G.R. No.

154491

November 14, 2008

COCA-COLA BOTTLERS, PHILS., INC. (CCBPI), Naga Plant, petitioner, vs. QUINTIN J. GOMEZ, a.k.a. "KIT" GOMEZ and DANILO E. GALICIA, a.k.a. "DANNY GALICIA", respondents. DECISION BRION, J.: Is the hoarding of a competitor's product containers punishable as unfair competition under the Intellectual Property Code (IP Code, Republic Act No. 8293) that would entitle the aggrieved party to a search warrant against the hoarder? This is the issue we grapple with in this petition for review on certiorari involving two rival multinational softdrink giants; petitioner Coca-Cola Bottlers, Phils., Inc. (Coca-Cola) accuses Pepsi Cola Products Phils., Inc. (Pepsi), represented by the respondents, of hoarding empty Coke bottles in bad faith to discredit its business and to sabotage its operation in Bicolandia. BACKGROUND The facts, as culled from the records, are summarized below. On July 2, 2001, Coca-Cola applied for a search warrant against Pepsi for hoarding Coke empty bottles in Pepsi's yard in Concepcion Grande, Naga City, an act allegedly penalized as unfair competition under the IP Code. Coca-Cola claimed that the bottles must be confiscated to preclude their illegal use, destruction or concealment by the respondents.1 In support of the application, Coca-Cola submitted the sworn statements of three witnesses: Naga plant representative Arnel John Ponce said he was informed that one of their plant security guards had gained access into the Pepsi compound and had seen empty Coke bottles; acting plant security officer Ylano A. Regaspi said he investigated reports that Pepsi was hoarding large quantities of Coke bottles by requesting their security guard to enter the Pepsi plant and he was informed by the security guard that Pepsi hoarded several Coke bottles; security guard Edwin Lirio stated that he entered Pepsi's yard on July 2, 2001 at 4 p.m. and saw empty Coke bottles inside Pepsi shells or cases.2

Municipal Trial Court (MTC) Executive Judge Julian C. Ocampo of Naga City, after taking the joint deposition of the witnesses, issued Search Warrant No. 2001-013 to seize 2,500 Litro and 3,000 eight and 12 ounces empty Coke bottles at Pepsi's Naga yard for violation of Section 168.3 (c) of the IP Code.4 The local police seized and brought to the MTC's custody 2,464 Litro and 4,036 eight and 12 ounces empty Coke bottles, 205 Pepsi shells for Litro, and 168 Pepsi shells for smaller (eight and 12 ounces) empty Coke bottles, and later filed with the Office of the City Prosecutor of Naga a complaint against two Pepsi officers for violation of Section 168.3 (c) in relation to Section 170 of the IP Code.5 The named respondents, also the respondents in this petition, were Pepsi regional sales manager Danilo E. Galicia (Galicia) and its Naga general manager Quintin J. Gomez, Jr. (Gomez). In their counter-affidavits, Galicia and Gomez claimed that the bottles came from various Pepsi retailers and wholesalers who included them in their return to make up for shortages of empty Pepsi bottles; they had no way of ascertaining beforehand the return of empty Coke bottles as they simply received what had been delivered; the presence of the bottles in their yard was not intentional nor deliberate; Ponce and Regaspi's statements are hearsay as they had no personal knowledge of the alleged crime; there is no mention in the IP Code of the crime of possession of empty bottles; and that the ambiguity of the law, which has a penal nature, must be construed strictly against the State and liberally in their favor. Pepsi security guards Eduardo E. Miral and Rene Acebuche executed a joint affidavit stating that per their logbook, Lirio did not visit or enter the plant premises in the afternoon of July 2, 2001. The respondents also filed motions for the return of their shells and to quash the search warrant. They contended that no probable cause existed to justify the issuance of the search warrant; the facts charged do not constitute an offense; and their Naga plant was in urgent need of the shells. Coca-Cola opposed the motions as the shells were part of the evidence of the crime, arguing that Pepsi used the shells in hoarding the bottles. It insisted that the issuance of warrant was based on probable cause for unfair competition under the IP Code, and that the respondents violated R.A. 623, the law regulating the use of stamped or marked bottles, boxes, and other similar containers.

THE MTC RULINGS On September 19, 2001, the MTC issued the first assailed order6 denying the twin motions. It explained there was an exhaustive examination of the applicant and its witnesses through searching questions and that the Pepsi shells are prima facie evidence that the bottles were placed there by the respondents. In their motion for reconsideration, the respondents argued for the quashal of the warrant as the MTC did not conduct a probing and exhaustive examination; the applicant and its witnesses had no personal knowledge of facts surrounding the hoarding; the court failed to order the return of the "borrowed" shells; there was no crime involved; the warrant was issued based on hearsay evidence; and the seizure of the shells was illegal because they were not included in the warrant. On November 14, 2001, the MTC denied the motion for reconsideration in the second assailed order,7 explaining that the issue of whether there was unfair competition can only be resolved during trial. The respondents responded by filing a petition for certiorari under Rule 65 of the Revised Rules of Court before the Regional Trial Court (RTC) of Naga City on the ground that the subject search warrant was issued without probable cause and that the empty shells were neither mentioned in the warrant nor the objects of the perceived crime. THE RTC RULINGS On May 8, 2002, the RTC voided the warrant for lack of probable cause and the non-commission of the crime of unfair competition, even as it implied that other laws may have been violated by the respondents. The RTC, though, found no grave abuse of discretion on the part of the issuing MTC judge.8 Thus, Accordingly, as prayed for, Search Warrant No. 2001-02 issued by the Honorable Judge Julian C. Ocampo III on July 2, 2001 is ANNULLED and SET ASIDE. The Orders issued by the Pairing Judge of Br. 1, MTCC of Naga City dated September 19, 2001 and November 14, 2001 are also declared VOID and SET ASIDE. The City Prosecutor of Naga City and SPO1 Ernesto Paredes are directed to return to the Petitioner the properties seized by virtue of Search Warrant No. 2001-02. No costs.

SO ORDERED.9 In a motion for reconsideration, which the RTC denied on July 12, 2002, the petitioner stressed that the decision of the RTC was contradictory because it absolved Judge Ocampo of grave abuse of discretion in issuing the search warrant, but at the same time nullified the issued warrant. The MTC should have dismissed the petition when it found out that Judge Ocampo did not commit any grave abuse of discretion. Bypassing the Court of Appeals, the petitioner asks us through this petition for review on certiorari under Rule 45 of the Rules of Court to reverse the decision of the RTC. Essentially, the petition raises questions against the RTC's nullification of the warrant when it found no grave abuse of discretion committed by the issuing judge. THE PETITION and THE PARTIES' POSITIONS In its petition, the petitioner insists the RTC should have dismissed the respondents' petition for certiorari because it found no grave abuse of discretion by the MTC in issuing the search warrant. The petitioner further argues that the IP Code was enacted into law to remedy various forms of unfair competition accompanying globalization as well as to replace the inutile provision of unfair competition under Article 189 of the Revised Penal Code. Section 168.3(c) of the IP Code does not limit the scope of protection on the particular acts enumerated as it expands the meaning of unfair competition to include "other acts contrary to good faith of a nature calculated to discredit the goods, business or services of another." The inherent element of unfair competition is fraud or deceit, and that hoarding of large quantities of a competitor's empty bottles is necessarily characterized by bad faith. It claims that its Bicol bottling operation was prejudiced by the respondents' hoarding and destruction of its empty bottles. The petitioner also argues that the quashal of the search warrant was improper because it complied with all the essential requisites of a valid warrant. The empty bottles were concealed in Pepsi shells to prevent discovery while they were systematically being destroyed to hamper the petitioner's bottling operation and to undermine the capability of its bottling operations in Bicol. The respondents counter-argue that although Judge Ocampo conducted his own examination, he gravely erred and abused his

discretion when he ignored the rule on the need of sufficient evidence to establish probable cause; satisfactory and convincing evidence is essential to hold them guilty of unfair competition; the hoarding of empty Coke bottles did not cause actual or probable deception and confusion on the part of the general public; the alleged criminal acts do not show conduct aimed at deceiving the public; there was no attempt to use the empty bottles or pass them off as the respondents' goods. The respondents also argue that the IP Code does not criminalize bottle hoarding, as the acts penalized must always involve fraud and deceit. The hoarding does not make them liable for unfair competition as there was no deception or fraud on the end-users. THE ISSUE Based on the parties' positions, the basic issue submitted to us for resolution is whether the Naga MTC was correct in issuing Search Warrant No. 2001-01 for the seizure of the empty Coke bottles from Pepsi's yard for probable violation of Section 168.3 (c) of the IP Code. This basic issue involves two sub-issues, namely, the substantive issue of whether the application for search warrant effectively charged an offense, i.e., a violation of Section 168.3 (c) of the IP Code; and the procedural issue of whether the MTC observed the procedures required by the Rules of Court in the issuance of search warrants. OUR RULING We resolve to deny the petition for lack of merit. We clarify at the outset that while we agree with the RTC decision, our agreement is more in the result than in the reasons that supported it. The decision is correct in nullifying the search warrant because it was issued on an invalid substantive basis - the acts imputed on the respondents do not violate Section 168.3 (c) of the IP Code. For this reason, we deny the present petition. The issuance of a search warrant10 against a personal property11 is governed by Rule 126 of the Revised Rules of Court whose relevant sections state: Section 4. Requisites for issuing search warrant. - A search warrant shall not issue except upon probable cause in connection with one specific offense to be determined personally by the judge after examination under oath or affirmation of the complainant and the

witnesses he may produce, and particularly describing the place to be searched and the things to be seized which may be anywhere in the Philippines. Section 5. Examination of complainant; record. - The judge must, before issuing the warrant, personally examine in the form of searching questions and answers, in writing and under oath, the complainant and the witnesses he may produce on facts personally known to them and attach to the record their sworn statements together with the affidavits submitted. Section 6. Issuance and form of search warrant. - If the judge is satisfied of the existence of facts upon which the application is based or that there is probable cause to believe that they exist, he shall issue the warrant, which must be substantially in the form prescribed by these Rules. [Emphasis supplied] To paraphrase this rule, a search warrant may be issued only if there is probable cause in connection with a specific offense alleged in an application based on the personal knowledge of the applicant and his or her witnesses. This is the substantive requirement in the issuance of a search warrant. Procedurally, the determination of probable cause is a personal task of the judge before whom the application for search warrant is filed, as he has to examine under oath or affirmation the applicant and his or her witnesses in the form of "searching questions and answers" in writing and under oath. The warrant, if issued, must particularly describe the place to be searched and the things to be seized.

We paraphrase these requirements to stress that they have substantive and procedural aspects. Apparently, the RTC recognized this dual nature of the requirements and, hence, treated them separately; it approved of the way the MTC handled the procedural aspects of the issuance of the search warrant but found its action on the substantive aspect wanting. It therefore resolved to nullify the warrant, without however expressly declaring that the MTC gravely abused its discretion when it issued the warrant applied for. The RTC's error, however, is in the form rather than the substance of the decision as the nullification of the issued warrant for the reason the RTC gave was equivalent to the declaration that grave abuse of discretion was committed. In fact, we so rule as the discussions below will show.

Jurisprudence teaches us that probable cause, as a condition for the issuance of a search warrant, is such reasons supported by facts and circumstances as will warrant a cautious man in the belief that his action and the means taken in prosecuting it are legally just and proper. Probable cause requires facts and circumstances that would lead a reasonably prudent man to believe that an offense has been committed and the objects sought in connection with that offense are in the place to be searched.12 Implicit in this statement is the recognition that an underlying offense must, in the first place, exist. In other words, the acts alleged, taken together, must constitute an offense and that these acts are imputable to an offender in relation with whom a search warrant is applied for. In the context of the present case, the question is whether the act charged - alleged to be hoarding of empty Coke bottles constitutes an offense under Section 168.3 (c) of the IP Code. Section 168 in its entirety states: SECTION 168. Unfair Competition, Rights, Regulation and Remedies. 168.1. A person who has identified in the mind of the public the goods he manufactures or deals in, his business or services from those of others, whether or not a registered mark is employed, has a property right in the goodwill of the said goods, business or services so identified, which will be protected in the same manner as other property rights. 168.2. Any person who shall employ deception or any other means contrary to good faith by which he shall pass off the goods manufactured by him or in which he deals, or his business, or services for those of the one having established such goodwill, or who shall commit any acts calculated to produce said result, shall be guilty of unfair competition, and shall be subject to an action therefor. 168.3. In particular, and without in any way limiting the scope of protection against unfair competition, the following shall be deemed guilty of unfair competition: (a) Any person, who is selling his goods and gives them the general appearance of goods of another manufacturer or dealer, either as to the goods themselves or in the wrapping of the packages in which they are contained, or the devices or words thereon, or in any other feature of their appearance, which would be likely to influence purchasers to believe that the goods offered are those of

a manufacturer or dealer, other than the actual manufacturer or dealer, or who otherwise clothes the goods with such appearance as shall deceive the public and defraud another of his legitimate trade, or any subsequent vendor of such goods or any agent of any vendor engaged in selling such goods with a like purpose; (b) Any person who by any artifice, or device, or who employs any other means calculated to induce the false belief that such person is offering the services of another who has identified such services in the mind of the public; or (c) Any person who shall make any false statement in the course of trade or who shall commit any other act contrary to good faith of a nature calculated to discredit the goods, business or services of another. 168.4. The remedies provided by Sections 156, 157 and 161 shall apply mutatis mutandis. (Sec. 29, R.A. No. 166a) The petitioner theorizes that the above section does not limit the scope of protection on the particular acts enumerated as it expands the meaning of unfair competition to include "other acts contrary to good faith of a nature calculated to discredit the goods, business or services of another." Allegedly, the respondents' hoarding of Coca Cola empty bottles is one such act. We do not agree with the petitioner's expansive interpretation of Section 168.3 (c). "Unfair competition," previously defined in Philippine jurisprudence in relation with R.A. No. 166 and Articles 188 and 189 of the Revised Penal Code, is now covered by Section 168 of the IP Code as this Code has expressly repealed R.A. No. 165 and R.A. No. 166, and Articles 188 and 189 of the Revised Penal Code. Articles 168.1 and 168.2, as quoted above, provide the concept and general rule on the definition of unfair competition. The law does not thereby cover every unfair act committed in the course of business; it covers only acts characterized by "deception or any other means contrary to good faith" in the passing off of goods and services as those of another who has established goodwill in relation with these goods or services, or any other act calculated to produce the same result. What unfair competition is, is further particularized under Section 168.3 when it provides specifics of what unfair competition is

"without in any way limiting the scope of protection against unfair competition." Part of these particulars is provided under Section 168.3(c) which provides the general "catch-all" phrase that the petitioner cites. Under this phrase, a person shall be guilty of unfair competition "who shall commit any other act contrary to good faith of a nature calculated to discredit the goods, business or services of another." From jurisprudence, unfair competition has been defined as the passing off (or palming off) or attempting to pass off upon the public the goods or business of one person as the goods or business of another with the end and probable effect of deceiving the public. It formulated the "true test" of unfair competition: whether the acts of defendant are such as are calculated to deceive the ordinary buyer making his purchases under the ordinary conditions which prevail in the particular trade to which the controversy relates.13 One of the essential requisites in an action to restrain unfair competition is proof of fraud; the intent to deceive must be shown before the right to recover can exist.14 The advent of the IP Code has not significantly changed these rulings as they are fully in accord with what Section 168 of the Code in its entirety provides. Deception, passing off and fraud upon the public are still the key elements that must be present for unfair competition to exist. The act alleged to violate the petitioner's rights under Section 168.3 (c) is hoarding which we gather to be the collection of the petitioner's empty bottles so that they can be withdrawn from circulation and thus impede the circulation of the petitioner's bottled products. This, according to the petitioner, is an act contrary to good faith - a conclusion that, if true, is indeed an unfair act on the part of the respondents. The critical question, however, is not the intrinsic unfairness of the act of hoarding; what is critical for purposes of Section 168.3 (c) is to determine if the hoarding, as charged, "is of a nature calculated to discredit the goods, business or services" of the petitioner. We hold that it is not. Hoarding as defined by the petitioner is not even an act within the contemplation of the IP Code. The petitioner's cited basis is a provision of the IP Code, a set of rules that refer to a very specific subject - intellectual property. Aside from the IP Code's actual substantive contents (which relate specifically to patents, licensing, trademarks, trade names, service marks, copyrights, and the protection and infringement of the

intellectual properties that these protective measures embody), the coverage and intent of the Code is expressly reflected in its "Declaration of State Policy" which states: Section 2. Declaration of State Policy. - The State recognizes that an effective intellectual and industrial property system is vital to the development of domestic and creative activity, facilitates transfer of technology, attracts foreign investments, and ensures market access for our products. It shall protect and secure the exclusive rights of scientists, inventors, artists and other gifted citizens to their intellectual property and creations, particularly when beneficial to the people, for such periods as provided in this Act. The use of intellectual property bears a social function. To this end, the State shall promote the diffusion of knowledge and information for the promotion of national development and progress and the common good. It is also the policy of the State to streamline administrative procedures of registering patents, trademarks and copyright, to liberalize the registration on the transfer of technology, and to enhance the enforcement of intellectual property rights in the Philippines. (n) "Intellectual property rights" have furthermore been defined under Section 4 of the Code to consist of: a) Copyright and Related Rights; b) Trademarks and Service Marks; c) Geographic Indications; d) IndustrialDesigns; e) Patents; f) Layout-Designs (Topographies) of Integrated Circuits; and g)Protection of Undisclosed Information. Given the IP Code's specific focus, a first test that should be made when a question arises on whether a matter is covered by the Code is to ask if it refers to an intellectual property as defined in the Code. If it does not, then coverage by the Code may be negated. A second test, if a disputed matter does not expressly refer to an intellectual property right as defined above, is whether it falls under the general "unfair competition" concept and definition under Sections 168.1 and 168.2 of the Code. The question then is whether there is "deception" or any other similar act in "passing off" of goods or services to be those of another who enjoys established goodwill.

Separately from these tests is the application of the principles of statutory construction giving particular attention, not so much to the focus of the IP Code generally, but to the terms of Section 168 in particular. Under the principle of "noscitur a sociis," when a particular word or phrase is ambiguous in itself or is equally susceptible of various meanings, its correct construction may be made clear and specific by considering the company of words in which it is found or with which it is associated.15

waters, cider, milk, cream, or other lawful beverages in bottles, boxes, casks, kegs, or barrels, and other similar containers, with their names or the names of their principals or products, or other marks of ownership stamped or marked thereon, may register with the Philippine Patent Office a description of the names or are used by them, under the same conditions, rules, and regulations, made applicable by law or regulation to the issuance of trademarks. SECTION 2. It shall be unlawful for any person, without the written consent of the manufacturer, bottler or seller who has successfully registered the marks of ownership in accordance with the provisions of the next preceding section, to fill such bottles, boxes, kegs, barrels, or other similar containers so marked or stamped, for the purpose of sale, or to sell, dispose of, buy, or traffic in, or wantonly destroy the same, whether filled or not, or to use the same for drinking vessels or glasses or for any other purpose than that registered by the manufacturer, bottler or seller. Any violation of this section shall be punished by a fine or not more than one hundred pesos or imprisonment of not more than thirty days or both. As its coverage is defined under Section 1, the Act appears to be a measure that may overlap or be affected by the provisions of Part II of the IP Code on "The Law on Trademarks, Service Marks and Trade Names." What is certain is that the IP Code has not expressly repealed this Act. The Act appears, too, to have specific reference to a special type of registrants - the manufacturers, bottlers or sellers of soda water, mineral or aerated waters, cider, milk, cream, or other lawful beverages in bottles, boxes, casks, kegs, or barrels, and other similar containers - who are given special protection with respect to the containers they use. In this sense, it is in fact a law of specific coverage and application, compared with the general terms and application of the IP Code. Thus, under its Section 2, it speaks specifically of unlawful use of containers and even of the unlawfulness of their wanton destruction - a matter that escapes the IP Code's generalities unless linked with the concepts of "deception" and "passing off" as discussed above. Unfortunately, the Act is not the law in issue in the present case and one that the parties did not consider at all in the search warrant application. The petitioner in fact could not have cited it in its search warrant application since the "one specific offense" that the law allows and which the petitioner used was Section 168.3 (c). If it serves any purpose at all in our discussions, it is to show that the underlying factual situation of the present case is in fact

As basis for this interpretative analysis, we note that Section 168.1 speaks of a person who has earned goodwill with respect to his goods and services and who is entitled to protection under the Code, with or without a registered mark. Section 168.2, as previously discussed, refers to the general definition of unfair competition. Section 168.3, on the other hand, refers to the specific instances of unfair competition, with Section 168.1 referring to the sale of goods given the appearance of the goods of another; Section 168.2, to the inducement of belief that his or her goods or services are that of another who has earned goodwill; while the disputed Section 168.3 being a "catch all" clause whose coverage the parties now dispute. Under all the above approaches, we conclude that the "hoarding" as defined and charged by the petitioner - does not fall within the coverage of the IP Code and of Section 168 in particular. It does not relate to any patent, trademark, trade name or service mark that the respondents have invaded, intruded into or used without proper authority from the petitioner. Nor are the respondents alleged to be fraudulently "passing off" their products or services as those of the petitioner. The respondents are not also alleged to be undertaking any representation or misrepresentation that would confuse or tend to confuse the goods of the petitioner with those of the respondents, or vice versa. What in fact the petitioner alleges is an act foreign to the Code, to the concepts it embodies and to the acts it regulates; as alleged, hoarding inflicts unfairness by seeking to limit the opposition's sales by depriving it of the bottles it can use for these sales. In this light, hoarding for purposes of destruction is closer to what another law - R.A. No. 623 - covers, to wit: SECTION 1. Persons engaged or licensed to engage in the manufacture, bottling or selling of soda water, mineral or aerated

covered by another law, not by the IP Code that the petitioner cites. Viewed in this light, the lack of probable cause to support the disputed search warrant at once becomes apparent. Where, as in this case, the imputed acts do not violate the cited offense, the ruling of this Court penned by Mr. Justice Bellosillo is particularly instructive: In the issuance of search warrants, the Rules of Court requires a finding of probable cause in connection with one specific offense to be determined personally by the judge after examination of the complainant and the witnesses he may produce, and particularly describing the place to be searched and the things to be seized. Hence, since there is no crime to speak of, the search warrant does not even begin to fulfill these stringent requirements and is therefore defective on its face. The nullity of the warrant renders moot and academic the other issues raised in petitioners' Motion to Quash and Motion for Reconsideration. Since the assailed search warrant is null and void, all property seized by virtue thereof should be returned to petitioners in accordance with established jurisprudence.16 Based on the foregoing, we conclude that the RTC correctly ruled that the petitioner's search warrant should properly be quashed for the petitioner's failure to show that the acts imputed to the respondents do not violate the cited offense. There could not have been any probable cause to support the issuance of a search warrant because no crime in the first place was effectively charged. This conclusion renders unnecessary any further discussion on whether the search warrant application properly alleged that the imputed act of holding Coke empties was in fact a "hoarding" in bad faith aimed to prejudice the petitioner's operations, or whether the MTC duly complied with the procedural requirements for the issuance of a search warrant under Rule 126 of the Rules of Court. WHEREFORE, we hereby DENY the petition for lack of merit. Accordingly, we confirm that Search Warrant No. 2001-01, issued by the Municipal Trial Court, Branch 1, Naga City, is NULL and VOID. Costs against the petitioner. SO ORDERED.

G.R. No. 155703

September 8, 2008

THE REPUBLIC OF THE PHILIPPINES, petitioner, vs. DOMINADOR SANTUA, respondent. DECISION NACHURA, J.: Should the courts grant a petition for reconstitution of a certificate of title on the basis of a tax declaration, survey plan and technical description? This is the question that confronts the Court in this petition for review of the Court of Appeals (CA) Decision1 dated September 23, 2002. The facts of the case are undisputed: On February, 16, 1999, respondent Dominador Santua filed with the Regional Trial Court (RTC) of Calapan, Oriental Mindoro, a petition for judicial reconstitution of Transfer Certificate of Title (TCT) No. T-22868. Respondent alleged that he is the registered owner of certain parcels of land with an area of 3,306 square meters, situated in Poblacion, Victoria, Oriental Mindoro, and covered by TCT No. T-22868; the original copy of TCT No. T-22868 was among those destroyed by the fire that completely razed the Capitol Building then housing the Office of the Register of Deeds of Oriental Mindoro on August 12, 1977; the owners duplicate copy was lost while in respondents possession and all efforts exerted to locate the same proved futile; there are no co-owners, mortgagees, or lessees duplicate of said certificate of title; there are no buildings or improvements existing on said land which do not belong to respondent; respondent and his family are in actual possession of the property and have been paying taxes thereon; and there exists no deeds or instrument affecting the property which have been presented for and pending registration in the Office of the Register of Deeds. The names and addresses of the adjoining property owners were enumerated in the petition. Attached to the petition were a tax declaration, survey plan, and technical description of each lot.2 On February 25, 1999, the RTC issued an Order3 setting the initial hearing of the case. It also directed the publication of the order in the Official Gazette, its posting at the main entrance of the Capitol

Building and in the Municipal Building of Victoria, Calapan City, and sending of copies thereof to all adjoining owners mentioned in the petition, the Register of Deeds, Provincial Prosecutor, Director of Lands, Solicitor General and the Administrator of the Land Registration Authority.

Respondent complied with the jurisdictional requirements. The court thus commissioned the Clerk of Court to receive the respondents evidence and submit his findings to the court. Aside from the documents that delved into the jurisdictional aspect of the petition, respondent offered the following documents in support of his petition: Exh. "C" - Tax Declaration No. 15003-816 indicating the name of Dominador Santua as owner of the lots covered by TCT No. 22868; Exh. "D" - Technical description of Lot 5358-A-3-0-8-B, (LRC) PSD257136; Exh. "E" - Technical description of Lot 5358-A-3-0-8-C, (LRC) PSD257136; Exh. "F" - Technical description of Lot 5358-A-3-0-8-D, (LRC) PSD257136; Exh. "G" - Technical description of Lot 5358-A-3-0-8-E, (LRC) PSD257136; Exh. "H" - Technical description of Lot 5358-A-3-0-8-F, (LRC) PSD257136; Exh. "I" - Blue print plan of Lot 5358-A-3-0-8, (LRC) PSD-251540 as surveyed for Dominador Santua, et al. Exh. "J" - Certification dated September 24, 1982 issued by the Acting Register of Deeds of this province, certifying to the effect that all original certificates of title on file with the Registry were destroyed by reason of the fire that hit the Capitol Building housing the Office of the Register of Deeds on August 12, 1977. Respondent testified that he is the registered owner of certain parcels of land known as Lot No. 5358-A-3-0-8-B, with an area of 730 square meters; Lot No. 5358-A-3-0-8-C, with an area of 731 square meters; Lot No. 5358-A-3-0-8-D, with an area of 731 square

meters; Lot No. 5358-A-3-0-8-E, with an area of 731 square meters, and Lot No. 5358-A-3-0-8-F, with an area of 383 square meters, or a total area of 3,306 square meters, situated in Poblacion, Victoria, Mindoro. The original copy of this title was among the documents destroyed on August 12, 1977 when fire razed the entire Capitol Building then housing the Office of the Register of Deeds, while the owners duplicate copy in the respondents possession was lost when their house was destroyed by the Intensity 7 earthquake that hit the province on November 15, 1994. There is no co-owners, mortgagees or lessees duplicate copy of said title previously issued by the Register of Deeds. There exist no deeds of instruments affecting the property, which have been presented to, or pending registration with, the Office of the Register of Deeds. It has never been offered as a bail bond or as collateral to secure a loan with any banking institution or any person. It has not been declared as null and void by any court or competent authority. It is not a subject of attachment. The Provincial Assessor, Mr. Onisimo Naling, testified that the tax declaration submitted in evidence is a true and genuine tax declaration issued by their office. Mrs. Flordeliza Villao, Records Officer III of the Register of Deeds, testified that the Certification issued by her office is a true and genuine certification. The adjoining property owners were notified of the hearing of the petition but no one interposed any objection thereto. On December 15, 2000, the RTC granted the petition, thus: ACCORDINGLY, finding the instant petition to be well-taken and there being no opposition thereto, same is hereby granted. The Register of Deeds of this province is hereby directed to reconstitute the original and the owners duplicate copies of Transfer Certificate of Title No. T-22868 in the name of "DOMINADOR SANTUA, married to Natividad Paner, of legal age, Filipino citizen and a resident of Poblacion, Victoria, Oriental Mindoro" on the basis of the tax declaration, technical descriptions and plan of Lot No. 5358-A-3-08-B, Lot No. 5358-A-3-0-8-C, Lot No. 5358-A-3-0-8-D, Lot No. 5358A-3-0-8-E, and Lot No. 5358-A-3-0-8-F, (LRC) Psd 257136, thirty (30) days after receipt of this Order by the Register of Deeds of this province and the Land Registration Authority. SO ORDERED.4 On January 16, 2001, the Office of the Solicitor General filed a Notice of Appeal, which was given due course by the RTC.

On September 23, 2002, the CA affirmed the RTC Decision.5 Petitioner filed this petition for review raising the sole issue WHETHER OR NOT TAX DECLARATIONS, TECHNICAL DESCRIPTION AND LOT PLANS ARE SUFFICIENT BASES FOR THE RECONSTITUTION OF LOST OR DESTROYED CERTIFICATES OF TITLE6 In a Comment/Manifestation7 dated September 11, 2003, respondents counsel manifested that respondent is submitting the petition for review for resolution without any comment from him. Respondents waiver of the filing of a comment is unfortunate considering that we find the petition meritorious. The reconstitution of a certificate of title denotes restoration in the original form and condition of a lost or destroyed instrument attesting the title of a person to a piece of land.8 It partakes of a land registration proceeding.9 Thus, it must be granted only upon clear proof that the title sought to be restored was indeed issued to the petitioner.10 In this regard, Section 3 of Republic Act (RA) No. 26 enumerates the documents regarded as valid and sufficient bases for reconstitution of a transfer certificate of title: SEC. 3. Transfer certificates of title shall be reconstituted from such of the sources hereunder enumerated as may be available, in the following order: (a) The owners duplicate of the certificate of title; (b) The co-owners, mortgagees or lessees duplicate of the certificate of title; (c) A certified copy of the certificate of title, previously issued by the register of deeds or by a legal custodian thereof; (d) The deed of transfer or other document on file in the registry of deeds, containing the description of the property, or an authenticated copy thereof, showing that its original had been registered, and pursuant to which the lost or destroyed transfer certificate of title was issued; (e) A document, on file in the registry of deeds, by which the property the description of which is given in said documents, is mortgaged, leased or encumbered, or an authenticated copy of said document showing that its original had been registered; and

(f) Any other document which, in the judgment of the court, is sufficient and proper basis for reconstituting the lost or destroyed certificate of title. The instant petition for reconstitution is anchored on Section 3(f) of RA No. 26, with respondent proffering three significant documents a tax declaration, survey plan and technical descriptions of each lot. The Court has already settled in a number of cases that, following the principle of ejusdem generis in statutory construction, "any document" mentioned in Section 3 should be interpreted to refer to documents similar to those previously enumerated therein.11 As aptly observed by the petitioner, the documents enumerated in Section 3(a), (b), (c), (d) and (e) are documents that had been issued or are on file with the Register of Deeds, thus, highly credible. Moreover, they are documents from which the particulars of the certificate of title or the circumstances which brought about its issuance could readily be ascertained. After all, the purpose of reconstitution proceedings under RA No. 26 is the restoration in the original form and condition of a lost or destroyed instrument attesting the title of a person to a piece of land.12 Consequently, a petitioners documentary evidence should be able to establish that the lost or destroyed certificate of title has, in fact, been issued to the petitioner or his predecessor-in-interest and such title was in force at the time it was lost or destroyed.13

destroyed title16 but merely determines whether a re-issuance of such title is proper. As for the survey plan and technical descriptions, the Court has previously dismissed the same as not the documents referred to in Section 3(f) but merely additional documents that should accompany the petition for reconstitution as required under Section 12 of RA 26 and Land Registration Commission Circular No. 35.17 Moreover, a survey plan or technical description prepared at the instance of a party cannot be considered in his favor, the same being self-serving.18 Further, in Lee v. Republic,19 the Court declared the reconstitution based on a survey plan and technical descriptions void for lack of factual support. Once again, we caution the courts against the hasty and reckless grant of petitions for reconstitution. Strict observance of the rules is vital to prevent parties from exploiting reconstitution proceedings as a quick but illegal way to obtain Torrens certificate of titles over parcels of land which turn out to be already covered by existing titles.20 Courts should bear in mind that should the petition for reconstitution be denied for lack of sufficient basis, the petitioner is not left without a remedy. He may still file an application for confirmation of his title under the provisions of the Land Registration Act, if he is in fact the lawful owner.21 WHEREFORE, premises considered, the petition is GRANTED. The Decision of the Court of Appeals dated September 23, 2002 is REVERSED and SET ASIDE. The petition for reconstitution is DENIED. SO ORDERED.

The tax declaration obviously does not serve as a valid basis for reconstitution. For one, we cannot safely rely on Tax Declaration No. 15003-816 as evidence of the subject property being covered by TCT No. T-22868 in the name of respondent because a tax declaration is executed for taxation purposes only and is actually prepared by the alleged owner himself.14 In fact, in Heirs of Eulalio Ragua v. Court of Appeals,15 the Court pronounced that a tax declaration is not a reliable source for the reconstitution of a certificate of title. At most, the tax declaration can only be prima facie evidence of possession or a claim of ownership, which however is not the issue in a reconstitution proceeding. A reconstitution of title does not pass upon the ownership of the land covered by the lost or

10

G.R. No. 169332

February 11, 2008

ABS-CBN BROADCASTING CORPORATION, petitioner, vs. WORLD INTERACTIVE NETWORK SYSTEMS (WINS) JAPAN CO., LTD., respondent. DECISION CORONA, J.: This petition for review on certiorari under Rule 45 of the Rules of Court seeks to set aside the February 16, 2005 decision1 and August 16, 2005 resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 81940. On September 27, 1999, petitioner ABS-CBN Broadcasting Corporation entered into a licensing agreement with respondent World Interactive Network Systems (WINS) Japan Co., Ltd., a foreign corporation licensed under the laws of Japan. Under the agreement, respondent was granted the exclusive license to distribute and sublicense the distribution of the television service known as "The Filipino Channel" (TFC) in Japan. By virtue thereof, petitioner undertook to transmit the TFC programming signals to respondent which the latter received through its decoders and distributed to its subscribers. A dispute arose between the parties when petitioner accused respondent of inserting nine episodes of WINS WEEKLY, a weekly 35-minute community news program for Filipinos in Japan, into the TFC programming from March to May 2002.3 Petitioner claimed that these were "unauthorized insertions" constituting a material breach of their agreement. Consequently, on May 9, 2002,4 petitioner notified respondent of its intention to terminate the agreement effective June 10, 2002. Thereafter, respondent filed an arbitration suit pursuant to the arbitration clause of its agreement with petitioner. It contended that the airing of WINS WEEKLY was made with petitioner's prior approval. It also alleged that petitioner only threatened to terminate their agreement because it wanted to renegotiate the terms thereof to allow it to demand higher fees. Respondent also prayed for damages for petitioner's alleged grant of an exclusive

distribution license to another entity, NHK (Japan Broadcasting Corporation).5 The parties appointed Professor Alfredo F. Tadiar to act as sole arbitrator. They stipulated on the following issues in their terms of reference (TOR)6: 1. Was the broadcast of WINS WEEKLY by the claimant duly authorized by the respondent [herein petitioner]? 2. Did such broadcast constitute a material breach of the agreement that is a ground for termination of the agreement in accordance with Section 13 (a) thereof? 3. If so, was the breach seasonably cured under the same contractual provision of Section 13 (a)? 4. Which party is entitled to the payment of damages they claim and to the other reliefs prayed for? xxx xxx xxx

The arbitrator found in favor of respondent.7 He held that petitioner gave its approval to respondent for the airing of WINS WEEKLY as shown by a series of written exchanges between the parties. He also ruled that, had there really been a material breach of the agreement, petitioner should have terminated the same instead of sending a mere notice to terminate said agreement. The arbitrator found that petitioner threatened to terminate the agreement due to its desire to compel respondent to re-negotiate the terms thereof for higher fees. He further stated that even if respondent committed a breach of the agreement, the same was seasonably cured. He then allowed respondent to recover temperate damages, attorney's fees and one-half of the amount it paid as arbitrator's fee. Petitioner filed in the CA a petition for review under Rule 43 of the Rules of Court or, in the alternative, a petition for certiorari under Rule 65 of the same Rules, with application for temporary restraining order and writ of preliminary injunction. It was docketed as CA-G.R. SP No. 81940. It alleged serious errors of fact and law and/or grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the arbitrator.

11

Respondent, on the other hand, filed a petition for confirmation of arbitral award before the Regional Trial Court (RTC) of Quezon City, Branch 93, docketed as Civil Case No. Q-04-51822. Consequently, petitioner filed a supplemental petition in the CA seeking to enjoin the RTC of Quezon City from further proceeding with the hearing of respondent's petition for confirmation of arbitral award. After the petition was admitted by the appellate court, the RTC of Quezon City issued an order holding in abeyance any further action on respondent's petition as the assailed decision of the arbitrator had already become the subject of an appeal in the CA. Respondent filed a motion for reconsideration but no resolution has been issued by the lower court to date.8 On February 16, 2005, the CA rendered the assailed decision dismissing ABS-CBNs petition for lack of jurisdiction. It stated that as the TOR itself provided that the arbitrator's decision shall be final and unappealable and that no motion for reconsideration shall be filed, then the petition for review must fail. It ruled that it is the RTC which has jurisdiction over questions relating to arbitration. It held that the only instance it can exercise jurisdiction over an arbitral award is an appeal from the trial court's decision confirming, vacating or modifying the arbitral award. It further stated that a petition for certiorari under Rule 65 of the Rules of Court is proper in arbitration cases only if the courts refuse or neglect to inquire into the facts of an arbitrator's award. The dispositive portion of the CA decision read: WHEREFORE, the instant petition is hereby DISMISSED for lack of jurisdiction. The application for a writ of injunction and temporary restraining order is likewise ENIED. The Regional Trial Court of Quezon City Branch 93 is directed to proceed with the trial for the Petition for Confirmation of Arbitral Award. SO ORDERED. Petitioner moved for reconsideration. The same was denied. Hence, this petition. Petitioner contends that the CA, in effect, ruled that: (a) it should have first filed a petition to vacate the award in the RTC and only in case of denial could it elevate the matter to the CA via a petition for review under Rule 43 and (b) the assailed decision implied that an aggrieved party to an arbitral award does not have the option of directly filing a petition for review under Rule 43 or a petition for certiorari under Rule 65 with the CA even if the issues raised

pertain to errors of fact and law or grave abuse of discretion, as the case may be, and not dependent upon such grounds as enumerated under Section 24 (petition to vacate an arbitral award) of RA 876 (the Arbitration Law). Petitioner alleged serious error on the part of the CA. The issue before us is whether or not an aggrieved party in a voluntary arbitration dispute may avail of, directly in the CA, a petition for review under Rule 43 or a petition for certiorari under Rule 65 of the Rules of Court, instead of filing a petition to vacate the award in the RTC when the grounds invoked to overturn the arbitrators decision are other than those for a petition to vacate an arbitral award enumerated under RA 876. RA 876 itself mandates that it is the Court of First Instance, now the RTC, which has jurisdiction over questions relating to arbitration,9 such as a petition to vacate an arbitral award. Section 24 of RA 876 provides for the specific grounds for a petition to vacate an award made by an arbitrator: Sec. 24. Grounds for vacating award. - In any one of the following cases, the court must make an order vacating the award upon the petition of any party to the controversy when such party proves affirmatively that in the arbitration proceedings: (a) The award was procured by corruption, fraud, or other undue means; or (b) That there was evident partiality or corruption in the arbitrators or any of them; or (c) That the arbitrators were guilty of misconduct in refusing to postpone the hearing upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; that one or more of the arbitrators was disqualified to act as such under section nine hereof, and willfully refrained from disclosing such disqualifications or of any other misbehavior by which the rights of any party have been materially prejudiced; or (d) That the arbitrators exceeded their powers, or so imperfectly executed them, that a mutual, final and definite award upon the subject matter submitted to them was not made. Based on the foregoing provisions, the law itself clearly provides that the RTC must issue an order vacating an arbitral award only

12

"in any one of the . . . cases" enumerated therein. Under the legal maxim in statutory construction expressio unius est exclusio alterius, the explicit mention of one thing in a statute means the elimination of others not specifically mentioned. As RA 876 did not expressly provide for errors of fact and/or law and grave abuse of discretion (proper grounds for a petition for review under Rule 43 and a petition for certiorari under Rule 65, respectively) as grounds for maintaining a petition to vacate an arbitral award in the RTC, it necessarily follows that a party may not avail of the latter remedy on the grounds of errors of fact and/or law or grave abuse of discretion to overturn an arbitral award. Adamson v. Court of Appeals10 gave ample warning that a petition to vacate filed in the RTC which is not based on the grounds enumerated in Section 24 of RA 876 should be dismissed. In that case, the trial court vacated the arbitral award seemingly based on grounds included in Section 24 of RA 876 but a closer reading thereof revealed otherwise. On appeal, the CA reversed the decision of the trial court and affirmed the arbitral award. In affirming the CA, we held: The Court of Appeals, in reversing the trial court's decision held that the nullification of the decision of the Arbitration Committee was not based on the grounds provided by the Arbitration Law and that xxx private respondents (petitioners herein) have failed to substantiate with any evidence their claim of partiality. Significantly, even as respondent judge ruled against the arbitrator's award, he could not find fault with their impartiality and integrity. Evidently, the nullification of the award rendered at the case at bar was not made on the basis of any of the grounds provided by law. xxx xxx xxx

court had no legal basis for vacating the award. (Emphasis supplied). In cases not falling under any of the aforementioned grounds to vacate an award, the Court has already made several pronouncements that a petition for review under Rule 43 or a petition for certiorari under Rule 65 may be availed of in the CA. Which one would depend on the grounds relied upon by petitioner. In Luzon Development Bank v. Association of Luzon Development Bank Employees,11 the Court held that a voluntary arbitrator is properly classified as a "quasi-judicial instrumentality" and is, thus, within the ambit of Section 9 (3) of the Judiciary Reorganization Act, as amended. Under this section, the Court of Appeals shall exercise: xxx xxx xxx

(3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, including the Securities and Exchange Commission, the Employees Compensation Commission and the Civil Service Commission, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the Labor Code of the Philippines under Presidential Decree No. 442, as amended, the provisions of this Act and of subparagraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948. (Emphasis supplied) As such, decisions handed down by voluntary arbitrators fall within the exclusive appellate jurisdiction of the CA. This decision was taken into consideration in approving Section 1 of Rule 43 of the Rules of Court.12 Thus: SECTION 1. Scope. - This Rule shall apply to appeals from judgments or final orders of the Court of Tax Appeals and from awards, judgments, final orders or resolutions of or authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions. Among these agencies are the Civil Service Commission, Central Board of Assessment Appeals, Securities and Exchange Commission, Office of the President, Land Registration Authority, Social Security Commission, Civil Aeronautics Board, Bureau of Patents, Trademarks and Technology Transfer, National Electrification Administration, Energy Regulatory Board, National Telecommunications Commission, Department of Agrarian Reform

It is clear, therefore, that the award was vacated not because of evident partiality of the arbitrators but because the latter interpreted the contract in a way which was not favorable to herein petitioners and because it considered that herein private respondents, by submitting the controversy to arbitration, was seeking to renege on its obligations under the contract. xxx xxx xxx

It is clear then that the Court of Appeals reversed the trial court not because the latter reviewed the arbitration award involved herein, but because the respondent appellate court found that the trial

13

under Republic Act Number 6657, Government Service Insurance System, Employees Compensation Commission, Agricultural Inventions Board, Insurance Commission, Philippine Atomic Energy Commission, Board of Investments, Construction Industry Arbitration Commission, and voluntary arbitrators authorized by law. (Emphasis supplied) This rule was cited in Sevilla Trading Company v. Semana,13 Manila Midtown Hotel v. Borromeo,14 and Nippon Paint Employees Union-Olalia v. Court of Appeals.15 These cases held that the proper remedy from the adverse decision of a voluntary arbitrator, if errors of fact and/or law are raised, is a petition for review under Rule 43 of the Rules of Court. Thus, petitioner's contention that it may avail of a petition for review under Rule 43 under the circumstances of this case is correct. As to petitioner's arguments that a petition for certiorari under Rule 65 may also be resorted to, we hold the same to be in accordance with the Constitution and jurisprudence. Section 1 of Article VIII of the 1987 Constitution provides that: SECTION 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be established by law. Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government. (Emphasis supplied) As may be gleaned from the above stated provision, it is well within the power and jurisdiction of the Court to inquire whether any instrumentality of the Government, such as a voluntary arbitrator, has gravely abused its discretion in the exercise of its functions and prerogatives. Any agreement stipulating that "the decision of the arbitrator shall be final and unappealable" and "that no further judicial recourse if either party disagrees with the whole or any part of the arbitrator's award may be availed of" cannot be held to preclude in proper cases the power of judicial review which is inherent in courts.16 We will not hesitate to review a voluntary arbitrator's award where there is a showing of grave abuse of authority or discretion and such is properly raised in a petition for certiorari17 and there is no appeal, nor any plain, speedy remedy in the course of law.18

Significantly, Insular Savings Bank v. Far East Bank and Trust Company19 definitively outlined several judicial remedies an aggrieved party to an arbitral award may undertake: (1) a petition in the proper RTC to issue an order to vacate the award on the grounds provided for in Section 24 of RA 876; (2) a petition for review in the CA under Rule 43 of the Rules of Court on questions of fact, of law, or mixed questions of fact and law; and (3) a petition for certiorari under Rule 65 of the Rules of Court should the arbitrator have acted without or in excess of his jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction. Nevertheless, although petitioners position on the judicial remedies available to it was correct, we sustain the dismissal of its petition by the CA. The remedy petitioner availed of, entitled "alternative petition for review under Rule 43 or petition for certiorari under Rule 65," was wrong. Time and again, we have ruled that the remedies of appeal and certiorari are mutually exclusive and not alternative or successive.20 Proper issues that may be raised in a petition for review under Rule 43 pertain to errors of fact, law or mixed questions of fact and law.21 While a petition for certiorari under Rule 65 should only limit itself to errors of jurisdiction, that is, grave abuse of discretion amounting to a lack or excess of jurisdiction.22 Moreover, it cannot be availed of where appeal is the proper remedy or as a substitute for a lapsed appeal.23 In the case at bar, the questions raised by petitioner in its alternative petition before the CA were the following: A. THE SOLE ARBITRATOR COMMITTED SERIOUS ERROR AND/OR GRAVELY ABUSED HIS DISCRETION IN RULING THAT THE BROADCAST OF "WINS WEEKLY" WAS DULY AUTHORIZED BY ABSCBN. B. THE SOLE ARBITRATOR COMMITTED SERIOUS ERROR AND/OR GRAVELY ABUSED HIS DISCRETION IN RULING THAT THE UNAUTHORIZED BROADCAST DID NOT CONSTITUTE MATERIAL BREACH OF THE AGREEMENT.

14

C. THE SOLE ARBITRATOR COMMITTED SERIOUS ERROR AND/OR GRAVELY ABUSED HIS DISCRETION IN RULING THAT WINS SEASONABLY CURED THE BREACH. D. THE SOLE ARBITRATOR COMMITTED SERIOUS ERROR AND/OR GRAVELY ABUSED HIS DISCRETION IN RULING THAT TEMPERATE DAMAGES IN THE AMOUNT OF P1,166,955.00 MAY BE AWARDED TO WINS. E. THE SOLE ARBITRATOR COMMITTED SERIOUS ERROR AND/OR GRAVELY ABUSED HIS DISCRETION IN AWARDING ATTORNEY'S FEES IN THE UNREASONABLE AMOUNT AND UNCONSCIONABLE AMOUNT OF P850,000.00. F. THE ERROR COMMITTED BY THE SOLE ARBITRATOR IS NOT A SIMPLE ERROR OF JUDGMENT OR ABUSE OF DISCRETION. IT IS GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OR EXCESS OF JURISDICTION. A careful reading of the assigned errors reveals that the real issues calling for the CA's resolution were less the alleged grave abuse of discretion exercised by the arbitrator and more about the arbitrators appreciation of the issues and evidence presented by the parties. Therefore, the issues clearly fall under the classification of errors of fact and law questions which may be passed upon by the CA via a petition for review under Rule 43. Petitioner cleverly crafted its assignment of errors in such a way as to straddle both judicial remedies, that is, by alleging serious errors of fact and law (in which case a petition for review under Rule 43 would be proper) and grave abuse of discretion (because of which a petition for certiorari under Rule 65 would be permissible). It must be emphasized that every lawyer should be familiar with the distinctions between the two remedies for it is not the duty of the courts to determine under which rule the petition should fall.24 Petitioner's ploy was fatal to its cause. An appeal taken either to this Court or the CA by the wrong or inappropriate mode shall be dismissed.25 Thus, the alternative petition filed in the CA, being an inappropriate mode of appeal, should have been dismissed outright by the CA. WHEREFORE, the petition is hereby DENIED. The February 16, 2005 decision and August 16, 2005 resolution of the Court of Appeals in CA-G.R. SP No. 81940 directing the Regional Trial Court of Quezon City, Branch 93 to proceed with the trial of the petition for confirmation of arbitral award is AFFIRMED.

Costs against petitioner. SO ORDERED.

15

G.R. No. 150606

June 7, 2007

STATE PROSECUTOR AND SPECIAL PROSECUTOR ON SSS CASES IN REGION V, ROMULO SJ. TOLENTINO, AND REGIONAL STATE PROSECUTOR SANTIAGO M. TURINGAN, as alter ego of the Secretary of Justice in Region V, in their official capacities, and, for and in representation of the PEOPLE OF THE PHILIPPINES and MARITES C. DE LA TORRE, in her official capacity as counsel for the Complainant, SOCIAL SECURITY SYSTEM (SSS) Bicol Cluster, petitioners, vs. HON. PABLO M. PAQUEO, JR., in his capacity as Presiding Judge of RTC, Branch 23, of the City of Naga, and Accused BENEDICT DY TECKLO, respondents. DESICION AZCUNA, J.: This is a petition for certiorari and mandamus alleging that respondent Judge Pablo M. Paqueo, Jr., Regional Trial Court (RTC) of Naga City, Branch 23, acted with grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the Orders dated August 24, 2001 and October 15, 2001. The Order dated August 24, 2001 granted the Motion to Quash of private respondent Benedict Dy Tecklo, thus dismissing the Information filed by petitioner State Prosecutor Romulo SJ. Tolentino. The Order dated October 15, 2001 denied State Prosecutor Tolentinos Objection and Motion dated September 5, 2001. The facts are: On June 22, 2001, petitioner State Prosecutor Romulo SJ. Tolentino filed an Information charging private respondent Benedict Dy Tecklo, the owner/proprietor of Qualistronic Builders, of violation of Sec. 22 (a) in relation to Sec. 28 (e) of Republic Act No. 82821 for failing to remit the premiums due for his employee to the Social Security System despite demand. The Information contains a certification by State Prosecutor Tolentino, thus: CERTIFICATION

I HEREBY CERTIFY THAT THE REQUIRED INVESTIGATION IN THIS CASE HAS BEEN CONDUCTED BY THE UNDERSIGNED SPECIAL PROSECUTOR IN ACCORDANCE WITH LAW AND UNDER OATH AS OFFICER OF THE COURT, THAT THERE IS REASONABLE GROUND TO BELIEVE THAT THE OFFENSE HAS BEEN COMMITTED, THAT THE ACCUSED IS PROBABLY GUILTY THEREOF AND THAT THE FILING OF THE INFORMATION IS WITH THE PRIOR AUTHORITY AND APPROVAL OF THE REGIONAL STATE PROSECUTOR.2 The case was raffled to the RTC of Naga City, Branch 23, presided by respondent Judge Pablo M. Paqueo, Jr. It was set for arraignment on August 7, 2001. On said date, counsel for private respondent moved for the deferment of the arraignment and requested time to file a motion to quash the Information, which request was granted by the court. On August 10, 2001, private respondent filed a Motion to Quash, thus: Accused, through counsel, most respectfully moves to quash the Information x x x upon the sole ground that State Prosecutor Romulo SJ Tolentino, not being the City Prosecutor nor the Provincial Prosecutor, has no legal personality nor is he legally clothed with the authority to commence prosecution by the filing of the Information and thus prosecute the case.3 On August 16, 2001, State Prosecutor Tolentino filed an Opposition to Motion to Quash4 on the following grounds: (1) He (State Prosecutor Tolentino) is authorized to investigate, file the necessary Information and prosecute SSS cases since he was designated as Special Prosecutor for SSS cases by Regional State Prosecutor Santiago M. Turingan by virtue of Regional Order No. 97-024A dated July 14, 1997; (2) In a letter5 dated October 24, 2000, Chief State Prosecutor Jovencito Zuo confirmed such authority and that Informations to be filed in court by prosecutors-designate do not need the approval of the Regional State Prosecutor or Provincial or City Prosecutor; (3) Under the Administrative Code of 1987, the Regional State Prosecutor, as alter ego of the Secretary of Justice, is vested with authority to designate Special Prosecutors; and (4) The City Prosecutor has been inhibited by the private complainant from investigating SSS Cases as it is the Panel of

16

Prosecutors that is now acting as City Prosecutor over all city cases involving violations of the Social Security Act. As acting Prosecutor, the panel outranks the City Prosecutor. On August 24, 2001, the RTC issued an Order quashing the Information and dismissing the case, thus: For resolution is a motion to quash filed by x x x counsel for the accused, with an opposition to the same filed by State Prosecutor Romulo SJ. Tolentino, the prosecutor who filed the information. The motion is based on the lack of legal personality of State Prosecutor Tolentino, [not being] legally clothed with the authority to commence prosecution by the filing of the information and, thus, prosecute the case. One of the grounds provided by the rules to quash an Information is paragraph (c), of Sec. 3 of Rule 117. "(c) that the officer who filed the information had no authority to do so." A glance on the face of the information would glaringly show that it was filed by State Prosecutor Romulo Tolentino, without the approval of the City Prosecutor of Naga City, the situs of the crime, a blatant violation of the third paragraph of Sec. 4 of Rule 112 of the Revised Rules on Criminal Procedure. An information filed by a qualified and authorized officer is required for the jurisdiction of the court over the case (Villa v. Ibaez, et al., 88 Phil. 402). A justification put up by State Prosecutor Tolentino is a Regional Order No. 07-024-A subject of which is the Designation of Personnel issued by the Regional State Prosecutor which in effect designated him as the special prosecutor to handle the investigation of all SSS cases filed before the Offices of the City Prosecutor of the Cities of Naga, Iriga and Legaspi and the Offices of the Provincial Prosecutor of the different provinces in the Bicol Region, except the provinces of Catanduanes and Masbate, and if evidence warrants to file the necessary information and prosecute the same in the court of [appropriate] jurisdiction. The designation of State Prosecutor Tolentino to investigate, file this information if the evidence warrants, and to prosecute SSS cases in court does not exempt him from complying with the

provision of the third paragraph of [Sec. 4 of] Rule 112 of the Revised Rules on Criminal Procedure, that no complaint or information may be filed or dismissed by an investigating prosecutor without the prior written authority or approval of the Provincial or City Prosecutor or Chief State Prosecutor or the Ombudsman or his deputy. The designation given to Prosecutor Tolentino came from the Regional Chief State Prosecutor [who] is not one of those mentioned exclusively by the Rules to approve in writing the filing or the dismissal of an information. Also, as ruled by this court in a similar case which was dismissed, the second attached document supporting the opposition to the motion, is but an opinion of the Chief State prosecutor which has no force and effect to set aside the mandatory requirement of the Rules in the filing of an information in court. WHEREFORE, in view of all the foregoing, the motion is granted, The information is hereby ordered quashed and dismissed.6 Petitioner State Prosecutor Tolentino filed an Objection and Motion praying that the Order dated August 24, 2001 be set aside and that the case entitled People v. Tecklo be scheduled for arraignment without unnecessary delay. In an Order dated October 15, 2001, respondent Judge denied Tolentinos Objection and Motion, thus: For consideration is an Objection and Motion filed by State Prosecutor Romulo SJ. Tolentino, praying that the Order of this court dated August 24, 2001 be set aside and the case be scheduled for arraignment. Acting on said motion upon receipt thereof, the court gave the defense a period of fifteen (15) days from receipt of the order dated September 18, 2001 to file its comment and/or opposition; however, the period lapsed with the court never receiving any comment and/or opposition from the defense. The records show that the issue raised in the pleadings from both parties is whether Prosecutor Tolentino, in filing the information, can just ignore the provision of the third paragraph of Sec. 4 of Rule 112 of the Revised Rules on [C]riminal [P]rocedure. It is the stand of this court, when it ruled and so holds that Prosecutor Tolentino may conduct exclusive investigation and prosecute all violations of the provisions of the SSS Laws within the

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Bicol Region, but in the filing of the information in court, he must comply with [x x x] the above-cited provision of the rules on criminal procedure, that is, to have the provincial or city prosecutor at the situs of the offense approve in writing said information. It was further ruled by this court that failure to secure said written authority of the provincial or city prosecutor would touch on the jurisdiction of this court. With the foregoing, this court cannot find any legal basis to disturb its ruling of August 24, 2001. The instant objection and motion is therefore denied. SO ORDERED.7 Petitioners, thereafter, filed this petition praying for the nullification of the Orders dated August 24, 2001 and October 15, 2001. The main issue in this case is whether or not petitioner State Prosecutor Tolentino is duly authorized to file the subject Information without the approval of the City Prosecutor? In their Memorandum,8 petitioners allege that State Prosecutor Tolentino was duly authorized to file the Information based on the following: 1. Petitioner Regional State Prosecutor Santiago M. Turingan, per Regional Order dated July 14, 1997, authorized State Prosecutor Tolentino to file the necessary Information for violations of Republic Act No. 8282 in the Bicol Region, except Masbate and Catanduanes, and to prosecute the same in courts of competent jurisdiction. This was in response to the request of the SSS, Region V for the designation of a Special Prosecutor to handle the prosecution of said criminal cases with the Office of the City Prosecutor and Office of the Provincial Prosecutor of the cities of Naga, Legaspi and Iriga and all provinces of the Bicol Region. 2. Per ruling of the Chief State Prosecutor in his letter dated October 24, 2000, ". . . the information to be filed in court by prosecutors-designate do not need the approval of the Regional State Prosecutor or the Provincial or City Prosecutor." An administrative opinion interpreting existing rules issued by agencies directly involved in the implementation of the rules should be respected and upheld. Respondent judge quashed the Information based on Sec. 3 (d), Rule 117 of the Revised Rules of Criminal Procedure in relation to

the third paragraph of Sec. 4, Rule 112 of the Revised Rules of Criminal Procedure, thus: Rule 112. Sec 4. Resolution of investigating prosecutor and its review. x x x No complaint or information may be filed or dismissed by an investigating prosecutor without the prior written authority or approval of the provincial or city prosecutor or chief state prosecutor or the Ombudsman or his deputy.9 Rule 117. Sec. 3. Grounds. The accused may move to quash the complaint or information on any of the following grounds: xxx (d) That the officer who filed the information had no authority to do so. Notably, changes in the third paragraph of Sec. 4, Rule 112 were introduced in the Revised Rules of Criminal Procedure, which took effect on December 1, 2000. It is noted that the letter dated October 24, 2000 of Chief State Prosecutor Jovencito R. Zuo, upon which State Prosecutor Tolentino relies to support his authority to file the subject Information without the approval of the City Prosecutor, was issued before the changes in the third paragraph of Sec. 4, Rule 112 were introduced in the Revised Rules of Criminal Procedure. While the old 1985 Rules of Criminal Procedure, as amended, stated that "[no] complaint or information may be filed or dismissed by an investigating fiscal without the prior written authority or approval of the provincial or city fiscal of chief state prosecutor," the 2000 Revised Rules of Criminal Procedure states that "[n]o complaint or information may be filed or dismissed by an investigating prosecutor without the prior written authority or approval of the provincial or city prosecutor or chief state prosecutor or the Ombudsman or his deputy." Since the provision is couched in negative terms importing that the act shall not be done otherwise than designated, it is mandatory.10 An examination of the functions11 of the Regional State Prosecutor under Sec. 8 of Presidential Decree No. 127512 showed that they do not include that of approving the Information filed or dismissed by the investigating prosecutor.

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It is a rule of statutory construction that the express mention of one person, thing, or consequence implies the exclusion of all others, expressio unius est exclusio alterius. Since the Regional State Prosecutor is not included among the law officers authorized to approve the filing or dismissal of the Information of the investigating prosecutor, the Information filed by petitioner State Prosecutor Tolentino did not comply with the requirement of Sec. 4, Rule 112 of the Revised Rules of Criminal Procedure. Consequently, the non-compliance was a ground to quash the Information under Sec. 3 (d), Rule 117 of the Revised Rules of Criminal Procedure. Petitioners also contend that the accused must move to quash at any time before entering his plea and the trial court is barred from granting further time to the accused to do so; and that there is no evidence in support of the motion to quash. Rule 117 of the Revised Rules of Criminal Procedure on the Motion to Quash provides: SECTION 1. Time to move to quash.At any time before entering his plea, the accused may move to quash the complaint or information. SEC. 2. Form and contents. The motion to quash shall be in writing, signed by the accused or his counsel and shall distinctly specify its factual and legal grounds. The court shall consider no grounds other than those stated in the motion, except lack of jurisdiction over the offense charged. The Court finds that there is substantial compliance by private respondent with the rule above quoted, as it was satisfactorily explained in his Memorandum13 that his counsel orally moved to quash the Information before the arraignment on August 7, 2001. In an Order issued on the same date, respondent Judge required private respondents counsel to file a motion to quash within five days from the issuance of the Order. Accordingly, the motion was filed on August 10, 2001. Moreover, there was no need to submit any evidence to support the ground for quashing the Information, since it was apparent and within judicial notice that petitioner State Prosecutor Tolentino was not the City Prosecutor or the Provincial Prosecutor.

As regards the allegation of willful miscitation of the ground for quashing the Information, the Court finds that respondent Judge failed to cite in his Order the correct paragraph under Rule 117 of the Rules of Court where the ground relied upon for quashing the Information is enumerated. What is important, however, is that he correctly cited the ground for quashing the Information. Certiorari implies an indifferent disregard of the law, arbitrariness and caprice, an omission to weigh pertinent considerations, a decision arrived at without rational deliberation.14 In this petition for certiorari, the Court finds that respondent judge did not gravely abuse his discretion in dismissing the Information filed by petitioner State Prosecutor Romulo SJ. Tolentino for failure to comply with the third paragraph of Sec. 4, Rule 112 of the Revised Rules of Criminal Procedure. The Rules of Court governs the pleading, practice and procedure in all courts of the Philippines. For the orderly administration of justice, the provisions contained therein should be followed by all litigants, but especially by the prosecution arm of the Government. WHEREFORE, the petition for certiorari and mandamus is DISMISSED for lack of merit. No costs. SO ORDERED.

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G.R. No. 158084

August 29, 2008

J.K. MERCADO & SONS AGRICULTURAL ENTERPRISES, INC., petitioner, vs. HON. PATRICIA A. STO. TOMAS, in her capacity as Secretary of Labor and Employment, ANICETO S. TORREJOS, SR., JOHNNY MANGARIN, ZOSIMO ALBASIN, ALBERTO ABAD, RONALD ABAD, EDGARDO FLORES, JOSEPH COSIDO, MAYORMITO VELCHES, EDUARDO BIGNO, BENEDICTO NOTARTE, CARLOS LIBRE, DIOSDADO ORE, LITO DAGUPAN, EPIFANIO BULILAWA, JUSTINIANO BADIANA, VALERIO VIADO, LORENZO GRAPA, LEONARDO BULILAWA, RUBEN BAYANSAW, LUISITO DOCUSIN, CARLO MAGNO CANO, JOSEPH DUMAYANOS, FELIX BAYANG, NILO PROCURATO, REY LACABO, ALEJANDRO NAGAYO, JR., DOMINADOR QUIBO, RICHARD TAMPARONG, MANUEL LEOCADIO, GERSON PENA, REY MENDEZ, FERNANDO VALLEJO, TOMAS DAHUNOG, DIONESIO FERNIS, ESTITIA PAQUERA, JOEL JAMOROL, GERSON RECTO, ELADIO JAECTIN, JUDE PROCURATO, ERNESTO SOTTO, FAUSTINO MONTECILLO, RUDY QUIBO, JUSTINIANO CAL, JR., ROSELITO GONZALES, CLET QUETE, ELDIE DAGUPAN, HENIA PROCURATO, BIENVENIDO BORROMEO and CRISANTO MORALES, respondents. DECISION AZCUNA, J.: This is a petition for review on certiorari under Rule 45 of the Rules of Court. The facts are stated in the Decision of the Court of Appeals in CAG.R. SP No. 70003 dated March 10, 2003: On December 3, 1993, the Regional Tripartite Wages and Productivity Board, Region XI, issued Wage Order No. RTWPB-XI-03, granting a Cost of Living Allowance (COLA) to covered workers. On January 28, 1994, petitioner filed an application for exemption from the coverage of the aforesaid wage order. Thus, however, was denied by the regional wage board in an Order dated April 11, 1994, the dispositive portion of which states: "WHEREFORE, premises considered, the application for exemption from compliance with Wage Order No. RTWPB-XI-03 is DENIED for

Lack of Merit. Applicant J.K. MERCADO AND SONS AGRICULTURAL ENTERPRISES, INCORPORATED is hereby ordered to pay its covered workers the allowance prescribed under said Wage Order plus interest of one percent (1%) per month retroactive December 1, 1993. Let copies of the Order be furnished the Regional Director of the Department of Labor and Employment, Region XI to cause the computation of the award and the issuance of writ of execution, the parties concerned and the National Wages Productivity Commission for their information and guidance. Notwithstanding the said order, private respondents were not given the benefits due them under Wage Order No. RTWPB-XI-03. On July 10, 1998, private respondents filed an Urgent Motion for Writ of Execution, and Writ of Garnishment in RTWPB-XI-03-CBBE-94 NWPBC Case No. E-95-087 Case No. R1100 seeking the enforcement of subject wage order against several entities including herein petitioner. In reaction thereto, petitioner submitted an Inquiry dated August 13, 1998, stating that it is not a party to the aforesaid case and has not entered appearance therein. On October 7, 1998, the OIC-Regional Director, Region XI, issued a Writ of Execution for the enforcement of the Order dated April 11, 1994 of the Regional Tripartite Wages and Productivity Board. On November 17, 1998 and November 23, 1998, respectively, petitioner filed a Motion to Quash the Writ of Execution and a Supplemental Motion to the Motion to Quash. Petitioner argued that herein private respondents right had already prescribed due to their failure to move for the execution of the April 11, 1994 Order within the period provided under Article 291 of the Labor Code, as amended, or within three (3) years from the finality of the said order. Ruling that the benefits which remained unpaid have not prescribed and that the private respondents need not file a claim to be entitled thereto, the Regional Director denied the Motion to Quash in an Order dated January 7, 1999. Not satisfied with the denial of its motion to quash, petitioner filed a Notice of Appeal on January 29, 1999.

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Petitioner argued on appeal that the Regional Director abused his discretion in issuing the writ of execution since it was not a party to RTWPB-XI-03-CBBE-97-NWPC Case No. E-95-087. Petitioner likewise argued that the Regional Director abused his discretion in issuing the writ of execution in the absence of any motion filed by private respondents. Petitioner likewise claimed that since more than three (3) years have already elapsed from the time of the finality of the order dated April 11, 1994, the right of private respondents to claim the benefits under the same had already prescribed. Denying the appeal, the dispositive portion of the assailed order dated February 2, 2001 reads: "WHEREFORE, the Appeal is denied for lack of merit and the order dated January 7, 1999, is affirmed." On March 2, 2001, petitioner filed a Motion for Reconsideration but the same was denied for lack of merit by public respondent in an Order dated March 14, 2002. The Court of Appeals stated the issues, thus: Before us petitioner contends that: "xxx the Honorable Undersecretary and Hon. Secretary of Labor and Employment committed grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the assailed Orders [Annexes A & B], as the same are contrary to Law and Jurisprudence, in: 1. Declaring that an application for exemption from compliance with Wage Orders before the Wage Board is equivalent to money claims provided for under Article 291 of the Labor Code. 2. Deliberately refusing and failing to recognize that the prescriptive period to file money claims under Article 291 of the Labor Code applies to money claims for COLA granted under Wage Order No. RTWPB-XI-03. 3. Ruling that DOLE Regional Directors can legally issue writs of execution to enforce Wage Orders pursuant to Policy Instruction No. 55, beyond the 3-year prescriptive period provided under Article 291 of the Labor Code, pursuant to Section 1, Rule 39 of the Revised Rules of Court. The assailed Decision resolved the issues, as follows:

The petition is not meritorious. It must be stressed at the outset that while the filing by herein private respondents of the Urgent Motion for Writ of Execution and Writ of Garnishment refer to recovery of benefits under the subject Wage Order No. RTWPB-XI-03, which entitled respondents to a cost of living allowance (COLA), Article 291 of the Labor Code finds no application in the case at bar since what is being enforced is the final order dated April 11, 1994 denying petitioners application for exemption under the wage order. Being a final order, the same may be the subject of execution motu proprio or upon motion by any of the parties concerned. The law is equivocal that a judgment may be executed on motion within five (5) years from the date of its entry or from the date it becomes final and executory. Hence, we see no basis for petitioners insistence on the applicability of Article 291 of the Labor Code in the instant case. Arguing that a money claim must be filed by herein private respondents to avail of the wage differential or COLA granted under Wage Order No. 3, petitioner avers: "The crux of the controversy in the case at bar is not when the writ of execution issued by the Regional Director of Region XI can be enforced, but rather, whether a money claim must be filed first by private respondents against petitioner for the latters refusal to pay the COLA granted under WO 03." We are not persuaded. Clearly, petitioners contention is premised on the mistaken belief that the right of private respondents to recover their wage differential or COLA under Wage Order No. 03 is still a contestable issue. It must be emphasized that the order dated April 11, 1994 had long become final and executory. Petitioner did not appeal the said order. Having failed to avail of the remedy of appeal of the said order, petitioner cannot belatedly avoid its duty to comply with the said order by insisting that a money claim must first be filed by herein private respondents. A contrary ruling would result to absurdity and would even unjustly benefit petitioner who for quite sometime had exerted every effort to avoid the obligation of giving the wage differential or COLA granted under Wage Order No. 3.

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Petitioner now presents the following issues: 1. Whether or not the Honorable Court of Appeals committed an error in holding that Article 291 of the Labor Code is not applicable to recovery of benefits under the subject Wage Order No. RTWPBXI-03, which entitled respondents to a cost of living allowance (COLA). 2. Whether or not the Court of Appeals committed an error in holding that the cost of living allowance (COLA) granted by Wage Order No. RTWPB-XI-03 can be enforced without the appropriate case having been filed by herein private respondents within the three (3) year prescriptive period. 3. Whether or not the claim of the private respondents for cost of living allowance (COLA) pursuant to Wage Order No. RTWPB-XI-03 has already prescribed because of the failure of the respondents to make the appropriate claim within the three (3) year prescriptive period provided by Article 291 of the Labor Code, as amended. The Court sees no error on the part of the Court of Appeals. Art. 291 of the Labor Code applies to money claims in general and provides for a 3-year prescriptive period to file them.

SO ORDERED.

On the other hand, respondent employees money claims in this case had been reduced to a judgment, in the form of a Wage Order, which has become final and executory. The prescription applicable, therefore, is not the general one that applies to money claims, but the specific one applying to judgments. Thus, the right to enforce the judgment, having been exercised within five years, has not yet prescribed. Stated otherwise, a claimant has three years to press a money claim. Once judgment is rendered in her favor, she has five years to ask for execution of the judgment, counted from its finality. This is consistent with the rule on statutory construction that a general provision should yield to a specific one and with the mandate of social justice that doubts should be resolved in favor of labor. WHEREFORE, the petition is DENIED. No costs.

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G.R. No. 174168

March 30, 2009

SY TIONG SHIOU, JUANITA TAN SY, JOLIE ROSS TAN, ROMER TAN, CHARLIE TAN, and JESSIE JAMES TAN, Petitioners, vs. SY CHIM and FELICIDAD CHAN SY, Respondents. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 179438 March 30, 2009

In the two other complaints, I.S. No. 03E-15287 and 03E-15288,6 Sy Tiong Shiou was charged with falsification under Article 172, in relation to Article 171 of the Revised Penal Code (RPC), and perjury under Article 183 of the RPC. According to the Spouses Sy, Sy Tiong Shiou executed under oath the 2003 General Information Sheet (GIS) wherein he falsely stated that the shareholdings of the Spouses Sy had decreased despite the fact that they had not executed any conveyance of their shares.7 Sy Tiong Shiou, et al. argued before the prosecutor that the issues involved in the civil case for accounting and damages pending before the RTC of Manila were intimately related to the two criminal complaints filed by the Spouses Sy against them, and thus constituted a prejudicial question that should require the suspension of the criminal complaints. They also argued that the Spouses Sys request for inspection was premature as the latters concern may be properly addressed once an answer is filed in the civil case. Sy Tiong Shiou, on the other hand, denied the accusations against him, alleging that before the 2003 GIS was submitted to the Securities and Exchange Commission (SEC), the same was shown to respondents, who at that time were the President/Chairman of the Board and Assistant Treasurer of the corporation, and that they did not object to the entries in the GIS. Sy Tiong Shiou also argued that the issues raised in the pending civil case for accounting presented a prejudicial question that necessitated the suspension of criminal proceedings. On 29 December 2003, the investigating prosecutor issued a resolution recommending the suspension of the criminal complaints for violation of the Corporation Code and the dismissal of the criminal complaints for falsification and perjury against Sy Tiong Shiou.8 The reviewing prosecutor approved the resolution. The Spouses Sy moved for the reconsideration of the resolution, but their motion was denied on 14 June 2004.9 The Spouses Sy thereupon filed a petition for review with the Department of Justice (DOJ), which the latter denied in a resolution issued on 02 September 2004.10 Their subsequent motion for reconsideration was likewise denied in the resolution of 20 July 2005.11 The Spouses Sy elevated the DOJs resolutions to the Court of Appeals through a petition for certiorari, imputing grave abuse of discretion on the part of the DOJ. The appellate court granted the petition12 and directed the City Prosecutors Office to file the appropriate informations against Sy Tiong Shiou, et al. for violation of Section 74, in relation to Section 144 of the Corporation Code

SY CHIM and FELICIDAD CHAN SY, Petitioners, vs. SY TIONG SHIOU and JUANITA TAN, Respondents. DECISION TINGA, J.: These consolidated petitions involving the same parties. although related, dwell on different issues. G.R. No. 174168. This is a petition for review1 assailing the decision and resolution of the Court of Appeals dated 31 May 2006 and 8 August 2006, respectively, in CA-G.R. SP No. 91416.2 On 30 May 2003, four criminal complaints were filed by Sy Chim and Felicidad Chan Sy (Spouses Sy) against Sy Tiong Shiou, Juanita Tan Sy, Jolie Ross Tan, Romer Tan, Charlie Tan and Jessie James Tan (Sy Tiong Shiou, et al.) before the City Prosecutors Office of Manila. The cases were later consolidated. Two of the complaints, I.S. Nos. 03E-15285 and 03E-15286,3 were for alleged violation of Section 74 in relation to Section 144 of the Corporation Code. In these complaints, the Spouses Sy averred that they are stockholders and directors of Sy Siy Ho & Sons, Inc. (the corporation) who asked Sy Tiong Shiou, et al., officers of the corporation, to allow them to inspect the books and records of the business on three occasions to no avail. In a letter4 dated 21 May 2003, Sy Tiong Shiou, et al. denied the request, citing civil and intra-corporate cases pending in court.5

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and of Articles 172 and 183 of the RPC. The appellate court ruled that the civil case for accounting and damages cannot be deemed prejudicial to the maintenance or prosecution of a criminal action for violation of Section 74 in relation to Section 144 of the Corporation Code since a finding in the civil case that respondents mishandled or misappropriated the funds would not be determinative of their guilt or innocence in the criminal complaint. In the same manner, the criminal complaints for falsification and/or perjury should not have been dismissed on the ground of prejudicial question because the accounting case is unrelated and not necessarily determinative of the success or failure of the falsification or perjury charges. Furthermore, the Court of Appeals held that there was probable cause that Sy Tiong Shiou had committed falsification and that the City of Manila where the 2003 GIS was executed is the proper venue for the institution of the perjury charges. Sy Tiong Shiou, et al. sought reconsideration of the Court of Appeals decision but their motion was denied.13 On 2 April 2008, the Court ordered the consolidation of G.R. No. 179438 with G.R. No. 174168.14 Sy Tiong Shiou, et al. argue that findings of the DOJ in affirming, modifying or reversing the recommendations of the public prosecutor cannot be the subject of certiorari or review of the Court of Appeals because the DOJ is not a quasi-judicial body within the purview of Section 1, Rule 65 of the Rules of Court. Petitioners rely on the separate opinion of former Chief Justice Andres R. Narvasa in Roberts, Jr. v. Court of Appeals,15 wherein he wrote that this Court should not be called upon to determine the existence of probable cause, as there is no provision of law authorizing an aggrieved party to petition for such a determination.16 In any event, they argue, assuming without admitting that the findings of the DOJ may be subject to judicial review under Section 1, Rule 65 of the Rules of Court, the DOJ has not committed any grave abuse of discretion in affirming the findings of the City Prosecutor of Manila. They claim that the Spouses Sys request for inspection was not made in good faith and that their motives were tainted with the intention to harass and to intimidate Sy Tiong Shiou, et al. from pursuing the criminal and civil cases pending before the prosecutors office and the Regional Trial Court (RTC) of Manila, Branch 46. Thus, to accede to the Spouses Sys request would pose serious threats to the existence of the corporation.17 Sy Tiong Shiou, et al. aver that the RTC had already denied the motion for production and inspection and instead ordered petitioners to make the corporate records available to the appointed independent

auditor. Hence, the DOJ did not commit any grave abuse of discretion in affirming the recommendation of the City Prosecutor of Manila.18 They further argue that adherence to the Court of Appeals ruling that the accounting case is unrelated to, and not necessarily determinative of the success of, the criminal complaint for falsification and/or perjury would unnecessarily indict petitioner Sy Tiong Shiou for the said offenses he may not have committed but only because of an outcome unfavorable to him in the civil action.19 Indeed, a preliminary proceeding is not a quasi-judicial function and that the DOJ is not a quasi-judicial agency exercising a quasijudicial function when it reviews the findings of a public prosecutor regarding the presence of probable cause.20 Moreover, it is settled that the preliminary investigation proper, i.e., the determination of whether there is reasonable ground to believe that the accused is guilty of the offense charged and should be subjected to the expense, rigors and embarrassment of trial, is the function of the prosecution.21 This Court has adopted a policy of non-interference in the conduct of preliminary investigations and leaves to the investigating prosecutor sufficient latitude of discretion in the determination of what constitutes sufficient evidence as will establish probable cause for the filing of information against the supposed offender.22 As in every rule, however, there are settled exceptions. Hence, the principle of non-interference does not apply when there is grave abuse of discretion which would authorize the aggrieved person to file a petition for certiorari and prohibition under Rule 65, 1997 Rules of Civil Procedure.23 As correctly found by the Court of Appeals, the DOJ gravely abused its discretion when it suspended the hearing of the charges for violation of the Corporation Code on the ground of prejudicial question and when it dismissed the criminal complaints. A prejudicial question comes into play generally in a situation where a civil action and a criminal action are both pending and there exists in the former an issue which must be preemptively resolved before the criminal action may proceed since howsoever the issue raised in the civil action is resolved would be determinative juris et de jure of the guilt or innocence of the accused in the criminal case. The reason behind the principle of prejudicial question is to avoid two conflicting decisions. It has two essential elements: (a) the civil action involves an issue similar or

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intimately related to the issue raised in the criminal action; and (b) the resolution of such issue determines whether or not the criminal action may proceed.24 The civil action and the criminal cases do not involve any prejudicial question. The civil action for accounting and damages, Civil Case No. 03106456 pending before the RTC Manila, Branch 46, seeks the issuance of an order compelling the Spouses Sy to render a full, complete and true accounting of all the amounts, proceeds and fund paid to, received and earned by the corporation since 1993 and to restitute it such amounts, proceeds and funds which the Spouses Sy have misappropriated. The criminal cases, on the other hand, charge that the Spouses Sy were illegally prevented from getting inside company premises and from inspecting company records, and that Sy Tiong Shiou falsified the entries in the GIS, specifically the Spouses Sys shares in the corporation. Surely, the civil case presents no prejudicial question to the criminal cases since a finding that the Spouses Sy mishandled the funds will have no effect on the determination of guilt in the complaint for violation of Section 74 in relation to Section 144 of the Corporation Code; the civil case concerns the validity of Sy Tiong Shious refusal to allow inspection of the records, while in the falsification and perjury cases, what is material is the veracity of the entries made by Sy Tiong Shiou in the sworn GIS. Anent the issue of probable cause, the Court also finds that there is enough probable cause to warrant the institution of the criminal cases. The term probable cause does not mean actual and positive cause nor does it import absolute certainty. It is merely based on opinion and reasonable belief. Thus a finding of probable cause does not require an inquiry into whether there is sufficient evidence to procure a conviction. It is enough that it is believed that the act or omission complained of constitutes the offense charged. Precisely, there is a trial for the reception of evidence of the prosecution in support of the charge.25 In order that probable cause to file a criminal case may be arrived at, or in order to engender the well-founded belief that a crime has been committed, the elements of the crime charged should be present. This is based on the principle that every crime is defined

by its elements, without which there should beat the mostno criminal offense.26 Section 74 of the Corporation Code reads in part: xxx The records of all business transactions of the corporation and the minutes of any meeting shall be open to inspection by any director, trustee, stockholder or member of the corporation at reasonable hours on business days and he may demand, in writing, for a copy of excerpts from said records or minutes, at his expense. Any officer or agent of the corporation who shall refuse to allow any director, trustee, stockholder or member of the corporation to examine and copy excerpts from its records or minutes, in accordance with the provisions of this Code, shall be liable to such director, trustee, stockholder or member for damages, and in addition, shall be guilty of an offense which shall be punishable under Section 144 of this Code: Provided, That if such refusal is made pursuant to a resolution or order of the Board of Directors or Trustees, the liability under this section for such action shall be imposed upon the directors or trustees who voted for such refusal: and Provided, further, That it shall be a defense to any action under this section that the person demanding to examine and copy excerpts from the corporation's records and minutes has improperly used any information secured through any prior examination of the records or minutes of such corporation or of any other corporation, or was not acting in good faith or for a legitimate purpose in making his demand. Meanwhile, Section 144 of the same Code provides: Sec. 144. Violations of the Code.Violations of any of the provisions of this Code or its amendments not otherwise specifically penalized therein shall be punished by a fine of not less than one thousand (P1,000.00) pesos but not more than ten thousand (P10,000.00) pesos or by imprisonment for not less than thirty (30) days but not more than five (5) years, or both, in the discretion of the court. If the violation is committed by a corporation, the same may, after notice and hearing, be dissolved in appropriate proceedings before the Securities and Exchange Commission: Provided, That such dissolution shall not preclude the institution of appropriate action against the director, trustee or officer of the corporation responsible for said violation: Provided, further, That

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nothing in this section shall be construed to repeal the other causes for dissolution of a corporation provided in this Code. In the recent case of Ang-Abaya, et al. v. Ang, et al.,27 the Court had the occasion to enumerate the requisites before the penal provision under Section 144 of the Corporation Code may be applied in a case of violation of a stockholder or members right to inspect the corporate books/records as provided for under Section 74 of the Corporation Code. The elements of the offense, as laid down in the case, are: First. A director, trustee, stockholder or member has made a prior demand in writing for a copy of excerpts from the corporations records or minutes; Second. Any officer or agent of the concerned corporation shall refuse to allow the said director, trustee, stockholder or member of the corporation to examine and copy said excerpts; Third. If such refusal is made pursuant to a resolution or order of the board of directors or trustees, the liability under this section for such action shall be imposed upon the directors or trustees who voted for such refusal; and, Fourth. Where the officer or agent of the corporation sets up the defense that the person demanding to examine and copy excerpts from the corporations records and minutes has improperly used any information secured through any prior examination of the records or minutes of such corporation or of any other corporation, or was not acting in good faith or for a legitimate purpose in making his demand, the contrary must be shown or proved.28 Thus, in a criminal complaint for violation of Section 74 of the Corporation Code, the defense of improper use or motive is in the nature of a justifying circumstance that would exonerate those who raise and are able to prove the same. Accordingly, where the corporation denies inspection on the ground of improper motive or purpose, the burden of proof is taken from the shareholder and placed on the corporation.29 However, where no such improper motive or purpose is alleged, and even though so alleged, it is not proved by the corporation, then there is no valid reason to deny the requested inspection. In the instant case, however, the Court finds that the denial of inspection was predicated on the pending civil case against the

Spouses Sy. This is evident from the 21 May 2003 letter of Sy Tiong Shiou, et al.s counsel30 to the Spouses Sy,31 which reads: Gentlemen: We write in behalf of our clients, SY SIY HO, INC. ( Guan Yiac Hardware); SY TIONG SHIOU, JUANITA TAN SY; JOLIE ROSS TAN; CHARLIE TAN; ROMER TAN; and JESSE JAMES TAN, relative to your letter dated 16 May 2003. Please be informed that a case for Accounting and Damages had already been filed against your clients, Sy Chim and Felicidad Chan Sy before the Regional Trial Court of Manila, Branch 46, denominated as Civil Case No. 03106456. We fully understand your desire for our clients to respond to your demands, however, under the prevailing circumstance this would not be advisable. The concerns that you raised in your letter can later on be addressed after your clients shall have filed their responsive pleading in the abovesaid case. We trust that this response will at the moment be enough.32 Even in their Joint Counter-Affidavit dated 23 September 2003,33 Sy Tiong Shiou, et al. did not make any allegation that "the person demanding to examine and copy excerpts from the corporations records and minutes has improperly used any information secured through any prior examination of the records or minutes of such corporation or of any other corporation, or was not acting in good faith or for a legitimate purpose in making his demand." Instead, they merely reiterated the pendency of the civil case. There being no allegation of improper motive, and it being undisputed that Sy Tiong Shiou, et al. denied Sy Chim and Felicidad Chan Sys request for inspection, the Court rules and so holds that the DOJ erred in dismissing the criminal charge for violation of Section 74 in relation to Section 144 of the Corporation Code. Now on the existence of probable cause for the falsification and/or perjury charges. The Spouses Sy charge Sy Tiong Shiou with the offense of falsification of public documents under Article 171, paragraph 4; and/or perjury under Article 183 of the Revised Penal Code (RPC). The elements of falsification of public documents through an untruthful narration of facts are: (a) the offender makes in a document untruthful statements in a narration of facts; (b) the offender has a legal obligation to disclose the truth of the facts

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narrated;34 (c) the facts narrated by the offender are absolutely false; and (d) the perversion of truth in the narration of facts was made with the wrongful intent to injure a third person.35 On the other hand, the elements of perjury are: (a) that the accused made a statement under oath or executed an affidavit upon a material matter; (b) that the statement or affidavit was made before a competent officer, authorized to receive and administer oath; (c) that in that statement or affidavit, the accused made a willful and deliberate assertion of a falsehood; and, (d) that the sworn statement or affidavit containing the falsity is required by law or made for a legal purpose. A General Information Sheet (GIS) is required to be filed within thirty (30) days following the date of the annual or a special meeting, and must be certified and sworn to by the corporate secretary, or by the president, or any duly authorized officer of the corporation.36 From the records, the 2003 GIS submitted to the SEC on 8 April 2003 was executed under oath by Sy Tiong Shiou in Manila, in his capacity as Vice President and General Manager.37 By executing the document under oath, he, in effect, attested to the veracity38 of its contents. The Spouses Sy claim that the entries in the GIS pertaining to them do not reflect the true number of shares that they own in the company. They attached to their complaint the 2002 GIS of the company, also executed by Sy Tiong Shiou, and compared the entries therein vis-a-vis the ones in the 2003 GIS. The Spouses Sy noted the marked decrease in their shareholdings, averring that at no time after the execution of the 2002 GIS, up to the time of the filing of their criminal complaints did they execute or authorize the execution of any document or deed transferring, conveying or disposing their shares or any portion thereof; and thus there is absolutely no basis for the figures reflected in the 2003 GIS.39 The Spouses Sy claim that the false statements were made by Sy Tiong Shiou with the wrongful intent of injuring them. All the elements of both offenses are sufficiently averred in the complaint-affidavits. The Court agrees with the Court of Appeals holding, citing the case of Fabia v. Court of Appeals, that the doctrine of primary jurisdiction no longer precludes the simultaneous filing of the criminal case with the corporate/civil case.40 Moreover, the Court finds that the City of Manila is the proper venue for the perjury charges, the GIS having been subscribed and sworn to in the said place. Under Section 10(a), Rule 110 of the Revised Rules of Court, the criminal action shall be instituted and tried in the court of the municipality or territory where the offense was committed or where

any of its essential ingredients occurred.41 In Villanueva v. Secretary of Justice,42 the Court held that the felony is consummated when the false statement is made.43 Thus in this case, it was alleged that the perjury was committed when Sy Tiong Shiou subscribed and sworn to the GIS in the City of Manila, thus, following Section 10(a), Rule 110 of the Revised Rules of Court, the City of Manila is the proper venue for the offense. G. R. No. 179438. This petition assails the decision44 and resolution45 of the Court of Appeals dated 26 May 2004 and 29 August 2007, respectively, in CA-G.R. SP No. 81897. On 3 February 2003, Juanita Tan, corporate treasurer of Sy Siy Ho & Sons, Inc. (the corporation), a family corporation doing business under the name and style Guan Yiac Hardware, submitted a letter46 to the corporations Board of Directors (Board) stating that the control, supervision and administration of all corporate funds were exercised by Sy Chim and Felicidad Chan Sy (Spouses Sy), corporate president and assistant treasurer, respectively. In the same letter, Juanita Tan disclosed that Felicidad Chan Sy did not make cash deposits to any of the corporations banks from 1 November 2001 to 31 January 2003, thus the total bank remittances for the past years were less than reflected in the corporate financial statements, accounting books and records. Finally, Juanita Tan sought to be free from any responsibility over all corporate funds. The Board granted Juanita Tans request and authorized the employment of an external auditor to render a complete audit of all the corporate accounting books and records.47 Consequently, the Board hired the accounting firm Banaria, Banaria & Company. In its Report48 dated 5 April 2003, the accounting firm attributed to the Spouses Sy P67,117,230.30 as unaccounted receipts and disbursements from 1994 to 2002.49 A demand letter50 was subsequently served on the Spouses Sy on 15 April 2003. On the same date, the children of the Spouses Sy allegedly stole from the corporation cash, postdated checks and other important documents. After the incident, the Spouses Sy allegedly transferred residence and ceased reporting to the corporation. Thereupon, the corporation filed a criminal complaint for robbery against the Spouses Sy before the City Prosecutors Office of Manila.51 A search warrant was subsequently issued by the Regional Trial Court.52

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On 26 April 2003, Sy Tiong Shiou, corporate Vice President and General Manager, called a special meeting to be held on 6 May 2003 to fill up the positions vacated by the Spouses Sy. Sy Tiong Shiou was subsequently elected as the new president and his wife, Juanita Tan, the new Vice President.53 Despite these developments, Sy Chim still caused the issuance of a Notice of Stockholders meeting dated 11 June 2003 in his capacity as the alleged corporate president.54 Meanwhile, on 1 July 2003, the corporation, through Romer S. Tan, filed its Amended Complaint for Accounting and Damages55 against the Spouses Sy before the RTC Manila, praying for a complete and true accounting of all the amounts paid to, received and earned by the company since 1993 and for the restitution of the said amount.56 The complaint also prayed for a temporary restraining order (TRO) and or preliminary injunction to restrain Sy Chim from calling a stockholders meeting on the ground of lack of authority. By way of Answer,57 the Spouses Sy averred that Sy Chim was a mere figurehead and Felicidad Chan Sy merely performed clerical functions, as it was Sy Tiong Shiou and his spouse, Juanita Tan, who have been authorized by the corporations by-laws to supervise, control and administer corporate funds, and as such were the ones responsible for the unaccounted funds. They assailed the meetings called by Sy Tiong Shiou on the grounds that the same were held without notice to them and without their participation, in violation of the by-laws. The Spouses Sy also pursued their counter-claim for moral and exemplary damages and attorneys fees. On 9 September 2003, the Spouses Sy filed their Motion for Leave to File Third-Party Complaint,58 praying that their attached Third Party Complaint59 be allowed and admitted against Sy Tiong Shiou and his spouse. In the said third-party complaint, the Spouses Sy accused Sy Tiong Shiou and Juanita Tan as directly liable for the corporations claim for misappropriating corporate funds. On 8 October 2003, the trial court granted the motion for leave to file the third-party complaint, and forthwith directed the issuance of summons against Sy Tiong Shiou and Juanita Tan.60 On 16 January 2004, their counsel allegedly discovered that Sy Tiong Shiou and Juanita Tan were not furnished with the copies of several pleadings, as well as a court order, which resulted in their having been declared in default for failure to file their answer to the third-party complaint; thus, they opted not to file a motion for reconsideration

anymore and instead filed a petition for certiorari before the Court of Appeals. In its Decision dated 26 May 2004, the Court of Appeals granted the petition of Sy Tiong Shiou and Juanita Tan.61 The appellate court declared that a third-party complaint is not allowed under the Interim Rules of Procedure Governing Intra-Corporate Controversies Under R.A. No. 8799 (Interim Rules), it not being included in the exclusive enumeration of allowed pleadings under Section 2, Rule 2 thereof. Moreover, even if such a pleading were allowed, the admission of the third-party complaint against Sy Tiong Shiou and Juanita Tan still would have no basis from the facts or the law and jurisprudence.62 The Court of Appeals also ruled that the respondent judge committed a manifest error amounting to lack of jurisdiction in admitting the third-party complaint and in summarily declaring Sy Tiong Shiou and Juanita Tan in default for failure to file their answer within the purported reglementary period. The Court of Appeals set aside the trial courts 8 October 2003 Order admitting the third-party complaint, as well as the 19 December 2003 Order, declaring Sy Tiong Shiou and Juanita Tan in default for failure to file their answer. The trial court was further ordered to dismiss the third-party complaint without prejudice to any action that the corporation may separately file against Sy Tiong Shiou and Juanita Tan.63 The Spouses Sy filed a motion for reconsideration, but their motion was denied on 29 August 2007.64 Sy Chim and Felicidad Chan Sy argue before this Court that a thirdparty complaint is not excluded or prohibited by the Interim Rules, and that the Court of Appeals erred in ruling that their third- party complaint is not actionable because their action is not in respect of the corporations claims. They add that the disallowance of the third-party complaint will result in multiplicity of suits. The third-party complaint should be allowed. The conflicting provisions of the Interim Rules of Procedure for Inter-Corporate Controversies read: Rule 1, Sec. 8. Prohibited pleadings.The following pleadings are prohibited: (1) Motion to dismiss; (2) Motion for a bill of particulars;

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(3) Motion for new trial, or for reconsideration of judgment or order, or for re-opening of trial; (4) Motion for extension of time to file pleadings, affidavits or any other paper, except those filed due to clearly compelling reasons. Such motion must be verified and under oath; and (5) Motion for postponement and other motions of similar intent, except those filed due to clearly compelling reasons. Such motion must be verified and under oath. Rule 2, Sec.2. Pleadings allowed.The only pleadings allowed to be filed under these Rules are the complaint, answer, compulsory counterclaims or cross-claims pleaded in the answer, and the answer to the counterclaims or cross-claims.65 There is a conflict, for while a third-party complaint is not included in the allowed pleadings, neither is it among the prohibited ones. Nevertheless, this conflict may be resolved by following the wellentrenched rule in statutory construction, that every part of the statute must be interpreted with reference to the context, i.e., that every part of the statute must be considered together with the other parts, and kept subservient to the general intent of the whole enactment.66 Statutes, including rules, should be construed in the light of the object to be achieved and the evil or mischief to be suppressed and they should be given such construction as will advance the object, suppress the mischief and secure the benefits intended. A statute should therefore be read with reference to its leading idea, and its general purpose and intention should be gathered from the whole act, and this predominant purpose will prevail over the literal import of particular terms or clauses, if plainly apparent, operating as a limitation upon some and as a reason for expanding the signification of others, so that the interpretation may accord with the spirit of the entire act, and so that the policy and object of the statute as a whole may be made effectual and operative to the widest possible extent.67 Otherwise stated, the spirit, rather than the letter of a law determines its construction; hence, a statute, as in the rules in this case, must be read according to its spirit and intent.68 This spirit and intent can be gleaned from Sec. 3, Rule 1 of the Interim Rules, which reads: Sec. 3. Construction.These Rules shall be liberally construed in order to promote their objective of securing a just, summary,

speedy and inexpensive determination of every action or proceeding.69 Now, a third-party complaint is a claim that a defending party may, with leave of court, file against a person not a party to the action, called the third-party defendant, for contribution, indemnity, subrogation or any other relief, in respect of his opponents claim. It is actually a complaint independent of, and separate and distinct from the plaintiffs complaint. In fact, were it not for Rule 6, Section 11 of the Rules of Court, such third-party complaint would have to be filed independently and separately from the original complaint by the defendant against the third-party defendant. Jurisprudence is consistent in declaring that the purpose of a third-party complaint is to avoid circuitry of action and unnecessary proliferation of law suits and of disposing expeditiously in one litigation all the matters arising from one particular set of facts.70 It thus appears that the summary nature of the proceedings governed by the Interim Rules, and the allowance of the filing of third-party complaints is premised on one objectivethe expeditious disposition of cases. Moreover, following the rule of liberal interpretation found in the Interim Rules, and taking into consideration the suppletory application of the Rules of Court under Rule 1, Sec. 271 of the Interim Rules, the Court finds that a thirdparty complaint is not, and should not be prohibited in controversies governed by the Interim Rules. The logic and justness of this conclusion are rendered beyond question when it is considered that Sy Tiong Shiou and Juanita Tan are not complete strangers to the litigation as in fact they are the moving spirit behind the filing of the principal complaint for accounting and damages against the Spouses Sy.1avvphi1 The Court also rules that the third-party complaint of the Spouses Sy should be admitted. A prerequisite to the exercise of such right is that some substantive basis for a third-party claim be found to exist, whether the basis be one of indemnity, subrogation, contribution or other substantive right. The bringing of a third-party defendant is proper if he would be liable to the plaintiff or to the defendant or both for all or part of the plaintiffs claim against the original defendant, although the third-party defendants liability arises out of another transaction. The defendant may implead another as third-party defendant: (a) on an allegation of liability of the latter to the defendant for

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contribution, indemnity, subrogation or any other relief; (b) on the ground of direct liability of the third-party defendant to the plaintiff; or (c) the liability of the third-party defendant to both the plaintiff and the defendant.72 In determining the sufficiency of the third-party complaint, the allegations in the original complaint and the third-party complaint must be examined. A third-party complaint must allege facts which prima facie show that the defendant is entitled to contribution, indemnity, subrogation or other relief from the third-party defendant.73 The complaint alleges that the Spouses Sy, as officers of the corporation, have acted illegally in raiding its corporate funds, hence they are duty bound to render a full, complete and true accounting of all the amounts, proceeds and funds paid to, received and earned by the corporation since 1993 and to restitute to the corporation all such amounts, proceeds, and funds which they took and misappropriated for their own use and benefit, to the damage and prejudice of the plaintiff and its stockholders.74 On the other hand, in the third-party complaint, the Spouses Sy claim that it is Sy Tiong Shiou and Juanita Tan who had full and complete control of the day-to day operations and complete control and custody of the funds of the corporation, and hence they are the ones liable for any shortfall or unaccounted difference of the corporations cash account. Thus, Sy Tiong Shiou and Juanita Tan should render a full, complete and true accounting of all the amounts, proceeds, funds paid to, received and earned by the corporation since 1993, including the amount attributed to the Spouses Sy in the complaint for accounting and damages. In their prayer, the Spouses Sy moved that Sy Tiong Shiou and Juanita Tan be declared as directly and solely liable in respect of the corporations claim for accounting and damages, and that in the event that they, the Spouses Sy, are adjudged liable to the corporation, Sy Tiong Shiou and Juanita Tan be ordered to pay all amounts necessary to discharge their liability to the corporation by way of indemnity or reimbursement. The allegations in the third-party complaint impute direct liability on the part of Sy Tiong Shiou and Juanita Tan to the corporation for the very same claims which the corporation interposed against the Spouses Sy. It is clear therefore that the Spouses Sys third-party

complaint is in respect of the plaintiff corporations claims,75 and thus the allowance of the third-party complaint is warranted. WHEREFORE, these cases are resolved as follows: G.R. No. 174168 The petition for review is DENIED. The Decision and Resolution of the Court of Appeals dated 31 May 2006 and 8 August 2006, respectively, in CA-G.R. SP No. 91416 are AFFIRMED. Costs against the petitioners. G.R. No. 179438 The petition is GRANTED. The decision and resolution of the Court of Appeals dated 26 May 2004 and 29 August 2007, respectively, in CA-G.R. SP No. 81897 are SET ASIDE and the Orders of the Regional Trial Court of Manila Branch 46 dated 8 October 2003 and 19 December 2003 are REINSTATED. SO ORDERED.

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G.R. No. 176478

February 4, 2008

LORNA A. MEDINA, petitioner, vs. COMMISSION ON AUDIT (COA), represented by the Audit Team of EUFROCINIA MAWAK, SUSAN PALLERNA, and MA. DOLORES TEPORA, respondents. DECISION TINGA, J.: While highlighting the interplay between the powers of two constitutional offices, one mandated as the government monitor of public fund expenditures and the other as the sentinel against graft and corruption in government, this case resolves some questions about the extent of their powers. This is a petition for review on certiorari1 under Rule 45 of the 1997 Rules of Civil Procedure seeking the reversal of the Decision2 and Resolution3 of the Court of Appeals in CA-G.R. SP No. 89539. The Court of Appeals' decision affirmed the two joint orders issued by the Office of the Deputy Ombudsman for Luzon finding herein petitioner Lorna A. Medina guilty of grave misconduct and dishonesty. The Resolution of the same court denied petitioner's motion for reconsideration of the said decision. The instant petition originated from the audit conducted by respondent Commission on Audit (COA) on the cash and accounts handled by petitioner in her official capacity as Municipal Treasurer of General Mariano Alvarez, Cavite. In the Joint Affidavit4 executed by herein respondents Eufrocinia M. Mawak, head of the audit team, and Susana L. Pallerna, Ma. Dolores C. Tepora and a certain Nelson T. Alvarez, who were all state auditors of the Provincial Auditor's Office of Cavite, they all stated that they had examined petitioner's financial records covering 19 August 1999 to 26 September 2000 and discovered a total cash shortage in the aggregate amount of P4,080,631.36. They thus directed petitioner to immediately restitute the shortage within 72 hours from receipt of the demand letter but petitioner allegedly failed to comply. The state auditors submitted a report to the Provincial Auditor's Office and recommended the relief of petitioner from her post as municipal treasurer and the filing of criminal charges against her.

COA, represented by the aforementioned state auditors, filed an administrative case docketed as OMB-L-A-04-0361-F before the Office of the Deputy Ombudsman for Luzon, charging petitioner with grave misconduct and dishonesty. As directed, petitioner filed a Counter-Affidavit5 and a Position Paper6 mainly raising the following defenses: (1) the audit team was not independent and competent; (2) the computation of her accountabilities was overstated and erroneous; (3) the audit team failed to verify documents such as bank reconciliation statements, general ledgers and cashbooks presented during the cash count; (4) the documents in support of the audit report were not signed, hence, were selfserving; (5) the cash shortage in the amount of P379,646.51 under the SEF and Trust Fund as well as the disallowed amount of P585,803.37 had no basis as the same pertained to a previous audit and, thus, should have been excluded from the computation of the total shortage; (6) the cash items amounting to P883,952.91 in the form of reimbursement expense receipts should not have been disallowed because they were actually received by individual payees; (7) petitioner's cash on hand accountability was overstated because a collection was not immediately recorded; and (8) the audit team erroneously credited petitioner's accounts to another cashier. In a Decision7 dated 8 November 2004, Deputy Ombudsman Victor C. Fernandez approved the recommendation of the Graft Investigation and Prosecution Officer to dismiss petitioner from service based on the existence of substantial evidence of a discrepancy in petitioner's account totaling P4,080,631.36. The said decision noted petitioner's supposed failure to file a counteraffidavit and position paper despite due notice. On 29 November 2004, petitioner filed an urgent motion8 stating that she complied with the directive to file a counter-affidavit and position paper and praying that the defenses therein be considered in reversing the 8 November 2004 decision. The motion was treated as a motion for reconsideration of the said decision. On 31 January 2005, Deputy Ombudsman Fernandez issued the first assailed Joint Order9 denying petitioner's urgent motion. Although the order acknowledged the erroneous statement in the 8 November 2004 Decision stating that petitioner failed to submit a counter-affidavit, nevertheless, it affirmed the Resolution and Decision both dated 8 November 2004. Deputy Ombudsman Fernandez ruled that petitioner's Counter-Affidavit and Position Paper did not present exculpatory arguments that would negate

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the allegation of discrepancy on petitioner's accounts. He also held that petitioner's concerns relating to the conduct of the audit should have been raised at the time of the audit or immediately thereafter, and that petitioner's failure to produce the amount of cash shortage despite demand created a presumption that she appropriated public funds under her custody for her own personal use.10 Petitioner sought reconsideration11 on grounds of newly discovered and material evidence and grave errors of fact and/or law prejudicial to her own interest. The purported newly discovered evidence consisted of petitioner's request for reconsideration of the audit report filed and still pending before the office of the audit team head, herein respondent Mawak, and letters sent by petitioner's counsel to the provincial auditor of Cavite questioning the audit and requesting a re-audit of petitioner's accounts. In the second assailed Joint Order dated 22 March 2005,12 Deputy Ombudsman Fernandez denied petitioner's motion for reconsideration. He reiterated that petitioner's allegations as regards the incompetence of the audit team and the errors in the audit report were matters which may be properly ventilated during trial. He explained that petitioner failed to produce the missing funds despite notice thereof creating a presumption that the same were appropriated for personal use and for the purpose of preliminary investigation, such findings warranted the filing of criminal charges against petitioner. The deputy ombudsman held that petitioner's belated request for re-audit could not be considered newly discovered evidence and denied the request for a formal investigation on the ground that petitioner was afforded due process when she filed her counter-affidavit and position paper.13 Petitioner elevated the matter to the Court of Appeals via a Petition for Review14 questioning the denial of her request for a formal investigation, the penalty of dismissal, and the sufficiency of the evidence against her. The Court of Appeals dismissed the petition in the assailed Decision dated 23 October 2006.15 It held that petitioner was not entitled to a formal investigation and it affirmed the deputy ombudsman's factual finding that petitioner was guilty of grave misconduct and dishonesty. The appellate court also denied petitioner's motion for reconsideration in a Resolution dated 30 January 2007.

Hence, the instant petition16 seeking the reversal of the Court of Appeals' decision on the following grounds: (1) the Court of Appeals failed to order a formal reinvestigation, to reopen and review the records of the administrative case, to consider newly discovered evidence attached to petitioner's motion for reconsideration of the deputy ombudsman's Decision and to consider material allegations in the motion for reconsideration of the assailed decision; (2) petitioner was able to overcome the presumption that she appropriated the missing funds for personal use; (3) the filing of the administrative case was baseless; and (4) the penalty of dismissal was unwarranted. The instant petition reiterates the issues brought up before the Court of Appeals, namely: whether petitioner was deprived of her right to due process, whether the penalty of dismissal is proper and whether petitioner's guilt for grave misconduct and dishonesty is supported by substantial evidence. Invoking her right to due process, petitioner, on one hand, insists that she is entitled to a formal investigation, citing the Administrative Code of 1987, Book V, Title I, Subtitle A, Section 48 (2)17 and (3).18 On the other hand, in support of its argument that the propriety of conducting a formal investigation rests on the sound discretion of the hearing officer, respondent COA, through the Office of the Solicitor General (OSG), relies on Administrative Order No. 07, as amended by Administrative Order No. 17, Rule III, Section 5,19 governing the procedure in administrative cases filed before the Office of the Ombudsman. The validity of Administrative Order No. 07, Rule III, Section 5 is not in dispute. However, petitioner argues that said provision is inferior to the provision in the Administrative Code which entitles the respondent to a formal investigation if he so desires. Petitioner's theory is erroneous. Administrative Order No. 07, as amended by Administrative Order No. 17, particularly governs the procedure in administrative proceedings before the Office of the Ombudsman. The Rules of Procedure of the Office of the Ombudsman was issued pursuant to the authority vested in the Office of the Ombudsman under Republic Act No. 6770, otherwise known as "The Ombudsman Act of 1989." When an administrative agency promulgates rules and regulations, it "makes" a new law with the force and effect of a valid law. Rules and regulations when promulgated in pursuance of

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the procedure or authority conferred upon the administrative agency by law, partake of the nature of a statute.20 On the other hand, the provisions in the Administrative Code cited by petitioner in support of her theory that she is entitled to a formal investigation apply only to administrative cases filed before the Civil Service Commission (CSC). In particular, Section 48(2) and Section 48(3) are subsumed under Subtitle A of Title I, which pertains to the CSC and to the procedure of administrative cases filed before the CSC. The administrative complaint against petitioner was filed before the Office of the Ombudsman, suggesting that a different set of procedural rules govern. And rightly so, the Deputy Ombudsman applied the provisions of Rules of Procedure of the Office of the Ombudsman in ruling that the prerogative to elect a formal investigation pertains to the hearing officer and not to petitioner. On various occasions,21 the Court has ruled on the primacy of special laws and of their implementing regulations over the Administrative Code of 1987 in settling controversies specifically subject of these special laws. For instance, in Hon. Joson v. Exec. Sec. Torres,22 the Court held that the Local Government Code of 1991, the Rules and Regulations Implementing the Local Government Code of 1991, and Administrative Order No. 23 (A.O. No. 23)23 govern administrative disciplinary proceedings against elective local officials, whereas the Rules of Court and the Administrative Code of 1987 apply in a suppletory character to all matters not provided in A.O. No. 23.24 The aforesaid ruling is based on the principle of statutory construction that where there are two statutes applicable to a particular case, that which is specially intended for the said case must prevail.25 More significantly, in Lapid v. Court of Appeals,26 the Court expressly upheld the applicability of The Ombudsman Act of 1989 and the implementing rules and regulations thereof to the exclusion of the Local Government Code and the Administrative Code of 1989 on the issue of the execution of the Ombudsman's decision pending appeal. The Court noted that petitioner therein was charged before the Office of the Ombudsman and accordingly, The Ombudsman Act of 1989 should apply exclusively. The Court explained, thus: There is no basis in law for the proposition that the provisions of the Administrative Code of 1987 and the Local Government Code on execution pending review should be applied suppletorily to the

provisions of the Ombudsman Act as there is nothing in the Ombudsman Act which provides for such suppletory application. xxx xxx xxx And while in one respect, the Ombudsman Law, the Administrative Code of 1987 and the Local Government Code are in pari materia insofar as the three laws relate or deal with public officers, the similarity ends there. It is a principle in statutory construction that where there are two statutes that apply to a particular case, that which was specially designed for the said case must prevail over the other. In the instant case, the acts attributed to petitioner could have been the subject of administrative disciplinary proceedings before the Office of the President under the Local Government Code or before the Office of the Ombudsman under the Ombudsman Act. Considering however, that petitioner was charged under the Ombudsman Act, it is this law alone which should govern his case.27 Thus, as between the Administrative Code of 1987 and Administrative Order No. 07, as amended, issued by the Office of the Ombudsman, the latter governs in this case which involves an administrative complaint filed with the Office of the Ombudsman and which raises the question of whether petitioner is entitled to a formal investigation as a matter of right. Even assuming the Administrative Code is applicable, still there is a formidable hindrance to petitioner's prayer for a formal investigation. The records show that petitioner sought a reinvestigation only as an afterthought, that is, after the deputy ombudsman had already rendered a decision on the administrative complaint. The reinvestigation should have been requested at the first opportunity but definitely before the rendition of a decision. As correctly pointed out by the OSG, the denial of petitioner's request for a formal investigation is not tantamount to a denial of her right to due process. Petitioner was required to file a counteraffidavit and position paper and later on, was given a chance to file two motions for reconsideration of the decision of the deputy ombudsman. The essence of due process in administrative proceedings is the opportunity to explain one's side or seek a reconsideration of the action or ruling complained of. As long as the parties are given the opportunity to be heard before judgment is rendered, the demands of due process are sufficiently met.28

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Petitioner's assertion that the Court of Appeals refused to reopen and review the case and ignored material issues and arguments in her motion for reconsideration of the 23 October 2006 Decision in violation of her right to due process, is quite hollow. The appellate court disposed of petitioner's contention that she was able to controvert the accusations against her in this wise: Regarding the second, third and fourth assigned errors, We judiciously believe that the issues raised therein are essentially factual in nature. The rule is that the findings of fact in administrative decisions must be respected as long as they are supported by substantial evidence, even if not overwhelming or preponderant. It is not for the reviewing court to weight the conflicting evidence, determine the credibility of the witnesses or otherwise substitute its own judgment for that of the administrative agency on the sufficiency of evidence. It has been consistently held that substantial evidence is all that is needed to support an administrative finding of fact which means such relevant evidence as a reasonable mind might accept to support a conclusion.29 Nothing prevents the Court of Appeals from adopting the factual findings and conclusion of the deputy ombudsman on the ground that the findings and conclusions were based on substantial evidence. Well-settled is the rule that the findings of fact of administrative bodies, if based on substantial evidence, are controlling on the reviewing authority. It is settled that it is not for the appellate court to substitute its own judgment for that of the administrative agency on the sufficiency of the evidence and the credibility of the witnesses. Administrative decisions on matters within their jurisdiction are entitled to respect and can only be set aside on proof of grave abuse of discretion, fraud or error of law.30 Guided by this principle, the appellate court correctly affirmed the finding of guilt for grave misconduct and dishonesty. Unfazed, petitioner now asks this Court to once again review the factual findings and conclusions of the Deputy Ombudsman which had already been affirmed by the Court of Appeals. Whether the finding of petitioner's guilt for grave misconduct and dishonesty is supported by substantial evidence, suffice it to say these are factual issues calling for a review of the records of the case. Clear and unmistakable is the rule that the Supreme Court is not a trier of facts. Just as well entrenched is the doctrine that pure issues of fact may not be the proper subject of appeal by certiorari under Rule 45 of the Revised Rules of Court as this mode of appeal is

generally confined to questions of law. Only questions of law, not questions of fact, may be raised before the Supreme Court in a petition for review under Rule 45. This Court cannot be tasked to go over the proofs presented by the petitioners in the lower courts and analyze, assess and weigh them to ascertain if the court a quo and the appellate court were correct in their appreciation of the evidence.31 Anyhow, the Court adopts the following findings of the Court of Appeals which are borne out by the records of the case: x x x It is a fact that an examination was conducted on the cash and accounts of respondent and that a shortage was found. While the latter argues that the auditors did not observe the proper procedure in conducting an examination and as a consequence of which, she was not able to justify the alleged shortage, we take note that the latter was given the opportunity to make such explanation when the auditors sent her a demand letter.32 On the penalty of dismissal which petitioner claims is too harsh, petitioner argues that the mitigating circumstances of this being her first offense and of the unreasonable length of time in filing the administrative case should be considered in her favor. Jurisprudence is replete with cases declaring that a grave offense cannot be mitigated by the fact that the accused is a first time offender or by the length of service of the accused. In Civil Service Commission v. Cortez,33 the Court held as follows: The gravity of the offense committed is also the reason why we cannot consider the "first offense" circumstance invoked by respondent. In several cases, we imposed the heavier penalty of dismissal or a fine of more than P20,000.00, considering the gravity of the offense committed, even if the offense charged was respondent's first offense. Thus, in the present case, even though the offense respondent was found guilty of was her first offense, the gravity thereof outweighs the fact that it was her first offense.34 Also, in Concerned Employees v. Nuestro,35 a court employee charged with and found guilty of dishonesty for falsification was meted the penalty of dismissal notwithstanding the length of her service in view of the gravity of the offense charged. To end, it must be stressed that dishonesty and grave misconduct have always been and should remain anathema in the civil service.

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They inevitably reflect on the fitness of a civil servant to continue in office. When an officer or employee is disciplined, the object sought is not the punishment of such officer or employee but the improvement of the public service and the preservation of the public's faith and confidence in the government.36 WHEREFORE, the instant petition for review on certiorari is DENIED. The Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 89539 are hereby AFFIRMED. Costs against petitioner. SO ORDERED.

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G.R. No. 168617

February 19, 2007

BERNADETTE L. ADASA, petitioner, vs. CECILLE S. ABALOS, Respondent. DECISION CHICO-NAZARIO, J.: This Petition for Review under Rule 45 of the Rules of Court, filed by petitioner Bernadette L. Adasa, seeks to nullify and set aside the 21 July 2004 Decision1 and 10 June 2005 Resolution2 of the Court of Appeals in CA-G.R. SP No. 76396 which nullified the Resolutions of the Department of Justice (DOJ). The Resolutions of the DOJ reversed and set aside the Resolution of the Office of the City Prosecutor of Iligan City, which found on reinvestigation probable cause against petitioner, and directed the Office of the City Prosecutor of Iligan City to withdraw the information for Estafa against petitioner. The instant case emanated from the two complaints-affidavits filed by respondent Cecille S. Abalos on 18 January 2001 before the Office of the City Prosecutor of Iligan City, against petitioner for Estafa. Respondent alleged in the complaints-affidavits that petitioner, through deceit, received and encashed two checks issued in the name of respondent without respondents knowledge and consent and that despite repeated demands by the latter, petitioner failed and refused to pay the proceeds of the checks. On 23 March 2001, petitioner filed a counter-affidavit admitting that she received and encashed the two checks issued in favor of respondent. In her Supplemental Affidavit filed on 29 March 2001, petitioner, however, recanted and alleged instead that it was a certain Bebie Correa who received the two checks which are the subject matter of the complaints and encashed the same; and that said Bebie Correa left the country after misappropriating the proceeds of the checks.

On 25 April 2001, a resolution was issued by the Office of the City Prosecutor of Iligan City finding probable cause against petitioner and ordering the filing of two separate Informations for Estafa Thru Falsification of Commercial Document by a Private Individual, under Article 315 in relation to Articles 171 and 172 of the Revised Penal Code, as amended. Consequently, two separate criminal cases were filed against petitioner docketed as Criminal Cases No. 8781 and No. 8782, raffled to Branches 4 and 5, Regional Trial Court of Iligan City, respectively. This instant petition pertains only to Criminal Case No. 8782. On 8 June 2001, upon motion of the petitioner, the trial court in Criminal Case No. 8782 issued an order directing the Office of the City Prosecutor of Iligan City to conduct a reinvestigation. After conducting the reinvestigation, the Office of the City Prosecutor of Iligan City issued a resolution dated 30 August 2001, affirming the finding of probable cause against petitioner. Meanwhile, during her arraignment on 1 October 2001 in Criminal Case No. 8782, petitioner entered an unconditional plea of not guilty.3 Dissatisfied with the finding of the Office of the City Prosecutor of Iligan City, petitioner filed a Petition for Review before the DOJ on 15 October 2001. In a Resolution dated 11 July 2002, the DOJ reversed and set aside the 30 August 2001 resolution of the Office of the City Prosecutor of Iligan City and directed the said office to withdraw the Information for Estafa against petitioner. The said DOJ resolution prompted the Office of the City Prosecutor of Iligan City to file a "Motion to Withdraw Information" on 25 July 2002. On 26 July 2002, respondent filed a motion for reconsideration of said resolution of the DOJ arguing that the DOJ should have dismissed outright the petition for review since Section 7 of DOJ Circular No. 70 mandates that when an accused has already been arraigned and the aggrieved party files a petition for review before the DOJ, the Secretary of Justice cannot, and should not take cognizance of the petition, or even give due course thereto, but

36

instead deny it outright. Respondent claimed Section 12 thereof mentions arraignment as one of the grounds for the dismissal of the petition for review before the DOJ. In a resolution dated 30 January 2003, the DOJ denied the Motion for Reconsideration opining that under Section 12, in relation to Section 7, of DOJ Circular No. 70, the Secretary of Justice is not precluded from entertaining any appeal taken to him even where the accused has already been arraigned in court. This is due to the permissive language "may" utilized in Section 12 whereby the Secretary has the discretion to entertain an appealed resolution notwithstanding the fact that the accused has been arraigned. Meanwhile, on 27 February 2003, the trial court issued an order granting petitioners "Motion to Withdraw Information" and dismissing Criminal Case No. 8782. No action was taken by respondent or any party of the case from the said order of dismissal. Aggrieved by the resolution of the DOJ, respondent filed a Petition for Certiorari before the Court of Appeals. Respondent raised the following issues before the appellate court: 1. Whether or not the Department of Justice gravely abused its discretion in giving due course to petitioners petition for review despite its having been filed after the latter had already been arraigned; 2. Whether or not there is probable cause that the crime of estafa has been committed and that petitioner is probably guilty thereof; 3. Whether or not the petition before the Court of Appeals has been rendered moot and academic by the order of the Regional Trial Court dismissing Criminal Case No. 8782. The Court of Appeals in a Decision dated 21 July 2004 granted respondents petition and reversed the Resolutions of the DOJ dated 11 July 2002 and 30 January 2003. In resolving the first issue, the Court of Appeals, relying heavily on Section 7 of DOJ Circular No. 70 which states "[i]f an information has been filed in court pursuant to the appealed resolution, the petition shall not be given due course if the accused had already been arraigned," ruled that since petitioner was arraigned before she filed the petition for review with the DOJ, it was imperative for the DOJ to dismiss such petition. It added that when petitioner

pleaded to the charge, she was deemed to have waived her right to reinvestigation and right to question any irregularity that surrounds it. Anent the second issue, the Court of Appeals declared that the existence of probable cause or the lack of it, cannot be dealt with by it since factual issues are not proper subjects of a Petition for Certiorari. In disposing of the last issue, the Court of Appeals held that the order of the trial court dismissing the subject criminal case pursuant to the assailed resolutions of the DOJ did not render the petition moot and academic. It said that since the trial courts order relied solely on the resolutions of the DOJ, said order is void as it violated the rule which enjoins the trial court to assess the evidence presented before it in a motion to dismiss and not to rely solely on the prosecutors averment that the Secretary of Justice had recommended the dismissal of the case. Dissatisfied by the Court of Appeals ruling, petitioner filed a Motion for Reconsideration setting forth the following grounds: 1. that the over-all language of Sections 7 and 12 of Department Circular No. 70 is permissive and directory such that the Secretary of Justice may entertain an appeal despite the fact that the accused had been arraigned; 2. that the contemporaneous construction by the Secretary of Justice should be given great weight and respect; 3. that Section 7 of the Circular applies only to resolutions rendered pursuant to a preliminary investigation, not on a reinvestigation; 4. that the trial courts order of dismissal of the criminal case has rendered the instant petition moot and academic; 5. that her arraignment was null and void it being conducted despite her protestations; and 6. that despite her being arraigned, the supposed waiver of her right to preliminary investigation has been nullified or recalled by virtue of the trial courts order of reinvestigation.4 The Court of Appeals stood firm by its decision. This time, however, it tried to construe Section 7 side by side with Section 12 of DOJ Circular No. 70 and attempted to reconcile these two provisions.

37

According to the appellate court, the phrase "shall not" in paragraph two, first sentence of Section 7 of subject circular, to wit: If an information has been filed in court pursuant to the appealed resolution, the petition shall not be given due course if the accused had already been arraigned. x x x. (Emphasis supplied.) employed in the circular denotes a positive prohibition. Applying the principle in statutory construction - that when a statute or provision contains words of positive prohibition, such as "shall not," "cannot," or "ought not" or which is couched in negative terms importing that the act shall not be done otherwise than designated, that statute or provision is mandatory, thus rendering the provision mandatory it opined that the subject provision simply means that the Secretary of Justice has no other course of action but to deny or dismiss a petition before him when arraignment of an accused had already taken place prior to the filing of the petition for review. On the other hand, reading Section 12 of the same circular which reads: The Secretary may reverse, affirm or modify the appealed resolution. He may, motu proprio or upon motion, dismiss the petition for review on any of the following grounds: xxxx (e) That the accused had already been arraigned when the appeal was taken; x x x. the Court of Appeals opined that the permissive word "may" in Section 12 would seem to imply that the Secretary of Justice has discretion to entertain an appeal notwithstanding the fact that the accused has been arraigned. This provision should not be treated separately, but should be read in relation to Section 7. The two provisions, taken together, simply meant that when an accused was already arraigned when the aggrieved party files a petition for review, the Secretary of Justice cannot, and should not take cognizance of the petition, or even give due course thereto, but instead dismiss or deny it outright. The appellate court added that the word "may" in Section 12 should be read as "shall" or "must" since such construction is absolutely necessary to give effect to the apparent intention of the rule as gathered from the context.

As to the contemporaneous construction of the Secretary of Justice, the Court of Appeals stated that the same should not be given weight since it was erroneous. Anent petitioners argument that Section 7 of the questioned circular applies only to original resolutions that brought about the filing of the corresponding informations in court, but not to resolutions rendered pursuant to a motion for reinvestigation, the appellate court simply brushed aside such contention as having no basis in the circular questioned. It also rejected petitioners protestation that her arraignment was forced upon her since she failed to present any evidence to substantiate the same. It is petitioners contention that despite her being arraigned, the supposed waiver of her right to preliminary investigation has been nullified by virtue of the trial courts order or reinvestigation. On this score, the Court of Appeals rebuffed such argument stating that there was no "supposed waiver of preliminary investigation" to speak of for the reason that petitioner had actually undergone preliminary investigation. Petitioner remained unconvinced with the explanations of the Court of Appeals. Hence, the instant petition. Again, petitioner contends that the DOJ can give due course to an appeal or petition for review despite its having been filed after the accused had already been arraigned. It asserts that the fact of arraignment of an accused before the filing of an appeal or petition for review before the DOJ "is not at all relevant" as the DOJ can still take cognizance of the appeal or Petition for Review before it. In support of this contention, petitioner set her sights on the ruling of this Court in Crespo v. Mogul,5 to wit: The rule therefore in this jurisdiction is that once a complaint or information is filed in Court any disposition of the case as to its dismissal or the conviction or acquittal of the accused rests in the sound discretion of the Court. Although the fiscal retains the direction and control of the prosecution of criminal cases even while the case is already in Court he cannot impose his opinion on the trial court. The Court is the best and sole judge on what to do with the case before it. The determination of the case is within its exclusive jurisdiction and competence. A motion to dismiss the

38

case filed by the fiscal should be addressed to the Court who has the option to grant or deny the same. It does not matter if this is done before or after the arraignment of the accused or that the motion was filed after a reinvestigation or upon instructions of the Secretary of Justice who reviewed the records of the investigation. (Emphasis supplied.) To bolster her position, petitioner cites Roberts v. Court of Appeals,6 which stated: There is nothing in Crespo vs. Mogul which bars the DOJ from taking cognizance of an appeal, by way of a petition for review, by an accused in a criminal case from an unfavorable ruling of the investigating prosecutor. It merely advised the DOJ to, "as far as practicable, refrain from entertaining a petition for review or appeal from the action of the fiscal, when the complaint or information has already been filed in Court. x x x. (Emphasis supplied.) Petitioner likewise invokes Marcelo v. Court of Appeals7 where this Court declared: Nothing in the said ruling forecloses the power or authority of the Secretary of Justice to review resolutions of his subordinates in criminal cases. The Secretary of Justice is only enjoined to refrain as far as practicable from entertaining a petition for review or appeal from the action of the prosecutor once a complaint or information is filed in court. In any case, the grant of a motion to dismiss, which the prosecution may file after the Secretary of Justice reverses an appealed resolution, is subject to the discretion of the court. The Court is unconvinced. A cursory reading of Crespo v. Mogul reveals that the ruling therein does not concern the issue of an appeal or petition for review before the DOJ after arraignment. Verily, the pronouncement therein has to do with the filing of a motion to dismiss and the courts discretion to deny or grant the same. As correctly pointed out by respondent, the emphasized portion in the Crespo ruling is a parcel of the entire paragraph which relates to the duty and jurisdiction of the trial court to determine for itself whether or not to dismiss a case before it, and which states that such duty comes into play regardless of whether such motion is filed before or after arraignment and upon whose instructions. The allusion to the Secretary of Justice as reviewing the records of investigation and giving instructions for the filing of a motion to dismiss in the cited

ruling does not take into consideration of whether the appeal or petition before the Secretary of Justice was filed after arraignment. Significantly, in the Crespo case, the accused had not yet been arraigned when the appeal or petition for review was filed before the DOJ. Undoubtedly, petitioners reliance on the said case is misplaced. Also unavailing is petitioners invocation of the cases of Roberts v. Court of Appeals and Marcelo v. Court of Appeals. As in Crespo v. Mogul, neither Roberts v. Court of Appeals nor Marcelo v. Court of Appeals took into account of whether the appeal or petition before the Secretary of Justice was filed after arraignment. Just like in the Crespo case, the accused in both Roberts v. Court of Appeals and Marcelo v. Court of Appeals had not yet been arraigned when the appeal or petition for review was filed before the DOJ. Moreover, petitioner asserts that the Court of Appeals interpretation of the provisions of DOJ Circular No. 70 violated three basic rules in statutory construction. First, the rule that the provision that appears last in the order of position in the rule or regulation must prevail. Second, the rule that the contemporaneous construction of a statute or regulation by the officers who enforce it should be given weight. Third, petitioner lifted a portion from Agpalos Statutory Construction8 where the word "shall" had been construed as a permissive, and not a mandatory language. The all too-familiar rule in statutory construction, in this case, an administrative rule9 of procedure, is that when a statute or rule is clear and unambiguous, interpretation need not be resorted to.10 Since Section 7 of the subject circular clearly and categorically directs the DOJ to dismiss outright an appeal or a petition for review filed after arraignment, no resort to interpretation is necessary. Petitioners reliance to the statutory principle that "the last in order of position in the rule or regulation must prevail" is not applicable. In addition to the fact that Section 7 of DOJ Circular No. 70 needs no construction, the cited principle cannot apply because, as correctly observed by the Court of Appeals, there is no irreconcilable conflict between Section 7 and Section 12 of DOJ Circular No. 70. Section 7 of the circular provides: SECTION 7. Action on the petition. The Secretary of Justice may dismiss the petition outright if he finds the same to be patently

39

without merit or manifestly intended for delay, or when the issues raised therein are too unsubstantial to require consideration. If an information has been filed in court pursuant to the appealed resolution, the petition shall not be given due course if the accused had already been arraigned. Any arraignment made after the filing of the petition shall not bar the Secretary of Justice from exercising his power of review. (Italics supplied.) On the other hand, Section 12 of the same circular states: SECTION 12. Disposition of the Appeal. The Secretary may reverse, affirm or modify the appealed resolution. He may, motu proprio or upon motion, dismiss the petition for review on any of the following grounds: (a) That the petition was filed beyond the period prescribed in Section 3 hereof; (b) That the procedure or any of the requirements herein provided has not been complied with; (c) That there is no showing of any reversible error; (d) That the appealed resolution is interlocutory in nature, except when it suspends the proceedings based on the alleged existence of a prejudicial question; (e) That the accused had already been arraigned when the appeal was taken; (f) That the offense has already prescribed; and (g) That other legal or factual grounds exist to warrant a dismissal. (Emphases supplied.) It is noteworthy that the principle cited by petitioner reveals that, to find application, the same presupposes that "one part of the statute cannot be reconciled or harmonized with another part without nullifying one in favor of the other." In the instant case, however, Section 7 is neither contradictory nor irreconcilable with Section 12. As can be seen above, Section 7 pertains to the action on the petition that the DOJ must take, while Section 12 enumerates the options the DOJ has with regard to the disposition of a petition for review or of an appeal.

As aptly observed by respondent, Section 7 specifically applies to a situation on what the DOJ must do when confronted with an appeal or a petition for review that is either clearly without merit, manifestly intended to delay, or filed after an accused has already been arraigned, i.e., he may dismiss it outright if it is patently without merit or manifestly intended to delay, or, if it was filed after the acccused has already been arraigned, the Secretary shall not give it due course. Section 12 applies generally to the disposition of an appeal. Under said section, the DOJ may take any of four actions when disposing an appeal, namely: 1. reverse the appealed resolution; 2. modify the appealed resolution; 3. affirm the appealed resolution; 4. dismiss the appeal altogether, depending on the circumstances and incidents attendant thereto. As to the dismissal of a petition for review or an appeal, the grounds are provided for in Section 12 and, consequently, the DOJ must evaluate the pertinent circumstances and the facts of the case in order to determine which ground or grounds shall apply.

Thus, when an accused has already been arraigned, the DOJ must not give the appeal or petition for review due course and must dismiss the same. This is bolstered by the fact that arraignment of the accused prior to the filing of the appeal or petition for review is set forth as one of the grounds for its dismissal. Therefore, in such instance, the DOJ, noting that the arraignment of an accused prior to the filing of an appeal or petition for review is a ground for dismissal under Section 12, must go back to Section 7 and act upon as mandated therein. In other words, the DOJ must not give due course to, and must necessarily dismiss, the appeal. Likewise, petitioners reliance on the principle of contemporary construction, i.e., the DOJ is not precluded from entertaining appeals where the accused had already been arraigned, because it exercises discretionary power, and because it promulgated itself the circular in question, is unpersuasive. As aptly ratiocinated by the Court of Appeals:

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True indeed is the principle that a contemporaneous interpretation or construction by the officers charged with the enforcement of the rules and regulations it promulgated is entitled to great weight by the court in the latters construction of such rules and regulations. That does not, however, make such a construction necessarily controlling or binding. For equally settled is the rule that courts may disregard contemporaneous construction in instances where the law or rule construed possesses no ambiguity, where the construction is clearly erroneous, where strong reason to the contrary exists, and where the court has previously given the statute a different interpretation. If through misapprehension of law or a rule an executive or administrative officer called upon to implement it has erroneously applied or executed it, the error may be corrected when the true construction is ascertained. If a contemporaneous construction is found to be erroneous, the same must be declared null and void. Such principle should be as it is applied in the case at bar.11 Petitioners posture on a supposed exception to the mandatory import of the word "shall" is misplaced. It is petitioners view that the language of Section 12 is permissive and therefore the mandate in Section 7 has been transformed into a matter within the discretion of the DOJ. To support this stance, petitioner cites a portion of Agpalos Statutory Construction which reads: For instance, the word "shall" in Section 2 of Republic Act 304 which states that "banks or other financial institutions owned or controlled by the Government shall, subject to availability of funds xxx, accept at a discount at not more than two per centum for ten years such (backpay) certificate" implies not a mandatory, but a discretionary, meaning because of the phrase "subject to availability of funds." Similarly, the word "shall" in the provision to the effect that a corporation violating the corporation law "shall, upon such violation being proved, be dissolved by quo warranto proceedings" has been construed as "may."12 After a judicious scrutiny of the cited passage, it becomes apparent that the same is not applicable to the provision in question. In the cited passage, the word "shall" departed from its mandatory import connotation because it was connected to certain provisos/conditions: "subject to the availability of funds" and "upon such violation being proved." No such proviso/condition, however, can be found in Section 7 of the subject circular. Hence, the word "shall" retains its mandatory import.

At this juncture, the Court of Appeals disquisition in this matter is enlightening: Indeed, if the intent of Department Circular No. 70 were to give the Secretary of Justice a discretionary power to dismiss or to entertain a petition for review despite its being outrightly dismissible, such as when the accused has already been arraigned, or where the crime the accused is being charged with has already prescribed, or there is no reversible error that has been committed, or that there are legal or factual grounds warranting dismissal, the result would not only be incongruous but also irrational and even unjust. For then, the action of the Secretary of Justice of giving due course to the petition would serve no purpose and would only allow a great waste of time. Moreover, to give the second sentence of Section 12 in relation to its paragraph (e) a directory application would not only subvert the avowed objectives of the Circular, that is, for the expeditious and efficient administration of justice, but would also render its other mandatory provisions - Sections 3, 5, 6 and 7, nugatory.13 In her steadfast effort to champion her case, petitioner contends that the issue as to whether the DOJ rightfully entertained the instant case, despite the arraignment of the accused prior to its filing, has been rendered moot and academic with the order of dismissal by the trial court dated 27 February 2003. Such contention deserves scant consideration. It must be stressed that the trial court dismissed the case precisely because of the Resolutions of the DOJ after it had, in grave abuse of its discretion, took cognizance of the petition for review filed by petitioner. Having been rendered in grave abuse of its discretion, the Resolutions of the DOJ are void. As the order of dismissal of the trial court was made pursuant to the void Resolutions of the DOJ, said order was likewise void. The rule in this jurisdiction is that a void judgment is a complete nullity and without legal effect, and that all proceedings or actions founded thereon are themselves regarded as invalid and ineffective for any purpose.14 That respondent did not file a motion for reconsideration or appeal from the dismissal order of the trial court is of no moment. Since the dismissal was void, there was nothing for respondent to oppose. Petitioner further asserts that Section 7 of DOJ Circular No. 70 applies only to appeals from original resolution of the City Prosecutor and does not apply in the instant case where an appeal is interposed by petitioner from the Resolution of the City

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Prosecutor denying her motion for reinvestigation. This claim is baseless.1avvphi1.net A reading of Section 7 discloses that there is no qualification given by the same provision to limit its application to appeals from original resolutions and not to resolutions on reinvestigation. Hence, the rule stating that "when the law does not distinguish, we must not distinguish"15 finds application in this regard. Petitioner asserts that her arraignment was null and void as the same was improvidently conducted. Again, this contention is without merit. Records reveal that petitioners arraignment was without any restriction, condition or reservation.16 In fact she was assisted by her counsels Atty. Arthur Abudiente and Atty. Maglinao when she pleaded to the charge.17 Moreover, the settled rule is that when an accused pleads to the charge, he is deemed to have waived the right to preliminary investigation and the right to question any irregularity that surrounds it.18 This precept is also applicable in cases of reinvestigation as well as in cases of review of such reinvestigation. In this case, when petitioner unconditionally pleaded to the charge, she effectively waived the reinvestigation of the case by the prosecutor as well as the right to appeal the result thereof to the DOJ Secretary. Thus, with the arraignment of the petitioner, the DOJ Secretary can no longer entertain the appeal or petition for review because petitioner had already waived or abandoned the same. Lastly, while there is authority19 permitting the Court to make its own determination of probable cause, such, however, cannot be made applicable in the instant case. As earlier stated, the arraignment of petitioner constitutes a waiver of her right to preliminary investigation or reinvestigation. Such waiver is tantamount to a finding of probable cause. For this reason, there is no need for the Court to determine the existence or non-existence of probable cause. Besides, under Rule 45 of the Rules of Court, only questions of law may be raised in, and be subject of, a petition for review on certiorari since this Court is not a trier of facts. This being the case, this Court cannot review the evidence adduced by the parties before the prosecutor on the issue of the absence or presence of probable cause.20

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated 21 July 2004 and its Resolution dated 10 June 2005 in CA-G.R. SP No. 76396 are AFFIRMED. Costs against petitioner. SO ORDERED.

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G.R. No. 166735

November 23, 2007

SPS. NEREO & NIEVA DELFINO, Petitioners, vs. ST. JAMES HOSPITAL, INC., and THE HONORABLE RONALDO ZAMORA, EXECUTIVE SECRETARY, OFFICE OF THE PRESIDENT. Respondents. RESOLUTION CHICO-NAZARIO, J.: Before Us for Resolution is the Motion for Reconsideration of private respondent St. James Hospital, Inc., seeking the reversal of Our Decision dated 5 September 2006. Respondent assails the Decision on the ground that the Court had erroneously interpreted the 1991 Comprehensive Land Use Plan (CLUP) or the Comprehensive Zoning Ordinance of the Municipality of Santa Rosa, Laguna, in ruling that the St. James Hospital is a non-conforming structure under the 1991 Zoning Ordinance and that the expansion of the St. James Hospital into a four-storey, forty-bed capacity medical institution within the Mariquita Pueblo Subdivision is prohibited under the provisions of the 1991 Zoning Ordinance. Moreover, respondent now contends that the case must now be decided in accordance with the latest Zoning Ordinance passed in 1999 or the Santa Rosa Zoning Ordinance which was only submitted as evidence in the instant Motion for Reconsideration. Respondent now claims that the legislative history of the 1991 Zoning Ordinance shows that commercial and institutional uses were expressly allowed in Sec. 2, par. 1 of said Ordinance as it retained uses that are commercial and institutional as well as recreational in character and those for the maintenance of ecological balance. Thus, respondent postulates that even if parks, playgrounds and recreation centers which were expressly provided for in the 1981 Zoning Ordinance under letters (h) and (k) were excluded in the enumeration in the 1991 Zoning Ordinance, the same cannot, by any stretch of logic, be interpreted to mean that they are no longer allowed. On the contrary, respondent explains that what appears is the fact that parks, playgrounds, and recreation centers are deemed to have been covered by Sec. 2, par. 1 of the 1991 Zoning Ordinance which speaks of "x x x other spaces designed for recreational pursuit and maintenance of ecological balance x x x." Hence, respondent concludes that the

same reading applies in the non-inclusion of the words hospitals, clinics, school, churches and other places of worship, and drugstores which cannot be interpreted to mean that the aforesaid uses are to be deemed non-conforming under the 1991 Zoning Ordinance as these uses are allegedly covered by the clause allowing for institutional and commercial uses. Arising from this interpretation, respondent maintains that the Court erred in applying Sec. 1 of Article X of the 1991 Zoning Ordinance which pertains only to existing non-conforming uses and buildings, since, according to respondent, the St. James Hospital and its expansion are consistent with the uses allowed under the zoning ordinance. To address this matter, we deem it necessary to reiterate our discussion in our Decision dated 5 September 2006, wherein we have thoroughly examined the pertinent provisions of the 1981 and 1991 Zoning Ordinances, to wit: Likewise, it must be stressed at this juncture that a comprehensive scrutiny of both Ordinances will disclose that the uses formerly allowed within a residential zone under the 1981 Zoning Ordinance such as schools, religious facilities and places of worship, and clinics and hospitals have now been transferred to the institutional zone under the 1991 Zoning Ordinance1 . This clearly demonstrates the intention of the Sangguniang Bayan to delimit the allowable uses in the residential zone only to those expressly enumerated under Section 2, Article VI of the 1991 Zoning Ordinance, which no longer includes hospitals. It is lamentable that both the Office of the President and the Court of Appeals gave undue emphasis to the word "institutional" as mentioned in Section 2, Article VI of the 1991 Zoning Ordinance and even went through great lengths to define said term in order to include hospitals under the ambit of said provision. However, they neglected the fact that under Section 4, Article VI of said Ordinance2 , there is now another zone, separate and distinct from a residential zone, which is classified as "institutional", wherein health facilities, such as hospitals, are expressly enumerated among those structures allowed within said zone. Moreover, both the Office of the President and the appellate court failed to consider that any meaning or interpretation to be given to the term "institutional" as used in Section 2, Article VI must be correspondingly limited by the explicit enumeration of allowable

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uses contained in the same section. Whatever meaning the legislative body had intended in employing the word "institutional" must be discerned in light of the restrictive enumeration in the said article. Under the legal maxim expression unius est exclusion alterius, the express mention of one thing in a law, means the exclusion of others not expressly mentioned3 . Thus, in interpreting the whole of Section 2, Article VI, it must be understood that in expressly enumerating the allowable uses within a residential zone, those not included in the enumeration are deemed excluded. Hence, since hospitals, among other things, are not among those enumerated as allowable uses within the residential zone, the only inference to be deduced from said exclusion is that said hospitals have been deliberately eliminated from those structures permitted to be constructed within a residential area in Santa Rosa, Laguna. Furthermore, according to the rule of casus omissus in statutory construction, a thing omitted must be considered to have been omitted intentionally. Therefore, with the omission of the phrase "hospital with not more than ten capacity" in the new Zoning Ordinance, and the corresponding transfer of said allowable usage to another zone classification, the only logical conclusion is that the legislative body had intended that said use be removed from those allowed within a residential zone. Thus, the construction of medical institutions, such as St. James Hospital, within a residential zone is now prohibited under the 1991 Zoning Ordinance. xxxx Having concluded that the St. James Hospital is now considered a non-conforming structure under the 1991 Zoning Ordinance, we now come to the issue of the legality of the proposed expansion of said hospital into a four-storey, forty-bed medical institution. We shall decide this said issue in accordance with the provisions of the 1991 Zoning Ordinance relating to non-conforming buildings, the applicable law at the time of the proposal. As stated in Section 1 of Article X of the 1991 Zoning Ordinance: Section 1. EXISTING NON-CONFORMING USES AND BUILDINGS. The lawful uses of any building, structure or land at the point of adoption or amendment of this Ordinance may be continued, although such does not conform with the provisions of this Ordinance. 1. That no non-conforming use shall be enlarged or increased or extended to occupy a greater area or land that has already been

occupied by such use at the time of the adoption of this Ordinance, or moved in whole or in part to any other portion of the lot parcel of land where such non-conforming use exist at the time of the adoption of this Ordinance.4 (Emphasis ours.) It is clear from the abovequoted provision of the 1991 Zoning Ordinance that the expansion of a non-conforming building is prohibited. Hence, we accordingly resolve that the expansion of the St. James Hospital into a four-storey, forty-bed capacity medical institution within the Mariquita Pueblo Subdivision as prohibited under the provisions of the 1991 Zoning Ordinance. From our discussion above, it is clear that the position of respondent is erroneous.1awp++i1 As stated in our Decision, a comprehensive scrutiny of both zoning ordinances will disclose that the uses formerly allowed within a residential zone under the 1981 Zoning Ordinance such as schools, religious facilities and places of worship, and clinics and hospitals have been transferred to the institutional zone under the 1991 Zoning Ordinance. This clearly indicates that the allowable uses in the residential zone have been delimited only to those expressly enumerated under Section 2, Article VI of the 1991 Zoning Ordinance, which no longer includes hospitals. With respect to respondents claim that the controversy must now be decided in light of latest Zoning Ordinance passed in 1999 or the Santa Rosa Zoning Ordinance, it must be stressed at this point that the present case arose in 1994 when respondent St. James Hospital, Inc., applied for a permit with the Housing and Land Use Regulatory Board (HLURB) to expand its hospital into a four-storey, forty-bed capacity medical institution, at which time, the zoning ordinance in effect was the 1991 Zoning Ordinance. It is a wellsettled rule that the law in force at the time of the occurrence of the cause of action is the applicable law notwithstanding its subsequent amendment or repeal.5 Hence, in resolving the instant case, the zoning ordinance to be used in interpreting the legality or illegality of said expansion is that which was in full force and effect at the time of the application for expansion which is the 1991 Zoning Ordinance, regardless of its subsequent amendment or repeal by the passage of the 1999 Zoning Ordinance. Moreover, pleadings, arguments and evidence were submitted by both parties as regards the provisions of the 1991 Zoning Ordinance only. Apparently, the 1999 Zoning Ordinance was already enacted and in effect by the time the petitioners appealed

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their case to this Court on 7 February 2005. Petitioners, however, in their appeal, consistently maintained their argument that the expansion undertaken by the respondent in 1994 violated the 1991 Zoning Ordinance, and respondent likewise limited itself to the defense that it had complied therewith. It bears to emphasize that respondent called the attention of this Court to the enactment of the 1999 Zoning Ordinance and asserted its compliance with this latest zoning ordinance only in its Motion for Reconsideration before this Court. Points of law, theories, issues and arguments not adequately brought to the attention of the trial court need not be, and ordinarily will not be, considered by a reviewing court as they cannot be raised for the first time on appeal because this would be offensive to the basic rules of fair play, justice and due process.6 This rule holds even more true when the points of law, theories, issues and arguments are belatedly raised for the first time in the motion for reconsideration of this Courts decision. Accordingly, the Motion for Reconsideration of respondent St. James Hospital, Inc., is hereby DENIED. However, this is without prejudice to respondent St. James Hospital, Inc.s reapplication for expansion in accordance with the requirements under zoning ordinances now in effect. SO ORDERED.

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