PP vs Azzaraga DECISION SERENO, J.

:: In the present Petition for Prohibition with Prayer for Temporary Restraining Order/Preliminary Mandatory Injunction under Rule 65 of the Rules of Court, petitioner questions the legality of Chapter V, Section 9 of A.M. No. 03-8-02-SC or the Guidelines on the Selection and Appointment of Executive Judges and Defining Their Powers, Prerogatives and Duties issued by this Court on 27 January 2004, in relation to Section 90 of the Comprehensive Dangerous Drugs Act of 2002. The antecedent facts are as follows: On 7 February 2009, petitioner filed two (2) Informations[1] before the Regional Trial Court (RTC) of Iloilo City against private respondent John Rey Prevendido for Violation of Article II, Sections 5 and 11 of Republic Act (R.A.) No. 9165 or the Comprehensive Dangerous Drugs Act of 2002. The cases were raffled to Branch 36, a designated special court pursuant to R.A. 9165, presided by Judge Victor E. Gelvezon. Soon after, however, Judge Gelvezon disclosed that Coreen Gemarino, the Philippine Drug Enforcement Agency (PDEA) operative who conducted the entrapment operation against private respondent, had close family ties with him. Thus, in order to preserve the integrity of the court, Judge Gelvezon issued an Order[2] dated 17 February 2009 inhibiting himself from trying the case. The cases were then reassigned to the other special court, Branch 25, presided by Judge Evelyn E. Salao. On 24 February 2009, Judge Salao also issued an Order[3] whereby she inhibited herself for the reason that Coreen Gemarino was a cousin; thus, the cases were endorsed to the Office of the Executive Judge for reassignment. Citing Chap. V, Sec. 9 of A.M. No. 03-8-02-SC, Executive Judge Antonio M. Natino ordered the Clerk of Court to forward the entire records of the cases to Branch 37 presided over by public respondent, the pairing judge of Branch 36, which was the special court that originally handled the cases.[4] On 16 March 2009, however, as soon as public respondent proceeded with the cases, Prosecutor Kenneth John Amamanglon filed a Motion to Transfer Case to a Branch of Competent Jurisdiction.[5] He questioned the jurisdiction of public respondent to hear the cases, citing Sec. 90 of R.A. 9165. Prosecutor Amamanglon also claimed that, as the prosecutor assigned to Branch 37, he was not among the prosecutors who had been designated to handle cases exclusively involving violations of R.A. 9165. On the same day, respondent judge denied the motion on three grounds, to wit: 1. This motion ought not to have been filed in this court for lack of legal basis; 2. This court is not without jurisdiction to hear the instant case; 3. The matter about the appearance of Trial Prosecutor Kenneth John Amamanglon should have been addressed to the Department concerned.[6] Respondent judge thus set the hearing on the Motion for Admission to Bail[7] filed on 10 February 2008. He directed the city prosecutor to assign an assistant city prosecutor to handle the case effective 20 March 2009. Prosecutor Amamanglon, however, moved for a reconsideration[8] of respondent judge s Order, contending that the trial court needed a special designation from this Court in order to have jurisdiction over the cases. Thus, Prosecutor Amamanglon concluded, absent the special designation, respondent court should remand the cases to the Office of the Executive Judge for reraffling to another court specially designated pursuant to R.A. 9165. To support its contention, petitioner further cited this Court s 11 October 2005 Resolution in A.M. No. 05-9-03-SC, which clarified whether drug courts should be included in the regular raffle. Respondent judge denied the Motion for Reconsideration in its Order dated 20 March 2009.[9] He held that A.M. No. 03-8-02-SC should be deemed to have modified the designation of special courts for drug cases. He declared that, under the circumstances enumerated in A.M. No. 03-8-02-SC, Branch 37 itself became a special court. He further ruled that A.M. No. 05-9-03-SC was inapplicable. On 23 March 2009, the city prosecutor endorsed the assailed Orders of respondent judge to the Office of the Solicitor General for the appropriate review and filing of the necessary action.[10] Thus, on 24 March 2009, petitioner filed the present petition before this Court. On 27 March 2009, while the Petition for Prohibition was pending, respondent judge issued an Order[11] inhibiting himself from hearing the case after private respondent alleged that the former was biased for the prosecution. The cases were thereafter transferred to Branch 35, also a regular court, presided by Judge Fe Gallon-Gayanilo. Absent a temporary restraining order from this Court, the trial court proceeded to hear the cases. The present petition raises two (2) issues, to wit: I. WHETHER OR NOT RESPONDENT JUDGE HAS JURISDICTION OVER THE DRUG CASES IN CRIMINAL CASE NOS. 09-68815/16 DESPITE HIS ASSIGNMENT TO A REGULAR COURT II. WHETHER OR NOT A.M. NO. 03-8-02-SC IS IN CONFORMITY WITH SECTION 90 OF REPUBLIC ACT NO. 9165, MANDATING THE DESIGNATION OF SPECIAL COURTS TO EXCLUSIVELY TRY AND HEAR DRUG CASES[12] At the outset, it is an established policy that parties must observe the hierarchy of courts before they can seek relief directly from this Court. The rationale for this rule is twofold: (a) it would be an imposition upon the limited time of this Court; and (b) it would inevitably result in a delay, intended or otherwise, in the adjudication of cases, which in some instances, had to be remanded or referred to the lower court as the proper forum under the rules of procedure, or as better equipped to resolve the issues because this Court is not a trier of facts.[13] It is only for special and compelling reasons that this Court shall exercise its primary jurisdiction over the extraordinary remedy of writ of prohibition. However, in the case at bar, since it is only the Supreme Court itself that can clarify the assailed guidelines, petitioner is exempted from this rule. The petition, however, must fail. The crux of the matter in the present case is whether or not this Court violated Sec. 90 of R.A. 9165 when it issued A.M. 03-8-02SC, particularly Chap. V, Sec. 9, which prescribes the manner in which the executive judge reassigns cases in instances of inhibition or disqualification of judges sitting in special courts. Petitioner insists that should respondent judge (now Judge Fe Gallon-Gayanilo of Branch 35) continue hearing and trying the case, it would result in the circumvention of the legislative conferment of jurisdiction to a court to exclusively try and hear drug offenses only. [14]

Contrary to the assertion of petitioner, this Court did not commit any violation of R.A. 9165 when it issued the assailed guidelines. Rather, it merely obeyed Article VIII, Sec. 5(5) of the 1987 Constitution, which mandates that the rules promulgated by this Court should provide a simplified and inexpensive procedure for the speedy disposition of cases, in conformity with the right of all persons to a speedy disposition of their cases before all judicial, quasi-judicial, or administrative bodies.[15] As this Court stated in San Ildefonso Lines v. Court of Appeals,[16] there must be a renewed adherence to the time-honored dictum that procedural rules are designed not to defeat, but to safeguard, the ends of substantial justice. Petitioner grounds its assertion on Sec. 90 of R.A. 9165, which states: Jurisdiction. The Supreme Court shall designate special courts from among the existing Regional Trial Courts in each judicial region to exclusively try and hear cases involving violations of this Act. The number of courts designated in each judicial region shall be based on the population and the number of cases pending in their respective jurisdiction. ... ... ... Trial of the case under this Section shall be finished by the court not later than sixty (60) days from the date of the filing of the information. Decision on said cases shall be rendered within a period of fifteen (15) days from the date of submission of the case for resolution. Petitioner interprets the above provision to mean that a court must be specifically designated by the Supreme Court as a special court. But what is Chap. V, Sec. 9 of A.M. No. 03-8-02-SC if not an express designation of a special court? Chap. V, Sec. 9 of A.M. No. 03-8-02-SC provides: Raffle and re-assignment of cases in special courts where judge is disqualified or voluntarily inhibits himself/herself from hearing case. (a) Where a judge in a court designated to try and decide ... ... ... (3) cases involving violations of the Dangerous Drugs Act, or ...is disqualified or voluntarily inhibits himself/herself from hearing a case, the following guidelines shall be observed: (ii) Where there are more than two special courts of the same nature in the station, the Executive Judge shall immediately assign the case by raffle to the other or another special court of the same nature. In case the Presiding Judge of the other special court is also disqualified or inhibits himself/herself, the case shall be forwarded to the pairing judge of the special court which originally handled the said case. If the pairing judge is also disqualified or inhibits himself/herself, the case shall be raffled to the other regular courts. At the next raffle, an additional case shall be assigned to the disqualified or inhibiting judge/s to replace the case so removed from his/her/their court... (Emphasis supplied.) Under R.A. 9165, Congress empowered this Court with the full discretion to designate special courts to hear, try and decide drug cases. It was precisely in the exercise of this discretionary power that the powers of the executive judge were included in Chap. V, Sec. 9 of A.M. No. 03-8-02-SC vis--vis Sec. 5(5) of Article VIII of the 1987 Constitution. Thus, in cases of inhibition or disqualification, the executive judge is mandated to assign the drug case to a regular court in the following order: first, to the pairing judge of the special court where the case was originally assigned; and, second, if the pairing judge is likewise disqualified or has inhibited himself, then to another regular court through a raffle. Under these exceptional circumstances, this Court designated the regular court, ipso facto, as a special court but only for that case. Being a designated special court, it is likewise bound to follow the relevant rules in trying and deciding the drug case pursuant to R.A. 9165. Petitioner also contends that the legislative intent of R.A. 9165 is to make use of the expertise of trial judges in complicated and technical rules of the special drug law. Thus, petitioner suggests that in instances in which all the judges of special courts have inhibited themselves or are otherwise disqualified, the venue for the affected drug cases should be transferred to the nearest station that has designated special courts. Petitioner s suggestion is ill-advised. To subscribe to this suggestion is to defeat the purpose of the law. Undoubtedly, petitioner s unwarranted suggestion would entail the use of precious resources, time and effort to transfer the cases to another station. On the other hand, the assailed guidelines provide for a much more practical and expedient manner of hearing and deciding the cases. To reiterate, over and above utilizing the expertise of trial judges, the rationale behind Sec. 90 of R.A. 9165 and Chap. V, Sec. 9 of A.M. No. 03-8-02-SC is to effect an efficient administration of justice and speedy disposition of cases, as well as to breathe life into the policy enunciated in Sec. 2 of R.A. 9165, to wit: Declaration of policy. It is the policy of the State to safeguard the integrity of its territory and the well-being of its citizenry particularly the youth, from the harmful effects of dangerous drugs on their physical and mental well-being, and to defend the same against acts or omissions detrimental to their development and preservation. In view of the foregoing, the State needs to enhance further the efficacy of the law against dangerous drugs, it being one of today's more serious social ills. Toward this end, the government shall pursue an intensive and unrelenting campaign against the trafficking and use of dangerous drugs and other similar substances through an integrated system of planning, implementation and enforcement of anti-drug abuse policies, programs, and projects. The government shall however aim to achieve a balance in the national drug control program so that people with legitimate medical needs are not prevented from being treated with adequate amounts of appropriate medications, which include the use of dangerous drugs. It is further declared the policy of the State to provide effective mechanisms or measures to re-integrate into society individuals who have fallen victims to drug abuse or dangerous drug dependence through sustainable programs of treatment and rehabilitation. (Emphasis supplied.)

As a matter of fact, this Court also issued similar guidelines with regard to environmental cases,[17] election cases involving elective municipal officials,[18] and cases that involve killings of political activists and members of media.[19] Foremost in its mind is the speedy and efficient administration of justice. Petitioner further points out that this Court issued A.M. No. 05-9-03-SC to define the phrase to exclusively try and hear cases involving violations of this Act to mean ...[c]ourts designated as special courts for drug cases shall try and hear drug-related cases only, i.e., cases involving violations of RA 9165, to the exclusion of other courts. Hence, petitioner submits, drug cases should not be assigned to regular courts according to the procedure provided in A.M. No. 03-8-02-SC; in other words, the two issuances contradict each other. Again, this Court disagrees. Petitioner underestimates the rule-making power of this Court. Nothing in A.M. No. 05-9-03-SC or in A.M. No. 03-8-03-SC suggests that they contradict each other. In fact, both were issued with a common rationale, that is, to expeditiously resolve criminal cases involving violations of R.A. 9165, especially in the light of the strict time frame provided in Sec. 90 of R.A. 9165. Both provide for the guidelines regarding the assignment of drug cases to special courts. Thus, A.M. No. 05-9-03-SC provides for the exemption of special courts from the regular raffle under normal circumstances, while A.M. No. 03-8-02-SC provide for the assignment of drug cases to special courts except under special circumstances that would warrant reassignment to a regular court. Moreover, the exemption of special courts from the regular raffle was not established as an ironclad rule. A.M. No. 05-9-03-SC does in fact allow special courts to acquire jurisdiction over cases that are not drug cases. In the interest of justice, executive judges may recommend to the Supreme Court the inclusion of drug courts in the regular raffle, and this Court has the discretion to approve the recommendation, as the Resolution states: WHEREFORE, Executive Judges and presiding judges of special courts for drug cases shall hereby observe the following guidelines: 4. If, in the opinion of Executive Judges, the caseload of certain drug courts allows their inclusion in the regular raffle without adversely affecting their ability to expeditiously resolve the drug cases assigned to them and their inclusion in the regular raffle becomes necessary to decongest the caseload of other branches, the concerned Executive Judges shall recommend to this Court the inclusion of drug courts in their jurisdiction in the regular raffle. The concerned drug courts shall remain exempt from the regular raffle until the recommendation is approved. (Emphasis supplied.) In conclusion, the two sets of guidelines are examples of this Court s foresight and prudence in the exercise of its rule-making power. These guidelines were issued to prevent or address possible scenarios that might hinder the proper administration of justice. WHEREFORE, in view of the foregoing, the Petition for Prohibition is DISMISSED for lack of merit. SO ORDERED.

For review in these consolidated petitions is the November 23, 2004 Decision[1] of the Court of Appeals (CA) in CA-G.R. SP. No. [3] [2] 78218, as well as the Resolutions dated February 4, 2005 and September 13, 2005, denying the motions for its reconsideration. Liberty Commercial Center, Inc. (LICOMCEN) is a corporation engaged in the business of operating shopping malls. In March 1997, the City Government of Legaspi leased its lot in the Central District of Legaspi to LICOMCEN. The Lease Contract was based on the Build-Operate-Transfer Scheme under which LICOMCEN will finance, develop and construct the LCC City Mall (CITIMALL). LICOMCEN engaged E.S. De Castro and Associates (ESCA) as its engineering consultant for the project. On September 1, 1997, LICOMCEN and Foundation Specialist, Inc. (FSI) signed a Construction Agreement for the bored pile [4] foundation of CITIMALL. Forming part of the agreement were the Bid Documents and the General Conditions of Contract (GCC)[5] prepared by ESCA. A salient provision of the GCC is the authority granted the engineering consultant to suspend the work, wholly or partly. LICOMCEN was also given the right to suspend the work or terminate the contract. Among other caveats, GC-05 provided that questions arising out or in connection with the contract or its breach should be litigated in the courts of Legaspi, except where otherwise stated, or when such question is submitted for settlement through arbitration. GC-61 also provided that disputes arising out of the execution of the work should first be submitted to LICOMCEN for resolution, whose decision shall be final and binding, if not contested within thirty (30) days from receipt. Otherwise, the dispute shall be submitted to the Construction Industry Arbitration Commission (CIAC) for arbitration. Upon receipt of the notice to proceed, FSI commenced work and undertook to complete it within ninety (90) days, all in accordance with the approved drawing, plans, and specifications. In the course of the construction, LICOMCEN revised the design for the CITIMALL involving changes in the bored piles and substantial reduction in number and length of the piles. ESCA, thus, informed FSI of the major revision on December 16, [6] 1997 and ordered the non-delivery of the steel bars, pending approval of the new design. FSI, however, responded that the steel bars had already been loaded and shipped out of Manila. ESCA then suggested the delivery of 50% of the steel bars to the jobsite and the return of the other 50% to Manila, where storage and security were better.[7] On January 15, 1998, LICOMCEN sent another letter to FSI ordering all the construction activities suspended, because Albay Accredited Constructions Association (AACA) had contested the award of the Contract of Lease to LICOMCEN and filed criminal complaints with the Office of the Ombudsman for violation of the Anti-Graft and Corrupt Practices Act against LICOMCEN and the City Government of Legaspi. Thus, pending a clear resolution of the case, LICOMCEN decided to suspend all construction activities. It also requested FSI not to unload the steel bars.[8]

On January 17, 1998, the steel bars for the CITIMALL arrived at the Legaspi port, and despite LICOMCEN s previous request, these [9] were unloaded and delivered to the jobsite and some to Tuanzon compound, FSI s batching site. Then, on January 19, 1998, LICOMCEN reiterated its decision to suspend construction, and ordered demobilization of the materials and equipment for the [10] Finally, on February 17, 1998, LICOMCEN indefinitely suspended the project, due to the pending cases in the project. [11] Ombudsman. FSI demanded payment for its work accomplishments, material costs, and standby off equipment, as well as other expenses [12] amounting to P22,667,026.97, but LICOMCEN took no heed. On October 12, 1998, the Ombudsman dismissed the cases filed against the City Government and LICOMCEN. The dismissal was affirmed by this Court[13]and attained finality on September 20, 2000.[14] This notwithstanding, LICOMCEN did not lift the suspension of the construction that it previously ordered. It then hired Designtech Consultants and Management System (Designtech) as its new project consultant, which, in turn, invited contractors, including FSI, to bid for the bored piling works for [15] CITIMALL. FSI reiterated its demand for payment from LICOMCEN, but the latter failed and refused to pay, prompting FSI to file a petition for arbitration with the CIAC, docketed as CIAC Case No. 37-2002. LICOMCEN denied the claim of FSI, arguing that it lacks factual and legal basis. It also assailed the jurisdiction of the CIAC to take cognizance of the suit, claiming that jurisdiction over the controversy was vested in the regular courts, and that arbitration under the GC-61 of the GCC may only be resorted to if the dispute concerns the execution of works, not if it concerns breach of contract. During the preliminary conference, the parties agreed to submit the controversy to the Arbitral Tribunal and signed the Terms of Reference (TOR).[16] But onFebruary 4, 2003, LICOMCEN, through a collaborating counsel, filed an Ex Abundati Ad Cautela Omnibus Motion.[17] It reiterated the claim that the arbitration clause in the contract does not cover claims for payment of unrealized profits and damages, and FSI did not comply with the condition precedent for the filing of the suit, thus, the CIAC cannot take cognizance of the suit. LICOMCEN further averred that FSI has no cause of action against it because the claim for material costs has no factual basis and because the contract is clear that FSI cannot claim damages beyond the actual work accomplishments, but only reasonable expenses for the suspension or termination of the contract. LICOMCEN also alleged that the expenses incurred by FSI, if there be any, cannot be considered reasonable, because there was no showing that the materials were ordered and actually delivered to the job site. Finally, it prayed for the suspension of the proceedings, pending the resolution of its omnibus motion. On February 20, 2003, the CIAC issued an Order[18] denying LICOMCEN s omnibus motion on the ground that it runs counter to the stipulations in the TOR. Trial, thereafter, ensued. FSI and LICOMCEN presented witnesses in support of their respective claims. [19] After due proceedings, the CIAC rendered a Decision in favor of FSI, the dispositive portion of which reads: WHEREFORE, premises considered, judgment is hereby rendered in favor of Claimant FOUNDATION SPECIALIST, INC. and against Respondent LICOMCEN, INCORPORATED, ordering the latter to pay to the former the following amounts: 1. P14,643,638. 51 representing material costs at site; 2. P2,957,989.94 representing payment for equipment and labor standby costs; 3. P5,120,000.00 representing unrealized profit; and 4. P1,264,404.12 representing the unpaid balance of FSI's billing. FURTHER, the said Respondent is ordered to solely and exclusively bear the entire cost of arbitration proceedings in the total amount of P474,407.95 as indicated in the TOR, and to reimburse the herein Claimant of any amount thereof which it had advanced and paid pursuant to TOR. All the above-awarded amounts shall bear interest of 6% per annum from the date of the formal demand on February 3, 1998 (Par. 10, Admitted Facts, TOR) until the date this Decision/Award becomes final and executory and 12% per annum from the date this Decision/Award becomes final and executory until fully paid. SO ORDERED.[20]

LICOMCEN elevated the CIAC Decision to the CA. It faulted the CIAC for taking cognizance of the case, arguing that it has no jurisdiction over the suit. It also assailed the award and the ruling that the contract had been terminated, allegedly for lack of factual and legal basis. On November 23, 2004, the CA rendered the assailed Decision, modifying the CIAC Decision, viz.: WHEREFORE, the foregoing considered, the assailed Decision is hereby MODIFIED to the extent that paragraph 1 of the dispositive portion is amended and accordingly, petitioner is ordered to pay only the amount of P5,694,939.865 representing the material costs at site; and paragraphs 2 and 3 on equipment and labor standby costs and unrealized profit of the same dispositive portion are deleted. The rest is AFFIRMED in all respects. No cost. SO ORDERED.[21] Both LICOMCEN and FSI filed motions for partial reconsideration, but these were denied by the CA in its Resolutions [23] [22] dated February 4, 2005 and September 13, 2005. LICOMCEN and FSI reacted with the instant petitions. Considering that the cases involve the same parties, issues and assailed decision, this Court ordered the consolidation of G.R. No. 167022 and G.R. No. 169678 in its Resolution dated November 20, 2006. LICOMCEN raised the following issues: 1.WHETHER OR NOT THE PROJECT WAS MERELY SUSPENDED AND NOT TERMINATED.

2. WHETHER OR NOT THE TRIBUNAL HAD JURISDICTION OVER THE DISPUTE. 3.WHETHER OR NOT FSI IS ENTITLED TO CLAIM ANY AMOUNT OF DAMAGES. 4.WHETHER OR NOT LICOMCEN IS THE PARTY AT FAULT.[24] FSI, on the other hand, interposes the following: 1. THE COURT OF APPEALS ERRED IN NOT AWARDING TO PETITIONER THE FULL AMOUNT OF MATERIAL COSTS AT THE SITE. 2. THE COURT OF APPEALS ERRED IN DENYING PETITIONER'S CLAIM FOR EQUIPMENT AND LABOR STANDBY COSTS. 3. THE COURT OF APPEALS ERRED IN DENYING PETITIONER'S CLAIM FOR UNREALIZED PROFIT. 4. THE COURT OF APPEALS ERRED IN RENDERING A MERE MINUTE RESOLUTION IN RESOLVING PETITIONER'S MOTION FOR PARTIAL RECONSIDERATION.[25] First, we resolve the issue of the CIAC s jurisdiction. LICOMCEN insists that the CIAC had no jurisdiction over the suit. Citing GC-05 and GC-61 of the GCC, it posits that jurisdiction over the dispute rests with the regular courts of Legaspi City. The argument is misplaced. The power and authority of a court to hear, try, and decide a case is defined as jurisdiction. Elementary is the distinction between jurisdiction over the subject matter and jurisdiction over the person. The former is conferred by the Constitution or by law, while the latter is acquired by virtue of the party's voluntary submission to the authority of the court through the exercise of its coercive process.[26] Section 4 of Executive Order (E.O.) No. 1008, or the Construction Industry Arbitration Law, provides: SECTION 4. Jurisdiction. The CIAC shall have original and exclusive jurisdiction over disputes arising from, or connected with, contracts entered into by parties involved in construction in the Philippines, whether the dispute arises before or after the completion of the contract, or after the abandonment or breach thereof. These disputes may involve government or private contracts. For the Board to acquire jurisdiction, the parties to a dispute must agree to submit the same to voluntary arbitration. The jurisdiction of the CIAC may include but is not limited to violation of specifications for materials and workmanship; violation of the terms of agreement; interpretation and/or application of contractual provisions; amount of damages and penalties; commencement time and delays; maintenance and defects; payment default of employer or contractor and changes in contract cost. Excluded from the coverage of this law are disputes arising from employer-employee relationships which shall continue to be covered by the Labor Code of the Philippines. (Emphasis supplied) Corollarily, Section 1, Article III of the Rules of Procedure Governing Construction Arbitration provides that recourse to the CIAC may be availed of whenever a contract contains a clause for the submission of a future controversy to arbitration, thus: SECTION 1. Submission to CIAC Jurisdiction. An arbitration clause in a construction contract or a submission to arbitration of a construction dispute shall be deemed an agreement to submit an existing or future controversy to CIAC jurisdiction, notwithstanding the reference to a different arbitration institution or arbitral body in such contract or submission. When a contract contains a clause for the submission of a future controversy to arbitration, it is not necessary for the parties to enter into a submission agreement before the claimant may invoke the jurisdiction of CIAC. Clearly then, the CIAC has original and exclusive jurisdiction over disputes arising from or connected with construction contracts entered into by parties that have agreed to submit their dispute to voluntary arbitration.[27] The GCC signed by LICOMCEN and FSI had the following arbitral clause: GC-61 DISPUTES AND ARBITRATION Should any dispute of any kind arise between the LICOMCEN, INCORPORATED and the Contractor or the Engineer and the Contractor in connection with, or arising out of the execution of the Works, such dispute shall first be referred to and settled by the LICOMCEN, INCORPORATED who shall within a period of thirty (30) days after being formally requested by either party to resolve the dispute, issue a written decision to the Engineer and Contractor. Such decision shall be final and binding upon the parties and the Contractor shall proceed with the execution of the Works with due diligence notwithstanding any Contractor s objection to the decision of the Engineer. If within a period of thirty (30) days from receipt of the LICOMCEN, INCORPORATED s decision on the dispute, either party does not officially give notice to contest such decision through arbitration, the said decision shall remain final and binding. However, should any party within thirty (30) days from receipt of the LICOMCEN, INCORPORATED s decision contest said decision, the dispute shall be submitted for arbitration under the Construction Industry Arbitration Law, Executive Order 1008. The arbitrators appointed under said rules and regulations shall have full power to open up, revise and review any decision, opinion, direction, certificate or valuation of the LICOMCEN, INCORPORATED. Neither party shall be limited to the evidence or arguments put before the LICOMCEN, INCORPORATED for the purpose of obtaining his said decision. No decision given by the LICOMCEN, INCORPORATED shall disqualify him from being called as a witness and giving evidence in the arbitration. It is understood that the obligations of the LICOMCEN, INCORPORATED, the Engineer and the Contractor shall not be altered by reason of the arbitration being conducted during the progress of the Works.[28] LICOMCEN theorizes that this arbitration clause cannot vest jurisdiction in the CIAC, because it covers only disputes arising out of or in connection with the execution of works, whether permanent or temporary. It argues that since the claim of FSI was not connected to or did not arise out of the execution of the works as contemplated in GC-61, but is based on alleged breach of contract, under GC-05[29] of the GCC, the dispute can only be taken cognizance of by the regular courts. Furthermore, FSI failed

to comply with the condition precedent for arbitration. Thus, according to LICOMCEN, the CIAC erred in assuming jurisdiction over the case. Contrary to what LICOMCEN wants to portray, the CIAC validly acquired jurisdiction over the dispute. Firstly, LICOMCEN [30] submitted itself to the jurisdiction of the CIAC when its president Antonio S. Tan signed the TOR during the preliminary conference. The TOR states: V. MODE OF ARBITRATION The parties agree that their differences be settled by an Arbitral Tribunal who were appointed in accordance with the provision of Article V, Section 2 of the CIAC Rules of Procedure Governing Construction Arbitration, as follows SALVADOR C. CEGUERA Chairma FELISBERTO G.L. REYES Member SALVADOR P. CASTRO, JR. Member The case shall be decided in accordance with the Contract of the parties and the Construction Industry Arbitration Law (Executive Order No. 1008) and on the basis of evidence submitted, applicable laws, and industry practices where applicable under the law.[31] Secondly, we agree with the CA that the suit arose from the execution of works defined in the contract. As it aptly ratiocinated: [T]he dispute between [FSI] and [LICOMCEN] arose out of or in connection with the execution of works. [LICOMCEN] has gone quite far in interpreting disputes arising out of or in connection with the execution of work as separate and distinct from disputes arising out of or in connection with the contract citing the various provisions of the Construction Agreement and Bid Documents to preclude CIAC from taking cognizance of the case. To the mind of this Court, such differentiation is immaterial. Article 1374 of the Civil Code on the interpretation of contracts ordains that the various stipulations of a contract shall be interpreted together, attributing to the doubtful ones that sense which may result from all of them taken jointly. Essentially, while we agree that [FSI s] money claims against [LICOMCEN] arose out of or in connection with the contract, the same necessarily arose from the work it accomplished or sought to accomplish pursuant thereto. Thus, said monetary claims can be categorized as a dispute arising out of or in connection with the execution of work.[32] Thirdly, FSI complied with the condition precedent provided in GC-61. Record shows that FSI referred the claim to ESCA on February 3, 1998, and then to LICOMCEN on March 3, 1998,[33] but it was disallowed on March 24, 1998.[34] Then, on April 15, 1998, FSI rejected the evaluation of the billings made by ESCA and LICOMCEN and further informed the latter of its intention to [35] FSI exerted efforts to have the claim settled amicably, but no settlement was arrived at. Hence, turn over the project. on March 14, 2001, FSI through counsel made a final demand to pay.[36] LICOMCEN, however, adamantly refused to pay, prompting FSI to file suit with the CIAC. Clearly, FSI substantially complied with the condition precedent laid down in GC61. Finally, the arbitral clause in the agreement, considering that the requisites for its application are present, is a commitment by the parties to submit to arbitration the disputes covered therein. Because that clause is binding, they are expected to abide by [37] it in good faith. Just as meaningful, the issue of jurisdiction was rendered moot by LICOMCEN's active participation in the proceedings before the CIAC. It is true that LICOMCEN initially assailed the jurisdiction of the CIAC. But when the CIAC asserted its jurisdiction in its February 20, 2003 Order,[38] LICOMCEN did not seek relief from the CIAC ruling. Instead, LICOMCEN took part in the discussion on the merits of the case, even going to the extent of seeking affirmative relief. The active involvement of a party in the proceedings is tantamount to an invocation of, or at least an acquiescence to, the court's jurisdiction. Such participation indicates a willingness to abide by the resolution of the case, and will bar said party from later on impugning the court or body's [39] jurisdiction. The Court will not countenance the effort of any party to subvert or defeat the objective of voluntary arbitration [40] for its own private motives. After submitting itself to arbitration proceedings and actively participating therein, LICOMCEN is estopped from assailing the jurisdiction of the CIAC, merely because the latter rendered an adverse decision. Having resolved the issue of jurisdiction, we proceed to the merits of the case. LICOMCEN faults the CIAC and the CA for ruling that the contract had been terminated, insisting that it was merely indefinitely suspended. To bolster its position, LICOMCEN cited GC-41 of the GCC which reads: GC-41 LICOMCEN, INCORPORATED S RIGHT TO SUSPEND WORK OR TERMINATE THE CONTRACT xxxx 2. For Convenience of LICOMCEN, INCORPORATED If any time before completion of work under the Contract it shall be found by the LICOMCEN, INCORPORATED that reasons beyond the control of the parties render it impossible or against the interest of LICOMCEN, INCORPORATED to complete the work, the LICOMCEN, INCORPORATED at any time, by written notice to the Contractor, may discontinue the work and terminate the Contract in whole or in part. Upon issuance of such notice of termination, the Contractor shall discontinue the work in such manner, sequence and at such time as the LICOMCEN, INCORPORATED/Engineer may direct, continuing and doing after said notice only such work and only until such time or times as the LICOMCEN, INCORPORATED/Engineer may direct. x x x[41] (Emphasis supplied)

Unfortunately for LICOMCEN, this provision does not support but enervates its theory of indefinite suspension. The cited provision may be invoked only in cases of termination of contract, as clearly inferred from the phrase discontinue the work and terminate the contract. And in statutory construction implies conjunction, joinder or union.[42] Thus, by invoking GC41, LICOMCEN, in effect, admitted that the contract had already been terminated. The termination of the contract was made obvious and unmistakable when LICOMCEN s new project consultant rebidded the contract for the bored piling works for the CITIMALL.[43] The claim that the rebidding was conducted for purposes of getting [44] cost estimates for a possible new design taxes our credulity. It impresses us as nothing more than a lame attempt of LICOMCEN to avoid liability under the contract. As the CIAC had taken pains to demonstrate: Suspension of work is ordinarily understood to mean a temporary work stoppage or a cessation of work for the time being. It may be assumed that, at least initially, LCC had a valid reason to suspend the Works on December 16, 1997 pursuant to GC-38 above-quoted. The evidence show, however, that it has not ordered a resumption of work up to the present despite the lapse of more than four years, and despite the dismissal of the case filed with the Office of the Ombudsman which it gave as reason for the suspension in the first place. As such, LCC s suspension of the Works had already lost its essential characteristic of being merely temporary or only for the time being. To still consider it a suspension at this point is to do violence to reason and logic. Perhaps because of this LCC came up with the assertion that what we have is an indefinite suspension. There is no such term in the Construction Agreement or the Contract Documents. In fact, it is unknown in the construction industry. Construction work may either be suspended or terminated, but never indefinitely suspended. Since it is not sanctioned by practice and not mentioned in the herein Construction Agreement and the Contract Documents, indefinite suspension is irregular and invalid. Due to the apparent incongruity of an indefinite suspension, LCC changed the term to continued suspension in its Memorandum. Unfortunately for it, the factual situation remains unchanged. The Works stay suspended for an indefinite period of time.[45] Accordingly, the CA did not err in affirming the CIAC ruling that the contract had already been terminated. Neither can LICOMCEN find refuge in the principle of laches to steer clear of liability. It is not just the lapse of time or delay that constitutes laches. The essence of laches is the failure or neglect, for an unreasonable and unexplained length of time, to do that which, through due diligence, could or should have been done earlier, thus giving rise to a presumption that the party entitled to [46] assert it had either abandoned or declined to assert it. Indeed, FSI filed its petition for arbitration only on October 8, 2002, or after the lapse of more than four years since the project was indefinitely suspended. But we agree with the CIAC and the CA that such delay can hardly be considered unreasonable to give rise to the conclusion that FSI already abandoned its claim. On the contrary, the delay was due to the fact that FSI exerted efforts to have the claim settled extra-judicially which LICOMCEN rebuffed. Besides, except for LICOMCEN s allegation that the filing of the suit is already barred by laches, no proof was offered to show that the filing of the suit was iniquitous or unfair to LICOMCEN. We reiterate that, unless reasons of inequitable proportions are adduced, a delay within the prescriptive period is sanctioned by law and is not to be considered delay that would bar relief.[47] In the instant case, FSI filed its claim well within the [48] ten-year prescriptive period provided for in Article 1144 of the Civil Code. Therefore, laches cannot be invoked to bar FSI from instituting this suit. The doctrine of laches is based upon grounds of public policy which require, for the peace of society, discouraging stale claims. It is principally a question of the inequity or unfairness of permitting a right or claim to be enforced or asserted. There is no absolute rule as to what constitutes laches; each case is to be determined according to its particular circumstances. The question of laches is addressed to the sound discretion of the court, and since it is an equitable doctrine, its application is controlled by equitable considerations. It cannot be worked to defeat justice or to perpetrate fraud and injustice. [49] We now come to the monetary awards granted to FSI. LICOMCEN avers that the award lacked factual and legal basis. FSI, on the other hand, posits otherwise, and cries foul on the modification made by the CA. It asserts that the CA erred in disregarding the pieces of evidence that it submitted in support of the claim despite the lack of objection and opposition from LICOMCEN. It insists entitlement to the full amount of material costs at site, for equipment and labor standard costs, as well as unrealized profits. In this connection, we must emphasize the distinction between admissibility of evidence and its probative value. Just because a piece of evidence is not objected to does not ipso facto mean that it conclusively proves the fact in dispute. The admissibility of evidence should not be confused with its probative value. Admissibility refers to the question of whether certain pieces of evidence are to be considered at all, while probative value refers to the question of whether the admitted evidence proves an issue. Thus, a particular item of evidence may be admissible, but its evidentiary weight depends on judicial evaluation within the [50] guidelines provided by the rules of evidence. We have carefully gone over the records and are satisfied that the findings of the CA are well supported by evidence. As mentioned above, the contract between LICOMCEN and FSI had already been terminated and, in such case, the GCC expressly provides that: GC-42 PAYMENT FOR TERMINATED CONTRACT If the Contract is terminated as aforesaid, the Contractor will be paid for all items of work executed, and satisfactorily completed and accepted by the LICOMCEN, INCORPORATED up to the date of termination, at the rates and prices provided for in the contract and in addition:

1. The cost of partially accomplished items of additional or extra work agreed upon by the LICOMCEN, INCORPORATED and the Contractor. 2. The cost of materials or goods reasonably ordered for the Permanent or Temporary Works which have been delivered to the Contractor but not yet used and which delivery has been certified by the Engineer. 3. The reasonable cost of demobilization For any payment due the Contractor under the above conditions, the LICOMCEN, INCORPORATED, however, shall deduct any outstanding balance due from the Contractor for advances in respect to mobilization and materials, and any other sum the LICOMCEN, INCORPORATED is entitled to be credited.[51] We agree with the Court of Appeals that the liability of LICOMCEN for the cost of materials on site is only P5,694,939.85. The said award represents the materials reasonably ordered for the project and which were delivered to the job site. FSI cannot demand full payment of the steel bars under Purchase Order No. 6035.[52] As shown by the records, the steel bars were loaded at [54] [53] But as early as December 16, 1997, M/V Alberto only on January 12, 1998 and reached Legaspi City on January 16, 1998. LICOMCEN already informed FSI of the major revision of the design and ordered the non-delivery to the jobsite of the 50% of the steel bars. Inexplicably, FSI continued the delivery. Worse, it unloaded all the steel bars and delivered them to the jobsite and [55] some to the Tuanzon batching plant onJanuary 17, 1998, despite LICOMCEN s order not to do so. FSI cannot now claim payment of the cost of all these materials. LICOMCEN, however, cannot deny liability for 50% of the steel bars because, as mentioned, it ordered their delivery to the jobsite. The steel bars had in fact been delivered to the jobsite and inventoried by Cesar Cortez of ESCA,[56] contrary to LICOMCEN s claim. The payment of these materials is, therefore, in order, pursuant to GC-41: The Contractor shall receive compensation for reasonable expenses incurred in good faith for the performance of the Contract and for reasonable expenses associated with the termination of the Contract. x x x.[57] We also uphold the denial of FSI s claim for equipment and labor standard costs, as no convincing evidence was presented to prove it. The list of rented equipment[58] and the list of workers[59] offered by FSI and which were admitted by CIAC, are far from being clear and convincing proof that FSI actually incurred the expenses stated therein. As aptly said by the CA, FSI should have presented convincing pieces of documentary evidence, such as the lease contract or the receipts of payment issued by the owners of the rented equipment, to establish the claim. As to its claimed labor expenses, the list of employees does not categorically prove that these listed employees were actually employed at the construction site during the suspension. Hence, even assuming that LICOMCEN failed to submit evidence to rebut these lists, they do not ipso facto translate into duly proven facts. FSI still had the burden of proving its cause of action, because it is the one asserting entitlement to an affirmative relief.[60] On this score, FSI failed. The CA, therefore, committed no reversible error in denying the claim. FSI s claim for unrealized profit has to be rejected too. GC-41 specifically provided that: x x x The Contractor shall have no claim for anticipated profits on the work thus terminated, nor any other claim, except for work actually performed at the time of complete discontinuance, including any variations authorized by the LICOMCEN, INCORPORATED/Engineer to be done under the section dealing with variation, after the date of said order, and for any claims for variations accruing up to the date of said notice of termination.[61] (Emphasis supplied) The provision was agreed upon by the parties freely, and significantly, FSI did not question this. It is not for the Court to change the stipulations in the contract when they are not illegal. Article 1306 of the Civil Code provides that the contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.[62] Besides, no convincing proof was offered to prove the claim. In light of the foregoing, the CA, therefore, correctly denied the claim for unrealized profit. Similarly, we agree with the CIAC and the CA that LICOMCEN should bear the cost of arbitration as it adamantly refused to pay FSI s just and valid claim, prompting the latter to institute a petition for arbitration. In sum, we find no reason to disturb the decision of the CA. It cannot be faulted for denying FSI s motion for reconsideration [63] through a mere Minute Resolution, for as we held in Ortigas and Company Limited Partnership v. Velasco: The filing of a motion for reconsideration, authorized by Rule 52 of the Rules of Court, does not impose on the Court the obligation to deal individually and specifically with the grounds relied upon therefor, in much the same way that the Court does in its judgment or final order as regards the issues raised and submitted for decision. This would be a useless formality or ritual invariably involving merely a reiteration of the reasons already set forth in the judgment or final order for rejecting the arguments advanced by the movant; and it would be a needless act, too, with respect to issues raised for the first time, these being, x x x deemed waived because not asserted at the first opportunity. It suffices for the Court to deal generally and summarily with the motion for reconsideration, and merely state a legal ground for its denial (Sec. 14, Art. VIII, Constitution); i.e., the motion contains merely a reiteration or rehash of arguments already submitted to and pronounced without merit by the Court in its judgment, or the basic issues have already been passed upon, or the motion discloses no substantial argument or cogent reason to warrant reconsideration or modification of the judgment or final order; or the arguments in the motion are too unsubstantial to require consideration, etc. WHEREFORE, the herein petitions for review are DENIED, and the assailed Decision and Resolutions of the Court of Appeals are AFFIRMED. SO ORDERED.

FIRST DIVISION [G.R. No. 139561. June 10, 2003] SPOUSES FEDERICO ATUEL and SARAH ATUEL and SPOUSES GEORGE GALDIANO and ELIADA GALDIANO, petitioners, vs. SPOUSES BERNABE VALDEZ and CONCHITA VALDEZ, respondents. DECISION CARPIO, J.: The Case Before us is a petition for review on certiorari[1] seeking to reverse the Decision[2] of the Court of Appeals dated 20 May 1999 in CA-G.R. SP No. 48682 as well as the Resolution dated 14 July 1999 denying the Motion for Reconsideration. The Court of Appeals in its assailed decision affirmed the Decision of the Department of Agrarian Reform Adjudication Board[3] ( DARAB ) which reversed the Decision[4] of the Municipal Agrarian Reform Office ( MARO ) in Malaybalay, Bukidnon. The MARO of Bukidnon ordered the Department of Agrarian Reform ( DAR ), Agusan del Sur, to segregate 2,000 square meters from the land of the Spouses Bernabe and Conchita Valdez. The MARO of Bukidnon also awarded the same segregated land to the Spouses Federico and Sarah Atuel and the Spouses George and Eliada Galdiano. The Facts The present controversy springs from a battle of possession over a portion of a property in Poblacion (formerly Sibagat Nuevo), Sibagat, Agusan del Sur. Atty. Manuel D. Cab ( Cab ) is the registered owner of two parcels of land in Poblacion, Sibagat, Agusan del Sur with an area of 125,804 square meters ( Cab Property ). The Cab Property is covered by OCT No. P-5638 issued pursuant to Free Patent No. 1318. The Cab Property is traversed by the Butuan to Davao Road and adjacent to the municipal building of Sibagat. From the Cab Property, Cab donated the lot occupied by the municipal building.[5] In 1964, Cab appointed Federico Atuel ( Atuel ) as administrator of the Cab Property. Sometime in 1977, Bernabe Valdez ( Valdez ) arrived in Sibagat from Baogo Bontoc, Southern Leyte. Valdez is the nephew of [6] Atuel, who recommended to Cab to lease a portion of the Cab Property to Valdez. On 9 October 1978, Cab and Valdez entered into a Lease of Improved Agricultural Land under which Valdez leased a 1.25-hectare portion of the Cab Property for P300.00 per year for two years. In 1982, Cab allowed the Spouses Federico and Sarah Atuel ( Spouses Atuel ) and the Spouses George and Eliada Galdiano ( Spouses Galdiano ) to occupy a 2,000-square meter portion of the Cab Property. The Spouses Atuel and the Spouses Galdiano constructed their respective houses on this 2,000-square meter lot ( Subject Lot ). On 27 September 1985, the Sangguniang Bayan of Sibagat, Agusan del Sur, approved the town plan of the Municipality of Sibagat which classified the Cab Property as residential, subject to the approval of the Ministry of Human Settlements Regulatory Commission. On 25 June 1988, Cab informed Valdez that their lease contract had already expired, and demanded that Valdez stop cultivating the 1.25-hectare portion of the Cab Property and vacate the same. On 2 October 1988, responding to Cab s letter, the MARO of Sibagat, Agusan del Sur informed Cab that Valdez was properly identified as a tenant, and thus deemed to be the owner of the land he cultivated. The MARO added that on 14 September 1988, pursuant to Presidential Decree No. 27, Emancipation Patent No. A-159969 was issued to Valdez for a 2.3231-hectare portion ( PD 27 Land ) of the Cab Property. The PD 27 Land included the 2,000-square meter Subject Lot occupied by the houses of the Spouses Atuel and the Spouses Galdiano. On 11 May 1989, Cab filed with the DAR in Manila a petition for cancellation of Valdez s emancipation patent. Cab claimed that his property is not planted to rice and corn and that Valdez is a civil law lessee, not a tenant.[7] Consequently, the DAR ordered the Regional Director of Cagayan de Oro City to conduct an investigation regarding the petition.[8] On 17 September 1989, the Housing and Land Use Regulatory Board ( HLURB ) approved the Town Plan and Zoning Ordinance of fifty-eight municipalities, including that of Sibagat. The HLURB classified the Cab Property as 90 percent residential, and the remaining portion as institutional and park or open space. [9] On 27 September 1991, the Spouses Bernabe and Conchita Valdez ( Spouses Valdez ) filed a complaint for Recovery of Possession with Damages with the DARAB in Malaybalay, Bukidnon against the Spouses Atuel and the Spouses Galdiano. In their complaint, the Spouses Valdez alleged that the Spouses Atuel and the Spouses Galdiano stealthily and through fraud entered and occupied a portion of the above-described property with an area of 2,000 sq. m. more or less. The Spouses Valdez claimed that the Spouses Atuel and the Spouses Galdiano, despite repeated demands, refused to restore possession of the said portion of land to the Spouses Valdez. The Spouses Valdez prayed that the Spouses Atuel and the Spouses Galdiano be ordered to vacate and restore to the Spouses Valdez possession of the Subject Lot. The Spouses Valdez also prayed for payment of litigation expenses, as well as unearned income from the Subject Lot and moral damages. In their answer, the Spouses Atuel and the Spouses Galdiano asserted that the Spouses Valdez had no cause of action against them because Cab is the owner of the Subject Lot while Atuel is the administrator of the Cab Property. The Spouses Atuel and the Spouses Galdiano claimed that upon Cab s instruction and consent, they had been occupying the Cab Property since 1964, long before the Spouses Valdez leased a portion of the Cab Property in 1978. The Spouses Atuel and the Spouses Galdiano also pointed out that the Spouses Valdez never set foot on the Subject Lot nor cultivated the same, thus, there is no dispossession to speak of. Moreover, the Spouses Atuel and the Spouses Galdiano alleged that the emancipation patent issued to Valdez is null and void. The Spouses Atuel and the Spouses Galdiano maintained that the entire Cab Property, which is covered by the Free Patent issued to Cab, has already been classified as residential, hence, no longer covered by PD No. 27.[10]

On 4 March 1993, the DARAB Provincial Adjudicator, after hearing the case, issued a decision which disposed of as follows: WHEREFORE, premises above considered, the DAR Agusan del Sur is hereby ordered to segregate the TWO THOUSAND (2,000) SQ. METERS, more or less, from the land of the complainants, Transfer Certificate of Title No. 1261 covered by Emancipation Patent No. A-159969, and award the same to the respondents; and hereby ordered this case dismissed. [11] SO ORDERED. Dissatisfied with the decision, the Spouses Atuel and the Spouses Galdiano appealed to the DARAB Central Office. The DARAB Central Office reversed the decision of the DARAB Provincial Adjudicator, thus: WHEREFORE, premises considered, the appealed decision is hereby REVERSED. Judgment is hereby rendered as follows: (1) Enjoining the respondents-appellants from committing acts of intrusion and maintain the possessory rights of the complainants over the EP (Emancipation Patent) covered land; and (2) Ordering the MARO (Municipal Agrarian Reform Officer) or PARO (Provincial Agrarian Reform Officer) concerned to assist the parties in determining the amount to be reimbursed in favor of the respondents for whatever improvements made on the 2,000 square meter portion to be paid by the complainants. [12] SO ORDERED. [13] Aggrieved by the decision, the Spouses Atuel and the Spouses Galdiano filed a petition for review with the Court of Appeals. On 20 May 1999, the Court of Appeals affirmed the decision of the DARAB Central Office and dismissed the petition for lack of merit. The Spouses Atuel and the Spouses Galdiano filed a Motion for Reconsideration which the Court of Appeals denied. On 14 January 1998, while the case was pending in the Court of Appeals, the Spouses Valdez sold 5,000 square meters out of the PD 27 Land to the Municipality of Sibagat.[14] Hence, the instant petition. The Ruling of the Court of Appeals In affirming the decision of the DARAB, the Court of Appeals ruled that the DARAB has primary and exclusive jurisdiction over cases involving the issuance, correction and cancellation of emancipation patents. The Court of Appeals held that the DARAB s decision should be respected because it enjoys the presumption of regularity. [15] The Court of Appeals also ruled that the DARAB correctly relied on Pagtalunan v. Tamayo where this Court held that upon issuance of an emancipation patent, a holder acquires a vested right of absolute ownership in the land. [16] The Court of Appeals further held that the doctrine laid down in Teodoro v. Macaraeg is applicable. In Teodoro, this Court ruled that a landowner has full liberty to enter into a civil lease contract covering his property. However, once a landowner enters into a contract of lease whereby his land is to be devoted to agricultural production and said landholding is susceptible of personal cultivation by the lessee, solely or with the help of labor coming from his immediate farm household, then such contract is of the very essence of a leasehold agreement. Otherwise, the Court added, it would be easy to subvert, under the guise of the liberty to contract, the intendment of the law of protecting the underprivileged and ordinarily credulous farmer from the unscrupulous schemes and pernicious practices of the landed gentry. [17] The Issue [18] After a review of the issues raised, the question boils down to whether the Spouses Valdez are entitled to seek redress from the DARAB in recovering possession of the 2,000-square meter Subject Lot from the Spouses Atuel and the Spouses Galdiano. The Court s Ruling We grant the petition based not on the arguments of the Spouses Atuel and the Spouses Galdiano but on an entirely different ground. We reverse the decision of the Court of Appeals because of the DARAB s lack of jurisdiction to take cognizance of the present controversy. The DARAB has no jurisdiction to take cognizance of the Spouses Valdez s complaint for recovery of possession of the Subject Lot. Though the parties do not challenge the jurisdiction of the DARAB, the Court may motu proprio consider the issue of [19] jurisdiction. The Court has discretion to determine whether the DARAB validly acquired jurisdiction over the case. Jurisdiction over the subject matter is conferred only by law. It may not be conferred on the court by consent or waiver of the parties where [20] the court otherwise would have no jurisdiction over the subject matter of the action. In their complaint for recovery of possession, the Spouses Valdez alleged, among others, that they are farmers and beneficiaries of an emancipation patent. The Spouses Valdez also alleged that the Spouses Atuel and the Spouses Galdiano stealthily and [21] fraudulently occupied the 2,000-square meter Subject Lot. The Spouses Valdez claimed that despite repeated demands, the Spouses Atuel and the Spouses Galdiano refused to vacate and restore possession of the Subject Lot to the Spouses Valdez.[22] The Spouses Valdez prayed that the Spouses Atuel and the Spouses Galdiano be ordered to vacate and restore possession of the Subject Lot to the Spouses Valdez. The Spouses Valdez did not allege the existence of tenancy relations, if any, between them and the Spouses Atuel and the [23] Spouses Galdiano. In Morta, Sr. v. Occidental, this Court ruled: It is axiomatic that what determines the nature of an action as well as which court has jurisdiction over it, are the allegations in the complaint and the character of the relief sought. Jurisdiction over the subject matter is determined upon the allegations made in the complaint. In the instant case, the allegations in the complaint, which are contained in the decision of the MARO,[24] indicate that the nature and subject matter of the instant case is for recovery of possession or accion publiciana. The issue to be resolved is who between the Spouses Valdez on one hand, and the Spouses Atuel and the Spouses Galdiano on the other, have a better right to possession of the 2,000-square meter Subject Lot forming part of the PD 27 Land. The Spouses Atuel and the Spouses Galdiano [25] likewise raise the issue of ownership by insisting that Cab is the real and lawful owner of the Subject Lot. In Cruz v. Torres, this Court had occasion to discuss the nature of an action to recover possession or accion publiciana, thus:

xxx This is an action for recovery of the right to posses and is a plenary action in an ordinary civil proceeding in a regional trial court to determine the better right of possession of realty independently of the title. Accion publiciana or plenaria de posesion is also used to refer to an ejectment suit filed after the expiration of one year from the accrual of the cause of action or from the [26] unlawful withholding of possession of the realty. In such case, the regional trial court has jurisdiction. xxx [27] For the DARAB to acquire jurisdiction over the case, there must exist a tenancy relations between the parties. This Court held in Morta,[28] that in order for a tenancy agreement to take hold over a dispute, it is essential to establish all its indispensable elements, to wit: xxx 1) that the parties are the landowner and the tenant or agricultural lessee; 2) that the subject matter of the relationship is an agricultural land; 3) that there is consent between the parties to the relationship; 4) that the purpose of the relationship is to bring about agricultural production; 5) that there is personal cultivation on the part of the tenant or agricultural lessee; and 6) that the harvest is shared between the landowner and the tenant or agricultural lessee. [29] xxx (Emphasis supplied) Emphasizing the DARAB s jurisdiction, this Court held in Hon. Antonio M. Nuesa, et al. v. Hon. Court of Appeals, et al.,[30] that: xxx the DAR is vested with the primary jurisdiction to determine and adjudicate agrarian reform matters and shall have the exclusive jurisdiction over all matters involving the implementation of the agrarian reform program. The DARAB has primary, original and appellate jurisdiction to determine and adjudicate all agrarian disputes, cases, controversies, and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program under R.A. 6657, E.O. Nos. 229, 228 and 129-A, R.A. 3844 as amended by R.A. 6389, P.D. No. 27 and other agrarian laws and their implementing rules and regulations. (Emphasis supplied) Under Section 3(d) of Republic Act No. 6657, otherwise known as the CARP Law, an agrarian dispute is defined as follows: (d) xxx any controversy relating to tenurial arrangements, whether leasehold, tenancy, stewardship or otherwise, over lands devoted to agriculture, including disputes concerning farmworkers' associations or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms or conditions of such tenurial arrangements. It includes any controversy relating to compensation of lands acquired under this Act and other terms and conditions of transfer of ownership from landowners to farmworkers, tenants and other agrarian reform beneficiaries, whether the disputants stand in the proximate relation of farm operator and beneficiary, landowner and tenant, or lessor and lessee. In the instant case, the Spouses Atuel and the Spouses Galdiano are not and do not claim to be the owners of the 2,000-square meter Subject Lot where their houses are constructed. They also do not claim ownership to any other portion of the PD 27 Land. They and the Spouses Valdez have no tenurial, leasehold, or any agrarian relationswhatsoever that will bring this [32] controversy within Section 3(d) of RA No. 6657.[31] The instant case is similar to Chico v. CA, where this Court ruled that the DARAB had no jurisdiction over a case which did not involve any tenurial or agrarian relations between the parties. Since the DARAB has no jurisdiction over the present controversy, it should not have taken cognizance of the Spouses Valdez s complaint for recovery of possession. Jurisdiction over an accion publiciana is vested in a court of general jurisdiction.[33]Specifically, the regional trial court exercises exclusive original jurisdiction in all civil actions which involve x x x possession of real [34] However, if the assessed value of the real property involved does not exceed P50,000.00 in Metro Manila, property. and P20,000.00 outside of Metro Manila, the municipal trial court exercises jurisdiction over actions to recover possession of real [35] property. Moreover, the municipal trial court exercises jurisdiction over all cases of forcible entry and unlawful detainer. The Court of Appeals correctly stated that the DARAB has exclusive original jurisdiction over cases involving the issuance, correction and cancellation of registered emancipation patents. However, the Spouses Valdez s complaint for recovery of possession does not involve or seek the cancellation of any emancipation patent. It was the Spouses Atuel and the Spouses Galdiano who attacked the validity of the emancipation patent as part of their affirmative defenses in their answer to the complaint. The rule is well settled that thejurisdiction of the court (or agency in this case) cannot be made to depend on the defenses made by the defendant in his answer or motion to dismiss. If such were the rule, the question of jurisdiction would depend almost entirely on the defendant.[36] [37] Jurisdiction over the subject matter cannot be acquired through, or waived by, any act or omission of the parties. The active participation of the parties in the proceedings before the DARAB does not vest jurisdiction on the DARAB, as jurisdiction is conferred only by law. The courts or the parties cannot disregard the rule of non-waiver of jurisdiction. Likewise, estoppel does [38] not apply to confer jurisdiction to a tribunal that has none over a cause of action. The failure of the parties to challenge the jurisdiction of the DARAB does not prevent this Court from addressing the issue, as the DARAB s lack of jurisdiction is apparent on the face of the complaint. Issues of jurisdiction are not subject to the whims of the parties.[39] In a long line of decisions, this Court has consistently held that an order or decision rendered by a tribunal or agency without jurisdiction is a total nullity.[40] Accordingly, we rule that the decision of the DARAB in the instant case is null and void. Consequently, the decision of the Court of Appeals affirming the decision of the DARAB is likewise invalid. This Court finds no compelling reason to rule on the other issues raised by the Spouses Atuel and the Spouses Galdiano. WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals dated 20 May 1999 and the Resolution dated 14 July 1999 in CA-G.R. SP No. 48682 are REVERSED and SET ASIDE. The MARO s Decision dated 4 March 1993, and the DARAB s Decision dated 17 June 1998, are declared NULL and VOID for lack of jurisdiction. No costs. SO ORDERED. FIRST DIVISION [G.R. No. 145838. July 20, 2001]

NICASIO I. ALCANTARA, petitioner, vs. COMMISSION ON THE SETTLEMENT OF LAND PROBLEMS, SECRETARY OF DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES ANTONIO CERILLES, THE DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES, ROLANDO PAGLANGAN, ET AL., respondents. HEIRS OF DATU ABDUL S. PENDATUN, REP. BY DATU NASSER B. PENDATUN, AL HAJ., HEIRS OF SABAL MULA, and GAWAN CLAN, REP. BY TRIBAL CHIEFTAIN LORETO GAWAN, intervenors. DECISION KAPUNAN, J.: This is a petition for review on certiorari assailing the Decision of the Court of Appeals dated June 22, 2000 in CA-G.R. SP No. 53159[1] and its Resolution dated October 16, 2000 denying petitioner s motion for reconsideration. The facts of the case are as follows: Sometime in 1993, petitioner Nicasio Alcantara was granted Forest Land Grazing Lease Agreement No. 542 (FLGLA No. 542) by the Department of Environment and Natural Resources (DENR). Under said FLGLA, Alcantara was allowed to lease Nine Hundred Twenty-Three (923) hectares of public forest land at Sitio Lanton, Barrio Apopong, General Santos City for grazing purposes for a period of twenty-five (25) years to expire on 31 December 2018. As early as 1990, however, private respondent Rolando Paglangan together with Esmael Sabel and Lasid Acop filed a lettercomplaint with the Commission on Settlement of Land Problems (COSLAP) seeking the cancellation of FLGLA No. 542 and the reversion of the entire 923 hectares to the B laan and Maguindanaoan tribes. The case was docketed as COSLAP Case No. 98052. Petitioner filed his Answer questioning the jurisdiction of the COSLAP over the case, since the dispute involved a claim for recovery of ancestral land. Petitioner claimed that the case should have been filed with the DENR since it is the latter which has jurisdiction to administer and dispose of public lands, including grazing lands. Notwithstanding petitioner s objection to the COSLAP s exercise of jurisdiction over the case, said body continued the hearings thereon. Petitioner alleged that COSLAP did not conduct formal hearings on the case, and that he was not notified nor given the [2] opportunity to be present and participate in the field interviews and ocular inspections conducted by COSLAP. On August 3, 1998, the COSLAP issued a Decision ordering the cancellation of FLGLA No. 542. Petitioner appealed the same to the Court of Appeals by petition for review on certiorari. The Court of Appeals dismissed the petition in its Decision dated June 22, 2000, and also denied petitioners motion for reconsideration in a Resolution dated October 16, 2000.[3] Hence, the present petition. Petitioner contends that the Court of Appeals erred in ruling that he had earlier recognized the jurisdiction of the COSLAP over the case. He stated further that the appellate court should have considered that the COSLAP does not possess the historical, genealogical and anthropological expertise to act on ancestral land claims, and that it is the National Commission on Indigenous Peoples (NCIP), under the Indigenous People s Rights Act of 1997[4] which has jurisdiction over such claims. Petitioner thus submits that the COSLAP s decision ordering the cancellation of FLGLA No. 542 and declaring the area being claimed by private [5] respondent as ancestral land is void for having been issued by a body which does not have jurisdiction over said matters. In his Comment, private respondent Rolando Paglangan argued that the petition should be dismissed since the petition for [6] certiorari filed by petitioner in the Court of Appeals was filed out of time. He also contended that the COSLAP has the power to entertain cases involving indigenous cultural communities when the DENR or the NCIP fails or refuses to act on a complaint or grievance brought before them.[7] He alleged that the dispute between petitioner and the B laan tribe antedated the creation of [8] the NCIP, hence, filing of the petition for cancellation of the FLGLA with the COSLAP. On April 6, 2001, a Motion for Leave to Intervene and to File Complaint-in-Intervention was filed with this Court by the Heirs of Datu Abdul S. Pendatun, represented by Datu Nasser B. Pendatun, Al Haj; the Heirs of Sabal Mula, represented by Hadji Latip K. Mula; and the Gawan Clan, represented by their Tribal Chieftain Loreto Gawan. Subsequently, on May 24, 2001, they filed an Amended Motion for Leave to Intervene and to File Amended Complaint-inIntervention. In their Amended Complaint-in-Intervention, they allege that the parcels of land in dispute form part of their ancestral lands, and that they have been in open, continuous, exclusive and notorious possession under claim of ownership of the same. They stated further that private respondent Rolando Paglangan acts only as agent of the Mula clan, and not of the [9] other intervenors. The Court finds no reason to disturb the ruling of the Court of Appeals. The Court of Appeals did not commit any reversible error in the assailed decision. The Court agrees with the appellate court that petitioner is estopped from questioning the jurisdiction of the COSLAP since he participated actively in the proceedings before said body by filing an Answer, a Motion for Reconsideration of the COSLAP s decision and a Supplement to Respondent s Motion for Reconsideration. The Court also notes the appellate court s observation that petitioner began to question the jurisdiction of the COSLAP only when he realized that his period to appeal the COSLAP s decision had already lapsed.[10] It has been repeatedly held by this Court that the active participation of a respondent in the case pending against him before a court or a quasi-judicial body is tantamount to a recognition of that court s or body s recognition and a willingness to abide by the resolution of the case and will bar said party from later on impugning the court s or body s jurisdiction.[11] Moreover, Executive Order No. 561 creating the COSLAP, the law then prevailing when private respondents filed their complaint for cancellation of FLGLA No. 542, provides in Section 3, paragraph 2(a) thereof that said Commission may assume jurisdiction over land disputes involving occupants of the land in question and pasture lease agreement holders: Sec. 3. Powers and Functions. -- The Commission shall have the following powers and functions: xxx

2. Refer and follow-up for immediate action by the agency having appropriate jurisdiction any land problem or dispute referred to the Commission: Provided, That the Commission, may, in the following cases, assume jurisdiction and resolve land problems or disputes which are critical and explosive in nature considering, for instance, the large number of the parties involved, the presence or emergence of social tension or unrest, or other similar critical situations requiring immediate action: (a) Between occupants/squatters and pasture lease agreement holders or timber concessionaires; (b) Between occupants/squatters and government reservation grantees; (c) Between occupants/squatters and public land claimants or applicants; (d) Petitions for classification, release and/or subdivision of lands of the public domain; and (e) Other similar land problems of grave urgency and magnitude. The Commission shall promulgate such rules of procedure as will insure expeditious resolution and action on the above cases. The resolution, order or decision of the Commission on any of the foregoing cases shall have the force and effect of a regular administrative resolution, order or decision and shall be binding upon the parties therein and upon the agency having jurisdiction over the same. Said resolution, order or decision shall become final and executory within thirty (30) days from its promulgation and shall be appealable by certiorari only to the Supreme Court. (Emphasis supplied.) The Court of Appeals also stated that based on the records, the the land area being claimed by private respondents belongs to the B laan indigenous cultural community since they have been in possession of, and have been occupying and cultivating the [12] same since time immemorial, a fact has not been disputed by petitioner. It was likewise declared by the appellate court that FLGLA No. 542 granted to petitioner violated Section 1 of Presidential Decree No. 410[13] which states that all unappropriated agricultural lands forming part of the public domain are declared part of the ancestral lands of the indigenous cultural groups occupying the same, and these lands are further declared alienable and disposable, to be distributed exclusively among the members of the indigenous cultural group concerned. The Court finds no reason to depart from such finding by the appellate court, it being a settled rule that findings of fact of the Court of Appeals are binding and conclusive upon the Supreme Court absent any showing that such findings are not supported by [14] the evidence on record. WHEREFORE, the petition is hereby DENIED. SO ORDERED. ACQUIRED JURISDICTION OVER THE ISSUES SPS GONZAGA V CA (SPS ABAGAT) SCRACALLEJO SR; October 18, 2004 NATURE Petition for the Review of the Decision and resolutionof CA FACTS - October 22, 1991 > Sps Abagat filed complaintagainst Sps Gonzaga for recovery of possession of land in Baclaran, Paraaque issued in their names, asowners. Sps Abagat alleged in their complaint thatthey were the owners of a small hut (barongbarong)constructed on the lot, which was then owned by thegovernment- February 22, 1961 > Abagat filed an application forsales patent over the land- January 26, 1973 > hut was gutted by fire and afterthat, Sps Gregorio built a two-storey house on theproperty without their consent. Sps Abagat filed acomplaint for ejectment against Sps Gregorio butcomplaint was dismissed for lack of jurisdictionbecause in their answer to the complaint, the SpsGregorio claimed ownership over the house- Sps Gregorio sold house to Sps Gonzaga forP100,000 under a deed of conditional sale, in whichSps Gregorio undertook to secure an award of theland by the government in favor of Sps Gonzaga. Inan MOA, Sps Gregorio indicated that if they would not secure such, they would return P90,000 aspayment for the house- January 2, 1986 > Bureau of Lands granted theapplication of Abagat for a sales patent over theproperty. TCT No. 128186 was issued by theRegister of Deeds in his name. Sps Abagatdemanded that Sps Gonzaga vacate the property,but latter refused- September 29, 1992 > Sps Abagat filed a motionfor leave to file a third-party complaint against theSps Gregorio. TC no longer resolved the motion forleave to file a third-party complaint - Trial Court > October 10, 1994, in favor of SpsAbagatCA > December 19, 1997, affirmed the decision of the trial court on. On the plea of Sps Gonzaga thatthe TC should have ordered the Sps Gregorio torefund to them the P90,000.00 the latter hadreceived as payment for the house, CA ruled that aseparate complaint should have been filed againstthe Sps Gregorio, instead of appealing the decision of the TC. ISSUE: WON RTC and CA erred in not ordering Sps Gregorioto refund to them the P90,000 they had paid for thehouse and which the latter promised to do so undertheir Memorandum of Agreement HELD: NO. Ratio: The rule is that a party is entitled only to suchrelief consistent with and limited to that sought bythe pleadings or incidental thereto. A trial courtwould be acting beyond its jurisdiction if it grantsrelief to a party beyond the scope of the pleadings.Moreover, the right of a party to recover depends,not on the prayer, but on the scope of the pleadings,the issues made and the law. Reasoning: - Sps Gonzaga failed to file any pleading against SpsGregorio for the enforcement of the deed of conditional sale, the deed of final and absolute sale,and the Memorandum of Agreement executed bythem. The petitioners filed their motion for leave tofile a third-party complaint against the intervenors,Sps Gregorio, and appended thereto their third-partycomplaint for indemnity for any judgment that maybe rendered by the court against them and in favorof the respondents. However, Sps Gonzaga did notinclude in their prayer that judgment be renderedagainst the third-party defendants to refund theP90,000.00 paid by them to the Sps Gregorio. SpsGonzaga failed to assail the trial court s order of denial in the appellate court. Even after the trialcourt had granted leave to the Sps Gregorio tointervene as parties-defendants and the latter filedtheir Answer-inIntervention, Sps Gonzaga failed tofile a cross-claim against the intervenors for specificperformance for the refund of the P90,000.00 theyhad received from the petitioners under their deed of conditional sale, the deed of final and absolute saleand the memorandum of agreement and pay filingand docket fees therefor. Disposition Petition is DENIED DUE COURSE

THIRD DIVISION [G.R. No. 147406, July 14, 2008] [1] VENANCIO FIGUEROA Y CERVANTES, PETITIONER, VS. PEOPLE OF THE PHILIPPINES RESPONDENT. DECISION NACHURA, J.: When is a litigant estopped by laches from assailing the jurisdiction of a tribunal? This is the paramount issue raised in this petition for review of the February 28, 2001 Decision[2] of the Court of Appeals (CA) in CA-G.R. CR No. 22697. Pertinent are the following antecedent facts and proceedings: [3] On July 8, 1994, an information for reckless imprudence resulting in homicide was filed against the petitioner before the Regional Trial Court (RTC) of Bulacan, Branch 18.[4] The case was docketed as Criminal Case No. 2235-M-94.[5] Trial on the merits ensued and on August 19, 1998, the trial court convicted the petitioner as charged.[6]In his appeal before the CA, the petitioner questioned, among others, for the first time, the trial court's jurisdiction.[7] The appellate court, however, in the challenged decision, considered the petitioner to have actively participated in the trial and to have belatedly attacked the jurisdiction of the RTC; thus, he was already estopped by laches from asserting the trial court's lack of jurisdiction. Finding no other ground to reverse the trial court's decision, the CA affirmed the petitioner's conviction but modified the penalty imposed and the damages awarded.[8] Dissatisfied, the petitioner filed the instant petition for review on certiorari raising the following issues for our resolution: a. Does the fact that the petitioner failed to raise the issue of jurisdiction during the trial of this case, which was initiated and filed by the public prosecutor before the wrong court, constitute laches in relation to the doctrine laid down in Tijam v. Sibonghanoy, notwithstanding the fact that said issue was immediately raised in petitioner's appeal to the Honorable Court of Appeals? Conversely, does the active participation of the petitioner in the trial of his case, which is initiated and filed not by him but by the public prosecutor, amount to estoppel? b. Does the admission of the petitioner that it is difficult toimmediately stop a bus while it is running at 40 kilometers per hour for the purpose of avoiding a person who unexpectedly crossed the road, constitute enough incriminating evidence to warrant his conviction for the crime charged? c. Is the Honorable Court of Appeals justified in considering the place of accident as falling within Item 4 of Section 35 (b) of the Land Transportation and Traffic Code, and subsequently ruling that the speed limit thereto is only 20 kilometers per hour, when no evidence whatsoever to that effect was ever presented by the prosecution during the trial of this case? d. Is the Honorable Court of Appeals justified in convicting the petitioner for homicide through reckless imprudence (the legally correct designation is "reckless imprudence resulting to homicide") with violation of the Land Transportation and Traffic Code when the prosecution did not prove this during the trial and, more importantly, the information filed against the petitioner does not contain an allegation to that effect? e. Does the uncontroverted testimony of the defense witness Leonardo Hernal that the victim unexpectedly crossed the road resulting in him getting hit by the bus driven by the petitioner not enough evidence to acquit him of the crime charged?[9] Applied uniformly is the familiar rule that the jurisdiction of the court to hear and decide a case is conferred by the law in force at the time of the institution of the action, unless such statute provides for a retroactive application thereof.[10] In this case, at the time the criminal information for reckless imprudence resulting in homicide with violation of the Automobile Law (now Land Transportation and Traffic Code) was filed, Section 32(2) of Batas Pambansa (B.P.) Blg. 129[11] had already been amended by [12] Republic Act No. 7691. The said provision thus reads: Sec. 32. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in Criminal Cases.-Except in cases falling within the exclusive original jurisdiction of Regional Trial Courts and the Sandiganbayan, the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise: x x x x (2) Exclusive original jurisdiction over all offenses punishable with imprisonment not exceeding six (6) years irrespective of the amount of fine, and regardless of other imposable accessory or other penalties, including the civil liability arising from such offenses or predicated thereon, irrespective of kind, nature, value or amount thereof:Provided, however, That in offenses involving damage to property through criminal negligence, they shall have exclusive original jurisdiction thereof. As the imposable penalty for the crime charged herein is prision correccional in its medium and maximum periods or imprisonment for 2 years, 4 months and 1 day to 6 years,[13] jurisdiction to hear and try the same is conferred on the Municipal Trial Courts (MTCs). Clearly, therefore, the RTC of Bulacan does not have jurisdiction over Criminal Case No. 2235-M-94. While both the appellate court and the Solicitor General acknowledge this fact, they nevertheless are of the position that the principle of estoppel by laches has already precluded the petitioner from questioning the jurisdiction of the RTC--the trial went on for 4 years with the petitioner actively participating therein and without him ever raising the jurisdictional infirmity. The petitioner, for his part, counters that the lack of jurisdiction of a court over the subject matter may be raised at any time even for the first time on appeal. As undue delay is further absent herein, the principle of laches will not be applicable. To settle once and for all this problem of jurisdiction vis- -vis estoppel by laches, which continuously confounds the bench and the bar, we shall analyze the various Court decisions on the matter. As early as 1901, this Court has declared that unless jurisdiction has been conferred by some legislative act, no court or tribunal [14] [15] can act on a matter submitted to it. We went on to state in U.S. v. De La Santa that: It has been frequently held that a lack of jurisdiction over the subject-matter is fatal, and subject to objection at any stage of the proceedings, either in the court below or on appeal (Ency. of Pl. & Pr., vol. 12, p. 189, and large array of cases there cited), and indeed, where the subject-matter is not within the jurisdiction, the court may dismiss the proceeding ex mero motu. (4 Ill., 133; 190 Ind., 79; Chipman vs. Waterbury, 59 Conn., 496.) Jurisdiction over the subject-matter in a judicial proceeding is conferred by the sovereign authority which organizes the court; it is

given only by law and in the manner prescribed by law and an objection based on the lack of such jurisdiction can not be waived [16] by the parties. x x x Later, in People v. Casiano,[17] the Court explained: 4. The operation of the principle of estoppel on the question of jurisdiction seemingly depends upon whether the lower court actually had jurisdiction or not. If it had no jurisdiction, but the case was tried and decided upon the theory that it hadjurisdiction, the parties are not barred, on appeal, from assailing such jurisdiction, for the same "must exist as a matter of law, and may not be conferred by consent of the parties or by estoppel" (5 C.J.S., 861-863). However, if the lower court had jurisdiction, and the case was heard and decided upon a given theory, such, for instance, as that the court had no jurisdiction, the party who induced it to adopt such theory will not be permitted, on appeal, to assume an inconsistent position--that the lower court hadjurisdiction. Here, the principle of estoppel applies. The rule that jurisdiction is conferred by law, and does not depend upon the will of the parties, has no bearing thereon. Thus, Corpus Juris Secundum says: Where accused has secured a decision that the indictment is void, or has been granted an instruction based on its defective character directing the jury to acquit, he is estopped, when subsequently indicted, to assert that the former indictment was valid. In such case, there may be a new prosecution whether the indictment in the former prosecution was good or bad. Similarly, where, after the jury was impaneled and sworn, the court on accused's motion quashed the information on the erroneous assumption that the court had no jurisdiction, accused cannot successfully plead former jeopardy to a new information. x x x (22 C.J.S., sec. 252, pp. 388-389; italics ours.) Where accused procured a prior conviction to be set aside on the ground that the court was without jurisdiction, he is estopped subsequently to assert, in support of a defense of previous jeopardy, that such court had jurisdiction." (22 C.J.S. p. 378.)[18] But in Pindagan Agricultural Co., Inc. v. Dans,[19] the Court, in not sustaining the plea of lack of jurisdiction by the plaintiffappellee therein, made the following observations: It is surprising why it is only now, after the decision has been rendered, that the plaintiff-appellee presents the question of this Court's jurisdiction over the case. Republic Act No. 2613 was enacted on August 1, 1959. This case was argued on January 29, 1960. Notwithstanding this fact, the jurisdiction of this Court was never impugned until the adverse decision of this Court was handed down. The conduct of counsel leads us to believe that they must have always been of the belief that notwithstanding said enactment of Republic Act 2613 this Court has jurisdiction of the case, such conduct being born out of a conviction that the actual real value of the properties in question actually exceeds the jurisdictional amount of this Court (over P200,000). Our minute resolution in G.R. No. L-10096, Hyson Tan, et al. vs. Filipinas Compaa de Seguros, et al., of March 23, 1956, a parallel case, is applicable to the conduct of plaintiff-appellee in this case, thus: x x x that an appellant who files his brief and submits his case to the Court of Appeals for decision, without questioning the latter's jurisdiction until decision is rendered therein, should be considered as having voluntarily waived so much of his claim as would exceed the jurisdiction of said Appellate Court; for the reason that a contrary rule would encourage the undesirable practice of appellants submitting their cases for decision to the Court of Appeals in expectation of favorable judgment, but with intent of attacking its jurisdiction should the decision be unfavorable: x x x[20] [21] Then came our ruling in Tijam v. Sibonghanoy that a party may be barred by laches from invoking lack of jurisdiction at a late hour for the purpose of annulling everything done in the case with the active participation of said party invoking the plea. We expounded, thus: A party may be estopped or barred from raising a question in different ways and for different reasons. Thus, we speak of estoppel in pais, of estoppel by deed or by record, and of estoppel by laches . Laches, in a general sense, is failure or neglect, for an unreasonable and unexplained length of time, to do that which, by exercising due diligence, could or should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it. The doctrine of laches or of "stale demands" is based upon grounds of public policy which requires, for the peace of society, the discouragement of stale claims and, unlike the statute of limitations, is not a mere question of time but is principally a question of the inequity or unfairness of permitting a right or claim to be enforced or asserted. It has been held that a party cannot invoke the jurisdiction of a court to secure affirmative relief against his opponent and, after obtaining or failing to obtain such relief, repudiate or question that same jurisdiction (Dean vs. Dean, 136 Or. 694, 86 A.L.R. 79). In the case just cited, by way of explaining the rule, it was further said that the question whether the court had jurisdiction either of the subject matter of the action or of the parties was not important in such cases because the party is barred from such conduct not because the judgment or order of the court is valid and conclusive as an adjudication, but for the reason that such a practice cannot be tolerated-obviously for reasons of public policy. Furthermore, it has also been held that after voluntarily submitting a cause and encountering an adverse decision on the merits, it is too late for the loser to question the jurisdiction or power of the court (Pease vs. Rathbun-Jones etc., 243 U.S. 273, 61 L. Ed. 715, 37 S.Ct. 283; St. Louis etc. vs. McBride, 141 U.S. 127, 35 L. Ed. 659). And in Littleton vs. Burgess, 16 Wyo. 58, the Court said that it is not right for a party who has affirmed and invoked the jurisdiction of a court in a particular matter to secure an affirmative relief, to afterwards deny that same jurisdiction to escape a penalty. Upon this same principle is what We said in the three cases mentioned in the resolution of the Court of Appeals of May 20, 1963 (supra)--to the effect that we frown upon the "undesirable practice" of a party submitting his case for decision and then accepting the judgment, only if favorable, and attacking it for lack of jurisdiction, when adverse--as well as in Pindagan etc. vs. Dans et al., G.R. L-14591, September 26, 1962; Montelibano et al. vs. Bacolod-Murcia Milling Co., Inc., G.R. L-15092; Young Men Labor Union etc. vs. The Court of Industrial Relations et al., G.R. L-20307, Feb. 26, 1965, and Mejia vs. Lucas, 100 Phil. p. 277. The facts of this case show that from the time the Surety became a quasi-party on July 31, 1948, it could have raised the question of the lack of jurisdiction of the Court of First Instance of Cebu to take cognizance of the present action by reason of the sum of money involved which, according to the law then in force, was within the original exclusive jurisdiction of inferior courts. It failed to do so. Instead, at several stages of the proceedings in the court a quo, as well as in the Court of Appeals, it invoked the jurisdiction of said courts to obtain affirmative relief and submitted its case for a final adjudication on the merits. It was only after an adverse decision was rendered by the Court of Appeals that it finally woke up to raise the question of jurisdiction. Were we to

sanction such conduct on its part, We would in effect be declaring as useless all the proceedings had in the present case since it was commenced on July 19, 1948 and compel the judgment creditors to go up their Calvary once more. The inequity and unfairness of this is not only patent but revolting.[22] For quite a time since we made this pronouncement in Sibonghanoy, courts and tribunals, in resolving issues that involve the [23] belated invocation of lack of jurisdiction, have applied the principle of estoppel by laches. Thus, in Calimlim v. Ramirez, we pointed out that Sibonghanoy was developing into a general rule rather than the exception: A rule that had been settled by unquestioned acceptance and upheld in decisions so numerous to cite is that the jurisdiction of a court over the subject-matter of the action is a matter of law and may not be conferred by consent or agreement of the parties. The lack of jurisdiction of a court may be raised at any stage of the proceedings, even on appeal. This doctrine has been qualified by recent pronouncements which stemmed principally from the ruling in the cited case of Sibonghanoy. It is to be regretted, however, that the holding in said case had been applied to situations which were obviously not contemplated therein. The exceptional circumstance involved in Sibonghanoy which justified the departure from the accepted concept of non-waivability of objection to jurisdiction has been ignored and, instead a blanket doctrine had been repeatedly upheld that rendered the supposed ruling in Sibonghanoy not as the exception, but rather the general rule, virtually overthrowing altogether the timehonored principle that the issue of jurisdiction is not lost by waiver or by estoppel. In Sibonghanoy, the defense of lack of jurisdiction of the court that rendered the questioned ruling was held to be barred by estoppel by laches. It was ruled that the lack of jurisdiction having been raised for the first time in a motion to dismiss filed almost fifteen (15) years after the questioned ruling had been rendered, such a plea may no longer be raised for being barred by laches. As defined in said case, laches is "failure or neglect, for an unreasonable and unexplained length of time, to do that which, by exercising due diligence, could or should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert has abandoned it or declined to assert it. [24] In Calimlim, despite the fact that the one who benefited from the plea of lack of jurisdiction was the one who invoked the court's jurisdiction, and who later obtained an adverse judgment therein, we refused to apply the ruling in Sibonghanoy. The Court accorded supremacy to the time-honored principle that the issue of jurisdiction is not lost by waiver or by estoppel. Yet, in subsequent cases decided after Calimlim, which by sheer volume are too plentiful to mention, the Sibonghanoy doctrine, as foretold in Calimlim, became the rule rather than the exception. As such, in Soliven v. Fastforms Philippines, Inc.,[25]the Court ruled: While it is true that jurisdiction may be raised at any time, "this rule presupposes that estoppel has not supervened." In the instant case, respondent actively participated in all stages of the proceedings before the trial court and invoked its authority by asking for an affirmative relief. Clearly, respondent is estopped from challenging the trial court's jurisdiction, especially when an adverse judgment has been rendered. In PNOC Shipping and Transport Corporation vs. Court of Appeals, we held: Moreover, we note that petitioner did not question at all the jurisdiction of the lower court x x x in its answers to both the amended complaint and the second amended complaint. It did so only in its motion for reconsideration of the decision of the lower court after it had received an adverse decision. As this Court held in Pantranco North Express, Inc. vs. Court of Appeals (G.R. No. 105180, July 5, 1993, 224 SCRA 477, 491), participation in all stages of the case before the trial court, that included invoking its authority in asking for affirmative relief, effectively barre petitioner by estoppel from challenging the court's jurisdiction. Notably, from the time it filed its answer to the second amended complaint on April 16, 1985, petitioner did not question the lower court's jurisdiction. It was only on December 29, 1989 when it filed its motion for reconsideration of the lower court's decision that petitioner raised the question of the lower court's lack of jurisdiction. Petitioner thus foreclosed its right to raise the issue of jurisdiction by its own inaction. (italics ours) Similarly, in the subsequent case of Sta. Lucia Realty and Development, Inc. vs. Cabrigas, we ruled: In the case at bar, it was found by the trial court in its 30 September 1996 decision in LCR Case No. Q-60161(93) that private respondents (who filed the petition for reconstitution of titles) failed to comply with both sections 12 and 13 of RA 26 and therefore, it had no jurisdiction over the subject matter of the case. However, private respondents never questioned the trial court's jurisdiction over its petition for reconstitution throughout the duration of LCR Case No. Q-60161(93). On the contrary, private respondents actively participated in the reconstitution proceedings by filing pleadings and presenting its evidence. They invoked the trial court's jurisdiction in order to obtain affirmative relief - the reconstitution of their titles. Private respondents have thus foreclosed their right to raise the issue of jurisdiction by their own actions. The Court has constantly upheld the doctrine that while jurisdiction may be assailed at any stage, a litigant's participation in all stages of the case before the trial court, including the invocation of its authority in asking for affirmative relief, bars such party from challenging the court's jurisdiction (PNOC Shipping and Transport Corporation vs. Court of Appeals, 297 SCRA 402 [1998]).A party cannot invoke the jurisdiction of a court to secure affirmative relief against his opponent and after obtaining or failing to obtain such relief, repudiate or question that same jurisdiction (Asset Privatization Trust vs. Court of Appeals, 300 SCRA 579 [1998]; Province of Bulacan vs. Court of Appeals, 299 SCRA 442 [1998]). The Court frowns upon the undesirable practice of a party participating in the proceedings and submitting his case for decision and then accepting judgment, only if favorable, and attacking it for lack of jurisdiction, when adverse (Producers Bank of the Philippines vs. NLRC, 298 SCRA 517 [1998], citing Ilocos Sur Electric Cooperative, Inc. vs. NLRC, 241 SCRA 36 [1995]). (italics ours)[26] Noteworthy, however, is that, in the 2005 case of Metromedia Times Corporation v. Pastorin,[27] where the issue of lack of jurisdiction was raised only in the National Labor Relations Commission (NLRC) on appeal, we stated, after examining the doctrines of jurisdiction vis- -vis estoppel, that the ruling in Sibonghanoy stands as an exception, rather than the general rule. [28] Metromedia, thus, was not estopped from assailing the jurisdiction of the labor arbiter before the NLRC on appeal. Later, in Francel Realty Corporation v. Sycip,[29] the Court clarified that: Petitioner argues that the CA's affirmation of the trial court's dismissal of its case was erroneous, considering that a full-blown trial had already been conducted. In effect, it contends that lack of jurisdiction could no longer be used as a ground for dismissal after trial had ensued and ended. The above argument is anchored on estoppel by laches, which has been used quite successfully in a number of cases to thwart dismissals based on lack of jurisdiction. Tijam v. Sibonghanoy, in which this doctrine was espoused, held that a party may be barred from questioning a court's jurisdiction after being invoked to secure affirmative relief against its opponent. In fine, laches

prevents the issue of lack of jurisdiction from being raised for the first time on appeal by a litigant whose purpose is to annul everything done in a trial in which it has actively participated. Laches is defined as the "failure or neglect for an unreasonable and unexplained length of time, to do that which, by exercising due diligence, could or should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it." The ruling in Sibonghanoy on the matter of jurisdiction is, however, the exception rather than the rule. Estoppel by laches may be invoked to bar the issue of lack of jurisdiction only in cases in which the factual milieu is analogous to that in the cited case. In such controversies, laches should be clearly present; that is, lack of jurisdiction must have been raised so belatedly as to warrant the presumption that the party entitled to assert it had abandoned or declined to assert it.ThatSibonghanoy applies only to exceptional circumstances is clarified inCalimlim v. Ramirez, which we quote: A rule that had been settled by unquestioned acceptance and upheld in decisions so numerous to cite is that the jurisdiction of a court over the subject-matter of the action is a matter of law and may not be conferred by consent or agreement of the parties. The lack of jurisdiction of a court may be raised at any stage of the proceedings, even on appeal. This doctrine has been qualified by recent pronouncements which stemmed principally from the ruling in the cited case of Sibonghanoy. It is to be regretted, however, that the holding in said case had been applied to situations which were obviously not contemplated therein. The exceptional circumstance involved in Sibonghanoy which justified the departure from the accepted concept of nonwaivability of objection to jurisdiction has been ignored and, instead a blanket doctrine had been repeatedly upheld that rendered the supposed ruling in Sibonghanoy not as the exception, but rather the general rule, virtually overthrowing altogether the time-honored principle that the issue of jurisdiction is not lost by waiver or by estoppel . Indeed, the general rule remains: a court's lack of jurisdiction may be raised at any stage of the proceedings, even on appeal. The reason is that jurisdiction is conferred by law, and lack of it affects the very authority of the court to take cognizance of and to render judgment on the action. Moreover, jurisdiction is determined by the averments of the complaint, not by the defenses contained in the answer.[30] [31] Also, in Mangaliag v. Catubig-Pastoral, even if the pleader of lack of jurisdictionactively took part in the trial proceedings by presenting a witness to seek exoneration, the Court, reiterating the doctrine in Calimlim, said: Private respondent argues that the defense of lack of jurisdiction may be waived by estoppel through active participation in the trial. Such, however, is not the general rule but an exception, best characterized by the peculiar circumstances in Tijam vs. Sibonghanoy. In Sibonghanoy, the party invoking lack of jurisdiction did so only after fifteen years and at a stage when the proceedings had already been elevated to the CA.Sibonghanoy is an exceptional case because of the presence of laches, which was defined therein as failure or neglect for an unreasonable and unexplained length of time to do that which, by exercising due diligence, could or should have been done earlier; it is the negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert has abandoned it or declined to assert it.[32] [33] And in the more recent Regalado v. Go, the Court again emphasized that lachesshould be clearly present for the Sibonghanoy doctrine to be applicable, thus: Laches is defined as the "failure or neglect for an unreasonable and unexplained length of time, to do that which, by exercising due diligence, could or should have been done earlier, it is negligence or omission to assert a right within a reasonable length of time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it." The ruling in People v. Regalario that was based on the landmark doctrine enunciated in Tijam v. Sibonghanoy on the matter of jurisdiction by estoppel is the exception rather than the rule. Estoppel by laches may be invoked to bar the issue of lack of jurisdiction only in cases in which the factual milieu is analogous to that in the cited case.In such controversies, laches should have been clearly present; that is, lack of jurisdiction must have been raised so belatedly as to warrant the presumption that the party entitled to assert it had abandoned or declined to assert it. In Sibonghanoy, the defense of lack of jurisdiction was raised for the first time in a motion to dismiss filed by the Surety almost 15 years after the questioned ruling had been rendered. At several stages of the proceedings, in the court a quo as well as in the Court of Appeals, the Surety invoked the jurisdiction of the said courts to obtain affirmative relief and submitted its case for final adjudication on the merits. It was only when the adverse decision was rendered by the Court of Appeals that it finally woke up to raise the question of jurisdiction. Clearly, the factual settings attendant in Sibonghanoy are not present in the case at bar. Petitioner Atty. Regalado, after the receipt of the Court of Appeals resolution finding her guilty of contempt, promptly filed a Motion for Reconsideration assailing the said court's jurisdiction based on procedural infirmity in initiating the action. Her compliance with the appellate court's directive to show cause why she should not be cited for contempt and filing a single piece of pleading to that effect could not be considered as an active participation in the judicial proceedings so as to take the case within the milieu of Sibonghanoy. Rather, it is the natural fear to disobey the mandate of the court that could lead to dire consequences that impelled her to comply.[34] The Court, thus, wavered on when to apply the exceptional circumstance inSibonghanoy and on when to apply the general rule enunciated as early as in De La Santa and expounded at length in Calimlim. The general rule should, however, be, as it has always been, that the issue of jurisdiction may be raised at any stage of the proceedings, even on appeal, and is not lost by waiver or by estoppel. Estoppel by laches, to bar a litigant from asserting the court's absence or lack of jurisdiction, only supervenes in exceptional cases similar to the factual milieu of Tijam v. Sibonghanoy.Indeed, the fact that a person attempts to invoke unauthorized jurisdiction of a court does not estop him from thereafter challenging its jurisdiction over the subject matter, since such jurisdiction must arise by law and not by mere consent of the parties. This is especially true where the person seeking to invoke unauthorized jurisdiction of the court does not thereby secure any advantage or the adverse party does not suffer any harm.[35] Applying the said doctrine to the instant case, the petitioner is in no way estopped by laches in assailing the jurisdiction of the RTC, considering that he raised the lack thereof in his appeal before the appellate court. At that time, no considerable period had yet elapsed for laches to attach. True, delay alone, though unreasonable, will not sustain the defense of "estoppel by laches" unless it further appears that the party, knowing his rights, has not sought to enforce them until the condition of the party pleading laches has in good faith become so changed that he cannot be restored to his former state, if the rights be then

enforced, due to loss of evidence, change of title, intervention of equities, and other causes.[36] In applying the principle of estoppel by laches in the exceptional case of Sibonghanoy, the Court therein considered the patent and revolting inequity and unfairness of having the judgment creditors go up their Calvary once more after more or less 15 years. [37] The same, however, does not obtain in the instant case. We note at this point that estoppel, being in the nature of a forfeiture, is not favored by law. It is to be applied rarely--only from necessity, and only in extraordinary circumstances. The doctrine must be applied with great care and the equity must be strong [38] in its favor. When misapplied, the doctrine of estoppel may be a most effective weapon for the accomplishment of [39] injustice. Moreover, a judgment rendered without jurisdiction over the subject matter is void.[40] Hence, the Revised Rules of Court provides for remedies in attacking judgments rendered by courts or tribunals that have no jurisdiction over the concerned [41] cases. No laches will even attach when the judgment is null and void for want of jurisdiction. As we have stated in Heirs of [42] Julian Dela Cruz and Leonora Talaro v. Heirs of Alberto Cruz, It is axiomatic that the jurisdiction of a tribunal, including a quasi-judicial officer or government agency, over the nature and subject matter of a petition or complaint is determined by the material allegations therein and the character of the relief prayed for, irrespective of whether the petitioner or complainant is entitled to any or all such reliefs. Jurisdiction over the nature and subject matter of an action is conferred by the Constitution and the law, and not by the consent or waiver of the parties where the court otherwise would have no jurisdiction over the nature or subject matter of the action. Nor can it be acquired through, or waived by, any act or omission of the parties. Moreover, estoppel does not apply to confer jurisdiction to a tribunal that has none over the cause of action.x x x Indeed, the jurisdiction of the court or tribunal is not affected by the defenses or theories set up by the defendant or respondent in his answer or motion to dismiss. Jurisdiction should be determined by considering not only the status or the relationship of the parties but also the nature of the issues or questions that is the subject of the controversy. x x x x The proceedings before a court or tribunal without jurisdiction, including its decision, are null and void, hence, susceptible to direct and collateral attacks .[43] With the above considerations, we find it unnecessary to resolve the other issues raised in the petition. WHEREFORE, premises considered, the petition for review on certiorari is GRANTED. Criminal Case No. 2235- M-94 is hereby DISMISSED without prejudice. SO ORDERED. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 183357 March 15, 2010 HONORIO BERNARDO, Petitioner, vs. HEIRS OF EUSEBIO VILLEGAS, Respondents. DECISION PEREZ, J.: 1 This petition for review on certiorari under Rule 45 of the Rules of Court seeks to assail the validity of the Decision dated 21 April 2008 of the Court of Appeals, which affirmed the judgment of the Regional Trial Court (RTC) of Binangonan, Rizal in Civil Case No. R-00-035. This controversy stemmed from a Complaint dated 14 November 2000 for accion publiciana filed by respondent Heirs of Eusebio Villegas against petitioner Honorio Bernardo, Romeo Gaza (Gaza) and Monina Francisco (Francisco). Respondents had earlier filed an ejectment case against the trio, docketed as Civil Case No. 99-065 with the Municipal Trial Court (MTC) of Binangonan, Rizal, which case was dismissed on the ground of lack of jurisdiction for having been filed beyond the one-year prescriptive period for filing a forcible entry case.2 Respondents alleged in the Complaint that their father, Eusebio Villegas, is the registered owner of a parcel of land covered by Transfer Certificate of Title (TCT) No. 46891 with an area of 18,369 square meters and situated in Barangay Pag-asa, Binangonan, Rizal; that petitioner, by stealth and in the guise of merely grazing his cattle, surreptitiously entered into possession of a portion of respondents land; that petitioner conspired and confederated with Gaza and Francisco by illegally constructing their own houses on the subject land; that the issue of possession was brought to the barangay for conciliation but no settlement was reached by the parties; and that petitioner, Gaza and Francisco had forcibly, unlawfully and unjustly possessed and continue to possess the subject property and had refused to vacate the same. In his Answer, petitioner denied taking possession of any portion of the property of respondents. He argued that the cause of action is barred by the judgment in the ejectment case. He claimed that he had been in possession of his land since the early 1950s.3 As he did before the MTC, petitioner also alleged lack of jurisdiction on the part of the RTC. Gaza alleged that he has been occupying an abandoned river bed adjacent to the property allegedly owned by 4 respondents. Gaza averred that he entered into a written agreement with petitioner, who claimed to own the land and allowed him to build a nipa hut thereon.5 An ocular inspection was conducted by the trial court judge. On 5 March 2007, the trial court rendered judgment in favor of respondents and ordered petitioner, Gaza and Francisco to vacate the subject land covered by TCT No. 46891 and to pay jointly and severally respondents the amount of P30,000.00 as attorney s fees and the cost of suit.6 The trial court held that the suit, being an accion publiciana, falls within its jurisdiction. It found that the houses of petitioner and Gaza were inside the titled property of respondents. Its findings were based on the testimony of one of the respondents, Estelito Villegas; the relocation plan prepared by Engineer Rico J. Rasay; and the Technical Report on Verification Survey submitted by 7 Engineer Robert C. Pangyarihan, petitioner s own witness. The trial court noted that petitioner failed to present any title or tax 8 declaration to prove ownership or possessory right. On appeal, the Court of Appeals affirmed the ruling of the trial court. In his appeal, petitioner questioned the jurisdiction of the trial court over the subject matter and argued that in their complaint, the respondents failed to state the assessed value of the property in dispute. The appellate court ruled that petitioner is

estopped from raising the issue of jurisdiction because he failed to file a motion to dismiss on such ground and, instead, actively participated in the proceedings before the trial court. With respect to the argument that being indispensable parties, all of the heirs of Eusebio Villegas should have been impleaded as parties, the appellate court disagreed and invoked Article 487 of the Civil Code, which provides that any one of the co-owners may bring an action for ejectment. The appellate court construed said provision to cover all kinds of actions for recovery of possession.9 The appellate court sustained the trial court s finding that the portions of the land occupied by petitioner and Gaza are owned by respondents. The appellate court likewise ruled that respondents could not be guilty of laches considering that Estelito Villegas, upon seeing for the first time in 1996 that petitioner was already building his house on the premises, verbally asked him to discontinue the construction.10 His motion for reconsideration having been denied, petitioner filed the instant petition. Petitioner insists that the trial court had no jurisdiction over the subject matter of the action for failure of respondents to allege the assessed value of the property involved in their complaint. Petitioner belies the ruling of the appellate court that he failed to raise objections before the trial court. Petitioner reiterates that he raised the defense of lack of jurisdiction as early as in his Answer filed before the trial court. Moreover, he argues that even if he did not raise the defense of lack of jurisdiction, the trial court should have dismissed the complaint motu proprio. Petitioner disputes the application to him of the doctrine of estoppel 11 by laches in Tijam v. Sibonghanoy. Petitioner avers that unlike in Tijam, he raised the issue of jurisdiction, not only in his answer, 12 but also in his appeal. Respondents defend the ruling of the Court of Appeals and maintain that petitioner is estopped from challenging the jurisdiction of the trial court.13 The issue presented before this Court is simple: Whether or not estoppel bars petitioner from raising the issue of lack of jurisdiction. Under Batas Pambansa Bilang 129, the plenary action of accion publiciana must be brought before the regional trial courts. With the modifications introduced by Republic Act No. 769114 in 1994, the jurisdiction of the regional trial courts was limited to real actions where the assessed value exceeds P20,000.00, and P50,000.00 where the action is filed in Metro Manila, thus: SEC. 19. Jurisdiction in civil cases. Regional Trial Courts shall exercise exclusive original jurisdiction: xxxx (2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, where the assessed value of the property involved exceeds Twenty thousand pesos (P20,000.00) or, for civil actions in Metro Manila, where such value exceeds Fifty thousand pesos (P50,000.00) except actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts. Under the law as modified, jurisdiction is determined by the assessed value of the property. A reading of the complaint shows that respondents failed to state the assessed value of the disputed land. The averments read: xxxx 3. EUSEBIO VILLEGAS, deceased father of hte plaintiffs, is the registered owner of a parcel of land situated in Barangay Pag-asa (formerly Barangay Tayuman), Binangonan, Rizal with a land area of 18,369 square meters. The same is covered by and embraced in Transfer Certificate of Title No. 46891 of the Registry of Deeds for the Province of Rizal. x x x. 4. Plaintiffs are the legal heirs of EUSEBIO VILLEGAS and succeeded to the subject parcel of land by virtue of their inheritance rights as compulsory heirs of said deceased Eusebio Villegas and upon his death, immediately took over and were enjoying the peaceful possession of the said parcel of land and exercising said rights of possession and ownership thereof; 5. That sometime in 1996, defendant Honorio Bernardo, by stealth and in guise of merely grazing his cattle, without the consent of the plaintiffs, surreptitiously entered into the possession of a portion of the subject parcel of land. Employing threats and intimidations, he claimed later that the area he illegally occupied is purportedly not part and parcel of the land owned by the plaintiff s predecessor, Eusebio Villegas, and forcibly fenced and built his house on the portion of land he illegally occupied; 6. Not being content with his own forcible and unlawful invasion, usurpation and incursion into the plaintiffs parcel of land, and in furtherance of his desire to forcibly exclude the plaintiffs of their lawful and for possession of the subject portion of plaintiffs parcel of land, defendant Bernardo, conspired and confederated with defendants Romeo Gaza and Monina Francisco by surreptitiously and illegally constructing their own houses on the subject parcel of land through stealth and intimidation; 7. That the issue of the possession of the subject parcel of land was brought under the Barangay Justice System in 1996 for conciliation but, no settlement was reached by the parties. Copies of the Certifications issued by the Barangay for that matter is hereto attached and marked as Annex "B"; 8. That the defendants have forcibly, unlawfully, and unjustly dispossessed and still continues to forcibly, unlawfully, and unjustly dispossesses the plaintiffs of their lawful rights of possession and ownership on a portion of the subject property since 1966 up to the present; 9. Because of the unjust refusal of the defendants to vacate the premises, plaintiffs were constrained to engage the services of counsel to protect their interest on the property for an agreed attorney s fee of P50,000.00, and have incurred litigation expenses[;] 10. By reason of the unlawful and forcible invasion by the defendants of the property of the plaintiffs which was accompanied by threats and intimidation, the plaintiffs have suffered and continue to suffer anxiety and sleepless nights for which the defendants should be made to indemnify by way of moral damages in the amount of at least P100,000.00; 11. To serve as an example to others who might be minded to commit similar wanton and unlawful acts, defendants should be held answerable for exemplary damages of not less than P50,000.00.15 This fact was noted by the Court of Appeals in its Decision but it proceeded to rule in this wise: Records show that at the time plaintiffs-appellees filed their complaint below, R.A. No. 7691 which amended Batas Pambansa Blg. 129 was already in effect. However, the complaint failed to allege the assessed value of the real property involved. Although appellant indeed raised the issue of jurisdiction in his answer, he had not filed a motion to dismiss on this ground nor reiterated the matter thereafter but actively participated in the proceedings after the denial of his demurrer to evidence anchored on the

failure of the plaintiffs to identify in their complaint all the heirs of the registered owner and supposed lack of technical description of the property in the certificate of title. Indeed, appellant is now estopped to question the trial court s jurisdiction over the subject matter and nature of the case having actively pursued throughout the trial, by filing various pleadings and presenting all relevant documentary and testimonial evidence, his theory that the portion occupied by him is not covered by the 16 torrens title of Eusebio Villegas. We agree. As already shown, nowhere in the complaint was the assessed value of the subject property ever mentioned. There is no showing on the face of the complaint that the RTC has jurisdiction exclusive of the MTC. Indeed, absent any allegation in the complaint of the assessed value of the property, it cannot readily be determined which of the two trial courts had original and exclusive jurisdiction over the case.17 18 The general rule is that the jurisdiction of a court may be questioned at any stage of the proceedings. Lack of jurisdiction is one of those excepted grounds where the court may dismiss a claim or a case at any time when it appears from the pleadings or the 19 evidence on record that any of those grounds exists, even if they were not raised in the answer or in a motion to dismiss. The reason is that jurisdiction is conferred by law, and lack of it affects the very authority of the court to take cognizance of and to render judgment on the action.20 However, estoppel sets in when a party participates in all stages of a case before challenging the jurisdiction of the lower court. One cannot belatedly reject or repudiate its decision after voluntarily submitting to its jurisdiction, just to secure affirmative relief against one's opponent or after failing to obtain such relief. The Court has, time and again, frowned upon the undesirable practice of a party submitting a case for decision and then accepting the judgment, only if favorable, and attacking it for lack of jurisdiction when adverse.21 In Tijam, the Court held that it is iniquitous and unfair to void the trial court s decision for lack of jurisdiction considering that it was raised only after fifteen (15) years of tedious litigation, thus: The facts of this case show that from the time the Surety became a quasi-party on July 31, 1948, it could have raised the question of the lack of jurisdiction of the Court of First Instance of Cebu to take cognizance of the present action by reason of the sum of money involved which, according to the law then in force, was within the original exclusive jurisdiction of inferior courts. It failed to do so. Instead, at several stages of the proceedings in the court a quo as well as in the Court of Appeals, it invoked the jurisdiction of said courts to obtain affirmative relief and submitted its case for a final adjudication on the merits. It was only after an adverse decision was rendered by the Court of Appeals that it finally woke up to raise the question of jurisdiction. Were we to sanction such conduct on its part, We would in effect be declaring as useless all the proceedings had in the present case since it was commenced on July 19, 1948 and compel the judgment creditors to go up their Calvary once more. The inequity and 22 unfairness of this is not only patent but revolting. The principle of justice and equity as espoused in Tijam should be applied in this case. The MTC dismissed the ejectment case upon its ruling that the case is for accion publiciana. It did not assert jurisdiction over the case even if it could have done so based on the assessed value of the property subject of the accion publiciana. And there was no showing, indeed, not even an allegation, that the MTC was not aware of its jurisdictional authority over an accion publiciana involving property in the amount stated in the law. Moreover, petitioner did not bring up the issue of jurisdictional amount that would have led the MTC to proceed with the trial of the case. Petitioner obviously considered the dismissal to be in his favor. When, as a result of such dismissal, respondents brought the case as accion publiciana before the RTC, petitioner never brought up the issue of jurisdictional amount. What petitioner mentioned in his Answer before the RTC was the generally phrased allegation that "the Honorable 23 Court has no jurisdiction over the subject matter and the nature of the action in the above-entitled case." This general assertion, which lacks any basis, is not sufficient. Clearly, petitioner failed to point out the omission of the assessed value in the complaint. Petitioner actively participated during the trial by adducing evidence and filing numerous pleadings, none of which mentioned any defect in the jurisdiction of the RTC. It was only on appeal before the Court of Appeals, after he obtained an adverse judgment in the trial court, that petitioner, for the first time, came up with the argument that the decision is void because there was no allegation in the complaint about the value of the property. Clearly, petitioner is estopped from questioning the jurisdiction of the RTC. We note that the decisions of the RTC and of the Court of Appeals discussed extensively the merits of the case, which has been pending for nearly ten (10) years. It was handled by two (2) judges and its records had to be reconstituted after the fire that 24 gutted the courthouse. If we were to accede to petitioner s prayer, all the effort, time and expenses of parties who participated in the litigation would be wasted. Quite obviously, petitioner wants a repetition of the process hoping for the possibility of a reversal of the decision. The Court will not countenance such practice. 25 Significantly, the Technical Report on Verification Survey by Engineer Robert C. Pangyarihan, which was attached to and formed 26 part of the records, contained a tax declaration indicating that the subject property has an assessed value of P110,220.00. It is basic that the tax declaration indicating the assessed value of the property enjoys the presumption of regularity as it has been 27 issued by the proper government agency. Under Republic Act No. 7691, the RTC in fact has jurisdiction over the subject matter of the action.1avvphi1> Taking into consideration the decision of the MTC proclaiming that the case is one for accion publiciana and the assessed value of the property as evidenced by the case records, jurisdiction pertains, rightfully so, with the RTC. Perforce, the petition should be denied. WHEREFORE, the decision of the Court of Appeals dated 21 April 2008, affirming the judgment of the Regional Trial Court of Binangonan, Rizal dated 5 March 2007, is AFFIRMED. SO ORDERED.

Republic v. Lacap, G.R. No. 158253 March 2, 2007

FACTS Case is a petition for certoriari, assailing the decision of the Court of Appeals which affirmed, with modifications, ruling by the RTC granting the complaint for Specific Performance and damages filed by Lacap against RP, Dist. Eng. Of Pampanga issued an invitation to bid dated Jan 27, 1992 where Lacap and two other contractors were pre-qualified. Being the lowest bidder, Lacap won the bid for concreting of a certain baranggay, and

thereafter undertook the works and purchased materials and labor in connection with. On Oct 29, 1992, Office of the Dist. Eng conducted final investigation of end product and fount it 100% completed according to specs. Lacap thereafter sought the payment of the DPWH. DPWH withheld payment on the grounds that the CoA disapproved final release of funds due to Lacap s license as contractor having expired. Dist. Eng sought the opinion of DPWH legal. Legal then responded to Dist. Eng that the Contractors License Law (RA 4566) does not provide that a contract entered into by a contractor after expiry of license is void and that there is no law that expressly prohibits or declares void such a contract DPWH Legal Dept, through Dir III Cesar Mejia, issued First Indorsement on July 20 1994 recommending that payment be made to Lacap. Despite such recommendation, no payment was issued. On July 3, 1995, respondent filed the complaint for Specific Performance and Damages against petitioner before the RTC. On September 14, 1995, petitioner, through the Office of the Solicitor General (OSG), filed aMotion to Dismiss the complaint on the grounds that the complaint states no cause of actionand that the RTC had no jurisdiction over the nature of the action since respondent did notappeal to the COA the decision of the District Auditor to disapprove the claim. Following the submission of respondent s Opposition to Motion to Dismiss,the RTC issued an Order dated March 11, 1996 denying the Motion to Dismiss. The OSG filed a Motion for Reconsideration18 but it was likewise denied by the RTC in its Order dated May 23, 1996. On August 5, 1996, the OSG filed its Answer invoking the defenses of non-exhaustion of administrative remedies and the doctrine of non-suability of the State. Following trial, the RTC rendered on February 19, 1997 a decision ordering DPWH to pay Lacap for the contract of the project, 12% interest from demand until fully paid, and the costs of the suit CA affirmed the decision but lowered interest to 6% ISSUE: WON a contractor with an expired license is entitled to be paid for completed projects RULING: A contractor with an expired license is entitled payment for completed projects, but does not exonerate him from corresponding fines thereof. Section 35 of R.A. No. 4566 explicitly provides: SEC. 35. Penalties. Any contractor who, for a price, commission, fee or wage, submits or attempts to submit a bid to construct, or contracts to or undertakes to construct, or assumes charge in a supervisory capacity of a construction work within the purview of this Act, without first securing a license to engage in the business of contracting in this country; or who shall present or file the license certificate of another, give false evidence of any kind to the Board, or any member thereof in obtaining a certificate or license, impersonate another, or use an expired or revoked certificate or license, shall be deemed guilty of misdemeanor, and shall, upon conviction, be sentenced to pay a fine of not less than five hundred pesos but not more than five thousand pesos. The "plain meaning rule" or verba legis in statutory construction is that if the statute is clear, plain and free from ambiguity, it must be given its literal meaning and applied without interpretation. The wordings of R.A. No. 4566 are clear. It does not declare, expressly or impliedly, as void contracts entered into by a contractor whose license had already expired. Nonetheless, such contractor is liable for payment of the fine prescribed therein. Thus, respondent should be paid for the projects he completed. Such payment, however, is without prejudice to the payment of the fine prescribed under the law.

FELIPE N. MADRIAN vs FRANCISCA R. MADRIAN, G.R. No. 159374 July 12, 2007 When a family breaks up, the children are always the victims. The ensuing battle for custody of the minor children is not only a thorny issue but also a highly sensitive and heart-rending affair. Such is the case here. Even the usually technical subject of jurisdiction became emotionally charged. Petitioner Felipe N. Madrian and respondent Francisca R. Madrian were married on July 7, 1993 in Paraaque City. They resided in San Agustin Village, Brgy. Moonwalk, Paraaque City. Their union was blessed with three sons and a daughter: Ronnick, born on January 30, 1994; Phillip, born on November 19, 1996; Francis Angelo, born on May 12, 1998 and Krizia Ann, born on December 12, 2000. After a bitter quarrel on May 18, 2002, petitioner allegedly left their conjugal abode and took their three sons with him to Ligao City, Albay and subsequently to Sta. Rosa, Laguna. Respondent sought the help of her parents and parents-in-law to patch things up between her and petitioner to no avail. She then brought the matter to the Lupong Tagapamayapa in their barangay but this too proved futile. Thus respondent filed a petition for habeas corpus of Ronnick, Phillip and Francis Angelo in the Court of Appeals, alleging that petitioner s act of leaving the conjugal dwelling and going to Albay and then to Laguna disrupted the education of their children and deprived them of their mother s care. She prayed that petitioner be ordered to appear and produce their sons before the court and to explain why they should not be returned to her custody. Petitioner and respondent appeared at the hearing on September 17, 2002. They initially agreed that petitioner would return the custody of their three sons to respondent. Petitioner, however, had a change of heart[1] and decided to file a memorandum. On September 3, 2002, petitioner filed his memorandum[2] alleging that respondent was unfit to take custody of their three sons because she was habitually drunk, frequently went home late at night or in the wee hours of the

morning, spent much of her time at a beer house and neglected her duties as a mother. He claimed that, after their squabble on May 18, 2002, it was respondent who left, taking their daughter with her. It was only then that he went to Sta. Rosa, Laguna where he worked as a tricycle driver. He submitted a certification from the principal of the Dila Elementary School in Sta. Rosa, Laguna that Ronnick and Phillip were enrolled there. He also questioned the jurisdiction of the Court of Appeals claiming that under Section 5(b) of RA 8369 (otherwise known as the Family Courts Act of 1997 ) family courts have exclusive original jurisdiction to hear and decide the petition forhabeas corpus filed by respondent.[3] For her part, respondent averred that she did not leave their home on May 18, 2002 but was driven out by petitioner. She alleged that it was petitioner who was an alcoholic, gambler and drug addict. Petitioner s alcoholism and drug addiction impaired his mental faculties, causing him to commit acts of violence against her and their children. The situation was aggravated by the fact that their home was adjacent to that of her in-laws who frequently meddled in their personal problems.[4] On October 21, 2002, the Court of Appeals[5] rendered a decision[6] asserting its authority to take cognizance of the petition and ruling that, under Article 213 of the Family Code, respondent was entitled to the custody of Phillip and Francis Angelo who were at that time aged six and four, respectively, subject to the visitation rights of petitioner. With respect to Ronnick who was then eight years old, the court ruled that his custody should be determined by the proper family court in a special proceeding on custody of minors under Rule 99 of the Rules of Court. Petitioner moved for reconsideration of the Court of Appeals decision but it was denied. Hence, this recourse. Petitioner challenges the jurisdiction of the Court of Appeals over the petition for habeas corpus and insists that jurisdiction over the case is lodged in the family courts under RA 8369. He invokes Section 5(b) of RA 8369: Section 5. Jurisdiction of Family Courts. The Family Courts shall have exclusive original jurisdiction to hear and decide the following cases: xxx xxx xxx b) Petitions for guardianship, custody of children, habeas corpus in relation to the latter; xxx xxx xxx Petitioner is wrong. In Thornton v. Thornton,[7] this Court resolved the issue of the Court of Appeals jurisdiction to issue writs of habeas corpus in cases involving custody of minors in the light of the provision in RA 8369 giving family courts exclusive original jurisdiction over such petitions The Court of Appeals should take cognizance of the case since there is nothing in RA 8369 that revoked its jurisdiction to issue writs of habeas corpus involving the custody of minors. xxx xxx xx We rule therefore that RA 8369 did not divest the Court of Appeals and the Supreme Court of their jurisdiction over habeas corpus cases involving the custody of minors. xxx xxx xxx The provisions of RA 8369 reveal no manifest intent to revoke the jurisdiction of the Court of Appeals and Supreme Court to issue writs of habeas corpusrelating to the custody of minors. Further, it cannot be said that the provisions of RA 8369, RA 7092 [An Act Expanding the Jurisdiction of the Court of Appeals] and BP 129 [The Judiciary Reorganization Act of 1980] are absolutely incompatible since RA 8369 does not prohibit the Court of Appeals and the Supreme Court from issuing writs of habeas corpus in cases involving the custody of minors. Thus, the provisions of RA 8369 must be read in harmony with RA 7029 and BP 129 that family courts have concurrent jurisdiction with the Court of Appeals and the Supreme Court in petitions for habeas corpus where the custody of minors is at issue.[8] (emphases supplied) The jurisdiction of the Court of Appeals over petitions for habeas corpus was further affirmed by A.M. No. 03-0304-SC (April 22, 2004) in Re: Rule on Custody of Minors and Writ of Habeas Corpus in Relation to Custody of Minors: In any case, whatever uncertainty there was has been settled with the adoption of A.M. No. 03-03-04-SC Re: Rule on Custody of Minors and Writ of Habeas Corpus in Relation to Custody of Minors. Section 20 of the rule provides that: Section 20. Petition for writ of habeas corpus. A verified petition for a writ of habeas corpus involving custody of minors shall be filed with the Family Court. The writ shall be enforceable within its judicial region to which the Family Court belongs. xxx xxx xxx The petition may likewise be filed with the Supreme Court, Court of Appeals, or with any of its members and, if so granted, the writ shall be enforceable anywhere in the Philippines. The writ may be made returnable to a Family Court or to any regular court within the region where the petitioner resides or where the minor may be found for hearing and decision on the merits. From the foregoing, there is no doubt that the Court of Appeals and Supreme Court have concurrent jurisdiction with family courts in habeas corpuscases where the custody of minors is involved.[9] (emphases supplied)

We note that after petitioner moved out of their Paraaque residence on May 18, 2002, he twice transferred his sons to provinces covered by different judicial regions. This situation is what the Thornton interpretation of RA 8369 s provision on jurisdiction precisely addressed: [The reasoning that by giving family courts exclusive jurisdiction over habeas corpus cases, the lawmakers intended them to be the sole courts which can issue writs ofhabeas corpus] will result in an iniquitous situation, leaving individuals like [respondent] without legal recourse in obtaining custody of their children. Individuals who do not know the whereabouts of minors they are looking for would be helpless since they cannot seek redress from family courts whose writs are enforceable only in their respective territorial jurisdictions. Thus, if a minor is being transferred from one place to another, which seems to be the case here, the petitioner in ahabeas corpus case will be left without legal remedy. This lack of recourse could not have been the intention of the lawmakers when they passed [RA 8369].[10] Moreover, a careful reading of Section 5(b) of RA 8369 reveals that family courts are vested with original exclusive jurisdiction in custody cases, not in habeas corpus cases. Writs of habeas corpus which may be issued exclusively by family courts under Section 5(b) of RA 8369 pertain to the ancillary remedy that may be availed of in conjunction with a petition for custody of minors under Rule 99 of the Rules of Court. In other words, the issuance of the writ is merely ancillary to the custody case pending before the family court. The writ must be issued by the same court to avoid splitting of jurisdiction, conflicting decisions, interference by a co-equal court and judicial instability. The rule therefore is: when by law jurisdiction is conferred on a court or judicial officer, all auxiliary writs, processes and other means necessary to carry it into effect may be employed by such court or officer.[11] Once a court acquires jurisdiction over the subject matter of a case, it does so to the exclusion of all other courts, including related incidents and ancillary matters. Accordingly, the petition is hereby DENIED. Costs against petitioner,SO ORDERED.

G.R. No. 180384 March 26, 2010 LAND BANK OF THE PHILIPPINES, Petitioner, vs. CORAZON M. VILLEGAS, Respondent. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 180891 LAND BANK OF THE PHILIPPINES, Petitioner, vs. HEIRS OF CATALINO V. NOEL and PROCULA P. SY, Respondents. DECISION ABAD, J.: These consolidated cases1 are about the jurisdiction of a Regional Trial Court (RTC), acting as a Special Agrarian Court, over just compensation cases involving agricultural lands located outside its regular territorial jurisdiction but within the province where it is designated as agrarian court under the Comprehensive Agrarian Reform Law of 1988. The Facts and the Case Petitioner Land Bank of the Philippines (Land Bank) filed cases for determination of just compensation against respondent Corazon M. Villegas in Civil Case 2007-14174 and respondent heirs of Catalino V. Noel and Procula P. Sy in Civil Case 2007-14193 before the RTC of Dumaguete City, Branch 32, sitting as a Special Agrarian Court for the province of Negros Oriental. Respondent Villegas property was in Hibaiyo, Guihulngan City, Negros Oriental, while respondent heirs land was in Nangca, Bayawan City, Negros Oriental. These lands happened to be outside the regular territorial jurisdiction of RTC Branch 32 of Dumaguete City. On September 13, 2007 RTC, Branch 32 dismissed Civil Case 2007-14174 for lack of jurisdiction.2 It ruled that, although it had been designated Special Agrarian Court for Negros Oriental, the designation did not expand its territorial jurisdiction to hear agrarian cases under the territorial jurisdiction of the RTC, Branch 64 of Guihulngan City where respondent Villegas property can be found. On November 16, 2007 RTC, Branch 32 also dismissed Civil Case 2007-14193 for lack of jurisdiction. It pointed out that RTC, Branch 63 of Bayawan City had jurisdiction over the case since respondent heirs property was within the latter court s territorial jurisdiction. Petitioner Land Bank moved for the reconsideration of the dismissal of the two cases but RTC, Branch 32 denied both motions.3 Aggrieved, Land Bank directly filed this petitions for certiorari4 before this Court, raising a purely question of law. Sole Question Presented The sole question presented in these cases is whether or not an RTC, acting as Special Agrarian Court, has jurisdiction over just compensation cases involving agricultural lands located outside its regular jurisdiction but within the province where it is designated as an agrarian court under the Comprehensive Agrarian Reform Law of 1998. The Court s Ruling The RTC, Branch 32 based its order on Deputy Court Administrator (DCA) Zenaida Elepao s opinion that single sala courts have jurisdiction over agrarian cases involving lands located within its territorial jurisdiction. An RTC branch acting as a special agrarian court, she claimed, did not have expanded territorial jurisdiction. DCA Elepao said:

x x x [B]eing a single sala court, the Regional Trial Court, Branch 64, Guihulngan, Negros Oriental, has jurisdiction over all cases, including agrarian cases, cognizable by the Regional Trial Court emanating from the geographical areas within its territorial jurisdiction. Further, the jurisdiction of the Special Agrarian Courts over agrarian cases is co-extensive with its territorial jurisdiction. Administrative Order No. 80 dated July 18, 1989, as amended by Administrative Order No. 80A-90 dated February 23, 1990, did not expand the territorial jurisdiction of the courts designated as Special Agrarian Courts.5 Respondent Villegas6 adopts DCA Elepao s view. Villegas points out that the designation of RTC, Branch 32 as a Special Agrarian Court did not expand its territorial jurisdiction. Although it has been designated Special Agrarian Court for the Province of Negros Oriental, its jurisdiction as an RTC did not cover the whole province. Respondent Villegas adds that, in hearing just compensation cases, RTC, Branch 64 in Guihulngan City should be no different from the situation of other single sala courts that concurrently hear drugs and family-related cases even as the Supreme Court has designated family and drugs courts in Dumaguete City within the same province. Further, Guihulngan City is more than 100 kilometers from Dumaguete City where RTC, Branch 32 sits. For practical considerations, RTC, Branch 64 of Guihulngan City should hear and decide the case. For their part, on June 19, 2009 respondent heirs of Noel informed7 the Court that petitioner Land Bank had already paid them for their land. Consequently, they have no further interest in the outcome of the case. It is not clear, however, if the trial court had already approved a settlement.1avvphi1 "Jurisdiction" is the court s authority to hear and determine a case. The court s jurisdiction over the nature and subject matter of an action is conferred by law.8 In this case, the law that confers jurisdiction on Special Agrarian Courts designated by the Supreme Court in every province is Republic Act (R.A.) 6657 or the Comprehensive Agrarian Reform Law of 1988. Sections 56 and 57 are the relevant provisions: SEC. 56. Special Agrarian Court. - The Supreme Court shall designate at least one (1) branch of the Regional Trial Court (RTC) within each province to act as a Special Agrarian Court. The Supreme Court may designate more branches to constitute such additional Special Agrarian Courts as may be necessary to cope with the number of agrarian cases in each province. In the designation, the Supreme Court shall give preference to the Regional Trial Courts which have been assigned to handle agrarian cases or whose presiding judges were former judges of the defunct Court of Agrarian Relations. The Regional Trial Court (RTC) judges assigned to said courts shall exercise said special jurisdiction in addition to the regular jurisdiction of their respective courts. SEC. 57. Special Jurisdiction. - The Special Agrarian Courts shall have original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners, and the prosecution of all criminal offenses under this Act. The Rules of Court shall apply to all proceedings before the Special Agrarian Courts unless modified by this Act. The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction within thirty (30) days from submission of the case for decision. The law is clear. A branch of an RTC designated as a Special Agrarian Court for a province has the original and exclusive jurisdiction over all petitions for the determination of just compensation in that province. In Republic v. Court of Appeals,9 the Supreme Court ruled that Special Agrarian Courts have original and exclusive jurisdiction over two categories of cases: (1) all petitions for the determination of just compensation to landowners, and (2) the prosecution of all criminal offenses under R.A. 6657. By "special" jurisdiction, Special Agrarian Courts exercise power in addition to or over and above the ordinary jurisdiction of the RTC, such as taking cognizance of suits involving agricultural lands located outside their regular territorial jurisdiction, so long as they are within the province where they sit as Special Agrarian Courts. R.A. 6657 requires the designation by the Supreme Court before an RTC Branch can function as a Special Agrarian Court. The Supreme Court has not designated the single sala courts of RTC, Branch 64 of Guihulngan City and RTC, Branch 63 of Bayawan City as Special Agrarian Courts. Consequently, they cannot hear just compensation cases just because the lands subject of such cases happen to be within their territorial jurisdiction. Since RTC, Branch 32 of Dumaguete City is the designated Special Agrarian Court for the province of Negros Oriental, it has jurisdiction over all cases for determination of just compensation involving agricultural lands within that province, regardless of whether or not those properties are outside its regular territorial jurisdiction. WHEREFORE, the Court GRANTS the petitions, SETS ASIDE the orders of the Regional Trial Court, Branch 32 of Dumaguete City dated September 13, 2007 and October 30, 2007 in Civil Case 2007-14174, entitled Land Bank of the Philippines v. Corazon Villegas, and its orders dated November 16, 2007 and December 14, 2007 in Civil Case 200714193, entitled Land Bank of the Philippines v. Heirs of Catalino V. Noel and Procula P. Sy, which orders dismissed the cases before it for lack of jurisdiction. Further, the Court DIRECTS the Regional Trial Court, Branch 32 of Dumaguete City to immediately hear and decide the two cases unless a compromise agreement has in the meantime been approved in the latter case. SO ORDERED.

[THE COMMISSION ON ELECTIONS, vs. HON. THELMA CANLASTRINIDAD-PE AGUIRRE,and MA. LEONISA GENOVIA. G.R. No. 171208. September 7,2007. Carpio-Morales, J.] The present petition for Certiorari under Rule 64 of the Rules of Court involves jurisdiction over an election offense punishable under the Omnibus Election Code by "imprisonment of not less than one year but not more than six years."

FACTS That on or about July 15, 2002 Synchronized Barangay and SangguniangKabataan (SK) Elections, in the City of Caloocan, Metro Manila, Philippines, andwithin the jurisdiction of this Honorable Court, the abovenamed accused, did,then and there, willfully and unlawfully, cast her vote in substitution of anotherperson by misrepresenting herself to be Emely Genovia and voted in substitutionof said Emely Genovia, a registered voter in Precinct No. 779-A, Barangay 60,Caloocan City. Under Section 264 of the Omnibus Election Code, violation of anyelection offense:SECTION 264. Penalties. Any person found guilty of anyelection offense under this Code shall be punished withimprisonment of not less than one year but not more than six yearsand shall not be subject to probation.By Order of September 21, 2005, Caloocan RTC dismissed the case for lack of jurisdiction, it citing Section 32 (2) of Batas Pambansa (B.P.) Blg. 129 (TheJudiciary Reorganization Act of 1980) reading:Sec. 32. Jurisdiction of Metropolitan Trial Courts, MunicipalTrial Courts and Municipal Circuit Trial Courts in Criminal Cases. Except in cases falling within the exclusive jurisdiction of RegionalTrial Courts and of the Sandiganbayan, the Metropolitan TrialCourts, Municipal Trial Courts and Municipal Circuit Trial Courtsshall exercise:(2) Exclusive original jurisdiction over all offenses punishable withimprisonment not exceeding six (6) years irrespective of the amount of fine regardless of other imposable accessory penalties, including the civilliability arising from such offensesor predicated ther eon, irrespective of kind, nature, or valueamount thereof: Provided, howev er, That in offenses involvingdamage to property through criminal negligence, they shall haveexclusive original jurisdiction thereof. The COMELEC moved to reconsider the trial court's dismissal order, invitingattention to Section 268 of the Omnibus Election Code which reads:SECTION 268. Jurisdiction of courts. The regional trial courtshall have the exclusive original jurisdiction to try and decide anycriminal action or proceedings for violation of this Code, exceptthose relating to the offense of failure to register or failure to votewhich shall be under the jurisdiction of the metropolitan ormunicipal trial courts. From the decision of the courts, appeal willlie as in other criminal cases.November 15, 2005, the trial court denied the COMELEC's motion for "lack of merit." Hence, the present petition for certiorari. ISSUE: Whether or not the RTC have jurisdiction to try and decide criminal action orproceeding for violation of the Omnibus Election Code. RULING:The petition is meritorious. The Court said, as correctly argued by the COMELEC,Section 268 of the Omnibus Election Code specifically provides, regional trialcourts have exclusive jurisdiction to try and decide any criminal action orproceedings for violation of the Code "except those relating to the offense of failure to register or failure to vote."It bears emphasis that Congress has the plenary power to define, prescribe andapportion the jurisdictions of various courts. Hence, it may, by law, provide that acertain class of cases should be exclusively heard and determined by a specificcourt. Section 268 of Omnibus Election Code is one such and must thus beconstrued as an exception to BP Blg. 129, the general law on jurisdiction of courts.WHEREFORE, the petition is GRANTED. Respondent judge is DIRECTED to reinstate the case to the court docket and to conduct appropriate proceedingsthereon with reasonable dispatch.SO ORDERED.

SECOND DIVISION [G.R. No. 143581, January 07, 2008] KOREA TECHNOLOGIES CO., LTD., Petitioner, vs. HON. ALBERTO A. LERMA, in his capacity as Presiding Judge of Branch 256 of Regional Trial Court of Muntinlupa City, and PACIFIC GENERAL STEEL MANUFACTURING CORPORATION, Respondents. DECISION VELASCO JR., J.: In our jurisdiction, the policy is to favor alternative methods of resolving disputes, particularly in civil and commercial disputes. Arbitration along with mediation, conciliation, and negotiation, being inexpensive, speedy and less hostile methods have long been favored by this Court. The petition before us puts at issue an arbitration clause in a contract mutually agreed upon by the parties stipulating that they would submit themselves to arbitration in a foreign country. Regrettably, instead of hastening the resolution of their dispute, the parties wittingly or unwittingly prolonged the controversy. Petitioner Korea Technologies Co., Ltd. (KOGIES) is a Korean corporation which is engaged in the supply and installation of Liquefied Petroleum Gas (LPG) Cylinder manufacturing plants, while private respondent Pacific General Steel Manufacturing Corp. (PGSMC) is a domestic corporation.

On March 5, 1997, PGSMC and KOGIES executed a Contract[1] whereby KOGIES would set up an LPG Cylinder Manufacturing Plant in Carmona, Cavite. The contract was executed in the Philippines. On April 7, 1997, the parties executed, in Korea, an Amendment for Contract No. KLP-970301 dated March 5, 1997[2] amending the terms of payment. The contract and its amendment stipulated that KOGIES will ship the machinery and facilities necessary for manufacturing LPG cylinders for which PGSMC would pay USD 1,224,000. KOGIES would install and initiate the operation of the plant for which PGSMC bound itself to pay USD 306,000 upon the plant s production of the 11-kg. LPG cylinder samples. Thus, the total contract price amounted to USD 1,530,000. On October 14, 1997, PGSMC entered into a Contract of Lease[3] with Worth Properties, Inc. (Worth) for use of Worth s 5,079square meter property with a 4,032-square meter warehouse building to house the LPG manufacturing plant. The monthly rental was PhP 322,560 commencing on January 1, 1998 with a 10% annual increment clause. Subsequently, the machineries, equipment, and facilities for the manufacture of LPG cylinders were shipped, delivered, and installed in the Carmona plant. PGSMC paid KOGIES USD 1,224,000. However, gleaned from the Certificate[4] executed by the parties on January 22, 1998, after the installation of the plant, the initial operation could not be conducted as PGSMC encountered financial difficulties affecting the supply of materials, thus forcing the parties to agree that KOGIES would be deemed to have completely complied with the terms and conditions of the March 5, 1997 contract. For the remaining balance of USD306,000 for the installation and initial operation of the plant, PGSMC issued two postdated checks: (1) BPI Check No. 0316412 dated January 30, 1998 for PhP 4,500,000; and (2) BPI Check No. 0316413 dated March 30, 1998 for PhP 4,500,000.[5] When KOGIES deposited the checks, these were dishonored for the reason PAYMENT STOPPED. Thus, on May 8, 1998, [6] KOGIES sent a demand letter to PGSMC threatening criminal action for violation of Batas Pambansa Blg. 22 in case of nonpayment. On the same date, the wife of PGSMC s President faxed a letter dated May 7, 1998 to KOGIES President who was then staying at a Makati City hotel. She complained that not only did KOGIES deliver a different brand of hydraulic press from that agreed upon but it had not delivered several equipment parts already paid for. On May 14, 1998, PGSMC replied that the two checks it issued KOGIES were fully funded but the payments were stopped for [7] reasons previously made known to KOGIES. On June 1, 1998, PGSMC informed KOGIES that PGSMC was canceling their Contract dated March 5, 1997 on the ground that KOGIES had altered the quantity and lowered the quality of the machineries and equipment it delivered to PGSMC, and that PGSMC would dismantle and transfer the machineries, equipment, and facilities installed in the Carmona plant. Five days later, PGSMC filed before the Office of the Public Prosecutor an Affidavit-Complaint for Estafa docketed as I.S. No. 98-03813 against Mr. Dae Hyun Kang, President of KOGIES. On June 15, 1998, KOGIES wrote PGSMC informing the latter that PGSMC could not unilaterally rescind their contract nor dismantle and transfer the machineries and equipment on mere imagined violations by KOGIES. It also insisted that their disputes should be settled by arbitration as agreed upon in Article 15, the arbitration clause of their contract. On June 23, 1998, PGSMC again wrote KOGIES reiterating the contents of its June 1, 1998 letter threatening that the machineries, equipment, and facilities installed in the plant would be dismantled and transferred on July 4, 1998. Thus, on July 1, 1998, KOGIES instituted an Application for Arbitration before the Korean Commercial Arbitration Board (KCAB) in Seoul, Korea pursuant to Art. 15 of the Contract as amended. On July 3, 1998, KOGIES filed a Complaint for Specific Performance, docketed as Civil Case No. 98-117[8] against PGSMC before the Muntinlupa City Regional Trial Court (RTC). The RTC granted a temporary restraining order (TRO) on July 4, 1998, which was subsequently extended until July 22, 1998. In its complaint, KOGIES alleged that PGSMC had initially admitted that the checks that were stopped were not funded but later on claimed that it stopped payment of the checks for the reason that their value was not received as the former allegedly breached their contract by altering the quantity and lowering the quality of the machinery and equipment installed in the plant and failed to make the plant operational although it earlier certified to the contrary as shown in a January 22, 1998 Certificate. Likewise, KOGIES averred that PGSMC violated Art. 15 of their Contract, as amended, by unilaterally rescinding the contract without resorting to arbitration. KOGIES also asked that PGSMC be restrained from dismantling and transferring the machinery and equipment installed in the plant which the latter threatened to do on July 4, 1998. On July 9, 1998, PGSMC filed an opposition to the TRO arguing that KOGIES was not entitled to the TRO since Art. 15, the arbitration clause, was null and void for being against public policy as it ousts the local courts of jurisdiction over the instant controversy. On July 17, 1998, PGSMC filed its Answer with Compulsory Counterclaim[9] asserting that it had the full right to dismantle and transfer the machineries and equipment because it had paid for them in full as stipulated in the contract; that KOGIES was not entitled to the PhP 9,000,000 covered by the checks for failing to completely install and make the plant operational; and that KOGIES was liable for damages amounting to PhP 4,500,000 for altering the quantity and lowering the quality of the machineries and equipment. Moreover, PGSMC averred that it has already paid PhP 2,257,920 in rent (covering January to July 1998) to Worth and it was not willing to further shoulder the cost of renting the premises of the plant considering that the LPG cylinder manufacturing plant never became operational. After the parties submitted their Memoranda, on July 23, 1998, the RTC issued an Order denying the application for a writ of preliminary injunction, reasoning that PGSMC had paid KOGIES USD 1,224,000, the value of the machineries and equipment as shown in the contract such that KOGIES no longer had proprietary rights over them. And finally, the RTC held that Art. 15 of the

Contract as amended was invalid as it tended to oust the trial court or any other court jurisdiction over any dispute that may [10] arise between the parties. KOGIES prayer for an injunctive writ was denied. The dispositive portion of the Order stated: WHEREFORE, in view of the foregoing consideration, this Court believes and so holds that no cogent reason exists for this Court to grant the writ of preliminary injunction to restrain and refrain defendant from dismantling the machineries and facilities at the lot and building of Worth Properties, Incorporated at Carmona, Cavite and transfer the same to another site: and therefore denies plaintiff s application for a writ of preliminary injunction. On July 29, 1998, KOGIES filed its Reply to Answer and Answer to Counterclaim. [11]KOGIES denied it had altered the quantity and lowered the quality of the machinery, equipment, and facilities it delivered to the plant. It claimed that it had performed all the undertakings under the contract and had already produced certified samples of LPG cylinders. It averred that whatever was unfinished was PGSMC s fault since it failed to procure raw materials due to lack of funds. KOGIES, relying on Chung Fu [12] Industries (Phils.), Inc. v. Court of Appeals, insisted that the arbitration clause was without question valid. After KOGIES filed a Supplemental Memorandum with Motion to Dismiss answering PGSMC s memorandum of July 22, [14] 1998 and seeking dismissal of PGSMC s counterclaims, KOGIES, on August 4, 1998, filed its Motion for Reconsideration of the July 23, 1998 Order denying its application for an injunctive writ claiming that the contract was not merely for machinery and facilities worth USD 1,224,000 but was for the sale of an LPG manufacturing plant consisting of supply of all the machinery and facilities and transfer of technology for a total contract price of USD 1,530,000 such that the dismantling and transfer of the machinery and facilities would result in the dismantling and transfer of the very plant itself to the great prejudice of KOGIES as the still unpaid owner/seller of the plant. Moreover, KOGIES points out that the arbitration clause under Art. 15 of the Contract as amended was a valid arbitration stipulation under Art. 2044 of the Civil Code and as held by this Court in Chung Fu Industries (Phils.), Inc.[15] In the meantime, PGSMC filed a Motion for Inspection of Things to determine whether there was indeed alteration of the quantity and lowering of quality of the machineries and equipment, and whether these were properly installed. KOGIES opposed the motion positing that the queries and issues raised in the motion for inspection fell under the coverage of the arbitration clause in their contract. On September 21, 1998, the trial court issued an Order (1) granting PGSMC s motion for inspection; (2) denying KOGIES motion for reconsideration of the July 23, 1998 RTC Order; and (3) denying KOGIES motion to dismiss PGSMC s compulsory counterclaims as these counterclaims fell within the requisites of compulsory counterclaims. On October 2, 1998, KOGIES filed an Urgent Motion for Reconsideration[17] of the September 21, 1998 RTC Order granting inspection of the plant and denying dismissal of PGSMC s compulsory counterclaims. Ten days after, on October 12, 1998, without waiting for the resolution of its October 2, 1998 urgent motion for reconsideration, KOGIES filed before the Court of Appeals (CA) a petition for certiorari[18] docketed as CA-G.R. SP No. 49249, seeking annulment of the July 23, 1998 and September 21, 1998 RTC Orders and praying for the issuance of writs of prohibition, mandamus, and preliminary injunction to enjoin the RTC and PGSMC from inspecting, dismantling, and transferring the machineries and equipment in the Carmona plant, and to direct the RTC to enforce the specific agreement on arbitration to resolve the dispute. In the meantime, on October 19, 1998, the RTC denied KOGIES urgent motion for reconsideration and directed the Branch [19] Sheriff to proceed with the inspection of the machineries and equipment in the plant on October 28, 1998. Thereafter, KOGIES filed a Supplement to the Petition in CA-G.R. SP No. 49249 informing the CA about the October 19, 1998 RTC Order. It also reiterated its prayer for the issuance of the writs of prohibition, mandamus and preliminary injunction which was not acted upon by the CA. KOGIES asserted that the Branch Sheriff did not have the technical expertise to ascertain whether or not the machineries and equipment conformed to the specifications in the contract and were properly installed. On November 11, 1998, the Branch Sheriff filed his Sheriff equipment were not fully and properly installed. The Court of Appeals affirmed the trial court and declared the arbitration clause against public policy On May 30, 2000, the CA rendered the assailed Decision affirming the RTC Orders and dismissing the petition for certiorari filed by KOGIES. The CA found that the RTC did not gravely abuse its discretion in issuing the assailed July 23, 1998 and September 21, 1998 Orders. Moreover, the CA reasoned that KOGIES contention that the total contract price for USD 1,530,000 was for the whole plant and had not been fully paid was contrary to the finding of the RTC that PGSMC fully paid the price of USD 1,224,000, which was for all the machineries and equipment. According to the CA, this determination by the RTC was a factual finding beyond the ambit of a petition for certiorari. On the issue of the validity of the arbitration clause, the CA agreed with the lower court that an arbitration clause which provided for a final determination of the legal rights of the parties to the contract by arbitration was against public policy. On the issue of nonpayment of docket fees and non-attachment of a certificate of non-forum shopping by PGSMC, the CA held that the counterclaims of PGSMC were compulsory ones and payment of docket fees was not required since the Answer with counterclaim was not an initiatory pleading. For the same reason, the CA said a certificate of non-forum shopping was also not required. Furthermore, the CA held that the petition for certiorari had been filed prematurely since KOGIES did not wait for the resolution of its urgent motion for reconsideration of the September 21, 1998 RTC Order which was the plain, speedy, and adequate remedy available. According to the CA, the RTC must be given the opportunity to correct any alleged error it has committed, and that since the assailed orders were interlocutory, these cannot be the subject of a petition for certiorari.
[22] [20] [16] [13]

s Report

[21]

finding that the enumerated machineries and

Hence, we have this Petition for Review on Certiorari under Rule 45. TheIssues: Petitioner posits that the appellate court committed the following errors: a. PRONOUNCING THE QUESTION OF OWNERSHIP OVER THE MACHINERY AND FACILITIES AS A QUESTION OF FACT BEYOND THE AMBIT OF A PETITION FOR CERTIORARI INTENDED ONLY FOR CORRECTION OF ERRORS OF JURISDICTION OR GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF (SIC) EXCESS OF JURISDICTION, AND CONCLUDING THAT THE TRIAL COURT S FINDING ON THE SAME QUESTION WAS IMPROPERLY RAISED IN THE PETITION BELOW; DECLARING AS NULL AND VOID THE ARBITRATION CLAUSE IN ARTICLE 15 OF THE CONTRACT BETWEEN THE PARTIES FOR BEING CONTRARY TO PUBLIC POLICY AND FOR OUSTING THE COURTS OF JURISDICTION; DECREEING PRIVATE RESPONDENT S COUNTERCLAIMS TO BE ALL COMPULSORY NOT NECESSITATING PAYMENT OF DOCKET FEES AND CERTIFICATION OF NON-FORUM SHOPPING; RULING THAT THE PETITION WAS FILED PREMATURELY WITHOUT WAITING FOR THE RESOLUTION OF THE MOTION FOR RECONSIDERATION OF THE ORDER DATED SEPTEMBER 21, 1998 OR WITHOUT GIVING THE TRIAL COURT AN OPPORTUNITY TO CORRECT ITSELF; PROCLAIMING THE TWO ORDERS DATED JULY 23 AND SEPTEMBER 21, 1998 NOT TO BE PROPER SUBJECTS OF CERTIORARI AND PROHIBITION FOR BEING INTERLOCUTORY IN NATURE; NOT GRANTING THE RELIEFS AND REMEDIES PRAYED FOR IN HE (SIC) PETITION AND, INSTEAD, DISMISSING THE SAME [23] FOR ALLEGEDLY WITHOUT MERIT. s Ruling

b.

c.

d.

e.

f.

The Court

The petition is partly meritorious. Before we delve into the substantive issues, we shall first tackle the procedural issues. The rules on the payment of docket fees for counterclaims and cross claims were amended effective August 16, 2004 KOGIES strongly argues that when PGSMC filed the counterclaims, it should have paid docket fees and filed a certificate of nonforum shopping, and that its failure to do so was a fatal defect. We disagree with KOGIES. As aptly ruled by the CA, the counterclaims of PGSMC were incorporated in its Answer with Compulsory Counterclaim dated July 17, 1998 in accordance with Section 8 of Rule 11, 1997 Revised Rules of Civil Procedure, the rule that was effective at the time the Answer with Counterclaim was filed. Sec. 8 on existing counterclaim or cross-claim states, A compulsory counterclaim or a cross-claim that a defending party has at the time he files his answer shall be contained therein. On July 17, 1998, at the time PGSMC filed its Answer incorporating its counterclaims against KOGIES, it was not liable to pay filing fees for said counterclaims being compulsory in nature. We stress, however, that effective August 16, 2004 under Sec. 7, Rule 141, as amended by A.M. No. 04-2-04-SC, docket fees are now required to be paid in compulsory counterclaim or cross- claims. As to the failure to submit a certificate of forum shopping, PGSMC s Answer is not an initiatory pleading which requires a [24] certification against forum shopping under Sec. 5 of Rule 7, 1997 Revised Rules of Civil Procedure. It is a responsive pleading, hence, the courts a quo did not commit reversible error in denying KOGIES motion to dismiss PGSMC s compulsory counterclaims. Interlocutory orders proper subject of certiorari Citing Gamboa v. Cruz,[25] the CA also pronounced that certiorari and Prohibition are neither the remedies to question the propriety of an interlocutory order of the trial court. [26] The CA erred on its reliance on Gamboa. Gamboa involved the denial of a motion to acquit in a criminal case which was not assailable in an action for certiorari since the denial of a motion to quash required the accused to plead and to continue with the trial, and whatever objections the accused had in his motion to quash can then be used as part of his defense and subsequently can be raised as errors on his appeal if the judgment of the trial court is adverse to him. The general rule is that interlocutory orders cannot be challenged by an appeal. [27] Thus, inYamaoka v. Pescarich Manufacturing Corporation, we held: The proper remedy in such cases is an ordinary appeal from an adverse judgment on the merits, incorporating in said appeal the grounds for assailing the interlocutory orders. Allowing appeals from interlocutory orders would result in the sorry spectacle of a case being subject of a counterproductive ping-pong to and from the appellate court as often as a trial court is perceived to have made an error in any of its interlocutory rulings. However, where the assailed interlocutory order was issued with grave abuse of discretion or patently erroneous and the remedy of appeal would not afford adequate and expeditious relief, the Court allows certiorari as a mode of redress.[28] Also, appeals from interlocutory orders would open the floodgates to endless occasions for dilatory motions. Thus, where the interlocutory order was issued without or in excess of jurisdiction or with grave abuse of discretion, the remedy is certiorari.[29] The alleged grave abuse of discretion of the respondent court equivalent to lack of jurisdiction in the issuance of the two assailed

orders coupled with the fact that there is no plain, speedy, and adequate remedy in the ordinary course of law amply provides the basis for allowing the resort to a petition for certiorari under Rule 65. Prematurity of the petition before the CA Neither do we think that KOGIES was guilty of forum shopping in filing the petition for certiorari. Note that KOGIES motion for reconsideration of the July 23, 1998 RTC Order which denied the issuance of the injunctive writ had already been denied. Thus, KOGIES only remedy was to assail the RTC s interlocutory order via a petition for certiorari under Rule 65. While the October 2, 1998 motion for reconsideration of KOGIES of the September 21, 1998 RTC Order relating to the inspection of things, and the allowance of the compulsory counterclaims has not yet been resolved, the circumstances in this case would allow an exception to the rule that before certiorari may be availed of, the petitioner must have filed a motion for reconsideration and said motion should have been first resolved by the court a quo. The reason behind the rule is to enable [30] the lower court, in the first instance, to pass upon and correct its mistakes without the intervention of the higher court. The September 21, 1998 RTC Order directing the branch sheriff to inspect the plant, equipment, and facilities when he is not competent and knowledgeable on said matters is evidently flawed and devoid of any legal support. Moreover, there is an urgent necessity to resolve the issue on the dismantling of the facilities and any further delay would prejudice the interests of KOGIES. Indeed, there is real and imminent threat of irreparable destruction or substantial damage to KOGIES equipment and machineries. We find the resort to certiorari based on the gravely abusive orders of the trial court sans the ruling on the October 2, 1998 motion for reconsideration to be proper. The Core Issue: Article 15 of the Contract We now go to the core issue of the validity of Art. 15 of the Contract, the arbitration clause. It provides: Article 15. Arbitration. All disputes, controversies, or differences which may arise between the parties, out of or in relation to or in connection with this Contract or for the breach thereof, shall finally be settled by arbitration in Seoul, Korea in accordance with the Commercial Arbitration Rules of the Korean Commercial Arbitration Board. The award rendered by the arbitration(s) shall be final and bindingupon both parties concerned. (Emphasis supplied.) Petitioner claims the RTC and the CA erred in ruling that the arbitration clause is null and void. Petitioner is correct. Established in this jurisdiction is the rule that the law of the place where the contract is made governs. Lex loci contractus. The contract in this case was perfected here in the Philippines. Therefore, our laws ought to govern. Nonetheless, Art. 2044 of the Civil Code sanctions the validity of mutually agreed arbitral clause or the finality and binding effect of an arbitral award. Art. 2044 provides, Any stipulation that the arbitrators award or decision shall be final, is valid, without prejudice to Articles 2038, 2039 and 2040. (Emphasis supplied.) Arts. 2038,[31] 2039,[32] and 2040[33] abovecited refer to instances where a compromise or an arbitral award, as applied to Art. [34] 2044 pursuant to Art. 2043, may be voided, rescinded, or annulled, but these would not denigrate the finality of the arbitral award. The arbitration clause was mutually and voluntarily agreed upon by the parties. It has not been shown to be contrary to any law, or against morals, good customs, public order, or public policy. There has been no showing that the parties have not dealt with each other on equal footing. We find no reason why the arbitration clause should not be respected and complied with by both [35] parties. In Gonzales v. Climax Mining Ltd., we held that submission to arbitration is a contract and that a clause in a contract providing that all matters in dispute between the parties shall be referred to arbitration is a contract.[36] Again in Del Monte [t] Corporation-USA v. Court of Appeals, we likewise ruled that he provision to submit to arbitration any dispute arising therefrom and the relationship of the parties is part of that contract and is itself a contract. [37] Arbitration clause not contrary to public policy The arbitration clause which stipulates that the arbitration must be done in Seoul, Korea in accordance with the Commercial Arbitration Rules of the KCAB, and that the arbitral award is final and binding, is not contrary to public policy. This Court has sanctioned the validity of arbitration clauses in a catena of cases. In the 1957 case ofEastboard Navigation Ltd. v. Juan Ysmael and Co., Inc.,[38] this Court had occasion to rule that an arbitration clause to resolve differences and breaches of mutually agreed contractual terms is valid. In BF Corporation v. Court of Appeals, we held that [i]n this jurisdiction, arbitration has been held valid and constitutional. Even before the approval on June 19, 1953 of Republic Act No. 876, this Court has countenanced the settlement of disputes through arbitration. Republic Act No. 876 was adopted to supplement the New Civil Code s provisions on arbitration. [39] And in LM Power Engineering Corporation v. Capitol Industrial Construction Groups, Inc., we declared that: Being an inexpensive, speedy and amicable method of settling disputes, arbitration along with mediation, conciliation and negotiation is encouraged by the Supreme Court. Aside from unclogging judicial dockets, arbitration also hastens the resolution of disputes, especially of the commercial kind. It is thus regarded as the wave of the future in international civil and commercial disputes. Brushing aside a contractual agreement calling for arbitration between the parties would be a step backward. Consistent with the above-mentioned policy of encouraging alternative dispute resolution methods, courts should liberally construe arbitration clauses. Provided such clause is susceptible of an interpretation that covers the asserted dispute, an order to [40] arbitrate should be granted. Any doubt should be resolved in favor of arbitration.

Having said that the instant arbitration clause is not against public policy, we come to the question on what governs an arbitration clause specifying that in case of any dispute arising from the contract, an arbitral panel will be constituted in a foreign country and the arbitration rules of the foreign country would govern and its award shall be final and binding. RA 9285 incorporated the UNCITRAL Model law to which we are a signatory For domestic arbitration proceedings, we have particular agencies to arbitrate disputes arising from contractual relations. In case a foreign arbitral body is chosen by the parties, the arbitration rules of our domestic arbitration bodies would not be applied. As signatory to the Arbitration Rules of the UNCITRAL Model Law on International Commercial Arbitration[41] of the United Nations Commission on International Trade Law (UNCITRAL) in the New York Convention on June 21, 1985, the Philippines committed itself to be bound by the Model Law. We have even incorporated the Model Law in Republic Act No. (RA) 9285, otherwise known as the Alternative Dispute Resolution Act of 2004 entitled An Act to Institutionalize the Use of an Alternative Dispute Resolution System in the Philippines and to Establish the Office for Alternative Dispute Resolution, and for Other Purposes, promulgated on April 2, 2004. Secs. 19 and 20 of Chapter 4 of the Model Law are the pertinent provisions: CHAPTER 4 - INTERNATIONAL COMMERCIAL ARBITRATION SEC. 19. Adoption of the Model Law on International Commercial Arbitration. International commercial arbitration shall be governed by the Model Law on International Commercial Arbitration (the Model Law ) adopted by the United Nations Commission on International Trade Law on June 21, 1985 (United Nations Document A/40/17) and recommended for enactment by the General Assembly in Resolution No. 40/72 approved on December 11, 1985, copy of which is hereto attached as Appendix A . SEC. 20. Interpretation of Model Law. In interpreting the Model Law, regard shall be had to its international origin and to the need for uniformity in its interpretation and resort may be made to the travaux preparatories and the report of the Secretary General of the United Nations Commission on International Trade Law dated March 25, 1985 entitled, International Commercial Arbitration: Analytical Commentary on Draft Trade identified by reference number A/CN. 9/264. While RA 9285 was passed only in 2004, it nonetheless applies in the instant case since it is a procedural law which has a retroactive effect. Likewise, KOGIES filed its application for arbitration before the KCAB on July 1, 1998 and it is still pending because no arbitral award has yet been rendered. Thus, RA 9285 is applicable to the instant case. Well-settled is the rule that procedural laws are construed to be applicable to actions pending and undetermined at the time of their passage, and are deemed retroactive in that sense and to that extent. As a general rule, the retroactive application of procedural laws does not [42] violate any personal rights because no vested right has yet attached nor arisen from them. Among the pertinent features of RA 9285 applying and incorporating the UNCITRAL Model Law are the following: (1) The RTC must refer to arbitration in proper cases Under Sec. 24, the RTC does not have jurisdiction over disputes that are properly the subject of arbitration pursuant to an arbitration clause, and mandates the referral to arbitration in such cases, thus: SEC. 24. Referral to Arbitration. A court before which an action is brought in a matter which is the subject matter of an arbitration agreement shall, if at least one party so requests not later than the pre-trial conference, or upon the request of both parties thereafter, refer the parties to arbitration unless it finds that the arbitration agreement is null and void, inoperative or incapable of being performed. (2) Foreign arbitral awards must be confirmed by the RTC Foreign arbitral awards while mutually stipulated by the parties in the arbitration clause to be final and binding are not [43] immediately enforceable or cannot be implemented immediately. Sec. 35 of the UNCITRAL Model Law stipulates the requirement for the arbitral award to be recognized by a competent court for enforcement, which court under Sec. 36 of the UNCITRAL Model Law may refuse recognition or enforcement on the grounds provided for. RA 9285 incorporated these provisos to Secs. 42, 43, and 44 relative to Secs. 47 and 48, thus: SEC. 42. Application of the New York Convention. The New York Convention shall govern the recognition and enforcement of arbitral awards covered by said Convention. The recognition and enforcement of such arbitral awards shall be filed with the Regional Trial Court in accordance with the rules of procedure to be promulgated by the Supreme Court. Said procedural rules shall provide that the party relying on the award or applying for its enforcement shall file with the court the original or authenticated copy of the award and the arbitration agreement. If the award or agreement is not made in any of the official languages, the party shall supply a duly certified translation thereof into any of such languages. The applicant shall establish that the country in which foreign arbitration award was made in party to the New York Convention. xxxx SEC. 43. Recognition and Enforcement of Foreign Arbitral Awards Not Covered by the New York Convention. The recognition and enforcement of foreign arbitral awards not covered by the New York Convention shall be done in accordance with procedural rules to be promulgated by the Supreme Court. The Court may, on grounds of comity and reciprocity, recognize and enforce a non-convention award as a convention award. SEC. 44. Foreign Arbitral Award Not Foreign Judgment. A foreign arbitral award when confirmed by a court of a foreign

country, shall be recognized and enforced as a foreign arbitral award and not as a judgment of a foreign court. A foreign arbitral award, when confirmed by the Regional Trial Court, shall be enforced in the same manner as final and executory decisions of courts of law of the Philippines xxxx SEC. 47. Venue and Jurisdiction. Proceedings for recognition and enforcement of an arbitration agreement or for vacations, setting aside, correction or modification of an arbitral award, and any application with a court for arbitration assistance and supervision shall be deemed as special proceedings and shall be filed with the Regional Trial Court (i) where arbitration proceedings are conducted; (ii) where the asset to be attached or levied upon, or the act to be enjoined is located; (iii) where any of the parties to the dispute resides or has his place of business; or (iv) in the National Judicial Capital Region, at the option of the applicant. SEC. 48. Notice of Proceeding to Parties. In a special proceeding for recognition and enforcement of an arbitral award, the Court shall send notice to the parties at their address of record in the arbitration, or if any part cannot be served notice at such address, at such party s last known address. The notice shall be sent al least fifteen (15) days before the date set for the initial hearing of the application. It is now clear that foreign arbitral awards when confirmed by the RTC are deemed not as a judgment of a foreign court but as a foreign arbitral award, and when confirmed, are enforced as final and executory decisions of our courts of law. Thus, it can be gleaned that the concept of a final and binding arbitral award is similar to judgments or awards given by some of our quasi-judicial bodies, like the National Labor Relations Commission and Mines Adjudication Board, whose final judgments are stipulated to be final and binding, but not immediately executory in the sense that they may still be judicially reviewed, upon the instance of any party. Therefore, the final foreign arbitral awards are similarly situated in that they need first to be confirmed by the RTC. (3) The RTC has jurisdiction to review foreign arbitral awards Sec. 42 in relation to Sec. 45 of RA 9285 designated and vested the RTC with specific authority and jurisdiction to set aside, reject, or vacate a foreign arbitral award on grounds provided under Art. 34(2) of the UNCITRAL Model Law. Secs. 42 and 45 provide: SEC. 42. Application of the New York Convention. The New York Convention shall govern the recognition and enforcement of arbitral awards covered by said Convention. The recognition and enforcement of such arbitral awards shall be filed with the Regional Trial Court in accordance with the rules of procedure to be promulgated by the Supreme Court. Said procedural rules shall provide that the party relying on the award or applying for its enforcement shall file with the court the original or authenticated copy of the award and the arbitration agreement. If the award or agreement is not made in any of the official languages, the party shall supply a duly certified translation thereof into any of such languages. The applicant shall establish that the country in which foreign arbitration award was made is party to the New York Convention. If the application for rejection or suspension of enforcement of an award has been made, the Regional Trial Court may, if it considers it proper, vacate its decision and may also, on the application of the party claiming recognition or enforcement of the award, order the party to provide appropriate security. xxxx SEC. 45. Rejection of a Foreign Arbitral Award. A party to a foreign arbitration proceeding may oppose an application for recognition and enforcement of the arbitral award in accordance with the procedures and rules to be promulgated by the Supreme Court only on those grounds enumerated under Article V of the New York Convention. Any other ground raised shall be disregarded by the Regional Trial Court. Thus, while the RTC does not have jurisdiction over disputes governed by arbitration mutually agreed upon by the parties, still the foreign arbitral award is subject to judicial review by the RTC which can set aside, reject, or vacate it. In this sense, what this Court held in Chung Fu Industries (Phils.), Inc. relied upon by KOGIES is applicable insofar as the foreign arbitral awards, while final and binding, do not oust courts of jurisdiction since these arbitral awards are not absolute and without exceptions as they are still judicially reviewable. Chapter 7 of RA 9285 has made it clear that all arbitral awards, whether domestic or foreign, are subject to judicial review on specific grounds provided for. (4) Grounds for judicial review different in domestic and foreign arbitral awards The differences between a final arbitral award from an international or foreign arbitral tribunal and an award given by a local arbitral tribunal are the specific grounds or conditions that vest jurisdiction over our courts to review the awards. For foreign or international arbitral awards which must first be confirmed by the RTC, the grounds for setting aside, rejecting or vacating the award by the RTC are provided under Art. 34(2) of the UNCITRAL Model Law. For final domestic arbitral awards, which also need confirmation by the RTC pursuant to Sec. 23 of RA 876 and shall be [45] recognized as final and executory decisions of the RTC, they may only be assailed before the RTC and vacated on the grounds [46] provided under Sec. 25 of RA 876.
[44]

(5) RTC decision of assailed foreign arbitral award appealable Sec. 46 of RA 9285 provides for an appeal before the CA as the remedy of an aggrieved party in cases where the RTC sets aside, rejects, vacates, modifies, or corrects an arbitral award, thus: SEC. 46. Appeal from Court Decision or Arbitral Awards. A decision of the Regional Trial Court confirming, vacating, setting aside, modifying or correcting an arbitral award may be appealed to the Court of Appeals in accordance with the rules and procedure to be promulgated by the Supreme Court. The losing party who appeals from the judgment of the court confirming an arbitral award shall be required by the appellate court to post a counterbond executed in favor of the prevailing party equal to the amount of the award in accordance with the rules to be promulgated by the Supreme Court. Thereafter, the CA decision may further be appealed or reviewed before this Court through a petition for review under Rule 45 of the Rules of Court. PGSMC has remedies to protect its interests Thus, based on the foregoing features of RA 9285, PGSMC must submit to the foreign arbitration as it bound itself through the subject contract. While it may have misgivings on the foreign arbitration done in Korea by the KCAB, it has available remedies under RA 9285. Its interests are duly protected by the law which requires that the arbitral award that may be rendered by KCAB must be confirmed here by the RTC before it can be enforced. With our disquisition above, petitioner is correct in its contention that an arbitration clause, stipulating that the arbitral award is final and binding, does not oust our courts of jurisdiction as the international arbitral award, the award of which is not absolute and without exceptions, is still judicially reviewable under certain conditions provided for by the UNCITRAL Model Law on ICA as applied and incorporated in RA 9285. Finally, it must be noted that there is nothing in the subject Contract which provides that the parties may dispense with the arbitration clause. Unilateral rescission improper and illegal Having ruled that the arbitration clause of the subject contract is valid and binding on the parties, and not contrary to public policy; consequently, being bound to the contract of arbitration, a party may not unilaterally rescind or terminate the contract for whatever cause without first resorting to arbitration. What this Court held in University of the Philippines v. De Los Angeles[47] and reiterated in succeeding cases,[48] that the act of treating a contract as rescinded on account of infractions by the other contracting party is valid albeit provisional as it can be judicially assailed, is not applicable to the instant case on account of a valid stipulation on arbitration. Where an arbitration clause in a contract is availing, neither of the parties can unilaterally treat the contract as rescinded since whatever infractions or breaches by a party or differences arising from the contract must be brought first and resolved by arbitration, and not through an extrajudicial rescission or judicial action. The issues arising from the contract between PGSMC and KOGIES on whether the equipment and machineries delivered and installed were properly installed and operational in the plant in Carmona, Cavite; the ownership of equipment and payment of the contract price; and whether there was substantial compliance by KOGIES in the production of the samples, given the alleged fact that PGSMC could not supply the raw materials required to produce the sample LPG cylinders, are matters proper for arbitration. Indeed, we note that on July 1, 1998, KOGIES instituted an Application for Arbitration before the KCAB in Seoul, Korea pursuant to Art. 15 of the Contract as amended. Thus, it is incumbent upon PGSMC to abide by its commitment to arbitrate. Corollarily, the trial court gravely abused its discretion in granting PGSMC s Motion for Inspection of Things on September 21, 1998, as the subject matter of the motion is under the primary jurisdiction of the mutually agreed arbitral body, the KCAB in Korea. In addition, whatever findings and conclusions made by the RTC Branch Sheriff from the inspection made on October 28, 1998, as ordered by the trial court on October 19, 1998, is of no worth as said Sheriff is not technically competent to ascertain the actual status of the equipment and machineries as installed in the plant. For these reasons, the September 21, 1998 and October 19, 1998 RTC Orders pertaining to the grant of the inspection of the equipment and machineries have to be recalled and nullified. Issue on ownership of plant proper for arbitration Petitioner assails the CA ruling that the issue petitioner raised on whether the total contract price of USD 1,530,000 was for the whole plant and its installation is beyond the ambit of a Petition for Certiorari. Petitioner s position is untenable. It is settled that questions of fact cannot be raised in an original action for certiorari.[49] Whether or not there was full payment for the machineries and equipment and installation is indeed a factual issue prohibited by Rule 65. However, what appears to constitute a grave abuse of discretion is the order of the RTC in resolving the issue on the ownership of the plant when it is the arbitral body (KCAB) and not the RTC which has jurisdiction and authority over the said issue. The RTC s determination of such factual issue constitutes grave abuse of discretion and must be reversed and set aside.

RTC has interim jurisdiction to protect the rights of the parties Anent the July 23, 1998 Order denying the issuance of the injunctive writ paving the way for PGSMC to dismantle and transfer the equipment and machineries, we find it to be in order considering the factual milieu of the instant case. Firstly, while the issue of the proper installation of the equipment and machineries might well be under the primary jurisdiction of the arbitral body to decide, yet the RTC under Sec. 28 of RA 9285 has jurisdiction to hear and grant interim measures to protect vested rights of the parties. Sec. 28 pertinently provides: SEC. 28. Grant of interim Measure of Protection. (a) It is not incompatible with an arbitration agreement for a party to request, before constitution of the tribunal, from a Court to grant such measure. After constitution of the arbitral tribunal and during arbitral proceedings, a request for an interim measure of protection, or modification thereof, may be made with the arbitral or to the extent that the arbitral tribunal has no power to act or is unable to act effectivity, the request may be made with the Court. The arbitral tribunal is deemed constituted when the sole arbitrator or the third arbitrator, who has been nominated, has accepted the nomination and written communication of said nomination and acceptance has been received by the party making the request. (b) The following rules on interim or provisional relief shall be observed: Any party may request that provisional relief be granted against the adverse party. Such relief may be granted: (i) to prevent irreparable loss or injury; (ii) to provide security for the performance of any obligation; (iii) to produce or preserve any evidence; or (iv) to compel any other appropriate act or omission. (c) The order granting provisional relief may be conditioned upon the provision of security or any act or omission specified in the order. (d) Interim or provisional relief is requested by written application transmitted by reasonable means to the Court or arbitral tribunal as the case may be and the party against whom the relief is sought, describing in appropriate detail the precise relief, the party against whom the relief is requested, the grounds for the relief, and the evidence supporting the request. (e) The order shall be binding upon the parties. (f) Either party may apply with the Court for assistance in implementing or enforcing an interim measure ordered by an arbitral tribunal. (g) A party who does not comply with the order shall be liable for all damages resulting from noncompliance, including all expenses, and reasonable attorney's fees, paid in obtaining the order s judicial enforcement. (Emphasis ours.) Art. 17(2) of the UNCITRAL Model Law on ICA defines an interim measure of protection as: Article 17. Power of arbitral tribunal to order interim measures xxx xxx xxx (2) An interim measure is any temporary measure, whether in the form of an award or in another form, by which, at any time prior to the issuance of the award by which the dispute is finally decided, the arbitral tribunal orders a party to: (a) Maintain or restore the status quo pending determination of the dispute; (b) Take action that would prevent, or refrain from taking action that is likely to cause, current or imminent harm or prejudice tothe arbitral process itself; (c) Provide a means of preserving assets out of which a subsequent award may be satisfied; or (d) Preserve evidence that may be relevant and material to the resolution of the dispute. Art. 17 J of UNCITRAL Model Law on ICA also grants courts power and jurisdiction to issue interim measures: Article 17 J. Court-ordered interim measures A court shall have the same power of issuing an interim measure in relation to arbitration proceedings, irrespective of whether their place is in the territory of this State, as it has in relation to proceedings in courts. The court shall exercise such power in accordance with its own procedures in consideration of the specific features of international arbitration. In the recent 2006 case of Transfield Philippines, Inc. v. Luzon Hydro Corporation, we were explicit that even the pendency of an arbitral proceeding does not foreclose resort to the courts for provisional reliefs. We explicated this way: As a fundamental point, the pendency of arbitral proceedings does not foreclose resort to the courts for provisional reliefs. The Rules of the ICC, which governs the parties arbitral dispute, allows the application of a party to a judicial authority for interim or conservatory measures. Likewise, Section 14 of Republic Act (R.A.) No. 876 (The Arbitration Law) recognizes the rights of any party to petition the court to take measures to safeguard and/or conserve any matter which is the subject of the dispute in arbitration. In addition, R.A. 9285, otherwise known as the Alternative Dispute Resolution Act of 2004, allows the filing of provisional or interim measures with the regular courts whenever the arbitral tribunal has no power to act or to act effectively.[50] It is thus beyond cavil that the RTC has authority and jurisdiction to grant interim measures of protection. Secondly, considering that the equipment and machineries are in the possession of PGSMC, it has the right to protect and preserve the equipment and machineries in the best way it can. Considering that the LPG plant was non-operational, PGSMC has the right to dismantle and transfer the equipment and machineries either for their protection and preservation or for the better way to make good use of them which is ineluctably within the management discretion of PGSMC. Thirdly, and of greater import is the reason that maintaining the equipment and machineries in Worth s property is not to the best interest of PGSMC due to the prohibitive rent while the LPG plant as set-up is not operational. PGSMC was losing PhP322,560 as monthly rentals or PhP3.87M for 1998 alone without considering the 10% annual rent increment in maintaining the plant. Fourthly, and corollarily, while the KCAB can rule on motions or petitions relating to the preservation or transfer of the equipment and machineries as an interim measure, yet on hindsight, the July 23, 1998 Order of the RTC allowing the transfer of

the equipment and machineries given the non-recognition by the lower courts of the arbitral clause, has accorded an interim measure of protection to PGSMC which would otherwise been irreparably damaged. Fifth, KOGIES is not unjustly prejudiced as it has already been paid a substantial amount based on the contract. Moreover, KOGIES is amply protected by the arbitral action it has instituted before the KCAB, the award of which can be enforced in our jurisdiction through the RTC. Besides, by our decision, PGSMC is compelled to submit to arbitration pursuant to the valid arbitration clause of its contract with KOGIES. PGSMC to preserve the subject equipment and machineries Finally, while PGSMC may have been granted the right to dismantle and transfer the subject equipment and machineries, it does not have the right to convey or dispose of the same considering the pending arbitral proceedings to settle the differences of the parties. PGSMC therefore must preserve and maintain the subject equipment and machineries with the diligence of a good father of a family[51] until final resolution of the arbitral proceedings and enforcement of the award, if any. WHEREFORE, this petition is PARTLY GRANTED, in that: (1) The May 30, 2000 CA Decision in CA-G.R. SP No. 49249 is REVERSED and SET ASIDE; (2) The September 21, 1998 and October 19, 1998 RTC Orders in Civil Case No. 98-117 are REVERSED and SET ASIDE; (3) The parties are hereby ORDERED to submit themselves to the arbitration of their dispute and differences arising from the subject Contract before the KCAB; and (4) PGSMC is hereby ALLOWED to dismantle and transfer the equipment and machineries, if it had not done so, and ORDERED to preserve and maintain them until the finality of whatever arbitral award is given in the arbitration proceedings. No pronouncement as to costs.SO ORDERED.

HERALD BLACK DACASIN,Petitioner, v. SHARON DEL MUNDO DACASIN,Respondent. G.R. No. 168785 : February 5, 2010 CARPIO,J.: Facts: Herald, American, and Sharon, Filipino, were married in Manila in April 1994. They have one daughter, Stephanie, born on September 21, 1995. In June 1999, Sharon sought and obtained a divorce decree from the Circuit Court, 19th Judicial Circuit, Lake County, Illinois (Illinois court). In its ruling, the Illinois court dissolved the marriage of petitioner and respondent, awarded to respondent sole custody of Stephanie and retained jurisdiction over the case for enforcement purposes. On January 28, 2002, both executed in Manila a contract for joint custody over Stephanie. In 2004, Herald filed a case against Sharon alleging that Sharon had exercised sole custody over Stephanie contrary to their agreement. o The trial court held that (1) it is precluded from taking cognizance over the suit considering the Illinois court s retention of jurisdiction to enforce its divorce decree, including its order awarding sole custody of Stephanie to respondent; (2) the divorce decree is binding on petitioner following the nationality rule prevailing in this jurisdiction; and (3) the Agreement is void for contravening Article 2035, paragraph 5 of the Civil Code prohibiting compromise agreements on jurisdiction and dismissed the case. Issue: WON the trial court has jurisdiction to take cognizance of petitioner s suit and enforce the Agreement on the joint custody of the parties child. Held/ Rationale: The trial court s refusal to entertain petitioner s suit was grounded not on its lack of power to do so but on its thinking that the Illinois court s divorce decree stripped it of jurisdiction. This conclusion is unfounded. What the Illinois court retained was jurisdiction x x x for the purpose of enforcing all and sundry the various provisions of [its] Judgment for Dissolution. Petitioner s suit seeks the enforcement not of the various provisions of the divorce decree but of the post-divorce Agreement on joint child custody. Thus, the action lies beyond the zone of the Illinois court s so-called retained jurisdiction.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 154473 April 24, 2009 PEOPLE OF THE PHILIPPINES and PHOTOKINA MARKETING CORPORATION, Petitioners, vs. ALFREDO L. BENIPAYO, Respondent. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 155573 April 24, 2009 PHOTOKINA MARKETING CORPORATION, Petitioner, vs. ALFREDO L. BENIPAYO, Respondent. DECISION NACHURA, J.: Before the Court are two consolidated petitions for review on certiorari filed under Rules 45 and 122 of the Rules of Court: (1) G.R. No. 154473 assailing the June 18, 20021 and the June 23, 20022 Orders of the Regional Trial Court (RTC) of Quezon City, Branch 102 in Criminal Case No. Q-02-109407; and (2) G.R. No. 155573 challenging the June 25, 20023 and the September 18, 20024 Orders of the RTC of Quezon City, Branch 101 in Criminal Case No. Q-02-109406. The petitions, while involving the same issues, rest on different factual settings, thus: G.R. No. 154473 On January 31, 2002, respondent Alfredo L. Benipayo, then Chairman of the Commission on Elections (COMELEC), delivered a speech in the "Forum on Electoral Problems: Roots and Responses in the Philippines" held at the Balay Kalinaw, University of the

Philippines-Diliman Campus, Quezon City.5 The speech was subsequently published in the February 4 and 5, 2002 issues of the 6 Manila Bulletin. Petitioner corporation, believing that it was the one alluded to by the respondent when he stated in his speech that Even worse, the Commission came right up to the brink of signing a 6.5 billion contract for a registration solution that could have been bought for 350 million pesos, and an ID solution that isn t even a requirement for voting. But reason intervened and no contract was signed. Now, they are at it again, trying to hoodwink us into contract that is so grossly disadvantageous to the government that it offends common sense to say that it would be worth the 6.5 billion-peso price tag.7 8 filed, through its authorized representative, an Affidavit-Complaint for libel. Arguing that he was an impeachable officer, respondent questioned the jurisdiction of the Office of the City Prosecutor of Quezon City (OCP-QC).9 Despite the challenge, the City Prosecutor filed an Information10 for libel against the respondent, docketed as Criminal Case No. Q-02-109407, with the RTC of Quezon City, Branch 102. Petitioner later filed a Motion for Inhibition and Consolidation,11 contending that Judge Jaime N. Salazar of Branch 102 could not impartially preside over the case because his appointment to the judiciary was made possible through the recommendation of respondent s father-in-law. Petitioner further moved that the case be ordered consolidated with the other libel case [Criminal Case No. Q-02-103406, which is the subject of G.R. No. 155573] pending with Branch 101 of the RTC. While the said motion remained unresolved, respondent, for his part, moved for the dismissal of the case on the assertion that the trial court had no jurisdiction over his person for he was an impeachable officer and thus, could not be criminally prosecuted before any court during his incumbency; and that, assuming he can be criminally prosecuted, it was the Office of the 12 Ombudsman that should investigate him and the case should be filed with the Sandiganbayan. 13 On June 18, 2002, the trial court issued the challenged Order dismissing Criminal Case No. Q-02-109407 and considering as moot and academic petitioner s motion to inhibit. While the RTC found that respondent was no longer an impeachable officer because his appointment was not confirmed by Congress, it ruled that the case had to be dismissed for lack of jurisdiction considering that the alleged libel was committed by respondent in relation to his office he delivered the speech in his official capacity as COMELEC Chair. Accordingly, it was the Sandiganbayan that had jurisdiction over the case to the exclusion of all other courts. On motion for reconsideration, the trial court adhered to its ruling that it was not vested with jurisdiction to hear the libel case.14 Aggrieved, petitioners timely filed before the Court, on pure questions of law, the instant Petition for Review on 15 Certiorari under Rule 122 in relation to Rule 45 of the Rules of Court raising the following grounds: I. THE TRIAL COURT SHOULD HAVE FIRST RESOLVED THE MOTION TO INHIBIT BEFORE RESOLVING THE MOTION TO DISMISS; II. THE TRIAL COURT ERRED IN RULING THAT THE CRIME OF LIBEL IN THIS CASE WAS COMMITTED BY ACCUSED "IN RELATION TO HIS OFFICE;" AND III. THE TRIAL COURT ERRED IN RULING THAT IT HAD NO JURISDICTION IN THIS CASE.16 G.R. No. 155573 On March 13, 2002, respondent, as COMELEC Chair, and COMELEC Commissioner Luzviminda Tangcangco were guests of the talk show "Point Blank," hosted by Ces Drilon and televised nationwide on the ANC-23 channel. The television show s episode that day was entitled "COMELEC Wars."17 In that episode, the following conversation transpired: Drilon: Are you saying, Chairman, that COMELEC funds are being used for a "PR" campaign against you? Is that what you are saying? Benipayo: No, I think [it s] not COMELEC funds, [it s] Photokina funds. You know, admittedly, according to [c]harg d [a]ffaires of the U.S. Embassy[,] in a letter sent to me in July of 2001, it is what s been [so] happening to the Photokina deal, they have already spent in excess of 2.4 [m]illion U.S. [d]ollars. At that time[,] that s about 120 [m]illion pesos and I said, what for[?] [T]hey 18 wouldn t tell me, you see. Now you asked me, [who is] funding this? I think it s pretty obvious. Petitioner considered respondent s statement as defamatory, and, through its authorized representative, filed a ComplaintAffidavit19 for libel. Respondent similarly questioned the jurisdiction of the OCP-QC.20 The City Prosecutor, however, consequently instituted Criminal Case No. Q-02-109406 by filing the corresponding Information21 with the RTC of Quezon City, Branch 101. Respondent also moved for the dismissal of the information raising similar arguments that the court had no jurisdiction over his person, he being an impeachable officer; and that, even if criminal prosecution were possible, jurisdiction rested with the 22 Sandiganbayan. On June 25, 2002, the trial court issued the assailed Order23 dismissing Criminal Case No. Q-02-109406 for lack of jurisdiction over the person of the respondent. The RTC, in the further assailed September 18, 2002 Order,24denied petitioner s Motion for 25 Reconsideration. Displeased with the rulings of the trial court, petitioners seasonably filed before this Court, on pure questions of law, another Petition for Review on Certiorari26 under Rule 122 in relation to Rule 45 of the Rules of Court raising the following grounds: I. THE TRIAL COURT ERRED IN RULING THAT THE CRIME OF LIBEL IN THIS CASE WAS COMMITTED BY RESPONDENT "IN RELATION TO HIS OFFICE"; AND II. IN THE ABSENCE OF ANY ALLEGATION IN THE INFORMATION THAT THE CRIME OF LIBEL WAS COMMITTED BY RESPONDENT IN RELATION TO HIS OFFICE, THE TRIAL COURT ERRED IN RULING THAT IT HAD NO JURISDICTION OVER THE CASE BELOW. III. EVEN ON THE ASSUMPTION THAT THE SANDIGANBAYAN HAS JURISDICTION OVER THE CASE, THE TRIAL COURT SHOULD HAVE ENDORSED THE CASE TO THE SANDIGANBAYAN INSTEAD OF DISMISSING IT OUTRIGHT.27 Considering that the two petitions, as aforesaid, involve the same issues and the same parties, the Court, upon the recommendation of the Clerk of Court,28 consolidated the cases.29 The core issue for the resolution of the Court in these twin cases is whether the RTC has jurisdiction over libel cases to the exclusion of all other courts. The Ruling of the Court The Court observes that the parties have argued at length in their pleadings on the issue of whether the alleged criminal acts of respondent are committed in relation to his office. They are of the conviction that the resolution of the said question will ultimately determine which court the RTC or the Sandiganbayan has jurisdiction over the criminal cases filed. The Court, however, notes that both parties are working on a wrong premise. The foremost concern, which the parties, and even the trial court, failed to identify, is whether, under our current laws, jurisdiction over libel cases, or written defamations to be more

specific, is shared by the RTC with the Sandiganbayan. Indeed, if the said courts do not have concurrent jurisdiction to try the offense, it would be pointless to still determine whether the crime is committed in relation to office. Uniformly applied is the familiar rule that the jurisdiction of the court to hear and decide a case is conferred by the law in force at the time of the institution of the action, unless a latter statute provides for a retroactive application thereof.30 Article 360 of the 31 32 Revised Penal Code (RPC), as amended by Republic Act No. 4363, is explicit on which court has jurisdiction to try cases of written defamations, thus: The criminal and civil action for damages in cases of written defamations as provided for in this chapter, shall be filed simultaneously or separately with the court of first instance [now, the Regional Trial Court] of the province or city where the libelous article is printed and first published or where any of the offended parties actually resides at the time of the commission of the offense xxx.33 [Underscoring and italics ours.]1avvphi1.zw+ 34 More than three decades ago, the Court, in Jalandoni v. Endaya, acknowledged the unmistakable import of the said provision: There is no need to make mention again that it is a court of first instance [now, the Regional Trial Court] that is specifically designated to try a libel case. Its language is categorical; its meaning is free from doubt. This is one of those statutory provisions 35 that leave no room for interpretation. All that is required is application. What the law ordains must then be followed. 36 This exclusive and original jurisdiction of the RTC over written defamations is echoed in Bocobo v. Estanislao, where the Court further declared that jurisdiction remains with the trial court even if the libelous act is committed "by similar means,"37 and 38 despite the fact that the phrase "by similar means" is not repeated in the latter portion of Article 360. In these cases, and in those that followed, the Court had been unwavering in its pronouncement that the expanded jurisdiction of the municipal trial 39 courts cannot be exercised over libel cases. Thus, in Manzano v. Hon. Valera, we explained at length that: The applicable law is still Article 360 of the Revised Penal Code, which categorically provides that jurisdiction over libel cases [is] lodged with the Courts of First Instance (now Regional Trial Courts). This Court already had the opportunity to rule on the matter in G.R. No. 123263, People vs. MTC of Quezon City, Branch 32 and Isah v. Red wherein a similar question of jurisdiction over libel was raised. In that case, the MTC judge opined that it was the first level courts which had jurisdiction due to the enactment of RA 7691. Upon elevation of the matter to us, respondent judge s orders were nullified for lack of jurisdiction, as follows: "WHEREFORE, the petition is granted: the respondent Court s Orders dated August 14, 1995, September 7, 1995, and October 18, 1995 are declared null and void for having been issued without jurisdiction; and said Court is enjoined from further taking cognizance of and proceeding with Criminal Case No. 43-00548, which it is commanded to remand to the Executive Judge of the Regional Trial Court of Quezon City for proper disposition." Another case involving the same question was cited as resolving the matter: "Anent the question of jurisdiction, we ** find no reversible error committed by public respondent Court of Appeals in denying petitioner s motion to dismiss for lack of jurisdiction. The contention ** that R.A. 7691 divested the Regional Trial Courts of jurisdiction to try libel cases cannot be sustained. While libel is punishable by imprisonment of six months and one day to four years and two months (Art. 360, Revised Penal Code) which imposable penalty is lodged within the Municipal Trial Court s jurisdiction under R.A. No. 7691 (Sec. 32 [2]), said law however, excludes therefrom ** cases falling within the exclusive original jurisdiction of the Regional Trial Courts **. The Court in Bocobo vs. Estanislao, 72 SCRA 520 and Jalandoni vs. Endaya, 55 SCRA 261, correctly cited by the Court of Appeals, has laid down the rule that Regional Trial courts have the exclusive jurisdiction over libel cases, hence, the expanded jurisdiction conferred by R.A. 7691 to inferior courts cannot be applied to libel cases." Conformably with [these] rulings, we now hold that public respondent committed an error in ordering that the criminal case for libel be tried by the MTC of Bangued. For, although RA 7691 was enacted to decongest the clogged dockets of the Regional Trail Courts by expanding the jurisdiction of first level courts, said law is of a general character. Even if it is a later enactment, it does not alter the provision of Article 360 of the RPC, a law of a special nature. "Laws vesting jurisdiction exclusively with a particular court, are special in character, and should prevail over the Judiciary Act defining the jurisdiction of other courts (such as the Court of First Instance) which is a general law." A later enactment like RA 7691 does not automatically override an existing law, because it is a well-settled principle of construction that, in case of conflict between a general law and a special law, the latter must prevail regardless of the dates of their enactment. Jurisdiction conferred by a special law on the RTC must therefore prevail over that granted by a general law on the MTC. Moreover, from the provisions of R.A. 7691, there seems to be no manifest intent to repeal or alter the jurisdiction in libel cases. If there was such intent, then the amending law should have clearly so indicated because implied repeals are not favored. As much as possible, effect must be given to all enactments of the legislature. A special law cannot be repealed, amended or altered by a subsequent general law by mere implication. Furthermore, for an implied repeal, a pre-condition must be found, that is, a substantial conflict should exist between the new and prior laws. Absent an express repeal, a subsequent law cannot be construed as repealing a prior one unless an irreconcilable inconsistency or repugnancy exists in the terms of the new and old laws. The two laws, in brief, must be absolutely incompatible. In the law which broadened the jurisdiction of the first level courts, there is no absolute prohibition barring Regional Trial Courts from taking cognizance of certain cases over which they have been priorly granted special and exclusive jurisdiction. Such grant of the RTC (previously CFI) was categorically contained in the first sentence of the amended Sec. 32 of B.P. 129. The inconsistency referred to in Section 6 of RA 7691, therefore, does not apply to cases of criminal libel. Lastly, in Administrative Order No. 104-96 issued 21 October 1996, this Court delineated the proper jurisdiction over libel cases, hence settled the matter with finality: "RE: DESIGNATION OF SPECIAL COURTS FOR KIDNAPPING, ROBBERY, CARNAPPING, DANGEROUS DRUGS CASES AND OTHER HEINOUS CRIMES; INTELLECTUAL PROPERTY RIGHTS VIOLATIONS AND JURISDICTION IN LIBEL CASES. xxxx C "LIBEL CASES SHALL BE TRIED BY THE REGIONAL TRIAL COURTS HAVING JURISDICTION OVER THEM TO THE EXCLUSION OF THE METROPOLITAN TRIAL COURTS, MUNICIPAL TRIAL COURTS IN CITIES, MUNICIPAL TRIAL COURTS AND MUNICIPAL CIRCUIT TRIAL COURTS." (Underscoring supplied)40 41 As we have constantly held in Jalandoni, Bocobo, People v. Metropolitan Trial Court of Quezon City, Br. 32, Manzano, and analogous cases, we must, in the same way, declare herein that the law, as it still stands at present, dictates that criminal and civil actions for damages in cases of written defamations shall be filed simultaneously or separately with the RTC to the exclusion

of all other courts. A subsequent enactment of a law defining the jurisdiction of other courts cannot simply override, in the absence of an express repeal or modification, the specific provision in the RPC vesting in the RTC, as aforesaid, jurisdiction over defamations in writing or by similar means.42 The grant to the Sandiganbayan43 of jurisdiction over offenses committed in relation to (public) office, similar to the expansion of the jurisdiction of the MTCs, did not divest the RTC of its exclusive and original jurisdiction to try written defamation cases regardless of whether the offense is committed in relation to office. The broad and general phraseology of Section 4, Presidential Decree No. 1606, as amended by Republic Act No. 8249,44 cannot be construed to have impliedly repealed, or even simply modified, such exclusive and original jurisdiction of the RTC.45 Since jurisdiction over written defamations exclusively rests in the RTC without qualification, it is unnecessary and futile for the parties to argue on whether the crime is committed in relation to office. Thus, the conclusion reached by the trial court that the respondent committed the alleged libelous acts in relation to his office as former COMELEC chair, and deprives it of jurisdiction to try the case, is, following the above disquisition, gross error. This Court, therefore, orders the reinstatement of Criminal Cases Nos. Q-02-109406 and Q-02-109407 and their remand to the respective Regional Trial Courts for further proceedings. Having said that, the Court finds unnecessary any further discussion of the other issues raised in the petitions. WHEREFORE, premises considered, the consolidated petitions for review on certiorari are GRANTED. Criminal Cases Nos. Q-02109406 and Q-02-109407 are REINSTATED and REMANDED to the Regional Trial Court of Quezon City for further proceedings. SO ORDERED.