that the movant asks for.29 Consequently, our
procedural rules provide that a motion that does not afford the
adverse party this kind of opportunity should simply be
disregarded.30
The notice requirement is even more mandatory when the
movant asks for the issuance of a preliminary injunction
and/or a TRO. Under Section 5, Rule 58 of the Rules of Court,
no preliminary injunction shall be granted without a hearing
and without prior notice to the party sought to be enjoined. The
prior notice under this requirement is as important as the
hearing, as no hearing can meaningfully take place, with both
parties present or represented, unless a prior notice of the
hearing is given.
Additionally, in the same way that an original complaint must
be served on the defendant, a copy of the complaint-in-
intervention must be served on the adverse party with the July 5, 2006 of respondent Judge Ramon S. Caguioa in Civil
requisite proof of service duly filed prior to any valid court Case No. 102-0-05 for being NULL and VOID. We DISMISS
action. Absent these or any reason duly explained and the prayer for writ of prohibition on the ground of mootness.
accepted excusing strict compliance, the court is without Costs against Metatrans Trading International Corporation
authority to act on such complaint; any action taken without and Hundred Young Subic International, Inc.
the required service contravenes the law and the rules, and SO ORDERED.
violates the adverse party’s basic and constitutional right to
due process.
In the present case, records show that the OSG had never
received – contrary to the private respondents’ claim – a copy
of the motions and complaints-in-intervention.31 The Republic
duly and fully manifested the irregularity before the
respondent judge.32 Thus, the mere statement in the assailed
orders that the parties were duly notified is insufficient on the
face of the appropriate manifestation made and the supporting
proof that the Republic submitted. In these lights, the motions
and complaints-in-intervention cannot but be mere scraps of
paper that the respondent judge had no reason to consider; in
admitting them despite the absence of prior notice, the
respondent judge denied the Republic of its right to due
process.
While we may agree with the private respondents’ claim that
the matter of intervention is addressed to the sound discretion
of the court,33 what should not be forgotten is the requirement
that the exercise of discretion must in the first place be
"sound." In other words, the basic precepts of fair play and the
protection of all interests involved must always be considered
in the exercise of discretion. Under the circumstances of the
present case, these considerations demand that the original
parties to the action, which include the Republic, must have
been properly informed to give them a chance to protect their
interests. These interests include, among others, the protection
of the Republic’s revenue-generating authority that should
have been insulated against damage through the filing of a
proper bond. Thus, even from this narrow view that does not
yet consider the element of fair play, the private respondents’
case must fail; judicial discretion cannot override a party
litigant’s right to due process.
All told, the respondent judge acted with grave abuse of
discretion warranting the issuance of the corrective writ
of certiorari. Grave abuse of discretion arises when a lower
court or tribunal violates the Constitution or grossly disregards
the law or existing jurisprudence.34 The term refers to such
capricious and whimsical exercise of judgment equivalent to
lack of jurisdiction, as when the act amounts to an evasion of
a positive duty or to a virtual refusal to perform a duty enjoined
by law, or to act at all in contemplation of law .35 The
respondent judge so acted so that the orders he issued should
be declared void and of no effect.
Petition for prohibition and prayer for inhibition are denied
for having been mooted by subsequent events
On November 9, 2006, the Republic filed an administrative
case against the respondent judge for gross ignorance of the
law, manifest partiality and conduct prejudicial to the best
interest of the service. The case, docketed as A.M. No. RTJ-
07-2063, is likewise related to Civil Case No. 102-0-05 that
underlie the present petition. By a decision dated June 26,
2009, and while this case was still pending, this Court found
the respondent judge guilty of gross ignorance of the law and
conduct prejudicial to the best interest of the service. The
Court accordingly dismissed the respondent judge from the
service.
In light of these supervening events, the Court sees no reason
to resolve the other matters raised in this petition for being
moot.
WHEREFORE, under these premises, we PARTIALLY
GRANT the petition. We GRANT the writ of certiorari and
accordingly SET ASIDE the orders dated August 11, 2005 and