G.R. No.

159357 April 28, 2004

Brother MARIANO "MIKE" Z. VELARDE, petitioner,

vs.
SOCIAL JUSTICE SOCIETY, respondent.

DECISION

PANGANIBAN, J.:

A decision that does not conform to the form and substance required by the Constitution
and the law is void and deemed legally inexistent. To be valid, decisions should comply
with the form, the procedure and the substantive requirements laid out in the
Constitution, the Rules of Court and relevant circulars/orders of the Supreme Court. For
the guidance of the bench and the bar, the Court hereby discusses these forms, procedures
and requirements.

The Case

Before us is a Petition for Review1 under Rule 45 of the Rules of Court, assailing the
June 12, 2003 Decision2 and July 29, 2003 Order3 of the Regional Trial Court (RTC) of
Manila (Branch 49).4

The challenged Decision was the offshoot of a Petition for Declaratory Relief5 filed
before the RTC-Manila by herein Respondent Social Justice Society (SJS) against herein
Petitioner Mariano "Mike" Z. Velarde, together with His Eminence, Jaime Cardinal Sin,
Executive Minister Eraño Manalo, Brother Eddie Villanueva and Brother Eliseo F.
Soriano as co-respondents. The Petition prayed for the resolution of the question
"whether or not the act of a religious leader like any of herein respondents, in endorsing
the candidacy of a candidate for elective office or in urging or requiring the members of
his flock to vote for a specified candidate, is violative of the letter or spirit of the
constitutional provisions x x x."6

Alleging that the questioned Decision did not contain a statement of facts and a
dispositive portion, herein petitioner filed a Clarificatory Motion and Motion for
Reconsideration before the trial court. Soriano, his co-respondent, similarly filed a
separate Motion for Reconsideration. In response, the trial court issued the assailed
Order, which held as follows:

"x x x [T]his Court cannot reconsider, because what it was asked to do, was only
to clarify a Constitutional provision and to declare whether acts are violative
thereof. The Decision did not make a dispositive portion because a dispositive
portion is required only in coercive reliefs, where a redress from wrong suffered
and the benefit that the prevailing party wronged should get. The step that these
movants have to take, is direct appeal under Rule 45 of the Rules of Court, for a
conclusive interpretation of the Constitutional provision to the Supreme Court."7

The Antecedent Proceedings

On January 28, 2003, SJS filed a Petition for Declaratory Relief ("SJS Petition") before
the RTC-Manila against Velarde and his aforesaid co-respondents. SJS, a registered
political party, sought the interpretation of several constitutional provisions,8 specifically
on the separation of church and state; and a declaratory judgment on the constitutionality
of the acts of religious leaders endorsing a candidate for an elective office, or urging or
requiring the members of their flock to vote for a specified candidate.
The subsequent proceedings were recounted in the challenged Decision in these words:

"x x x. Bro. Eddie Villanueva submitted, within the original period [to file an
Answer], a Motion to Dismiss. Subsequently, Executive Minister Eraño Manalo
and Bro. Mike Velarde, filed their Motions to Dismiss. While His Eminence
Jaime Cardinal L. Sin, filed a Comment and Bro. Eli Soriano, filed an Answer
within the extended period and similarly prayed for the dismissal of the Petition.
All sought the dismissal of the Petition on the common grounds that it does not
state a cause of action and that there is no justiciable controversy. They were
ordered to submit a pleading by way of advisement, which was closely followed
by another Order denying all the Motions to Dismiss. Bro. Mike Velarde, Bro.
Eddie Villanueva and Executive Minister Eraño Manalo moved to reconsider the
denial. His Eminence Jaime Cardinal L. Sin, asked for extension to file
memorandum. Only Bro. Eli Soriano complied with the first Order by submitting
his Memorandum. x x x.

"x x x the Court denied the Motions to Dismiss, and the Motions for
Reconsideration filed by Bro. Mike Velarde, Bro. Eddie Villanueva and
Executive Minister Eraño Manalo, which raised no new arguments other than
those already considered in the motions to dismiss x x x."9

After narrating the above incidents, the trial court said that it had jurisdiction over the
Petition, because "in praying for a determination as to whether the actions imputed to the
respondents are violative of Article II, Section 6 of the Fundamental Law, [the Petition]
has raised only a question of law."10 It then proceeded to a lengthy discussion of the issue
raised in the Petition – the separation of church and state – even tracing, to some extent,
the historical background of the principle. Through its discourse, the court a quo opined
at some point that the "[e]ndorsement of specific candidates in an election to any public
office is a clear violation of the separation clause."11

After its essay on the legal issue, however, the trial court failed to include a dispositive
portion in its assailed Decision. Thus, Velarde and Soriano filed separate Motions for
Reconsideration which, as mentioned earlier, were denied by the lower court.

Hence, this Petition for Review.12

This Court, in a Resolution13 dated September 2, 2003, required SJS and the Office of the
Solicitor General (OSG) to submit their respective comments. In the same Resolution, the
Court gave the other parties -- impleaded as respondents in the original case below --the
opportunity to comment, if they so desired.

On April 13, 2004, the Court en banc conducted an Oral Argument.14

The Issues

In his Petition, Brother Mike Velarde submits the following issues for this Court’s
resolution:

"1. Whether or not the Decision dated 12 June 2003 rendered by the court a quo
was proper and valid;

"2. Whether or not there exists justiceable controversy in herein respondent’s

Petition for declaratory relief;

"3. Whether or not herein respondent has legal interest in filing the Petition for
declaratory relief;
 "4. Whether or not the constitutional question sought to be resolved by herein
respondent is ripe for judicial determination;

"5. Whether or not there is adequate remedy other than the declaratory relief; and,

"6. Whether or not the court a quo has jurisdiction over the Petition for
declaratory relief of herein respondent."15

During the Oral Argument, the issues were narrowed down and classified as follows:

"A. Procedural Issues

"Did the Petition for Declaratory Relief raise a justiciable controversy? Did it
state a cause of action? Did respondent have any legal standing to file the Petition
for Declaratory Relief?

"B. Substantive Issues

"1. Did the RTC Decision conform to the form and substance required by
the Constitution, the law and the Rules of Court?

"2. May religious leaders like herein petitioner, Bro. Mike Velarde, be
prohibited from endorsing candidates for public office? Corollarily, may
they be banned from campaigning against said candidates?"

The Court’s Ruling

The Petition of Brother Mike Velarde is meritorious.

Procedural Issues:

Requisites of Petitions for Declaratory Relief

Section 1 of Rule 63 of the Rules of Court, which deals with petitions for declaratory
relief, provides in part:

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

Based on the foregoing, an action for declaratory relief should be filed by a person
interested under a deed, a will, a contract or other written instrument, and whose rights
are affected by a statute, an executive order, a regulation or an ordinance. The purpose of
the remedy is to interpret or to determine the validity of the written instrument and to
seek a judicial declaration of the parties’ rights or duties thereunder.16 The essential
requisites of the action are as follows: (1) there is a justiciable controversy; (2) the
controversy is between persons whose interests are adverse; (3) the party seeking the
relief has a legal interest in the controversy; and (4) the issue is ripe for judicial
determination.17

Justiciable Controversy
Brother Mike Velarde contends that the SJS Petition failed to allege, much less establish
before the trial court, that there existed a justiciable controversy or an adverse legal
interest between them; and that SJS had a legal right that was being violated or threatened
to be violated by petitioner. On the contrary, Velarde alleges that SJS premised its action
on mere speculations, contingent events, and hypothetical issues that had not yet ripened
into an actual controversy. Thus, its Petition for Declaratory Relief must fail.

A justiciable controversy refers to an existing case or controversy that is appropriate or

ripe for judicial determination, not one that is conjectural or merely anticipatory.18 The
SJS Petition for Declaratory Relief fell short of this test. It miserably failed to allege an
existing controversy or dispute between the petitioner and the named respondents therein.
Further, the Petition did not sufficiently state what specific legal right of the petitioner
was violated by the respondents therein; and what particular act or acts of the latter were
in breach of its rights, the law or the Constitution.

As pointed out by Brother Eliseo F. Soriano in his Comment,19 what exactly has he done
that merited the attention of SJS? He confesses that he does not know the answer,
because the SJS Petition (as well as the assailed Decision of the RTC) "yields nothing in
this respect." His Eminence, Jaime Cardinal Sin, adds that, at the time SJS filed its
Petition on January 28, 2003, the election season had not even started yet; and that, in any
event, he has not been actively involved in partisan politics.

An initiatory complaint or petition filed with the trial court should contain "a plain,
concise and direct statement of the ultimate facts on which the party pleading relies for
his claim x x x."20 Yet, the SJS Petition stated no ultimate facts.

Indeed, SJS merely speculated or anticipated without factual moorings that, as religious
leaders, the petitioner and his co-respondents below had endorsed or threatened to
endorse a candidate or candidates for elective offices; and that such actual or threatened
endorsement "will enable [them] to elect men to public office who [would] in turn be
forever beholden to their leaders, enabling them to control the government"[;]21 and
"pos[ing] a clear and present danger of serious erosion of the people’s faith in the
electoral process[;] and reinforc[ing] their belief that religious leaders determine the
ultimate result of elections,"22 which would then be violative of the separation clause.

Such premise is highly speculative and merely theoretical, to say the least. Clearly, it
does not suffice to constitute a justiciable controversy. The Petition does not even allege
any indication or manifest intent on the part of any of the respondents below to champion
an electoral candidate, or to urge their so-called flock to vote for, or not to vote for, a
particular candidate. It is a time-honored rule that sheer speculation does not give rise to
an actionable right.

Obviously, there is no factual allegation that SJS’ rights are being subjected to any
threatened, imminent and inevitable violation that should be prevented by the declaratory
relief sought. The judicial power and duty of the courts to settle actual controversies
involving rights that are legally demandable and enforceable23 cannot be exercised when
there is no actual or threatened violation of a legal right.

All that the 5-page SJS Petition prayed for was "that the question raised in paragraph 9
hereof be resolved."24 In other words, it merely sought an opinion of the trial court on
whether the speculated acts of religious leaders endorsing elective candidates for political
offices violated the constitutional principle on the separation of church and state. SJS did
not ask for a declaration of its rights and duties; neither did it pray for the stoppage of any
threatened violation of its declared rights. Courts, however, are proscribed from rendering
an advisory opinion.25
 Cause of Action

Respondent SJS asserts that in order to maintain a petition for declaratory relief, a cause
of action need not be alleged or proven. Supposedly, for such petition to prosper, there
need not be any violation of a right, breach of duty or actual wrong committed by one
party against the other.

Petitioner, on the other hand, argues that the subject matter of an action for declaratory
relief should be a deed, a will, a contract (or other written instrument), a statute, an
executive order, a regulation or an ordinance. But the subject matter of the SJS Petition is
"the constitutionality of an act of a religious leader to endorse the candidacy of a
candidate for elective office or to urge or require the members of the flock to vote for a
specified candidate."26 According to petitioner, this subject matter is "beyond the realm
of an action for declaratory relief."27 Petitioner avers that in the absence of a valid subject
matter, the Petition fails to state a cause of action and, hence, should have been dismissed
outright by the court a quo.

A cause of action is an act or an omission of one party in violation of the legal right or
rights of another, causing injury to the latter.28 Its essential elements are the following:
(1) a right in favor of the plaintiff; (2) an obligation on the part of the named defendant to
respect or not to violate such right; and (3) such defendant’s act or omission that is
violative of the right of the plaintiff or constituting a breach of the obligation of the
former to the latter.29

The failure of a complaint to state a cause of action is a ground for its outright
dismissal.30 However, in special civil actions for declaratory relief, the concept of a cause
of action under ordinary civil actions does not strictly apply. The reason for this
exception is that an action for declaratory relief presupposes that there has been no actual
breach of the instruments involved or of rights arising thereunder.31 Nevertheless, a
breach or violation should be impending, imminent or at least threatened.

A perusal of the Petition filed by SJS before the RTC discloses no explicit allegation that
the former had any legal right in its favor that it sought to protect. We can only infer the
interest, supposedly in its favor, from its bare allegation that it "has thousands of
members who are citizens-taxpayers-registered voters and who are keenly interested in a
judicial clarification of the constitutionality of the partisan participation of religious
leaders in Philippine politics and in the process to insure adherence to the Constitution by
everyone x x x."32

Such general averment does not, however, suffice to constitute a legal right or interest.
Not only is the presumed interest not personal in character; it is likewise too vague,
highly speculative and uncertain.33 The Rules require that the interest must be material to
the issue and affected by the questioned act or instrument, as distinguished from simple
curiosity or incidental interest in the question raised.34

To bolster its stance, SJS cites the Corpus Juris Secundum and submits that the
"[p]laintiff in a declaratory judgment action does not seek to enforce a claim against [the]
defendant, but seeks a judicial declaration of [the] rights of the parties for the purpose of
guiding [their] future conduct, and the essential distinction between a ‘declaratory
judgment action’ and the usual ‘action’ is that no actual wrong need have been committed
or loss have occurred in order to sustain the declaratory judgment action, although there
must be no uncertainty that the loss will occur or that the asserted rights will be
invaded."35

SJS has, however, ignored the crucial point of its own reference – that there must be no
uncertainty that the loss will occur or that the asserted rights will be invaded. Precisely,
as discussed earlier, it merely conjectures that herein petitioner (and his co-respondents
below) might actively participate in partisan politics, use "the awesome voting strength of
its faithful flock [to] enable it to elect men to public office x x x, enabling [it] to control
the government."36

During the Oral Argument, though, Petitioner Velarde and his co-respondents below all
strongly asserted that they had not in any way engaged or intended to participate in
partisan politics. They all firmly assured this Court that they had not done anything to
trigger the issue raised and to entitle SJS to the relief sought.

Indeed, the Court finds in the Petition for Declaratory Relief no single allegation of fact
upon which SJS could base a right of relief from the named respondents. In any event,
even granting that it sufficiently asserted a legal right it sought to protect, there was
nevertheless no certainty that such right would be invaded by the said respondents. Not
even the alleged proximity of the elections to the time the Petition was filed below
(January 28, 2003) would have provided the certainty that it had a legal right that would
be jeopardized or violated by any of those respondents.

Legal Standing

Legal standing or locus standi has been defined as a personal and substantial interest in
the case, such that the party has sustained or will sustain direct injury as a result of the
challenged act.37 Interest means a material interest in issue that is affected by the
questioned act or instrument, as distinguished from a mere incidental interest in the
question involved.38

Petitioner alleges that "[i]n seeking declaratory relief as to the constitutionality of an act
of a religious leader to endorse, or require the members of the religious flock to vote for a
specific candidate, herein Respondent SJS has no legal interest in the controversy";39 it
has failed to establish how the resolution of the proffered question would benefit or injure
it.

Parties bringing suits challenging the constitutionality of a law, an act or a statute must
show "not only that the law [or act] is invalid, but also that [they have] sustained or [are]
in immediate or imminent danger of sustaining some direct injury as a result of its
enforcement, and not merely that [they] suffer thereby in some indefinite way."40 They
must demonstrate that they have been, or are about to be, denied some right or privilege
to which they are lawfully entitled, or that they are about to be subjected to some burdens
or penalties by reason of the statute or act complained of.41

First, parties suing as taxpayers must specifically prove that they have sufficient interest
in preventing the illegal expenditure of money raised by taxation.42 A taxpayer’s action
may be properly brought only when there is an exercise by Congress of its taxing or
spending power.43 In the present case, there is no allegation, whether express or implied,
that taxpayers’ money is being illegally disbursed.

Second, there was no showing in the Petition for Declaratory Relief that SJS as a political
party or its members as registered voters would be adversely affected by the alleged acts
of the respondents below, if the question at issue was not resolved. There was no
allegation that SJS had suffered or would be deprived of votes due to the acts imputed to
the said respondents. Neither did it allege that any of its members would be denied the
right of suffrage or the privilege to be voted for a public office they are seeking.

Finally, the allegedly keen interest of its "thousands of members who are citizens-
taxpayers-registered voters" is too general44 and beyond the contemplation of the
standards set by our jurisprudence. Not only is the presumed interest impersonal in
character; it is likewise too vague, highly speculative and uncertain to satisfy the
requirement of standing.45

Transcendental Importance

In any event, SJS urges the Court to take cognizance of the Petition, even sans legal
standing, considering that "the issues raised are of paramount public interest."

In not a few cases, the Court has liberalized the locus standi requirement when a petition
raises an issue of transcendental significance or paramount importance to the people.46
Recently, after holding that the IBP had no locus standi to bring the suit, the Court in IBP
v. Zamora47 nevertheless entertained the Petition therein. It noted that "the IBP has
advanced constitutional issues which deserve the attention of this Court in view of their
seriousness, novelty and weight as precedents."48

Similarly in the instant case, the Court deemed the constitutional issue raised in the SJS
Petition to be of paramount interest to the Filipino people. The issue did not simply
concern a delineation of the separation between church and state, but ran smack into the
governance of our country. The issue was both transcendental in importance and novel in
nature, since it had never been decided before.

The Court, thus, called for Oral Argument to determine with certainty whether it could
resolve the constitutional issue despite the barren allegations in the SJS Petition as well as
the abbreviated proceedings in the court below. Much to its chagrin, however, counsels
for the parties -- particularly for Respondent SJS -- made no satisfactory allegations or
clarifications that would supply the deficiencies hereinabove discussed. Hence, even if
the Court would exempt this case from the stringent locus standi requirement, such heroic
effort would be futile because the transcendental issue cannot be resolved anyway.

Proper Proceedings Before the Trial Court

To prevent a repetition of this waste of precious judicial time and effort, and for the
guidance of the bench and the bar, the Court reiterates the elementary procedure49 that
must be followed by trial courts in the conduct of civil cases.50

Prefatorily, the trial court may -- motu proprio or upon motion of the defendant -- dismiss
a complaint51 (or petition, in a special civil action) that does not allege the plaintiff’s (or
petitioner’s) cause or causes of action.52 A complaint or petition should contain "a plain,
concise and direct statement of the ultimate facts on which the party pleading relies for
his claim or defense."53 It should likewise clearly specify the relief sought.54

Upon the filing of the complaint/petition and the payment of the requisite legal fees, the
clerk of court shall forthwith issue the corresponding summons to the defendants or the
respondents, with a directive that the defendant answer55 within 15 days, unless a
different period is fixed by the court.56 The summons shall also contain a notice that if
such answer is not filed, the plaintiffs/petitioners shall take a judgment by default and
may be granted the relief applied for.57 The court, however, may -- upon such terms as
may be just -- allow an answer to be filed after the time fixed by the Rules.58

If the answer sets forth a counterclaim or cross-claim, it must be answered within ten (10)
days from service.59 A reply may be filed within ten (10) days from service of the
pleading responded to.60

When an answer fails to tender an issue or admits the material allegations of the adverse
party’s pleading, the court may, on motion of that party, direct judgment on such
pleading (except in actions for declaration of nullity or annulment of marriage or for legal
separation).61 Meanwhile, a party seeking to recover upon a claim, a counterclaim or
crossclaim -- or to obtain a declaratory relief -- may, at any time after the answer thereto
has been served, move for a summary judgment in its favor.62 Similarly, a party against
whom a claim, a counterclaim or crossclaim is asserted -- or a declaratory relief sought --
may, at any time, move for a summary judgment in its favor.63 After the motion is heard,
the judgment sought shall be rendered forthwith if there is a showing that, except as to
the amount of damages, there is no genuine issue as to any material fact; and that the
moving party is entitled to a judgment as a matter of law.64

Within the time for -- but before -- filing the answer to the complaint or petition, the
defendant may file a motion to dismiss based on any of the grounds stated in Section 1 of
Rule 16 of the Rules of Court. During the hearing of the motion, the parties shall submit
their arguments on the questions of law, and their evidence on the questions of fact.65
After the hearing, the court may dismiss the action or claim, deny the motion, or order the
amendment of the pleadings. It shall not defer the resolution of the motion for the reason
that the ground relied upon is not indubitable. In every case, the resolution shall state
clearly and distinctly the reasons therefor.66

If the motion is denied, the movant may file an answer within the balance of the period
originally prescribed to file an answer, but not less than five (5) days in any event,
computed from the receipt of the notice of the denial. If the pleading is ordered to be
amended, the defendant shall file an answer within fifteen (15) days, counted from the
service of the amended pleading, unless the court provides a longer period.67

After the last pleading has been served and filed, the case shall be set for pretrial,68 which
is a mandatory proceeding.69 A plaintiff’s/ petitioner’s (or its duly authorized
representative’s) non-appearance at the pretrial, if without valid cause, shall result in the
dismissal of the action with prejudice, unless the court orders otherwise. A similar failure
on the part of the defendant shall be a cause for allowing the plaintiff/petitioner to present
evidence ex parte, and the court to render judgment on the basis thereof.70

The parties are required to file their pretrial briefs; failure to do so shall have the same
effect as failure to appear at the pretrial.71 Upon the termination thereof, the court shall
issue an order reciting in detail the matters taken up at the conference; the action taken on
them, the amendments allowed to the pleadings; and the agreements or admissions, if
any, made by the parties regarding any of the matters considered.72 The parties may
further avail themselves of any of the modes of discovery,73 if they so wish.

Thereafter, the case shall be set for trial,74 in which the parties shall adduce their
respective evidence in support of their claims and/or defenses. By their written consent or
upon the application of either party, or on its own motion, the court may also order any or
all of the issues to be referred to a commissioner, who is to be appointed by it or to be
agreed upon by the parties.75 The trial or hearing before the commissioner shall proceed
in all respects as it would if held before the court.76

Upon the completion of such proceedings, the commissioner shall file with the court a
written report on the matters referred by the parties.77 The report shall be set for hearing,
after which the court shall issue an order adopting, modifying or rejecting it in whole or
in part; or recommitting it with instructions; or requiring the parties to present further
evidence before the commissioner or the court.78

Finally, a judgment or final order determining the merits of the case shall be rendered.
The decision shall be in writing, personally and directly prepared by the judge, stating
clearly and distinctly the facts and the law on which it is based, signed by the issuing
magistrate, and filed with the clerk of court.79
Based on these elementary guidelines, let us examine the proceedings before the trial
court in the instant case.

First, with respect to the initiatory pleading of the SJS. Even a cursory perusal of the
Petition immediately reveals its gross inadequacy. It contained no statement of ultimate
facts upon which the petitioner relied for its claim. Furthermore, it did not specify the
relief it sought from the court, but merely asked it to answer a hypothetical question.

Relief, as contemplated in a legal action, refers to a specific coercive measure prayed for
as a result of a violation of the rights of a plaintiff or a petitioner.80 As already discussed
earlier, the Petition before the trial court had no allegations of fact81 or of any specific
violation of the petitioner’s rights, which the respondents had a duty to respect. Such
deficiency amounted to a failure to state a cause of action; hence, no coercive relief could
be sought and adjudicated. The Petition evidently lacked substantive requirements and,
we repeat, should have been dismissed at the outset.

Second, with respect to the trial court proceedings. Within the period set to file their
respective answers to the SJS Petition, Velarde, Villanueva and Manalo filed Motions to
Dismiss; Cardinal Sin, a Comment; and Soriano, within a priorly granted extended
period, an Answer in which he likewise prayed for the dismissal of the Petition.82 SJS
filed a Rejoinder to the Motion of Velarde, who subsequently filed a Sur-Rejoinder.
Supposedly, there were "several scheduled settings, in which the "[c]ourt was apprised of
the respective positions of the parties."83 The nature of such settings -- whether pretrial or
trial hearings -- was not disclosed in the records. Before ruling on the Motions to
Dismiss, the trial court issued an Order84 dated May 8, 2003, directing the parties to
submit their memoranda. Issued shortly thereafter was another Order85 dated May 14,
2003, denying all the Motions to Dismiss.

In the latter Order, the trial court perfunctorily ruled:

"The Court now resolves to deny the Motions to Dismiss, and after all the
memoranda are submitted, then, the case shall be deemed as submitted for
resolution."86

Apparently, contrary to the requirement of Section 2 of Rule 16 of the Rules of Court, the
Motions were not heard. Worse, the Order purportedly resolving the Motions to Dismiss
did not state any reason at all for their denial, in contravention of Section 3 of the said
Rule 16. There was not even any statement of the grounds relied upon by the Motions;
much less, of the legal findings and conclusions of the trial court.

Thus, Velarde, Villanueva and Manalo moved for reconsideration. Pending the resolution
of these Motions for Reconsideration, Villanueva filed a Motion to suspend the filing of
the parties’ memoranda. But instead of separately resolving the pending Motions fairly
and squarely, the trial court again transgressed the Rules of Court when it immediately
proceeded to issue its Decision, even before tackling the issues raised in those Motions.

Furthermore, the RTC issued its "Decision" without allowing the parties to file their
answers. For this reason, there was no joinder of the issues. If only it had allowed the
filing of those answers, the trial court would have known, as the Oral Argument revealed,
that the petitioner and his co-respondents below had not committed or threatened to
commit the act attributed to them (endorsing candidates) -- the act that was supposedly
the factual basis of the suit.

Parenthetically, the court a quo further failed to give a notice of the Petition to the OSG,
which was entitled to be heard upon questions involving the constitutionality or validity
of statutes and other measures.87
Moreover, as will be discussed in more detail, the questioned Decision of the trial court
was utterly wanting in the requirements prescribed by the Constitution and the Rules of
Court.

All in all, during the loosely abbreviated proceedings of the case, the trial court indeed
acted with inexplicable haste, with total ignorance of the law -- or, worse, in cavalier
disregard of the rules of procedure -- and with grave abuse of discretion.

Contrary to the contentions of the trial judge and of SJS, proceedings for declaratory
relief must still follow the process described above -- the petition must state a cause of
action; the proceedings must undergo the procedure outlined in the Rules of Court; and
the decision must adhere to constitutional and legal requirements.

First Substantive Issue:

Fundamental Requirements of a Decision

The Constitution commands that "[n]o decision shall be rendered by any court without
expressing therein clearly and distinctly the facts and the law on which it is based. No
petition for review or motion for reconsideration of a decision of the court shall be
refused due course or denied without stating the basis therefor."88

Consistent with this constitutional mandate, Section 1 of Rule 36 of the Rules on Civil
Procedure similarly provides:

"Sec. 1. Rendition of judgments and final orders. – A judgment or final order

determining the merits of the case shall be in writing personally and directly
prepared by the judge, stating clearly and distinctly the facts and the law on which
it is based, signed by him and filed with the clerk of court."

In the same vein, Section 2 of Rule 120 of the Rules of Court on Criminal Procedure
reads as follows:

"Sec. 2. Form and contents of judgments. -- The judgment must be written in the
official language, personally and directly prepared by the judge and signed by him
and shall contain clearly and distinctly a statement of the facts proved or admitted
by the accused and the law upon which the judgment is based.

"x x x xxx x x x."

Pursuant to the Constitution, this Court also issued on January 28, 1988, Administrative
Circular No. 1, prompting all judges "to make complete findings of facts in their
decisions, and scrutinize closely the legal aspects of the case in the light of the evidence
presented. They should avoid the tendency to generalize and form conclusions without
detailing the facts from which such conclusions are deduced."

In many cases,89 this Court has time and time again reminded "magistrates to heed the
demand of Section 14, Article VIII of the Constitution." The Court, through Chief Justice
Hilario G. Davide Jr. in Yao v. Court of Appeals,90 discussed at length the implications of
this provision and strongly exhorted thus:

"Faithful adherence to the requirements of Section 14, Article VIII of the Constitution is
indisputably a paramount component of due process and fair play. It is likewise
demanded by the due process clause of the Constitution. The parties to a litigation should
be informed of how it was decided, with an explanation of the factual and legal reasons
that led to the conclusions of the court. The court cannot simply say that judgment is
rendered in favor of X and against Y and just leave it at that without any justification
whatsoever for its action. The losing party is entitled to know why he lost, so he may
appeal to the higher court, if permitted, should he believe that the decision should be
reversed. A decision that does not clearly and distinctly state the facts and the law on
which it is based leaves the parties in the dark as to how it was reached and is precisely
prejudicial to the losing party, who is unable to pinpoint the possible errors of the court
for review by a higher tribunal. More than that, the requirement is an assurance to the
parties that, in reaching judgment, the judge did so through the processes of legal
reasoning. It is, thus, a safeguard against the impetuosity of the judge, preventing him
from deciding ipse dixit. Vouchsafed neither the sword nor the purse by the Constitution
but nonetheless vested with the sovereign prerogative of passing judgment on the life,
liberty or property of his fellowmen, the judge must ultimately depend on the power of
reason for sustained public confidence in the justness of his decision."

In People v. Bugarin,91 the Court also explained:

"The requirement that the decisions of courts must be in writing and that they
must set forth clearly and distinctly the facts and the law on which they are based
serves many functions. It is intended, among other things, to inform the parties of
the reason or reasons for the decision so that if any of them appeals, he can point
out to the appellate court the finding of facts or the rulings on points of law with
which he disagrees. More than that, the requirement is an assurance to the parties
that, in reaching judgment, the judge did so through the processes of legal
reasoning. x x x."

Indeed, elementary due process demands that the parties to a litigation be given
information on how the case was decided, as well as an explanation of the factual and
legal reasons that led to the conclusions of the court.92

In Madrid v. Court of Appeals,93 this Court had instructed magistrates to exert effort to
ensure that their decisions would present a comprehensive analysis or account of the
factual and legal findings that would substantially address the issues raised by the parties.

In the present case, it is starkly obvious that the assailed Decision contains no statement
of facts -- much less an assessment or analysis thereof -- or of the court’s findings as to
the probable facts. The assailed Decision begins with a statement of the nature of the
action and the question or issue presented. Then follows a brief explanation of the
constitutional provisions involved, and what the Petition sought to achieve. Thereafter,
the ensuing procedural incidents before the trial court are tracked. The Decision proceeds
to a full-length opinion on the nature and the extent of the separation of church and state.
Without expressly stating the final conclusion she has reached or specifying the relief
granted or denied, the trial judge ends her "Decision" with the clause "SO ORDERED."

What were the antecedents that necessitated the filing of the Petition? What exactly were
the distinct facts that gave rise to the question sought to be resolved by SJS? More
important, what were the factual findings and analysis on which the trial court based its
legal findings and conclusions? None were stated or implied. Indeed, the RTC’s Decision
cannot be upheld for its failure to express clearly and distinctly the facts on which it was
based. Thus, the trial court clearly transgressed the constitutional directive.

The significance of factual findings lies in the value of the decision as a precedent. How
can it be so if one cannot apply the ruling to similar circumstances, simply because such
circumstances are unknown? Otherwise stated, how will the ruling be applied in the
future, if there is no point of factual comparison?
Moreover, the court a quo did not include a resolutory or dispositive portion in its so-
called Decision. The importance of such portion was explained in the early case
Manalang v. Tuason de Rickards,94 from which we quote:

"The resolution of the Court on a given issue as embodied in the dispositive part
of the decision or order is the investitive or controlling factor that determines and
settles the rights of the parties and the questions presented therein,
notwithstanding the existence of statements or declaration in the body of said
order that may be confusing."

The assailed Decision in the present case leaves us in the dark as to its final resolution of
the Petition. To recall, the original Petition was for declaratory relief. So, what relief did
the trial court grant or deny? What rights of the parties did it conclusively declare? Its
final statement says, "SO ORDERED." But what exactly did the court order? It had the
temerity to label its issuance a "Decision," when nothing was in fact decided.

Respondent SJS insists that the dispositive portion can be found in the body of the
assailed Decision. It claims that the issue is disposed of and the Petition finally resolved
by the statement of the trial court found on page 10 of its 14-page Decision, which reads:
"Endorsement of specific candidates in an election to any public office is a clear violation
of the separation clause."95

We cannot agree.

In Magdalena Estate, Inc. v. Caluag,96 the obligation of the party imposed by the Court
was allegedly contained in the text of the original Decision. The Court, however, held:

"x x x The quoted finding of the lower court cannot supply deficiencies in the
dispositive portion. It is a mere opinion of the court and the rule is settled that
where there is a conflict between the dispositive part and the opinion, the former
must prevail over the latter on the theory that the dispositive portion is the final
order while the opinion is merely a statement ordering nothing." (Italics in the
original)

Thus, the dispositive portion cannot be deemed to be the statement quoted by SJS and
embedded in the last paragraph of page 10 of the assailed 14-page Decision. If at all, that
statement is merely an answer to a hypothetical legal question and just a part of the
opinion of the trial court. It does not conclusively declare the rights (or obligations) of the
parties to the Petition. Neither does it grant any -- much less, the proper -- relief under the
circumstances, as required of a dispositive portion.

Failure to comply with the constitutional injunction is a grave abuse of discretion

amounting to lack or excess of jurisdiction. Decisions or orders issued in careless
disregard of the constitutional mandate are a patent nullity and must be struck down as
void.97

Parts of a Decision

In general, the essential parts of a good decision consist of the following: (1) statement of
the case; (2) statement of facts; (3) issues or assignment of errors; (4) court ruling, in
which each issue is, as a rule, separately considered and resolved; and, finally, (5)
dispositive portion. The ponente may also opt to include an introduction or a prologue as
well as an epilogue, especially in cases in which controversial or novel issues are
involved.98
An introduction may consist of a concise but comprehensive statement of the principal
factual or legal issue/s of the case. In some cases -- particularly those concerning public
interest; or involving complicated commercial, scientific, technical or otherwise rare
subject matters -- a longer introduction or prologue may serve to acquaint readers with
the specific nature of the controversy and the issues involved. An epilogue may be a
summation of the important principles applied to the resolution of the issues of
paramount public interest or significance. It may also lay down an enduring philosophy
of law or guiding principle.

Let us now, again for the guidance of the bench and the bar, discuss the essential parts of
a good decision.

1. Statement of the Case

The Statement of the Case consists of a legal definition of the nature of the action. At the
first instance, this part states whether the action is a civil case for collection, ejectment,
quieting of title, foreclosure of mortgage, and so on; or, if it is a criminal case, this part
describes the specific charge -- quoted usually from the accusatory portion of the
information -- and the plea of the accused. Also mentioned here are whether the case is
being decided on appeal or on a petition for certiorari, the court of origin, the case
number in the trial court, and the dispositive portion of the assailed decision.

In a criminal case, the verbatim reproduction of the criminal information serves as a

guide in determining the nature and the gravity of the offense for which the accused may
be found culpable. As a rule, the accused cannot be convicted of a crime different from or
graver than that charged.

Also, quoting verbatim the text of the information is especially important when there is a
question on the sufficiency of the charge, or on whether qualifying and modifying
circumstances have been adequately alleged therein.

To ensure that due process is accorded, it is important to give a short description of the
proceedings regarding the plea of the accused. Absence of an arraignment, or a serious
irregularity therein, may render the judgment void, and further consideration by the
appellate court would be futile. In some instances, especially in appealed cases, it would
also be useful to mention the fact of the appellants’ detention, in order to dispose of the
preliminary query -- whether or not they have abandoned their appeal by absconding or
jumping bail.

Mentioning the court of origin and the case number originally assigned helps in
facilitating the consolidation of the records of the case in both the trial and the appellate
courts, after entry of final judgment.

Finally, the reproduction of the decretal portion of the assailed decision informs the
reader of how the appealed case was decided by the court a quo.

2. Statement of Facts

There are different ways of relating the facts of the case. First, under the objective or
reportorial method, the judge summarizes -- without comment -- the testimony of each
witness and the contents of each exhibit. Second, under the synthesis method, the factual
theory of the plaintiff or prosecution and then that of the defendant or defense is
summarized according to the judge’s best light. Third, in the subjective method, the
version of the facts accepted by the judge is simply narrated without explaining what the
parties’ versions are. Finally, through a combination of objective and subjective means,
the testimony of each witness is reported and the judge then formulates his or her own
version of the facts.

In criminal cases, it is better to present both the version of the prosecution and that of the
defense, in the interest of fairness and due process. A detailed evaluation of the
contentions of the parties must follow. The resolution of most criminal cases, unlike civil
and other cases, depends to a large extent on the factual issues and the appreciation of the
evidence. The plausibility or the implausibility of each version can sometimes be initially
drawn from a reading of the facts. Thereafter, the bases of the court in arriving at its
findings and conclusions should be explained.

On appeal, the fact that the assailed decision of the lower court fully, intelligently and
correctly resolved all factual and legal issues involved may partly explain why the
reviewing court finds no reason to reverse the findings and conclusions of the former.
Conversely, the lower court’s patent misappreciation of the facts or misapplication of the
law would aid in a better understanding of why its ruling is reversed or modified.

In appealed civil cases, the opposing sets of facts no longer need to be presented. Issues
for resolution usually involve questions of law, grave abuse of discretion, or want of
jurisdiction; hence, the facts of the case are often undisputed by the parties. With few
exceptions, factual issues are not entertained in non-criminal cases. Consequently, the
narration of facts by the lower court, if exhaustive and clear, may be reproduced;
otherwise, the material factual antecedents should be restated in the words of the
reviewing magistrate.

In addition, the reasoning of the lower court or body whose decision is under review
should be laid out, in order that the parties may clearly understand why the lower court
ruled in a certain way, and why the reviewing court either finds no reason to reverse it or
concludes otherwise.

3. Issues or Assignment of Errors

Both factual and legal issues should be stated. On appeal, the assignment of errors, as
mentioned in the appellant’s brief, may be reproduced in toto and tackled seriatim, so as
to avoid motions for reconsideration of the final decision on the ground that the court
failed to consider all assigned errors that could affect the outcome of the case. But when
the appellant presents repetitive issues or when the assigned errors do not strike at the
main issue, these may be restated in clearer and more coherent terms.

Though not specifically questioned by the parties, additional issues may also be included,
if deemed important for substantial justice to be rendered. Note that appealed criminal
cases are given de novo review, in contrast to noncriminal cases in which the reviewing
court is generally limited to issues specifically raised in the appeal. The few exceptions
are errors of jurisdiction; questions not raised but necessary in arriving at a just decision
on the case; or unassigned errors that are closely related to those properly assigned, or
upon which depends the determination of the question properly raised.

4. The Court’s Ruling

This part contains a full discussion of the specific errors or issues raised in the complaint,
petition or appeal, as the case may be; as well as of other issues the court deems essential
to a just disposition of the case. Where there are several issues, each one of them should
be separately addressed, as much as practicable. The respective contentions of the parties
should also be mentioned here. When procedural questions are raised in addition to
substantive ones, it is better to resolve the former preliminarily.
5. The Disposition or Dispositive Portion

In a criminal case, the disposition should include a finding of innocence or guilt, the
specific crime committed, the penalty imposed, the participation of the accused, the
modifying circumstances if any, and the civil liability and costs. In case an acquittal is
decreed, the court must order the immediate release of the accused, if detained, (unless
they are being held for another cause) and order the director of the Bureau of Corrections
(or wherever the accused is detained) to report, within a maximum of ten (10) days from
notice, the exact date when the accused were set free.

In a civil case as well as in a special civil action, the disposition should state whether the
complaint or petition is granted or denied, the specific relief granted, and the costs. The
following test of completeness may be applied. First, the parties should know their rights
and obligations. Second, they should know how to execute the decision under alternative
contingencies. Third, there should be no need for further proceedings to dispose of the
issues. Fourth, the case should be terminated by according the proper relief. The "proper
relief" usually depends upon what the parties seek in their pleadings. It may declare their
rights and duties, command the performance of positive prestations, or order them to
abstain from specific acts. The disposition must also adjudicate costs.

The foregoing parts need not always be discussed in sequence. But they should all be
present and plainly identifiable in the decision. Depending on the writer’s character,
genre and style, the language should be fresh and free-flowing, not necessarily
stereotyped or in a fixed form; much less highfalutin, hackneyed and pretentious. At all
times, however, the decision must be clear, concise, complete and correct.

Second Substantive Issue:

Religious Leaders’ Endorsement

of Candidates for Public Office

The basic question posed in the SJS Petition -- WHETHER ENDORSEMENTS OF

CANDIDACIES BY RELIGIOUS LEADERS IS UNCONSTITUTIONAL --
undoubtedly deserves serious consideration. As stated earlier, the Court deems this
constitutional issue to be of paramount interest to the Filipino citizenry, for it concerns
the governance of our country and its people. Thus, despite the obvious procedural
transgressions by both SJS and the trial court, this Court still called for Oral Argument,
so as not to leave any doubt that there might be room to entertain and dispose of the SJS
Petition on the merits.

Counsel for SJS has utterly failed, however, to convince the Court that there are enough
factual and legal bases to resolve the paramount issue. On the other hand, the Office of
the Solicitor General has sided with petitioner insofar as there are no facts supporting the
SJS Petition and the assailed Decision.

We reiterate that the said Petition failed to state directly the ultimate facts that it relied
upon for its claim. During the Oral Argument, counsel for SJS candidly admitted that
there were no factual allegations in its Petition for Declaratory Relief. Neither were there
factual findings in the assailed Decision. At best, SJS merely asked the trial court to
answer a hypothetical question. In effect, it merely sought an advisory opinion, the
rendition of which was beyond the court’s constitutional mandate and jurisdiction.99

Indeed, the assailed Decision was rendered in clear violation of the Constitution, because
it made no findings of facts and final disposition. Hence, it is void and deemed legally
inexistent. Consequently, there is nothing for this Court to review, affirm, reverse or even
just modify.

Regrettably, it is not legally possible for the Court to take up, on the merits, the
paramount question involving a constitutional principle. It is a time-honored rule that "the
constitutionality of a statute [or act] will be passed upon only if, and to the extent that, it
is directly and necessarily involved in a justiciable controversy and is essential to the
protection of the rights of the parties concerned."100

WHEREFORE, the Petition for Review of Brother Mike Velarde is GRANTED. The
assailed June 12, 2003 Decision and July 29, 2003 Order of the Regional Trial Court of
Manila (Branch 49) are hereby DECLARED NULL AND VOID and thus SET ASIDE.
The SJS Petition for Declaratory Relief is DISMISSED for failure to state a cause of
action.

Let a copy of this Decision be furnished the Office of the Court Administrator to evaluate
and recommend whether the trial judge may, after observing due process, be held
administratively liable for rendering a decision violative of the Constitution, the Rules of
Court and relevant circulars of this Court. No costs.

SO ORDERED.
G.R. No. 160465 April 28, 2004

ROMEO M. ESTRELLA, petitioners,

vs.
COMMISSION ON ELECTIONS, HON. COMMISSIONER RALPH C. LANTION
and ROLANDO F. SALVADOR, respondents.

RESOLUTION

CARPIO MORALES, J.:

Before this Court is a petition for certiorari under Rule 64 seeking to set aside and nullify
the November 5, 2003 Status Quo Ante Order1 issued by the Commission on Elections
(COMELEC) En Banc in EAC No. A-10-2002, "Romeo F. Estrella v. Rolando F.
Salvador."

Romeo M. Estrella (petitioner) and Rolando F. Salvador (respondent) were mayoralty

candidates in Baliuag, Bulacan during the May 14, 2001 Elections.

The Municipal Board of Canvassers proclaimed respondent as winner. Petitioner

thereafter filed before the Regional Trial Court (RTC) of Bulacan an election protest,
docketed as EPC No. 10-M-2001, which was raffled to Branch 10 thereof.2

By Decision of April 10, 2002, the RTC annulled respondent’s proclamation and declared
petitioner as the duly elected mayor of Baliuag.3

Respondent appealed the RTC decision to the COMELEC where it was docketed as EAC
No. A-10-2002, and raffled to the second Division thereof, while petitioner filed before
the RTC a motion for execution of the decision pending appeal.4

The RTC, by Order of April 16, 2002, granted petitioner’s motion for execution pending
appeal and accordingly issued a writ of execution.5

Respondent thus assailed the April 16, 2002 Order of the RTC via petition for certiorari
filed on April 24, 2002 before the COMELEC where it was docketed as SPR No. 21-
2002, and raffled also to the Second Division thereof.6

Petitioner later moved for the inhibition7 of Commissioner Ralph C. Lantion, a member
of the COMELEC Second Division.

On May 30, 2002, the COMELEC Second Division issued a Status Quo Ante Order,8

By Order of July 9, 2002, the motion for inhibition of Commissioner Lantion was denied
by the COMELEC Second Division.

On July 11, 2002, petitioner filed before this Court a petition for certiorari questioning
the COMELEC Second Division May 20, 2002 Status Quo Ante Order, which petition
was supplemented on July 30, 2002. The petition was docketed by this Court as G.R. No.
154041.

As no temporary restraining order was issued by this Court, the May 30, 2002 Status Quo
Ante Order of the COMELEC Second Division was implemented on or about July 17,
2003, resulting in the ouster of petitioner from the mayoral post.
In the meantime, during the July 23, 2002 hearing of SPR No. 21-2002, COMELEC
Commissioner Lantion inhibited himself.9 Commissioner Ressureccion Z. Borra was, by
Order of August 25, 2002,10 thus designated in place of Commissioner Lantion.

During the pendency of G.R. No. 154041 before this Court, the COMELEC Second
Division, by Order of January 16, 2003, nullified in SPR No. 21-2002 the writ of
execution11 issued by the RTC. Respondent filed a Motion for Reconsideration of the said
Order which motion was duly certified to the COMELEC En Banc.

On September 16, 2003, this Court, by Resolution on even date, dismissed G.R. No.
154041 on the grounds that 1) the case had become moot and academic because of the
COMELEC Second Division’s resolution on the merits of SPR No. 21-2002, and (2) this
Court has no jurisdiction over Division orders or rulings of the COMELEC.

On October 15, 2003, the COMELEC Second Division, issued in EAC No. A-10-2002
an Order12 adopting the order of substitution in SPR No. 21-2002 dated August 25, 2002
designating Commissioner Borra as substitute member thereof.

On October 20, 2003, the COMELEC Second Division issued in EAC No. A-10-2002 a
Resolution13 affirming with modifications the RTC decision and declaring petitioner as
the duly elected mayor. On even date, respondent moved to reconsider14 the said October
20, 2003 Order.

Petitioner, in the meantime, filed on October 22, 2003 a motion for immediate
execution15 of the COMELEC Second Division October 20, 2003 Resolution, which was
set for hearing on October 28, 2003 but reset to November 4, 2003.

On October 29, 2003, respondent filed before the COMELEC Second Division a "very
urgent motion to consider the instant case certified to the Commission en banc."16

Respondent later filed on November 3, 2003 a "very urgent manifestation and motion to
suspend proceedings."17

Hearing of the incidents in EAC No. A-10-2002 was conducted on November 4, 2003.
The following day or on November 5, 2003, the COMELEC Second Division issued an
Order18 denying respondent’s plea for suspension of proceedings and granting
petitioner’s motion for execution pending appeal and accordingly directing the issuance
of a writ of execution. On even date, the COMELEC En Banc issued the questioned
November 5, 2003 Status Quo Ante Order. Five (5) members including Commissioner
Lantion participated in this November 5, 2003 Order wherein Commissioner Lantion
stated that "his previous voluntary inhibition is only in the SPR cases and not in the
EAC" and "as further agreed in the Second Division, [he] will not participate in the
Division deliberations but will vote when the case is elevated [to the] en banc." Of the
five Commissioners, Commissioner Borra dissented.

Hence, the present petition, alleging as follows:

I. THE NOV. 5 STATUS QUO ANTE ORDER IS NULL AND VOID FOR WANT OF
CONSTITUTIONAL AND STATUTORY AUTHORITY OF THE COMELEC TO
ISSUE SUCH AND ORDER.

II. THE COMELEC EN BANC PALPABLY ACTED WITHOUT JURISDICTION

AND IN FLAGRANT BREACH OF INTER-COLLEGIAL COMITY WHEN IT
ISSUED THE NOV. 5 ORDER CONSIDERING THAT EAC NO. A-10-2002 IS STILL
UNDER THE PRIMARY AND CONTINUING JURISDICTION OF THE SPECIAL
SECOND DIVISION WHICH HAS YET TO FULLY DISPOSE OF ESTRELLA’S
TIMELY FILED MOTION FOR IMMEDIATE EXECUTION.

III. DUE TO HIS PREVIOUS VOLUNTARY INHIBITION IN A RELATED CASE,

SPR NO. 21-2002 AND AT THE DIVISION LEVEL IN THE SAME CASE, EAC NO.
A-10-2002, COMMISSIONER LANTION’S VOTE IN THE ASSAILED ORDER
SHOULD BE DISREGARDED AND CANCELLED. THE EN BANC’S NOV. 5
ORDER IS THUS INVALID FOR FURTHER REASON THAT IT IS NOT
SUPPORTED BY THE REQUIRED MAJORITY VOTE.

IV. THE COMELEC EN BANC ALSO ACTED ARBITRARILY AND IN MANIFEST

GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK AND/OR EXCESS OF
JURISDICTION WHEN IT PREVENTED THE ENFORCEMENT OF THE
DIVISION’S ORDER OF EXECUTION THE ISSUANCE OF WHICH IS LEGALLY
JUSTIFIED UNDER THE APPLICABLE CASE PRECEDENTS AND WARRANTED
UNDER THE SPECIFIC FACTS AND CIRCUMSTANCES OF THE CASE.

V. THE COMELEC EN BANC GROSSLY VIOLATED ESTRELLA’S RIGHT TO

EQUAL PROTECTION OF THE LAWS AND EQUAL OR FAIR TREATMENT
WHEN IT IGNORED ITS OWN CASE PRECEDENTS AND PRACTICE. IN STARK
CONTRAST TO WHAT IT DID IN THIS CASE, THE EN BANC HAD PREVIOUSLY
ALLOWED THE FIRST DIVISION, IN AT LEAST TWO RECENT CASES (EPC NO.
2001-19 AND EAC NO. A-4-20030 TO RESOLVE TIMELY FILED MOTION FOR
EXECUTION PENDING RECONSIDERATION AND GAVE SAID DIVISION A
FREE HAND AT FULLY DISPOSING OF SAID INCIDENTS.

Petitioner argues that Commissioner Lantion’s vote in the assailed order should be
disregarded because of his previous inhibition in a similar case and in the same case in
the Division level, thus making said assailed order null and void as it was not concurred
by the required majority.

Petitioner’s argument is meritorious.

Commissioner Lantion’s voluntary piecemeal inhibition cannot be countenanced.

Nowhere in the COMELEC Rules does it allow a Commissioner to voluntarily inhibit
with reservation. To allow him to participate in the En Banc proceedings when he
previously inhibited himself in the Division is, absent any satisfactory justification, not
only judicially unethical but legally improper and absurd.

Since Commissioner Lantion could not participate and vote in the issuance of the
questioned order, thus leaving three (3) members concurring therewith, the necessary
votes of four (4) or majority of the members of the COMELEC was not attained. The
order thus failed to comply with the number of votes necessary for the pronouncement of
a decision or order, as required under Rule 3, Section 5(a) of the COMELEC Rules of
Procedure which provides:

Section 5. Quorum; Votes Required. – (a) When sitting en banc, four (4)
Members of the Commission shall constitute a quorum for the purpose of
transacting business. The concurrence of a majority of the Members of the
Commission shall be necessary for the pronouncement of a decision,
resolution, order or ruling.

WHEREFORE, the instant petition is GRANTED. The Status Quo Ante Order dated
November 5, 2003 issued by the COMELEC En Banc is hereby NULLIFIED. This
Resolution is IMMEDIATELY EXECUTORY.
SO ORDERED.
G.R. No. 161418 April 28, 2004

NOEL Y. REPOL, petitioner,

vs.
COMMISSION ON ELECTIONS and VIOLETO CERACAS, respondents.

DECISION

CARPIO, J.:

The Case

Petitioner Noel Y. Repol ("Repol") filed this Petition for Certiorari1 on 21 January 2004
alleging that the Commission on Elections ("COMELEC") First Division2 committed
grave abuse of discretion in issuing the Order dated 12 January 2004 ("Order") in SPR
Case No. 1-2004. The Order directed "the parties to maintain the STATUS QUO ANTE,
which is the condition prevailing before the issuance and implementation of the
questioned Order of the court a quo dated January 5, 2004 in Election Case No. T-001
entitled, ‘Noel Y. Repol versus Violeto Ceracas.’"

The Facts

Repol and private respondent Violeto Ceracas ("Ceracas") were candidates for Municipal
Mayor of Pagsanghan, Samar in the 14 May 2001 elections. On 16 May 2001, Ceracas
was proclaimed as the duly elected mayor with 66 votes more than Repol.

On 23 May 2001, Repol filed an election protest before the Regional Trial Court of
Tarangnan, Samar, Branch 40 ("trial court"), docketed as Election Case No. T-001.
Claiming that fraud and other irregularities marred the elections in Precincts 3A, 5A and
71, Repol prayed for revision of the ballots in these precincts. Judge Francisco Mazo
dismissed the election protest on 28 August 2001. On certiorari, the COMELEC First
Division reversed the dismissal order of Judge Mazo in a Resolution dated 22 May 2002
"for being issued with grave abuse of discretion tantamount to lack of jurisdiction." The
COMELEC First Division directed the trial court "to reinstate the subject election protest,
conduct the revision of ballots from the protested precincts and render its Decision with
immediate dispatch." On 18 September 2003, the COMELEC en banc denied Ceracas’s
motion to reconsider the Resolution dated 22 May 2002. The COMELEC en banc
affirmed in toto the reinstatement of Repol’s election protest. This time around, trial and
revision of the ballots ensued with Judge Roberto A. Navidad presiding.

On 30 December 2003, the trial court declared Ceracas’s proclamation void and
proclaimed Repol the duly elected mayor of Pagsanghan, Samar. The trial court
explained thus:

After a very careful study and meticulous and painstaking appraisal of the
contested ballots, the Court finds and so holds that the cheating and commission
of various frauds and irregularities in these three contested precincts was massive,
used many people to fill up the ballots – including the voters, connivance with
those perpetrating the fraud and the members of the Board of Election Inspectors,
the perpetrators of the fraud enjoyed the luxury of time to perpetrate the fraud and
filling the ballots, that filling up of some of the ballots was done outside of the
voting booth and it is not difficult to finally find the answers to the questions of
the Protestant as to wherever and whatever happened to the 24 excess ballots it
noted in precinct 3A (Barangay Canlapwas) and 21 excess ballots in precinct 5A
(Brgy. Sto. Ninio).
From the foregoing peculiar facts and circumstances it is clearly evident that the
electoral fraud was perpetrated by the use of some ballots as shuttles [lanzadera],
by which device, the ballots of the voters who are not skilled in the act of writing
or whose fidelity to party is in doubt is illegally written out for them by others.

It is likewise not hard to find the answers why the sisters in law of the Protestee
were illegally at the table of the BEI Chairman controlling the voting process and
even angrily and at the top of their voices demanding that some voters be allowed
to vote as illiterates even though there were no proper identifications and
indications that indeed they were illiterates. Or why the Minutes of Voting in
precinct 5A is not the printed one. It only means that there was something to hide.

After a very careful study, meticulous and painstaking appraisal of the ballots the
Court finds that the handwriting of one person in some of the ballots in one
precinct are also found in the other two precincts.

Thus, the handwriting in the ballots in Exhibits 1, 12, 24, 27, 37, 38, 39, 40, 41,
42, 43, 44, 45, 46, 47, 51, 53 all in Precinct 3A (Canlapwas) is the same
handwriting as in the ballots in Exhs. 3, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33,
38, 39, 40, 56, 57, 58, 59 all in Precinct 5A (Sto. Ninio) and is also the same
handwriting in the ballots in Exhs. 3, 12, 13, 14, 25, 30, 36, 38, 41, 44, 49, 51, 52
all in Precinct 7A (Buenos Aires).

The handwriting in the ballots in Exhs. 3, 6, 8, 9, 10, 13, 16, 19, 21, 22, 23, 26 all
of Precinct 3A (Canlapwas) is the same handwriting in the ballots in Exhs. 12, 34,
35, 37, 43, 44, 45, 49, 50, 51, 52, 53, 54, 55, 60, 61, 64, 65, 68, 69, 70, 71 all
precinct 5A (Sto. Ninio) is the same handwriting in the ballots in Exhs. 10, 26, 27,
28, 29, 36, 61, 62, 65, 66, 67 all of precinct 7A (Buenos Aires).

Likewise, the other handwriting in the ballots in Exhs. 4, 48, 60, 61, 64 and 65 all
in precinct 3A (Canlapwas) is the same handwriting in the ballots in Exhs. 14, 15,
16, 17, 18, 19, 20, 21, 22 all in precinct 5A (Sto. Ninio) is the same handwriting
in the ballots in Exhs. 40, and 47 all in precinct 7A (Buenos Aires).

Likewise, the handwriting in the ballots in Exhs. 11, 8, 20, 30 all of Precinct 3A
(Canlapwas) is the same handwriting in the ballots in Exhs. 46, 47, 48, 63 all in
precinct 5A (Sto. Ninio).

In like manner, the handwriting in the ballots in Exhs. 2, 7, 14, 35, 36 all in
precinct 3A (Canlapwas) is the same handwriting in the ballots in Exhs. 6, 7, 36,
all in precinct 5A (Sto. Ninio).

All these ballots should not be counted in favor of the Protestee.

Further, the following ballots are marked for their being written with or
unnecessary decorations serving to easily identify his vote. Accordingly, they
should not be counted in favor of the protestee. These ballots are:

1. Exhibits 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13 all of Precinct 5A (Sto.

Ninio) and

2. Exhs. 1, 2 and 3 all of precinct 7A (Buenos Aires).

Clearly, the will of the electorate was fraudulently substituted by the will of the
perpetrators of the fraud.
 All in all a total of 142 votes had been illegally counted in favor of the Protestee.
Deducting 66 from 142 we get a total of 76. In other words, the Protestant
garnered a majority of 76 votes over that of the protestee.3

In light of these findings, the trial court rendered judgment as follows:

WHEREFORE, and in view of the foregoing, judgment is hereby rendered

DECLARING as null and void the proclamation of the Protestee and instead
hereby PROCLAIM AND DECLARE, NOEL Y. REPOL, the duly elected Mayor
of Pagsanghan, Samar in the May 2001 elections with a majority of 77 votes.4

Repol filed before the trial court a motion for execution pending appeal. On 5 January
2004, the trial court granted Repol’s motion and issued a writ of execution. Meanwhile,
Ceracas appealed the trial court’s judgment to the COMELEC.

On 6 January 2004, Repol took his oath of office as the duly elected mayor of
Pagsanghan, Samar. On the same date, Ceracas filed before the trial court an omnibus
motion to reconsider, set aside and quash the writ of execution.

During the pendency of Ceracas’s appeal with the COMELEC and without waiting for
the trial court to resolve his omnibus motion, Ceracas filed with the COMELEC a
Petition for Certiorari (with prayer for temporary restraining order, writ of preliminary
injunction and/or status quo ante) assailing the writ of execution, docketed as SPR No. 1-
2004.5 On 12 January 2004, the COMELEC First Division issued the assailed Order
directing the parties to maintain the status quo ante. The Order reads in part:

Acting on the Petition for Certiorari with Prayer for the issuance of Temporary
Restraining Order, Writ of Preliminary Injunction and/or Status Quo Ante Order
filed by Petitioner Violeto Ceracas through counsel on January 8, 2004, the
Commission (First Division) hereby directs respondents to file their Answer
within ten (10) days from receipt hereof.

The application for the Writ of Preliminary Injunction shall be heard on January
29, 2004 at ten o’clock in the morning at the Comelec Session Hall, Intramuros,
Manila.

In the interest of justice and so as not to render the issues moot and academic, the
Comelec (First Division) hereby directs the parties to maintain the STATUS QUO
ANTE, which is the condition prevailing before the issuance and implementation
of the questioned Order of the court a quo dated January 5, 2004 in Election Case
No. T-001, entitled, "Noel Y. Repol versus Violeto Ceracas".

Accordingly, effective immediately, private respondent Noel Repol, is hereby

ordered to cease and desist from assuming the duties and functions of
Municipal Mayor of Pagsanghan, Western Samar until further orders from
this Commission. In the meantime, petitioner Violeto Ceracas shall assume
the post of Municipal Mayor of Pagsanghan, Western Samar.

The Provincial Election Supervisor of Samar and the Provincial Director of the
Philippine National Police (PNP), Catbalogan, Samar, are hereby directed to
immediately implement this Order and make a return of service within five (5)
days from the implementation thereof.

The Clerk of Commission is hereby directed to serve a copy of this Order together
with a copy of the Petition to each of the respondents.6 (Emphasis supplied)
At the scheduled hearing on 29 January 2004, the COMELEC First Division issued an
order which reads in full:

In today’s hearing of the application for a Writ of Preliminary Injunction prayed

for in the above entitled petition, Atty. Sixto S. Brillantes appeared for the
petitioner, while Attys. Baltazar Y. Repol and Farah D. Repol appeared for the
private respondent.

Both parties argued on their respective legal positions.

In view of the pendency of the petition for certiorari filed by private respondent
with the Supreme Court questioning the status quo ante issued on January 12,
2004, both parties are hereby given five (5) days from today or until February 3,
2004 to file their respective memoranda on the issue of whether this Commission
can resolve on the Application for a Writ of Preliminary Injunction despite the
pendency of the said petition. Parties may likewise include in their memoranda
authorities and arguments on the life span of a status quo ante Order issued by the
Commission. Thereafter, with or without the said memoranda, the said issue shall
be deemed submitted for resolution.

SO ORDERED.

Hence, the instant petition.

The Issues

Repol raises the sole issue of –

WHETHER THE COMELEC IS EMPOWERED UNDER ANY STATUTE,

RULE, OR JURISPRUDENCE TO ISSUE A STATUS QUO ANTE IN EFFECT
OVERTURNING THE EFFECTIVE ENFORCEMENT OF THE WRIT OF
EXECUTION ISSUED BY THE TRIAL COURT AND SUSPENDING
INDEFINITELY, WITHOUT PRIOR NOTICE AND HEARING, THE
IMPLEMENTATION OF SUCH WRIT.7

Repol argues that the COMELEC First Division acted with grave abuse of discretion in
issuing the status quo ante Order which indefinitely suspended and effectively nullified
the trial court’s writ of execution. Repol contends that the COMELEC First Division has
no authority to issue the Order after the trial court found the election in the protested
precincts marred by fraud and after the trial court considered meritorious the grounds
cited by Repol in his motion for execution pending appeal. According to Repol, the law,
rule and jurisprudence limit the COMELEC’s power to issue temporary restraining orders
to a non-extendible period of 20 days from the date of issuance.

Ceracas agrees with Repol that the rules do not expressly grant to the COMELEC the
power to issue status quo ante orders. However, Ceracas argues that the COMELEC’s
power to issue temporary restraining orders and preliminary injunctions necessarily
includes the power to issue status quo ante orders.

On the other hand, the Office of the Solicitor General (OSG) appearing on behalf of the
COMELEC, prays that the Court dismiss the instant petition. The OSG asserts that Repol
cannot challenge before this Court by way of a petition for certiorari an interlocutory
order issued by a COMELEC Division without first filing a motion for reconsideration
with the COMELEC en banc.

The Court’s Ruling

The petition is meritorious.

Remedy to Assail Interlocutory Orders of the COMELEC in Division

Where the COMELEC in division allegedly committed grave abuse of discretion or acted
without or in excess of jurisdiction in issuing an interlocutory order, the applicable rule is
Section 5(c), Rule 3 of the 1993 COMELEC Rules of Procedure, which states-

Section 5. Quorum; Votes Required. –

(a) x x x.

(b) x x x.

(c) Any motion to reconsider a decision, resolution, order or ruling of a

Division shall be resolved by the Commission en banc except motions on
interlocutory orders of the division, which shall be resolved by the
division which issued the order. (Emphasis supplied)

The 12 January 2004 Order did not dispose of the case completely as there is something
more to be done. Interlocutory orders merely rule on an incidental issue and do not
terminate or finally dispose of the case as they leave something to be done before it is
finally decided on the merits.8 Since the COMELEC First Division issued the
interlocutory Order of 12 January 2004, the same COMELEC First Division should
resolve Repol’s motion for reconsideration of the Order. The remedy of the aggrieved
party is neither to file a motion for reconsideration for certification to the COMELEC en
banc nor to elevate the issue to this Court via a petition for certiorari under Rule 65 of the
Rules of Civil Procedure.

Section 5, Rule 19 of the 1993 COMELEC Rules of Procedure governs motions for
reconsideration of decisions of a COMELEC Division, as follows:

SEC. 5. How Motion for Reconsideration Disposed of. - Upon the filing of a
motion to reconsider a decision, resolution, order or ruling of a Division, the
Clerk of Court concerned shall, within twenty-four (24) hours from the filing
thereof, notify the presiding Commissioner. The latter shall within two (2) days
thereafter certify the case to the Commission en banc.

In Gementiza v. Commission on Elections,9 the Court explained the import of this rule in
this wise:

Under the above-quoted rule, the acts of a Division that are subject of a motion
for reconsideration must have a character of finality before the same can be
elevated to the COMELEC en banc. The elementary rule is that an order is final
in nature if it completely disposes of the entire case. But if there is something
more to be done in the case after its issuance, that order is interlocutory.

Only final orders of the COMELEC in Division may be raised before the COMELEC en
banc. Section 3, Article IX-C of the 1987 Constitution mandates that only motions for
reconsideration of final decisions shall be decided by the COMELEC en banc, thus:

SEC. 3. The Commission on Elections may sit en banc or in two divisions, and
shall promulgate its rules of procedure in order to expedite disposition of election
cases, including pre-proclamation controversies. All such election cases shall be
heard and decided in Division, provided that motions for reconsideration of
decisions shall be decided by the Commission en banc. (Emphasis supplied)
Under this constitutional provision, the COMELEC en banc shall decide motions for
reconsideration only of "decisions" of a Division, meaning those acts having a final
character.10 Clearly, the assailed status quo ante Order, being interlocutory, should first
be resolved by the COMELEC First Division via a motion for reconsideration.

Furthermore, the present controversy does not fall under any of the instances over which
the COMELEC en banc can take cognizance of the case. Section 2, Rule 3 of the 1993
COMELEC Rules of Procedure provides:

SEC. 2. The Commission En Banc. – The Commission shall sit en banc in cases
hereinafter specifically provided, or in pre-proclamation cases upon a vote of a
majority of the members of the Commission, or in all other cases where a division
is not authorized to act, or where, upon a unanimous vote of all the Members of a
Division, an interlocutory matter or issue relative to an action or proceeding
before it is decided to be referred to the Commission en banc.

The present case is not one of the cases specifically provided under the COMELEC Rules
of Procedure in which the COMELEC may sit en banc. Neither is this case one where a
division is not authorized to act nor a case where the members of the First Division
unanimously voted to refer the issue to the COMELEC en banc. Thus, the COMELEC en
banc is not even the proper forum where Repol may bring the assailed interlocutory
Order for resolution.

We held in Ambil, Jr. v. Commission on Elections11 that -

Under the existing Constitutional scheme, a party to an election case within the
jurisdiction of the COMELEC in division can not dispense with the filing of a
motion for reconsideration of a decision, resolution or final order of the Division
of the Commission on Elections because the case would not reach the Comelec en
banc without such motion for reconsideration having been filed x x x.

Repol went directly to the Supreme Court from an interlocutory order of the COMELEC
First Division. Section 7, Article IX of the 1987 Constitution prescribes the power of the
Supreme Court to review decisions of the COMELEC, as follows:

Section 7. Each commission shall decide by a majority vote of all its members
any case or matter brought before it within sixty days from the date of its
submission for decision or resolution. A case or matter is deemed submitted for
decision or resolution upon the filing of the last pleading, brief, or memorandum
required by the rules of the commission or by the commission itself. Unless
otherwise provided by this constitution or by law, any decision, order, or ruling of
each commission may be brought to the Supreme Court on certiorari by the
aggrieved party within thirty days from receipt of a copy thereof.

We have interpreted this constitutional provision to mean final orders, rulings and
decisions of the COMELEC rendered in the exercise of its adjudicatory or quasi-judicial
powers.12 The decision must be a final decision or resolution of the COMELEC en
banc.13 The Supreme Court has no power to review via certiorari14 an interlocutory order
or even a final resolution of a Division of the COMELEC. Failure to abide by this
procedural requirement constitutes a ground for dismissal of the petition.15

However, this rule is not ironclad. In ABS-CBN Broadcasting Corporation v.

COMELEC,16 we stated –

This Court, however, has ruled in the past that this procedural requirement [of
filing a motion for reconsideration] may be glossed over to prevent a miscarriage
 of justice, when the issue involves the principle of social justice or the protection
of labor, when the decision or resolution sought to be set aside is a nullity, or
when the need for relief is extremely urgent and certiorari is the only adequate
and speedy remedy available.

The Court further pointed out in ABS-CBN that an exception was warranted under the
peculiar circumstances of the case since there was hardly enough opportunity to move for
a reconsideration and to obtain a swift resolution in time for the 11 May 1998 elections.
The same can be said in Repol’s case. We rule that direct resort to this Court through a
special civil action for certiorari is justified under the circumstances obtaining in the
present case.

Validity of the Status Quo Ante Order

The main issue to be resolved in this petition is whether the COMELEC First Division
acted with grave abuse of discretion amounting to lack or excess of jurisdiction in issuing
the status quo ante Order which effectively overturned the trial court’s grant of execution
pending appeal in Repol’s favor. This issue is not mooted even if the next elections are
just a few weeks away. The holding of periodic elections is a basic feature of our
democratic government.17 To set aside the resolution of the issue now will only postpone
a task that could well crop up again in future elections.18

We rule in the affirmative.

First. Rule 30 of the 1993 COMELEC Rule of Procedure provides the metes and bounds
on the COMELEC’s power to issue injunctive relief as follows:

SECTION 1. Preliminary Injunction. - The Commission or any of its Divisions

may grant preliminary injunction in any ordinary action, special action, special
case, or special relief pending before it.

SECTION 2. Grounds for issuance of preliminary injunction. - A preliminary

injunction may be granted at any time after the commencement of an action or
proceeding and before judgment when it is established that:

(a) The petitioner or protestant is entitled to the relief demanded and the
whole or part of such relief consists in restraining the commission or
continuance of the acts complained of, or in the performance of an act or
acts, either for a limited period or perpetually.

(b) The commission or continuance of some act complained of during the

pendency of the action or the non-performance thereof would work
injustice to the petitioner or protestant.

(c) The respondent or protestee is doing, threatens, or is about to do, or is

procuring to be done, some act in violation of petitioner’s/protestant’s
rights respecting the subject of the action, and tending to render the
judgment ineffectual.

SECTION 3. Grant of injunction discretionary. - The grant of the preliminary

injunction is entirely left to the sound discretion of the Commission or its
Divisions.

SECTION 4. Bond for preliminary injunction. - No writ of preliminary injunction

shall be issued unless the applicant shall file a bond, in an amount to be fixed by
the Commission or the Division concerned, to the effect that the
 petitioner/protestant will pay to such party all damages which the latter may
sustain by reason of the injunction if the Commission or the Division concerned
shall finally decide that the petitioner/protestant was not entitled thereto.

SECTION 5. Preliminary injunction not granted without notice; issuance of

restraining order. - No preliminary injunction shall be granted without notice to
the adverse party. If it shall appear from the facts shown by affidavits or the
verified petition that great or irreparable injury would result to the applicant
before the matter can be heard on notice, the Commission or any Division to
which the application for preliminary injunction was made, may issue a
restraining order to be effective only for a period of twenty days from date of
its issuance. Within the said twenty-day period, the Commission or the Division,
as the case may be, must cause an order to be served on the respondent requiring
him to show cause, at a specified time and place, why the injunction should not be
granted, and determine within the same period whether or not the preliminary
injunction shall be granted and shall accordingly issue the corresponding order. In
the event that the application for preliminary injunction is denied, the restraining
order is deemed automatically vacated. (Emphasis supplied)

A cursory reading of the Order dated 12 January 2004 or the so-called status quo ante
Order reveals that it was actually a temporary restraining order. It ordered Repol to cease
and desist from assuming the position of municipal mayor of Pagsanghan, Samar and
directed Ceracas to assume the post in the meantime. The status quo ante Order had a life
span of more than 20 days since the directive was qualified by the phrase "until further
orders from this Commission." This violates the rule that a temporary retraining order has
an effective period of only 20 days and automatically expires upon the COMELEC’s
denial of the preliminary injunction. Thus, the status quo ante Order automatically ceased
to have any effect after 1 February 2004 since the COMELEC First Division did not issue
a writ of preliminary injunction.

While the hearing on Ceracas’s application for a writ of preliminary injunction was held
on 29 January 2004, the COMELEC First Division failed to resolve the application.
Instead, it issued an Order directing the parties to file their memoranda until 3 February
2004 on their respective positions "on the life span of status quo ante orders and whether
a writ of preliminary injunction should be granted in the case." Clearly, the COMELEC
First Division’s indecision on the matter not only worked injustice to Repol but also
failed to dispel the uncertainty beclouding the real choice of the electorate for municipal
mayor.

Second. The decision of the trial court in Election Case No. T-001 was rendered on 30
December 2003, or after almost one year of trial and revision of the questioned ballots. It
found Repol as the candidate with the plurality of votes. The grant of execution pending
appeal was well within the discretionary powers of the trial court.19 In the recent case of
Edgar Y. Santos v. Commission on Elections (First Division) and Pedro Q. Panulaya,20
we ruled:

Between the determination by the trial court of who of the candidates won the
elections and the finding of the Board of Canvassers as to whom to proclaim, it is
the court’s decision that should prevail. This was sufficiently explained in the
case of Ramas v. COMELEC in this wise:

All that was required for a valid exercise of the discretion to allow
execution pending appeal was that the immediate execution should be
based "upon good reasons to be stated in a special order." The rationale
why such execution is allowed in election cases is, as stated in Gahol v.
Riodique, "to give as much recognition to the worth of a trial judge’s
 decision as that which is initially ascribed by the law to the proclamation
by the board of canvassers." Thus:

Why should the proclamation by the board of canvassers suffice as

basis of the right to assume office, subject to future contingencies
attendant to a protest, and not the decision of a court of justice?
Indeed, when it is considered that the board of canvassers is
composed of persons who are less technically prepared to make an
accurate appreciation of the ballots, apart from their being more
apt to yield to extraneous considerations, and that the board must
act summarily, practically racing against time, while, on the other
hand, the judge has the benefit of all the evidence the parties can
offer and of admittedly better technical preparation and
background, apart from his being allowed ample time for
conscientious study and mature deliberation before rendering
judgment, one cannot but perceive the wisdom of allowing the
immediate execution of decisions in election cases adverse to the
protestees, notwithstanding the perfection and pendency of appeals
therefrom, as long as there are, in the sound discretion of the court,
good reasons therefor.

To deprive trial courts of their discretion to grant execution pending appeal

would, in the words of Tobon Uy v. COMELEC, bring back the ghost of the
"grab-the-proclamation-prolong the protest" techniques so often resorted to by
devious politicians in the past in their efforts to perpetuate their hold to an elective
office. This would, as a consequence, lay to waste the will of the electorate.

Applying Santos to this petition, we hold that the COMELEC First Division
committed grave abuse of discretion in setting aside the trial court’s order
granting execution pending appeal.

Ceracas was Guilty of Forum Shopping

We must point out that Ceracas is guilty of forum-shopping. At the time he instituted
SPR Case No. 1-2004 with the COMELEC, he had a pending omnibus motion to
reconsider, set aside and quash the writ of execution with the trial court. In addition,
Ceracas’s appeal of the trial court’s adverse decision was also pending before the
COMELEC.21 Forum shopping is an act of a party, against whom an adverse judgment or
order has been rendered in one forum, of seeking and possibly getting a favorable opinion
in another forum, other than by appeal or special civil action for certiorari.22 It may also
be the institution of two or more actions or proceedings grounded on the same cause on
the supposition that one or the other court would make a favorable disposition.23

Due to a clear showing that Ceracas was forum-shopping, the COMELEC First Division,
following our ruling in Santos,24 should have dismissed outright instead of giving due
course to Ceracas’s petition in SPR No. 1-2004.

WHEREFORE, the instant petition is GRANTED. The Order dated 12 January 2004 of
the COMELEC First Division in SPR Case No. 1-2004 is ANNULLED and said case is
ordered DISMISSED on the ground of forum-shopping. The Order dated 5 January 2004
of the Regional Trial Court of Tarangnan, Samar, Branch 40, granting the execution
pending appeal of its decision in Election Case No. T-001, and the Writ of Execution
issued pursuant thereto, are REINSTATED. The full enforcement of the said Writ must
forthwith be made.

This Decision shall be immediately executory.

G.R. No. 209330

SECRETARY LEILA DE LIMA, ASSISTANT STATE PROSECUTOR

STEWART ALLAN A. MARIANO, ASSISTANT STATE PROSECUTOR VIMAR
M. BARCELLANO and ASSISTANT STATE PROSECUTOR GERARD E.
GAERLAN, Petitioners,
vs.
MARIO JOEL T. REYES, Respondent.

DECISION

LEONEN, J.:

The Secretary of Justice has the discretion, upon motion or motu proprio, to act on any
matter that may cause a probable miscarriage of justice in the conduct of a preliminary
investigation. This action may include, but is not limited to, the conduct of a
reinvestigation. Furthermore, a petition for certiorari under Rule 65 questioning the
regularity of preliminary investigation becomes moot after the trial court completes its
determination of probable cause and issues a warrant of arrest.

This Petition for Review on Certiorari assails the Decision1 dated March 19, 2013 and
Resolution2 dated September 27, 2013 of the Court of Appeals, which rendered null and
void Department of Justice Order No. 7103 issued by the Secretary of Justice.4 The
Department Order created a second panel of prosecutors to conduct a reinvestigation of a
murder case in view of the first panel of prosecutors' failure to admit the complainant's
additional evidence.

Dr. Gerardo Ortega (Dr. Ortega), also known as "Doc Gerry," was a veterinarian and
anchor of several radio shows in Palawan. On January 24, 2011, at around 10:30 am, he
was shot dead inside the Baguio Wagwagan Ukay-ukay in San Pedro, Puerto Princesa
City, Palawan.5 After a brief chase with police officers, Marlon B. Recamata was
arrested. On the same day, he made an extrajudicial confession admitting that he shot Dr.
Ortega. He also implicated Rodolfo "Bumar" O. Edrad (Edrad), Dennis C. Aranas, and
Armando "Salbakotah" R. Noel, Jr.6

On February 6, 2011, Edrad executed a Sinumpaang Salaysay before the Counter-

Terrorism Division of the National Bureau of Investigation where he alleged that it was
former Palawan Governor Mario Joel T. Reyes (former Governor Reyes) who ordered the
killing of Dr. Ortega.7

On February 7, 2011, Secretary of Justice Leila De Lima issued Department Order No:
0918 creating a special panel of prosecutors (First Panel) to conduct preliminary
investigation. The First Panel was composed of Senior Assistant Prosecutor Edwin S.
Dayog, Assistant State Prosecutor Bryan Jacinto S. Cacha, and Assistant State Prosecutor
John Benedict D. Medina.9

On February 14, 2011, Dr. Patria Gloria Inocencio-Ortega (Dr. Inocencio-Ortega), Dr.
Ortega's wife, filed a Supplemental Affidavit-Complaint implicating former Governor
Reyes as the mastermind of her husband's murder. Former Governor Reyes' brother,
Coron Mayor Mario T. Reyes, Jr., former Marinduque Governor Jose T. Carreon, former
Provincial Administrator Atty. Romeo Seratubias, Marlon Recamata, Dennis Aranas,
Valentin Lesias, Arturo D. Regalado; Armando Noel, Rodolfo O. Edrad, and several John
and Jane Does were also implicated.10

On June 8, 2011, the First Panel concluded its preliminary investigation and issued the
Resolution11 dismissing the Affidavit-Complaint.
On June 28, 2011, Dr. Inocencio-Ortega filed a Motion to Re-Open Preliminary
Investigation, which, among others, sought the admission of mobile phone
communications between former Governor Reyes and Edrad.12 On July 7, 2011, while
the Motion to Re-Open was still pending, Dr. Inocencio-Ortega filed a Motion for Partial
Reconsideration Ad Cautelam of the Resolution dated June 8, 2011. Both Motions were
denied by the First Panel in the Resolution13 dated September 2, 2011.14

On September 7, 2011, the Secretary of Justice issued Department Order No. 710
creating a new panel of investigators (Second Panel) to conduct a reinvestigation of the
case. The Second Panel was composed of Assistant State Prosecutor Stewart Allan M.
Mariano, Assistant State Prosecutor Vimar M. Barcellano, and Assistant State Prosecutor
Gerard E. Gaerlan.

Department Order No. 710 ordered the reinvestigation of the case "in the interest of
service and due process"15 to address the offer of additional evidence denied by the First
Panel in its Resolution dated September 2, 2011. The Department Order also revoked
Department Order No. 091.16

Pursuant to Department Order No. 710, the Second Panel issued a Subpoena requiring
former Governor Reyes to appear before them on October 6 and 13, 2011 and to submit
his counter-affidavit and supporting evidence.17

On September 29, 2011, Dr. Inocencio-Ortega filed before the Secretary of Justice a
Petition for Review (Ad Cautelam) assailing the First Panel's Resolution dated September
2, 2011.18

On October 3, 2011, former Governor Reyes filed before the Court of Appeals a Petition
for Certiorari and Prohibition with Prayer for a Writ of Preliminary Injunction and/or
Temporary Restraining Order assailing the creation of the Second Panel. In his Petition,
he argued that the Secretary of Justice gravely abused her discretion when she constituted
a new panel. He also argued that the parties were already afforded due process and that
the evidence to be addressed by the reinvestigation was neither new nor material to the
case.19

On March 12, 2012, the Second Panel issued the Resolution finding probable cause and
recommending the filing of informations on all accused, including former Governor
Reyes.20 Branch 52 of the Regional Trial Court of Palawan subsequently issued warrants
of arrest on March 27, 2012.21 However, the warrants against former Governor Reyes
and his brother were ineffective since the two allegedly left the country days before the
warrants could be served.22

On March 29, 2012, former Governor Reyes filed before the Secretary of Justice a
Petition for Review Ad Cautelam23 assailing the Second Panel's Resolution dated March
12, 2012.

On April 2, 2012, he also filed before the Court of Appeals a Supplemental Petition for
Certiorari and Prohibition with Prayer for Writ of Preliminary Injunction and/or
Temporary Restraining Order impleading Branch 52 of the Regional Trial Court of
Palawan.24

In his Supplemental Petition, former Governor Reyes argued that the Regional Trial
Court could not enforce the Second Panel's Resolution dated March 12, 2012 and proceed
with the prosecution of his case since this Resolution was void.25
On March 19, 2013, the Court of Appeals, in a Special Division of Five, rendered the
Decision26 declaring Department Order No. 710 null and void and reinstating the First
Panel's Resolutions dated June 8, 2011 and September 2, 2011.

According to the Court of Appeals, the Secretary of Justice committed grave abuse of
discretion when she issued Department Order No. 710 and created the Second Panel. The
Court of Appeals found that she should have modified or reversed the Resolutions of the
First Panel pursuant to the 2000 NPS Rule on Appeal27 instead of issuing Department'
Order No. 710 and creating the Second Panel. It found that because of her failure to
follow the procedure in the 2000 NPS Rule on Appeal, two Petitions for Review Ad
Cautelam filed by the opposing parties were pending before her.28

The Court of Appeals also found that the Secretary of Justice's admission that the
issuance of Department Order No. 710 did not set aside the First Panel's Resolution dated
June 8, 2011 and September 2, 2011 "[compounded] the already anomalous situation."29
It also stated that Department Order No. 710 did not give the Second Panel the power to
reverse, affirm, or modify the Resolutions of the First Panel; therefore, the Second Panel
did not have the authority to assess the admissibility and weight of any existing or
additional evidence.30

The Secretary of Justice, the Second Panel, and Dr. Inocencio-Ortega filed a Motion for
Reconsideration of the Decision dated March 19, 2013. The Motion, however, was
denied by the Court of Appeals in the Resolution31 dated September 27, 2013.

In its Resolution, the Court of Appeals stated that the Secretary of Justice had not shown
the alleged miscarriage of justice sought to be prevented by the creation of the Second
Panel since both parties were given full opportunity to present their evidence before the
First Panel. It also ruled that the evidence examined by the Second Panel was not
additional evidence but "forgotten evidence"32 that was already available before the First
Panel during the conduct of the preliminary investigation.33

Aggrieved, the Secretary of Justice and the Second Panel filed the present Petition for
Review on Certiorari34 assailing the Decision dated March 19, 2013 and Resolution
dated September 27, 2013 of the Court of Appeals. Respondent Mario Joel T. Reyes filed
his Comment35 to the Petition in compliance with this court's Resolution dated February
17, 2014.36 Petitioners' Reply37 to the Comment was filed on October 14, 2014 in
compliance with this court's Resolution dated June 23, 2014.38

Petitioners argue that the Secretary of Justice acted within her authority when she issued
Department Order No. 710. They argue that her issuance was a purely executive function
and not a quasi-judicial function that could be the subject of a petition for certiorari or
prohibition.39 In their submissions, they point out that under Republic Act No. 10071
and the 2000 NPS Rule on Appeal, the Secretary of Justice has the power to create a new
panel of prosecutors to reinvestigate a case to prevent a miscarriage of justice.40

Petitioners' position was that the First Panel "appear[ed] to have ignored the rules of
preliminary investigation"41 when it refused to receive additional evidence that would
have been crucial for the determination of the existence of probable cause.42 They assert
that respondent was not deprived of due process when the reinvestigation was ordered
since he was not prevented from presenting controverting evidence to Dr. Inocencio-
Ortega's additional evidence. 43 Petitioners argue that since the Information had been
filed, the disposition of the case was already within the discretion of the trial court.44

Respondent, on the other hand, argues that the Secretary of Justice had no authority to
order motu proprio the reinvestigation of the case since Dr. Inocencio-Ortega was able to
submit her alleged new evidence to the First Panel when she filed her Motion for Partial
Reconsideration. He argues that all parties had already been given the opportunity to
present their evidence before the First Panel so it was not necessary to conduct a
reinvestigation.45

Respondent argues that the Secretary of Justice's discretion to create a new panel of
prosecutors was not "unbridled"46 since the 2000 NPS Rule on Appeal requires that there
be compelling circumstances for her to be able to designate another prosecutor to conduct
the reinvestigation.47 He argues that the Second Panel's Resolution dated March 12,
2012 was void since the Panel was created by a department order that was beyond the
Secretary of Justice's authority to issue. He further argues that the trial court did not
acquire jurisdiction over the case since the Information filed by the Second Panel was
void.48

The issues for this court's resolution are:

First, whether the Court of Appeals erred in ruling that the Secretary of Justice committed
grave abuse of discretion when she issued Department Order No. 710, and with regard to
this:

a. Whether the issuance of Department Order No. 710 was an executive function
beyond the scope of a petition for certiorari or prohibition; and

b. Whether the Secretary of Justice is authorized to create motu proprio another

panel of prosecutors in order to conduct a reinvestigation of the case.

Lastly, whether this Petition for Certiorari has already been rendered moot by the filing
of the information in court, pursuant to Crespo v. Mogul.49

The determination by the Department of Justice of the existence of probable cause is not
a quasi-judicial proceeding. However, the actions of the Secretary of Justice in affirming
or reversing the findings of prosecutors may still be subject to judicial review if it is
tainted with grave abuse of discretion.

Under the Rules of Court, a writ of certiorari is directed against "any tribunal, board or
officer exercising judicial or quasi-judicial functions."50 A quasi-judicial function is "the
action, discretion, etc., of public administrative officers or bodies, who are required to
investigate facts, or ascertain the existence of facts, hold hearings, and draw conclusions
from them, as a basis for their official action and to exercise discretion of a judicial
nature."51 Otherwise stated, an administrative agency performs quasi-judicial functions if
it renders awards, determines the rights of opposing parties, or if their decisions have the
same effect as the judgment of a court.52

In a preliminary investigation, the prosecutor does not determine the guilt or innocence of
an accused. The prosecutor only determines "whether there is sufficient ground to
engender a well-founded belief that a crime has been committed and the respondent is
probably guilty thereof, and should be held for trial."53 As such, the prosecutor does not
perform quasi-judicial functions. In Santos v. Go:54

[T]he prosecutor in a preliminary investigation does not determine the guilt or innocence
of the accused. He does not exercise adjudication nor rule-making functions. Preliminary
investigation is merely inquisitorial, and is often the only means of discovering the
persons who may be reasonably charged with a crime and to enable the fiscal to prepare
his complaint or information. It is not a trial of the case on the merits and has no purpose
except that of determining whether a crime has been committed and whether there is
probable cause to believe that the accused is guilty thereof. While the fiscal makes that
determination, he cannot be said to be acting as a quasi-court, for it is the courts,
ultimately, that pass judgment on the accused, not the fiscal.

Though some cases describe the public prosecutors power to conduct a preliminary
investigation as quasi-judicial in nature, this is true only to the extent that, like quasi-
judicial bodies, the prosecutor is an officer of the executive department exercising powers
akin to those of a court, and the similarity ends at this point. A quasi-judicial body is as
an organ of government other than a court and other than a legislature which affects the
rights of private parties through either adjudication or rule-making. A quasi-judicial
agency performs adjudicatory functions such that its awards, determine the rights of
parties, and their decisions have the same effect as judgments of a court. Such is not the
case when a public prosecutor conducts a preliminary investigation to determine probable
cause to file an information against a person charged with a criminal offense, or when the
Secretary of Justice is reviewing the formers order or resolutions.55

In Spouses Dacudao v. Secretary of Justice,56 a petition for certiorari, prohibition, and.

mandamus was filed.against the Secretary of Justice's issuance of a department order.
The assailed order directed all prosecutors to forward all cases already filed against Celso
de los Angeles of the Legacy Group to the Secretariat of the Special Panel created by the
Department of Justice.

This court dismissed the petition on the ground that petitions for certiorari and
prohibition are directed on]y to tribunals that exercise judicial or quasi-judicial functions.
The issuance of the department order was a purely administrative or executive function of
the Secretary of Justice. While the Department of Justice may perform functions similar
to that of a court of law, it is not a quasi-judicial agency:

The fact that the DOJ is the primary prosecution arm of the Government does not make it
a quasi-judicial office or agency. Its preliminary investigation of cases is not a quasi-
judicial proceeding. Nor does the DOJ exercise a quasi-judicial function when it reviews
the findings of a public prosecutor on the finding of probable cause in any case. Indeed,
in Bautista v. Court of Appeals, the Supreme Court has held that a preliminary
investigation is not a quasi-judicial proceeding, stating:

... [t]he prosecutor in a preliminary investigation does not determine the guilt or
innocence of the accused. He does not exercise adjudication nor rule-making functions.
Preliminary investigation is merely inquisitorial, and is often the only means of
discovering the persons who may be reasonably charged with a crime and to enable the
fiscal to prepare his complaint or information. It is not a trial of the case on the merits and
has no purpose except that of determining whether a crime has been committed and
whether there is probable cause to believe that the accused is guilty thereof. While the
fiscal makes that determination, he cannot be said to be acting as a quasi-court, for it is
the courts, ultimately, that pass judgment on the accused, not the fiscal.

There may be some decisions of the Court that have characterized the public prosecutor's
power to conduct a preliminary investigation as quasi-judicial in nature. Still, this
characterization is true only to the extent that the public prosecutor, like a quasi-judicial
body, is an officer of the executive department exercising powers akin to those of a court
of law.

But the limited similarity. between the public prosecutor and a quasi-judicial body
quickly ends there. For sure, a quasi-judicial body is an organ of government other than a
court of law or a legislative office that affects the rights of private parties through either
adjudication or rulemaking; it performs adjudicatory functions, and its awards and
adjudications determine the rights of the parties coming before it; its decisions have the
same effect as the judgments of a court of law. In contrast, that is not the effect whenever
a public prosecutor conducts a preliminary investigation to determine. probable cause in
order to file a criminal information against a person properly charged with the offense, or
whenever the Secretary of Justice reviews the public prosecutor's orders or resolutions.57
(Emphasis supplied)

Similarly, in Callo-Claridad v. Esteban,58 we have stated that a petition for review under
Rule 43 of the Rules of Court cannot be brought to assail the Secretary of Justice's
resolution dismissing a complaint for lack of probable cause since this is an "essentially
executive function":59

A petition for review under Rule 43 is a mode of appeal to be taken only to review the
decisions, resolutions or awards by the quasi-judicial officers, agencies or bodies,
particularly those specified in Section 1 of Rule 43. In the matter before us, however, the
Secretary of Justice was not an officer performing a quasi-judicial function. In reviewing
the findings of the OCP of Quezon City on the matter of probable cause, the Secretary of
Justice performed an essentially executive function to determine whether the crime
alleged against the respondents was committed, and whether there was 'probable cause to
believe that the respondents _were guilty thereof.60

A writ of prohibition, on the other hand, is directed against "the proceedings of any
tribunal, corporation, board, officer or person, whether exercising judicial, quasi-judicial
or ministerial functions."61 The Department of Justice is not a court of law and its
officers do not perform quasi-judicial functions. The Secretary of Justice's review of the
resolutions of prosecutors is also not a ministerial function.

An act is considered ministerial if "an officer or tribunal performs in the context of a

given set of facts, in a prescribed manner and without regard for the exercise of his or its
own judgment, upon the propriety or impropriety of the act done."62 In contrast, an act is
considered discretionary "[i]f the law imposes a duty upon a public officer, and gives him
the right to decide how or when the duty shall be performed."63 Considering that "full
discretionary authority has been delegated to the executive branch in the determination of
probable cause during a preliminary investigation,"64 the functions of the prosecutors
and the Secretary of Justice are not ministerial.

However, even when an administrative agency does not perform a judicial, quasi-judicial,
or ministerial function, the Constitution mandates the exercise of judicial review when
there is an allegation of grave abuse of discretion.65 In Auto Prominence Corporation v.
Winterkorn:66

In ascertaining whether the Secretary of Justice committed grave abuse of discretion

amounting to lack or excess of jurisdiction in his determination of the existence of
probable cause, the party seeking the writ of certiorari must be able to establish that the
Secretary of Justice exercised his executive power in an arbitrary and despotic manner,
by reason of passion or personal hostility, and the abuse of discretion must be so patent
and gross as would amount to an evasion or to a unilateral refusal to perform the duty
enjoined or to act in contemplation of law. Grave abuse of discretion is not enough; it
must amount to lack or excess of jurisdiction. Excess of jurisdiction signifies that he had
jurisdiction over the case, but (he) transcended the same or acted without authority.67

Therefore, any question on whether the Secretary of Justice committed grave abuse of
discretion amounting to lack or excess of jurisdiction in affirming, reversing, or
modifying the resolutions of prosecutors may be the subject of a petition for certiorari
under Rule 65 of the Rules of Court.

II
Under existing laws, rules of procedure, and jurisprudence, the Secretary of Justice is
authorized to issue Department Order No. 710.

Section 4 of Republic Act No. 1007168 outlines the powers granted by law to the
Secretary of Justice. The provision reads:

Section 4. Power of the Secretary of Justice. - The power vested in the Secretary of
Justice includes authority to act directly on any matter involving national security or a
probable miscarriage of justice within the jurisdiction of the prosecution staff, regional
prosecution office, and the provincial prosecutor or the city prosecutor and to review,
reverse, revise, modify or affirm on appeal or petition for review as the law or the rules of
the Department of Justice (DOJ) may provide, final judgments and orders of the
prosecutor general, regional prosecutors, provincial prosecutors, and city prosecutors.

A criminal prosecution is initiated by the filing of a complaint to a prosecutor who shall

then conduct a preliminary investigation in order to determine whether there is probable
cause to hold the accused for trial in court.69 The recommendation of the investigating
prosecutor on whether to dismiss the complaint or to file the corresponding information
in court is still subject to the approval of the provincial or city prosecutor or chief state
prosecutor.70

However, a party is not precluded from appealing the resolutions of the provincial or city
prosecutor or chief state prosecutor to the Secretary of Justice. Under the 2000 NPS Rule
on Appeal,71 appeals may be taken within 15 days within receipt of the resolution by
filing a verified petition for review before the Secretary of Justice.72

In this case, the Secretary of Justice designated a panel of prosecutors to investigate on

the Complaint filed by Dr. Inocencio-Ortega. The First Panel, after conduct of the
preliminary investigation, resolved to dismiss the Complaint on the ground that the
evidence was insufficient to support a finding of probable cause. Dr. Inocencio-Ortega
filed a Motion to Re-Open and a Motion for Partial Investigation, which were both
denied by the First Panel. Before Dr. Inocencio-Ortega could file a petition for review,
the Secretary of Justice issued Department Order No. 710 and constituted another panel
of prosecutors to reinvestigate the case. The question therefore is whether, under the 2000
NPS Rule on Appeal, the Secretary of Justice may, even without a pending petition for
review, motu proprio order the conduct of a reinvestigation.

The 2000 NPS Rule on Appeal requires the filing of a petition for review before the
Secretary of Justice can reverse, affirm, or modify the appealed resolution of the
provincial or city prosecutor or chief state prosecutor.73 The Secretary of Justice may
also order the conduct of a reinvestigation in order to resolve the petition for review.
Under Section 11:

SECTION 11. Reinvestigation. If the Secretary of Justice finds it necessary to

reinvestigate the case, the reinvestigation shall be held by the investigating prosecutor,
unless, for compelling reasons, another prosecutor is designated to conduct the same.

Under Rule 112, Section 4 of the Rules of Court, however, the Secretary of Justice may
motu proprio reverse or modify resolutions of the provincial or city prosecutor or the
chief state prosecutor even without a pending petition for review. Section 4 states:

SEC. 4. Resolution of investigating prosecutor and its review. - If the investigating

prosecutor finds cause to hold the respondent for trial, he shall prepare the resolution and
information. He shall certify under oath in the information that he, or as shown by the
record, an authorized officer, has personally examined the complainant and his witnesses;
that there is reasonable ground to believe that a crime has been committed and that the
accused is probably guilty thereof; that the accused was informed of the complaint and of
the evidence submitted against him; and that he was given an opportunity to submit
controverting evidence. Otherwise, he shall recommend the dismissal of the complaint.

....

If upon petition by a proper party under such rules as the Department of Justice may
prescribe or motu proprio, the Secretary of Justice reverses or modifies the resolution of
the provincial or city prosecutor or chief state prosecutor, he shall direct the prosecutor
concerned either to file the corresponding information without conducting another
preliminary investigation, or to dismiss or move for dismissal of the complaint or
information with notice to the parties. The same rule shall apply in preliminary
investigations conducted by the officers of the Office of the Ombudsman. (Emphasis
supplied)

The Secretary of Justice exercises control and supervision over prosecutors and it is
within her authority to affirm, nullify, reverse, or modify the resolutions of her
prosecutors. In Ledesma v. Court of Appeals:74

Decisions or resolutions of prosecutors are subject to appeal to the secretary of justice

who, under the Revised Administrative Code, exercises the power of direct control and
supervision over said prosecutors; and who may thus affirm, nullify, reverse or modify
their rulings.

Section 39, Chapter 8, Book IV in relation to Section 5, 8, and 9, Chapter 2, Title III of
the Code gives the secretary of justice supervision and control over the Office of the
Chief Prosecutor and the Provincial and City Prosecution Offices. The scope of his power
of supervision and control is delineated in Section 38, paragraph 1, Chapter 7, Book IV of
the Code:

(1) Supervision and Control. Supervision and control shall include authority to act
directly whenever a specific function is entrusted by law or regulation to a subordinate;
direct the performance of duty; restrain the commission of acts; review, approve, reverse
or modify acts and decisions of subordinate officials or units[.]75

Similarly, in Rural Community Bank of Guimba v. Hon. Talavera: 76

The actions of prosecutors are not unlimited; they are subject to review by the secretary
of justice who may affirm, nullify, reverse or modify their actions or opinions. ·
Consequently the secretary may direct them to file either a motion to dismiss the case or
an information against the accused.

In short, the secretary of justice, who has the power of supervision and control over
prosecuting officers, is the ultimate authority who decides which of the conflicting
theories of the complainants and the respondents should be believed.77

Section 4 of Republic Act No. 10071 also gives the Secretary of Justice the authority to
directly act on any "probable miscarriage of justice within the jurisdiction of the
prosecution staff, regional prosecution office, and the provincial prosecutor or the city
prosecutor." Accordingly, the Secretary of Justice may step in and order a reinvestigation
even without a prior motion or petition from a party in order to prevent any probable
miscarriage of justice.

Dr. Inocencio-Ortega filed a Motion to Re-Open the preliminary Investigation before the
First Panel in order to admit as evidence mobile phone conversations between Edrad and
respondent and argued that these phone conversations tend to prove that respondent was
the mastermind of her husband's murder. The First Panel, however, dismissed the Motion
on the ground that it was filed out of time. The First Panel stated:

Re-opening of the preliminary investigation for the purpose of receiving additional

evidence presupposes that the case has been submitted for resolution but no resolution
has been promulgated therein by the investigating prosecutor. Since a resolution has
already been promulgated by the panel of prosecutors in this case, the motion to re-open
the. preliminary investigation is not proper and has to be denied.78

In the same Resolution, the First Panel denied Dr. Inocencio-Ortega's Motion for Partial
Reconsideration on the ground that "the evidence on record does not suffice to establish
probable cause."79 It was then that the Secretary of Justice issued Department Order No.
710, which states:

In the interest of service and due process, and to give both parties all the reasonable
opportunity to present their evidence during the preliminary investigation, a new panel is
hereby created composed of the following for the purpose of conducting a reinvestigation
....

....

The reinvestigation in this case is hereby ordered to address the offer of additional
evidence by the complainants, which was denied by the former panel in its Resolution of
2 September 2011 on the ground that an earlier resolution has already been promulgated
prior to the filing of the said motion, and such other issues which may be raised before
the present panel.80 (Emphasis supplied)

In her reply-letter dated September 29, 2011 to respondent's counsel, the Secretary of
Justice further explained that:

The order to reinvestigate was dictated by substantial justice and our desire to have a
comprehensive investigation. We do not want any stone unturned, or any evidence
overlooked. As stated in D.O. No. 710, we want to give "both parties all the reasonable
opportunity to present their evidence. "81

Under these circumstances, it is clear that the Secretary of Justice issued Department
Order No. 710 because she had reason to believe that the First Panel's refusal to admit the
additional evidence may cause a probable miscarriage of justice to the parties. The
Second Panel was created not to overturn the findings and recommendations of the First
Panel but to make sure that all the evidence, including the evidence that the First Panel
refused to admit, was investigated. Therefore, the Secretary of Justice did not act in an
"arbitrary and despotic manner, by reason of passion or personal hostility."82

Accordingly, Dr. Inocencio-Ortega's Petition for Review before the Secretary of Justice
was rendered moot with the issuance by the Second Panel of the Resolution dated March
12, 2012 and the filing of the Information against respondent before the trial court.

III

The filing of the information and the issuance by the trial court of the respondent's
warrant of arrest has already rendered this Petition moot.

It is settled that executive determination of probable cause is different from the judicial
determination of probable cause. In People v. Castillo and Mejia:83
There are two kinds of determination of probable cause: executive and judicial. The
executive determination of probable cause is one made during preliminary investigation.
It is a function that properly pertains to the public prosecutor who is given a broad
discretion to determine whether probable cause exists and to charge those whom he
believes to have committed the crime as defined by law and thus should be held for trial.
Otherwise stated, such official has the quasi-judicial authority to determine whether or
not a criminal case must be filed in court. Whether or not that function has been correctly
discharged by the public prosecutor, i.e., whether or not he has made a correct
ascertainment of the existence of probable cause in a case, is a matter that the trial court
itself does not and may not be compelled to pass upon.

The judicial determination of probable cause, on the other hand, is one made by the judge
to ascertain whether a warrant of arrest should be issued against the accused. The judge
must satisfy himself that based on the evidence submitted, there is necessity for placing
the accused under custody in order not to frustrate the ends of justice. If the judge finds
no probable cause, the judge cannot be forced to issue the arrest warrant.84 (Emphasis
supplied)

The courts do not interfere with the prosecutor's conduct of a preliminary investigation.
The prosecutor's determination of probable cause is solely within his or her discretion.
Prosecutors are given a wide latitude of discretion to determine whether an information
should be filed in court or whether the complaint should be dismissed.85

A preliminary investigation .is "merely inquisitorial,"86 and is only conducted to aid the
prosecutor in preparing the information.87 It serves a two-fold purpose: first, to protect
the innocent against wrongful prosecutions; and second, to spare the state from using its
funds and resources in useless prosecutions. In Salonga v. Cruz-Paño:88

The purpose of a preliminary investigation is to secure the innocent against hasty,

malicious and oppressive prosecution, and to protect him from an open and public
accusation of crime, from the trouble, expense and anxiety of a public trial, and also to
protect the state from useless and expensive trials.89

Moreover, a preliminary investigation is merely preparatory to a trial. It is not a trial on

the merits. An accused's right to a preliminary investigation is merely statutory; it is not a
right guaranteed by the Constitution. Hence, any alleged irregularity in an investigation's
conduct does not render the information void nor impair its validity. In Lozada v.
Fernando:90

It has been said time and again that a preliminary investigation is not properly" a trial or
any part thereof but is merely preparatory thereto, its only purpose being to determine
whether a crime has been committed and whether there is probable cause to believe the
accused guilty thereof. The right to such investigation is not a fundamental right
guaranteed by the constitution. At most, it is statutory. And rights conferred upon accused
persons to participate in preliminary investigations concerning themselves depend upon
the provisions of law by which such rights are specifically secured, rather than upon the
phrase "due process of law."91 (Citations omitted)

People V. Narca92 further states:

It must be emphasized that the preliminary investigation is not the venue for the full
exercise of the rights of the parties. This is why preliminary investigation is not
considered as a part of trial but merely preparatory thereto and that the records therein
shall not form part of the records of the case in court. Parties' may submit affidavits but
have no right to examine witnesses though they can propound questions through the
investigating officer. In fact, a preliminary investigation may even be conducted ex-parte
in certain cases. Moreover, in Section 1 of Rule 112, the purpose of a preliminary
investigation is only to determine a well grounded belief if a crime was probably
committed by an accused. In any case, the invalidity or absence of a preliminary
investigation does not affect the jurisdiction of the court which may have taken
cognizance of the information nor impair the validity of the information or otherwise
render it defective.93 (Emphasis supplied)

Once the information is filed in court, the court acquires jurisdiction of the case and any
motion to dismiss the case or to determine the accused's guilt or innocence rests within
the sound discretion of the court. In Crespo v. Mogul:94

The filing of a complaint or information in Court initiates a criminal action. The Court
thereby acquires jurisdiction over the case, which is the authority to hear and determine
the case. When after the filing of the complaint or information a warrant for the arrest of
the accused is issued by the trial court and the accused either voluntarily submitted
himself to the Court or was duly arrested, the Court thereby acquired jurisdiction over the
person of the accused.

The preliminary investigation conducted by the fiscal for the purpose of determining
whether a prima facie case exists warranting the prosecution of the accused is terminated
upon the filing of the information in the proper court. In turn, as above stated, the filing
of said information sets in motion the criminal action against the accused in Court.
Should the fiscal find it proper to conduct a reinvestigation of the case, at such stage, the
permission of the Court must be secured. After such reinvestigation the finding and
recommendations of the fiscal should be submitted to the Court for appropriate action.
While it is true that the fiscal has the quasi judicial discretion to determine whether or not
a criminal case should be filed in court or not, once the case had already been brought to
Court whatever disposition the fiscal may feel should be proper in the case thereafter
should be addressed for the consideration of the Court, the only qualification is that the
action of the Court must not impair the substantial rights of the accused or the right of the
People to due process of law.1âwphi1

Whether the accused had been arraigned or not and whether it was due to a
reinvestigation by the fiscal or a review by the Secretary of Justice whereby a motion to
dismiss was submitted to the Court, the Court in the exercise of its discretion may grant
the motion or deny it and require that the trial on the merits proceed for the proper
determination of the case.

However, one may ask, if the trial court refuses to grant the motion to dismiss filed by the
fiscal upon the directive of the Secretary of Justice will there not be a vacuum in the
prosecution? A state prosecutor to handle the case cannot possibly be designated by the
Secretary of Justice who does not believe that there is a basis for prosecution nor can the
fiscal be expected to handle the prosecution of the case thereby defying the superior order
of the Secretary of Justice.

The answer is simple. The role of the fiscal or prosecutor as We all know is to see that
justice is -done and not necessarily to secure the conviction of the person accused before
the Courts. Thus, in spite of his opinion to the contrary, it is the duty of the fiscal to
proceed with the presentation of evidence of the prosecution to the Court to enable the
Court to arrive at its own independent judgment as to whether the accused should be
convicted or acquitted. The fiscal should not shirk from the responsibility of appearing
for the People of the Philippines even under such circumstances much less should he
abandon the prosecution of the case leaving it to the hands of a private prosecutor for then
the entire proceedings will be null and void. The least that the fiscal should do is to
continue to appear for the prosecution although he may turn over the presentation of the
evidence to the private prosecutor but still under his direction and control.
The rule therefore in this jurisdiction is that once a complaint or information is filed in
Court any disposition of the case as to its dismissal or the conviction or acquittal of the
accused rests in the sound discretion of the Court. Although the fiscal retains the
direction and control of the prosecution of criminal cases even while the case is already
in Court he cannot impose his opinion on the trial court. The Court is the best and sole
judge on what to do with the case before it. · The determination of the case is within its
exclusive jurisdiction and competence. A motion to dismiss the case filed by the fiscal
should be addressed to the Court who has the option to grant or deny the same. It does
not matter if this is done before or after the arraignment of the accused or that the motion
was filed after a reinvestigation or upon instructions of the Secretary of Justice who
reviewed the records of the investigation.95 (Emphasis supplied)

Thus, it would be ill-advised for the Secretary of Justice to proceed with resolving
respondent's Petition for Review pending before her. It would be more prudent to refrain
from entertaining the Petition considering that the trial court already issued a warrant of
arrest against respondent.96 The issuance of the warrant signifies that the trial court has
made an independent determination of the existence of probable cause. In Mendoza v.
People:97

While it is within the trial court's discretion to make an independent assessment of the
evidence on hand, it is only for the purpose of determining whether a warrant of arrest
should be issued. The judge does not act as an appellate court of the prosecutor and has
no capacity to review the prosecutor's determination of probable cause; rather, the judge
makes a determination of probable cause independent of the prosecutor's finding.98

Here, the trial court has already determined, independently of any finding or
recommendation by the First Panel or the Second Panel, that probable cause exists. for
the issuance of the warrant of arrest against respondent. Probable cause has been
judicially determined. Jurisdiction over the case, therefore, has transferred to the trial
court. A petition for certiorari questioning the validity of the preliminary investigation in
any other venue has been rendered moot by the issuance of the warrant of arrest and the
conduct of arraignment.

The Court of Appeals should have dismissed the Petition for Certiorari filed before them
when the trial court issued its warrant of arrest. Since the trial court has already acquired
jurisdiction over the case and the existence of probable cause has been judicially
determined, a petition for certiorari questioning the conduct of the preliminary
investigation ceases to be the "plain, speedy, and adequate remedy"99 provided by law.
Since this Petition for Review is an appeal from .a moot Petition for Certiorari, it must
also be rendered moot.

The prudent course of action at this stage would be to proceed to trial. Respondent,
however, is not without remedies. He may still file any appropriate action before the trial
court or question any alleged irregularity in the preliminary investigation during pre-trial.

WHEREFORE, the Petition is DISMISSED for being moot. Branch 52 of the Regional
Trial Court of Palawan is DIRECTED to proceed with prosecution of Criminal Case No.
26839.

SO ORDERED.
G.R. No. 197825

CAMILO SIBAL, Petitioner,

vs.
PEDRO BUQUEL, SANTIAGO BUQUEL, JR., ROSALINDA BUQUEL,
represented by FRANCISCO BUQUEL, Respondents.

DECISION

PERALTA, J.:

Before the Court is a Petition for Review under Rule 45 of the Rules of Court which
petitioner Camilo Sibal filed, assailing the Decision1 of the Court of Appeals (CA), dated
March 16, 2011, and its Resolution2 dated July 7, 2011 in CA-G.R. SP NO. 104774. The
CA affirmed the Decision3 of the Regional Trial Court (RTC) of Tuguegarao City,
Cagayan, Branch 02, dated January 5, 2007, in Civil Case No. 6429.

The facts, as gathered from the records, are as follows:

Respondents Pedro Buquel, Santiago .Buquel, Jr., Rosalinda Buquel and Francisco
Buquel inherited from their parents, Santiago Buquel, Sr. and Faustina Buquet, a parcel
of land cqnsisting of 81,022 sq. m. covered by Original Certificate of Title No. 0-725.
Sometime in January 1999, petitioner Camilo Sibal and Tobi Mangoba took possession
of a portion of the property which belonged to Santiago, Sr. Thereafter, the Buquels made
several demands against Sibal and Mangoba for them to vacate and turn over the
property, but the latter refused to do so. Hence, they filed a complaint before the
Tuguegarao RTC for recovery 0f possession and damages.

On January 5, 2007, the Tuguegarao RTC ruled in favor of the Buquels, the decretal
portion of the Decision provides:

WHEREFORE, in the light of the foregoing, the Court hereby renders judgment in favor
of the Plaintiffs Pedro Buquel, Santiago Buquel, Jr., Rosalinda Buquel, and Francisco
I3uquel as against Defendants Camilo Sibal and Tobi Mangoba ordering:

1.The restoration to Plaintiffs of their peaceful possession of the land in question,

specifically on the share of Santiago Buquel; Jr.;

2. The Defendants to pay the plaintiffs the amount of Ten Thousand Pesos for
Attorney's Fees; and

3. The Defendants to pay to the Plaintiffs the amount of Fifteen Thousand Pesos
as moral and actual damages.

SO ORDERED.4

Thereafter, said RTC Decision became final and executory; hence, the trial court issued a
writ of execution.

On August 8, 2008, Sibal filed a Petition for Annulment of the RTC Decision before the
CA, where he raised lack of jurisdiction and extrinsic fraud as grounds. On March 16,
201l, the CA dismissed Sibal' s petition, thus:

WHEREFORE, premises considered, the instant petition is hereby DISMISSED for

lack of merit.
SO ORDERED.5

Sibal filed a Motion for Reconsideration, but the same was denied. Thus, he filed the
instant petition.

Sibal maintains that the RTC did not acquire jurisdiction over the case and that the
Buquels were guilty of extrinsic fraud.

The petition is devoid of merit.

Sibal contends that the RTC Decision should be annulled on the ground that the RTC
never acquired jurisdiction over the case as the complaint filed merely alleged that the
value of the subject property is P51,190.00, without, however, categorically- mentioning
its assessed value, and only the real property tax order of payment was attached to the
complaint and not the tax declaration that would determine the assessed value of the
property. But, upon review of the records, the Court notes that the Real Property Tax
Order of Payment No. 091-05713-03 dated November 24, 2002, or "Exhibit C," shows
that the amount of P5l,190.00 is truly the assessed value of the property, which fact Sibal
failed to refute.

A petition for annulment of judgment is a remedy in equity so exceptional in nature that it

may be availed of only if the judgment, final order, or final resolution sought to be
annulled was rendered by a court lacking jurisdiction or through extrinsic fraud, and only
when other remedies are wanting.6 In the present case, Sibal was able to avail of other
remedies when he filed before the RTC a motion to quash the writ of execution and a
motion to annul judgment.

Moreover, parties aggrieved by final judgments, orders or resolutions cannot be allowed

to easily and readily abuse a petition for annulment of judgment.1âwphi1 Thus, the Court
has instituted safeguards by limiting the grounds for annulment to lack of jurisdiction and
extrinsic fraud, and by prescribing in Section 1 of Rule 47 of the Rules of Court that the
petitioner should show that the ordinary remedies of new trial, appeal, petition for relief
or other appropriate remedies are no longer available without fault on the part of the
petitioner. A petition for annulment that ignores or disregards any of the safeguards
cannot prosper.7

Further, it must be emphasized that not every kind of fraud justifies the action of
annulment of judgment. Only extrinsic fraud does. According to Cosmic Lumber
Corporation v. Court of Appeals,8 fraud is extrinsic when the unsuccessful party has
been prevented from fully exhibiting his case, by fraud or deception practiced on him by
his opponent, as by keeping him away ,from court, a false promise of a compromise; or
where the defendant never had knowledge of the suit, being kept in ignorance by the acts
of the plaintiff; or where an attorney fraudulently or without authority connives at his
defeat; these and similar cases which show that there has never been a real contest in the
trial or hearing of the case are reasons for which a new suit may be sustained to set aside
and annul the former judgment and open the case for a new and fair hearing.

As a ground for annulment of judgment, extrinsic fraud must arise from an act of the
adverse party, and the fraud must be of such nature as to have deprived the petitioner of
its clay in court. The fraud is not extrinsic if the act was committed by the petitioner's
own counsel.9

The case at bar is closely similar to, if not the same with the case of Pinausukan Seafood
House v. FEBTC.10 In this case, the Court noticed that the petition's own language
mentioned mistake and gross negligence on the part of petitioner's own counsel. The
petition even suggested that the negligence of its counsel may constitute professional
misconduct. The Court then ruled that such neglect of counsel, even if it were true, was
not tantamount to extrinsic fraud because it did not emanate from any act of FEBTC as
the prevailing party, and did not occur outside the trial of the case. What is certain, for
purposes of application of Rule 47, is that mistake and gross negligence cannot be
equated to the extrinsic fraud under Rule 47. By its very nature, extrinsic fraud relates to
a cause that is collateral in character, i.e., it relates to any fraudulent act 9f the prevailing
party in litigation which is committed outside of the trial of the case, where the defeated
party has been prevented from presenting fully his side of the cause, by fraud or
deception practiced on him by his opponent. And even in the presence of fraud,
annulment will not lie unless the fraud is committed by the adverse party, not by one's
own lawyer. In the latter case, the remedy of the client is to proceed against his own
lawyer and not to re-litigate the case where judgment had been rendered.

Sibal asserts that the negligence of his former counsel in handling his defense during the
proceedings in Civil Case No. 6429 resulted in violation of his right to due process. He
claims that his counsel's inexcusable negligence denied him of his clay in court.
However, he admitted that he attended only one stage of the proceedings below, which
was the preliminary conference. He was not aware of the subsequent proceedings as he
was totally dependent on his former counsel and would merely wait for the latter to notify
him if his attendance would be required. There was likewise no indication that his
counsel was in fact in cahoots with the Buquels to obtain the assailed judgment. Sibal
must therefore bear the unfortunate consequences of his actions. As a litigant, he should
not have entirely left the case in his counsel's hands, for he had the continuing duty to
keep himself abreast of the developments, if only to protect his own interest in the
litigation. He could have discharged said duty by keeping in regular touch with his
counsel, but he failed to do so.11

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated
March 16, 2011 and its Resolution dated July 7, 2011 in CA-G.R. SP No. 104774 are
hereby AFFIRMED.

SO ORDERED.
G.R. No. 167615

SPOUSES ALEXANDER AND JULIE LAM, Doing Business Under the Name and
Style "COLORKWIK LABORATORIES" AND "COLORKWIK PHOTO
SUPPLY", Petitioners,
vs.
KODAK PHILIPPINES, LTD., Respondent.

DECISION

LEONEN, J.:

This is a Petition for Review on Certiorari filed on April 20, 2005 assailing the March 30,
2005 Decision1 and September 9, 2005 Amended Decision2 of the Court of Appeals,
which modified the February 26, 1999 Decision3 of the Regional Trial Court by reducing
the amount of damages awarded to petitioners Spouses Alexander and Julie Lam (Lam
Spouses).4 The Lam Spouses argue that respondent Kodak Philippines, Ltd.’s breach of
their contract of sale entitles them to damages more than the amount awarded by the
Court of Appeals.5

On January 8, 1992, the Lam Spouses and Kodak Philippines, Ltd. entered into an
agreement (Letter Agreement) for the sale of three (3) units of the Kodak Minilab System
22XL6 (Minilab Equipment) in the amount of ₱1,796,000.00 per unit,7 with the
following terms:

This confirms our verbal agreement for Kodak Phils., Ltd. To provide Colorkwik
Laboratories, Inc. with three (3) units Kodak Minilab System 22XL . . . for your proposed
outlets in Rizal Avenue (Manila), Tagum (Davao del Norte), and your existing Multicolor
photo counter in Cotabato City under the following terms and conditions:

1. Said Minilab Equipment packages will avail a total of 19% multiple order
discount based on prevailing equipment price provided said equipment packages
will be purchased not later than June 30, 1992.

2. 19% Multiple Order Discount shall be applied in the form of merchandise and
delivered in advance immediately after signing of the contract.

* Also includes start-up packages worth P61,000.00.

3. NO DOWNPAYMENT.

4. Minilab Equipment Package shall be payable in 48 monthly installments at

THIRTY FIVE THOUSAND PESOS (P35,000.00) inclusive of 24% interest rate
for the first 12 months; the balance shall be re-amortized for the remaining 36
months and the prevailing interest shall be applied.

5. Prevailing price of Kodak Minilab System 22XL as of January 8, 1992 is at

ONE MILLION SEVEN HUNDRED NINETY SIX THOUSAND PESOS.

6. Price is subject to change without prior notice.

*Secured with PDCs; 1st monthly amortization due 45 days after installation[.]8
On January 15, 1992, Kodak Philippines, Ltd. delivered one (1) unit of the Minilab
Equipment in Tagum, Davao Province.9 The delivered unit was installed by Noritsu
representatives on March 9, 1992.10 The Lam Spouses issued postdated checks
amounting to ₱35,000.00 each for 12 months as payment for the first delivered unit, with
the first check due on March 31, 1992.11

The Lam Spouses requested that Kodak Philippines, Ltd. not negotiate the check dated
March 31, 1992 allegedly due to insufficiency of funds.12 The same request was made
for the check due on April 30, 1992. However, both checks were negotiated by Kodak
Philippines, Ltd. and were honored by the depository bank.13 The 10 other checks were
subsequently dishonored after the Lam Spouses ordered the depository bank to stop
payment.14

Kodak Philippines, Ltd. canceled the sale and demanded that the Lam Spouses return the
unit it delivered together with its accessories.15 The Lam Spouses ignored the demand
but also rescinded the contract through the letter dated November 18, 1992 on account of
Kodak Philippines, Ltd.’s failure to deliver the two (2) remaining Minilab Equipment
units.16

On November 25, 1992, Kodak Philippines, Ltd. filed a Complaint for replevin and/or
recovery of sum of money. The case was raffled to Branch 61 of the Regional Trial
Court, Makati City.17 The Summons and a copy of Kodak Philippines, Ltd.’s Complaint
was personally served on the Lam Spouses.18

The Lam Spouses failed to appear during the pre-trial conference and submit their pre-
trial brief despite being given extensions.19 Thus, on July 30, 1993, they were declared in
default.20 Kodak Philippines, Ltd. presented evidence ex-parte.21 The trial court issued
the Decision in favor of Kodak Philippines, Ltd. ordering the seizure of the Minilab
Equipment, which included the lone delivered unit, its standard accessories, and a
separate generator set.22 Based on this Decision, Kodak Philippines, Ltd. was able to
obtain a writ of seizure on December 16, 1992 for the Minilab Equipment installed at the
Lam Spouses’ outlet in Tagum, Davao Province.23 The writ was enforced on December
21, 1992, and Kodak Philippines, Ltd. gained possession of the Minilab Equipment unit,
accessories, and the generator set.24

The Lam Spouses then filed before the Court of Appeals a Petition to Set Aside the
Orders issued by the trial court dated July 30, 1993 and August 13, 1993. These Orders
were subsequently set aside by the Court of Appeals Ninth Division, and the case was
remanded to the trial court for pre-trial.25

On September 12, 1995, an Urgent Motion for Inhibition was filed against Judge
Fernando V. Gorospe, Jr.,26 who had issued the writ of seizure.27 The ground for the
motion for inhibition was not provided. Nevertheless, Judge Fernando V. Gorospe Jr.
inhibited himself, and the case was reassigned to Branch 65 of the Regional Trial Court,
Makati City on October 3, 1995.28

In the Decision dated February 26, 1999, the Regional Trial Court found that Kodak
Philippines, Ltd. defaulted in the performance of its obligation under its Letter
Agreement with the Lam Spouses.29 It held that Kodak Philippines, Ltd.’s failure to
deliver two (2) out of the three (3) units of the Minilab Equipment caused the Lam
Spouses to stop paying for the rest of the installments.30 The trial court noted that while
the Letter Agreement did not specify a period within which the delivery of all units was
to be made, the Civil Code provides "reasonable time" as the standard period for
compliance:

The second paragraph of Article 1521 of the Civil Code provides:

Where by a contract of sale the seller is bound to send the goods to the buyer, but no time
for sending them is fixed, the seller is bound to send them within a reasonable time.

What constitutes reasonable time is dependent on the circumstances availing both on the
part of the seller and the buyer. In this case, delivery of the first unit was made five (5)
days after the date of the agreement. Delivery of the other two (2) units, however, was
never made despite the lapse of at least three (3) months.31

Kodak Philippines, Ltd. failed to give a sufficient explanation for its failure to deliver all
three (3) purchased units within a reasonable time.32

The trial court found:

Kodak would have the court believe that it did not deliver the other two (2) units due to
the failure of defendants to make good the installments subsequent to the second. The
court is not convinced. First of all, there should have been simultaneous delivery on
account of the circumstances surrounding the transaction. . . . Even after the first delivery
. . . no delivery was made despite repeated demands from the defendants and despite the
fact no installments were due. Then in March and in April (three and four months
respectively from the date of the agreement and the first delivery) when the installments
due were both honored, still no delivery was made.

Second, although it might be said that Kodak was testing the waters with just one
delivery - determining first defendants’ capacity to pay - it was not at liberty to do so. It
is implicit in the letter agreement that delivery within a reasonable time was of the
essence and failure to so deliver within a reasonable time and despite demand would
render the vendor in default.

....

Third, at least two (2) checks were honored. If indeed Kodak refused delivery on account
of defendants’ inability to pay, non-delivery during the two (2) months that payments
were honored is unjustified.33

Nevertheless, the trial court also ruled that when the Lam Spouses accepted delivery of
the first unit, they became liable for the fair value of the goods received:

On the other hand, defendants accepted delivery of one (1) unit. Under Article 1522 of
the Civil Code, in the event the buyer accepts incomplete delivery and uses the goods so
delivered, not then knowing that there would not be any further delivery by the seller, the
buyer shall be liable only for the fair value to him of the goods received. In other words,
the buyer is still liable for the value of the property received. Defendants were under
obligation to pay the amount of the unit. Failure of delivery of the other units did not
thereby give unto them the right to suspend payment on the unit delivered. Indeed, in
incomplete deliveries, the buyer has the remedy of refusing payment unless delivery is
first made. In this case though, payment for the two undelivered units have not even
commenced; the installments made were for only one (1) unit.

Hence, Kodak is right to retrieve the unit delivered.34

The Lam Spouses were under obligation to pay for the amount of one unit, and the failure
to deliver the remaining units did not give them the right to suspend payment for the unit
already delivered.35 However, the trial court held that since Kodak Philippines, Ltd. had
elected to cancel the sale and retrieve the delivered unit, it could no longer seek payment
for any deterioration that the unit may have suffered while under the custody of the Lam
Spouses.36
As to the generator set, the trial court ruled that Kodak Philippines, Ltd. attempted to
mislead the court by claiming that it had delivered the generator set with its accessories to
the Lam Spouses, when the evidence showed that the Lam Spouses had purchased it from
Davao Ken Trading, not from Kodak Philippines, Ltd.37 Thus, the generator set that
Kodak Philippines, Ltd. wrongfully took from the Lam Spouses should be replaced.38

The dispositive portion of the Regional Trial Court Decision reads:

PREMISES CONSIDERED, the case is hereby dismissed. Plaintiff is ordered to pay the
following:

1) PHP 130,000.00 representing the amount of the generator set, plus legal
interest at 12% per annum from December 1992 until fully paid; and

2) PHP 1,300,000.00 as actual expenses in the renovation of the Tagum, Davao

and Rizal Ave., Manila outlets.

SO ORDERED.39

On March 31, 1999, the Lam Spouses filed their Notice of Partial Appeal, raising as an
issue the Regional Trial Court’s failure to order Kodak Philippines, Ltd. to pay: (1)
₱2,040,000 in actual damages; (2) ₱50,000,000 in moral damages; (3) ₱20,000,000 in
exemplary damages; (4) ₱353,000 in attorney’s fees; and (5) ₱300,000 as litigation
expenses.40 The Lam Spouses did not appeal the Regional Trial Court’s award for the
generator set and the renovation expenses.41

Kodak Philippines, Ltd. also filed an appeal. However, the Court of Appeals42 dismissed
it on December 16, 2002 for Kodak Philippines, Ltd.’s failure to file its appellant’s brief,
without prejudice to the continuation of the Lam Spouses’ appeal.43 The Court of
Appeals’ December 16, 2002 Resolution denying Kodak Philippines, Ltd.’s appeal
became final and executory on January 4, 2003.44

In the Decision45 dated March 30, 2005, the Court of Appeals Special Fourteenth
Division modified the February 26, 1999 Decision of the Regional Trial Court:

WHEREFORE, PREMISES CONSIDERED, the Assailed Decision dated 26 February

1999 of the Regional Trial Court, Branch 65 in Civil Case No. 92-3442 is hereby
MODIFIED. Plaintiff-appellant is ordered to pay the following:

1. P130,000.00 representing the amount of the generator set, plus legal interest at
12% per annum from December 1992 until fully paid; and

2. P440,000.00 as actual damages;

3. P25,000.00 as moral damages; and

4. P50,000.00 as exemplary damages.

SO ORDERED.46 (Emphasis supplied)

The Court of Appeals agreed with the trial court’s Decision, but extensively discussed the
basis for the modification of the dispositive portion.

The Court of Appeals ruled that the Letter Agreement executed by the parties showed
that their obligations were susceptible of partial performance. Under Article 1225 of the
New Civil Code, their obligations are divisible:
In determining the divisibility of an obligation, the following factors may be considered,
to wit: (1) the will or intention of the parties, which may be expressed or presumed; (2)
the objective or purpose of the stipulated prestation; (3) the nature of the thing; and (4)
provisions of law affecting the prestation.

Applying the foregoing factors to this case, We found that the intention of the parties is to
be bound separately for each Minilab Equipment to be delivered as shown by the
separate purchase price for each of the item, by the acceptance of Sps. Lam of separate
deliveries for the first Minilab Equipment and for those of the remaining two and the
separate payment arrangements for each of the equipment. Under this premise, Sps. Lam
shall be liable for the entire amount of the purchase price of the Minilab

Equipment delivered considering that Kodak had already completely fulfilled its
obligation to deliver the same. . . .

Third, it is also evident that the contract is one that is severable in character as
demonstrated by the separate purchase price for each of the minilab equipment. "If the
part to be performed by one party consists in several distinct and separate items and the
price is apportioned to each of them, the contract will generally be held to be severable.
In such case, each distinct stipulation relating to a separate subject matter will be treated
as a separate contract." Considering this, Kodak's breach of its obligation to deliver the
other two (2) equipment cannot bar its recovery for the full payment of the equipment
already delivered. As far as Kodak is concerned, it had already fully complied with its
separable obligation to deliver the first unit of Minilab Equipment.47 (Emphasis
supplied)

The Court of Appeals held that the issuance of a writ of replevin is proper insofar as the
delivered Minilab Equipment unit and its standard accessories are concerned, since
Kodak Philippines, Ltd. had the right to possess it:48

The purchase price of said equipment is P1,796,000.00 which, under the agreement is
payable with forty eight (48) monthly amortization. It is undisputed that Sps. Lam made
payments which amounted to Two Hundred Seventy Thousand Pesos (P270,000.00)
through the following checks: Metrobank Check Nos. 00892620 and 00892621 dated 31
March 1992 and 30 April 1992 respectively in the amount of Thirty Five Thousand Pesos
(P35,000.00) each, and BPI Family Check dated 31 July 1992 amounting to Two
Hundred Thousand Pesos (P200,000.00). This being the case, Sps. Lam are still liable to
Kodak in the amount of One Million Five Hundred Twenty Six Thousand Pesos
(P1,526,000.00), which is payable in several monthly amortization, pursuant to the Letter
Agreement. However, Sps. Lam admitted that sometime in May 1992, they had already
ordered their drawee bank to stop the payment on all the other checks they had issued to
Kodak as payment for the Minilab Equipment delivered to them. Clearly then, Kodak
ha[d] the right to repossess the said equipment, through this replevin suit. Sps. Lam
cannot excuse themselves from paying in full the purchase price of the equipment
delivered to them on account of Kodak’s breach of the contract to deliver the other two
(2) Minilab Equipment, as contemplated in the Letter Agreement.49 (Emphasis supplied)

Echoing the ruling of the trial court, the Court of Appeals held that the liability of the
Lam Spouses to pay the remaining balance for the first delivered unit is based on the
second sentence of Article 1592 of the New Civil Code.50 The Lam Spouses’ receipt and
use of the Minilab Equipment before they knew that Kodak Philippines, Ltd. would not
deliver the two (2) remaining units has made them liable for the unpaid portion of the
purchase price.51

The Court of Appeals noted that Kodak Philippines, Ltd. sought the rescission of its
contract with the Lam Spouses in the letter dated October 14, 1992.52 The rescission was
based on Article 1191 of the New Civil Code, which provides: "The power to rescind
obligations is implied in reciprocal ones, in case one of the obligors should not comply
with what is incumbent upon him."53 In its letter, Kodak Philippines, Ltd. demanded that
the Lam Spouses surrender the lone delivered unit of Minilab Equipment along with its
standard accessories.54

The Court of Appeals likewise noted that the Lam Spouses rescinded the contract through
its letter dated November 18, 1992 on account of Kodak Philippines, Inc.’s breach of the
parties’ agreement to deliver the two (2) remaining units.55

As a result of this rescission under Article 1191, the Court of Appeals ruled that "both
parties must be restored to their original situation, as far as practicable, as if the contract
was never entered into."56 The Court of Appeals ratiocinated that Article 1191 had the
effect of extinguishing the obligatory relation as if one was never created:57

To rescind is to declare a contract void in its inception and to put an end to it as though it
never were. It is not merely to terminate it and to release parties from further obligations
to each other but abrogate it from the beginning and restore parties to relative positions
which they would have occupied had no contract been made.58

The Lam Spouses were ordered to relinquish possession of the Minilab Equipment unit
and its standard accessories, while Kodak Philippines, Ltd. was ordered to return the
amount of ₱270,000.00, tendered by the Lam Spouses as partial payment.59

As to the actual damages sought by the parties, the Court of Appeals found that the Lam
Spouses were able to substantiate the following:

Incentive fee paid to Mr. Ruales in the amount of P100,000.00; the rider to the contract of
lease which made the Sps. Lam liable, by way of advance payment, in the amount of
P40,000.00, the same being intended for the repair of the flooring of the leased premises;
and lastly, the payment of P300,000.00, as compromise agreement for the pre-termination
of the contract of lease with Ruales.60

The total amount is ₱440,000.00. The Court of Appeals found that all other claims made
by the Lam Spouses were not supported by evidence, either through official receipts or
check payments.61

As regards the generator set improperly seized from Kodak Philippines, Ltd. on the basis
of the writ of replevin, the Court of Appeals found that there was no basis for the Lam
Spouses’ claim for reasonable rental of ₱5,000.00. It held that the trial court’s award of
12% interest, in addition to the cost of the generator set in the amount of ₱130,000.00, is
sufficient compensation for whatever damage the Lam Spouses suffered on account of its
improper seizure.62

The Court of Appeals also ruled on the Lam Spouses’ entitlement to moral and
exemplary damages, as well as attorney’s fees and litigation expenses:

In seeking recovery of the Minilab Equipment, Kodak cannot be considered to have

manifested bad faith and malevolence because as earlier ruled upon, it was well within its
right to do the same. However, with respect to the seizure of the generator set, where
Kodak misrepresented to the court a quo its alleged right over the said item, Kodak’s bad
faith and abuse of judicial processes become self-evident. Considering the off-setting
circumstances attendant, the amount of P25,000.00 by way of moral damages is
considered sufficient.
In addition, so as to serve as an example to the public that an application for replevin
should not be accompanied by any false claims and misrepresentation, the amount of
P50,000.00 by way of exemplary damages should be pegged against Kodak.

With respect to the attorney’s fees and litigation expenses, We find that there is no basis
to award Sps. Lam the amount sought for.63

Kodak Philippines, Ltd. moved for reconsideration of the Court of Appeals Decision, but
it was denied for lack of merit.64 However, the Court of Appeals noted that the Lam
Spouses’ Opposition correctly pointed out that the additional award of ₱270,000.00 made
by the trial court was not mentioned in the decretal portion of the March 30, 2005
Decision:

Going over the Decision, specifically page 12 thereof, the Court noted that, in addition to
the amount of Two Hundred Seventy Thousand (P270,000.00) which plaintiff-appellant
should return to the defendantsappellants, the Court also ruled that defendants-appellants
should, in turn, relinquish possession of the Minilab Equipment and the standard
accessories to plaintiff-appellant. Inadvertently, these material items were not mentioned
in the decretal portion of the Decision. Hence, the proper correction should herein be
made.65

The Lam Spouses filed this Petition for Review on April 14, 2005. On the other hand,
Kodak Philippines, Ltd. filed its Motion for Reconsideration66 before the Court of
Appeals on April 22, 2005.

While the Petition for Review on Certiorari filed by the Lam Spouses was pending before
this court, the Court of Appeals Special Fourteenth Division, acting on Kodak
Philippines, Ltd.’s Motion for Reconsideration, issued the Amended Decision67 dated
September 9, 2005. The dispositive portion of the Decision reads:

WHEREFORE, premises considered, this Court resolved that:

A. Plaintiff-appellant’s Motion for Reconsideration is hereby DENIED for lack

of merit.

B. The decretal portion of the 30 March 2005 Decision should now read as
follows:

"WHEREFORE, PREMISES CONSIDERED, the Assailed Decision dated 26 February

1999 of the Regional Trial Court, Branch 65 in Civil Cases No. 92-3442 is hereby
MODIFIED. Plaintiff-appellant is ordered to pay the following:

a. P270,000.00 representing the partial payment made on the Minilab equipment.

b. P130,000.00 representing the amount of the generator set, plus legal interest at
12% per annum from December 1992 until fully paid;

c. P440,000.00 as actual damages;

d. P25,000.00 as moral damages; and

e. P50,000.00 as exemplary damages.

Upon the other hand, defendants-appellants are hereby ordered to return to plaintiff-
appellant the Minilab equipment and the standard accessories delivered by plaintiff-
appellant.
SO ORDERED."

SO ORDERED.68 (Emphasis in the original)

Upon receiving the Amended Decision of the Court of Appeals, Kodak Philippines, Ltd.
filed a Motion for Extension of Time to File an Appeal by Certiorari under Rule 45 of the
1997 Rules of Civil Procedure before this court.69

This was docketed as G.R. No. 169639. In the Motion for Consolidation dated November
2, 2005, the Lam Spouses moved that G.R. No. 167615 and G.R. No. 169639 be
consolidated since both involved the same parties, issues, transactions, and essential facts
and circumstances.70

In the Resolution dated November 16, 2005, this court noted the Lam Spouses’
September 23 and September 30, 2005 Manifestations praying that the Court of Appeals’
September 9, 2005 Amended Decision be considered in the resolution of the Petition for
Review on Certiorari.71 It also granted the Lam Spouses’ Motion for Consolidation.72

In the Resolution73 dated September 20, 2006, this court deconsolidated G.R No. 167615
from G.R. No. 169639 and declared G.R. No. 169639 closed and terminated since Kodak
Philippines, Ltd. failed to file its Petition for Review.

II

We resolve the following issues:

First, whether the contract between petitioners Spouses Alexander and Julie Lam and
respondent Kodak Philippines, Ltd. pertained to obligations that are severable, divisible,
and susceptible of partial performance under Article 1225 of the New Civil Code; and

Second, upon rescission of the contract, what the parties are entitled to under Article
1190 and Article 1522 of the New Civil Code.

Petitioners argue that the Letter Agreement it executed with respondent for three (3)
Minilab Equipment units was not severable, divisible, and susceptible of partial
performance. Respondent’s recovery of the delivered unit was unjustified.74

Petitioners assert that the obligations of the parties were not susceptible of partial
performance since the Letter Agreement was for a package deal consisting of three (3)
units.75 For the delivery of these units, petitioners were obliged to pay 48 monthly
payments, the total of which constituted one debt.76 Having relied on respondent’s
assurance that the three units would be delivered at the same time, petitioners
simultaneously rented and renovated three stores in anticipation of simultaneous
operations.77 Petitioners argue that the divisibility of the object does not necessarily
determine the divisibility of the obligation since the latter is tested against its
susceptibility to a partial performance.78 They argue that even if the object is susceptible
of separate deliveries, the transaction is indivisible if the parties intended the realization
of all parts of the agreed obligation.79

Petitioners support the claim that it was the parties’ intention to have an indivisible
agreement by asserting that the payments they made to respondent were intended to be
applied to the whole package of three units.80 The postdated checks were also intended
as initial payment for the whole package.81 The separate purchase price for each item
was merely intended to particularize the unit prices, not to negate the indivisible nature of
their transaction.82 As to the issue of delivery, petitioners claim that their acceptance of
separate deliveries of the units was solely due to the constraints faced by respondent, who
had sole control over delivery matters.83

With the obligation being indivisible, petitioners argue that respondent’s failure to
comply with its obligation to deliver the two (2) remaining Minilab Equipment units
amounted to a breach. Petitioners claim that the breach entitled them to the remedy of
rescission and damages under Article 1191 of the New Civil Code.84

Petitioners also argue that they are entitled to moral damages more than the ₱50,000.00
awarded by the Court of Appeals since respondent’s wrongful act of accusing them of
non-payment of their obligations caused them sleepless nights, mental anguish, and
wounded feelings.85 They further claim that, to serve as an example for the public good,
they are entitled to exemplary damages as respondent, in making false allegations, acted
in evident bad faith and in a wanton, oppressive, capricious, and malevolent manner.86

Petitioners also assert that they are entitled to attorney’s fees and litigation expenses
under Article 2208 of the New Civil Code since respondent’s act of bringing a suit
against them was baseless and malicious. This prompted them to engage the services of a
lawyer.87

Respondent argues that the parties’ Letter Agreement contained divisible obligations
susceptible of partial performance as defined by Article 1225 of the New Civil Code.88
In respondent’s view, it was the intention of the parties to be bound separately for each
individually priced Minilab Equipment unit to be delivered to different outlets:89

The three (3) Minilab Equipment are intended by petitioners LAM for install[a]tion at
their Tagum, Davao del Norte, Sta. Cruz, Manila and Cotabato City outlets. Each of these
units [is] independent from one another, as many of them may perform its own job
without the other. Clearly the objective or purpose of the prestation, the obligation is
divisible.

The nature of each unit of the three (3) Minilab Equipment is such that one can perform
its own functions, without awaiting for the other units to perform and complete its job. So
much so, the nature of the object of the Letter Agreement is susceptible of partial
performance, thus the obligation is divisible.90

With the contract being severable in character, respondent argues that it performed its
obligation when it delivered one unit of the Minilab Equipment.91 Since each unit could
perform on its own, there was no need to await the delivery of the other units to complete
its job.92 Respondent then is of the view that when petitioners ordered the depository
bank to stop payment of the issued checks covering the first delivered unit, they violated
their obligations under the Letter Agreement since respondent was already entitled to full
payment.93

Respondent also argues that petitioners benefited from the use of the Minilab Equipment
for 10 months—from March to December 1992— despite having paid only two (2)
monthly installments.94 Respondent avers that the two monthly installments amounting
to ₱70,000.00 should be the subject of an offset against the amount the Court of Appeals
awarded to petitioners.95

Respondent further avers that petitioners have no basis for claiming damages since the
seizure and recovery of the Minilab Equipment was not in bad faith and respondent was
well within its right.96

III
The Letter Agreement contained an indivisible obligation.

Both parties rely on the Letter Agreement97 as basis of their respective obligations.
Written by respondent’s Jeffrey T. Go and Antonio V. Mines and addressed to petitioner
Alexander Lam, the Letter Agreement contemplated a "package deal" involving three (3)
units of the Kodak Minilab System 22XL, with the following terms and conditions:

This confirms our verbal agreement for Kodak Phils., Ltd. to provide Colorkwik
Laboratories, Inc. with three (3) units Kodak Minilab System 22XL . . . for your proposed
outlets in Rizal Avenue (Manila), Tagum (Davao del Norte), and your existing Multicolor
photo counter in Cotabato City under the following terms and conditions:

1. Said Minilab Equipment packages will avail a total of 19% multiple order
discount based on prevailing equipment price provided said equipment packages
will be purchased not later than June 30, 1992.

2. 19% Multiple Order Discount shall be applied in the form of merchandise and
delivered in advance immediately after signing of the contract.

* Also includes start-up packages worth P61,000.00.

3. NO DOWNPAYMENT.

4. Minilab Equipment Package shall be payable in 48 monthly installments at

THIRTY FIVE THOUSAND PESOS (P35,000.00) inclusive of 24% interest rate
for the first 12 months; the balance shall be re-amortized for the remaining 36
months and the prevailing interest shall be applied.

5. Prevailing price of Kodak Minilab System 22XL as of January 8, 1992 is at

ONE MILLION SEVEN HUNDRED NINETY SIX THOUSAND PESOS.

6. Price is subject to change without prior notice.

*Secured with PDCs; 1st monthly amortization due 45 days after installation[.]98

Based on the foregoing, the intention of the parties is for there to be a single transaction
covering all three (3) units of the Minilab Equipment. Respondent’s obligation was to
deliver all products purchased under a "package," and, in turn, petitioners’ obligation was
to pay for the total purchase price, payable in installments.

The intention of the parties to bind themselves to an indivisible obligation can be further
discerned through their direct acts in relation to the package deal. There was only one
agreement covering all three (3) units of the Minilab Equipment and their accessories.
The Letter Agreement specified only one purpose for the buyer, which was to obtain
these units for three different outlets. If the intention of the parties were to have a
divisible contract, then separate agreements could have been made for each Minilab
Equipment unit instead of covering all three in one package deal. Furthermore, the 19%
multiple order discount as contained in the Letter Agreement was applied to all three
acquired units.99 The "no downpayment" term contained in the Letter Agreement was
also applicable to all the Minilab Equipment units. Lastly, the fourth clause of the Letter
Agreement clearly referred to the object of the contract as "Minilab Equipment Package."

In ruling that the contract between the parties intended to cover divisible obligations, the
Court of Appeals highlighted: (a) the separate purchase price of each item; (b)
petitioners’ acceptance of separate deliveries of the units; and (c) the separate payment
arrangements for each unit.100 However, through the specified terms and conditions, the
tenor of the Letter Agreement indicated an intention for a single transaction. This intent
must prevail even though the articles involved are physically separable and capable of
being paid for and delivered individually, consistent with the New Civil Code:

Article 1225. For the purposes of the preceding articles, obligations to give definite
things and those which are not susceptible of partial performance shall be deemed to be
indivisible.

When the obligation has for its object the execution of a certain number of days of work,
the accomplishment of work by metrical units, or analogous things which by their nature
are susceptible of partial performance, it shall be divisible.

However, even though the object or service may be physically divisible, an obligation is
indivisible if so provided by law or intended by the parties. (Emphasis supplied)

In Nazareno v. Court of Appeals,101 the indivisibility of an obligation is tested against

whether it can be the subject of partial performance:

An obligation is indivisible when it cannot be validly performed in parts, whatever may

be the nature of the thing which is the object thereof. The indivisibility refers to the
prestation and not to the object thereof. In the present case, the Deed of Sale of January
29, 1970 supposedly conveyed the six lots to Natividad. The obligation is clearly
indivisible because the performance of the contract cannot be done in parts, otherwise the
value of what is transferred is diminished. Petitioners are therefore mistaken in basing the
indivisibility of a contract on the number of obligors.102 (Emphasis supplied, citation
omitted)

There is no indication in the Letter Agreement that the units petitioners ordered were
covered by three (3) separate transactions. The factors considered by the Court of
Appeals are mere incidents of the execution of the obligation, which is to deliver three
units of the Minilab Equipment on the part of respondent and payment for all three on the
part of petitioners. The intention to create an indivisible contract is apparent from the
benefits that the Letter Agreement afforded to both parties. Petitioners were given the
19% discount on account of a multiple order, with the discount being equally applicable
to all units that they sought to acquire. The provision on "no downpayment" was also
applicable to all units. Respondent, in turn, was entitled to payment of all three Minilab
Equipment units, payable by installments.

IV

With both parties opting for rescission of the contract under Article 1191, the Court of
Appeals correctly ordered for restitution.

The contract between the parties is one of sale, where one party obligates himself or
herself to transfer the ownership and deliver a determinate thing, while the other pays a
certain price in money or its equivalent.103 A contract of sale is perfected upon the
meeting of minds as to the object and the price, and the parties may reciprocally demand
the performance of their respective obligations from that point on.104

The Court of Appeals correctly noted that respondent had rescinded the parties’ Letter
Agreement through the letter dated October 14, 1992.105 It likewise noted petitioners’
rescission through the letter dated November 18, 1992.106 This rescission from both
parties is founded on Article 1191 of the New Civil Code:

The power to rescind obligations is implied in reciprocal ones, in case one of the obligors
should not comply with what is incumbent upon him.
The injured party may choose between the fulfilment and the rescission of the obligation,
with the payment of damages in either case. He may also seek rescission, even after he
has chosen fulfilment, if the latter should become impossible.

The court shall decree the rescission claimed, unless there be just cause authorizing the
fixing of a period.

Rescission under Article 1191 has the effect of mutual restitution.107 In Velarde v. Court
of Appeals:108

Rescission abrogates the contract from its inception and requires a mutual restitution of
benefits received.

....

Rescission creates the obligation to return the object of the contract. It can be carried out
only when the one who demands rescission can return whatever he may be obliged to
restore. To rescind is to declare a contract void at its inception and to put an end to it as
though it never was. It is not merely to terminate it and release the parties from further
obligations to each other, but to abrogate it from the beginning and restore the parties to
their relative positions as if no contract has been made.109 (Emphasis supplied, citations
omitted)

The Court of Appeals correctly ruled that both parties must be restored to their original
situation as far as practicable, as if the contract was never entered into. Petitioners must
relinquish possession of the delivered Minilab Equipment unit and accessories, while
respondent must return the amount tendered by petitioners as partial payment for the unit
received. Further, respondent cannot claim that the two (2) monthly installments should
be offset against the amount awarded by the Court of Appeals to petitioners because the
effect of rescission under Article 1191 is to bring the parties back to their original
positions before the contract was entered into. Also in Velarde:

As discussed earlier, the breach committed by petitioners was the nonperformance of a

reciprocal obligation, not a violation of the terms and conditions of the mortgage
contract. Therefore, the automatic rescission and forfeiture of payment clauses stipulated
in the contract does not apply. Instead, Civil Code provisions shall govern and regulate
the resolution of this controversy.

Considering that the rescission of the contract is based on Article 1191 of the Civil Code,
mutual restitution is required to bring back the parties to their original situation prior to
the inception of the contract. Accordingly, the initial payment of ₱800,000 and the
corresponding mortgage payments in the amounts of ₱27,225, ₱23,000 and ₱23,925
(totaling ₱874,150.00) advanced by petitioners should be returned by private
respondents, lest the latter unjustly enrich themselves at the expense of the former.110
(Emphasis supplied)

When rescission is sought under Article 1191 of the Civil Code, it need not be judicially
invoked because the power to resolve is implied in reciprocal obligations.111 The right to
resolve allows an injured party to minimize the damages he or she may suffer on account
of the other party’s failure to perform what is incumbent upon him or her.112 When a
party fails to comply with his or her obligation, the other party’s right to resolve the
contract is triggered.113 The resolution immediately produces legal effects if the non-
performing party does not question the resolution.114 Court intervention only becomes
necessary when the party who allegedly failed to comply with his or her obligation
disputes the resolution of the contract.115 Since both parties in this case have exercised
their right to resolve under Article 1191, there is no need for a judicial decree before the
resolution produces effects.

The issue of damages is a factual one. A petition for review on certiorari under Rule 45
shall only pertain to questions of law.116 It is not the duty of this court to re-evaluate the
evidence adduced before the lower courts.117 Furthermore, unless the petition clearly
shows that there is grave abuse of discretion, the findings of fact of the trial court as
affirmed by the Court of Appeals are conclusive upon this court.118 In Lorzano v.
Tabayag, Jr.:119

For a question to be one of law, the same must not involve an examination of the
probative value of the evidence presented by the litigants or any of them. The resolution
of the issue must rest solely on what the law provides on the given set of circumstances.
Once it is clear that the issue invites a review of the evidence presented, the question
posed is one of fact.

....

For the same reason, we would ordinarily disregard the petitioner’s allegation as to the
propriety of the award of moral damages and attorney’s fees in favor of the respondent
as it is a question of fact. Thus, questions on whether or not there was a preponderance
of evidence to justify the award of damages or whether or not there was a causal
connection between the given set of facts and the damage suffered by the private
complainant or whether or not the act from which civil liability might arise exists are
questions of fact.

Essentially, the petitioner is questioning the award of moral damages and attorney’s fees
in favor of the respondent as the same is supposedly not fully supported by evidence.
However, in the final analysis, the question of whether the said award is fully supported
by evidence is a factual question as it would necessitate whether the evidence adduced in
support of the same has any probative value. For a question to be one of law, it must
involve no examination of the probative value of the evidence presented by the litigants
or any of them.120 (Emphasis supplied, citations omitted)

The damages awarded by the Court of Appeals were supported by documentary

evidence.121 Petitioners failed to show any reason why the factual determination of the
Court of Appeals must be reviewed, especially in light of their failure to produce receipts
or check payments to support their other claim for actual damages.122

Furthermore, the actual damages amounting to ₱2,040,000.00 being sought by

petitioners123 must be tempered on account of their own failure to pay the rest of the
installments for the delivered unit. This failure on their part is a breach of their
obligation, for which the liability of respondent, for its failure to deliver the remaining
units, shall be equitably tempered on account of Article 1192 of the New Civil Code.124
In Central Bank of the Philippines v. Court of Appeals:125

Since both parties were in default in the performance of their respective reciprocal
obligations, that is, Island Savings Bank failed to comply with its obligation to furnish
the entire loan and Sulpicio M. Tolentino failed to comply with his obligation to pay his
₱17,000.00 debt within 3 years as stipulated, they are both liable for damages.

Article 1192 of the Civil Code provides that in case both parties have committed a breach
of their reciprocal obligations, the liability of the first infractor shall be equitably
tempered by the courts. WE rule that the liability of Island Savings Bank for damages in
not furnishing the entire loan is offset by the liability of Sulpicio M. Tolentino for
damages, in the form of penalties and surcharges, for not paying his overdue ₱17,000.00
debt. The liability of Sulpicio M. Tolentino for interest on his ₱17,000.00 debt shall not
be included in offsetting the liabilities of both parties. Since Sulpicio M. Tolentino
derived some benefit for his use of the ₱17,000.00, it is just that he should account for the
interest thereon.126 (Emphasis supplied)

The award for moral and exemplary damages also appears to be sufficient. Moral
damages are granted to alleviate the moral suffering suffered by a party due to an act of
another, but it is not intended to enrich the victim at the defendant’s expense.127 It is not
meant to punish the culpable party and, therefore, must always be reasonable vis-a-vis the
injury caused.128 Exemplary damages, on the other hand, are awarded when the
injurious act is attended by bad faith.129 In this case, respondent was found to have
misrepresented its right over the generator set that was seized. As such, it is properly
liable for exemplary damages as an example to the public.130

However, the dispositive portion of the Court of Appeals Amended Decision dated
September 9, 2005 must be modified to include the recovery of attorney’s fees and costs
of suit in favor of petitioners. In Sunbanun v. Go:131

Furthermore, we affirm the award of exemplary damages and attorney’s fees. Exemplary
damages may be awarded when a wrongful act is accompanied by bad faith or when the
defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner
which would justify an award of exemplary damages under Article 2232 of the Civil
Code. Since the award of exemplary damages is proper in this case, attorney’s fees and
cost of the suit may also be recovered as provided under Article 2208 of the Civil
Code.132 (Emphasis supplied, citation omitted)

Based on the amount awarded for moral and exemplary damages, it is reasonable to
award petitioners ₱20,000.00 as attorney’s fees.

WHEREFORE, the Petition is DENIED. The Amended Decision dated September 9,

2005 is AFFIRMED with MODIFICATION. Respondent Kodak Philippines, Ltd. is
ordered to pay petitioners Alexander and Julie Lam:

(a) P270,000.00, representing the partial payment made on the Minilab

Equipment;

(b) P130,000.00, representing the amount of the generator set, plus legal interest
at 12% .per annum from December 1992 until fully paid;

(c) P440,000.00 as actual damages;

(d) P25,000.00 as moral damages;

(e) P50,000.00 as exemplary damages; and

(f) P20,000.00 as attorney's fees.

Petitioners are ordered to return the Kodak Minilab System 22XL unit and its standard
accessories to respondent.

SO ORDERED.