Sunday, November 14, 2010 11:07 PM Remedial Law Review University of the Philippines College of Law Second Semester Yr 2010-2011

Prof. TJ Herbosa Jurisdiction Subject matter jurisdiction Allegations of complaint determine jurisdiction – Hasegawa et al v. Kitamura GR 149177 Nov 23, 2007 Jurisdiction by estoppel – Figueroa v. People, GR 147407, Jul 14, 2008; Payment of filing fees - Ruby Shelter v. Hon. Formaran GR 174914 Feb 10, 2009 Distinguished from venue – Chavez v. CA GR 125813 Feb 6, 2007 Doctrine of non-interference – Springfield v. RTC Judge GR 142626 Feb 6, 2007 Primary jurisdiction – Sta. Ana v. Carpo GR 164340 Nov 28, 2008 Supreme Court Philippine Constitution, Article VIII Power of judicial review – Garcillano v. House GR 170338 Dec 23, 2008 Doctrine of stare decisis – Lazatin v. Desierto GR 147097 June 5, 2009 Hierarchy of courts – Ferdinand Cruz v. Priscilla Mijares et al GR 154404 Sep 11, 2008; First United v. Poro Point GR 178799 Jan 19, 2009 Appellate jurisdiction – First Lepanto Ceramics, Inc. v. CA, GR 110571, Mar 10, 1994 SC Power of administrative supervision – Sarah Ampong v. CSC GR 167916 Aug 26, 2008
Court of Appeals BP 129, as amended by RA 7902, Sec. 9 and RA 8246 Question of law , fact or both – CGP Transport v. PU Leasing GR 164547 Mar 28, 2007

Court of Tax Appeals RA 9282
Sandiganbayan RA 8249 Regional Trial Courts BP 129, as amended by RA 7691, Sec. 5 Incapable of pecuniary estimation - Bokingco v. CA, GR No. 161739, May 4, 2006; RCP v. CA GR 136109 Aug 1, 2002; Recovery of possession – Honorio Bernardo v. Heirs of Eusebio Villegas GR 183357 Mar 15, 2010; Encarnacion v. Amigo, GR No. 169793 Sep 15, 2006 Issue of constitutionality – Planters Products v. Fertiphil GR 166006 Mar 14, 2008 Quasi judicial agency – Badillo v. CA GR 131903 June 26, 2008 CIAC – Fort Bonifacio v Domingo GR 180768 Feb 27, 2009 RTC acting as Special Agrarian Court – Land Bank v. Ralla Balista GR 164631 Jun 26, 2009 Default jurisdiction – Mun of Pateros v. CA GR 157714 Jun 16, 2009 HLURB – Tricorp v. CA GR 165742 Jun 30, 2009;Ma. Luisa Dazon v. Kenneth Yap and People Jan 15, 2010 Family Courts Sec 5, RA 8369 Family Courts Act of 1997 A.M. No. 02-11-10-SC Rules on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable Marriages A.M. No. 02-11-11 Rule on Legal Separation A.M. No. 02-11-12 Rule on Provisional Orders A.M. No. 03-04-04-SC Rule on Custody of Minors and Writ of Habeas Corpus in Relation to Custody of Minors A.M. No. 03-02-05-SC Rule on Guardianship of Minors A.M. No. 02-6-02-SC Rule on Adoption

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A.M. No. 02-6-02-SC Rule on Adoption Summary Proceedings under the Family Code, Title XI, Chapters 1 to 3 on separation in fact between husband and wife or abandonment by one of the other and incidents involving parental authority; Chapter 4 on Art. 41 (declaration of a spouse as presumptively dead), Art. 51(action of a child for presumptive legitime), Art. 69 (judicial declaration of family domicile in case of disagreement of the spouses), Art. 73 (spouse’s objection to the profession of the other spouse), Arts. 96 and 124 (annulment of husband’s decision in the administration and enjoyment of community or conjugal property; appointment of spouse as sole administrator except cases of “incompetent” other spouse which shall be under Rules 93 and 95) and Art. 217 (entrusting children to homes and orphanages). Madrinan v. Madrinan GR 159374 Jul 12, 2007 Yu v Yu GR 164915 Mar 10, 2006
Commercial Courts Sec. 5.2, RA 8799 A.M. No. 01-2-04-SC Interim Rules of Procedure Governing Intra-corporate Controversies A.M. 00-8-10-SC Interim Rules of Procedure on Corporate Rehabilitation (note FRIA) Oscar Reyes v. RTC Makati GR 165744 Aug 11, 2008

Metropolitan Trial Courts, Municipal Trial Courts/Circuit Trial Courts BP 129, as amended by RA 7691, Secs. 2 to 4 Unlawful detainer v. agrarian dispute – Sps Fajardo v. Anita Flores GR 167891 Jan 15, 2010 Recovery of possession – Vda De Barrera et al v. Heirs of Vicente Legaspi GR 174346 Sept 12, 2008; Ouano v. PGTT Gr No. 134230 July 7, 2002;
Barangay Lupon RA 7160 (Local Government Code of 1991) Secs 399-422 Substantial compliance – Leo Wee v. George de Castro et al GR 1764095 Aug 20, 2008; Aquino v. Aure, GR 153567 Feb 18, 2008 CIVIL PROCEDURE Ordinary Civil Actions Rules 1 to 39 Rule 1 General Provisions of the Rules of Court Liberal application – Makati Ins. V. Reyes et al GR 167403 Aug 6, 2008; Rural Bank of Seven Lakes v. Dan GR 174109 Dec 24, 2008;

Rule 2 Cause of Action Elements of a cause of action - Ceroferr v. CA 376 SCRA 144; Camarines Sur Electric v. Aquino GR 167691 Sep 23, 2008 Sufficiency of allegations –Vinzons-Chato v. Fortune GR 141309 Dec 23, 2008 Splitting a cause of action – BPI Family v. De Coscuella, GR No. 167724, Jun 27, 2006 Joinder of causes of action – UCPB v. Sps. Beluso GR 159912 Aug 17, 2007 Rule 3 Parties to Civil Actions Real party in interest – Carlos v. Sandoval GR 179922 Dec 16, 2008; Estreller v. Ysmael GR 170264 Mar 13, 2009 Indispensable parties – Robert De Galicia v. Mercado, GR No. 146744, Mar 6, 2006; Lagunilla v. Velasco GR 169276 Jun 16, 2009; Josephine Marmo v Moises Anacay GR 182585 Nov 27 2009; Leonis Navigation v Catalina Villamater GR 179169 Mar 3, 2010 Necessary parties – Relucio v. Lopez 373 SCRA 578; AutoCorp v. Intra Strata GR 166662 Jun 27, 2008 Capacity to sue and be sued - Van ZuiDen v. GTVL Manufacturing 523 SCRA 233; Deutsche v CA GR 152318 Apr 16, 2009 Misjoinder/non-joinder of parties – Chua v. Torres GR 151900 Aug 30, 2005; Anicia Valdez Tallorin v Heirs of Juanito Tarona GR 177429 Nov 24, 2009; Littie Sarah Agdeppa v Heirs of Ignacio Bonete GR 164436 Jan 15 2010 Successors in interest – Sui Man Hui Chan v. CA, GR 147999, Feb 27, 2004 Substitute parties – Carandang vs. Heirs of De Guzman GR 160347 Nov. 29, 2006; Judge Sumaljag v. Literato GR 149787 Jun 18, 2008; Domingo v Landicho GR 170015 Aug 29, 2007; Napere v. Barbarona GR 160426 Jan 31, 2008 Indigent parties – Sps Algura v. LGU GR 150135 Oct 30, 2006

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Indigent parties – Sps Algura v. LGU GR 150135 Oct 30, 2006 Rule 4 Venue of Actions Personal action – Uniwide v. Cruz GR 171456 Aug 9, 2007 Real Action – Infante v. Aran Builders, GR 156594 Aug 24, 2007; HiYield v. CA GR 168863 Jun 23, 2009 Principal party ; when to object – Irene Marcos-Araneta v. CA GR 154096 Aug 22, 2008 Stipulated venue not exclusive - Philbanking v. Tensuan, 230 SCRA 413; Spouses Lantin v. Judge Lantion, GR No. 160053, Aug 28, 2006 Rule 5 Uniform Procedure in Trial Courts Revised Rules on Summary Procedure Summary procedure – Estate of Macadangdang v Gaviola GR 156809 Mar 4, 2009; Angelina Soriente v Estate pf Arsenio Concepcion GR 160239 Nov 25 2009; Sps Edillo v Sps Dulpina GR 188360 Jan 21 2010

Rule 6 Kinds of Pleadings Answer – Rosete v. Lim, GR No. 136051, Jun 8, 2006 Compulsory counterclaim – Financial Builders. V. FPA 338 SCRA 346; Reillo v. San Jose GR 166393 Jun 18, 2009 Permissive counterclaim – Banco de Oro v. CA GR 160354 Aug 25, 2005; Dec 19, 2007 Third party complaint – Asian Construction v. CA 458 SCRA 750; Sy Tiong Shion v Sy Chin GR 174168/179438 Mar 30, 2009 Cross-claim – Torres v. CA 49 SCRA 67
Rule 7 Parts of a Pleading Sufficient in form/substance – Sps Munsalado v. NHA GR 167181 Dec 23, 2008 Signature of counsel – Republic v. Kenrich Dev. Do., GR No. 149576, August 8, 2006 Verification/Certification – Madara v. Porillo GR 172449 Aug 20, 2008; Kaunlaran v. Uy GR 154974, Feb 4, 2008; Sps Valmonte v. Alcala GR 168667 Jul 23, 2008 Who can sign w/o sec cert – Mid-Pasig Land v Mario Tablante GR 162924 Feb 4, 2010 Rule 8 Manner of Making Allegations in Pleadings Ultimate facts – Far East Marble v. CA GR 94093 Aug 10, 1993 Specific denial under oath – Filipinas Textile v. CA 415 SCRA 635 No knowledge – Warner Barnes v. Reyes 103 Phil 602 Modes of specific denial – Gaza et al v. Lim GR 126863 Jan 16, 2003; Actionable document – Casent Realty v. Philbanking GR 150731 Sep 14, 2007; Malayan v. Regis Brokerage GR 172156 Nov 23, 2007 Rule 9 Effect of Failure to Plead No default motu proprio – Santos v PNOC GR 170943 Sep 23, 2008 Failure to appear – Monzon v. Sps Relova GR 171827 Sep 17, 2008 Remedies of party declared in default – Gomez v. Montalban GR 174414 Mar 14, 2008 Default judgment – Gajudo v. Traders Royal GR 151098, Mar 21, 2006

Rule 10 Amended and Supplemental Pleadings Substantial amendment - PPA v. Gothong and Aboitiz GR 158401 Jan 28, 2008 When amendments allowed - Quirao v. Quirao 414 SCRA 430; Bautista v. Maya-Maya Cottages, GR 148361, Nov 29, 2005; Marcos -Araneta et al v. CA GR 154096 Aug 22, 2008 Conform to evidence – Cagungun v. Planters Dev Bank GR 158674 Oct 17, 2005
Rule 11 When to File Responsive Pleading Saturday, Sunday or legal holiday - Alarilla v. Ocampo 417 SCRA 601 Rule 12 Bill of Particulars When a complaint is vague – Bantillo v. IAC, GR No 75311, Oct. 18, 1988; Republic v. SB and Marcos, GR 148154, Dec 17, 2007 Rule 13 Filing and Service of Pleadings, Judgments and Other Paper Personal filing and service – Maceda, et al. v. Macatangay, GR 164947, Jan 31, 2006 Service by registered mail - Andy Quelnan v. VHF Phil GR 138500, Sep16, 2005; Marcelino Domingo v CA GR 169122 Feb 2 2010; Sps Belen v. Hon. Chavez, GR 175334, Mar 26, 2008 Service upon counsel – GCP Many Transport v. Principe GR 141484, Nov 11, 2005 Notice of lis pendens – Sps Vicente v. Avera GR 169970 Jun 20, 2009

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Rule 14 Summons Kinds of actions - Gomez v. CA GR 127692 March 10, 2004; San Pedro v. Ong GR 17758 Oct 17, 2008; Personal vs. substituted service of summons - Guiguinto Credit Coop v. Torres, GR No. 170926, Sep 15, 2006; Guanzon v Arrandoza Dec 6, 2006 GR 155392; Potenciano v. Barnes GR 159421 Aug 20, 2008 Substituted service – Clarita Garcia v SB and Republic GR 170122 Oct 12, 2009 Extraterritorial service – Montefalcon et al v. Vasquez GR 165016 Jun 17, 2008; Elmer v. Dakila Trading GR 172242 Aug 14, 2007; Temporarily out – PCIB v Alejando GR 175587 Sep 21, 2007; Sps Torres v. Amparo Medina GR166730 Maar 10 2010 Domestic juridical entity – BPI v. Spouses Santiago Mar 28, 2007; Paramount v. Ordonez GR 175109, Aug 6, 2008 Substantial compliance - Mason v. CA 413 SCRA 303; Millenium v. Tan GR 131724 Feb 28, 2000
Rule 15 Motions Notice of hearing - KKK Foundation Inc. v. Hon. Bargas, et al GR 163785 Dec 27, 2007; Camarines Corp v. Aquino GR 167691 Sept 23, 2008; Motion for extension – Sarmiento v. Zaratan Feb 5, 2007 Proof of service – Romulo et al v. Peralta, GR 165665 Jan 31, 2007

Rule 16 Motion to Dismiss Jurisdiction over subject matter – DAR v. Hon. Abdulwahid GR 163285 Feb 27, 2008 Jurisdiction over person – Republic v. Glasgow GR 170281, Jan 18, 2008 Failure to state a cause of action - Equitable PCIB v. CA GR 143556 Mar 16, 2004; Goodyear Phil v. Sy GR 154554 Nov 9, 2005; Aldemita v. Heirs of Silva Nov 2, 2006; PDI v. Alameda GR 160604 Mar 28, 2008; Heirs of Maramag v. Maramag GR 181132 Jun 5, 2009 Lack of cause of action - Rural Bank of Calinog v. CA GR 146519, Jul 8, 2005; Bayot v. CA GR 155635 Nov 7, 2008 Litis pendentia - Mid Pasig Land Dev v. CA 413 SCRA 204; Intramuros Administration v. Contacto 402 SCRA 581 Res judicata – Francisco v. Roque GR 151339 Jan 31, 2006; Cruz v. CA GR 164797 Feb 13, 2006 Prescription – Heirs of Dolleton v. Fil-estate GR 170750 Apr 7, 2009; Lasquite v Victory Hills GR 175375 Jun 23, 2009; Paid, waived, etc. – Doña Rosana Realty v. Molave Dev Corp GR 180523 Mar 26, 2010 Forum Non Conveniens – Raytheon Int‘l v. Rouzie GR 162894 Feb 26, 2008 Denial of, unappealable – Malicdem v. Flores Sep 8, 2006; PNB v Estate of De Guzman et al GR 182507 Jun 16, 2010 Rule 17 Dismissal of Actions Grounds – Pinga v. Santiago, GR No. 170354, Jun 30, 2006 Failure to prosecute – Filinvest v. CA GR 142439 Dec 6, 2006; RN Dev v. A.I.I GR 166104 Jun 26, 2008; Dismissal without prejudice – Heirs of Gaudiane v. CA, GR 119879, March 11, 2004; Cruz v. CA GR 164797 Feb 13, 2006 Notice of dismissal prevails over motion to dismiss – Dael v. Sps Beltran GR 156470 Apr 30, 2008 Counterclaim – Mendoza v. Paule GR 175885 Feb 31, 2009 Effect – Benedicto v. Lacson GR 141508 May 5, 2010 Rule 18 Pre-Trial AM No. 03-1-09-SC Rule on Guidelines to be Observed by Trial Court Judges and Clerks of Court in the Conduct of Pre-Trial and Use of Deposition-Discovery Measures Effect of failure to appear - Saguid v. CA 403 SCRA 678; Jazmin Espiritu v. Vladimir Lazaro, GR 181020, Nov 25, 2009 Admissions at pre-trial - Biesterbos v. CA 411 SCRA 396 Other pre-trial requirements - Advance Textile Mills v. Tan GR 154040 Jul 28, 2005; Anatalia Ramos v. Dominga Dizon, GR No. 137247, Aug. 7, 2006
Rule 19 Intervention Requirements - Nordic Asia v. CA 403 SCRA 390 When to intervene - Salandanan v Sps Mendoza GR 160280 (2009) Who may intervene – GSIS v Nocom GR 175989 Feb 4, 2008; Asia‘s Emerging Dragon v DOTC GR 169914; Rep v CA GR 174166 Mar 24, 2008; Office of Ombudsman v. Maximo D. Sison GR 185954 Feb 16, 2010

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Rule 20 Calendar of Cases Rule 21 Subpoena Macaspac v. Flores AM No. P-05-2072 Aug 13, 2008; Re Subpoena of Dir Amante AM No. 10-1-13-SC Mar 2, 2010 Rule 22 Computati on of Time Filing on the last day - De Las Alas v. CA 83 SCRA 200 Rule 23 Depositions Pending Action DFA Guidelines in Taking Depositions before Philippine Consular Officers Abroad Purpose of rules of discovery – Republic v. Sandiganbayan, 204 SCRA 212. Manner of taking – Pfeger Dulay v Dulay, GR 158857 Nov 11, 2005 Admissibility – Jowel Sales v. Sabino GR 133154 Dec 9, 2005 Sec 4- San Luis v. Rojas GR 159127 Mar 3, 2008; Dasmarinas v. Reyes, 225 SCRA 622 Deposition (oral examination) in criminal cases – Rosete v. Lim GR 136051 June 8, 2006

Rule 24 Depositions Before Action or Pending Appeal Availability of deponent as a witness - Hyatt Industrial v. Ley Construction, GR No. 147143, Mar 10, 2006
Rule 25 Interrogatories to Parties Rule 26 Admissions by Adverse Party Purpose – DBP v. CA GR 153034 Sep 20, 2005 Period to answer a request for admission- Po v. CA 164 SCRA 668 To whom served - Briboneria v. CA 216 SCRA 616 Effect of non-compliance – Limos et al v Sps Odones GR 186979 Aug 11, 2010 Rule 27 Production or Inspection of Documents or Things Solidbank v. Gateway GR 164805 Apr 30, 2008 Rule 28 Physical and Mental Exami nation of Persons See RA 8054 Sec 17 [a] Rule 29 Refusal to Comply with Modes of Discovery Rule 30 Trial When trial can be dispensed with - Republic v. Vda De Neri GR 139588 Mar 4, 2004 Absence of a party – Spouses Calo v. Spouses Tan, GR 151266 Nov 29, 2005 Rule 31 Consolidation or Severance Requisites of consolidation - Republic v. CA 403 SCRA 403 What actions can be consolidated - Teston v. DBP GR 144374 Nov 11, 2005; Gregorio Espinoza v. UOB, GR 175380, Mar 22, 2010 Rule 32 Trial by Commissioner When proper – Manotok Realty v. CLT Realty GR 123346 Nov 29, 2005

Rule 33 Demurrer to Evi dence Effects of filing a demurrer - Radiowealth Finance Co v. Sps Del Rosario GR 138739 Jul 6, 2000; Heirs of Santiago v. Heirs of Palma GR 160832 Oct 27, 2006 What evidence – Casent Realty v. Philbanking GR 150731 Sep 14, 2007 Rule 34 Judgment on the Pleadings Sham or specific denials - Manufacturer‘s Bank v. Diversified 173 SCRA 357; Tan v. De La Vega, GR No. 168809, Mar 10, 2006 Fails to tender an issue – Pesane Animas Monzao v. Pryce Properties GR 156474 Aug 16, 2005; Sps Ong v. Roban Lending GR 172592 Jul 9, 2008; Reillo v San Jose GR 166393 Jun 18, 2009 Who files – Doris Sunbanun v. Aurora Go GR 163280 Feb 2, 2010 Rule 35 Summary Judgments Distinguish from Rule 34 – Nocom v. Camerino GR 182984 Feb 10, 2009 Genuine issues of fact – Evangelista v. Mercator Finance 409 SCRA 410; Bitanga v. Pyramid GR 173526 Aug 28, 2008; Phil Countryside v Toring GR 157862 Apr 16, 2009; BPI v. Sps. Yu GR 184122 Jan 20, 201; Eland Phil v Garcia GR 173289 Feb 17, 2010 Partial summary judgment - Monterey Foods Corp v. Eserjose 410 SCRA 627; Asian Construction v. PCI Bank, GR No. 153827, Aug 25, 2006; Jose Feliciano Loy v. SMC GR REMLAW Page 5

Construction v. PCI Bank, GR No. 153827, Aug 25, 2006; Jose Feliciano Loy v. SMC GR 164886 Nov 24, 2009 Not applicable – Carlos v. Sandoval GR 179922 Dec 16, 2008 Rule 36 Judgments, Final Orders and Entry Thereof Form of judgment – Velarde v. SJS GR 159357 Apr 28, 2004 Several and separate judgments - Miranda v. CA 71 SCRA 295; De Leon v. CA GR 138884 June 6, 2002; Republic v. Nolasco 457 SCRA 400 Dispositive portion – Obra v. Badua et al GR 149125 Aug 9, 2007

Rule 37 New Trial or Reconsideration Second MR not allowed – Sps Balanoba v. Madriaga GR 160109 Nov 22, 2005 Requisities of MNT – Bernaldez v. Francia, 398 SCRA 488; Capuz v. CA 233 SCRA 471 Intrinsic fraud v. extrinsic fraud – Libudan v. Gil 45 SCRA 17 Period to file – Delos Santos v. Elizalde Feb 2, 2007
Rule 38 Relief from Judgments, Orders, or Other Proceedings Propriety of relief from judgment – Spouses Que v. CA GR 150739 Aug 18, 2005; Monzon v. Sps Relova GR 171827 Sep 17, 2008 Petition for relief before the MTC - Sps Mesina v. Meer GR 146845 Jul 2, 2002 Excusable negligence - Land Bank v. Natividad 458 SCRA 441; Gomez v. Montalban GR 174414 Mar 14, 2008 CA – Redena v. CA Feb 6, 2007 Who may file – De La Cruz v. Quiazon GR 171961 Nov 28, 2008

Rule 39 Execution, Satisfaction and Effect of Judgments Immutability of final judgment – Roman Catholic Archbishop v. Heir of Manuel Abella GR 143510 Nov 23, 2005; Session Delights Ice Cream v. CA, GR 172149, Feb 8, 2010 Res Judicata – Heirs of Igmedio Maglaque v. CA 524 SCRA 234; PCGG et al v. SB and Officers GR 124772 Aug 14, 2007; DBP v La Campana GR 137694 Jan 17, 2005 Conclusiveness of judgment - Cayana v. CA GR 125607 18 Mar 2004; Republic of the Phil v. Ramon Yu GR 157557 March 10, 2006 Execution pending appeal - Stronghold Ins. V. Felix GR 148090 Nov 28, 2006; JP Latex v. Hon. De Leon GR 177121 Mar 16, 2009; Archinet Intl v Becco GR 183753 Jun 19, 2009; Rosario T. Florendo vs. Paramount Ins. Co. GR 167976 Jan. 20, 2010 By motion/independent action – Yau v. Silverio Feb 4, 2008 GR 158848/171994 Money judgment– Jerome Solco v. Provido Feb 11, 2008 GR 176533 Redemption period - Hi Yield Realty Inc v. CA GR 138978 Sept 12, 2002 Exempt from execution – Honrado v. CA GR 166333 Nov 25, 2005 Garnishment – Cardinal v. Asset GR 149696 Sheriff‘s duties-Benjamin Sanga vs. Florencio Alcantara AMO-09-2657 Jan. 25, 2010; Domingo Peña vs. Achilles Regalado AM P-10-2772 Feb. 16, 2010 Third party claimant – Fermin v. Hon Estevez GR 147977 Mar 26, 2008 Foreign judgment – Republic v. Gingoyon GR 166429 Feb 1, 2006; Mijares, et al V. Hon. Judge GR 139325 , 455 SCRA; 2008 Quasha vs. CA GR 182013 Dec. 4, 2009 Supervening event – Republic v. Antonio et al GR 166866 Mar 27, 2008 Appeals In General Payment of docket fee – Camposagrado v. Camposagrado GR 143195 Sept 13, 2005 No appeal period - Republic v. Bermudez-Lorino, GR No. 160258, Jan 19, 2005 Mode of appeal from special courts - Land Bank of the Philippines v. De Leon 399 SCRA 376 Appeal from ―amended‖ judgment – De Grano v. Lacaba GR 158877 Jun 16, 2009
Rule 40 Appeal from Municipal Trial Courts to the Regional Trial Courts Non-payment of appeal fee - Badillo v. Tayag GR 143976 Apr 3, 2003 AM No. 07-7-12-SC Amendments to Rules 41, 45, 58 and 65 Dec 27, 2007 Filing of appeal memo – Estate of Macadangdang v. Gaviola GR 156809 Mar 4, 2009 Sec 7 (b) – Mejillano v. Lucillo GR 154717 Jun 19, 2009 Rule 41 Appeal from RTC Sec 1 – Simeon Valdez v. Financiera Manila, GR 183387, Sept 29, 2009; Palma v Galvez GR 165273 Mar 10, 2010 Period of time to appeal - Neypes v. CA GR 141524 Sep 14, 2005; First Aqua Sugar v. BPI

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Period of time to appeal - Neypes v. CA GR 141524 Sep 14, 2005; First Aqua Sugar v. BPI Feb 5, 2007 Appeal from dismissal - Philexport v. Phil Infrastructures GR 120384 Jan 13, 2004; Lullete S Ko v. PNB GR 169131-32 Jan 20, 2006 Period to appeal - Eda v. CA, GR No. 155251, Dec 8, 2004 Presence of grave abuse – Benedicta Samson v. Hon. Judge Macaraig, GR 166356, Feb 2, 2010 Record on appeal – Rovia v Heirs of Deleste, et al GR 160825 Mar 26, 2010
Rule 42 Petition for Review from RTC to CA Form & contents – Sps Lanaria v. Planta GR 172891 Nov 22, 2007; Perez v. Falcatan, GR 139536 Sept 26, 2005; Elsie Ang v. Dr. Grageda GR 166239 Jun 8, 2006 Period to appeal - Balgami v. CA, GR 131287, Dec 9, 2004

Rule 43 Appeals from the Court of Tax Appeals and Quasi-Judicial Agencies to the Court of Appeals Formal requirements - Dalton-Reyes v. CA, et al, GR 149580, Mar 16, 2005 Quasi judicial bodies - Jose Luis Angelo Orosa v. Alberto Roa, GR No. 140423, July 14, 2006; Villorente et al v. Aplaya Laiya GR 145013 Mar 13, 2005; Ruvivar v. Ombudsman GR 165012 Sept 16, 2008; Phillips Seafood v BOI GR 175787 Feb 4, 2009 Impleading the lower court or agency - Basmayor v. Atencio GR 160573 Oct 19, 2005 Attaching copy of judgment – CocaCola v. Cabalo, GR 144180 Jan 30, 2006 Supporting papers – BE San Diego Inc. v. Alzul 524 SCRA 402 Appeal from CSC – DECS v Cuanan GR 169013 Dec 16, 2008 Rule 44 Ordinary Appealed Cases Revised Internal Rules of the Court of Appeals (RIRCA) Grounds for dismissal of appeal - De Leon v. CA 383 SCRA 217 Contents of appellant‘s brief - De Liano v. CA 370 SCRA 349 Change of theory – Mon v CA GR 118292 Apr 14, 2004
Rule 45 Appeal by Certiorari to the Supreme Court Question of law - Agote v. Lorenzo, 464 SCRA 60, Jul 22, 2005; BPI v. CA, GR 160890, Nov. 10, 2004; CGP Transportation v. PCI Leasing Mar 28, 2007 Limited review – Local Superior of the Servants of Charity v. Jody King Construction GR 141715 Oct 12, 2005; Perez – Rosario, et al. v. CA, GR No. 140796, June 30, 2006; Republic v. Sta Ana- Burgos, 523 SCRA 309, GR 163254 , 1 June 2007 CA not impleaded – Selegna v. UCPB GR 165662 May 3, 2006 Distinguished from Rule 65 – Tagle v. Equitable PCI GR 172299 Apr 22, 2008; International Corporate Bank v. CA & PNB, Sept 5, 2006; San Miguel Bukid Homeowner v. City of Mandaluyong, GR 153653, Oct 2, 2009 Assignment of errors – Phil Hawk Corp v. Vivian Tan Lee, GR 166869, Feb 16, 2010

Rule 46 Original Cases Rule 65 supplements Rule 46 - Republic v. Carmel Dev 377 SCRA 459 Sec. 3 – China Banking Corp v. Padilla Feb 2, 2007
Rule 47 Annulment of Judgments or Final Orders and Resolutions Extrinsic fraud - Alma Jose v. Intra Strata 464 SCRA 496, Jul 28, 2005; De La Cruz v. Sison, GR 142464, Sept 26, 2005; Ramos v. Combong, Jr. GR 144273 Oct 20, 2005; Alaban v. CA GR 156021 Sept 23, 2005 Lack of jurisdiction – Ancheta v. Ancheta GR 145370, Mar 4, 2004; Republic thru APT v. ―G‖ Holdings GR 141241, Nov. 22, 2005; Sps Benatiro et al v. Heirs of Evaristo Cuyo GR 161220 Jul 30, 2008; GAUF v. RTC GR 139672 Mar 14, 2009; DENR v. Technological Advocates, GR 165333, Feb 9, 2010 SC resolution – Grande v. UP, GR No. 148456, Sep 15, 2006 Rule 48 Preliminary Conference Rule 49 Oral Argument Rule 50 Dismissal of Appeal Discretionary - PNB v. Philippine Milling 26 SCRA 712 Direct appeal to SC- Atlas Consolidated Mining 201 SCRA 51 Non-payment of fee – Cu-Unjieng v. CA, GR No. 139596, Jan 24, 2006 Non-filing of brief – Gov‘t v. CA et al GR 164150 Apr 14, 2008; Bachrach v. PPA GR

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Non-filing of brief – Gov‘t v. CA et al GR 164150 Apr 14, 2008; Bachrach v. PPA GR 159915 Mar12, 2009
Rule 51 Judgment Multiple proceedings - Crystal vs. CA, 160 SCRA 79 Rule 52 Motion for Reconsideration Badiola v. Ca GR 170691 Apr 23, 2008 Rule 53 New Trial Rule 54 Internal Business Rule 55 Publication of Judgments and Final Resolutions Rule 56 Procedure in the Supreme Court Sec 5 – Ericsson v. City of Pasig GR 176667 Nov 22, 2007; Law of the case/conflicting decisions – Collantes v. CA 517 SCRA 561 (2007) Prospective effect – Land Bank v. De Leon GR 143275 Mar 20, 2003 A.M. No. 99-8-09 SC Amended Rules on Who Shall Resolve MRs

Provisional Remedies Rule 57 Preliminary Attachment Grounds – PCL Industries v. CA GR 147970 March 31, 2006; Magaling v. Peter Ong GR 173333 Aug 13, 2008; Professional Video V Tesda GR 155504 Jun 26, 2009; Metro Inc. et al v. Lara‘s Gifts, GR 171741, Nov 27, 2009 Ex Parte issuance - Davao Light and Power Co., Inc. vs. CA, 204 SCRA 343; Onate v. Abrogar, 241 SCRA 659 Provisional/ancillary – Silangan Textile v. Judge Mar 12, 2007 Discharge of an attachment – Security Pacific Assurance v. Hon. Judge Tria-Infante GR 144740 Aug 31, 2005; Insular Savings v. CA 460 SCRA 122; Sofia Torres v. Nicanor Satsatin, GR 166759, Nov 25, 2009
Rule 58 Preliminary InjunctionClear legal right – Filipino Metals v. Secretary of Trade and Industry GR 157498 Jul 15, 2005; Levi Strauss v. Clinton Apparelle, GR No 138900 Sept 20, 2005; Duvaz Corp v. Export & Industry Bank 523 SCRA 405, Jun 7, 2007; Equitable PCIB v. Hon. Apurillo, GR 168746; Nov 5, 2009 Injunction should maintain status quo - Rualo v. Pitargue GR 140284 Jan 21, 2005; University v Ang Wong GR 150280 Apr 26, 2006 Injunction not proper - Tayag v. Lacson GR 134971 25 Mar 2004 Irreparable injury – G.G. Sportswear v. BDO, GR 184434, Feb 8, 2010 Summary hearing necessary/Procedure - Borja v. Salcedo 412 SCRA 110; National Electrification Adm v Val Villanueva GR 168203 Mar 9, 2010 RA 8975 act to ensure the expeditious implementation and completion of government infrastructure projects - Phil Ports Authority v. Pier 8 Arrastre GR No. 147861, Nov. 18, 2005; DFA v Falcon GR 176657 Sep 1, 2010 Grave abuse of discretion in grant – Overseas Workers v. Chavez 524 SCRA 451; Power Sites v United Neon GR 163406 Nov 24, 2009 Rule 59 Receivership No receivership of property in custodia legis - Dolar v. Sundiam 38 SCRA 616 Vivares v. Jose Reyes GR 155408 Feb 13, 2008

Rule 60 Replevin- Applicant must be owner of property - Servicewide Specialists v. CA 318 SCRA 493 No replevin of property in custodia legis - Vda de Danao v. Ginete 395 SCRA 542 Distinguished from labor case – Smart v. Astorga GR 148132 Jan 28 2008 542 SCRA 434 Improperly served – Rivera v. Vargas GR 165895 Jun 5, 2009
Rule 61 Support “Pendente Lite”- Judgment for support never final - Lam v. Chua GR 131286 18 Mar 2004 Future support cannot be subject of compromise - De Asis vs. CA, 303 SCRA 176 (1999)

Special Civil Actions Rule 62 Interpleader- Lessee‘s recourse to interpleader - Ocampo v. Tirona GR 147812 Apr 6, 2005 Rule 63 Declaratory Relief and Similar Remedies Nature; Requisites for declaratory relief - Jumamil v. Café et al, GR 144570, Sep 21, 2005; Republic v Mangotara, GR 170375 July 7, 2010 REMLAW Page 8

Republic v Mangotara, GR 170375 July 7, 2010 Who may file – SJS v. Lina GR 160031 Dec 18, 2008 When to file – Tambunting v. Spouses Sumabat GR 144101 Sept 16, 2005; Hon. Exec Secretary v. Southwing Heavy Industries, etc. GR 164171-72, 168741 Feb 20, 2006; Martelino et al v. NHMFC GR 160208 Jun 30, 2008 Rule 64 Review of Judgments and Final Orders and Resolutions of the Commission on Elections and the Commission on Audit – Benguet State University v. COA, 524 SCRA 437 Rule 65 Certiorari Grave abuse of discretion – Phil Rabbit Bus Lines v. Goimco GR 135507 Nov 29, 2005 ; Preferred Home Specialties, Inc. v. CA, GR No. 163593, Dec 16, 2005, 478 SCRA 387 Plain speedy adequate remedy – Cervantes v. CA GR 166755 Nov 18, 2005 ; Davao Merchant Marine v. CA GR 144075 April 19, 2006 Service of petition – New Ever Marketing v. CA GR 140555. July 14, 2005 Who are the parties - Flores v. Joven 394 SCRA 339 Where to file – Sps Colmenares v. Vda de Gonzales GR 155454 Dec 10, 2008 Other requirements - Eagle Ridge Golf v. CA, GR 178989, Mar 18, 2010 Constitutional commission – Comoporo v. COMELEC GR 178624 Jun 30, 2009 Distinguished from Rule 45 – Ang Biat Huan Sons v. CA Mar 22, 2007 ; DOLE v. Ruben Maceda, GR 185112, Jan 18, 2010 Sec 6 – Jimmy Areno v. Skycable, GR 180302, Feb 5, 2010 Prohibition Holy Spirit Homeowners v. Defensor, GR No. 163980, Aug. 3, 2006 ; Tan v. CA 524 SCRA 306 ; Estandarte v. PP GR 156851 Feb 18, 2008 Mandamus Calim v. Guerrero Mar 5, 2007 Sec 7 – AM 07-7-12 SC Uy Kiao Eng v. Nixon Lee, GR 176831, Jan 15, 2010 (mandamus will not lie if no public interest) Rule 66 Quo Warranto- Against public officers – Calleja v. Panday GR 168696 Feb 28, 2006 Clear legal right - Garces vs. CA, 253 SCRA 99 (1996); Feliciano v. Villasin GR 174929 Jun 27, 2008 Damages – Titus B. Villanueva v. Emma Rosquetta, GR 180764, Jan 19, 2010

Rule 67 Expropriati on Multiple appeals allowed - NPC v. Aguirre-Paderanga, 464 SCRA 481, Jul 28, 2005 Two stages in action for expropriation - National Housing v. Heirs Guivelondo 404 SCRA 389; Sps Curata v PPA GR 154251 Jun 22, 2009 Public Use – Masikip v. City of Pasig GR 136349 Jan 23, 2006 Reckoning date – City of Iloilo v Contreras-Besama GR 168967 Feb 12, 2010 Commissioners – Napocor v. Purefoods GR 160725 Sep 12, 2008
Rule 68 Foreclosure of Real Estate Mortgage- BPI Family v. Coscuella GR 167724 Jun 27, 2006; Teresita Monzon v. Sps Relova GR 171827 Sep 17, 2008 Rule 69 Partition Object of partition - Sepulveda v. Pelaez GR 152195 Jan 31, 2005; Balo v. CA GR 129704 Sep 30, 2005; Panganiban et al v. Oamil GR 149313 Jan 22, 2008 Two stages – Marasigan v. Marasigan GR 156078 Mar 14, 2008; Figuracion-Gerilla v. Vda de Figuracion GR 154322 Aug 22, 2006 Publication – Reillo v. San Jose GR 166393 Jun 18, 2009 Rule 70 Forcible Entry and Unlawful Detainer- Distinction between ―forcible entry‖ and ―unlawful detainer‖ - Acaylar v Naraya GR 176995 Jul 30, 2008; Sales v. Barro GR 171678 Dec 10, 2008 Question of ownership – Go Ke Cheng v Chan GR 153791 Aug 24, 2007; Sps. Samonte v. Century Savings Bank, GR 176413, Nov 25, 2009 Jurisdictional requirements for unlawful detainer - Ross-Rica v. Sps Ong GR 132197 Aug 16, 2005; Abaya v. Merit GR 176324 Apr 16, 2008 Jurisdictional requirements for forcible entry – Leonardo David v. Cordova GR 152992 July

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Jurisdictional requirements for forcible entry – Leonardo David v. Cordova GR 152992 July 27, 2005; Domalsin v. Spouses Valenciano GR 158687 Jan 25, 2006; Bunyi v Factor GR 172547 Jun 30, 2009 Stay of judgment – Bugarin v. Palisoc GR 157985 Dec 2, 2005; PNB v. DKS International GR 179161, Jan 22, 2010
Rule 71 Contempt Distinction ―direct‖ and ―indirect‖ contempt - Heirs of Vda De Roxas v. CA GR 138660 5 Feb 2004 ; Nunez v Ibay AM RTJ 06-1984 Jun 30, 2009 Modes of filing (re indirect contempt) Regalado v. Go GR 167988 Feb 6, 2007 Contempt against quasi-judicial entities - LBP v. Listana 408 SCRA 328 Penalty – Canada v. Judge Suerte AM No. RTJ-04-1875 SPECIAL PROCEEDINGS Rule 72 Subject Matter and Applicability of General Rules Distinction between ―civil action‖ and ―special proceeding‖ - Natcher v. CA 366 SCRA 385 Determination of heirship – Portugal v. Portugal-Beltran GR 155555 Aug 16, 2005 Termination of proceeding – Tabuada v. Ruiz GR 168799 Jun 27, 2008 Sec 2 – Hilado v. CA GR 164108 May 8, 2009

Settlement of Estate of Deceased Persons Rule 73 Venue and Process- Limited jurisdiction of probate court - Camaya v. Patulandon, GR 144915 23 Feb 2004; Pacioles v. Chuatoco-Ching GR 127920 Aug 9, 2005; Heirs of Doromio v. Heirs of Doromio GR 169454; 541 SCRA 479; Reyes v. Sotero, et al., GR No. 167405, Feb 16, 2006 Termination of the special proceeding - Munsayac-De Villa, v. CA 414 SCRA 436 Meaning of residence – San Luis v. San Luis Feb 6, 2007
Rule 74 Summary Settlement of Estates - Two year prescriptive period - Pedrosa v. CA, 353 SCRA 620 Extrajudicial partition - Pada-Kilario, et al. vs. CA et al., GR 134329, 19 Jan 2000

Rule 75 Production of Will. Allowance of Will Necessary- Probate mandatory - Pascual v. CA, 409 SCRA 105 Probate proceeding in rem – Alaban v. CA GR 156021 Sept 23, 2005 False will – Obando v People GR 138696 July 7, 2010 Rule 76 Allowance or Disallowance of Will - Grounds – Azuela v. CA, GR No. 122880, April 12, 2006 Rule 77 Allowance of Will Proved Outside of Philippines and Administration of Estate – Ancheta v. Guersay-Dalaygon; GR No. 139868, June 8, 2006
Rule 78 Letters Testamentary and of Administrati on, When and to Whom Issued Failure to attend hearings of applicant - Silverio v. CA, 304 SCRA 541 Intestate estate of Cristina suntay v Isabel Cojuangco GR 183053 June 16, 2010

Rule 79 Opposing Issuance of Letters Testamentary. Petition and Contest for Letters of Administration Justification for appointment of an administrator - Avelino v CA, GR 115181, 31 Mar 2000
Rule 80 Special Administrator Qualifications - Valarao v. Pascual 392 SCRA 695; Vilma Tan et al v. Hon Gedonio GR 166520 Mar 14, 2008 Justification for special administrator - De Guzman vs. Guadiz Jr., et al., L-48585, 31 Mar 1980 Appointment of special administrator discretionary - Jamero v. Melicos, GR 140929, 26 May 2005; Heirs of Castillo v. Gabriel GR 162934 Nov 11, 2005 474 SCRA Removal – Co v. Rosario et al GR No. 160671 Apr 30, 2008

Rule 81 Bonds of Executors and Administrators Rule 82- Revocation of Administration, Death, Resignation, and Removal of Executors and Administrators Ocampo v Ocampo GR 187879 Jul 2 , 2010 Rule 83 Inventory and Appraisal. Provision for Support of Family Provisional inclusion in inventory - Heirs of Miguel Franco v. CA, 418 SCRA 60; Chua v. REMLAW Page 10

Provisional inclusion in inventory - Heirs of Miguel Franco v. CA, 418 SCRA 60; Chua v. Absolute Management Corp. 413 SCRA 547
Rule 84 General Powers and Duties of Executors and Administrators Conflict of interest - Mananquil v. Villegas, GR 2430, 30 Aug 1990 Rule 85 Accountability and Compensation of Executors and Administrators Duty to account - Tumang v. Laguio GR 50277 14 Feb 1980; Charges and expenses of the administrator – Quasha Pena v. LCN Const GR 174873 Aug 26, 2008 Rule 86 Claims Against Estate Substitution of heirs - Heirs of Lorilla, et al. v. CA, GR 118655 12 Apr 2000; Liability of heirs for debts of decedent - Union Bank v. Santibañez, GR 149926, 23 Feb 2005 Atty‘s fees - Salonga Hernandez v. Pascual, GR No. 127165, May 2, 2006 Money claims – Stronghold v. Republic GR 174561 Jun 22, 2006 ; Gutierrez v. Barreto-Datu GR L-17175 Jul 31, 1962 Rule 87 Actions by and Against Executors and Administrators Recovery of estate property - Valera v. Inserto GR 56504, 7 May 1987; Damages arising from crime – ABS CBN v Office of Ombudsman GR 133347 Apr 23, 2010

Rule 88 Payment of the Debts of the Estate Rule 89 Sales, Mortgages, and other Encumbrances of Property of Decedent Mortgage of estate property - Pahamatong v. PNB, GR 156403, 31 Mar 2005; Orola v. Rural Bank of Pontevedra, GR 158566 Sept 20, 2005 Can heir sell estate property - Aggabao v. RTC, GR No. 146006 Feb 23, 2004
Rule 90 Distribution and Partition of the Estate Distribution, when – Quasha Pena v LCN Const GR 174873 Aug 26, 2008 Joinder – Guy v. CA GR 163707 Sep 15, 2006

Rule 91 Escheats - Republic v. CA & Solano GR 143483, 375 SCRA
Guardians and Guardianshi p Guardianship over Incompetents Rule 92 Venue Parco v. CA, L-33152 30 Jan 1982 Vanal v. Balmes, GR 132223, 19 June 2001 Rule 93 Appointment of Guardians Rule 94 Bonds of Guardians Rule 95 Selling and Encumbering Property of Ward De Pua v. San Agustin, GR L-17402, 25 July 1981 Rule 96 General Powers and Duties of Guardi ans Rule 97 Termination of Guardianship Guardianship of Minors AM 03-02-05 SC Rule on Guardianship of Minors Rule 98 Trustees Express trust vs. implied trust – Richard Lopez Trustee v. CA GR 157784 Dec 16, 2008; Heirs of Lorenzo Yap v. CA 312 SCRA 603; Saltiga de Romero v. CA 319 SCRA 180 ; Richard Lopez v CA GR 157784 Dec 16, 2008 Other Special Proceedings Rule 99 Adopti on and Custody of Minors RA 8551 An act establishing rules and policies on the domestic adoption of Filipino children and for other purposes AM No. 02-6-02-SC Rules on Adoption AM No. 03-04-04 –SC Rules on Custody of Minors and Writ of Habeas Corpus in relation to Custody of Minors In the matter of adoption of Stephanie Garcia, GR 148311, 31 Mar 2005; Republic v. Miller, 306 SCRA 183; Republic v. Hernandez, GR 117209, 9 Feb 1996 In re petition for adoption of Michelle Lim GR 168992 May 21, 2009

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Special Proceedings Invol vi ng Family Code Provisions AM 02-11-10-SC Rules on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable Marriages AM 02-11-11 SC Rule on Legal Separation AM 02-11-12 SC Rule on Provisional Orders

Other (Summary) Proceedings under the Family Code: Title XI, Chapters 1 to 3 on separation in fact between husband and wife or abandonment by one of the other and incidents involving parental authority Chapter 4 on Art. 41 (declaration of a spouse as presumpti vely dead) Art. 51(action of a child for presumpti ve legitime) Art. 69 (judicial declaration of family domicile in case of disagreement of the spouses) Art. 73 (spouse’s objection to the profession of the other spouse) Arts. 96 and 124 (annulment of husband’s decision in the administration and enjoyment of community or conjugal property appointment of spouse as sole administrator except cases of “incompetent” other spouse which shall be under Rules 93 and 95) Art. 217 (entrusting children to homes and orphanages).
Rule 101 Proceedings for Hospitalization of Insane Persons Chin Ah Foo v. Concepcion, 54 Phil 775

Rule 102 Habeas Corpus AM No. 03-04-04 SC Rules on Custody of Minors and Writ of Habeas Corpus in Relation to Custody of Minors SC Rules on Writs of Amparo and Habeas Data /Writ of Kalikasan Sec of Defense v Manalo GR 180906 Oct 7, 2009 In Re Writ of Habeas Corpus for Reynaldo De Villa, GR 158802, Nov. 17, 2004 Glenn Caballes v. CA, GR 163108, 23 Feb 2005; Ilusorio v. Bildner, 332 SCRA 169 Pp v. Andal, 307 SCRA 650; Feria v. CA, 325 SCRA 525; Canlas v. Napico GR 182795 Jun 5, 2008; Tapuz v. Del Rosario GR 182484 Jun 19, 2008 P/Supt. Felixberto Castillo v. Dr. Amanda T. Cruz, GR 182165, Nov 25, 2009; Gen Avelino Razon, Jr. et al. v Mary Jean Tagitis, et al, GR 182498, Feb 16, 2010; Yano et al v Sanchez et al GR 186640 Feb 11, 2010 Rule 103 Change of Name RA 9048 Clerical Error Law RA 9255 An act allowing illegitimate children to use the surname of their father Republic v. Lim, GR No. 153883 13 Jan 2004 In Re: Petition of Julian Wang, GR 159966, 30 March 2005 Republic v. Capote GR 157043 Feb 2, 2007 Rule 108 Cancellation or Correction of Entries in the Civil Registry Tan Co v. Civil Register, GR 138496; 23 Feb 2004 Lee v. CA, 367 SCRA 110 Barco v CA 420 SCRA 162 Gerbert Corpuz v Sto Tomas GR 186571 Aug 11, 2010
Rule 109 Appeals in Special Proceedings Testate of Maria Biascan v. Biascan, 347 SCRA 621; Briones v. Lilia Henson -Cruz GR 159130 Aug 22, 2008; Heirs of Siapian et al v Estate of Mackay GR 184799 Sept 1, 2010

Special Proceedings under Other Laws or SC rules Sec. 5/2 RA 8799 AM 01-2-04 – SC Interim Rules of Procedure governing Intra-corporate Controversies 2008 Rules on Corporate Rehabilitation (see rules 2 and 4 re: pre-trial) Pryce Corp v. CA GR 172302 Feb 4, 2008 NB v Equitable PCIBank GR 165571 Jan 20, 2009 Jerry Ong v PDUC GR 175117 aug 18, 2010; China Banking v Cebu Printing GR 172880 Aug 11, 2010
CRIMINAL PROCEDURE Rule 110 Prosecution of Offenses - Venue of libel cases - Macasaet v. People, 452 SCRA 255 Venue of BP 22 cases - Rigor v. People, GR No. 144887, Nov. 17, 2004 AM No. 02-2-07, Sec 5

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AM No. 02-2-07, Sec 5 Filing - Del Rosario v. Vda De Mercado 29 SCRA 116; SEC v Interport GR 135808 Oct 6, 2008 Reinvestigation - Crespo v. Mogul 151 SCRA 462; ; Harold Tamargo v. Romulo Awingan GR 177727, Jan 19, 2010 Amendment – Pp v. Casey 103 SCRA 21; Fronda –Baggao v. Pp GR 151785 Dec 10, 2007; PP v. Hon Cajigal GR 157472 Sep 20, 2007 Sec 5 (affidavit of desistance) – People v. De la Cerna GR 136899 – 904 Oct 9, 2002 Sec 6 – Lasoy et al v. Zenarosa GR 129472; People v. Puig GR 173654 – 765 Aug 28, 2009 Sec 15 – Isip v. People GR 170298 Jun 26, 2007; Sony Corp v. Supergreen GR 161823 Mar 22, 2007 Relationship – People v. Ceredon GR 167179 Jan 28, 2008 Date/time of commission – People v. Almendral GR 126025 Jul 6, 2004 Qualifying circumstances – Pp v. Buayaban GR No. 112459 Mar 28, 2003 ; Pp v. Masapol 417 SCRA 371; PP v. Coredon GR 167179 Jan 28, 2008 Sec 13 (duplicity of offenses) – People v. Soriano GR 178325 Feb 22, 2008 Complaint-affidavit – Hilario P. Soriano v. People, GR 162336, Feb 1, 2010
Rule 111 Prosecution of Civil Action- Sec 1 – Cancio v. Isip GR 133978 Nov 12, 2002; Cheng v. Sy GR 174238 Jul 7, 2009 Sec 3 – Samson v. Daway GR 1600554 Jul 21, 2004 Sec 5 – Ferrer v. SB GR 161067 Mar 14, 2008 Sec 7 – Dreamwork Construction v. Janiola GR 184861 Jun 30, 2009 Implied reservation - Sarmiento v. CA 394 SCRA 315 Express reservation - Hambon v. CA 399 SCRA 255 Civil liability - Salazar v. Pp 411 SCRA 598 ; First Producers Holdings Corp v. Luis Co., GR 139655 July 27, 2000; Corpus v. Siapno AM MTJ-96-1106 Jun 17, 2002; Cruz v. Ca 388 SCRA 72 BP22 – Sps Benito Lo Ban Tiong v. Balboa GR 158177 Jan 28, 2008; Cheng v. Sps Sy GR 174238 Jun 7, 2009 Sec 4 (death of accused) - People v. Abungan GR 136843 Sept 28, 2000; ABS-CBN v. Ombudsman GR 133347 Oct 15, 2008 Prejudicial question – People v. Consing GR 148193 Jan 16, 2003; Reyes v. Pearlbank GR 171435 Jul 30, 2008; Dreamwork v. Janiola GR 184861 Jun 30, 2009

Rule 112 Preliminary InvestigationAM No. 05-8-26-SC Amendment of Rules 112 and 114 of the Revised Rules on Criminal Procedure by Removing the Conduct of Preliminary Investigation from Judges of the First Level Courts Probable cause discretion of investigating prosecutor - Hegerty v. CA 409 SCRA 285 Cause of accusation – Miranda v. SB GR 154098 Jul 27, 2005 Contents of the information – People v. Ibanez 523 SCRA 136 Authority of prosecutor – Tolentino v. Paqueo 523 SCRA 377 Sec 3 – Santos-Concio et al v. DOJ Sec GR 175057 Jan 29, 2008; Racho v. Miro GR 168578 Sep 30, 2008; Sps Balaguan v Ca GR 174350 Aug 13, 2008 Non-interference by court – Aguirre v. DOJ GR 170723 Mar 23, 2008; Juanito Chan v. DOJ Sec GR 147065 Mar 14, 2008 When to question irregularities – Lolita Eugenio v. PP GR 168163 Mar 26, 2008; Failure to comply with Sec 4 - Cruz v CA 388 SCRA 72 Villaflor v. Vivar 349 SCRA 194; Uy v. SB 354 SCRA 651 Sec 6 – Baltazar v. People GR 174016 Jul 28, 2008; Tabujara III v. People GR 175162 Oct 29, 2008 Sec 7 – GR 158211 Aug 31, 2004 San Agustin v. People; Ladlad v. Velasco 523 SCRA 318 Secs. 8 and 9 – Victorias Milling v. Padilla GR 156962 Oct 6, 2008 Issuance of warrant discretionary on judge - Sesbreno v. Aglugub 452 SCRA 365 Second information – Saludaga v SB GR 184537 Apr 23, 2010 Rule 113 ArrestPeople v. Escordial GR 138934 January 16, 2002 Requirements for issuance of warrant of arrest - Gutierrez v. Hernandez 524 SCRA 1 Probable cause to issue warrant - AAA v. Carbonell GR 171465 Jan 8, 2007; People v. Laguio GR 128587 March 1, 2007 Inquest – Ladlad v. Velasco 523 SCRA 318 PP v. Molina 352 SCRA 174; PP v. Salanguit 356 SCRA 683 In flagrante delicto – People v. Alunday GR 181548 Sep 3, 2008; People v. Carlos de la Cruz GR 182348 Nov 20, 2008; REMLAW Page 13

GR 182348 Nov 20, 2008; Hot pursuit – People v. Recepcion et al GR 141943-45 Nov 13, 2002 Rule 114 Bail- Right to bail – San Miguel v. Hon. Maceda AM RTJ-03-1749 Apr 3, 2007 Esteban v. Alhambra GR No. 135012 Sep 7, 2004 Procedure re grant - Taborite v. Sollesta 408 SCRA 602; Serapio v. SB GR 148468, 148769, 149116 Jan 28, 2003; Yap v. CA 358 SCRA 564; Pp v. Fitzerald GR 140288 Oct 23, 2006 Where to appeal from denial of bail – Chua v. CA GR 140842 Apr 12, 2007 Discretionary bail (Sec 20) – Andres v. Beltran 415 SCRA 598 (2001) Sec. 26 – Okabe v. Gutierrez GR 150185 May 27, 2004 Meaning of ―reclusion perpetua‖ – Cenzon v. Hon. Abad Santos GR 164337 Jun 27, 2006 Sec 5 – Jose Antonio Leviste v CA GR 189122 Mar 17, 2010 OSG – Heirs of Sarah Burgos v CA GR 169711 Feb 8, 2010

Rule 115 Rights of Accused Phil. Constitution Art. III RA 8493 (Speedy Trial Act of 1998) and SC Circular No. 38-98 RA 7438 An act defining certain rights of person arrested, detained or under custodial investigation as well as the duties of arresting, detaining and investigating officers and providing penalties for violations thereof – Lumanog v People GR 182555 Sep 7, 2010 Speedy disposition – Cabarles v. Maceda GR 161330 Feb 20, 2007 Speedy trial – Perez v. People GR 164763 Feb 12, 2008; Benares v. Lim GR 173421 Dec 14, 2006; People v. Jose R. Hernandez, GR No. 154218 and 154372, August 28, 2006; Pp v Baloloy 381 SCRA 31; Miranda rights – Pp v. Teves 356 SCRA 14 Out of Court Identification – People v. Jojo Musa GR 170472, July 3, 2009 Right to counsel – Aquino v. Paiste GR 147782 Jun 25, 2008; People v. Serzo Jr GR 118435 Jun 20, 1997; PP v Domingo Reyes GR 178300 Mar 17, 2009 Rule 116 Arraignment and PleaChange of plea - Pp v Bernas 377 SCRA 391; Pp v. Ulit GR 131799-901 23 Feb 2004; Sec. 2 - Daan v SB GR 163972-77 Mar 28, 2008
Rule 117 Motion to QuashNot a MOD- Antonio Abador v. People GR 186001, Oct 2, 2009 Double jeopardy - Alonto v. People GR No. 140078, Dec 9, 2004; Pp v. Velasco 340 SCRA 207; Castro v. People GR 180832 Jul 23, 2008 Provisional dismissal - Pp v. Lacson GR 149453 Apr 1, 2003 ; Torres v. Sps Aguinaldo GR 164268 Jun 28, 2005 No authority to file - People v. Hon Garfin GR 153176, 29 Mar 2004 Denial not correctible by certiorari – Serana v. SB & PP GR 162059 Jan 22, 2008; Pp v. Romualdez GR 166510 Jul7 23, 2008 Res judicata – Pacifico Cruz v. SB GR 174599-609 Feb 12, 2010

Rule 118 Pre-TrialStipulation of facts - Bayas v. SB 391 SCRA 415 People v. Sitao, 387 SCRA 701
Rule 119 Trial RA No. 6981 The Witness Protection Act Affidavit v. testimony - Angcaco v Pp 378 SCRA 297 Right to counsel - People v. Sunga 399 SCRA 624 Demurrer to evidence - People v. Sandiganbayan GR 137707-11, Dec 17, 2004; Pp v. Sayaboc GR 147201, 15 Jan 2004 ; Cabarles v. Maceda & Pp GR 161330 Feb 20, 2007; Pp v. Tolentino et al GR 176385 Feb 26, 2008 Phil Const Art II Secs 12, 14, 16 and 17 Sec 4 – People v. Webb GR 132577 Aug 17, 1999 Sec. 15 – Vda de Manguerra v. Risos GR 152643 Aug 28, 2008 Subpoena – Roco v. Contreras GR 158275 Jun 28, 2005 Role of private prosecutor – Carino v. De Castro GR 176084 Apr 30, 2008

Rule 120 JudgmentDelay in promulgation - Cea v. Paguio 397 SCRA 494 Failure to appear at promulgation - Tolentino v. People, GR No. 170396, August 31, 2006 Sec 5 – Suero v People GR 156408 Jan 31, 2005 REMLAW Page 14

Sec 5 – Suero v People GR 156408 Jan 31, 2005 Determination of penalty – People v. Temporada GR 173473 Dec 17, 2008 Sec 2 – Lumanog v. People GR 182555 Sep 7, 2010
Rule 121 New Trial or Reconsideration- Requisites of MNT - Pp v Judavar 380 SCRA 548 Sec 2, Saludaga v SB GR 184537 Apr 23, 2010 Rule 122 Appeal- AM No. 00-5-03-SC – Re: Amendments to the Revised Rules of Criminal Procedure to Govern Death Penalty Cases – Pp v. Mateo GR 147678-87, Jul 7, 2004 Certiorari from grant of bail - Pobre v. CA, 463 SCRA 50, Jul 8, 2005 Failure to file brief - Tamayo v CA GR 147070 Feb 17, 2004 Escape pending appeal - Pp v. Latayada GR 146865 Feb 18, 2004; Vitto v. CA 404 SCRA 307 Hierarchy of courts - Quesada v. DOJ, GR No. 150325, Aug 31, 2006 Pp v. Bayotas 236 SCRA 239 Rule 123 Procedure in the Municipal Trial Courts - Rule 124 Procedure in the Court of Appeals - Dismissal of appeal - Pp v De La Concha 388 SCRA 280 Sec 8 - Nino Masas v. PP GR 177313 Dec 19, 2007 Rule 125 Procedure in the Supreme Court- Post-conviction review – Pp v. Labriaga 250 SCRA 163 Rule 126 Search and Seizure- Plain view – People v. Que Ming Kha GR 133265 May 29, 2002 Unannounced entry- People v. Huang Zhen Hua, GR 139301, Sep 29, 2004 Control of property - People v. Del Castillo GR 153254, Sep 30, 2004 Exceptions to warrant requirement - Caballes v. CA 373 SCRA 221 Time of arrest - PP v. Che Cun ting 328 SCRA 592; People v. Zenaida Quebral, GR 185379, Nov 27, 2009 Determination of probable cause - Sony Music v. Espanol GR 156804 March 14, 2005 People v. Judge Laguio & Wang Mar 16, 2007 Things to be seized – PP v Raul Nunez GR 177168 Jun 30, 2009 Things to be seized – Pp v. Raul Nunez GR 177168 Jun 30, 2009 Sec 13 – Sr. Inspc. Jerry C. Valeroso v. CA & Pp GR 164815, Sept 3, 2009 Rule 127 Provisional Remedies in Criminal Cases - EVIDENCE Rule 128 General Provisions - Competence – Ramirez v. CA 248 SCRA 590

Rule 129 What Need Not be Proved- Judicial admission - Republic v. Sandiganbayan 406 SCRA 190; BPI Savings v. CTA 330 SCRA 507 Judicial notice – Experttravel v. CA GR 152392 Rule 130 Rules of Admissibility- Real Evidence – People v. Bardaje 99 SCRA 388 DNA – read AM No. 06-11-5-SC Oct 15, 2007; Estate of Rogelio Ong v. Minor Diaz GR 171713 Dec 17, 2007; PP v Umamito GR 172607 Oct 26, 2007; Herrera v Alba GR 148220 Jun 15, 2005
Documentary Evi dence: Best/Secondary/Parol Evi dence Best evidence rule (Rule 130 Secs 2-8 ; Rule 132 Secs. 25 and 27) - Lee v. People Gr 159288 Oct 19, 2004 ; Mallari v. People, GR 153911 Dec 10, 2004; DECS v. Del Rosario GR 146586 Jan 26, 2005; Citibank Mastercard v. Teodoro 411 SCRA 577; Seaoil v Autocorp GR 164326 Oct 17, 2008 Parol evidence – Duvaz Corp v. Export and Industry Bank 523 SCRA 405 Parol evidence rule – Rule 130 Sec. 9 Ortanez v. CA 266 SCRA 561 Falsified document –Pacasum v PP GR 180314 Apr 16, 2009

Electronic Evidence REMLAW Page 15

Electronic Evidence RA 8792 Electronic Commerce Act Secs. 5, 6-15 AM 01-7-01-SC New Rules on Electronic Evidence, Rule 2, Sec 1; Rule 3, Rule 4 MCC v Ssangyong GR 170633 Oct 17, 2007 Aznar v. Citibank Mar 28, 2007; NPC v. Codilla GR 170491 Apr 3, 2007 Ang v CA et al GR 182835 Apr 20, 2010 Interpretation of Documents Testimonial Evidence: Qualification of Witnesses/Testimonial Privilege/Admissions and Confessions/Previous Conduct as Evi dence Qualification of witnesses Mental incapacity Rule 130 Sec 20, 21 - Pp v. Mendoza GR 113791 Feb 2, 1996 Marital disqualification Rule 130 Sec 22 – Pp v. Castaneda 88 SCRA 562 Deadman‘s Statute Rule 130 Sec 23 – Razon v. IAC 207 SCRA 234 Privileged Communications Marital communications Rule 130 Sec 24 (a) – Pp v. Carlos Mar 1975 Attorney-client Rule 130 Sec. 24 (b) – Pp v. Sandiganbayan 275 SCRA 505; Regala v. Sandiganbayan 262 SCRA 124 Physician-patient Rule 130 Sec. 24 - Lim v. CA 214 SCRA 273 (1992); Krohn v. CA 233 SCRA 146 State secrets Rule 130 Sec 24 (e) – BF v. Monetary Board 142 SCRA 523 (1986) Parental and filial privilege Rule 130 Sec 25 Newsman‘s privilege RA 53, as amended by RA 1477 Admissions and Confessions Admissions against interest Rule 130 Sec 26 & 32 – Keller & Co. v. COB 141 SCRA 86 Compromises Rule 130 Sec 27 – Pp v. Yparriguirre 268 SCRA 35; Pp v. Godoy 250 SCRA 676 Res Inter Alios Acta Rule 130 Sec 28 - Pp v. Racquel 265 SCRA 248 Exceptions to res inter alios acta rule Partner‘s agent‘s admissions Rule 130 Sec 28 Coconspirator‘s statements Rule 130 Sec 30 Pp v. Cabrera 57 SCRA 715 Admission by privies Rule 130 Sec 31 Sec 32 - Villanueva v. Balaguer GR 180197 Jun 23, 2009
Confessions Rule 130 Sec 33 – Pp v. Yip Wai Ming 264 SCRA 224; Pp v. Wong Chuen Ming 256 SCRA 135 Corpus delicti – Pp v. Romulo Tuniaco, GR 185710, Jan 19, 2010 The Hearsay Rule Testimonial knowledge Rule 130 Sec 36 – Pp v. Gaddi 170 SCRA 649 Hearsay, what is – Phil Free Press v. CA 473 SCRA GR 132864 Dying Declaration Rule 130 Sec 37 - Pp v. Macandog June 6, 2001 GR 129534; Pp v. Latayada GR 146865 Feb 18, 2004; Pp v Cerilla GR 177147 Nov 28, 2007 Declaration against interest Rule 130 Sec 38 - Estrada v. Disierto GR 146710-15 Apr 3, 2001; HKO Ah Pao v. Ting GR 153476; Heirs of Franco v. CA 418 SCRA 60 Act or declaration about pedigree / Family reputation or tradition regarding pedigree Rule 130 Secs 39, 40, 41 - Rosendo Herrera v. Alba GR 148220 June 15, 2005; Tison v. CA 276 SCRA 582 Res gestae Rule 130 Sec 42 – Pepito Capila v. Pp GR 146161 Jul 17, 2006; PP v. Cudal Oct 31, 2006; DPB Pool v. RMN GR 147039 Jan 27, 2006; Pp v. Tolentino 218 SCRA 337; Arthur Zarate v. RTC GR 152263, July 3, 2009 Entries in the course of business Rule 130 Sec 42 - Nestle Phil v. FY Sons GR 150780; Security Bank v. Gan GR 150464 Jun 27, 2006 Entries in official records Rule 130 Sec 44 – Pp v. Aureo Rojo GR 82737 July 5, 1989; Pp v. Cabuang 217 SCRA 675; Franco Cruz v. CA GR 172238 Sep 17, 2008 Commercial lists and the like Rule 130 Sec 45 – PNOC Shipping v. Ca 299 SCRA 402 Learned Treatises Rule 130 Sec 46 Prior testimony Rule 130 Sec 47 – Tan v. CA 20 SCRA 54

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Opinion Rule Rule 130 Secs 48 -50 Expert witnesses – Milagors Ilao Quianay v. Mapile GR 154087 Oct 25, 2005; Pp v. Adoviso 309 SCRA 1; Bacalso v. Padigos GR 173192 Apr 18, 2008

Character Evidence Rule 130 Secs 34-35; Rule 132 Sec 14 – PP v. Soliman 53 OG 8083
Rule 131 Burden of Proof and Presumptions - Republic v. Vda De Neri GR 139588 4 Mar 2004 Barcelon Roxas Sec v. CIR GR 157064 GR 157064 Aug 7, 2006 Substantial evidence in adm proc - Republic v. Canastillo 524 SCRA 546; Salvador Pleto v. PNP GR 169982 Nov 23, 2007 Authenticity of signature – Sanchez v. Mapalad GR 148516 Dec 27 2007 541 SCRA 397

Rule 132 Presentation of Evidence (Examination of Witnesses) Examination in open court – Galman v. Pamaran 138 SCRA 294 Cross-examination – Dela Paz v. IAS 154 SCRA 65 Impeachment by prior inconsistent statement – Villalon v. IAC 144 SCRA 443 Recalling witnesses – Pp v. Rivera 200 SCRA 786 Pp v. Cadley GR 150735 15 Mar 2004 Zalamea v CA 228 SCRA 23 Heirs of Sabanpan v. Comorposa 408 SCRA 692 Adverse party witness - Gaw v. Suy Ben Chua GR 160855; People v Obnuranis GR 181492 Dec 16, 2008 SC Administrative Memo No. 00-4-07 Rule on Examination of a Child Witness Authentication and Proof of Documents Rule 132 Secs 19-33; E-Commerce Act, Secs. 5, 6-15; REE Rules 5, 6, 9 & 11 Heirs of Gubaton v CA GR 150206 Mar 13, 2009 Llemos et al v. Llemos et al GR 150162 Jan 26, 2007; IBM Phil v. NLRC 305 SCRA 592; Pp v. Lazaro 317 SCRA 435\ Sps De La Rama v Sps Pape GR 142309 Jan 30, 2009 Offer and Objection Rule 132 Secs 34-40 Vda de Onate v. CA 250 SCRA 283; Heirs of Doromio v. Heirs of Doromio 541 SCRA 479; Deutsche Bank v SEC 481 SCRA 672
Rule 133 Weight and Sufficiency of Evidence- Habagat Grill v. DMC-Urban GR 155110 March 31, 2005; Pp v. Hijada GR 123696 11 Mar 2004; Heirs of Conti v. CA 300 SCRA 345

DNA Evi dence Estate of Ong v Diaz GR 171713 Dec 17, 2007 People v. Umanito GR 172607 Oct 26, 2007 Herrera v Alba GR 148220 Jan 15, 2005 In re Writ of Habeas Corpus for Reynaldo De Villa GR 158802 Nov 17, 2004
Rule 134 Sec. 6 – Go v. Looyuko GR 147923 537 SCRA 445 26 Oct 2007 Chain of custody in drugs cases – Bonifacio Tejada v. Pp GR 180693, Sep 4, 2009

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Hasegawa et al v. Kitamura GR 149177 Nov 23, 2007
Sunday, November 14, 2010 11:16 PM

KAZUHIRO HASEGAWA AND NIPPON ENGINEERING CONSULTANTS CO., LTD. VS. MINORU KITAMURA [G.R. No. 149177, November 23, 2007] NACHURA
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the April 18, 2001 Decision [1] of the Court of Appeals (CA) in CA-G.R. SP No. 60827, and the July 25, 2001 Resolution [2] denying the motion for reconsideration thereof. On March 30, 1999, petitioner Nippon Engineering Consultants Co., Ltd. (Nippon), a Japanese consultancy firm providing technical and management support in the infrastructure projects of foreign governments, [3] entered into an Independent Contractor Agreement (ICA) with respondent Minoru Kitamura, a Japanese national permanently residing in the Philippines. [4] The agreement provides that respondent was to extend professional services to Nippon for a year starting on April 1, 1999. [5] Nippon then assigned respondent to work as the project manager of the Southern Tagalog Access Road (STAR) Project in the Philippines, following the company's consultancy contract with the Philippine Government. [6]

When the STAR Project was near completion, the Department of Public Works and Highways (DPWH) engaged the consultancy services of Nippon, on January 28, 2000, this time for the detailed engineering and construction supervision of the BongabonBaler Road Improvement (BBRI) Project. [7] Respondent was named as the project manager in the contract's Appendix 3.1. [8]
On February 28, 2000, petitioner Kazuhiro Hasegawa, Nippon's general manager for its International Division, informed respondent that the company had no more intention of automatically renewing his ICA. His services would be engaged by the company only up to the substantial completion of the STAR Project on March 31, 2000, just in time for the ICA's expiry. [9] Threatened with impending unemployment, respondent, through his lawyer, requested a negotiation conference and demanded that he be assigned to the BBRI project. Nippon insisted that respondent’s contract was for a fixed term that had already expired, and refused to negotiate for the renewal of the ICA. [10] As he was not able to generate a positive response from the petitioners, respondent consequently initiated on June 1, 2000 Civil Case No. 00-0264 for specific performance and damages with the Regional Trial Court of Lipa City. [11] For their part, petitioners, contending that the ICA had been perfected in Japan and executed by and between Japanese nationals, moved to dismiss the complaint for lack of jurisdiction. They asserted that the claim for improper pre -termination of respondent's ICA could only be heard and ventilated in the proper courts of Japan following the principles of lex loci celebrationis and lex contractus.[12]

In the meantime, on June 20, 2000, the DPWH approved Nippon's request for the replacement of Kitamura by a certain Y. Kotake as project manager of the BBRI Project.[13]
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Project.[13]
On June 29, 2000, the RTC, invoking our ruling in Insular Government v. Frank [14] that matters connected with the performance of contracts are regulated by the law prevailing at the place of performance, [15] denied the motion to dismiss. [16] The trial court subsequently denied petitioners' motion for reconsideration, [17] prompting them to file with the appellate court, on August 14, 2000, their first Petition for Certiorari under Rule 65 [docketed as CA-G.R. SP No. 60205].[18] On August 23, 2000, the CA resolved to dismiss the petition on procedural grounds—for lack of statement of material dates and for insufficient verification and certification against forum shopping. [19] An Entry of Judgment was later issued by the appellate court on September 20, 2000.[20] Aggrieved by this development, petitioners filed with the CA, on September 19, 2000, still within the reglementary period, a second Petition for Certiorari under Rule 65 already stating therein the material dates and attaching thereto the proper verification and certification. This second petition, which substantially raised the same issues as those in the first, was docketed as CA-G.R. SP No. 60827.[21]

Ruling on the merits of the second petition, the appellate court rendered the assailed April 18, 2001 Decision [22] finding no grave abuse of discretion in the trial court's denial of the motion to dismiss. The CA ruled, among others, that the principle of lex loci celebrationis was not applicable to the case, because nowhere in the pleadings was the validity of the written agreement put in issue. The CA thus declared that the trial court was correct in applying instead the principle of lex loci solutionis.[23] Petitioners' motion for reconsideration was subsequently denied by the CA in the assailed July 25, 2001 Resolution. [24] Remaining steadfast in their stance despite the series of denials, petitioners instituted the instant Petition for Review on Certiorari [25] imputing the following errors to the appellate court: A. The honorable court of appeals gravely erred in finding that the trial court validly exercised jurisdiction over the instant controversy, despite the fact that the contract subject matter of the proceedings a quo was entered into by and between two japanese nationals, written wholly in the japanese language and executed in tokyo, japan. B. The honorable court of appeals gravely erred in overlooking the need to review our adherence to the principle of lex loci solutionis in the light of recent development[s] in private international laws. [26] The pivotal question that this Court is called upon to resolve is whether the subject matter jurisdiction of Philippine courts in civil cases for specific performance and damages involving contracts executed outside the country by foreign nationals may be assailed on the principles of lex loci celebrationis, lex contractus, the “state of the most significant relationship rule,― or forum non conveniens. However, before ruling on this issue, we must first dispose of the procedural matters raised by the respondent.
Kitamura contends that the finality of the appellate court's decision in CA-G.R. SP No. 60205 has already barred the filing of the second petition docketed as CA -G.R. SP No. 60827 (fundamentally raising the same issues as those in the first one) and

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the instant petition for review thereof. We do not agree. When the CA dismissed CA-G.R. SP No. 60205 on account of the petition's defective certification of non-forum shopping, it was a dismissal without prejudice.[27] The same holds true in the CA's dismissal of the said case due to defects in the formal requirement of verification [28] and in the other requirement in Rule 46 of the Rules of Court on the statement of the material dates. [29] The dismissal being without prejudice, petitioners can re-file the petition, or file a second petition attaching thereto the appropriate verification and certification—as they, in fact did—and stating therein the material dates, within the prescribed period[30] in Section 4, Rule 65 of the said Rules. [31] The dismissal of a case without prejudice signifies the absence of a decision on the merits and leaves the parties free to litigate the matter in a subsequent action as though the dismissed action had not been commenced. In other words, the termination of a case not on the merits does not bar another action involving the same parties, on the same subject matter and theory. [32] Necessarily, because the said dismissal is without prejudice and has no res judicata effect, and even if petitioners still indicated in the verification and certification of the second certiorari petition that the first had already been dismissed on procedural grounds, [33] petitioners are no longer required by the Rules to indicate in their certification of non-forum shopping in the instant petition for review of the second certiorari petition, the status of the aforesaid first petition before the CA. In any case, an omission in the certificate of non-forum shopping about any event that will not constitute res judicata and litis pendentia, as in the present case, is not a fatal defect. It will not warrant the dismissal and nullification of the entire proceedings, considering that the evils sought to be prevented by the said certificate are no longer present. [34]

The Court also finds no merit in respondent's contention that petitioner Hasegawa is only authorized to verify and certify, on behalf of Nippon, the certiorari petition filed with the CA and not the instant petition. True, the Authorization [35] dated September 4, 2000, which is attached to the second certiorari petition and which is also attached to the instant petition for review, is limited in scope—its wordings indicate that Hasegawa is given the authority to sign for and act on behalf of the company only in the petition filed with the appellate court, and that authority cannot extend to the instant petition for review. [36] In a plethora of cases, however, this Court has liberally applied the Rules or even suspended its application whenever a satisfactory explanation and a subsequent fulfillment of the requirements have been made.[37] Given that petitioners herein sufficiently explained their misgivings on this point and appended to their Reply [38] an updated Authorization [39] for Hasegawa to act on behalf of the company in the instant petition, the Court finds the same as sufficient compliance with the Rules.
However, the Court cannot extend the same liberal treatment to the defect in the verification and certification. As respondent pointed out, and to which we agree, Hasegawa is truly not authorized to act on behalf of Nippon in this case. The aforesaid September 4, 2000 Authorization and even the subsequent August 17, 2001 Authorization were issued only by Nippon's president and chief executive officer, not by the company's board of directors. In not a few cases, we have ruled that corporate powers are exercised by the board of directors; thus, no person, not even its officers, can bind the corporation, in the absence of authority from the board.[40] Considering that Hasegawa verified and certified the petition only on his
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board.[40] Considering that Hasegawa verified and certified the petition only on his behalf and not on behalf of the other petitioner, the petition has to be denied pursuant to Loquias v. Office of the Ombudsman. [41] Substantial compliance will not suffice in a matter that demands strict observance of the Rules. [42] While technical rules of procedure are designed not to frustrate the ends of justice, nonetheless, they are intended to effect the proper and orderly disposition of cases and effectively prevent the clogging of court dockets. [43] Further, the Court has observed that petitioners incorrectly filed a Rule 65 petition to question the trial court's denial of their motion to dismiss. It is a well -established rule that an order denying a motion to dismiss is interlocutory, and cannot be the subject of the extraordinary petition for certiorari or mandamus. The appropriate recourse is to file an answer and to interpose as defenses the objections raised in the motion, to proceed to trial, and, in case of an adverse decision, to elevate the entire case by appeal in due course. [44] While there are recognized exceptions to this rule,[45] petitioners' case does not fall among them. This brings us to the discussion of the substantive issue of the case.
Asserting that the RTC of Lipa City is an inconvenient forum, petitioners question its jurisdiction to hear and resolve the civil case for specific performance and damages filed by the respondent. The ICA subject of the litigation was entered into and perfected in Tokyo, Japan, by Japanese nationals, and written wholly in the Japanese language. Thus, petitioners posit that local courts have no substantial relationship to the parties [46] following the [state of the] most significant relationship rule in Private International Law. [47] The Court notes that petitioners adopted an additional but different theory when they elevated the case to the appellate court. In the Motion to Dismiss[48] filed with the trial court, petitioners never contended that the RTC is an inconvenient forum. They merely argued that the applicable law which will determine the validity or invalidity of respondent's claim is that of Japan, following the principles of lex loci celebrationis and lex contractus. [49] While not abandoning this stance in their petition before the appellate court, petitioners on certiorari significantly invoked the defense of forum non conveniens. [50] On petition for review before this Court, petitioners dropped their other arguments, maintained the forum non conveniens defense, and introduced their new argument that the applicable principle is the [state of the] most significant relationship rule. [51] Be that as it may, this Court is not inclined to deny this petition merely on the basis of the change in theory, as explained in Philippine Ports Authority v. City of Iloilo. [52] We only pointed out petitioners' inconstancy in their arguments to emphasize their incorrect assertion of conflict of laws principles.
To elucidate, in the judicial resolution of conflicts problems, three consecutive phases are involved: jurisdiction, choice of law, and recognition and enforcement of judgments. Corresponding to these phases are the following questions: (1) Where can or should litigation be initiated? (2) Which law will the court apply? and (3) Where can the resulting judgment be enforced?[53]

Analytically, jurisdiction and choice of law are two distinct concepts. [54] Jurisdiction considers whether it is fair to cause a defendant to travel to this state; choice of law asks the further question whether the application of a substantive law which will determine the merits of the case is fair to both parties. The power to exercise jurisdiction does not automatically give a state constitutional authority to apply forum law. While jurisdiction and the choice of the lex fori will often coincide, the “minimum contacts― for one
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and the choice of the lex fori will often coincide, the “minimum contacts― for one do not always provide the necessary “significant contacts― for the other. [55] The question of whether the law of a state can be applied to a transaction is different from the question of whether the courts of that state have jurisdiction to enter a judgment. [56]
In this case, only the first phase is at issue—jurisdiction. Jurisdiction, however, has various aspects. For a court to validly exercise its power to adjudicate a controversy, it must have jurisdiction over the plaintiff or the petitioner, over the defendant or the respondent, over the subject matter, over the issues of the case and, in cases involving property, over the res or the thing which is the subject of the litigation. [57] In assailing the trial court's jurisdiction herein, petitioners are actually referring to subject matter jurisdiction. Jurisdiction over the subject matter in a judicial proceeding is conferred by the sovereign authority which establishes and organizes the court. It is given only by law and in the manner prescribed by law. [58] It is further determined by the allegations of the complaint irrespective of whether the plaintiff is entitled to all or some of the claims asserted therein. [59] To succeed in its motion for the dismissal of an action for lack of jurisdiction over the subject matter of the claim, [60] the movant must show that the court or tribunal cannot act on the matter submitted to it because no law grants it the power to adjudicate the claims. [61] In the instant case, petitioners, in their motion to dismiss, do not claim that the trial court is not properly vested by law with jurisdiction to hear the subject controversy for, indeed, Civil Case No. 00-0264 for specific performance and damages is one not capable of pecuniary estimation and is properly cognizable by the RTC of Lipa City. [62] What they rather raise as grounds to question subject matter jurisdiction are the principles of lex loci celebrationis and lex contractus, and the “state of the most significant relationship rule.― The Court finds the invocation of these grounds unsound. Lex loci celebrationis relates to the “law of the place of the ceremony―[63] or the law of the place where a contract is made. [64] The doctrine of lex contractus or lex loci contractus means the “law of the place where a contract is executed or to be performed.―[65] It controls the nature, construction, and validity of the contract [66] and it may pertain to the law voluntarily agreed upon by the parties or the law intended by them either expressly or implicitly. [67] Under the “state of the most significant relationship rule,― to ascertain what state law to apply to a dispute, the court should determine which state has the most substantial connection to the occurrence and the parties. In a case involving a contract, the court should consider where the contract was made, was negotiated, was to be performed, and the domicile, place of business, or place of incorporation of the parties. [68] This rule takes into account several contacts and evaluates them according to their relative importance with respect to the particular issue to be resolved. [69] Since these three principles in conflict of laws make reference to the law applicable to a dispute, they are rules proper for the second phase, the choice of law. [70] They determine which state's law is to be applied in resolving the substantive issues of a conflicts problem. [71] Necessarily, as the only issue in this case is that of jurisdiction, choice-of-law rules are not only inapplicable but also not yet called for. Further, petitioners' premature invocation of choice-of-law rules is exposed by the fact that they have not yet pointed out any conflict between the laws of Japan and ours. Before determining which law should apply, first there should exist a conflict of laws situation requiring the application of the conflict of laws rules. [72] Also, when the law of a
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situation requiring the application of the conflict of laws rules. [72] Also, when the law of a foreign country is invoked to provide the proper rules for the solution of a case, the existence of such law must be pleaded and proved. [73] It should be noted that when a conflicts case, one involving a foreign element, is brought before a court or administrative agency, there are three alternatives open to the latter in disposing of it: (1) dismiss the case, either because of lack of jurisdiction or refusal to assume jurisdiction over the case; (2) assume jurisdiction over the case and apply the internal law of the forum; or (3) assume jurisdiction over the case and take into account or apply the law of some other State or States. [74] The court’s power to hear cases and controversies is derived from the Constitution and the laws. While it may choose to recognize laws of foreign nations, the court is not limited by foreign sovereign law short of treaties or other formal agreements, even in matters regarding rights provided by foreign sovereigns. [75]

Neither can the other ground raised, forum non conveniens, [76] be used to deprive the trial court of its jurisdiction herein. First, it is not a proper basis for a motion to dismiss because Section 1, Rule 16 of the Rules of Court does not include it as a ground. [77] Second, whether a suit should be entertained or dismissed on the basis of the said doctrine depends largely upon the facts of the particular case and is addressed to the sound discretion of the trial court. [78] In this case, the RTC decided to assume jurisdiction. Third, the propriety of dismissing a case based on this principle requires a factual determination; hence, this conflicts principle is more properly considered a matter of defense. [79]
Accordingly, since the RTC is vested by law with the power to entertain and hear the civil case filed by respondent and the grounds raised by petitioners to assail that jurisdiction are inappropriate, the trial and appellate courts correctly denied the petitioners’ motion to dismiss. WHEREFORE, premises considered, the petition for review on certiorari is DENIED.

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Figueroa v. People, GR 147407, Jul 14, 2008
Sunday, November 14, 2010 11:18 PM

FIGUEROA vs. PEOPLE OF THE PHILIPPINES JULY 14, 2008 NACHURA, J. SUBJECT AREA: Estoppel by laches NATURE: Petition for review on certiorari FACTS: Petitioner was charged with the crime of reckless imprudence resulting in homicide. The RTC found him guilty. In his appeal before the CA, the petitioner, for the first time, questioned RTCs jurisdiction on the case. The CA in affirming the decision of the RTC, ruled that the principle of estoppel by laches has already precluded the petitioner from questioning the jurisdiction of the RTC—the trial went on for 4 years with the petitioner actively participating therein and without him ever raising the jurisdictional infirmity. The petitioner, for his part, counters that the lack of jurisdiction of a court over the subject matter may be raised at any time even for the first time on appeal. As undue delay is further absent herein, the principle of laches will not be applicable. Hence, this petition. ISSUE: WON petitioner’s failure to raise the issue of jurisdiction during the trial of this case, constitute laches in relation to the doctrine laid down in Tijam v. Sibonghanoy, notwithstanding the fact that said issue was immediately raised in petitioner’s appeal to the CA HELD:No . RATIO: Citing the ruling in Calimlim vs. Ramirez, the Court held that as a general rule, the issue of jurisdiction may be raised at any stage of the proceedings, even on appeal, and is not lost by waiver or by estoppel. Estoppel by laches may be invoked to bar the issue of lack of jurisdiction only in cases in which the factual milieu is analogous to that of Tijam v. Sibonghanoy. Laches should be clearly present for the Sibonghanoy doctrine to be applicable, that is, lack of jurisdiction must have been raised so belatedly as to warrant the presumption that the party entitled to assert it had abandoned or declined to assert it. In Sibonghanoy, the party invoking lack of jurisdiction did so only after fifteen years and at a stage when the proceedings had already been elevated to the CA. Sibonghanoy is an exceptional case because of the presence of laches. In the case at bar, the factual settings attendant in Sibonghanoy are not present. Petitioner Atty. Regalado, after the receipt of the Court of Appeals resolution finding her guilty of contempt, promptly filed a Motion for Reconsideration assailing the said court’s jurisdiction based on procedural infirmity in initiating the action. Her compliance with the appellate court’s directive to show cause why she should not be cited for contempt and filing a single piece of pleading to that effect could not be considered as an active participation in the judicial proceedings so as to take the case within the milieu of Sibonghanoy. Rather, it is the natural fear to disobey the mandate of the court that could lead to dire consequences that impelled her to comply. The petitioner is in no way estopped by laches in assailing the jurisdiction of the RTC, considering that he raised the lack thereof in his appeal before the appellate court. At that time, no considerable period had yet elapsed for laches to attach.

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yet elapsed for laches to attach. DISPOSITIVE: Petition for review on certiorari is granted. Criminal case is dismissed
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Ruby Shelter v. Hon. Formaran GR 174914 Feb 10, 2009
Sunday, November 14, 2010 11:19 PM

G.R. No. 175914 : February 10, 2009
RUBY SHELTER BUILDERS AND REALTY DEVELOPMENT CORPORATION, Petitioner, vs. HON. PABLO C. FORMARAN III, Presiding Judge of Regional Trial Court Branch 21, Naga City, as Pairing Judge for Regional Trial Court Branch 22, Formerly Presided By HON. NOVELITA VILLEGAS-LLAGUNO (Retired 01 May 2006), ROMEO Y. TAN, ROBERTO L. OBIEDO and ATTY. TOMAS A. REYES, Respondents.

DE C I SI O N

CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking the reversal of the Decision[1 ] dated 22 November 2006 of the Court of Appeals in CA-G.R. SP No. 94800. The Court of Appeals, in its assailed Decision, affirmed the Order[2 ] dated 24 March 2006 of the Regional Trial Court (RTC), Branch 22, of Naga City, in Civil Case No. RTC-2006-0030, ordering petitioner Ruby Shelter Builders and Realty Development Corporation to pay additional docket/filing fees, computed based on Section 7(a) of Rule 141 of the Rules of Court, as amended.
chanroblesvirtuallawlibrary

The present Petition arose from the following facts: chanroblesvirtuallawlibrary
Petitioner obtained a loan[3 ] in the total amount of P95,700,620.00 from respondents Romeo Y. Tan (Tan) and Roberto L. Obiedo (Obiedo), secured by real estate mortgages over five parcels of land, all located in Triangulo, Naga City, covered by Transfer Certificates of Title (TCTs) No. 38376,[4 ] No. 29918,[5 ] No. 38374,[6 ] No. 39232,[7 ] and No. 39225,[8 ] issued by the Registry of Deeds for Naga City, in the name of petitioner. When petitioner was unable to pay the loan when it became due and demandable, respondents Tan and Obiedo agreed to an extension of the same. chanroblesvirtuallawlibrary

In a Memorandum of Agreement[9 ] dated 17 March 2005, respondents Tan and Obiedo granted petitioner until 31 December 2005 to settle its indebtedness, and condoned the interests, penalties and surcharges accruing thereon from 1 October 2004 to 31 December 2005 which amounted to P74,678,647.00. The Memorandum of Agreement required, in turn, that petitioner execute simultaneously with the said Memorandum, by way of dacion en pago, Deeds of Absolute Sale in favor of respondents Tan and Obiedo, covering the same parcels of land subject of the mortgages. The Deeds of Absolute Sale would be uniformly dated 2 January 2006, and state that petitioner sold to respondents Tan and Obiedo the parcels of land for
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that petitioner sold to respondents Tan and Obiedo the parcels of land for the following purchase prices: chanroblesvirtuallawlibrary TCT No. 38376 29918
38374

Purchase Price P 9,340,000.00 P 28,000,000.00
P 12,000,000.00

39232 39225

P 1,600,000.00 P 1,600,000.00

chanroblesvirtuallawlibrary

Petitioner could choose to pay off its indebtedness with individual or all five parcels of land; or it could redeem said properties by paying respondents Tan and Obiedo the following prices for the same, inclusive of interest and penalties: chanroblesvirtuallawlibrary TCT No. 38376 29918 38374 39232
39225

Redemption Price P 25,328,939.00 P 35,660,800.00 P 28,477,600.00 P 6,233,381.00
P 6,233,381.00

In the event that petitioner is able to redeem any of the afore-mentioned parcels of land, the Deed of Absolute Sale covering the said property shall be nullified and have no force and effect; and respondents Tan and Obiedo shall then return the owners duplicate of the corresponding TCT to petitioner and also execute a Deed of Discharge of Mortgage. However, if petitioner is unable to redeem the parcels of land within the period agreed upon, respondents Tan and Obiedo could already present the Deeds of Absolute Sale covering the same to the Office of the Register of Deeds for Naga City so respondents Tan and Obiedo could acquire TCTs to the said properties in their names. chanroblesvirtuallawlibrary The Memorandum of Agreement further provided that should petitioner contest, judicially or otherwise, any act, transaction, or event related to or necessarily connected with the said Memorandum and the Deeds of Absolute Sale involving the five parcels of land, it would pay respondents Tan and Obiedo P10,000,000.00 as liquidated damages inclusive of costs and attorneys fees. Petitioner would likewise pay respondents Tan and Obiedo the condoned interests, surcharges and penalties.[10] Finally, should a contest arise from the Memorandum of Agreement, Mr. Ruben Sia (Sia), President of petitioner corporation, personally assumes, jointly and severally with petitioner, the latters monetary obligation to respondent Tan and Obiedo.
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petitioner, the latters monetary obligation to respondent Tan and Obiedo.
chanroblesvirtuallawlibrary

Respondent Atty. Tomas A. Reyes (Reyes) was the Notary Public who notarized the Memorandum of Agreement dated 17 March 2005 between respondent Tan and Obiedo, on one hand, and petitioner, on the other.
chanroblesvirtuallawlibrary

Pursuant to the Memorandum of Agreement, petitioner, represented by Mr. Sia, executed separate Deeds of Absolute Sale,[1 1 ] over the five parcels of land, in favor of respondents Tan and Obiedo. On the blank spaces provided for in the said Deeds, somebody wrote the 3rd of January 2006 as the date of their execution. The Deeds were again notarized by respondent Atty. Reyes also on 3 January 2006. chanroblesvirtuallawlibrary Without payment having been made by petitioner on 31 December 2005, respondents Tan and Obiedo presented the Deeds of Absolute Sale dated 3 January 2006 before the Register of Deeds of Naga City on 8 March 2006, as a result of which, they were able to secure TCTs over the five parcels of land in their names. chanroblesvirtuallawlibrary On 16 March 2006, petitioner filed before the RTC a Complaint[1 2 ] against respondents Tan, Obiedo, and Atty. Reyes, for declaration of nullity of deeds of sales and damages, with prayer for the issuance of a writ of preliminary injunction and/or temporary restraining order (TRO). The Complaint was docketed as Civil Case No. 2006-0030. chanroblesvirtuallawlibrary On the basis of the facts already recounted above, petitioner raised two causes of action in its Complaint. chanroblesvirtuallawlibrary As for the first cause of action, petitioner alleged that as early as 27 December 2005, its President already wrote a letter informing respondents Tan and Obiedo of the intention of petitioner to pay its loan and requesting a meeting to compute the final amount due. The parties held meetings on 3 and 4 January 2006 but they failed to arrive at a mutually acceptable computation of the final amount of loan payable. Respondents Tan and Obiedo then refused the request of petitioner for further dialogues. Unbeknownst to petitioner, despite the ongoing meetings, respondents Tan and Obiedo, in evident bad faith, already had the pre-executed Deeds of Absolute Sale notarized on 3 January 2006 by respondent Atty. Reyes. Atty. Reyes, in connivance with respondents Tan and Obiedo, falsely made it appear in the Deeds of Absolute Sale that Mr. Sia had personally acknowledged/ratified the said Deeds before Atty. Reyes. chanroblesvirtuallawlibrary Asserting that the Deeds of Absolute Sale over the five parcels of land were executed merely as security for the payment of its loan to respondents Tan
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executed merely as security for the payment of its loan to respondents Tan and Obiedo; that the Deeds of Absolute Sale, executed in accordance with the Memorandum of Agreement, constituted pactum commisorium and as such, were null and void; and that the acknowledgment in the Deeds of Absolute Sale were falsified, petitioner averred: chanroblesvirtuallawlibrary 13.That by reason of the fraudulent actions by the [herein respondents], [herein petitioner] is prejudiced and is now in danger of being deprived, physically and legally, of the mortgaged properties without benefit of legal processes such as the remedy of foreclosure and its attendant procedures, solemnities and remedies available to a mortgagor, while [petitioner] is desirous and willing to pay its obligation and have the mortgaged properties released. [1 3] chanroblesvirtuallawlibrary

In support of its second cause of action, petitioner narrated in its Complaint that on 18 January 2006, respondents Tan and Obiedo forcibly took over, with the use of armed men, possession of the five parcels of land subject of the falsified Deeds of Absolute Sale and fenced the said properties with barbed wire. Beginning 3 March 2006, respondents Tan and Obiedo started demolishing some of the commercial spaces standing on the parcels of land in question which were being rented out by petitioner. Respondents Tan and Obiedo were also about to tear down a principal improvement on the properties consisting of a steel-and-concrete structure housing a motor vehicle terminal operated by petitioner. The actions of respondents Tan and Obiedo were to the damage and prejudice of petitioner and its tenants/lessees. Petitioner, alone, claimed to have suffered at least P300,000.00 in actual damages by reason of the physical invasion by respondents Tan and Obiedo and their armed goons of the five parcels of land. chanroblesvirtuallawlibrary Ultimately, petitioners prayer in its Complaint reads: chanroblesvirtuallawlibrary
WHEREFORE, premises considered, it is most respectfully prayed of this Honorable Court that upon the filing of this complaint, a 72-hour temporary restraining order be forthwith issued ex parte: chanroblesvirtuallawlibrary

(a)Restraining [herein respondents] Tan and Obiedo, their agents, privies or representatives, from committing act/s tending to alienate the mortgaged properties from the [herein petitioner] pending the resolution of the case, including but not limited to the acts complained of in paragraph 14, above; chanroblesvirtuallawlibrary (b)Restraining the Register of Deeds of Naga City from entertaining moves by the [respondents] to have [petitioners] certificates of title to the mortgaged properties cancelled and changed/registered in
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the mortgaged properties cancelled and changed/registered in [respondents] Tans and Obiedos names, and/or released to them;
chanroblesvirtuallawlibrary

(c)After notice and hearing, that a writ of preliminary injunction be issued imposing the same restraints indicated in the next preceding two paragraphs of this prayer; and chanroblesvirtuallawlibrary (d)After trial, judgment be rendered:

chanroblesvirtuallawlibrary

1. Making the injunction permanent; chanroblesvirtuallawlibrary 2. Declaring the provision in the Memorandum of Agreement requiring the [petitioner] to execute deed of sales (sic) in favor of the [respondents Tan and Obiedo] as dacion en pago in the event of nonpayment of the debt as pactum commissorium; chanroblesvirtuallawlibrary 3. Annulling the Deed[s] of Sale for TCT Nos. 29918, 38374, 38376, 39225 and 39232, all dated January 3, 2006, the same being in contravention of law; chanroblesvirtuallawlibrary 4. Ordering the [respondents] jointly and solidarily to pay the [petitioner] actual damages of at least P300,000.00; attorneys fees in the amount of P100,000.00 plus P1,000.00 per court attendance of counsel as appearance fee; litigation expenses in the amount of at least P10,000.00 and exemplary damages in the amount of P300,000.00, plus the costs. chanroblesvirtuallawlibrary
[Petitioner] further prays for such other reliefs as may be proper, just and equitable under the premises. [14]
chanroblesvirtuallawlibrary

Upon filing its C omplaint with the RTC on 16 March 2006, petitioner paid the sum of P13,644.25 for docket and other legal fees, as assessed by the Office of the Clerk of Court. The Clerk of Court initially considered Civil Case No. 2006-0030 as an action incapable of pecuniary estimation and computed the docket and other legal fees due thereon according to Section 7(b)(1), Rule 141 of the Rules of Court. chanroblesvirtuallawlibrary

Only respondent Tan filed an Answer[15] to the C omplaint of petitioner. Respondent Tan did admit that meetings were held with Mr. Sia, as the representative of petitioner, to thresh out Mr. Sias charge that the computation by respondents Tan and Obiedo of the interests, surcharges and penalties accruing on the loan of petitioner was replete with errors and uncertainties. However, Mr. Sia failed to back up his accusation of errors and uncertainties and to present his own final computation of the amount due. Disappointed and exasperated, respondents Tan and Obiedo informed Mr. Sia that they had already asked respondent Atty. Reyes to come over to notarize the Deeds of Absolute Sale. Respondent Atty. Reyes asked Mr. Sia whether it was his signature appearing above his printed

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Absolute Sale. Respondent Atty. Reyes asked Mr. Sia whether it was his signature appearing above his printed name on the Deeds of Absolute Sale, to which Mr. Sia replied yes. On 4 January 2006, Mr. Sia still failed to establish his claim of errors and uncertainties in the computation of the total amount which petitioner must pay respondent Tan and Obiedo. Mr. Sia, instead, sought a nine-month extension for paying the loan obligation of petitioner and the reduction of the interest rate thereon to only one percent (1%) per month. Respondents Tan and Obiedo rejected both demands. chanroblesvirtuallawlibrary

Respondent Tan maintained that the Deeds of Absolute Sale were not executed merely as securities for the loan of petitioner. The Deeds of Absolute Sale over the five parcels of land were the consideration for the payment of the total indebtedness of petitioner to respondents Tan and Obiedo, and the condonation of the 15-month interest which already accrued on the loan, while providing petitioner with the golden opportunity to still redeem all or even portions of the properties covered by said Deeds. Unfortunately, petitioner failed to exercise its right to redeem any of the said properties. chanroblesvirtuallawlibrary

Belying that they forcibly took possession of the five parcels of land, respondent Tan alleged that it was Mr. Sia who, with the aid of armed men, on board a Sports Utility Vehicle and a truck, rammed into the personnel of respondents Tan and Obiedo causing melee and disturbance. Moreover, by the execution of the Deeds of Absolute Sale, the properties subject thereof were, ipso jure, delivered to respondents Tan and Obiedo. The demolition of the existing structures on the properties was nothing but an exercise of dominion by respondents Tan and Obiedo.
chanroblesvirtuallawlibrary

Respondent Tan, thus, sought not just the dismissal of the C omplaint of petitioner, but also the grant of his counterclaim. The prayer in his Answer is faithfully reproduced below: chanroblesvirtuallawlibrary

Wherefore, premises considered, it is most respectfully prayed that, after due hearing, judgment be rendered dismissing the complaint, and on the counterclaim, [herein petitioner] and Ruben Sia, be ordered to indemnify, jointly and severally [herein respondents Tan and Obiedo] the amounts of not less than P10,000,000.00 as liquidated damages and the further sum of not less than P500,000.00 as attorneys fees. In the alternative, and should it become necessary, it is hereby prayed that [petitioner] be ordered to pay herein [respondents Tan and Obiedo] the entire principal loan of P95,700,620.00, plus interests, surcharges and penalties computed from March 17, 2005 until the entire sum is fully paid, including the amount of P74,678,647.00 foregone interest covering the period from October 1, 2004 to December 31, 2005 or for a total of fifteen (15) months, plus incidental expenses as may be proved in court, in the event that Annexes G to L be nullified. Other relief and remedies as are just and equitable under the premises are hereby prayed for.[1 6] chanroblesvirtuallawlibrary

Thereafter, respondent Tan filed before the RTC an Omnibus Motion in which he contended that Civil Case No. 2006-0030 involved real properties, the docket fees for which should be computed in accordance with Section 7(a), not Section 7(b)(1), of Rule 141 of the Rules of Court, as amended by A.M. No. 04-2-04-SC which took effect on 16 August 2004. Since petitioner did not pay the appropriate docket fees for Civil Case No. 2006-0030, the RTC did not acquire jurisdiction over the said case. Hence, respondent Tan asked the RTC to issue an order requiring petitioner to pay the correct and accurate docket fees pursuant to Section 7(a), Rule 141 of the Rules of Court, as amended; and should petitioner fail to do so, to deny and dismiss the prayer of petitioner for the annulment of the Deeds of Absolute Sale for having been executed in contravention of the law or of the Memorandum of Agreement as pactum commisorium. chanroblesvirtuallawlibrary

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As required by the RTC, the parties submitted their Position Papers on the matter. On 24 March 2006, the RTC issued an Order[17] granting respondent Tans Omnibus Motion. In holding that both petitioner and respondent Tan must pay docket fees in accordance with Section 7(a), Rule 141 of the Rules of Court, as amended, the RTC reasoned: chanroblesvirtuallawlibrary

It must be noted that under paragraph (b) 2. of the said Section 7, it is provided that QUIETING OF TITLE which is an action classified as beyond pecuniary estimation shall be governed by paragraph (a). Hence, the filing fee in an action for Declaration of Nullity of Deed which is also classified as beyond pecuniary estimation, must be computed based on the provision of Section 7(A) herein-above, in part, quoted. chanroblesvirtuallawlibrary

Since [herein respondent], Romeo Tan in his Answer has a counterclaim against the plaintiff, the former must likewise pay the necessary filling (sic) fees as provided for under Section 7 (A) of Amended Administrative Circular No. 35-2004 issued by the Supreme Court.[18] chanroblesvirtuallawlibrary

C onsequently, the RTC decreed on the matter of docket/filing fees: chanroblesvirtuallawlibrary

WHEREFORE, premises considered, the [herein petitioner] is hereby ordered to pay additional filing fee and the [herein respondent], Romeo Tan is also ordered to pay docket and filing fees on his counterclaim, both computed based on Section 7(a) of the Supreme C ourt Amended Administrative Circular No. 35-2004 within fifteen (15) days from receipt of this Order to the C lerk of Court, Regional Trial Court, Naga C ity and for the latter to compute and to collect the said fees accordingly.[19] chanroblesvirtuallawlibrary

Petitioner moved[20] for the partial reconsideration of the 24 March 2006 Order of the RTC, arguing that C ivil Case No. 2006-0030 was principally for the annulment of the Deeds of Absolute Sale and, as such, incapable of pecuniary estimation. Petitioner submitted that the RTC erred in applying Section 7(a), Rule 141 of the Rules of C ourt, as amended, to petitioners first cause of action in its C omplaint in C ivil Case No. 2006-0030. chanroblesvirtuallawlibrary

In its Order[21] dated 29 March 2006, the RTC refused to reconsider its 24 March 2006 Order, based on the following ratiocination: chanroblesvirtuallawlibrary

Analyzing, the action herein pertains to real property, for as admitted by the [herein petitioner], the deeds of sale in question pertain to real property x x x. The Deeds of Sale subject of the instant case have already been transferred in the name of the [herein respondents Tan and Obiedo].
chanroblesvirtuallawlibrary

C ompared with Quieting of Title, the latter action is brought when there is cloud on the title to real property or any interest therein or to prevent a cloud from being cast upon title to the real property (Art. 476, Civil Code of the Philippines) and the plaintiff must have legal or equitable title to or interest in the real property which is the subject matter of the action (Art. 447, ibid.), and yet plaintiff in QUIETING OF TITLE is required to pay the fees in accordance with paragraph (a) of Section 7 of the said Amended Administrative

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is required to pay the fees in accordance with paragraph (a) of Section 7 of the said Amended Administrative C ircular No. 35-2004, hence, with more reason that the [petitioner] who no longer has title to the real properties subject of the instant case must be required to pay the required fees in accordance with Section 7(a) of the Amended Administrative Circular No. 35-2004 afore-mentioned. chanroblesvirtuallawlibrary

Furthermore, while [petitioner] claims that the action for declaration of nullity of deed of sale and memorandum of agreement is one incapable of pecuniary estimation, however, as argued by the [respondent Tan], the issue as to how much filing and docket fees should be paid was never raised as an issue in the case of Russell vs. Vestil, 304 SCRA 738. chanroblesvirtuallawlibrary

xxxx

chanroblesvirtuallawlibrary

WHEREFORE, the Motion for Partial Reconsideration is hereby DENIED. [22] chanroblesvirtuallawlibrary

In a letter dated 19 April 2006, the RTC Clerk of C ourt computed, upon the request of counsel for the petitioner, the additional docket fees petitioner must pay for in Civil Case No. 2006-0030 as directed in the afore-mentioned RTC Orders. Per the computation of the RTC Clerk of C ourt, after excluding the amount petitioner previously paid on 16 March 2006, petitioner must still pay the amount of P720,392.60 as docket fees.[23] chanroblesvirtuallawlibrary

Petitioner, however, had not yet conceded, and it filed a Petition for Certiorari with the C ourt of Appeals; the petition was docketed as CA-G.R. SP No. 94800. According to petitioner, the RTC[24] acted with grave abuse of discretion, amounting to lack or excess of jurisdiction, when it issued its Orders dated 24 March 2006 and 29 March 2006 mandating that the docket/filing fees for Civil Case No. 2006-0030, an action for annulment of deeds of sale, be assessed under Section 7(a), Rule 141 of the Rules of C ourt, as amended. If the Orders would not be revoked, corrected, or rectified, petitioner would suffer grave injustice and irreparable damage. chanroblesvirtuallawlibrary

On 22 November 2006, the Court of Appeals promulgated its Decision wherein it held that: chanroblesvirtuallawlibrary

C learly, the petitioners complaint involves not only the annulment of the deeds of sale, but also the recovery of the real properties identified in the said documents. In other words, the objectives of the petitioner in filing the complaint were to cancel the deeds of sale and ultimately, to recover possession of the same. It is therefore a real action. chanroblesvirtuallawlibrary

C onsequently, the additional docket fees that must be paid cannot be assessed in accordance with Section 7(b). As a real action, Section 7(a) must be applied in the assessment and payment of the proper docket fee. chanroblesvirtuallawlibrary

Resultantly, there is no grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the court a quo. By grave abuse of discretion is meant capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction, and mere abuse of discretion is not enough it must be grave. The abuse must be grave and patent, and it must be shown that the discretion was exercised arbitrarily and

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despotically. chanroblesvirtuallawlibrary

Such a situation does not exist in this particular case. The evidence is insufficient to prove that the court a quo acted despotically in rendering the assailed orders. It acted properly and in accordance with law. Hence, error cannot be attributed to it. [25] chanroblesvirtuallawlibrary

Hence, the fallo of the Decision of the appellate court reads: chanroblesvirtuallawlibrary

WHEREFORE, the petition for certiorari is DENIED. The assailed Orders of the court a quo are AFFIRMED.[2 6 ] chanroblesvirtuallawlibrary

Without seeking reconsideration of the foregoing Decision with the Court of Appeals, petitioner filed its Petition for Review on Certiorari before this Court, with a lone assignment of error, to wit: chanroblesvirtuallawlibrary

18.The herein petitioner most respectfully submits that the C ourt of Appeals committed a grave and serious reversible error in affirming the assailed Orders of the Regional Trial Court which are clearly contrary to the pronouncement of this Honorable Court in the case of Spouses De Leon v. Court of Appeals, G.R. No. 104796, March 6, 1998, not to mention the fact that if the said judgment is allowed to stand and not rectified, the same would result in grave injustice and irreparable damage to herein petitioner in view of the prohibitive amount assessed as a consequence of said Orders. [27] chanroblesvirtuallawlibrary

In Manchester Development Corporation v. Court of Appeals,[28] the Court explicitly pronounced that [t]he court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. Hence, the payment of docket fees is not only mandatory, but also jurisdictional. chanroblesvirtuallawlibrary

In Sun Insurance Office, Ltd. (SIOL) v. Asuncion,[29] the Court laid down guidelines for the implementation of its previous pronouncement in Manchester under particular circumstances, to wit: chanroblesvirtuallawlibrary

1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period. chanroblesvirtuallawlibrary

2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period. chanroblesvirtuallawlibrary

3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the

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payment of the prescribed filing fee but, subsequently, the judgment awards a claim not specified in the pleading, or if specified the same has been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the Clerk of C ourt or his duly authorized deputy to enforce said lien and assess and collect the additional fee.
chanroblesvirtuallawlibrary

In the Petition at bar, the RTC found, and the Court of Appeals affirmed, that petitioner did not pay the correct amount of docket fees for C ivil Case No. 2006-0030. According to both the trial and appellate courts, petitioner should pay docket fees in accordance with Section 7(a), Rule 141 of the Rules of Court, as amended. Consistent with the liberal tenor of Sun Insurance, the RTC, instead of dismissing outright petitioners Complaint in Civil C ase No. 2006-0030, granted petitioner time to pay the additional docket fees. Despite the seeming munificence of the RTC , petitioner refused to pay the additional docket fees assessed against it, believing that it had already paid the correct amount before, pursuant to Section 7(b)(1), Rule 141 of the Rules of Court, as amended. chanroblesvirtuallawlibrary

Relevant to the present controversy are the following provisions under Rule 141 of the Rules of C ourt, as amended by A.M. No. 04-2-04-SC [30] and Supreme Court Amended Administrative Circular No. 35-2004[31]: chanroblesvirtuallawlibrary

SEC . 7. C lerks of Regional Trial Courts. chanroblesvirtuallawlibrary

(a)For filing an action or a permissive OR COMPULSORY counterclaim, CROSS-CLAIM, or money claim against an estate not based on judgment, or for filing a third-party, fourth-party, etc. complaint, or a complaint-in-intervention, if the total sum claimed, INCLUSIVE OF INTERESTS, PENALTIES, SURCHARGES, DAMAGES OF WHATEVER KIND, AND ATTORNEYS FEES, LITIGATIO NEXPENSES AND COSTS and/or in cases involving property, the FAIR MARKET value of the REAL property in litigation STATED IN THE CURRENT TAX DEC LARATION OR CURRENT ZONAL VALUATION OF THE BUREAU OF INTERNAL REVENUE, WHICHEVER IS HIGHER, OR IF THERE IS NONE, THE STATED VALUE OF THE PROPERTY IN LITIGATION OR THE VALUE OF THE PERSONAL PROPERTY IN LITIGATION OR THE VALUE OF THE PERSONAL PROPERTY IN LITIGATION AS ALLEGED BY THE CLAIMANT, is: chanroblesvirtuallawlibrary

[Table of fees omitted.] chanroblesvirtuallawlibrary

If the action involves both a money claim and relief pertaining to property, then THE fees will be charged on both the amounts claimed and value of property based on the formula prescribed in this paragraph a.
chanroblesvirtuallawlibrary

(b)For filing: chanroblesvirtuallawlibrary

1.Actions where the value of the subject matter cannot be estimated chanroblesvirtuallawlibrary

2.Special civil actions, except judicial foreclosure of mortgage, EXPROPRIATION PROCEEDINGS, PARTITION AND QUIETING OF TITLE which will chanroblesvirtuallawlibrary

3.

All other actions not involving property

chanroblesvirtuallawlibrary

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3.

All other actions not involving property

chanroblesvirtuallawlibrary

[Table of fees omitted.] chanroblesvirtuallawlibrary

The docket fees under Section 7(a), Rule 141, in cases involving real property depend on the fair market value of the same: the higher the value of the real property, the higher the docket fees due. In contrast, Section 7(b)(1), Rule 141 imposes a fixed or flat rate of docket fees on actions incapable of pecuniary estimation. chanroblesvirtuallawlibrary

In order to resolve the issue of whether petitioner paid the correct amount of docket fees, it is necessary to determine the true nature of its Complaint. The dictum adhered to in this jurisdiction is that the nature of an action is determined by the allegations in the body of the pleading or Complaint itself, rather than by its title or heading.[32] However, the Court finds it necessary, in ascertaining the true nature of Civil Case No. 2006-0030, to take into account significant facts and circumstances beyond the Complaint of petitioner, facts and circumstances which petitioner failed to state in its C omplaint but were disclosed in the preliminary proceedings before the court a quo. chanroblesvirtuallawlibrary

Petitioner persistently avers that its C omplaint in Civil Case No. 2006-0030 is primarily for the annulment of the Deeds of Absolute Sale. Based on the allegations and reliefs in the Complaint alone, one would get the impression that the titles to the subject real properties still rest with petitioner; and that the interest of respondents Tan and Obiedo in the same lies only in the Deeds of Absolute Sale sought to be annulled. chanroblesvirtuallawlibrary

What petitioner failed to mention in its C omplaint was that respondents Tan and Obiedo already had the Memorandum of Agreement, which clearly provided for the execution of the Deeds of Absolute Sale, registered on the TC Ts over the five parcels of land, then still in the name of petitioner. After respondents Tan and Obiedo had the Deeds of Absolute Sale notarized on 3 January 2006 and presented the same to Register of Deeds for Naga C ity on 8 March 2006, they were already issued TCTs over the real properties in question, in their own names. Respondents Tan and Obiedo have also acquired possession of the said properties, enabling them, by petitioners own admission, to demolish the improvements thereon. chanroblesvirtuallawlibrary

It is, thus, suspect that petitioner kept mum about the afore-mentioned facts and circumstances when they had already taken place before it filed its C omplaint before the RTC on 16 March 2006. Petitioner never expressed surprise when such facts and circumstances were established before the RTC, nor moved to amend its C omplaint accordingly. Even though the Memorandum of Agreement was supposed to have long been registered on its TCTs over the five parcels of land, petitioner did not pray for the removal of the same as a cloud on its title. In the same vein, although petitioner alleged that respondents Tan and Obiedo forcibly took physical possession of the subject real properties, petitioner did not seek the restoration of such possession to itself. And despite learning that respondents Tan and Obiedo already secured TCTs over the subject properties in their names, petitioner did not ask for the cancellation of said titles. The only logical and reasonable explanation is that petitioner is reluctant to bring to the attention of the C ourt certain facts and circumstances, keeping its C omplaint safely worded, so as to institute only an action for annulment of Deeds of Absolute Sale. Petitioner deliberately avoided raising issues on the title and possession of the real properties that may lead the Court to classify its case as a real action.
chanroblesvirtuallawlibrary

No matter how fastidiously petitioner attempts to conceal them, the allegations and reliefs it sought in its

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No matter how fastidiously petitioner attempts to conceal them, the allegations and reliefs it sought in its C omplaint in C ivil Case No. 2006-0030 appears to be ultimately a real action, involving as they do the recovery by petitioner of its title to and possession of the five parcels of land from respondents Tan and Obiedo. chanroblesvirtuallawlibrary

A real action is one in which the plaintiff seeks the recovery of real property; or, as indicated in what is now Section 1, Rule 4 of the Rules of C ourt, a real action is an action affecting title to or recovery of possession of real property.[33] chanroblesvirtuallawlibrary

Section 7, Rule 141 of the Rules of Court, prior to its amendment by A.M. No. 04-2-04-SC, had a specific paragraph governing the assessment of the docket fees for real action, to wit: chanroblesvirtuallawlibrary

In a real action, the assessed value of the property, or if there is none, the estimated value thereof shall be alleged by the claimant and shall be the basis in computing the fees.
chanroblesvirtuallawlibrary

It was in accordance with the afore-quoted provision that the Court, in Gochan v. Gochan,[34] held that although the caption of the complaint filed by therein respondents Mercedes Gochan, et al. with the RTC was denominated as one for specific performance and damages, the relief sought was the conveyance or transfer of real property, or ultimately, the execution of deeds of conveyance in their favor of the real properties enumerated in the provisional memorandum of agreement. Under these circumstances, the case before the RTC was actually a real action, affecting as it did title to or possession of real property. C onsequently, the basis for determining the correct docket fees shall be the assessed value of the property, or the estimated value thereof as alleged in the complaint. But since Mercedes Gochan failed to allege in their complaint the value of the real properties, the Court found that the RTC did not acquire jurisdiction over the same for non-payment of the correct docket fees. chanroblesvirtuallawlibrary

Likewise, in Siapno v. Manalo,[35] the C ourt disregarded the title/denomination of therein plaintiff Manalos amended petition as one for Mandamus with Revocation of Title and Damages; and adjudged the same to be a real action, the filing fees for which should have been computed based on the assessed value of the subject property or, if there was none, the estimated value thereof. The Court expounded in Siapno that: chanroblesvirtuallawlibrary

In his amended petition, respondent Manalo prayed that NTAs sale of the property in dispute to Standford East Realty Corporation and the title issued to the latter on the basis thereof, be declared null and void. In a very real sense, albeit the amended petition is styled as one for Mandamus with Revocation of Title and Damages, it is, at bottom, a suit to recover from Standford the realty in question and to vest in respondent the ownership and possession thereof. In short, the amended petition is in reality an action in res or a real action. Our pronouncement in Fortune Motors (Phils.), Inc. vs. Court of Appeals is instructive. There, we said: chanroblesvirtuallawlibrary
chanroblesvirtuallawlibrary

A prayer for annulment or rescission of contract does not operate to efface the true objectives and nature of the action which is to recover real property. (Inton, et al., v. Quintan, 81 Phil. 97, 1948) chanroblesvirtuallawlibrary

An action for the annulment or rescission of a sale of real property is a real action. Its prime objective is to recover said real property. (Gavieres v. Sanchez, 94 Phil. 760, 1954)

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prime objective is to recover said real property. (Gavieres v. Sanchez, 94 Phil. 760, 1954)
chanroblesvirtuallawlibrary

An action to annul a real estate mortgage foreclosure sale is no different from an action to annul a private sale of real property. (Muoz v. Llamas, 87 Phil. 737, 1950). chanroblesvirtuallawlibrary

While it is true that petitioner does not directly seek the recovery of title or possession of the property in question, his action for annulment of sale and his claim for damages are closely intertwined with the issue of ownership of the building which, under the law, is considered immovable property, the recovery of which is petitioner's primary objective. The prevalent doctrine is that an action for the annulment or rescission of a sale of real property does not operate to efface the fundamental and prime objective and nature of the case, which is to recover said real property. It is a real action.
chanroblesvirtuallawlibrary

Unfortunately, and evidently to evade payment of the correct amount of filing fee, respondent Manalo never alleged in the body of his amended petition, much less in the prayer portion thereof, the assessed value of the subject res, or, if there is none, the estimated value thereof, to serve as basis for the receiving clerk in computing and arriving at the proper amount of filing fee due thereon, as required under Section 7 of this C ourts en banc resolution of 04 September 1990 (Re: Proposed Amendments to Rule 141 on Legal Fees).
chanroblesvirtuallawlibrary

Even the amended petition, therefore, should have been expunged from the records.

chanroblesvirtuallawlibrary

In fine, we rule and so hold that the trial court never acquired jurisdiction over its C ivil Case No. Q-95-24791.[36] chanroblesvirtuallawlibrary

It was in Serrano v. Delica,[37] however, that the C ourt dealt with a complaint that bore the most similarity to the one at bar. Therein respondent Delica averred that undue influence, coercion, and intimidation were exerted upon him by therein petitioners Serrano, et al. to effect transfer of his properties. Thus, Delica filed a complaint before the RTC against Serrano, et al., praying that the special power of attorney, the affidavit, the new titles issued in the names of Serrano, et al., and the contracts of sale of the disputed properties be cancelled; that Serrano, et al. be ordered to pay Delica, jointly and severally, actual, moral and exemplary damages in the amount of P200,000.00, as well as attorneys fee of P200,000.00 and costs of litigation; that a TRO and a writ of preliminary injunction be issued ordering Serrano, et al. to immediately restore him to his possession of the parcels of land in question; and that after trial, the writ of injunction be made permanent. The Court dismissed Delicas complaint for the following reasons: chanroblesvirtuallawlibrary
chanroblesvirtuallawlibrary

A careful examination of respondents complaint is that it is a real action.

In Paderanga vs. Buissan, we

held that in a real action, the plaintiff seeks the recovery of real property, or, as stated in Section 2(a), Rule 4 of the Revised Rules of Court, a real action is one affecting title to real property or for the recovery of possession of, or for partition or condemnation of, or foreclosure of a mortgage on a real property.
chanroblesvirtuallawlibrary

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Obviously, respondents complaint is a real action involving not only the recovery of real properties, but likewise the cancellation of the titles thereto.
chanroblesvirtuallawlibrary

C onsidering that respondents complaint is a real action, the Rule requires that the assessed value of the property, or if there is none, the estimated value thereof shall be alleged by the claimant and shall be the basis in computing the fees. chanroblesvirtuallawlibrary

We note, however, that neither the assessed value nor the estimated value of the questioned parcels of land were alleged by respondent in both his original and amended complaint. What he stated in his amended complaint is that the disputed realties have a BIR zonal valuation of P1,200.00 per square meter. However, the alleged BIR zonal valuation is not the kind of valuation required by the Rule. It is the assessed value of the realty. Having utterly failed to comply with the requirement of the Rule that he shall allege in his complaint the assessed value of his real properties in controversy, the correct docket fee cannot be computed. As such, his complaint should not have been accepted by the trial court. We thus rule that it has not acquired jurisdiction over the present case for failure of herein respondent to pay the required docket fee. On this ground alone, respondents complaint is vulnerable to dismissal. [38] chanroblesvirtuallawlibrary

Brushing aside the significance of Serrano, petitioner argues that said decision, rendered by the Third Division of the C ourt, and not by the Court en banc, cannot modify or reverse the doctrine laid down in Spouses De Leon v. Court of Appeals.[39] Petitioner relies heavily on the declaration of this C ourt in Spouses De Leon that an action for annulment or rescission of a contract of sale of real property is incapable of pecuniary estimation. chanroblesvirtuallawlibrary

The C ourt, however, does not perceive a contradiction between Serrano and the Spouses De Leon. The Court calls attention to the following statement in Spouses De Leon: A review of the jurisprudence of this C ourt indicates that in determining whether an action is one the subject matter of which is not capable of pecuniary estimation, this C ourt has adopted the criterion of first ascertaining the nature of the principal action or remedy sought. Necessarily, the determination must be done on a case-to-case basis, depending on the facts and circumstances of each. What petitioner conveniently ignores is that in Spouses De Leon, the action therein that private respondents instituted before the RTC was solely for annulment or rescission of the contract of sale over a real property.[40] There appeared to be no transfer of title or possession to the adverse party. Their complaint simply prayed for:
chanroblesvirtuallawlibrary

1. Ordering the nullification or rescission of the Contract of C onditional Sale (Supplementary Agreement) for having violated the rights of plaintiffs (private respondents) guaranteed to them under Article 886 of the C ivil C ode and/or violation of the terms and conditions of the said contract.
chanroblesvirtuallawlibrary

2. Declaring void ab initio the Deed of Absolute Sale for being absolutely simulated; and

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3. Ordering defendants (petitioners) to pay plaintiffs (private respondents) attorney's fees in the amount of P100,000.00.[41] chanroblesvirtuallawlibrary

As this C ourt has previously discussed herein, the nature of Civil Case No. 2006-0030 instituted by petitioner

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As this C ourt has previously discussed herein, the nature of Civil Case No. 2006-0030 instituted by petitioner before the RTC is closer to that of Serrano, rather than of Spouses De Leon, hence, calling for the application of the ruling of the C ourt in the former, rather than in the latter. chanroblesvirtuallawlibrary
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It is also important to note that, with the amendments introduced by A.M. No. 04-2-04-SC, which became effective on 16 August 2004, the paragraph in Section 7, Rule 141 of the Rules of Court, pertaining specifically to the basis for computation of docket fees for real actions was deleted. Instead, Section 7(1) of Rule 141, as amended, provides that in cases involving real property, the FAIR MARKET value of the REAL property in litigation STATED IN THE CURRENT TAX DECLARATION OR CURRENT ZONAL VALUATION OF THE BUREAU OF INTERNAL REVENUE, WHICH IS HIGHER, OR IF THERE IS NONE, THE STATED VALUE OF THE PROPERTY IN LITIGATION x x x shall be the basis for the computation of the docket fees. Would such an amendment have an impact on Gochan, Siapno, and Serrano? The Court rules in the negative. chanroblesvirtuallawlibrary

A real action indisputably involves real property. The docket fees for a real action would still be determined in accordance with the value of the real property involved therein; the only difference is in what constitutes the acceptable value. In computing the docket fees for cases involving real properties, the courts, instead of relying on the assessed or estimated value, would now be using the fair market value of the real properties (as stated in the Tax Declaration or the Zonal Valuation of the Bureau of Internal Revenue, whichever is higher) or, in the absence thereof, the stated value of the same. chanroblesvirtuallawlibrary

In sum, the C ourt finds that the true nature of the action instituted by petitioner against respondents is the recovery of title to and possession of real property. It is a real action necessarily involving real property, the docket fees for which must be computed in accordance with Section 7(1), Rule 141 of the Rules of Court, as amended. The C ourt of Appeals, therefore, did not commit any error in affirming the RTC Orders requiring petitioner to pay additional docket fees for its Complaint in C ivil Case No. 2006-0030. chanroblesvirtuallawlibrary
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The C ourt does not give much credence to the allegation of petitioner that if the judgment of the Court of Appeals is allowed to stand and not rectified, it would result in grave injustice and irreparable injury to petitioner in view of the prohibitive amount assessed against it. It is a sweeping assertion which lacks evidentiary support. Undeniably, before the Court can conclude that the amount of docket fees is indeed prohibitive for a party, it would have to look into the financial capacity of said party. It baffles this Court that herein petitioner, having the capacity to enter into multi-million transactions, now stalls at paying P720,392.60 additional docket fees so it could champion before the courts its rights over the disputed real properties. Moreover, even though the C ourt exempts individuals, as indigent or pauper litigants, from paying docket fees, it has never extended such an exemption to a corporate entity. chanroblesvirtuallawlibrary
WHEREFORE, premises considered, the instant Petition for Review is hereby DENIED. The Decision, dated 22 November 2006, of the Court of Appeals in CA-G.R. SP No. 94800, which affirmed the Orders dated 24 March 2006 and 29 March 2006 of the R TC, Branch 22, of Naga City, in Civil Case No. RTC-2006-0030, ordering petitioner Ruby Shelter Builders and Realty De ve lopment Corporation to pay additional docket/filing fees, computed based on Section 7(a), Rule 141 of the Rules of Court, as amended, is hereby AFFIRMED. Costs against the petitioner.

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Chavez v. CA GR 125813 Feb 6, 2007
Sunday, November 14, 2010 11:20 PM

G.R. No. 125813 February 6, 2007 FRANCISCO I. CHAVEZ and PEOPLE OF THE PHILIPPINES, Petitioners, vs. COURT OF APPEALS, RAFAEL BASKIÑAS and RICARDO MANAPAT, Respondents. DEC ISIO N TINGA, J.: An Information for Libel dated 26 June 1995 was filed before the Regional Trial Court (RTC) of Manila against private respondents Rafael Baskinas and Ricardo Manapat, with petitioner Francisco Chavez as the complainant. The Information reads in part: "That on or about March 1995, in the City of Manila, Philippines, the said accused [Baskinas and Manapat] conspiring and confederating with others whose true names, real identities and present whereabouts are still unknown and helping one another, with malicious intent of impeaching the honesty, virtue, character and reputation of one FRANCISCO I. CHAVEZ, former Solicitor General of the Philippines, and with the evident purpose of injuring and exposing him to public ridicule, hatred and contempt, did then and there willfully, unlawfully and maliciously cause to be published in "Smart File," a magazine of general circulation in Manila, and in their respective capacity as Editor-in-Chief and Author-Reporter, the following, to wit: xx x x with which published articles, the said accused meant and intended to convey, as in fact they did mean and convey false and malicious imputations of a defect, vice and crime, which insinuations and imputations as the accused well knew are entirely false and untrue and without the foundation in fact whatsoever, and tend to impeach, besmirch and destroy the good name, character and reputation of said FRANCISCO I. CHAVEZ, as in fact, he was exposed to dishonor, discredit, public hatred, contempt and ridicule. CONTRARY TO LAW.1 Private respondents moved to quash the Information, as well as the corresponding warrants of arrest subsequently issued. However, these motions were denied by the RTC of Manila, Branch 16, in an Order dated 31 August 1995.2 Private respondents then filed a Petition for Certiorari with the Court of Appeals, assailing the 31 August 1995 Order. The petition was granted in a Decision dated 21 December 1995, hence the present petition. The crux of the matter revolves around whether the above-quoted Information is sufficient to sustain a charge for libel, considering the following requirement imposed by Article 360 of the Revised Penal Code, as amended by Rep. Act No. 4363: Article 360. Persons responsible.—Any person who shall publish, exhibit or cause the publication or exhibition of any defamation in writing or by similar means, shall be responsible for the same. The author or editor of a book or pamphlet, or the editor or business manager of a daily newspaper, magazine or serial publication, shall be responsible for the defamations contained therein to the same extent as if he were the author thereof. The criminal action and civil action for damages in cases of written defamations, as provided for in this chapter shall be filed simultaneously or separately with the court of first instance of the province or city where the libelous article is printed and first published or where any of the offended parties actually resides at the time of the commission of the offense: Provided, however, That where one of the offended parties is a public officer whose office is in the City of Manila at the time of the commission of the offense, the action shall be filed in the Court of First Instance of the City of Manila or of the city or province where the libelous article is printed and first published, and in case such public officer does not hold office in the City of Manila, the action shall be filed in the Court of First Instance of the province or city where he held office at the time of the commission of the offense or where the libelous article is printed and first published and in case one of the offended parties is a private individual, the action shall be filed
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published and in case one of the offended parties is a private individual, the action shall be filed in the Court of First Instance of the province or city where he actually resides at the time of the commission of the offense or where the libelous matter is printed and first published x x x. (Emphasis supplied.) Referring to the fact that the Information against private respondents states that the libelous matter was "caused to be published in Smart File, a magazine of general circulation in Manila," the Court of Appeals deemed the cases of Agbayani v. Sayo3 and Soriano v. IAC4 as controlling. Based on the doctrines pronounced in said cases, the appellate court held that the Information failed to allege where the written defamation was "printed and first published," an allegation sine qua non "if the circumstances as to where the libel was printed and first published is used as the basis of the venue of the publication."5 It was observed that "venue of libel cases where the complainant is a private person is either in any of only two places, namely: (1) where the subject article was printed and first published; and (2) where complainant of the commission actually resides at the time of the commission of the offense." The Information, it was noted, did not indicate that the libelous articles were printed or first published in Manila, or that petitioner resided in Manila at the time of the publication of the articles. The Court of Appeals further observed that even during the preliminary investigation, private respondents had already interposed that Smart File was actually printed and first published in the City of Makati, and that the address of the publisher Animal Farms Publication as indicated in the editorial page of the publication itself was a post office box with the Makati Central Post Office. Even as this observation was disputed by petitioner, who insisted the place of private respondent‘s printing and publishing business was actually in Manila, the Court of Appeals noted that he should have been alerted enough by private respondents' adverse insistence and that a due investigation would have inevitably revealed that private respondents had transferred from their previous Manila address to Makati by the time the subject articles were published.6 Before this Court, petitioner attacks the reliance placed on Agbayani and Soriano, primarily by pointing out that in both cases, the complainants were public officers, and not private officials. Petitioner submits that the 1965 amendments to Article 360 of the Revised Penal Code which imposed the present venue requisites were introduced in order to preclude the harassment of members of the press through libel suits filed in remote and distant places by public officers. Petitioner also assails the conclusion of the Court of Appeals that the place of printing and first publication of Smart File was in Makati, saying that this was derived out of hearsay evidence. Does the subject information sufficiently vest jurisdiction in the Manila trial courts to hear the libel charge, in consonance with Article 360 of the Revised Penal Code? Jurisprudence applying the provision has established that it does not. Agbayani supplies a comprehensive restatement of the rules of venue in actions for criminal libel, following the amendment by Rep. Act No. 4363 of the Revised Penal Code: Article 360 in its original form provided that the venue of the criminal and civil actions for written defamations is the province wherein the libel was published, displayed or exhibited, regardless of the place where the same was written, printed or composed. Article 360 originally did not specify the public officers and the courts that may conduct the preliminary investigation of complaints for libel. Before article 360 was amended, the rule was that a criminal action for libel may be instituted in any jurisdiction where the libelous article was published or circulated, irrespective of where it was written or printed (People v. Borja, 43 Phil. 618). Under that rule, the criminal action is transitory and the injured party has a choice of venue. Experience had shown that under that old rule the offended party could harass the accused in a libel case by laying the venue of the criminal action in a remote or distant place. Thus, in connection with an article published in the Daily Mirror and the Philippine Free Press, Pio Pedrosa, Manuel V. Villareal and Joaquin Roces were charged with libel in the justice of the peace court of San Fabian, Pangasinan (Amansec v. De Guzman, 93 Phil. 933). To forestall such harassment, Republic Act No. 4363 was enacted. It lays down specific rules as to the venue of the criminal action so as to prevent the offended party in written defamation cases from inconveniencing the accused by means of out-of-town libel suits, meaning complaints filed in remote municipal courts (Explanatory Note for the bill which became Republic Act No.
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filed in remote municipal courts (Explanatory Note for the bill which became Republic Act No. 4363, Congressional Record of May 20, 1965, pp. 424-5; Time, Inc. v. Reyes, L-28882, May 31, 1971, 39 SCRA 303, 311). The rules on venue in article 360 may be restated thus: 1. Whether the offended party is a public official or a private person, the criminal action may be filed in the Court of First Instance of the province or city where the libelous article is printed and first published. 2. If the offended party is a private individual, the criminal action may also be filed in the Court of First Instance of the province where he actually resided at the time of the commission of the offense. 3. If the offended party is a public officer whose office is in Manila at the time of the commission of the offense, the action may be filed in the Court of First Instance of Manila. 4. If the offended party is a public officer holding office outside of Manila, the action may be filed in the Court of First Instance of the province or city where he held office at the time of the commission of the offense.7 (Emphasis supplied.) The rules, as restated in Agbayani, do not lay a distinction that only those actions for criminal libel lodged by public officers need be filed in the place of printing and first publication. In fact, the rule is quite clear that such place of printing and first publication stands as one of only two venues where a private person may file the complaint for libel, the other venue being the place of residence of the offended party at the time the offense was committed. The very language itself of Article 360, as amended, does not support petitioner's thesis that where the complainant is a private person, a more liberal interpretation of the phrase "printed and first published" is warranted than when a public officer is the offended party. To wit: Article 360. Persons responsible.―x x x The criminal and civil action for damages in cases of written defamations as provided for in this chapter, shall be filed simultaneously or separately with the Court of First Instance of the province or city where the libelous article is printed and first published or where any of the offended parties actually resides at the time of the commission of the offense. x x x Where the law does not distinguish, we should not distinguish.8 Petitioner faults the Court of Appeals for relying on Agbayani and Soriano, two cases wherein the complainant was a public officer. Yet the Court has since had the opportunity to reiterate the Agbayani doctrine even in cases where the complainants were private persons. Most telling of the recent precedents is Agustin v. Pamintuan,9 which involved a criminal action for libel filed by a private person, the acting general manager of the Baguio Country Club, with the RTC of Baguio City. The relevant portion of the Information is quoted below: That on or about the 17th day of March 2000, in the City of Baguio, Philippines, and within the jurisdiction of this Honorable Court, the said accused, with deliberate intent and malicious intent and evil motive of attacking, injuring and impeaching the character, honesty, integrity, virtue and reputation of one Anthony De Leon the acting general manager of the Baguio Country Club, and as a private citizen of good standing and reputation in the community and with malicious intent of exposing the (sic) Anthony De Leon to public hatred, contempt, ridicule, discredit and dishonor, without any justifiable motive, did then and there willfully, maliciously and criminally prepare or cause to prepare, write in his column "Cocktails" and publish in the Philippine Daily Inquirer, a newspaper of general circulation in the City of Baguio and in the entire Philippines x x x.10 (Emphasis supplied.) The phrase "the Philippine Daily Inquirer, a newspaper of general circulation in the City of Baguio and in the entire Philippines" bears obvious similarity to the reference in the Information in this case to the publication involved as "‗Smart File,‘ a magazine of general circulation in Manila," and both private complainants in Agustin and the case at bar were private citizens at the time of the filing of the complaint. Yet the Court in Agustin ruled that the failure to allege that Baguio was the venue of printing and first publication, or that the complainant therein was a resident of Baguio, constituted a substantial defect that could not even be cured by mere amendment. The rules on venue as laid down in Agbayani were restated in Agustin,11 retaining no distinction as to venue whether the offended party is a public official or a private person. In fact, the Court considered the phrase "a newspaper of general circulation in the city of Baguio"
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fact, the Court considered the phrase "a newspaper of general circulation in the city of Baguio" as so utterly incapable of establishing Baguio as venue that the bulk of the discussion instead centered on whether the allegation that the complainant was the acting general manager of the Baguio Country Club sufficiently established that he was a resident of Baguio City. On that point, the Court ruled that it did not. In Macasaet v. People,12 the complainant was again a private person.13 The Information for libel against a gossip columnist and the editors of the tabloid which published the column was filed with the RTC of Quezon City, but it failed to state at all where the tabloid was printed and first published, or where the complainant resided. Even as evidence was presented during trial that complainant was a resident of Quezon City, the Court ultimately held that the allegations contained in the Information "[were] utterly insufficient to vest jurisdiction on the RTC of Quezon City."14 Again, the rules laid down in Agbayani were cited as controlling.15 The Court further held that the evidence establishing the complainant's place of residence as Quezon City could not cure the defect of the Information, noting that "it is settled that jurisdiction of a court over a criminal case is determined by the allegations of the complaint or information."16 Macasaet resolutely stated that since the place of printing and first publication or the place of residence at the time are "matters deal[ing] with the fundamental issue of the court's jurisdiction, Article 360 of the Revised Penal Code, as amended, mandates that either one of these statements must be alleged in the information itself and the absence of both from the very face of the information renders the latter fatally defective."17 We affirm that proposition, which is fatal to this petition. There is no question that the Information fails to allege that the City of Manila was the place where the offending articles were printed and first published, or that petitioner was a resident of Manila at the time the articles were published. Petitioner does submit that there is no need to employ the clause "printed and first published" in indicating where the crime of libel was committed, as the term "publish" is "generic and within the general context of the term 'print' in so far as the latter term is utilized to refer to the physical act of producing the publication."18 Certainly, that argument flies in the face of our holding in Agustin, which involved a similarly worded Information, and which stands as a precedent we have no inclination to disturb. Still, a perusal of the Information in this case reveals that the word "published" is utilized in the precise context of noting that the defendants "cause[d] to be published in 'Smart File', a magazine of general circulation in Manila." The Information states that the libelous articles were published in Smart File, and not that they were published in Manila. The place "Manila" is in turn employed to situate where Smart File was in general circulation, and not where the libel was published or first printed. The fact that Smart File was in general circulation in Manila does not necessarily establish that it was published and first printed in Manila, in the same way that while leading national dailies such as the Philippine Daily Inquirer or the Philippine Star are in general circulation in Cebu, it does not mean that these newspapers are published and first printed in Cebu. Indeed, if we hold that the Information at hand sufficiently vests jurisdiction in Manila courts since the publication is in general circulation in Manila, there would be no impediment to the filing of the libel action in other locations where Smart File is in general circulation. Using the example of the Inquirer or the Star, the granting of this petition would allow a resident of Aparri to file a criminal case for libel against a reporter or editor in Jolo, simply because these newspapers are in general circulation in Jolo. Such a consequence is precisely what Rep. Act No. 4363 sought to avoid. Our ruling in Banal III v. Panganiban19 might tend to support petitioner's argument that the phrase "printed and first published" need not be necessarily employed in the Information. The Information in that case filed by private persons before the Makati City RTC read that the libelous matter was found in a newspaper column "of the Philippine Daily Inquirer which is published in English in the City of Makati, Metro Manila, Philippines and of general circulation in the Philippines and abroad x x x x."20 The Court did observe that this information was "sufficient in form"21 as it clearly stated "that the newspaper is published in Makati City but circulated throughout the country, which allegation accordingly vests jurisdiction over the offense charged in the RTC of Makati City."22 Yet even notwithstanding the fact that the information in Banal III did not use the phrase "printed and first published," it still categorically
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information in Banal III did not use the phrase "printed and first published," it still categorically stated, at the very least, that the libelous matter was "published in English in the City of Makati." In contrast, what the Information at bar categorically states is that the libelous matter was "published in Smart File," not "published in Manila."23 The fact that the present Information further alleges that Smart File was "of general circulation in Manila" does not necessarily mean that the magazine was printed and first published in Manila. In any event, as the language in the present information hews closer to that in Agustin rather than Banal III, we find the former as the appropriate precedent to apply in this case. For us to grant the present petition, it would be necessary to abandon the Agbayani rule providing that a private person must file the complaint for libel either in the place of printing and first publication, or at the complainant's place of residence. We would also have to abandon the subsequent cases that reiterate this rule in Agbayani, such as Soriano, Agustin, and Macasaet. There is no convincing reason to resort to such a radical action. These limitations imposed on libel actions filed by private persons are hardly onerous, especially as they still allow such persons to file the civil or criminal complaint in their respective places of residence, in which situation there is no need to embark on a quest to determine with precision where the libelous matter was printed and first published.1awphi1.net If this disquisition impresses an unduly formalistic reading of the Information at hand, it should be reiterated that the flaws in the Information strike at the very heart of the jurisdiction of the Manila RTC. It is settled that jurisdiction of a court over a criminal case is determined by the allegations of the complaint or information,24 and the offense must have been committed or any one of its essential ingredients took place within the territorial jurisdiction of the court.25 Article 360 states, in as unequivocal a manner as possible, that the criminal and civil action for libel shall be filed with the court of the province or city "where the libelous article is printed and first published, or where any of the offended parties actually resides at the time of the commission of the offense." If the Information for libel does not establish with particularity any of these two venue requirements, the trial court would have no jurisdiction to hear the criminal case. Another point bears to be added. We are unable to share petitioner's insistence that since the protection of members of the mass media from frivolous libel suits filed by public officers in farflung places appears to have been a motivating force behind the amendments to Article 360, a more liberal interpretation of the provision should obtain if the complainant is a private person. Without the venue requirements under Article 360, a private person induced by a motive to harass could, similarly as a public officer, coerce a journalist to defend against a libel suit filed in the most remote of places. While Rep. Act No. 4363 does attribute value to the right to comment on the performance of public officials of their duties, it actually extends its protection to the right of any person to free expression, by assuring a reasonable venue requirement even if the subject of comment is not a public officer. Libel stands as an exception to one of the most cherished constitutional rights, that of free expression. While libel laws ensure a modicum of responsibility in one's own speech or expression, a prescribed legal standard that conveniences the easy proliferation of libel suits fosters an atmosphere that inhibits the right to speak freely. When such a prescribed standard is submitted for affirmation before this Court, as is done in this petition, it must receive the highest possible scrutiny, as it may interfere with the most basic of democratic rights. Finally, we decline to resolve the other issues raised in the petition, as the Information by itself is defective on its face, for the reasons we have stated, that there is no need to evaluate whether Smart File was actually printed and first published in Manila or Makati City. The plain fact is that the Information failed to make the sufficient allegation in that regard, and even any ascertainment that the articles were printed and first published in Manila does not cure the jurisdictional defect of the Information. WHEREFORE, the petition is DENIED.
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Springfield v. RTC Judge GR 142626 Feb 6, 2007
Sunday, November 14, 2010 11:20 PM

G.R. NO. 142628 February 6, 2007 SPRINGFIELD DEVELOPMENT CORPORATION, INC. and HEIRS OF PETRA CAPISTRANO PIIT, Petitioners, vs. HONORABLE PRESIDING JUDGE OF REGIONAL TRIAL COURT OF MISAMIS ORIENTAL, BRANCH 40, CAGAYAN DE ORO CITY, DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD (DARAB), DAR REGION X DIRECTOR, ROSALIO GAMULO, FORTUNATO TELEN, EMERITA OLANGO, THERESA MONTUERTO, DOMINGO H. CLAPERO, JOEL U. LIM, JENEMAIR U. POLLEY, FIDELA U. POLLEY, JESUS BATUTAY, NICANOR UCAB, EMERIA U. LIM, EMILITO CLAPERO, ANTONINA RIAS, AURILLIO ROMULO, ERWIN P. CLAPERO, EVELITO CULANGO, VILMA/CRUISINE ALONG, EFREN EMATA, GREGORIO CABARIBAN, and SABINA CANTORANA, Respondents. DEC ISIO N AUSTRIA-MARTINEZ, J.: Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court. The principal issue presented for resolution is whether the Regional Trial Court (RTC) has jurisdiction to annul final judgment of the Department of Agrarian Reform Adjudication Board (DARAB). The antecedent facts: Petra Capistrano Piit previously owned Lot No. 2291 located in Cagayan de Oro City which measured 123,408 square meters under Transfer Certificate of Title No. T-62623. Springfield Development Corporation, Inc. (Springfield) bought Lot No. 2291-C with an area of 68,732 square meters, and Lot No. 2291-D with an area of 49,778 square meters.1 Springfield developed these properties into a subdivision project called Mega Heights Subdivision.2 On May 4, 1990, the Department of Agrarian Reform (DAR), through its Municipal Agrarian Reform Officer, issued a Notice of Coverage,3 placing the property under the coverage of Republic Act (R.A.) No. 6657 or the Comprehensive Agrarian Reform Law of 1988. There being an opposition from the heirs of Petra Piit, the case was docketed as DARAB Case No. X-305. On August 27, 1991, DARAB Provincial Adjudicator Abeto A. Salcedo, Jr. rendered a decision declaring the nature of the property as residential and not suitable for agriculture.4 The Regional Director filed a notice of appeal, which the Provincial Adjudicator disallowed for being pro forma and frivolous.5 The decision became final and executory6 and Springfield proceeded to develop the property.7 The DAR Regional Director then filed a petition for relief from judgment of the DARAB Decision, docketed as DARAB Case No. 0555. In its Decision dated October 5, 1995, the DARAB granted the petition and gave due course to the Notice of Coverage. It also directed the Municipal Agrarian Reform Office to proceed with the documentation, acquisition, and distribution of the property to the true and lawful beneficiaries.8 The DARAB also issued an Order dated May 22, 1997, ordering the heirs of Piit and Springfield to pay the farmer-beneficiaries the amount of Twelve Million, Three Hundred Forty Thousand, Eight Hundred Pesos (P12,340,800.00), corresponding to the value of the property since the property has already been developed into a subdivision. On June 13, 1997, Springfield and the heirs of Piit (petitioners) filed with the RTC of Cagayan de Oro City, Branch 40, a petition for annulment of the DARAB Decision dated October 5, 1995 and all its subsequent proceedings. Petitioners contend that the DARAB decision was rendered without affording petitioners any notice and hearing.9 On motion filed by the farmer-beneficiaries, the RTC issued an Order dated June 25, 1997, dismissing the case for lack of jurisdiction.10 On July 2, 1997, petitioners filed with the Court of Appeals (CA) a special civil action for
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On July 2, 1997, petitioners filed with the Court of Appeals (CA) a special civil action for certiorari, mandamus, and prohibition with prayer for the issuance of writ of preliminary injunction and/or temporary restraining order, docketed as CA-G.R. SP No. 44563.11 Petitioners alleged that the RTC committed grave abuse of discretion when it ruled that the annulment of judgment filed before it is actually an action for certiorari in a different color. According to petitioners, what it sought before the RTC is an annulment of the DARAB Decision and not certiorari, as the DARAB Decision is void ab initio for having been rendered without due process of law.12 In the assailed Decision13 dated July 16, 1998, the CA dismissed the petition for lack of merit, ruling that the RTC does not have jurisdiction to annul the DARAB Decision because it is a coequal body.14 However, on January 12, 1999, the CA ordered the elevation of the DARAB records before it, declaring that it "overlooked the fact that petitioners likewise applied for a writ of prohibition against the enforcement of the DARAB decision which they claim to be patently void."15 Forwarded to the CA were the records of the original case filed with the DARAB-Region X, and it appearing that the petition for relief from judgment and its pertinent records were forwarded to the DARAB Central Office, the CA issued another Resolution on December 20, 1999,16 requiring the DARAB Central Office to forward the records of the case. But after receipt of the records, the CA simply denied petitioners' motion for reconsideration per Resolution17 dated February 23, 2000 without specifically resolving the issues raised concerning the prayer for a writ of prohibition. Hence, the present petition on the following grounds: I THE COURT OF APPEALS COMMITTED A CLEAR ERROR OF LAW IN APPLYING THE PRINCIPLE OF JUDICIAL STABILITY TO JUSTIFY ITS CONCLUSION DIVESTING THE REGIONAL TRIAL COURT OF ITS JURISDICTION VESTED BY LAW OVER CASES WHERE THE EXCLUSIVE JURISDICTION WAS NOT EXPRESSLY GRANTED TO ANY OTHER COURTS [SIC] OR TRIBUNAL, IN EFFECT, MODIFYING THE APPLICABLE LAW ON THE MATTER. II THE COURT OF APPEALS IRREGULARLY DISMISSED PETITIONERS' MOTION FOR RECONSIDERATION AFTER IT HAD RESOLVED TO ENTERTAIN PETITIONERS' PETITION FOR PROHIBITION AND TO REVIEW THE DARAB PROCEEDINGS, THEREBY DEPARTING FROM THE USUAL COURSE OF JUDICIAL PROCEEDINGS. III THE HONORABLE SUPREME COURT, BEING THE HIGHEST TEMPLE OF RIGHTS, AND TO AVOID SERIOUS MISCARRIAGE OF JUSTICE AND NEEDLESS DELAYS, IS MOST RESPECTFULLY URGED TO TAKE COGNIZANCE OF THE PETITION FILED IN CA-G.R. SP No. 44563 IN THE EXERCISE OF ITS CONCURRENT JURISDICTION, AS IF THE PETITION WAS ORIGINALLY LODGED BEFORE IT.18 Petitioners argue that under Batas Pambansa (B.P.) Blg. 129, there is no provision that vests with the CA jurisdiction over actions for annulment of DARAB judgments. Petitioners, however, contend that the RTC may take cognizance of the annulment case since Section 19 of B.P. Blg. 129 vests the RTC with general jurisdiction and an action for annulment is covered under such general jurisdiction. According to petitioners, "this is but a logical consequence of the fact that no other courts were expressly given the jurisdiction over such actions."19 Petitioners further argue that the CA was in error when it summarily ignored their application for a writ of prohibition, as it was necessary to restrain the DARAB from enforcing its void decision; and even if the DARAB decision was valid, the writ of prohibition could have enjoined the execution of the DARAB decision since there have been changes which will make the execution unjust and inequitable. In their Joint-Comments, the farmer-beneficiaries and the DARAB (respondents) refute

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petitioners' allegation that they were not afforded due process in the DARAB proceedings, stating that petitioners were impleaded as a party thereto, and in fact, they attended some of the hearings although their counsel was absent. Respondents also adopt the CA's ruling that the RTC is not vested with any jurisdiction to annul the DARAB decision. As stated at the outset, the main issue in this case is whether the RTC has jurisdiction to annul a final judgment of the DARAB. Note must be made that the petition for annulment of the DARAB decision was filed with the RTC on June 13, 1997, before the advent of the 1997 Rules of Civil Procedure, which took effect on July 1, 1997. Thus, the applicable law is B.P. Blg. 129 or the Judiciary Reorganization Act of 1980, enacted on August 10, 1981. It is also worthy of note that before the effectivity of B.P. Blg. 129, a court of first instance has the authority to annul a final and executory judgment rendered by another court of first instance or by another branch of the same court. This was the Court's ruling in Dulap v. Court of Appeals.20 Yet, in subsequent cases,21 the Court held that the better policy, as a matter of comity or courteous interaction between courts of first instance and the branches thereof, is for the annulment cases to be tried by the same court or branch which heard the main action. The foregoing doctrines were modified in Ngo Bun Tiong v. Sayo,22 where the Court expressed that pursuant to the policy of judicial stability, the doctrine of non-interference between concurrent and coordinate courts should be regarded as highly important in the administration of justice whereby the judgment of a court of competent jurisdiction may not be opened, modified or vacated by any court of concurrent jurisdiction. With the introduction of B.P. Blg. 129,23 the rule on annulment of judgments was specifically provided in Section 9(2), which vested in the then Intermediate Appellate Court (now the CA) the exclusive original jurisdiction over actions for annulment of judgments of RTCs. Sec. 9(3) of B.P. Blg. 129 also vested the CA with "exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders, or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, 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." As provided in paragraph 16 of the Interim Rules and Guidelines implementing B.P. Blg. 129, the quasi-judicial bodies whose decisions are exclusively appealable to the CA are those, which under the law, R.A. No. 5434,24 or its enabling acts, are specifically appealable to the CA. Significantly, B.P. Blg. 129 does not specifically provide for any power of the RTC to annul judgments of quasi-judicial bodies. However, in BF Northwest Homeowners Association, Inc. v. Intermediate Appellate Court,25 the Court ruled that the RTCs have jurisdiction over actions for annulment of the decisions of the National Water Resources Council, which is a quasi-judicial body ranked with inferior courts, pursuant to its original jurisdiction to issue writs of certiorari, prohibition, and mandamus, under Sec. 21(1) of B.P. Blg. 129, in relation to acts or omissions of an inferior court. This led to the conclusion that despite the absence of any provision in B.P. Blg. 129, the RTC had the power to entertain petitions for annulment of judgments of inferior courts and administrative or quasi-judicial bodies of equal ranking. This is also in harmony with the "pre-B.P. Blg. 129" rulings of the Court recognizing the power of a trial court (court of first instance) to annul final judgments.26 Hence, while it is true, as petitioners contend, that the RTC had the authority to annul final judgments, such authority pertained only to final judgments rendered by inferior courts and quasi-judicial bodies of equal ranking with such inferior courts. The foregoing statements beg the next question, i.e., whether the DARAB is a quasi-judicial body with the rank of an inferior court such that the RTC may take cognizance of an action for the annulments of its judgments. The answer is no. The DARAB is a quasi-judicial body created by Executive Order Nos. 229 and 129-A. R.A. No. 6657 delineated its adjudicatory powers and functions. The DARAB Revised Rules of Procedure adopted on December 26, 198827 specifically provides for the manner of judicial review of its decisions, orders, rulings, or awards. Rule XIV, Section 1 states: SECTION 1. Certiorari to the Court of Appeals. Any decision, order, award or ruling by the
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SECTION 1. Certiorari to the Court of Appeals. Any decision, order, award or ruling by the Board or its Adjudicators on any agrarian dispute or on any matter pertaining to the application, implementation, enforcement or interpretation of agrarian reform laws or rules and regulations promulgated thereunder, may be brought within fifteen (15) days from receipt of a copy thereof, to the Court of Appeals by certiorari, except as provided in the next succeeding section. Notwithstanding an appeal to the Court of Appeals the decision of the Board or Adjudicator appealed from, shall be immediately executory. Further, the prevailing 1997 Rules of Civil Procedure, as amended, expressly provides for an appeal from the DARAB decisions to the CA.28 The rule is that where legislation provides for an appeal from decisions of certain administrative bodies to the CA, it means that such bodies are co-equal with the RTC, in terms of rank and stature, and logically, beyond the control of the latter.29 Given that DARAB decisions are appealable to the CA, the inevitable conclusion is that the DARAB is a co-equal body with the RTC and its decisions are beyond the RTC's control. The CA was therefore correct in sustaining the RTC's dismissal of the petition for annulment of the DARAB Decision dated October 5, 1995, as the RTC does not have any jurisdiction to entertain the same. This brings to fore the issue of whether the petition for annulment of the DARAB judgment could be brought to the CA. As previously noted, Section 9(2) of B.P. Blg. 129 vested in the CA the exclusive original jurisdiction over actions for annulment of judgments, but only those rendered by the RTCs. It does not expressly give the CA the power to annul judgments of quasijudicial bodies. Thus, in Elcee Farms, Inc. v. Semillano,30 the Court affirmed the ruling of the CA that it has no jurisdiction to entertain a petition for annulment of a final and executory judgment of the NLRC, citing Section 9 of B.P. Blg. 129, as amended, which only vests in the CA "exclusive jurisdiction over actions for annulment of judgments of Regional Trial Courts." This was reiterated in Galang v. Court of Appeals,31 where the Court ruled that that the CA is without jurisdiction to entertain a petition for annulment of judgment of a final decision of the Securities and Exchange Commission. Recent rulings on similar cases involving annulments of judgments of quasi-judicial bodies are also quite instructive on this matter. In Cole v. Court of Appeals,32 involving an annulment of the judgment of the HLURB Arbiter and the Office of the President (OP), filed with the CA, the Court stated that, "(U)nder Rule 47 of the Rules of Court, the remedy of annulment of judgment is confined to decisions of the Regional Trial Court on the ground of extrinsic fraud and lack of jurisdiction x x x." The Court further ruled, viz.: Although the grounds set forth in the petition for annulment of judgment are fraud and lack of jurisdiction, said petition cannot prosper for the simple reason that the decision sought to be annulled was not rendered by the Regional Trial Court but by an administrative agency (HLU Arbiter and Office of the President), hence, not within the jurisdiction of the Court of Appeals. There is no such remedy as annulment of judgment of the HLURB or the Office of the President. Assuming arguendo that the annulment petition can be treated as a petition for review under Rule 43 of the 1997 Rules of Civil Procedure, the same should have been dismissed by the Court of Appeals, because no error of judgment was imputed to the HLURB and the Office of the President. Fraud and lack of jurisdiction are beyond the province of petitions under Rule 43 of the Rules of Court, as it covers only errors of judgment. A petition for annulment of judgment is an initiatory remedy, hence no error of judgment can be the subject thereof. Besides, the Arbiter and the Office of the President indisputably have jurisdiction over the cases brought before them in line with our ruling in Francisco Sycip, Jr. vs. Court of Appeals, promulgated on March 17, 2000, where the aggrieved townhouse buyers may seek protection from the HLURB under Presidential Decree No. 957, otherwise known as "Subdivision and Condominium Buyers' Protective Decree."33 (Emphasis supplied) In Macalalag v. Ombudsman,34 the Court ruled that Rule 47 of the 1997 Rules of Civil Procedure on annulment of judgments or final orders and resolutions covers "annulment by the Court of Appeals of judgments or final orders and resolutions in civil actions of Regional Trial Courts for which the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies
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which the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies could no longer be availed of through no fault of the petitioner." Thus, the Court concluded that judgments or final orders and resolutions of the Ombudsman in administrative cases cannot be annulled by the CA, more so, since The Ombudsman Act specifically deals with the remedy of an aggrieved party from orders, directives and decisions of the Ombudsman in administrative disciplinary cases only, and the right to appeal is not to be considered granted to parties aggrieved by orders and decisions of the Ombudsman in criminal or non-administrative cases. While these cases involve annulments of judgments under the 1997 Rules of Civil Procedure, as amended, still, they still find application in the present case, as the provisions of B.P. Blg. 129 and the 1997 Rules of Civil Procedure, as amended, on annulment of judgments are identical. Consequently, the silence of B.P. Blg. 129 on the jurisdiction of the CA to annul judgments or final orders and resolutions of quasi-judicial bodies like the DARAB indicates its lack of such authority. Further, petitioners are also asking the Court to take cognizance of their prayer for the issuance of a writ of prohibition, which they claim was not acted upon by the CA, citing the Court's action in Fortich v. Corona35 where the Court took cognizance of the petition previously filed with the CA due to compelling reasons. The Court is not persuaded to do so. Fortich involved a 144-hectare land located at San Vicente, Sumilao, Bukidnon, owned by the Norberto Quisumbing, Sr. Management and Development Corporation (NQSRMDC), which was leased as a pineapple plantation to Del Monte Philippines, Inc. for a period of 10 years. During the existence of the lease, the DAR placed the entire 144-hectare property under compulsory acquisition and assessed the land value at P2.38 million. When the NQSRMDC/BAIDA (Bukidnon Agro-Industrial Development Association) filed an application for conversion due to the passage of Resolution No. 6 by the Provincial Development Council of Bukidnon and Ordinance No. 24 by the Sangguniang Bayan of Sumilao, Bukidnon, reclassifying the area from agricultural to industrial/institutional, the same was disapproved by the DAR Secretary and instead, the property was placed under the compulsory coverage of Comprehensive Agrarian Reform Program for distribution to all qualified beneficiaries. This prompted Governor Carlos O. Fortich of Bukidnon to file an appeal with the OP, while NQSRMDC filed with the CA a petition for certiorari, and prohibition with preliminary injunction. The OP then issued a Decision dated March 29, 1996 reversing the DAR Secretary's decision and approving the application for conversion. Executive Secretary Ruben D. Torres denied the DAR's motion for reconsideration for having been filed beyond the reglementary period of 15 days, and it was also declared that the OP Decision dated March 29, 1996 had already become final and executory. Because of this, the farmer-beneficiaries staged a hunger strike on October 9, 1997, protesting the OP's decision. In order to resolve the strike, the OP issued a so-called "Win/Win" resolution on November 7, 1997, modifying the decision in that NQSRMDC's application for conversion is approved only with respect to the approximately 44-hectare portion of the land adjacent to the highway, as recommended by the Department of Agriculture, while the remaining approximately 100 hectares traversed by an irrigation canal and found to be suitable for agriculture shall be distributed to qualified farmer-beneficiaries.1awphi1.net A petition for certiorari and prohibition under Rule 65 of the Revised Rules of Court36 was then filed with the Court, which was contested by the Office of the Solicitor General on the ground that the proper remedy should have been to file a petition for review directly with the CA in accordance with Rule 43 of the Revised Rules of Court. In resolving the issue, the Court recognized the rule that the Supreme Court, CA and RTC have original concurrent jurisdiction to issue a writ of certiorari, prohibition, and mandamus. However, due to compelling reasons and in the interest of speedy justice, the Court resolved to take primary jurisdiction over the petition in the interest of speedy justice, after which the Court nullified the act of the OP in re-opening the case and substantially modifying its March 29, 1996 Decision which had already become final and executory, as it was in gross disregard of the rules and basic legal precept that accord finality to administrative determinations. It must be stressed at this point that the Court, as a rule, will not entertain direct resort to it unless

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the redress desired cannot be obtained in the appropriate courts, and exceptional and compelling circumstances, such as cases of national interest and of serious implications, justify the availment of the extraordinary remedy of writ of certiorari, prohibition, or mandamus calling for the exercise of its primary jurisdiction.37 The Court finds no compelling circumstances in this case to warrant a relaxation of the foregoing rule. The Fortich case is not analogous with the present case such that the Court is not bound to abandon all rules, take primary jurisdiction, and resolve the merits of petitioners' application for a writ of prohibition. In the present case, the assailed DARAB Decision dated October 5, 1995 granting the petition for relief from judgment and giving due course to the Notice of Coverage was made pursuant to a petition for relief from judgment filed by the DAR, albeit petitioners are contesting the validity of the proceedings held thereon. On the other hand, in Fortich, the OP's "Win/Win" resolution dated November 7, 1997 was made motu proprio, as a result of the hunger strike staged by the farmer-beneficiaries. Further, the OP's "Win/Win" Resolution dated November 7, 1997 in the Fortich case is a patently void judgment since it was evident that there was already an existing final and executory OP Decision dated March 29, 1996. In this case, the assailed DARAB Decision dated October 5, 1995 appears to be regular on its face, and for its alleged nullity to be resolved, the Court must delve into the records of the case in order to determine the validity of petitioners' argument of lack of due process, absent notice and hearing. Moreover, the principle of hierarchy of courts applies generally to cases involving factual questions. As it is not a trier of facts, the Court cannot entertain cases involving factual issues.38 The question of whether the DARAB Decision dated October 5, 1995 is null and void and enforceable against petitioners for having been rendered without affording petitioners due process is a factual question which requires a review of the records of this case for it to be judiciously resolved. The Court notes that the CA, indeed, failed to resolve petitioners' prayer for the issuance of the writ of prohibition, which, significantly, focuses on the alleged nullity of the DARAB Decision dated October 5, 1995. On this score, the CA found that the application for the issuance of the writ of prohibition was actually a collateral attack on the validity of the DARAB decision. But, a final and executory judgment may be set aside in three ways;39 and a collateral attack, whereby in an action to obtain a different relief, an attack on the judgment is nevertheless made as an incident thereof,40 is one of these. This tenet is based upon a court's inherent authority to expunge void acts from its records.41 Despite recognizing the need to resolve petitioners' application for the writ of prohibition in its Resolution dated January 12, 1999, the CA nonetheless summarily denied petitioners' motion for reconsideration in its Resolution dated February 23, 2000,42 leaving the matter hanging and unresolved. At first, the Court considered resolving the merits of petitioners' motion for reconsideration concerning their application for a writ of prohibition against enforcing the DARAB Decision dated October 5, 1995. Thus, in a Resolution dated June 5, 2006, the Court directed the CA to transmit the records of DARAB Case No. 0555, which was previously required by the CA to be forwarded to it per Resolution dated December 20, 1999.43 However, as of even date, the CA has not complied with the Court's Resolution. Withal, upon re-examination of the issues involved in this case, the Court deems it more judicious to remand this case to the CA for immediate resolution of petitioners' motion for reconsideration, re: their application for the writ of prohibition. Moreover, the radical conflict in the findings of the Provincial Adjudicator and the DARAB as regards the nature of the subject property necessitates a review of the present case. In this regard, the CA is in a better position to fully adjudicate the case for it can delve into the records to determine the probative value of the evidence supporting the findings of the Provincial Adjudicator and of the DARAB. In addition, the CA is empowered by its internal rules to require parties to submit additional documents, as it may find necessary to promote the ends of substantial justice, and further order the transmittal of the proper records for it to fully adjudicate the case. After all, it is an avowed policy of the courts that cases should be determined on the merits, after full opportunity to all parties for ventilation of their causes and defenses, rather than on technicality or some procedural imperfections. In that way, the ends of justice would be
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on technicality or some procedural imperfections. In that way, the ends of justice would be served better.44 WHEREFORE, the petition is PARTLY GRANTED. This case is REMANDED to the Court of Appeals which is DIRECTED to resolve petitioners' prayer for the issuance of the writ of prohibition in their Motion for Reconsideration. Upon finality of this Decision, let the records be remanded forthwith to the Court of Appeals.
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Sta. Ana v. Carpo GR 164340 Nov 28, 2008
Sunday, November 14, 2010 11:20 PM

OTILIA STA. ANA vs. SPOUSES LEON G. CARPO and AURORA CARPO G.R. No. 164340 November 28, 2008 NACHURA, J.: Before this Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Civil Procedure seeking the reversal of the Court of Appeals (CA) Decision2 dated March 5, 2004 which reversed and set aside the Decision3 of the Department of Agrarian Reform Adjudication Board (DARAB) dated June 24, 1998 and reinstated the Decision4 of the Provincial Agrarian Reform Adjudicator (PARAD) of Laguna dated October 12, 1993. The Facts Respondent Leon Carpo5 (Leon) and his brother Francisco G. Carpo are the registered co-owners of a parcel of land designated as Lot No. 2175 of the Santa Rosa Estate Subdivision, situated at Sta. Rosa, Laguna, covered by Transfer Certificate of Title (TCT) No. T-172726 of the Register of Deeds of Laguna, with an area of 91,337 square meters, more or less. A portion thereof, consisting of 3.5 hectares, pertained to Leon and his wife, respondent Aurora Carpo. It was devoted to rice and corn production (subject land) and was tenanted by one Domingo Pastolero (Domingo), husband of Adoracion Pastolero (Adoracion).7 When Domingo passed away, Adoracion together with her son Elpidio Pastolero, assumed the tenancy rights of Domingo over the subject land. However, on December 29, 1983, Adoracion, by executing a notarized Pinanumpaang Salaysay8 with the conformity of Leon, and for a consideration of P72,500.00, transferred her rights in favor of petitioner Otilia Sta. Ana9 (petitioner) who, together with her husband, Marciano de la Cruz (Marciano), became the new tenants of the subject land. At the outset, the parties had a harmonious tenancy relationship.10 Unfortunately, circumstances transpired which abraded the relationship. The Department of Agrarian Reform (DAR) mediated in order to amicably settle the controversy, but no settlement was reached by the parties. Thus, the instant case. In their Complaint for Ejectment due to Non-Payment of Lease Rentals11 dated December 1, 1989, respondents alleged that it was their agreement with petitioner and Marciano to increase the existing rentals from 36 cavans to 45 cavans, and that, if respondents wanted to repossess the property, they only had to pay the petitioner the amount of P72,500.00, the same amount paid by the latter to Adoracion. Respondents further averred that despite repeated demands, petitioner refused to pay the actual rentals from July 1985 to September 1989, in violation of Presidential Decree (P.D.) No. 817; and that the subject land had been declared, upon the recommendation of the Human Settlements Committee, suitable for commercial and industrial purposes, per Zoning Ordinance of 1981 of the Municipality of Sta. Rosa, Laguna. Respondents prayed that petitioner be ejected from the subject land and be directed to pay P75,016.00 as unpaid rentals. In their Answer12 dated January 26, 1990, petitioner and Marciano denied that there was an agreement to increase the existing rental which was already fixed at 36 cavans of palay, once or twice a year depending on the availability of irrigation water; that neither was there an agreement as to the future surrender of the land in favor of the respondents; that they did not refuse to pay the rentals because they even sent verbal and written notices to the respondents, advising them to accept the same; and that in view of the latter’s failure to respond, petitioner and Marciano were compelled to sell the harvest and to deposit the proceeds thereof in Savings Account No. 9166 with the Universal Savings Bank at Sta. Rosa, Laguna under the names of Leon and Marciano. As their special affirmative defense, petitioner and Marciano claimed that Marciano is a farmer-beneficiary of the subject land pursuant to P.D. 27. Petitioner and Marciano prayed for the outright dismissal of the complaint and for the declaration of Marciano as full owner of the subject land. Thereafter, trial on the merits ensued. The PARAD’s Ruling On October 12, 1993, the PARAD ruled that petitioner and Marciano deliberately defaulted in the payment of the rentals due the respondents. The PARAD found that the deposit made with Republic Planters Bank was actually in the names of petitioner and Marciano, hence, personal to them. The PARAD also found that it was only during the hearing that petitioner and Marciano deposited the
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PARAD also found that it was only during the hearing that petitioner and Marciano deposited the amount of P40,000.00 with the Universal Savings Bank for the unpaid rentals. As such the PARAD considered the deposits as late payments and as implied admission that indeed petitioner and Marciano did not pay the past rentals when they fell due. The PARAD further held and disposed thus: The intent of the defendant to subject the said area under PD 27 should pass the criteria set. Foremost is the determination of the aggregate riceland of plaintiff. He must have more than seven (7) hectares of land principally devoted to the planting of palay. Area over seven (7) hectares shall be the one to be covered by PD 27 on Operation Land Transfer (OLT). In the case at bar, defendants failed to prove that plaintiff has more than the required riceland. In fact the subject 3.5 hectares are jointly owned by two. Hence, coverage for OLT is remote. Defendant claimed that plaintiff is covered by LOI 474, and therefore, he is zero retention of area. In reference to said law, wherein it provides landowner with other agricultural land of more than 7 hectares, or have other industrial lands from where he and his family derived resources, then, the owner cannot retain any riceland. However, this is not applicable in the instant case, as the defendant failed to prove that plaintiff has other source of income from where they will derive their sustenance. WHEREFORE, in view of the foregoing, Judgment is hereby rendered: a) Ordering the ejectment of defendant from the subject landholding for non-payment of lease rentals; b) Ordering the defendant Marciano de la Cruz to surrender the possession and cultivation of the subject land to herein plaintiffs; c) Ordering the defendant to pay as actual damage the amount of P75,016.00 corresponding to the unpaid rentals from July 18, 1985 up to September 16, 1989[; and] d) [D]eclaring the subject land not covered by Presidential Decree No. 27, Republic Act [No.] 6657, and Executive Order No. 228. SO ORDERED. Petitioner and Marciano sought relief from the DARAB.13 The DARAB’s Ruling On June 24, 1998, the DARAB held: It is a fundamental rule in this jurisdiction that for non-payment of lease rentals to warrant the dispossession and ejectment of a tenant, the same must be made in a willful and deliberate manner (Cabero v. Caturna, et al., CA-G.R. 05886-R, March 10, 1977). For a valid ouster or ejectment of a farmertenant, the willful and deliberate intent not to pay lease rentals and/or share can be ascertained when there is a determination of will not to do a certain act. Considering the circumstances obtaining in this case, it cannot be concluded that the defendantsappellants deliberately failed or refused to pay their lease rentals. It was not the fault of defendantsappellants herein that the rentals did not reach the plaintiffs-appellees because the latter choose to lend a deaf ear to the notices sent to them. Clearly, therefore plaintiffs-appellees failed to show by substantial evidence that the defendants-appellants deliberately failed or refused to pay their lease rentals. It has been held that the mere failure of a tenant to pay the landowner’s share does not necessarily give the latter the right to eject the former when there is lack of deliberate intent on the part of the tenant to pay (Roxas y Cia v. Cabatuando, 1 SCRA 1106). Thus: WHEREFORE, finding the appeal interposed by the defendants-appellants to be meritorious, the Decision appealed from is hereby SET ASIDE and another judgment issued as follows: 1. Enjoining plaintiffs-appellees to respect the peaceful possession and cultivation of the land in suit by the defendants-appellants; and 2. Directing the MARO of Sta. Rosa, Laguna to assist the parties in the proper accounting of lease rentals to be paid by the defendants-appellants to the plaintiffs-appellees. No costs. SO ORDERED. Aggrieved, respondents appealed to the CA. On April 16, 2003, Marciano passed away.14 The CA’s Ruling On March 5, 2004, the CA affirmed the factual findings of the PARAD that petitioner and Marciano failed to pay the rentals and that there was no valid tender of payment. The CA added that this failure to pay was tainted with bad faith and deliberate intent. Thus, petitioner and Marciano did not legally comply with their duties as tenants. Moreover, the CA held that the subject land was not covered by P.D. 27,
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with their duties as tenants. Moreover, the CA held that the subject land was not covered by P.D. 27, Republic Act (R.A.) No. 6657 and Executive Order (E.O.) No. 228, since the same had become a residential, commercial and industrial land, to wit: In the case at bar, We opted to give more weight to the petitioners contention that the "subject landholding is for residential, commercial, and industrial purposes as declared by zoning ordinance of 1981 of the town of Sta. Rosa, Laguna upon recommendation of the Human Settlement Committee xxx." The vicinity map of the subject landholding shows that it is almost beside Nissan Motors Technopa[r]k and surrounded by the South Expressway and several companies such as the Coca-Cola Bottlers Philippines, Inc. and Toyota Motors Philippines along the Pulong Santa Cruz, National Road. The vicinity map shows therefore that the subject landholding is a residential, commercial, and industrial area exempted from the coverage of P.D. No. 27, Republic Act. No. 6657 and Executive Order No. 228. The CA ruled in favor of the respondents in this wise: WHEREFORE, premises considered and pursuant to applicable law and jurisprudence on the matter, the present Petition is hereby GRANTED. Accordingly, the decision of the Department of Agrarian Reform Adjudication Board-Central Office, Elliptical Road, Diliman, Quezon City (promulgated on June 24, 1998) is hereby REVERSED and SET ASIDE and a new one entered- REINSTATING the decision of the Department of Agrarian Reform Adjudication Board-Region IV, Office of the Provincial Adjudicator, Sta. Cruz, Laguna (dated October 12, 1993). No pronouncement as to costs. SO ORDERED. Petitioner filed a Motion for Reconsideration15 assailing the aforementioned Decision which the CA, however, denied in its Resolution16 dated June 28, 2004. Hence, this Petition based on the following grounds: THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN ARROGATING UPON ITSELF WHAT IS OTHERWISE DAR’S POWER TO DETERMINE WHETHER THE SUBJECT AGRICULTURAL LAND HAS BECOME RESIDENTIAL/INDUSTRIAL/COMMERCIAL. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED WHEN IT EQUATED "LAND RECLASSIFICATION" WITH "LAND CONVERSION" FOR PURPOSES OF DETERMINING THE PROPRIETY OF EJECTMENT OF AN AGRICULTURAL LESSEE. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED WHEN IT FAILED TO NOTE THAT AN EJECTMENT SUIT BASED ON A CLAIM OF NON-PAYMENT OF LEASE RENTAL IS DIAMETRICALLY ANTITHETICAL TO THE CLAIM THAT THE SUBJECT LAND IS NO LONGER AGRICULTURAL BUT "A RESIDENTIAL, COMMERCIAL AND INDUSTRIAL AREA EXEMPTED FROM THE COVERAGE OF P.D. NO. 27, REPUBLIC ACT NO. 6657 AND EXECUTIVE ORDER NO. 228. THE DECISION DATED MARCH 5, 2004--INSOFAR AS IT ADOPTED THE FINDING OF DARAB-REGION IV, OFFICE OF THE PROVINCIAL ADJUDICATOR, STA. CRUZ, LAGUNA INSTEAD OF THAT OF THE DARABCENTRAL--IS VIOLATIVE OF SEC. 14, ART. VIII OF THE 1987 CONSTITUTION FOR HAVING DECIDED WITHOUT EXPRESSING THEREIN CLEARLY AND DISTINCTLY THE FACTS AND THE LAW ON WHICH SAID DECISION IS BASED. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN RESORTING TO SURMISES AND CONJECTURES WHEN IT RULED THAT THE FAILURE OF THE HEREIN PETITIONER AND HER DECEASED HUSBAND TO DELIVER THE LEASE RENTALS TO HEREIN RESPONDENTS, WAS DONE SO IN BAD FAITH AND WITH DELIBERATE INTENT TO DEPRIVE THE LAND OWNERS THEREOF. Petitioner asseverates that there is no evidence to support respondents' claim that the failure to pay the lease rentals was tainted with malevolence, as the records are replete with acts indicative of good faith on the part of the petitioner and Marciano and bad faith on the part of respondents. Moreover, petitioner claimed that the power to determine whether or not the subject land is nonagricultural, hence, exempt from the coverage of the Comprehensive Agrarian Reform Law (CARL), lies with the DAR, and not with the courts; that mere reclassification by way of a zoning ordinance does not warrant the dispossession of a tenant but conversion does, and entitles the tenant to payment of disturbance compensation; the legal concepts of reclassification and conversion are separate and distinct from each other; that respondents' complaint before the PARAD alleged and established the fact that the subject land is a riceland, therefore, agricultural; that the CA failed to explain why it upheld the findings of the PARAD on the issue of non-payment of lease rentals; and that though the issue of nonpayment of lease rentals is a question of fact, due to the conflict of the factual findings of the PARAD and CA with those of the DARAB, petitioner asks that this Court review the evidence on record, and
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and CA with those of the DARAB, petitioner asks that this Court review the evidence on record, and pursuant to the CA decision in Cabero v. Caturna, et al.,17 rule on whether petitioner willfully and deliberately refused to pay lease rentals as to warrant her dispossession from the subject land.18 On the other hand, respondents aver that petitioner and her family are wealthy, as they own numerous properties in Sta. Rosa, Laguna including a luxurious house;19 that, as such, petitioner cannot be considered as a landless tenant deserving the protection of agrarian reform laws; that the DARAB negated the highest degree of respect the factual findings of the PARAD deserved; that petitioner's claims that Marciano repeatedly made verbal and written notices20 for Leon to accept their lease rentals were fraudulent designs to disguise the deliberate intent of petitioner not to pay the lease rentals; that when Leon went to petitioner's residence, petitioner did not pay the P10,000.00 due as lease rentals; that during the hearing before the PARAD, when respondents' counsel requested that they be furnished a bank certificate as to the existence of said bank deposits in Republic Planters Bank as of April 20, 1987 and October 1, 1987, petitioner herself commented, "Nagdeposito ho talaga kami sa pangalan namin";21 that the statement of petitioner is an admission that bank deposits, if any, were made, not in the name of Leon as contained in the written notices, but rather in the names of petitioner and Marciano; that such certificate was not introduced in evidence and that upon inquiry, said deposits do not actually exist; that per recent inquiry, the bank deposit in Universal Savings Bank only contains P1,020.19 due to previous withdrawals made by Marciano; that the foregoing circumstances indicate a pattern of fraudulent misrepresentations by the petitioner to mislead the DARAB into believing that petitioner and Marciano did not deliberately refuse to pay the lease rentals; that from July 18, 1985 up to the present, petitioner failed to pay the lease rentals showing again, the deliberate refusal to pay; that this default on the part of the petitioner has been recurring for several years already, thus depriving the respondents as landowners of their share of the subject land in violation of the principle of social justice; that as raised in respondents Omnibus Supplemental Motion for Reconsideration22 before the DARAB and as found by the CA based on its vicinity map,23 the subject land is of a residential, commercial and industrial character, exempted from agrarian reform coverage; and that the DARAB erred in not finding the sale of the tenancy rights of Adoracion to petitioner and Marciano for P72,500.00 violative of P.D. 27 even if the same was with Leon's consent. The sale, respondents contend was therefore, null and void ab initio, not susceptible of any ratification.24 Our Ruling Before we resolve this case on the merits, a procedural issue must be disposed of. Respondents strongly argue that the instant Petition was filed out of time because, while petitioner originally claimed to have received her copy of the CA Resolution25 dated June 28, 2004, denying her Motion for Reconsideration,26 on July 12, 2004, petitioner eventually admitted, after respondents showed proof to the contrary, that she actually received the said Resolution on July 7, 2004.27 Thus, petitioner had only up to July 22, 2004 to appeal the CA's ruling to this Court. In this case, petitioner filed her Motion28 for Extension of Time to File Petition for Review on Certiorari (Motion) on July 23, 2004. As such, there was no more period to extend. Further, the instant Petition was filed on August 27, 2004, or three (3) days beyond the thirty-day extended period. Hence, respondents submit that the CA decision had already become final and executory.29 Petitioner alleges that on July 15, 2004, she met with her counsel to engage the latter's legal services. During said meeting, counsel asked petitioner about the date of receipt of the assailed CA Resolution. Petitioner replied that she received her copy on July 12, 2004. On July 20, 2004, counsel filed an Entry of Appearance with the CA.30 On July 23, 2004, petitioner through counsel filed the Motion for Extension of Time to File Petition for Review. On August 11, 2004, petitioner received a copy of respondents' Opposition to the Motion. Thereafter, upon verification, petitioner admitted that she received the copy of the CA Resolution on July 7, 2004. Thus, her Motion was admittedly filed one day late. Petitioner begs the indulgence of this Court for her oversight and mistake, attributing the same to her lack of education and old age. Rules of procedure are merely tools designed to facilitate the attainment of justice. If the application of the Rules would tend to frustrate rather than to promote justice, it is always within our power to suspend the rules or except a particular case from their operation. Law and jurisprudence grant to courts the prerogative to relax compliance with the procedural rules, even the most mandatory in character, mindful of the duty to reconcile the need to put an end to litigation speedily and the parties'

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right to an opportunity to be heard.31 Our recent ruling in Tanenglian v. Lorenzo32 is instructive: We have not been oblivious to or unmindful of the extraordinary situations that merit liberal application of the Rules, allowing us, depending on the circumstances, to set aside technical infirmities and give due course to the appeal. In cases where we dispense with the technicalities, we do not mean to undermine the force and effectivity of the periods set by law. In those rare cases where we did not stringently apply the procedural rules, there always existed a clear need to prevent the commission of a grave injustice. Our judicial system and the courts have always tried to maintain a healthy balance between the strict enforcement of procedural laws and the guarantee that every litigant be given the full opportunity for the just and proper disposition of his cause. In this case, petitioner was one day late in filing her Motion for Extension. To deny the Petition on this ground alone is too harsh a penalty for a day’s delay, taking into consideration the time, resources and effort spent by petitioner and even by the respondents, in order to pursue this case all the way to this Court. Thus, we dispense with the apparent procedural defect and resolve this case on the merits. The ends of justice are better served when cases are determined on the merits – with all parties given full opportunity to ventilate their causes and defenses – rather than on technicality or some procedural imperfections.33 The Petition is impressed with merit. In sum, there are two (2) ultimate issues that require resolution in this case: 1) Whether the CA erred in ruling that the subject land had already become residential, commercial and/or industrial, thus, excluded from the coverage of our laws on agrarian reform; and 2) Whether the petitioner, as an agricultural tenant, failed to pay her lease rentals when the same fell due as to warrant her dispossession of the subject land. On the first issue, we rule in the affirmative. To recapitulate, the instant case sprang from a Complaint for Ejectment based on Non-Payment of lease rentals. Though an allegation was made by the respondents that the land had been declared, upon the recommendation of the Human Settlements Committee, suitable for commercial and industrial purposes, per Zoning Ordinance of 1981 of the Municipality of Sta. Rosa, no argument was advanced by respondents to support such allegation, in the same way that no prayer for the ejectment of the tenants was raised based on that allegation. The PARAD held that petitioner should be ejected for non-payment of lease rentals. It also ruled that the subject land is not covered by P.D. No. 27, R.A. No. 6657, and E.O. No. 228, not on the basis of the allegation in the complaint, but on the respondents' right of retention. On appeal, the DARAB concentrated on the issue of petitioner’s failure to pay lease rentals. When the DARAB ruled that petitioner and Marciano did not deliberately fail to pay said rentals, respondents raised a new issue in their Omnibus Motion that the transaction between Adoracion and petitioner was void in violation of P.D. No. 27, despite the conformity of Leon. This issue was not resolved by the DARAB. Finally, when the case reached the CA, the appellate court affirmed the findings of the PARAD that petitioner and Marciano deliberately and in bad faith did not pay the lease rentals. The CA, however, also held that the subject land had already become a residential, commercial and industrial area based on the vicinity map showing that the land was surrounded by commercial and industrial establishments. Without doubt, the PARAD acted without jurisdiction when it held that the subject land was no longer covered by our agrarian laws because of the retention rights of the respondents. The CA likewise acted without jurisdiction when it ruled that the land had become non-agricultural based on a zoning ordinance of 1981– on the strength of a mere vicinity map. These rulings violated the doctrine of primary jurisdiction. The doctrine of primary jurisdiction precludes the courts from resolving a controversy over which jurisdiction has initially been lodged in an administrative body of special competence. For agrarian reform cases, jurisdiction is vested in the Department of Agrarian Reform (DAR); more specifically, in the Department of Agrarian Reform Adjudication Board (DARAB). Executive Order 229 vested the DAR with (1) quasi-judicial powers to determine and adjudicate agrarian reform matters; and (2) jurisdiction over all matters involving the implementation of agrarian reform, except those falling under the exclusive original jurisdiction of the Department of Agriculture and the Department of Environment and Natural Resources.34 In Department of Agrarian Reform v. Abdulwahid,35 we held:
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In Department of Agrarian Reform v. Abdulwahid,35 we held: As held by this Court in Centeno v. Centeno [343 SCRA 153], "the DAR is vested with the primary jurisdiction to determine and adjudicate agrarian reform matters and shall have the exclusive jurisdiction over all matters involving the implementation of the agrarian reform program." The DARAB has primary, original and appellate jurisdiction "to determine and adjudicate all agrarian disputes, cases, controversies, and matters or incidents involving the implementation of the Comprehensive Agrarian Reform Program under R.A. No. 6657, E.O. Nos. 229, 228 and 129-A, R.A. No. 3844 as amended by R.A. No. 6389, P.D. No. 27 and other agrarian laws and their implementing rules and regulations." Under Section 3 (d) of R.A. No. 6657 (CARP Law), "agrarian dispute" is defined to include "(d) . . . any controversy relating to tenurial arrangements, whether leasehold, tenancy, stewardship or otherwise over lands devoted to agriculture, including disputes concerning farmworkers associations or representation of persons in negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions of such tenurial arrangements. It includes any controversy relating to compensation of lands acquired under this Act and other terms and conditions of transfer of ownership from landowners to farmworkers, tenants and other agrarian reform beneficiaries, whether the disputants stand in the proximate relation of farm operator and beneficiary, landowner and tenant, or lessor and lessee." Simply put, agrarian disputes, as defined by law and settled in jurisprudence, are within the primary and exclusive original jurisdiction of the PARAD and the DARAB, while issues of retention and non-coverage of a land under agrarian reform, among others, are within the domain of the DAR Secretary. Thus, Section 3, Rule II of the 2003 DARAB Rules of Procedure provides: SECTION 3. Agrarian Law Implementation Cases. – The Adjudicator or the Board shall have no jurisdiction over matters involving the administrative implementation of RA No. 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL) of 1988 and other agrarian laws as enunciated by pertinent rules and administrative orders, which shall be under the exclusive prerogative of and cognizable by the Office of the Secretary of the DAR in accordance with his issuances, to wit: 3.1 Classification and identification of landholdings for coverage under the agrarian reform program and the initial issuance of CLOAs and EPs, including protests or oppositions thereto and petitions for lifting of such coverage; 3.2 Classification, identification, inclusion, exclusion, qualification, or disqualification of potential/actual farmer-beneficiaries; 3.3 Subdivision surveys of land under CARP; 3.4 Recall, or cancellation of provisional lease rentals, Certificates of Land Transfers (CLTs) and CARP Beneficiary Certificates (CBCs) in cases outside the purview of Presidential Decree (PD) No. 816, including the issuance, recall, or cancellation of EPs or CLOAs not yet registered with the Register of Deeds; 3.5 Exercise of the right of retention by the landowner; 3.6 Application for exemption from coverage under Section 10 of RA 6657; 3.7 Application for exemption pursuant to Department of Justice (DOJ) Opinion No. 44 (1990); 3.8 Exclusion from CARP coverage of agricultural land used for livestock, swine, and poultry raising; 3.9 Cases of exemption/exclusion of fish pond and prawn farms from the coverage of CARP pursuant to RA 7881; 3.10 Issuance of Certificate of Exemption for land subject of Voluntary Offer to Sell (VOS) and Compulsory Acquisition (CA) found unsuitable for agricultural purposes; 3.11 Application for conversion of agricultural land to residential, commercial, industrial, or other nonagricultural uses and purposes including protests or oppositions thereto; 3.12 Determination of the rights of agrarian reform beneficiaries to homelots; 3.13 Disposition of excess area of the tenants/farmer-beneficiary's landholdings; 3.14 Increase in area of tillage of a tenant/farmer-beneficiary; 3.15 Conflict of claims in landed estates administered by DAR and its predecessors; or 3.16 Such other agrarian cases, disputes, matters or concerns referred to it by the Secretary of the DAR. Verily, there is an established tenancy relationship between petitioner and respondents in this case. An action for Ejectment for Non-Payment of lease rentals is clearly an agrarian dispute, cognizable at the initial stage by the PARAD and thereafter by the DARAB.36 But issues with respect to the retention rights of the respondents as landowners and the exclusion/exemption of the subject land from the coverage of
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respondents as landowners and the exclusion/exemption of the subject land from the coverage of agrarian reform are issues not cognizable by the PARAD and the DARAB, but by the DAR Secretary because, as aforementioned, the same are Agrarian Law Implementation (ALI) Cases. It has not escaped our notice that, as this case progressed and reached a higher level in the hierarchy of tribunals, the respondents would, invariably, proffer an additional theory or defense, in order to effect petitioner’s eviction from the land. As a consequence, the simple issue of ejectment based on nonpayment of rentals has been muddled. Proof necessary for the resolution of the issue of the land being covered by, or excluded/exempted from, P.D. No. 27, R.A. No. 6657, and other pertinent agrarian laws, as well as of the issue of the right of retention of the respondents, was not offered in evidence. Worse, the PARAD resolved the issue of retention even if it was not raised by the respondents at that level, and even if the PARAD had no jurisdiction over the same. Likewise, the CA ruled that the land had ceased being agricultural on the basis of a mere vicinity map, in open disregard of the Doctrine of Primary Jurisdiction, since the issue was within the province of the Secretary of DAR. We take this opportunity to remind the PARAD and the CA that "courts of justice have no power to decide a question not in issue." A judgment that goes beyond the issues, and purports to adjudicate something on which the parties were not heard, is extra-judicial, irregular and invalid. This norm applies not only to courts of justice, but also to quasi-judicial bodies such as the PARAD. Accordingly, premature and irregular were the PARAD ruling on the retention rights of the respondents, and the CA decision on the non-agricultural character of the land subject of this controversy -- these issues not having passed the scrutiny of the DAR Secretary -- are premature and irregular.37 Thus, we cannot allow ourselves to fall into the same error as that committed by the PARAD and the CA, and resolve the issue of the non-agricultural nature of the subject land by receiving, at this stage, pieces of evidence and evaluating the same, without the respondents having first introduced them in the proper forum. The Office of the DAR Secretary is in a better position to resolve the issues on retention and exclusion/exemption from agrarian reform coverage, being the agency lodged with such authority inasmuch it possesses the necessary expertise on the matter.38 Likewise, we refrain from entertaining the issue raised by respondents that petitioner and her family are not landless tenants and are therefore not deserving of any protection under our laws on agrarian reform, because fairness and due process dictate that issues not raised in the proceedings below should not be raised for the first time on appeal.39 On the second issue, we rule in the negative. Under Section 37 of Republic Act No. 3844,40 as amended, coupled with the fact that the respondents are the complainants themselves, the burden of proof to show the existence of a lawful cause for the ejectment of the petitioner as an agricultural lessee rests upon the respondents as agricultural lessors.41 This proceeds from the principle that a tenancy relationship, once established, entitles the tenant to security of tenure. Petitioner can only be ejected from the agricultural landholding on grounds provided by law.42 Section 36 of the same law pertinently provides: Sec. 36. Possession of Landholding; Exceptions. – Notwithstanding any agreement as to the period or future surrender, of the land, an agricultural lessee shall continue in the enjoyment and possession of his landholding except when his dispossession has been authorized by the Court in a judgment that is final and executory if after due hearing it is shown that: xxx x (6) The agricultural lessee does not pay the lease rental when it falls due: Provided, That if the nonpayment of the rental shall be due to crop failure to the extent of seventy-five per centum as a result of a fortuitous event, the non-payment shall not be a ground for dispossession, although the obligation to pay the rental due that particular crop is not thereby extinguished; xxx x Respondents failed to discharge such burden. The agricultural tenant's failure to pay the lease rentals must be willful and deliberate in order to warrant his dispossession of the land that he tills. Petitioner's counsel opines that there appears to be no decision by this Court on the matter; he thus submits that we should use the CA decision in Cabero v. Caturna. This is not correct. In an En Banc Decision by this Court in Roxas y Cia v. Cabatuando, et al.,43 we held that under our law and
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Decision by this Court in Roxas y Cia v. Cabatuando, et al.,43 we held that under our law and jurisprudence, mere failure of a tenant to pay the landholder's share does not necessarily give the latter the right to eject the former when there is lack of deliberate intent on the part of the tenant to pay. This ruling has not been overturned. The term "deliberate" is characterized by or results from slow, careful, thorough calculation and consideration of effects and consequences.44 The term "willful," on the other hand, is defined as one governed by will without yielding to reason or without regard to reason.45 We agree with the findings of the DARAB that it was not the fault of petitioner that the lease rentals did not reach the respondents because the latter chose to ignore the notices sent to them. To note, as early as November 10, 1986, Marciano executed an Affidavit46 stating that Leon refused to receive the respective lease rentals consisting of 37 cavans for November 1985 and July 1986. For 1987, Marciano wrote Leon two letters47 informing him of the availability of the lease rentals for April and October of the same year. On April 27, 1988, Marciano sought DAR intervention and mediation with respect to the execution of a leasehold contract and the fixing of the leasehold rentals.48 Meetings were set but respondents failed to attend.49 The dispute was referred to the barangay but the parties failed to amicably settle.50 These factual circumstances negate the PARAD findings of Marciano’s and petitioner's deliberate and willful intent not to pay lease rentals. Good faith was clearly demonstrated by Marciano and petitioner when, because respondents refused to accept the proffered payment, they even went to the point of seeking government intervention in order to address their problems with respondents. Absent such deliberate and willful refusal to pay lease rentals, petitioner's ejectment from the subject land is not justified. WHEREFORE, the instant Petition is GRANTED. The assailed Decision of the Court of Appeals in CA-G.R. SP No. 60640 is hereby REVERSED and SET ASIDE. The Decision of the Department of Agrarian Reform Adjudication Board (DARAB) dated June 24, 1998 in DARAB Case No. 2203 is REINSTATED without prejudice to the rights of respondent-spouses Leon and Aurora Carpo to seek recourse from the Office of the Department of Agrarian Reform (DAR) Secretary on the other issues they raised. No costs.
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Garcillano v. House GR 170338 Dec 23, 2008
Sunday, November 14, 2010 11:20 PM

G.R. No. 170338 December 23, 2008 Virgilio O. Garcillano vs. The House Of Representatives Committees On Public Information, Public Order And Safety, National Defense And Security, Information And Communications Technology, And Suffrage And Electoral Reforms G.R. No. 179275 December 23, 2008 Santiago Javier Ranada And Oswaldo D. Agcaoili, Petitioners, Vs. The Senate Of The Republic Of The Philippines, Represented By The Senate President The Honorable Manuel Villar, Respondents. Maj. Lindsay Rex Sagge, Petitioner-In-Intervention Aquilino Q. Pimentel, Jr., Benigno Noynoy C. Aquino, Rodolfo G. Biazon, Panfilo M. Lacson, Loren B. Legarda, M.A. Jamby A.S. Madrigal, And Antonio F. Trillanes, Respondents-Intervenors

NACHURA, J.: More than three years ago, tapes ostensibly containing a wiretapped conversation purportedly between the President of the Philippines and a high-ranking official of the Commission on Elections (COMELEC) surfaced. They captured unprecedented public attention and thrust the country into a controversy that placed the legitimacy of the present administration on the line, and resulted in the near-collapse of the Arroyo government. The tapes, notoriously referred to as the "Hello Garci" tapes, allegedly contained the President’s instructions to COMELEC Commissioner Virgilio Garcillano to manipulate in her favor results of the 2004 presidential elections. These recordings were to become the subject of heated legislative hearings conducted separately by committees of both Houses of Congress.1 In the House of Representatives (House), on June 8, 2005, then Minority Floor Leader Francis G. Escudero delivered a privilege speech, "Tale of Two Tapes," and set in motion a congressional investigation jointly conducted by the Committees on Public Information, Public Order and Safety, National Defense and Security, Information and Communications Technology, and Suffrage and Electoral Reforms (respondent House Committees). During the inquiry, several versions of the wiretapped conversation emerged. But on July 5, 2005, National Bureau of Investigation (NBI) Director Reynaldo Wycoco, Atty. Alan Paguia and the lawyer of former NBI Deputy Director Samuel Ong submitted to the respondent House Committees seven alleged "original" tape recordings of the supposed three-hour taped conversation. After prolonged and impassioned debate by the committee members on the admissibility and authenticity of the recordings, the tapes were eventually played in the chambers of the House.2 On August 3, 2005, the respondent House Committees decided to suspend the hearings indefinitely. Nevertheless, they decided to prepare committee reports based on the said recordings and the testimonies of the resource persons.3 Alarmed by these developments, petitioner Virgilio O. Garcillano (Garcillano) filed with this Court a Petition for Prohibition and Injunction, with Prayer for Temporary Restraining Order and/or Writ of Preliminary Injunction4 docketed as G.R. No. 170338. He prayed that the respondent House Committees be restrained from using these tape recordings of the "illegally obtained" wiretapped conversations in their committee reports and for any other purpose. He further implored that the said recordings and any reference thereto be ordered stricken off the records of the inquiry, and the respondent House Committees directed to desist from further using the recordings in any of the House proceedings.5 Without reaching its denouement, the House discussion and debates on the "Garci tapes" abruptly stopped. After more than two years of quiescence, Senator Panfilo Lacson roused the slumbering issue with a privilege speech, "The Lighthouse That Brought Darkness." In his discourse, Senator Lacson promised to provide the public "the whole unvarnished truth – the what’s, when’s, where’s, who’s and why’s" of the alleged wiretap, and sought an inquiry into the perceived willingness of telecommunications providers to participate in nefarious wiretapping activities. On motion of Senator Francis Pangilinan, Senator Lacson’s speech was referred to the Senate Committee on National Defense and Security, chaired by Senator Rodolfo Biazon, who had previously
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Committee on National Defense and Security, chaired by Senator Rodolfo Biazon, who had previously filed two bills6 seeking to regulate the sale, purchase and use of wiretapping equipment and to prohibit the Armed Forces of the Philippines (AFP) from performing electoral duties. 7 In the Senate’s plenary session the following day, a lengthy debate ensued when Senator Richard Gordon aired his concern on the possible transgression of Republic Act (R.A.) No. 42008 if the body were to conduct a legislative inquiry on the matter. On August 28, 2007, Senator Miriam Defensor-Santiago delivered a privilege speech, articulating her considered view that the Constitution absolutely bans the use, possession, replay or communication of the contents of the "Hello Garci" tapes. However, she recommended a legislative investigation into the role of the Intelligence Service of the AFP (ISAFP), the Philippine National Police or other government entities in the alleged illegal wiretapping of public officials.9 On September 6, 2007, petitioners Santiago Ranada and Oswaldo Agcaoili, retired justices of the Court of Appeals, filed before this Court a Petition for Prohibition with Prayer for the Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction,10 docketed as G.R. No. 179275, seeking to bar the Senate from conducting its scheduled legislative inquiry. They argued in the main that the intended legislative inquiry violates R.A. No. 4200 and Section 3, Article III of the Constitution.11 As the Court did not issue an injunctive writ, the Senate proceeded with its public hearings on the "Hello Garci" tapes on September 7,12 1713 and October 1,14 2007. Intervening as respondents,15 Senators Aquilino Q. Pimentel, Jr., Benigno Noynoy C. Aquino, Rodolfo G. Biazon, Panfilo M. Lacson, Loren B. Legarda, M.A. Jamby A.S. Madrigal and Antonio F. Trillanes filed their Comment16 on the petition on September 25, 2007. The Court subsequently heard the case on oral argument.17 On October 26, 2007, Maj. Lindsay Rex Sagge, a member of the ISAFP and one of the resource persons summoned by the Senate to appear and testify at its hearings, moved to intervene as petitioner in G.R. No. 179275.18 On November 20, 2007, the Court resolved to consolidate G.R. Nos. 170338 and 179275.19 It may be noted that while both petitions involve the "Hello Garci" recordings, they have different objectives–the first is poised at preventing the playing of the tapes in the House and their subsequent inclusion in the committee reports, and the second seeks to prohibit and stop the conduct of the Senate inquiry on the wiretapped conversation. The Court dismisses the first petition, G.R. No. 170338, and grants the second, G.R. No. 179275. -I Before delving into the merits of the case, the Court shall first resolve the issue on the parties’ standing, argued at length in their pleadings. In Tolentino v. COMELEC,20 we explained that "‘*l+egal standing’ or locus standi refers to a personal and substantial interest in a case such that the party has sustained or will sustain direct injury because of the challenged governmental act x x x," thus, generally, a party will be allowed to litigate only when (1) he can show that he has personally suffered some actual or threatened injury because of the allegedly illegal conduct of the government; (2) the injury is fairly traceable to the challenged action; and (3) the injury is likely to be redressed by a favorable action.21 The gist of the question of standing is whether a party has "alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions."22 However, considering that locus standi is a mere procedural technicality, the Court, in recent cases, has relaxed the stringent direct injury test. David v. Macapagal-Arroyo23 articulates that a "liberal policy has been observed, allowing ordinary citizens, members of Congress, and civic organizations to prosecute actions involving the constitutionality or validity of laws, regulations and rulings."24 The fairly recent Chavez v. Gonzales25 even permitted a non-member of the broadcast media, who failed to allege a personal stake in the outcome of the controversy, to challenge the acts of the Secretary of Justice and the National Telecommunications Commission. The majority, in the said case, echoed the current policy that "this Court has repeatedly and consistently refused to wield procedural barriers as impediments to its addressing and resolving serious legal questions that greatly impact on public interest, in keeping with the Court’s duty under the 1987 Constitution to determine whether or not other branches of government have kept themselves within the limits of the Constitution and the laws, and that they have
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government have kept themselves within the limits of the Constitution and the laws, and that they have not abused the discretion given to them."26 In G.R. No. 170338, petitioner Garcillano justifies his standing to initiate the petition by alleging that he is the person alluded to in the "Hello Garci" tapes. Further, his was publicly identified by the members of the respondent committees as one of the voices in the recordings.27 Obviously, therefore, petitioner Garcillano stands to be directly injured by the House committees’ actions and charges of electoral fraud. The Court recognizes his standing to institute the petition for prohibition. In G.R. No. 179275, petitioners Ranada and Agcaoili justify their standing by alleging that they are concerned citizens, taxpayers, and members of the IBP. They are of the firm conviction that any attempt to use the "Hello Garci" tapes will further divide the country. They wish to see the legal and proper use of public funds that will necessarily be defrayed in the ensuing public hearings. They are worried by the continuous violation of the laws and individual rights, and the blatant attempt to abuse constitutional processes through the conduct of legislative inquiries purportedly in aid of legislation.28 Intervenor Sagge alleges violation of his right to due process considering that he is summoned to attend the Senate hearings without being apprised not only of his rights therein through the publication of the Senate Rules of Procedure Governing Inquiries in Aid of Legislation, but also of the intended legislation which underpins the investigation. He further intervenes as a taxpayer bewailing the useless and wasteful expenditure of public funds involved in the conduct of the questioned hearings.29 Given that petitioners Ranada and Agcaoili allege an interest in the execution of the laws and that intervenor Sagge asserts his constitutional right to due process,30 they satisfy the requisite personal stake in the outcome of the controversy by merely being citizens of the Republic. Following the Court’s ruling in Francisco, Jr. v. The House of Representatives,31 we find sufficient petitioners Ranada’s and Agcaoili’s and intervenor Sagge’s allegation that the continuous conduct by the Senate of the questioned legislative inquiry will necessarily involve the expenditure of public funds.32 It should be noted that in Francisco, rights personal to then Chief Justice Hilario G. Davide, Jr. had been injured by the alleged unconstitutional acts of the House of Representatives, yet the Court granted standing to the petitioners therein for, as in this case, they invariably invoked the vindication of their own rights–as taxpayers, members of Congress, citizens, individually or in a class suit, and members of the bar and of the legal profession–which were also supposedly violated by the therein assailed unconstitutional acts.33 Likewise, a reading of the petition in G.R. No. 179275 shows that the petitioners and intervenor Sagge advance constitutional issues which deserve the attention of this Court in view of their seriousness, novelty and weight as precedents. The issues are of transcendental and paramount importance not only to the public but also to the Bench and the Bar, and should be resolved for the guidance of all.34 Thus, in the exercise of its sound discretion and given the liberal attitude it has shown in prior cases climaxing in the more recent case of Chavez, the Court recognizes the legal standing of petitioners Ranada and Agcaoili and intervenor Sagge. - II The Court, however, dismisses G.R. No. 170338 for being moot and academic. Repeatedly stressed in our prior decisions is the principle that the exercise by this Court of judicial power is limited to the determination and resolution of actual cases and controversies.35 By actual cases, we mean existing conflicts appropriate or ripe for judicial determination, not conjectural or anticipatory, for otherwise the decision of the Court will amount to an advisory opinion. The power of judicial inquiry does not extend to hypothetical questions because any attempt at abstraction could only lead to dialectics and barren legal questions and to sterile conclusions unrelated to actualities.36 Neither will the Court determine a moot question in a case in which no practical relief can be granted. A case becomes moot when its purpose has become stale.37 It is unnecessary to indulge in academic discussion of a case presenting a moot question as a judgment thereon cannot have any practical legal effect or, in the nature of things, cannot be enforced.38 In G.R. No. 170338, petitioner Garcillano implores from the Court, as aforementioned, the issuance of an injunctive writ to prohibit the respondent House Committees from playing the tape recordings and from including the same in their committee report. He likewise prays that the said tapes be stricken off the records of the House proceedings. But the Court notes that the recordings were already played in the House and heard by its members.39 There is also the widely publicized fact that the committee reports

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on the "Hello Garci" inquiry were completed and submitted to the House in plenary by the respondent committees.40 Having been overtaken by these events, the Garcillano petition has to be dismissed for being moot and academic. After all, prohibition is a preventive remedy to restrain the doing of an act about to be done, and not intended to provide a remedy for an act already accomplished.41 - III As to the petition in G.R. No. 179275, the Court grants the same. The Senate cannot be allowed to continue with the conduct of the questioned legislative inquiry without duly published rules of procedure, in clear derogation of the constitutional requirement. Section 21, Article VI of the 1987 Constitution explicitly provides that "[t]he Senate or the House of Representatives, or any of its respective committees may conduct inquiries in aid of legislation in accordance with its duly published rules of procedure." The requisite of publication of the rules is intended to satisfy the basic requirements of due process.42 Publication is indeed imperative, for it will be the height of injustice to punish or otherwise burden a citizen for the transgression of a law or rule of which he had no notice whatsoever, not even a constructive one.43 What constitutes publication is set forth in Article 2 of the Civil Code, which provides that "[l]aws shall take effect after 15 days following the completion of their publication either in the Official Gazette, or in a newspaper of general circulation in the Philippines."44 The respondents in G.R. No. 179275 admit in their pleadings and even on oral argument that the Senate Rules of Procedure Governing Inquiries in Aid of Legislation had been published in newspapers of general circulation only in 1995 and in 2006.45 With respect to the present Senate of the 14th Congress, however, of which the term of half of its members commenced on June 30, 2007, no effort was undertaken for the publication of these rules when they first opened their session. Recently, the Court had occasion to rule on this very same question. In Neri v. Senate Committee on Accountability of Public Officers and Investigations,46 we said: Fourth, we find merit in the argument of the OSG that respondent Committees likewise violated Section 21 of Article VI of the Constitution, requiring that the inquiry be in accordance with the "duly published rules of procedure." We quote the OSG’s explanation: The phrase "duly published rules of procedure" requires the Senate of every Congress to publish its rules of procedure governing inquiries in aid of legislation because every Senate is distinct from the one before it or after it. Since Senatorial elections are held every three (3) years for one-half of the Senate’s membership, the composition of the Senate also changes by the end of each term. Each Senate may thus enact a different set of rules as it may deem fit. Not having published its Rules of Procedure, the subject hearings in aid of legislation conducted by the 14th Senate, are therefore, procedurally infirm. Justice Antonio T. Carpio, in his Dissenting and Concurring Opinion, reinforces this ruling with the following rationalization: The present Senate under the 1987 Constitution is no longer a continuing legislative body. The present Senate has twenty-four members, twelve of whom are elected every three years for a term of six years each. Thus, the term of twelve Senators expires every three years, leaving less than a majority of Senators to continue into the next Congress. The 1987 Constitution, like the 1935 Constitution, requires a majority of Senators to "constitute a quorum to do business." Applying the same reasoning in Arnault v. Nazareno, the Senate under the 1987 Constitution is not a continuing body because less than majority of the Senators continue into the next Congress. The consequence is that the Rules of Procedure must be republished by the Senate after every expiry of the term of twelve Senators.47 The subject was explained with greater lucidity in our Resolution48 (On the Motion for Reconsideration) in the same case, viz.: On the nature of the Senate as a "continuing body," this Court sees fit to issue a clarification. Certainly, there is no debate that the Senate as an institution is "continuing," as it is not dissolved as an entity with each national election or change in the composition of its members. However, in the conduct of its day-to-day business the Senate of each Congress acts separately and independently of the Senate of the Congress before it. The Rules of the Senate itself confirms this when it states: RULE XLIV UNFINISHED BUSINESS SEC. 123. Unfinished business at the end of the session shall be taken up at the next session in the same status. All pending matters and proceedings shall terminate upon the expiration of one (1) Congress, but may be taken by the succeeding Congress as if present for the first time.
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be taken by the succeeding Congress as if present for the first time. Undeniably from the foregoing, all pending matters and proceedings, i.e., unpassed bills and even legislative investigations, of the Senate of a particular Congress are considered terminated upon the expiration of that Congress and it is merely optional on the Senate of the succeeding Congress to take up such unfinished matters, not in the same status, but as if presented for the first time. The logic and practicality of such a rule is readily apparent considering that the Senate of the succeeding Congress (which will typically have a different composition as that of the previous Congress) should not be bound by the acts and deliberations of the Senate of which they had no part. If the Senate is a continuing body even with respect to the conduct of its business, then pending matters will not be deemed terminated with the expiration of one Congress but will, as a matter of course, continue into the next Congress with the same status. This dichotomy of the continuity of the Senate as an institution and of the opposite nature of the conduct of its business is reflected in its Rules. The Rules of the Senate (i.e. the Senate’s main rules of procedure) states: RULE LI AMENDMENTS TO, OR REVISIONS OF, THE RULES SEC. 136. At the start of each session in which the Senators elected in the preceding elections shall begin their term of office, the President may endorse the Rules to the appropriate committee for amendment or revision. The Rules may also be amended by means of a motion which should be presented at least one day before its consideration, and the vote of the majority of the Senators present in the session shall be required for its approval. RULE LII DATE OF TAKING EFFECT SEC. 137. These Rules shall take effect on the date of their adoption and shall remain in force until they are amended or repealed. Section 136 of the Senate Rules quoted above takes into account the new composition of the Senate after an election and the possibility of the amendment or revision of the Rules at the start of each session in which the newly elected Senators shall begin their term. However, it is evident that the Senate has determined that its main rules are intended to be valid from the date of their adoption until they are amended or repealed. Such language is conspicuously absent from the Rules. The Rules simply state "(t)hese Rules shall take effect seven (7) days after publication in two (2) newspapers of general circulation." The latter does not explicitly provide for the continued effectivity of such rules until they are amended or repealed. In view of the difference in the language of the two sets of Senate rules, it cannot be presumed that the Rules (on legislative inquiries) would continue into the next Congress. The Senate of the next Congress may easily adopt different rules for its legislative inquiries which come within the rule on unfinished business. The language of Section 21, Article VI of the Constitution requiring that the inquiry be conducted in accordance with the duly published rules of procedure is categorical. It is incumbent upon the Senate to publish the rules for its legislative inquiries in each Congress or otherwise make the published rules clearly state that the same shall be effective in subsequent Congresses or until they are amended or repealed to sufficiently put public on notice. If it was the intention of the Senate for its present rules on legislative inquiries to be effective even in the next Congress, it could have easily adopted the same language it had used in its main rules regarding effectivity. Respondents justify their non-observance of the constitutionally mandated publication by arguing that the rules have never been amended since 1995 and, despite that, they are published in booklet form available to anyone for free, and accessible to the public at the Senate’s internet web page.49 The Court does not agree. The absence of any amendment to the rules cannot justify the Senate’s defiance of the clear and unambiguous language of Section 21, Article VI of the Constitution. The organic law instructs, without more, that the Senate or its committees may conduct inquiries in aid of legislation only in accordance with duly published rules of procedure, and does not make any distinction whether or not these rules have undergone amendments or revision. The constitutional mandate to publish the said rules prevails over any custom, practice or tradition followed by the Senate. Justice Carpio’s response to the same argument raised by the respondents is illuminating: The publication of the Rules of Procedure in the website of the Senate, or in pamphlet form available at the Senate, is not sufficient under the Tañada v. Tuvera ruling which requires publication either in the
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the Senate, is not sufficient under the Tañada v. Tuvera ruling which requires publication either in the Official Gazette or in a newspaper of general circulation. The Rules of Procedure even provide that the rules "shall take effect seven (7) days after publication in two (2) newspapers of general circulation," precluding any other form of publication. Publication in accordance with Tañada is mandatory to comply with the due process requirement because the Rules of Procedure put a person’s liberty at risk. A person who violates the Rules of Procedure could be arrested and detained by the Senate. The invocation by the respondents of the provisions of R.A. No. 8792,50 otherwise known as the Electronic Commerce Act of 2000, to support their claim of valid publication through the internet is all the more incorrect. R.A. 8792 considers an electronic data message or an electronic document as the functional equivalent of a written document only for evidentiary purposes.51 In other words, the law merely recognizes the admissibility in evidence (for their being the original) of electronic data messages and/or electronic documents.52 It does not make the internet a medium for publishing laws, rules and regulations. Given this discussion, the respondent Senate Committees, therefore, could not, in violation of the Constitution, use its unpublished rules in the legislative inquiry subject of these consolidated cases. The conduct of inquiries in aid of legislation by the Senate has to be deferred until it shall have caused the publication of the rules, because it can do so only "in accordance with its duly published rules of procedure." Very recently, the Senate caused the publication of the Senate Rules of Procedure Governing Inquiries in Aid of Legislation in the October 31, 2008 issues of Manila Bulletin and Malaya. While we take judicial notice of this fact, the recent publication does not cure the infirmity of the inquiry sought to be prohibited by the instant petitions. Insofar as the consolidated cases are concerned, the legislative investigation subject thereof still could not be undertaken by the respondent Senate Committees, because no published rules governed it, in clear contravention of the Constitution. With the foregoing disquisition, the Court finds it unnecessary to discuss the other issues raised in the consolidated petitions. WHEREFORE, the petition in G.R. No. 170338 is DISMISSED, and the petition in G.R. No. 179275 is GRANTED. Let a writ of prohibition be issued enjoining the Senate of the Republic of the Philippines and/or any of its committees from conducting any inquiry in aid of legislation centered on the "Hello Garci" tapes.
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Lazatin v. Desierto GR 147097 June 5, 2009
Sunday, November 14, 2010 11:20 PM

G.R. No. 147097 June 5, 2009 CARMELO F. LAZATIN, MARINO A. MORALES, TEODORO L. DAVID and ANGELITO A. PELAYO, Petitioner, vs. HON. ANIANO A. DESIERTO as OMBUDSMAN, and SANDIGANBAYAN, THIRD DIVISION, Respondents. DEC I SI O N PERALTA, J.: This resolves the petition for certiorari under Rule 65 of the Rules of Court, praying that the Ombudsman's disapproval of the Office of the Special Prosecutor's (OSP) Resolution 1 dated September 18, 2000, recommending dismissal of the criminal cases filed against herein petitioners, be reversed and set aside. The antecedent facts are as follows. On July 22, 1998, the Fact-Finding and Intelligence Bureau of the Office of the Ombudsman filed a Complaint-Affidavit docketed as OMB-0-98-1500, charging herein petitioners with Illegal Use of Public Funds as defined and penalized under Article 220 of the Revised Penal Code and violation of Section 3, paragraphs (a) and (e) of Republic Act (R.A.) No. 3019, as amended. The complaint alleged that there were irregularities in the use by then Congressman Carmello F. Lazatin of his Countrywide Development Fund (CDF) for the calendar year 1996, i.e., he was both proponent and implementer of the projects funded from his CDF; he signed vouchers and supporting papers pertinent to the disbursement as Disbursing Officer; and he received, as claimant, eighteen (18) checks amounting to P4,868,277.08. Thus, petitioner Lazatin, with the help of petitioners Marino A. Morales, Angelito A. Pelayo and Teodoro L. David, was allegedly able to convert his CDF into cash. A preliminary investigation was conducted and, thereafter, the Evaluation and Preliminary Investigation Bureau (EPIB) issued a Resolution 2 dated May 29, 2000 recommending the filing against herein petitioners of fourteen (14) counts each of Malversation of Public Funds and violation of Section 3 (e) of R.A. No. 3019. Said Resolution was approved by the Ombudsman; hence, twenty-eight (28) Informations docketed as Criminal Case Nos. 26087 to 26114 were filed against herein petitioners before the Sandiganbayan. Petitioner Lazatin and his co-petitioners then filed their respective Motions for Reconsideration/Reinvestigation, which motions were granted by the Sandiganbayan (Third Division). The Sandiganbayan also ordered the prosecution to re-evaluate the cases against petitioners. Subsequently, the OSP submitted to the Ombudsman its Resolution 3 dated September 18, 2000. It recommended the dismissal of the cases against petitioners for lack or insufficiency of evidence. The Ombudsman, however, ordered the Office of the Legal Affairs (OLA) to review the OSP Resolution. In a Memorandum4 dated October 24, 2000, the OLA recommended that the OSP Resolution be disapproved and the OSP be directed to proceed with the trial of the cases against petitioners. On October 27, 2000, the Ombudsman adopted the OLA Memorandum, thereby disapproving the OSP Resolution dated September 18, 2000 and ordering the aggressive prosecution of the subject cases. The cases were then returned to the Sandiganbayan for continuation of criminal proceedings. Thus, petitioners filed the instant petition. Petitioners allege that: I. THE OMBUDSMAN ACTED WITH GRAVE ABUSE OF DISCRETION OR ACTED WITHOUT OR IN EXCESS OF HIS JURISDICTION. II. THE QUESTIONED RESOLUTION WAS BASED ON MISAPPREHENSION OF FACTS, SPECULATIONS, SURMISES AND CONJECTURES. 5 Amplifying their arguments, petitioners asseverate that the Ombudsman had no authority to overturn the OSP's Resolution dismissing the cases against petitioners because, under Section 13, Article XI of the 1987 Constitution, the Ombudsman is clothed only with the power to watch, investigate and recommend the filing of proper cases against erring officials, but it was not granted the power to prosecute. They point out that under the Constitution, the power to prosecute belongs to the OSP (formerly the Tanodbayan), which was intended by the framers to be a separate and distinct entity
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(formerly the Tanodbayan), which was intended by the framers to be a separate and distinct entity from the Office of the Ombudsman. Petitioners conclude that, as provided by the Constitution, the OSP being a separate and distinct entity, the Ombudsman should have no power and authority over the OSP. Thus, petitioners maintain that R.A. No. 6770 (The Ombudsman Act of 1989), which made the OSP an organic component of the Office of the Ombudsman, should be struck down for being unconstitutional. Next, petitioners insist that they should be absolved from any liability because the checks were issued to petitioner Lazatin allegedly as reimbursement for the advances he made from his personal funds for expenses incurred to ensure the immediate implementation of projects that are badly needed by the Pinatubo victims. The Court finds the petition unmeritorious. Petitioners' attack against the constitutionality of R.A. No. 6770 is stale. It has long been settled that the provisions of R.A. No. 6770 granting the Office of the Ombudsman prosecutorial powers and placing the OSP under said office have no constitutional infirmity. The issue of whether said provisions of R.A. No. 6770 violated the Constitution had been fully dissected as far back as 1995 in Acop v. Office of the Ombudsman.6 Therein, the Court held that giving prosecutorial powers to the Ombudsman is in accordance with the Constitution as paragraph 8, Section 13, Article XI provides that the Ombudsman shall "exercise such other functions or duties as may be provided by law." Elucidating on this matter, the Court stated: x x x While the intention to withhold prosecutorial powers from the Ombudsman was indeed present, the Commission [referring to the Constitutional Commission of 1986] did not hesitate to recommend that the Legislature could, through statute, prescribe such other powers, functions, and duties to the Ombudsman. x x x As finally approved by the Commission after several amendments, this is now embodied in paragraph 8, Section 13, Article XI (Accountability of Public Officers) of the Constitution, which provides: Sec.13. The Office of the Ombudsman shall have the following powers, functions, and duties: xx x x Promulgate its rules and procedure and exercise such other functions or duties as may be provided by law. Expounding on this power of Congress to prescribe other powers, functions, and duties to the Ombudsman, we quote Commissioners Colayco and Monsod during interpellation by Commissioner Rodrigo: xx x x MR. RODRIGO: Precisely, I am coming to that. The last of the enumerated functions of the Ombudsman is: "to exercise such powers or perform such functions or duties as may be provided by law." So, the legislature may vest him with powers taken away from the Tanodbayan, may it not? MR. COLAYCO: Yes. MR. MONSOD: Yes. xx x x MR. RODRIGO: Madam President. Section 5 reads: "The Tanodbayan shall continue to function and exercise its powers as provided by law." MR. COLAYCO: That is correct, because it is under P.D. No. 1630. MR. RODRIGO: So, if it is provided by law, it can be taken away by law, I suppose. MR. COLAYCO: That is correct. MR. RODRIGO: And precisely, Section 12(6) says that among the functions that can be performed by the Ombudsman are "such functions or duties as may be provided by law." The sponsors admitted that the legislature later on might remove some powers from the Tanodbayan and transfer these to the Ombudsman. MR. COLAYCO: Madam President, that is correct. xx x x MR. RODRIGO: Madam President, what I am worried about is, if we create a constitutional body which has neither punitive nor prosecutory powers but only persuasive powers, we might be raising the
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neither punitive nor prosecutory powers but only persuasive powers, we might be raising the hopes of our people too much and then disappoint them. MR. MONSOD: I agree with the Commissioner. MR. RODRIGO: Anyway, since we state that the powers of the Ombudsman can later on be implemented by the legislature, why not leave this to the legislature? xx x x MR. MONSOD: (reacting to statements of Commissioner Blas Ople): xx x x With respect to the argument that he is a toothless animal, we would like to say that we are promoting the concept in its form at the present, but we are also saying that he can exercise such powers and functions as may be provided by law in accordance with the direction of the thinking of Commissioner Rodrigo. We do not think that at this time we should prescribe this, but we leave it up to Congress at some future time if it feels that it may need to designate what powers the Ombudsman need in order that he be more effective. This is not foreclosed. So, this is a reversible disability, unlike that of a eunuch; it is not an irreversible disability. 7 The constitutionality of Section 3 of R.A. No. 6770, which subsumed the OSP under the Office of the Ombudsman, was likewise upheld by the Court in Acop. It was explained, thus: x x x the petitioners conclude that the inclusion of the Office of the Special Prosecutor as among the offices under the Office of the Ombudsman in Section 3 of R.A. No. 6770 ("An Act Providing for the Functional and Structural Organization of the Office of the Ombudsman and for Other Purposes") is unconstitutional and void. The contention is not impressed with merit. x x x xx x x x x x Section 7 of Article XI expressly provides that the then existing Tanodbayan, to be henceforth known as the Office of the Special Prosecutor, "shall continue to function and exercise its powers as now or hereafter may be provided by law, except those conferred on the Office of the Ombudsman created under this Constitution." The underscored phrase evidently refers to the Tanodbayan's powers under P.D. No. 1630 or subsequent amendatory legislation. It follows then that Congress may remove any of the Tanodbayan's/Special Prosecutor's powers under P.D. No. 1630 or grant it other powers, except those powers conferred by the Constitution on the Office of the Ombudsman. Pursuing the present line of reasoning, when one considers that by express mandate of paragraph 8, Section 13, Article XI of the Constitution, the Ombudsman may "exercise such other powers or perform functions or duties as may be provided by law," it is indubitable then that Congress has the power to place the Office of the Special Prosecutor under the Office of the Ombudsman. In the same vein, Congress may remove some of the powers granted to the Tanodbayan by P.D. No. 1630 and transfer them to the Ombudsman; or grant the Office of the Special Prosecutor such other powers and functions and duties as Congress may deem fit and wise. This Congress did through the passage of R.A. No. 6770.8 The foregoing ruling of the Court has been reiterated in Camanag v. Guerrero.9 More recently, in Office of the Ombudsman v. Valera,10 the Court, basing its ratio decidendi on its ruling in Acop and Camanag, declared that the OSP is "merely a component of the Office of the Ombudsman and may only act under the supervision and control, and upon authority of the Ombudsman" and ruled that under R.A. No. 6770, the power to preventively suspend is lodged only with the Ombudsman and Deputy Ombudsman.11 The Court's ruling in Acop that the authority of the Ombudsman to prosecute based on R.A. No. 6770 was authorized by the Constitution was also made the foundation for the decision in Perez v. Sandiganbayan,12 where it was held that the power to prosecute carries with it the power to authorize the filing of informations, which power had not been delegated to the OSP. It is, therefore, beyond cavil that under the Constitution, Congress was not proscribed from legislating the grant of additional powers to the Ombudsman or placing the OSP under the Office of the Ombudsman. Petitioners now assert that the Court's ruling on the constitutionality of the provisions of R.A. No. 6770 should be revisited and the principle of stare decisis set aside. Again, this contention deserves scant consideration. The doctrine of stare decisis et non quieta movere (to adhere to precedents and not to unsettle things which are established) is embodied in Article 8 of the Civil Code of the Philippines which provides, thus: ART. 8. Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal system of the Philippines. It was further explained in Fermin v. People13 as follows: The doctrine of stare decisis enjoins adherence to judicial precedents. It requires courts in a country to follow the rule established in a decision of the Supreme Court thereof. That
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country to follow the rule established in a decision of the Supreme Court thereof. That decision becomes a judicial precedent to be followed in subsequent cases by all courts in the land. The doctrine of stare decisis is based on the principle that once a question of law has been examined and decided, it should be deemed settled and closed to further argument. 14 In Chinese Young Men's Christian Association of the Philippine Islands v. Remington Steel Corporation,15 the Court expounded on the importance of the foregoing doctrine, stating that: The doctrine of stare decisis is one of policy grounded on the necessity for securing certainty and stability of judicial decisions, thus: Time and again, the court has held that it is a very desirable and necessary judicial practice that when a court has laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases in which the facts are substantially the same. Stare decisis et non quieta movere. Stand by the decisions and disturb not what is settled. Stare decisis simply means that for the sake of certainty, a conclusion reached in one case should be applied to those that follow if the facts are substantially the same , even though the parties may be different. It proceeds from the first principle of justice that, absent any powerful countervailing considerations, like cases ought to be decided alike. Thus, where the same questions relating to the same event have been put forward by the parties similarly situated as in a previous case litigated and decided by a competent court, the rule of stare decisis is a bar to any attempt to relitigate the same issue.16 The doctrine has assumed such value in our judicial system that the Court has ruled that "[a] bandonment thereof must be based only on strong and compelling reasons, otherwise, the becoming virtue of predictability which is expected from this Court would be immeasurably affected and the public's confidence in the stability of the solemn pronouncements diminished." 17 Verily, only upon showing that circumstances attendant in a particular case override the great benefits derived by our judicial system from the doctrine of stare decisis, can the courts be justified in setting aside the same. In this case, petitioners have not shown any strong, compelling reason to convince the Court that the doctrine of stare decisis should not be applied to this case. They have not successfully demonstrated how or why it would be grave abuse of discretion for the Ombudsman, who has been validly conferred by law with the power of control and supervision over the OSP, to disapprove or overturn any resolution issued by the latter. The second issue advanced by petitioners is that the Ombudsman's disapproval of the OSP Resolution recommending dismissal of the cases is based on misapprehension of facts, speculations, surmises and conjectures. The question is really whether the Ombudsman correctly ruled that there was enough evidence to support a finding of probable cause. That issue, however, pertains to a mere error of judgment. It must be stressed that certiorari is a remedy meant to correct only errors of jurisdiction, not errors of judgment. This has been emphasized in First Corporation v. Former Sixth Division of the Court of Appeals, 18 to wit: It is a fundamental aphorism in law that a review of facts and evidence is not the province of the extraordinary remedy of certiorari, which is extra ordinem - beyond the ambit of appeal. In certiorari proceedings, judicial review does not go as far as to examine and assess the evidence of the parties and to weigh the probative value thereof. It does not include an inquiry as to the correctness of the evaluation of evidence. Any error committed in the evaluation of evidence is merely an error of judgment that cannot be remedied by certiorari. An error of judgment is one which the court may commit in the exercise of its jurisdiction. An error of jurisdiction is one where the act complained of was issued by the court without or in excess of jurisdiction, or with grave abuse of discretion, which is tantamount to lack or in excess of jurisdiction and which error is correctible only by the extraordinary writ of certiorari. Certiorari will not be issued to cure errors of the trial court in its appreciation of the evidence of the parties, or its conclusions anchored on the said findings and its conclusions of law. It is not for this Court to re -examine conflicting evidence, re-evaluate the credibility of the witnesses or substitute the findings of fact of the court a quo.19 Evidently, the issue of whether the evidence indeed supports a finding of probable cause would necessitate an examination and re-evaluation of the evidence upon which the Ombudsman based its disapproval of the OSP Resolution. Hence, the Petition for Certiorari should not be given due course. Likewise noteworthy is the holding of the Court in Presidential Ad Hoc Fact-Finding Committee on Behest Loans v. Desierto,20 imparting the value of the Ombudsman's independence, stating thus: Under Sections 12 and 13, Article XI of the 1987 Constitution and RA 6770 (The Ombudsman Act of 1989), the Ombudsman has the power to investigate and prosecute any act or omission of a public officer or employee when such act or omission appears to be illegal, unjust, improper or inefficient. It has been the consistent ruling of the Court not to interfere with the Ombudsman's exercise of his investigatory and prosecutory powers as long as his rulings are supported by substantial
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his investigatory and prosecutory powers as long as his rulings are supported by substantial evidence. Envisioned as the champion of the people and preserver of the integrity of public service, he has wide latitude in exercising his powers and is free from intervention from the three branches of government. This is to ensure that his Office is insulated from any outside pressure and improper influence.21 Indeed, for the Court to overturn the Ombudsman's finding of probable cause, it is imperative for petitioners to clearly prove that said public official acted with grave abuse of discretion. In Presidential Commission on Good Government v. Desierto,22 the Court elaborated on what constitutes such abuse, to wit: Grave abuse of discretion implies a capricious and whimsical exercise of judgment tantamount to lack of jurisdiction. The Ombudsman's exercise of power must have been done in an arbitrary or despotic manner which must be so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform the duty enjoined or to act at all in contemplation of law. x x x23 In this case, petitioners failed to demonstrate that the Ombudsman acted in a manner described above. Clearly, the Ombudsman was acting in accordance with R.A. No. 6770 and properly exercised its power of control and supervision over the OSP when it disapproved the Resolution dated September 18, 2000. It should also be noted that the petition does not question any order or action of the Sandiganbayan Third Division; hence, it should not have been included as a respondent in this petition. IN VIEW OF THE FOREGOING, the petition is DISMISSED for lack of merit.

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Ferdinand Cruz v. Priscilla Mijares et al GR 154404 Sep 11, 2008
Sunday, November 14, 2010 11:20 PM

[G.R. NO. 154464, September 11, 2008] FERDINAND A. CRUZ, VS. JUDGE PRISCILLA MIJARES, PRESIDING JUDGE, REGIONAL TRIAL COURT, BRANCH 108, PASAY CITY, METRO MANILA, PUBLIC RESPONDENT BENJAMIN MINA, PRIVATE RESPONDENT.

NACHURA, J.:

This is a Petition for Certiorari, Prohibition and Mandamus, with prayer for the issuance of a writ of preliminary injunction under Rule 65 of the Rules of Court. It was directly filed with this Court assailing the Resolutions dated May 10, 2002[1] and July 31, 2002[2] of the Regional Trial Court (RTC), Branch 108, Pasay City, which denied the appearance of the plaintiff Ferdinand A. Cruz, herein petitioner, as party litigant, and the refusal of the public respondent, Judge Priscilla Mijares, to voluntarily inhibit herself from trying the case. No writ of preliminary injunction was issued by this Court.
The antecedents: On March 5, 2002, Ferdinand A. Cruz (petitioner) sought permission to enter his appearance for and on his behalf, before the RTC, Branch 108, Pasay City, as the plaintiff in Civil Case No. 01-0410, for Abatement of Nuisance. Petitioner, a fourth year law student, anchors his claim on Section 34 of Rule 138 of the Rules of Court[3] that a non-lawyer may appear before any court and conduct his litigation personally. During the pre-trial, Judge Priscilla Mijares required the petitioner to secure a written permission from the Court Administrator before he could be allowed to appear as counsel for himself, a party-litigant. Atty. Stanley Cabrera, counsel for Benjamin Mina, Jr., filed a Motion to Dismiss instead of a pre-trial brief to which petitioner Cruz vehemently objected alleging that a Motion to Dismiss is not allowed after the Answer had been filed. Judge Mijares then remarked, "Hay naku, masama `yung marunong pa sa Huwes. Ok?" and proceeded to hear the pending Motion to Dismiss and calendared the next hearing on May 2, 2002. On March 6, 2002, petitioner Cruz filed a Manifestation and Motion to Inhibit,[4] praying for the voluntary inhibition of Judge Mijares. The Motion alleged that expected partiality on the part of the respondent judge in the conduct of the trial could be inferred from the contumacious remarks of Judge Mijares during the pre-trial. It asserts that the judge, in uttering an uncalled for remark, reflects a negative frame of mind, which engenders the belief that justice will not be served.[5]

In an Order[6] dated April 19, 2002, Judge Mijares denied the motion for inhibition stating that throwing tenuous allegations of partiality based on the said remark is not enough to warrant her voluntary inhibition, considering that it was said even prior to the start of pre-trial. Petitioner filed a motion for reconsideration[7] of the said order.
On May 10, 2002, Judge Mijares denied the motion with finality.[8] In the same Order, the trial court held that for the failure of petitioner Cruz to submit the promised document and jurisprudence, and for his failure to satisfy the requirements or conditions under Rule 138-A of the Rules of Court, his appearance was denied.

In a motion for reconsideration,[9] petitioner reiterated that the basis of his appearance was not Rule 138-A, but Section 34 of Rule 138. He contended that the two Rules were distinct and are applicable to different circumstances, but the respondent judge denied the same, still invoking Rule 138-A, in an
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different circumstances, but the respondent judge denied the same, still invoking Rule 138-A, in an Order[10] dated July 31, 2002. On August 16, 2002, the petitioner directly filed with this Court, the instant petition and assigns the following errors: I. The respondent regional trial court gravely erred and abused its discretion when it denied the appearance of the petitioner, for and in the latter's behalf, in civil case no. 01-0401 [sic] contrary to rule 138, section 34 of the rules of court, providing for the appearance of non-lawyers as a party litigant; II. the respondent court gravely erred and abused its discretion when it did not voluntarily inhibit despite the advent of jurisprudence [sic] that such an inhibition is proper to preserve the people's faith and confidence to the courts.

The core issues raised before the Court are: (1) whether the extraordinary writs of certiorari, prohibition and mandamus under Rule 65 of the 1997 Rules of Court may issue; and (2) whether the respondent court acted with grave abuse of discretion amounting to lack or excess of jurisdiction when it denied the appearance of the petitioner as party litigant and when the judge refused to inhibit herself from trying the case.
This Court's jurisdiction to issue writs of certiorari, prohibition, mandamus and injunction is not exclusive; it has concurrent jurisdiction with the RTCs and the Court of Appeals. This concurrence of jurisdiction is not, however, to be taken as an absolute, unrestrained freedom to choose the court where the application therefor will be directed.[11] A becoming regard of the judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against the RTCs should be filed with the Court of Appeals.[12] The hierarchy of courts is determinative of the appropriate forum for petitions for the extraordinary writs; and only in exceptional cases and for compelling reasons, or if warranted by the nature of the issues reviewed, may this Court take cognizance of petitions filed directly before it.[13] Considering, however, that this case involves the interpretation of Section 34, Rule 138 and Rule 138-A of the Rules of Court, the Court takes cognizance of herein petition. Nonetheless, the petitioner is cautioned not to continue his practice of filing directly before this Court petitions under Rule 65 when the issue raised can be resolved with dispatch by the Court of Appeals. We will not tolerate litigants who make a mockery of the judicial hierarchy as it necessarily delays more important concerns before us. In resolving the second issue, a comparative reading of Rule 138, Section 34 and Rule 138-A is necessary. Rule 138-A, or the Law Student Practice Rule, provides: RULE 138-A LAW STUDENT PRACTICE RULE Section 1. Conditions for Student Practice. - A law student who has successfully completed his 3rd year of the regular four-year prescribed law curriculum and is enrolled in a recognized law school's clinical legal education program approved by the Supreme Court, may appear without compensation in any civil, criminal or administrative case before any trial court, tribunal, board or officer, to represent indigent clients accepted by the legal clinic of the law school.

Sec. 2. Appearance. - The appearance of the law student authorized by this rule, shall be under the direct supervision and control of a member of the Integrated Bar of the Philippines duly accredited by the law school. Any and all pleadings, motions, briefs, memoranda or other papers to be filed, must be signed by the supervising attorney for and in behalf of the legal clinic.
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signed by the supervising attorney for and in behalf of the legal clinic. The respondent court held that the petitioner could not appear for himself and on his behalf because of his failure to comply with Rule 138-A. In denying petitioner's appearance, the court a quo tersely finds refuge in the fact that, on December 18, 1986, this Court issued Circular No. 19, which eventually became Rule 138-A, and the failure of Cruz to prove on record that he is enrolled in a recognized school's clinical legal education program and is under supervision of an attorney duly accredited by the law school. However, the petitioner insisted that the basis of his appearance was Section 34 of Rule 138, which provides: Sec. 34. By whom litigation is conducted. - In the court of a justice of the peace, a party may conduct his litigation in person, with the aid of an agent or friend appointed by him for that purpose, or with the aid of an attorney. In any other court, a party may conduct his litigation personally or by aid of an attorney, and his appearance must be either personal or by a duly authorized member of the bar. and is a rule distinct from Rule 138-A.

From the clear language of this provision of the Rules, it will have to be conceded that the contention of the petitioner has merit. It recognizes the right of an individual to represent himself in any case to which he is a party. The Rules state that a party may conduct his litigation personally or with the aid of an attorney, and that his appearance must either be personal or by a duly authorized member of the Bar. The individual litigant may personally do everything in the course of proceedings from commencement to the termination of the litigation.[14] Considering that a party personally conducting his litigation is restricted to the same rules of evidence and procedure as those qualified to practice law,[15] petitioner, not being a lawyer himself, runs the risk of falling into the snares and hazards of his own ignorance. Therefore, Cruz as plaintiff, at his own instance, can personally conduct the litigation of Civil Case No. 01-0410. He would then be acting not as a counsel or lawyer, but as a party exercising his right to represent himself.
The trial court must have been misled by the fact that the petitioner is a law student and must, therefore, be subject to the conditions of the Law Student Practice Rule. It erred in applying Rule 138-A, when the basis of the petitioner's claim is Section 34 of Rule 138. The former rule provides for conditions when a law student may appear in courts, while the latter rule allows the appearance of a non-lawyer as a party representing himself.

The conclusion of the trial court that Rule 138-A superseded Rule 138 by virtue of Circular No. 19 is misplaced. The Court never intended to repeal Rule 138 when it released the guidelines for limited law student practice. In fact, it was intended as an addendum to the instances when a non-lawyer may appear in courts and was incorporated to the Rules of Court through Rule 138-A.
It may be relevant to recall that, in respect to the constitutional right of an accused to be heard by himself and counsel,[16] this Court has held that during the trial, the right to counsel cannot be waived.[17] The rationale for this ruling was articulated in People v. Holgado,[18] where we declared that "even the most intelligent or educated man may have no skill in the science of law, particularly in the rules of procedure, and without counsel, he may be convicted not because he is guilty but because he does not know how to establish his innocence." The case at bar involves a civil case, with the petitioner as plaintiff therein. The solicitous concern that the Constitution accords the accused in a criminal prosecution obviously does not obtain in a civil case. Thus, a party litigant in a civil case, who insists that he can, without a lawyer's assistance, effectively undertake the successful pursuit of his claim, may be given the chance to do so. In this case, petitioner alleges that he is a law student and impliedly asserts that he has the competence to litigate the case himself. Evidently, he is aware of the perils incident to this decision. In addition, it was subsequently clarified in Bar Matter 730, that by virtue of Section 34, Rule 138, a law student may appear as an agent or a friend of a party litigant, without need of the supervision of a
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student may appear as an agent or a friend of a party litigant, without need of the supervision of a lawyer, before inferior courts. Here, we have a law student who, as party litigant, wishes to represent himself in court. We should grant his wish. Additionally, however, petitioner contends that the respondent judge committed manifest bias and partiality by ruling that there is no valid ground for her voluntary inhibition despite her alleged negative demeanor during the pre-trial when she said: "Hay naku, masama `yung marunong pa sa Huwes. Ok?" Petitioner avers that by denying his motion, the respondent judge already manifested conduct indicative of arbitrariness and prejudice, causing petitioner's and his co-plaintiff's loss of faith and confidence in the respondent's impartiality. We do not agree. It must be noted that because of this incident, the petitioner filed an administrative case [19] against the respondent for violation of the Canons of Judicial Ethics, which we dismissed for lack of merit on September 15, 2002. We now adopt the Court's findings of fact in the administrative case and rule that there was no grave abuse of discretion on the part of Judge Mijares when she did not inhibit herself from the trial of the case. In a Motion for Inhibition, the movant must prove the ground for bias and prejudice by clear and convincing evidence to disqualify a judge from participating in a particular trial,[20] as voluntary inhibition is primarily a matter of conscience and addressed to the sound discretion of the judge. The decision on whether she should inhibit herself must be based on her rational and logical assessment of the circumstances prevailing in the case before her.[21] Absent clear and convincing proof of grave abuse of discretion on the part of the judge, this Court will rule in favor of the presumption that official duty has been regularly performed.

WHEREFORE, the Petition is PARTIALLY GRANTED. The assailed Resolution and Order of the Regional Trial Court, Branch 108, Pasay City are MODIFIED. Regional Trial Court, Branch 108, Pasay City is DIRECTED to ADMIT the Entry of Appearance of petitioner in Civil Case No. 01-0410 as a party litigant.
No pronouncement as to costs.
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First United v. Poro Point GR 178799 Jan 19, 2009
Sunday, November 14, 2010 11:20 PM

G.R. No. 178799 January 19, 2009 FIRST UNITED CONSTRUCTORS CORPORATION, vs. PORO POINT MANAGEMENT CORPORATION (PPMC), THE SPECIAL BIDS & AWARDS COMMITTEE (SBAC) of PPMC, ATTY. FELIX S. RACADIO, and SATRAP CONSTRUCTION COMPANY, INC., NACHURA, J.: First United Constructors Corporation (FUCC) filed this special civil action for certiorari and prohibition with prayer for the issuance of a temporary restraining order, seeking to annul (i) the re-bidding of the contract for the Upgrading of the San Fernando Airport Project, Phase I, held on May 8, 2007; (ii) the Notice of Award1 dated May 23, 2007 to Satrap Construction Company, Inc. (SCCI); and (iii) Notice to Proceed2 dated May 29, 2007 also to SCCI. FUCC also seeks to permanently enjoin the Special Bids and Awards Committee (SBAC) and Poro Point Management Corporation (PPMC) from implementing the Contract3 in favor of SCCI. The factual antecedents are as follows: On January 26, 2007, PPMC approved the Contract for the Upgrading of the San Fernando Airport Phase I. The SBAC then issued invitations to reputable contractors to pre-qualify for the project. FUCC and two (2) other contractors - C.M. Pancho Construction, Inc. (C.M. Pancho) and EEI-New Kanlaon Construction, Inc. Joint Venture (EEI-New Kanlaon JV) responded to the invitation and were pre-qualified to bid for the project. However, upon evaluation, none of the pre-qualified bidders was chosen. C.M. Pancho was disqualified because it did not possess the required minimum years of experience in airport projects, while EEI New Kanlaon JV was disqualified because it did not submit a special license to bid as joint venture. FUCC’s technical proposal, on the other hand, obtained a failing mark because it failed to submit the automated weather observation system (AWOS) and its authorized representative did not sign some pages of the narrative construction method and the tax returns. FUCC sought reconsideration of the SBAC decision, but it was denied.4 FUCC then filed a protest5 with the PPMC. On March 26, 2007, Atty. Felix S. Racadio, PPMC Head, resolved FUCC’s protest, viz.: In sum, based on the issues raised and [the] arguments presented by FUCC, this OFFICE finds NO REVERSIBLE ERROR committed by SBAC, both on its findings of 06 March 2007 (giving FUCC the FAILED rating) and 12 March 2007 (denial of FUCC’s Motion for Reconsideration). In addition to the "NO REVERSIBLE ERROR FINDING," there exists a PRESUMPTION OF REGULARITY OF OFFICIAL ACTION OF A PUBLIC OFFICER. In the case at bar, such presumption applies. The burden of proof lies with the FUCC. On this score, FUCC failed to even just scratch the surface of the same. The proceedings and findings of SBAC, in the Pre-Qualification stage not having been put into issue by the PROTEST, then, FUCC had opted to leave them as they were, thus, let them remain UNDISTURBED. WHEREFORE, in view of the foregoing, the PROTEST filed by FUCC which is under consideration is hereby DISMISSEDfor lack of merit. The FILING FEE paid by FUCC, the protestant, via Metro Bank Cashier’s Check No. 0600018513, dated March 19, 2007, in the amount of Four Million Seven Hundred Twenty-One Thousand Pesos (P4,721,000.00), Philippine Currency, which is equivalent to one [percent] (%) of the ABC being NONREFUNDABLE (Sec. 55.1, IRR-A, RA 1984), the same is hereby ordered FORFEITED in favor of PPMC. SO ORDERED.6 SBAC then scheduled a re-bidding and issued new invitations to bid for the project. To enjoin the rebidding set on May 8, 2007, FUCC filed a petition for injunction with prayer for the issuance of a preliminary injunction or temporary restraining order (TRO) with the Regional Trial Court (RTC) of La Union, docketed as Civil Case No. 7274. On May 2, 2007, the RTC issued a TRO which, however, was lifted on May 4, 2007 because under Section 3 of Republic Act No. 8975,7 no court, except the Supreme Court, shall issue a TRO or injunction or prohibit the bidding or award of a government infrastructure project. SBAC thus proceeded with the rebidding of the project on May 8, 2007 and awarded the project to SCCI as the lowest qualified bidder.8
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bidding of the project on May 8, 2007 and awarded the project to SCCI as the lowest qualified bidder.8 The Contract9 for the project was signed, and a notice to proceed10 was served on SCCI on May 29, 2007. FUCC filed an amended petition with the RTC to enjoin the implementation of the project. The Office of the Government Corporate Counsel (OGCC) moved to dismiss the petition for lack of jurisdiction. Pending resolution of OGCC’s motion to dismiss, FUCC moved for the dismissal of its amended petition, which was granted by the RTC on July 4, 2007, to wit: Acting on the above-stated notice of dismissal, this Court hereby confirms the dismissal of the amended petition, in effect the dismissal of the whole action, without prejudice, pursuant to Sec. 1, Rule 17 of the Rules of Court. WHEREFORE, this case is hereby DISMISSED. SO ORDERED.11 Claiming that there is no appeal, or any speedy and adequate remedy in the ordinary course of law, FUCC comes to us via this petition. It also asks for the issuance of a TRO to enjoin the implementation of the project, asserting that SCCI is not qualified to undertake the project and the award clearly poses a real threat to the public welfare and safety. In its November 12, 2007 Resolution, this Court denied FUCC’s application for the issuance of a TRO for lack of merit. FUCC filed this petition praying for the following relief, viz.: (a) That upon receipt of this Petition, a Temporary Restraining Order (TRO) be issued enjoining the implementation of the contract for the Upgrading of the San Fernando Airport Project, Phase I with respondent [SCCI] as the contractor; (b) That after proper proceeding, judgment be rendered: (1) permanently enjoining the implementation of the contract for the Upgrading of the San Fernando Airport Project, Phase I with respondent [SCCI] as the contractor; (2) declaring the re-bidding of the contract for the Upgrading of the San Fernando Airport Project, Phase I on 08 May 2007 illegal and nullifying the results thereof; (3) annulling the Notice of Award dated 23 May 2007, the Contract for the Upgrading of the San Fernando Airport, Phase I entered into, by and between respondent PPMC and respondent [SCCI] on 29 May 2007, and the Notice to Proceed dated 29 May 2007; and (4) directing respondent SBAC and/or respondent PPMC and/or respondent Atty. Recadio to reconsider the "Failed" rating of the bid of FUCC, open the Financial Proposal Envelope submitted by FUCC during the original bidding, declare FUCC as the winning bidder, and forthwith award the contract to FUCC, as the winning bidder and being the only qualified contractor for the project. 12 It asserts that SBAC and PPMC committed grave abuse of discretion in disqualifying its bid, in denying its protest, in conducting a re-bidding and in awarding the project to SCCI. It insists that it is the only qualified contractor for the project and prays that it be declared the winning bidder. We dismiss the petition. Republic Act (RA) No. 9184, or the Government Procurement Reform Act, outlines the procedure to assail decisions of the SBAC in this wise: SEC. 55. Protests on Decisions of the BAC. – Decisions of BAC in all stages of procurement may be protested to the head of the procuring entity and shall be in writing. Decisions of the BAC may be protested by filing a verified position paper and paying a nonrefundable protest fee. The amount of protest fee and the periods during which the protests may be filed and resolved shall be specified in the IRR. SEC. 56. Resolution of Protests. - The protests shall be resolved strictly on the basis of records of the BAC. Up to a certain amount specified in the IRR, the decisions of the Head of the Procuring Entity shall be final. SEC. 57. Non-interruption of the Bidding Process. – In no case shall any protest taken from any decision treated in this Article stay or delay the bidding process. Protests must first be resolved before any award is made. SEC. 58. Resort to Regular Courts; Certiorari. – Court action may be resorted only after the protest contemplated in this Article shall have been completed. Cases that are filed in violation of the process specified in this Article shall be dismissed for lack of jurisdiction. The regional trial court shall have jurisdiction over final decisions of the head of the procuring entity. Court actions shall be governed by Rule 65 of the 1997 Rules of Civil Procedure. This provision is without prejudice to any law conferring on the Supreme Court the sole jurisdiction to issue temporary restraining orders and injunctions relating to Infrastructure Projects of Government. FUCC challenged the decision of SBAC in a protest filed with Atty. Racadio of the PPMC who affirmed the
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issue temporary restraining orders and injunctions relating to Infrastructure Projects of Government. FUCC challenged the decision of SBAC in a protest filed with Atty. Racadio of the PPMC who affirmed the SBAC decision. Instead of filing a petition for certiorari, as provided in Section 58, FUCC filed a petition for injunction with prayer for the issuance of a temporary restraining order and/or preliminary injunction with the RTC. FUCC, however, later moved for its dismissal theorizing that the RTC had no jurisdiction over petitions for injunction. Thereafter, it filed this petition for certiorari with this Court. Section 4, Rule 65 of the 1997 Rules of Civil Procedure provides that a special civil action for certiorari shall be filed not later than sixty (60) days from the notice of the judgment, order or resolution.13 FUCC admitted that it received the PPMC decision on March 27, 2007.14 However, it filed this petition assailing the said decision only on July 30, 2007. It is, therefore, too late in the day for FUCC, via this petition, to assail the PPMC decision which rated its bid as failed. Besides, FUCC violated the doctrine of judicial hierarchy in filing this petition for certiorari directly with this Court. Section 58 is clear that petitions for the issuance of a writ of certiorari against the decision of the head of the procuring agency, like PPMC, should be filed with the Regional Trial Court. Indeed, the jurisdiction of the RTC over petitions for certiorari is concurrent with this Court. However, such concurrence does not allow unrestricted freedom of choice of the court forum. A direct invocation of the Supreme Court’s original jurisdiction to issue this writ should be allowed only when there are special and important reasons, clearly and specifically set out in the petition.15 In the present case, FUCC adduced no special and important reason why direct recourse to this Court should be allowed. Thus, we reaffirm the judicial policy that this Court will not entertain a direct invocation of its jurisdiction unless the redress desired cannot be obtained in the appropriate lower courts, and exceptional and compelling circumstances justify the resort to the extraordinary remedy of a writ of certiorari. Similarly, the RTC is the proper venue to hear FUCC’s prayer for permanent injunction. Unquestionably, RA No. 897516 enjoins all courts, except the Supreme Court, from issuing any temporary restraining order, preliminary injunction, or preliminary mandatory injunction against the government, or any of its subdivisions, officials or any person or entity to restrain, prohibit or compel the bidding or awarding of a contract or project of the national government. The proscription, however, covers only temporary restraining orders or writs but not decisions on the merits granting permanent injunction. Therefore, while courts below are prohibited by RA No. 8795 from issuing TROs or preliminary restraining orders pending the adjudication of the case, said statute, however, does not explicitly proscribe the issuance of a permanent injunction granted by a court of law arising from an adjudication of a case on the merits.17 As we explained in Alvarez v. PICOP Resources, Inc.:18 x x x Republic Act No. 8975 merely proscribes the issuance of temporary restraining orders and writs of preliminary injunction and preliminary mandatory injunction. [It] cannot, under pain of violating the Constitution, deprive the courts of authority to take cognizance of the issues raised in the principal action, as long as such action and the relief sought are within their jurisdiction. Clearly, except for the prayer for the issuance of a TRO or preliminary injunction, the issues raised by FUCC and the relief it sought are within the jurisdiction of the RTC. It is a procedural faux pas for FUCC to invoke the original jurisdiction of this Court over the issuance of a writ of certiorari and permanent injunction. In any event, the invitation to bid contains a reservation for PPMC to reject any bid. It has been held that where the right to reject is so reserved, the lowest bid, or any bid for that matter, may be rejected on a mere technicality.19 The discretion to accept or reject bid and award contracts is vested in the government agencies entrusted with that function. This discretion is of such wide latitude that the Courts will not interfere therewith or direct the committee on bids to do a particular act or to enjoin such act within its prerogatives unless it is apparent that it is used as a shield to a fraudulent award;20 or an unfairness or injustice is shown;21 or when in the exercise of its authority, it gravely abuses or exceeds its jurisdiction. Thus, where PPMC as advertiser, availing itself of that right, opts to reject any or all bids, the losing bidder has no cause to complain or right to dispute that choice, unless fraudulent acts, injustice, unfairness or grave abuse of discretion is shown. FUCC alleges that SBAC and PPMC, along with the SCCI and five (5) other bidders, colluded to rig the results of the re-bidding so that SCCI would emerge as the so-called lowest bidder. The record, however, is bereft of any proof to substantiate the allegation. Neither is there any evidence offered to establish unfairness, injustice, caprice or arbitrariness on the part of the SBAC or the PPMC in awarding the contract to SCCI, the lowest bidder. The presumption of regularity of the bidding must thus be upheld.
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contract to SCCI, the lowest bidder. The presumption of regularity of the bidding must thus be upheld. As we explained in JG Summit Holdings, Inc. v. Court of Appeals:22 The discretion to accept or reject a bid and award contracts is vested in the Government agencies entrusted with that function. The discretion given to the authorities on this matter is of such wide latitude that the Courts will not interfere therewith, unless it is apparent that it is used as a shield to a fraudulent award (Jalandoni v. NARRA, 108 Phil. 486 [1960]). x x x The exercise of this discretion is a policy decision that necessitates prior inquiry, investigation, comparison, evaluation, and deliberation. This task can best be discharged by the Government agencies concerned, not by the Courts. The role of the Courts is to ascertain whether a branch or instrumentality of the Government has transgressed its constitutional boundaries. But the Courts will not interfere with executive or legislative discretion exercised within those boundaries. Otherwise, it strays into the realm of policy decision-making. It is only upon a clear showing of grave abuse of discretion that the Courts will set aside the award of a contract made by a government entity. Grave abuse of discretion implies a capricious, arbitrary and whimsical exercise of power (Filinvest Credit Corp. v. Intermediate Appellate Court, No. 65935, 30 September 1988, 166 SCRA 155). The abuse of discretion must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform a duty enjoined by law, as to act at all in contemplation of law, where the power is exercised in an arbitrary and despotic manner by reason of passion or hostility (Litton Mills, Inc. v. Galleon Trader, Inc., et al[.], L-40867, 26 July 1988, 163 SCRA 489). Accordingly, there being no showing of grave abuse of discretion, FUCC has no valid ground to demand annulment of the contract between PPMC and SCCI. WHEREFORE, the petition is DISMISSED. The assailed Decision of the PPMC is AFFIRMED. SO ORDERED.
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First Lepanto Ceramics, Inc. v. CA, GR 110571, Mar 10, 1994
Sunday, November 14, 2010 11:21 PM

G.R. No. 110571 March 10, 1994 FIRST LEPANTO CERAMICS, INC vs. CA and MARIWASA MANUFACTURING, INC., NOCON, J.: Brought to fore in this petition for certiorari and prohibition with application for preliminary injunction is the novel question of where and in what manner appeals from decisions of the Board of Investments (BOI) should be filed. A thorough scrutiny of the conflicting provisions of Batas Pambansa Bilang 129, otherwise known as the "Judiciary Reorganization Act of 1980," Executive Order No. 226, also known as the Omnibus Investments Code of 1987 and Supreme Court Circular No. 1-91 is, thus, called for. Briefly, this question of law arose when BOI, in its decision dated December 10, 1992 in BOI Case No. 92-005 granted petitioner First Lepanto Ceramics, Inc.'s application to amend its BOI certificate of registration by changing the scope of its registered product from "glazed floor tiles" to "ceramic tiles." Eventually, oppositor Mariwasa filed a motion for reconsideration of the said BOI decision while oppositor Fil-Hispano Ceramics, Inc. did not move to reconsider the same nor appeal therefrom. Soon rebuffed in its bid for reconsideration, Mariwasa filed a petition for review with respondent Court of Appeals pursuant to Circular 1-91. Acting on the petition, respondent court required the BOI and petitioner to comment on Mariwasa's petition and to show cause why no injunction should issue. On February 17, 1993, respondent court temporarily restrained the BOI from implementing its decision. This temporary restraining order lapsed by its own terms on March 9, 1993, twenty (20) days after its issuance, without respondent court issuing any preliminary injunction. On February 24, 1993, petitioner filed a "Motion to Dismiss Petition and to Lift Restraining Order" on the ground that respondent court has no appellate jurisdiction over BOI Case No. 92-005, the same being exclusively vested with the Supreme Court pursuant to Article 82 of the Omnibus Investments Code of 1987. On May 25, 1993, respondent court denied petitioner's motion to dismiss, the dispositive portion of which reads as follows: WHEREFORE, private respondent's motion to dismiss the petition is hereby DENIED, for lack of merit. Private respondent is hereby given an inextendible period of ten (10) days from receipt hereof within which to file its comment to the petition. 1 Upon receipt of a copy of the above resolution on June 4, 1993, petitioner decided not to file any motion for reconsideration as the question involved is essentially legal in nature and immediately filed a petition for certiorari and prohibition before this Court. Petitioner posits the view that respondent court acted without or in excess of its jurisdiction in issuing the questioned resolution of May 25, 1993, for the following reasons: I. Respondent court has no jurisdiction to entertain Mariwasa's appeal from the BOI's decision in BOI Case No. 92-005, which has become final. II. The appellate jurisdiction conferred by statute upon this Honorable Court cannot be amended or superseded by Circular No. 1-91. 2 Petitioner then concludes that: III. Mariwasa has lost it right to appeal . . . in this case. 3 Petitioner argues that the Judiciary Reorganization Act of 1980 or Batas Pambansa Bilang 129 and Circular 1-91, "Prescribing the Rules Governing Appeals to the Court of Appeals from a Final Order or Decision of the Court of Tax Appeals and Quasi-Judicial Agencies" cannot be the basis of Mariwasa's appeal to respondent court because the procedure for appeal laid down therein runs contrary to Article 82 of E.O. 226, which provides that appeals from decisions or orders of the BOI shall be filed directly with this Court, to wit: Judicial relief. — All orders or decisions of the Board (of Investments) in cases involving the provisions of this Code shall immediately be executory. No appeal from the order or decision of the Board by the party adversely affected shall stay such an order or decision; Provided, that all appeals shall be filed directly with the Supreme Court within thirty (30) days
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decision; Provided, that all appeals shall be filed directly with the Supreme Court within thirty (30) days from receipt of the order or decision. On the other hand, Mariwasa maintains that whatever "obvious inconsistency" or "irreconcilable repugnancy" there may have been between B.P. 129 and Article 82 of E.O. 226 on the question of venue for appeal has already been resolved by Circular 1-91 of the Supreme Court, which was promulgated on February 27, 1991 or four (4) years after E.O. 226 was enacted. Sections 1, 2 and 3 of Circular 1-91, is herein quoted below: 1. Scope. — These rules shall apply to appeals from final orders or decisions of the Court of Tax Appeals. They shall also apply to appeals from final orders or decisions of any quasi-judicial agency from which an appeal is now allowed by statute to the Court of Appeals or the Supreme Court. Among these agencies are the Securities and Exchange Commission, 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, Secretary of Agrarian Reform and Special Agrarian Courts under RA 6657, Government Service Insurance System, Employees Compensation Commission, Agricultural Inventions Board, Insurance Commission and Philippine Atomic Energy Commission. 2. Cases not covered. — These rules shall not apply to decisions and interlocutory orders of the National Labor Relations Commission or the Secretary of Labor and Employment under the Labor Code of the Philippines, the Central Board of Assessment Appeals, and other quasi-judicial agencies from which no appeal to the courts is prescribed or allowed by statute. 3. Who may appeal and where to appeal. — The appeal of a party affected by a final order, decision, or judgment of the Court of Tax Appeals or of a quasi-judicial agency shall be taken to the Court of Appeals within the period and in the manner herein provided, whether the appeal involves questions of fact or of law or mixed questions of fact and law. From final judgments or decisions of the Court of Appeals, the aggrieved party may appeal by certiorari to the Supreme Court as provided in Rule 45 of the Rules of Court. It may be called that Section 9(3) of B.P. 129 vests appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of quasi-judicial agencies on the Court of Appeals, to wit: (3) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders, awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, 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. The Intermediate Appellate Court shall have the power to try cases and conduct hearings, receive evidence and perform any and all acts necessary to resolve factual issues raised in cases falling within its original and appellate jurisdiction, including the power to grant and conduct new trials or further proceedings. These provisions shall not apply to decisions and interlocutory orders issued under the Labor Code of the Philippines and by the Central Board of Assessment Appeals. Clearly evident in the aforequoted provision of B.P. 129 is the laudable objective of providing a uniform procedure of appeal from decisions of all quasi-judicial agencies for the benefit of the bench and the bar. Equally laudable is the twin objective of B.P. 129 of unclogging the docket of this Court to enable it to attend to more important tasks, which in the words of Dean Vicente G. Sinco, as quoted in our decision in Conde v. Intermediate Appellate Court 4 is "less concerned with the decisions of cases that begin and end with the transient rights and obligations of particular individuals but is more intertwined with the direction of national policies, momentous economic and social problems, the delimitation of governmental authority and its impact upon fundamental rights. In Development Bank of the Philippines vs. Court of Appeals, 5 this Court noted that B.P. 129 did not deal only with "changes in the rules on procedures" and that not only was the Court of Appeals reorganized, but its jurisdiction and powers were also broadened by Section 9 thereof. Explaining the changes, this Court said: . . . Its original jurisdiction to issue writs of mandamus, prohibition, certiorari and habeas corpus, which theretofore could be exercised only in aid of its appellate jurisdiction, was expanded by (1) extending it so as to include the writ of quo warranto, and also (2) empowering it to issue all said extraordinary writs
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so as to include the writ of quo warranto, and also (2) empowering it to issue all said extraordinary writs "whether or not in aid of its appellate jurisdiction." Its appellate jurisdiction was also extended to cover not only final judgments of Regional Trial Courts, but also "all final judgments, decisions, resolutions, orders or awards of . . . quasi-judicial agencies, instrumentalities, boards or commissions, except those falling within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the provisions of this Act, and of sub-paragraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948," it being noteworthy in this connection that the text of the law is broad and comprehensive, and the explicitly stated exceptions have no reference whatever to the Court of Tax Appeals. Indeed, the intention to expand the original and appellate jurisdiction of the Court of Appeals over quasi-judicial agencies, instrumentalities, boards, or commissions, is further stressed by the last paragraph of Section 9 which excludes from its provisions, only the "decisions and interlocutory orders issued under the Labor Code of the Philippines and by the Central Board of Assessment Appeals." 6 However, it cannot be denied that the lawmaking system of the country is far from perfect. During the transitional period after the country emerged from the Marcos regime, the lawmaking power was lodged on the Executive Department. The obvious lack of deliberation in the drafting of our laws could perhaps explain the deviation of some of our laws from the goal of uniform procedure which B.P. 129 sought to promote. In exempli gratia, Executive Order No. 226 or the Omnibus Investments Code of 1987 provides that all appeals shall be filed directly with the Supreme Court within thirty (30) days from receipt of the order or decision. Noteworthy is the fact that presently, the Supreme Court entertains ordinary appeals only from decisions of the Regional Trial Courts in criminal cases where the penalty imposed is reclusion perpetua or higher. Judgments of regional trial courts may be appealed to the Supreme Court only by petition for review on certiorari within fifteen (15) days from notice of judgment in accordance with Rule 45 of the Rules of Court in relation to Section 17 of the Judiciary Act of 1948, as amended, this being the clear intendment of the provision of the Interim Rules that "(a)ppeals to the Supreme Court shall be taken by petition for certiorari which shall be governed by Rule 45 of the Rules of Court." Thus, the right of appeal provided in E.O. 226 within thirty (30) days from receipt of the order or decision is clearly not in consonance with the present procedure before this Court. Only decisions, orders or rulings of a Constitutional Commission (Civil Service Commission, Commission on Elections or Commission on Audit), may be brought to the Supreme Court on original petitions for certiorari under Rule 65 by the aggrieved party within thirty (30) days form receipt of a copy thereof. 7 Under this contextual backdrop, this Court, pursuant to its Constitutional power under Section 5(5), Article VIII of the 1987 Constitution to promulgate rules concerning pleading, practice and procedure in all courts, and by way of implementation of B.P. 129, issued Circular 1-91 prescribing the rules governing appeals to the Court of Appeals from final orders or decisions of the Court of Tax Appeals and quasijudicial agencies to eliminate unnecessary contradictions and confusing rules of procedure. Contrary to petitioner's contention, although a circular is not strictly a statute or law, it has, however, the force and effect of law according to settled jurisprudence. 8 In Inciong v. de Guia, 9 a circular of this Court was treated as law. In adopting the recommendation of the Investigating Judge to impose a sanction on a judge who violated Circular No. 7 of this Court dated September 23, 1974, as amended by Circular No. 3 dated April 24, 1975 and Circular No. 20 dated October 4, 1979, requiring raffling of cases, this Court quoted the ratiocination of the Investigating Judge, brushing aside the contention of respondent judge that assigning cases instead of raffling is a common practice and holding that respondent could not go against the circular of this Court until it is repealed or otherwise modified, as "(L)aws are repealed only by subsequent ones, and their violation or non-observance shall not be excused by disuse, or customs or practice to the contrary." 10 The argument that Article 82 of E.O. 226 cannot be validly repealed by Circular 1-91 because the former grants a substantive right which, under the Constitution cannot be modified, diminished or increased by this Court in the exercise of its rule-making powers is not entirely defensible as it seems. Respondent correctly argued that Article 82 of E.O. 226 grants the right of appeal from decisions or final orders of the BOI and in granting such right, it also provided where and in what manner such appeal can be brought. These latter portions simply deal with procedural aspects which this Court has the power to regulate by virtue of its constitutional rule-making powers.
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regulate by virtue of its constitutional rule-making powers. The case of Bustos v. Lucero 11 distinguished between rights created by a substantive law and those arising from procedural law: Substantive law creates substantive rights . . . . Substantive rights is a term which includes those rights which one enjoys under the legal system prior to the disturbance of normal relations (60 C.J., 980). Substantive law is that part of the law which creates, defines and regulates rights, or which regulates rights and duties which give rise to a cause of action, as oppossed to adjective or remedial law, which prescribes the method of enforcing rights or obtains a redress for their invasion. 12 Indeed, the question of where and in what manner appeals from decisions of the BOI should be brought pertains only to procedure or the method of enforcing the substantive right to appeal granted by E.O. 226. In other words, the right to appeal from decisions or final orders of the BOI under E.O. 226 remains and continues to be respected. Circular 1-91 simply transferred the venue of appeals from decisions of this agency to respondent Court of Appeals and provided a different period of appeal, i.e., fifteen (15) days from notice. It did not make an incursion into the substantive right to appeal. The fact that BOI is not expressly included in the list of quasi-judicial agencies found in the third sentence of Section 1 of Circular 1-91 does not mean that said circular does not apply to appeals from final orders or decision of the BOI. The second sentence of Section 1 thereof expressly states that "(T) hey shall also apply to appeals from final orders or decisions of any quasi-judicial agency from which an appeal is now allowed by statute to the Court of Appeals or the Supreme Court." E.O. 266 is one such statute. Besides, the enumeration is preceded by the words "(A)mong these agencies are . . . ," strongly implying that there are other quasi-judicial agencies which are covered by the Circular but which have not been expressly listed therein. More importantly, BOI does not fall within the purview of the exclusions listed in Section 2 of the circular. Only the following final decisions and interlocutory orders are expressly excluded from the circular, namely, those of: (1) the National Labor Relations Commission; (2) the Secretary of Labor and Employment; (3) the Central Board of Assessment Appeals and (4) other quasi-judicial agencies from which no appeal to the courts is prescribed or allowed by statute. Since in DBP v. CA 13 we upheld the appellate jurisdiction of the Court of Appeals over the Court of Tax Appeals despite the fact that the same is not among the agencies reorganized by B.P. 129, on the ground that B.P. 129 is broad and comprehensive, there is no reason why BOI should be excluded from Circular 1-91, which is but implementary of said law. Clearly, Circular 1-91 effectively repealed or superseded Article 82 of E.O. 226 insofar as the manner and method of enforcing the right to appeal from decisions of the BOI are concerned. Appeals from decisions of the BOI, which by statute was previously allowed to be filed directly with the Supreme Court, should now be brought to the Court of Appeals. WHEREFORE, in view of the foregoing reasons, the instant petition for certiorari and prohibition with application for temporary restraining order and preliminary injunction is hereby DISMISSED for lack of merit. The Temporary Restraining Order issued on July 19, 1993 is hereby LIFTED.
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Sarah Ampong v. CSC GR 167916 Aug 26, 2008
Sunday, November 14, 2010 11:21 PM

[G.R. No. 167916, August 26, 2008]

SARAH P. AMPONG VS. CIVIL SERVICE COMMISSION, CSC-REGIONAL OFFICE NO. 11, RESPONDENT.
REYES, R.T., J.: CAN the Civil Service Commission (CSC) properly assume jurisdiction over administrative proceedings against a judicial employee involving acts of dishonesty as a teacher, committed prior to her appointment to the judiciary? Before Us is a petition for review on certiorari assailing the Decision[1] of the Court of Appeals (CA) affirming the CSC's exercise of administrative jurisdiction over petitioner. The Facts The following facts are uncontroverted: On November 10, 1991, a Professional Board Examination for Teachers (PBET)[2] was held in Davao City. A certain Evelyn Junio-Decir[3] applied for and took the examination at Room 16, Kapitan Tomas Monteverde Elementary School. She passed with a rating of 74.27%.[4] At the time of the PBET examinations, petitioner Sarah P. Ampong (nee Navarra) and Decir were public school teachers under the supervision of the Department of Education, Culture and Sports (DECS).[5] Later, on August 3, 1993, Ampong transferred to the Regional Trial Court (RTC) in Alabel, Sarangani Province, where she was appointed as Court Interpreter III. On July 5, 1994, a woman representing herself as Evelyn Decir went to the Civil Service Regional Office (CSRO) No. XI, Davao City, to claim a copy of her PBET Certificate of Eligibility. During the course of the transaction, the CSRO personnel noticed that the woman did not resemble the picture of the examinee in the Picture Seat Plan (PSP). Upon further probing, it was confirmed that the person claiming the eligibility was different from the one who took the examinations. It was petitioner Ampong who took and passed the examinations under the name Evelyn Decir. The CSRO conducted a preliminary investigation and determined the existence of a prima facie case against Decir and Ampong for Dishonesty, Grave Misconduct and Conduct Prejudicial to the Best Interest of the Service. On August 23, 1994, they were formally charged and required to file answers under oath. The formal charge reads: That sometime before the conduct of the November 10, 1991 Professional Board Examination for Teachers (PBET), a certain Ms. Evelyn B. Junio (now Decir) took the said examination at Rm. 16 Kapitan Tomas Monteverde Elementary School, Davao City, with a passing rate of 74.27%; That on July 5, 1994 she appeared before the CSC Region XI Office to get her Guro Certificate; That upon verification, it was found out that the picture attached in the Picture Seat Plan, marked as Annex "A" and "A-1," respectively, were not the same compared to the picture attached in the CSC Form 212 of Evelyn JunioDecir marked herein as annex "B," "B-1," respectively. There was also a marked difference in the signatures affixed in the said annexes; That further investigations revealed that it was the pictures of Ms. Sarah Navarra, wife of her husband's first cousin, who took the said examination in behalf of Ms. Evelyn Junio-Decir, a provisional teacher; That the said act of Mesdames Decir and Navarra are acts of dishonesty and conduct prejudicial to the best interest of the service; that in (sic) taking the CS examination for and in behalf of another undermines the sanctity of the CS examinations; All these contrary to existing civil service laws and regulations. (Emphasis supplied) In her sworn statement dated November 3, 1994, Decir denied the charges against her. She reasoned out that it must have been the examination proctor who pasted the wrong picture on the PSP and that her signatures were different because she was still signing her maiden name at the time of the
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her signatures were different because she was still signing her maiden name at the time of the examination. In her Answer, Decir contended that: 2. The same accusation is denied, the truth being: a. When I took the Professional Board Examination for Teachers (PBET) in the year 1991, I handed my 1x1 I.D. picture to the proctor assigned in the examination room who might have inadvertently pasted in the Seat Plan [the] wrong picture instead [of] my own picture; b. With respect to the marked difference in my signature both appearing in the aforesaid Seat Plan and also with the Form 212, the disparity lies in that in the year 1991, when I took the afroresaid examination, I was still sporting my maiden name Evelyn B. Junio in order to coincide with all my pertinent supporting papers, like the special order (s.o.), appointment and among others, purposely to take said communications. However, immediately after taking the PBET Examination in 1991, I started using the full name of Evelyn Junio-Decir.[6] Even before filing an Answer, petitioner Ampong voluntarily appeared at the CSRO on February 2, 1995 and admitted to the wrongdoing. When reminded that she may avail herself of the services of counsel, petitioner voluntarily waived said right.

On March 13, 1995, petitioner gave another admission in the following tenor:
Q: A: Now, what is then your intention in coming to this Region inasmuch as you are still intending to file an answer to the formal charge? I came here because I want to admit personally. So that I will not be coming here anymore. I will submit my case for Resolution.

Q:
A:

So, you intend to waive your right for the formal hearing and you also admit orally on the guilt of the charge on the Formal Charge dated August 24, 1994?
Yes, Ma'am.

Q: A:

What else do you want to tell the Commission? x x x Inasmuch as I am already remorseful, I am repenting of the wrong that I have done. I am hoping that the Commission can help x x x so that I will be given or granted another chance to serve the government.
xxx x

Q:

Now inasmuch as you have declared that you have admitted the guilt that you took the examination for and in behalf of Evelyn Junio Decir, are you telling this to the Commission without the assistance of the counsel or waiver of your right to be assisted by counsel.

A:

Yes, Ma'am. I am waiving my right. [7] (Emphasis supplied)

Petitioner reiterated her admission in her sworn Answer dated March 16, 1995: 3. That, during the commission of the act, I was still under the Department of Education, Culture and Sports, as Teacher in-charge of San Miguel Primary School, Malungon North District, way back in 1991, when the husband of Evelyn Junio-Decir, my husband's cousin came to me and persuaded me to take the examination in behalf of his wife to which I disagreed but he earnestly begged so that I was convinced to agree because I pity his wife considering that she is an immediate relative, and there was no monetary consideration involved in this neither a compensatory reward for me, as I was overcome by their persuasion; 4. That, despite the fact that I was a teacher, I was not aware that the acts I was charged, is a ground for disciplinary action and punishable by dismissal; 5. That I should not have conformed to this anomalous transaction considering that I was born in a Christian family, and was brought up in the fear of Lord, and had been a consistent officer of the Church Board, had been a religious leader for so many years, and had been the organizer of the
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Church Board, had been a religious leader for so many years, and had been the organizer of the Music Festival of the Association of Evangelical Churches of Malungon, Sarangani Province, thus I was devoted to church work and was known to be of good conduct; and that my friends and acquaintances can vouch to that, but I was just forced by circumstances to agree to the spouses Godfre and Evelyn Decir.[8] (Emphasis added) CSC Finding and Penalty On March 21, 1996, the CSC found petitioner Ampong and Decir guilty of dishonesty, dismissing them from the service. The dispositive part of the CSC resolution states: WHEREFORE, the Commission hereby finds Evelyn J. Decir and Sarah P. Navarra guilty of Dishonesty. Accordingly, they are meted the penalty of dismissal with all its accessory penalties. The PBET rating of Decir is revoked.[9] Petitioner moved for reconsideration, raising for the first time the issue of jurisdiction.[10] She argued that the exclusive authority to discipline employees of the judiciary lies with the Supreme Court; that the CSC acted with abuse of discretion when it continued to exercise jurisdiction despite her assumption of duty as a judicial employee. She contended that at the time the case was instituted on August 23, 1994, the CSC already lost jurisdiction over her. She was appointed as Interpreter III of the RTC, Branch 38, Alabel, Sarangani Province on August 3, 1993. The CSC denied the motion for reconsideration.[11] According to the Commission, to allow petitioner to evade administrative liability would be a mockery of the country's administrative disciplinary system. It will open the floodgates for others to escape prosecution by the mere expedient of joining another branch of government. In upholding its jurisdiction over petitioner, the CSC differentiated between administrative supervision exercised by the Supreme Court and administrative jurisdiction granted to the Commission over all civil service employees: Moreover, it must be pointed out that administrative supervision is distinct from administrative jurisdiction. While it is true that this Commission does not have administrative supervision over employees in the judiciary, it definitely has concurrent jurisdiction over them. Such jurisdiction was conferred upon the Civil Service Commission pursuant to existing law specifically Section 12(11), Chapter 3, Book V of the Administrative Code of 1987 (Executive Order No. 292) which provides as follows: "(11) Hear and decide administrative cases instituted by or through it directly or on appeal, including contested appointment, and review decisions and actions of its offices and of the agencies attached to it x x x." The fact that court personnel are under the administrative supervision of the Supreme Court does not totally isolate them from the operations of the Civil Service Law. Appointments of all officials and employees in the judiciary is governed by the Civil Service Law (Section 5(6), Article VIII, 1987 Constitution). (Emphasis supplied) CA Disposition Via petition for review under Rule 43, petitioner elevated the matter to the CA.[12] She insisted that as a judicial employee, it is the Supreme Court and not the CSC that has disciplinary jurisdiction over her.

In a Decision dated November 30, 2004,[13] the CA denied the petition for lack of merit.
The CA noted that petitioner never raised the issue of jurisdiction until after the CSC ruled against her. Rather, she willingly appeared before the commission, freely admitted her wrongdoing, and even requested for clemency. Thus, she was estopped from questioning the Commission's jurisdiction. The appellate court opined that while lack of jurisdiction may be assailed at any stage, a party's active participation in the proceedings before a court, tribunal or body will estop such party from assailing its jurisdiction. The CA further ruled that a member of the judiciary may be under the jurisdiction of two different bodies. As a public school teacher or a court interpreter, petitioner was part of the civil service, subject to its rules and regulations. When she committed acts in violation of the Civil Service Law, the CSC was clothed with administrative jurisdiction over her. Issue
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clothed with administrative jurisdiction over her. Issue

Petitioner, through this petition, assigns the lone error that: The Honorable Court of Appeals-First Division decided a question of substance in a way not in accord with law and jurisprudence, gravely erred in facts and in law, and has sanctioned such departure and grave error because it ignored or was not aware of Garcia v. De la Peña, 229 SCRA 766 (1994) and Adm. Matter No. OCA I.P.I. 97-329-P (CSC v. Ampong) dated January 31, 2001, which reiterate the rule that exclusive authority to discipline employees of the judiciary lies with the Supreme Court, in issuing the questioned decision and resolution; which grave error warrant reversal of the questioned decision and resolution.[14] Put simply, the issue boils down to whether the CSC has administrative jurisdiction over an employee of the Judiciary for acts committed while said employee was still with the Executive or Education Department. Our Ruling
The answer to the question at the outset is in the negative but We rule against the petition on the ground of estoppel. It is true that the CSC has administrative jurisdiction over the civil service. As defined under the Constitution and the Administrative Code, the civil service embraces every branch, agency, subdivision, and instrumentality of the government, and government-owned or controlled corporations.[15] Pursuant to its administrative authority, the CSC is granted the power to "control, supervise, and coordinate the Civil Service examinations."[16] This authority grants to the CSC the right to take cognizance of any irregularity or anomaly connected with the examinations.[17] However, the Constitution provides that the Supreme Court is given exclusive administrative supervision over all courts and judicial personnel.[18] By virtue of this power, it is only the Supreme Court that can oversee the judges' and court personnel's compliance with all laws, rules and regulations. It may take the proper administrative action against them if they commit any violation. No other branch of government may intrude into this power, without running afoul of the doctrine of separation of powers.[19] Thus, this Court ruled that the Ombudsman cannot justify its investigation of a judge on the powers granted to it by the Constitution. It violates the specific mandate of the Constitution granting to the Supreme Court supervisory powers over all courts and their personnel; it undermines the independence of the judiciary.[20] In Civil Service Commission v. Sta. Ana,[21] this Court held that impersonating an examinee of a civil service examination is an act of dishonesty. But because the offender involved a judicial employee under the administrative supervision of the Supreme Court, the CSC filed the necessary charges before the Office of the Court Administrator (OCA), a procedure which this Court validated. A similar fate befell judicial personnel in Bartolata v. Julaton,[22] involving judicial employees who also impersonated civil service examinees. As in Sta. Ana, the CSC likewise filed the necessary charges before the OCA because respondents were judicial employees. Finding respondents guilty of dishonesty and meting the penalty of dismissal, this Court held that "respondents' machinations reflect their dishonesty and lack of integrity, rendering them unfit to maintain their positions as public servants and employees of the judiciary."[23] Compared to Sta. Ana and Bartolata, the present case involves a similar violation of the Civil Service Law by a judicial employee. But this case is slightly different in that petitioner committed the offense before her appointment to the judicial branch. At the time of commission, petitioner was a public school teacher under the administrative supervision of the DECS and, in taking the civil service examinations, under the CSC. Petitioner surreptitiously took the CSC-supervised PBET exam in place of another person. When she did that, she became a party to cheating or dishonesty in a civil service-supervised examination.

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It is well settled that the jurisdiction to try a case is to be determined by the law in force at the time of the institution of the action, not at the time of the commission of the offense.[24] Consonant with this principle, the time of commission is not material to determining which court has jurisdiction. It stands to reason that administrative jurisdiction over petitioner belongs to the Supreme Court, the action having been instituted by the CSC at the time when petitioner was already a judicial employee. Indeed, the standard procedure is for the CSC to bring its complaint against petitioner, a judicial employee, before the OCA. Records show that the CSC did not adhere to this procedure in the present case. However, we are constrained to uphold the ruling of the CSC based on the principle of estoppel. The previous actions of petitioner have estopped her from attacking the jurisdiction of the CSC. A party who has affirmed and invoked the jurisdiction of a court or tribunal exercising quasi-judicial functions to secure an affirmative relief may not afterwards deny that same jurisdiction to escape a penalty.[25] As this Court declared in Aquino v. Court of Appeals:[26] In the interest of sound administration of justice, such practice cannot be tolerated. If we are to sanction this argument, then all the proceedings had before the lower court and the Court of Appeals while valid in all other respects would simply become useless.[27] Under the principle of estoppel, a party may not be permitted to adopt a different theory on appeal to impugn the court's jurisdiction.[28] In Emin v. De Leon,[29] this Court sustained the exercise of jurisdiction by the CSC, while recognizing at the same time that original disciplinary jurisdiction over public school teachers belongs to the appropriate committee created for the purpose as provided for under the Magna Carta for Public School Teachers.[30] It was there held that a party who fully participated in the proceedings before the CSC and was accorded due process is estopped from subsequently attacking its jurisdiction.

Petitioner was given ample opportunity to present her side and adduce evidence in her defense before the CSC. She filed with it her answer to the charges leveled against her. When the CSC found her guilty, she moved for a reconsideration of the ruling. These circumstances all too clearly show that due process was accorded to petitioner.
Petitioner's admission of guilt stands. Apart from her full participation in the proceedings before the CSC, petitioner admitted to the offense charged - that she impersonated Decir and took the PBET exam in the latter's place. We note that even before petitioner filed a written answer, she voluntarily went to the CSC Regional Office and admitted to the charges against her. In the same breath, she waived her right to the assistance of counsel. Her admission, among others, led the CSC to find her guilty of dishonesty, meting out to her the penalty of dismissal. Now, she assails said confession, arguing that it was given without aid of counsel. In police custodial investigations, the assistance of counsel is necessary in order for an extra-judicial confession to be made admissible in evidence against the accused in a criminal complaint. If assistance was waived, the waiver should have been made with the assistance of counsel.[31]

But while a party's right to the assistance of counsel is sacred in proceedings criminal in nature, there is no such requirement in administrative proceedings. In Lumiqued v. Exevea,[32] this Court ruled that a party in an administrative inquiry may or may not be assisted by counsel. Moreover, the administrative body is under no duty to provide the person with counsel because assistance of counsel is not an absolute requirement.[33]
Petitioner's admission was given freely. There was no compulsion, threat or intimidation. As found by the CSC, petitioner's admission was substantial enough to support a finding of guilt. The CSC found petitioner guilty of dishonesty. It is categorized as "an act which includes the procurement and/or use of fake/spurious civil service eligibility, the giving of assistance to ensure the
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procurement and/or use of fake/spurious civil service eligibility, the giving of assistance to ensure the commission or procurement of the same, cheating, collusion, impersonation, or any other anomalous act which amounts to any violation of the Civil Service examination."[34] Petitioner impersonated Decir in the PBET exam, to ensure that the latter would obtain a passing mark. By intentionally practicing a deception to secure a passing mark, their acts undeniably involve dishonesty.[35] This Court has defined dishonesty as the "(d)isposition to lie, cheat, deceive, or defraud; untrustworthiness; lack of integrity; lack of honesty, probity or integrity in principle; lack of fairness and straightforwardness; disposition to defraud, deceive or betray."[36] Petitioner's dishonest act as a civil servant renders her unfit to be a judicial employee. Indeed, We take note that petitioner should not have been appointed as a judicial employee had this Court been made aware of the cheating that she committed in the civil service examinations. Be that as it may, petitioner's present status as a judicial employee is not a hindrance to her getting the penalty she deserves. The conduct and behavior of everyone connected with an office charged with the dispensation of justice is circumscribed with a heavy burden or responsibility. The image of a court, as a true temple of justice, is mirrored in the conduct, official or otherwise, of the men and women who work thereat, from the judge to the least and lowest of its personnel.[37] As the Court held in another administrative case for dishonesty: x x x Any act which diminishes or tends to diminish the faith of the people in the judiciary shall not be countenanced. We have not hesitated to impose the utmost penalty of dismissal for even the slightest breach of duty by, and the slightest irregularity in the conduct of, said officers and employees, if so warranted. Such breach and irregularity detract from the dignity of the highest court of the land and erode the faith of the people in the judiciary. xxx x As a final point, we take this opportunity to emphasize that no quibbling, much less hesitation or circumvention, on the part of any employee to follow and conform to the rules and regulations enunciated by this Court and the Commission on Civil Service, should be tolerated. The Court, therefore, will not hesitate to rid its ranks of undesirables who undermine its efforts toward an effective and efficient system of justice.[38] (Emphasis added) We will not tolerate dishonesty for the Judiciary expects the best from all its employees.[39] Hindi namin papayagan ang pandaraya sapagkat inaasahan ng Hudikatura ang pinakamabuti sa lahat nitong kawani. WHEREFORE, the petition is DENIED for lack of merit.
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BP 129, as amended by RA 7902
Sunday, November 14, 2010 11:21 PM

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RA 8246
Sunday, November 14, 2010 11:21 PM

REPUBLIC ACT NO. 8246 AN ACT CREATING ADDITIONAL DIVISIONS IN THE COURT OF APPEALS, INCREASING THE NUMBER OF COURT OF APPEALS JUSTICES FROM FIFTY-ONE (51) TO SIXTY-NINE (69), AMENDING FOR THE PURPOSE BATAS PAMBANSA BILANG 129, AS AMENDED OTHERWISE KNOWN AS THE JUDICIARY REORGANIZATION ACT OF 1980, APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES. Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: Section 1. Sec. 3, Chapter 1 of Batas Pambansa Blg. 129, as amended, is hereby further amended to read as follows: "Sec. 3. Organization. - There is hereby created a Court of Appeals which shall consist of a Presiding Justice and sixty-eight (68) Associate Justices who shall be appointed by the President of the Philippines. The Presiding Justice shall be so designated in his appointment, and the Associate Justices shall have precedence according to the dates of their respective appointments, or when the appointments of two or more of them shall bear the same date, according to the order in which their appointments were issued by the President. Any member who is reappointed to the Court after rendering service in any other position in the government shall retain the precedence to which he was entitled under his original appointment, and his service in the court shall, for all intents and purposes, be considered as continuous and uninterrupted." Sec. 2. Sec. 4 of Batas Pambansa Blg. 129, as amended, is hereby further amended to read as follows: "Sec. 4. Exercise of Powers and Functions. - The Court of Appeals shall exercise its powers, functions, and duties through twenty-three (23) divisions, each composed of three (3) members. The Court may sit en banc for the purpose of exercising administrative, ceremonial or other non-adjudicatory functions." Sec. 3. Sec. 10 of Batas Pambansa Blg. 129, as amended, is hereby further amended to read as follows: "Sec. 10. Place of Holding Sessions. - The Court of Appeals shall have its permanent stations as follows: the first seventeen (17) divisions shall be stationed in the City of Manila for cases coming from the First to the Fifth Judicial Regions; the Eighteenth, Nineteenth, and Twentieth Divisions shall be in Cebu City for cases coming from the Sixth, Seventh and Eighth Judicial Regions; the Twenty-first, Twenty-second and Twenty-third Divisions shall be in Cagayan de Oro City for cases coming from the Ninth, Tenth, Eleventh, and Twelfth Judicial Regions. Whenever demanded by public interest, or whenever justified by an increase in case load, the Supreme Court, upon its own initiative or upon recommendation of the Presiding Justice of the Court of Appeals, may authorize any division of the Court to hold sessions periodically, or for such periods and at such places as the Supreme Court may determine, for the purpose of hearing and deciding cases. Trials or hearings in the Court of Appeals must be continuous and must be completed within three (3) months unless extended by the Chief Justice of the Supreme Court." Sec. 4. The amount necessary to carry out the provisions of this Act shall be included in the General Appropriations Act of the year following its enactment into law and thereafter. Sec. 5. Upon the effectivity of this Act, all pending cases, except those which have been submitted for resolution, shall be referred to the proper division of the Court of Appeals. Sec. 6. Nothing in this Act shall be construed to allow the transfer, except in cases of temporary assignment, of any member of the Court of Appeals to any place or station without his or her written consent, or to undermine the security of tenure of its members as provided in the Constitution, or alter the seniority in said Court in accordance with existing laws. Sec. 7. The Supreme Court is hereby authorized and empowered to constitute a Study Committee composed of a member of the Judiciary, the prosecution, the Integrated Bar of the Philippines (IBP), a representative of the

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member of the Judiciary, the prosecution, the Integrated Bar of the Philippines (IBP), a representative of the association of law colleges and law professors, and a member of the public at large. The Committee shall undertake a serious study as to the feasibility and desirability of setting up a Regional Circuit Courts of Appeals in lieu and in place of the present Court of Appeals System. The Supreme Court shall submit the findings and recommendations of this Committee to Congress one (1) year after the effectivity of this Act. Sec. 8. Separability Clause. - If any portion or provision of this Act is declared unconstitutional, the remainder of this Act or any provision not affected thereby shall remain in force and effect. Sec. 9. Repealing Clause. - All laws, presidential decrees, letters of instruction, executive orders, rules and regulations, or any part thereof inconsistent with the provisions of this Act are hereby repealed or modified accordingly. Sec. 10. Effectivity. - This Act shall take effect after fifteen (15) days following its publication in two (2) newspapers of general circulation. Approved: 30 December 1996 Pasted from <http://www.chanrobles.com/republicactno8246.htm>

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CGP Transport v. PU Leasing GR 164547 Mar 28, 2007
Sunday, November 14, 2010 11:21 PM

G.R. No. 164547 March 28, 2007 CGP TRANSPORTATION AND SERVICES CORPORATION, Petitioner, vs. PCI LEASING AND FINANCE, INCORPORATED, Respondent. DE C I S I O N CHICO-NAZARIO, J.: Before us is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court seeking to annul and set aside the 26 March 2004 Decision1 and 13 July 2004 Resolution2 of the Court of Appeals in CA G.R. SP No. 68528 entitled "PCI Leasing and Finance, Inc. v. Hon. Alberto L. Lerma in His Capacity as Presiding Judge of Branch 256 of the Regional Trial Court of Muntinlupa City and CGP Transportation and Services Corporation." In the assailed decision, the Court of Appeals set aside the 27 March 20013 and 30 August 20014 Orders of the Regional Trial Court (RTC), Branch 256, of the City of Muntinlupa in LRC Case No. 99-020 entitled "In re: Petition for Issuance of Writ of Possession for Real Properties Covered by Transfer Certificates of Title Nos. 172319 and 180241 of the Register of Deeds for Makati City (CGP Transportation & Services Corporation Properties)." Herein respondent PCI Leasing and Finance, Incorporated (PCI) was originally the petitioner in the aforequoted case, while herein petitioner CGP Transportation and Services Corporation (CGP) was the oppositor therein. This case stemmed from the extra-judicial foreclosure proceedings instituted by herein respondent PCI against the Real Estate Mortgage5 and the Amendment of Real Estate Mortgage 6 executed by herein petitioner CGP. The facts are as follows: Petitioner CGP obtained two loans from respondent PCI, the collective principal sum of which amounted to Sixteen Million (P16,000,000.00) pesos. Both loans were secured by real estate mortgages over two parcels of land7 located in Bo. Cupang, Muntinlupa City, and covered by Transfer Certificates of Title Nos. 172319 and 180241 issued by the Registry of Deeds of Makati City. Petitioner CGP failed to pay its indebtedness to respondent PCI pursuant to the terms and conditions extant on the face of the Promissory Notes covering the two loans aforementioned. Accordingly, the latter filed a petition for extra-judicial foreclosure of the real properties subject of the Real Estate Mortgage and the Amendment of Real Estate Mortgage, pursuant to Act No. 3135,8 as amended. During the public auction held thereafter, respondent PCI was the highest bidder of the subject real properties. Consequently, the corresponding Certificates of Sale were issued in the name of respondent PCI. On 19 November 1997, the above-mentioned Certificates of Sale were registered with the Registry of Deeds of Makati City. Petitioner CGP, however, failed to redeem the real properties during the redemption period; thus, respondent PCI insisted that actual possession thereof be turned over to it. Expectedly, petitioner CGP balked at the idea and refused the demand. On 12 April 1999, respondent PCI9 filed before the Regional Trial Court of Muntinlupa City, Branch 256, and docketed as LRC Case No. 99-020, a petition for an exparte issuance of a Writ of Possession. Petitioner CGP opposed the subject petition. On 15 November 2000, the RTC issued an Order ruling against oppositor (herein petitioner) CGP’s stance. The Order, in part, reads: The petitioner is correct, the law expressly authorized the purchaser to petition for a writ of possession during the redemption period by filing an Ex-parte Motion under oath for that purpose and that the pendency of any separate civil action can be no obstacle to the issuance of the writ of possession which is a ministerial act of the trial court after a title on the property has been consolidated in the mortgage. Accordingly, Ex-parte reception of evidence is scheduled on December 1, 2000, at 2:00 o’clock in the afternoon.10 In its Motion for Reconsideration, petitioner CGP averred that the scheduled hearing was violative of the writ of preliminary injunction issued in its favor by the same trial court, albeit in a different case involving the same parties – particularly Civil Case No. 99-234, respecting a complaint for the annulment of the foreclosure proceedings earlier mentioned. It argued that notwithstanding the fact that the
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of the foreclosure proceedings earlier mentioned. It argued that notwithstanding the fact that the complaint for annulment of foreclosure proceedings had already been dismissed by the trial court, such order had not yet become final and executory inasmuch as it was appealed to the Court of Appeals. That being the case, the writ should still be considered in effect and subsisting. On 27 March 2001, the RTC reconsidered its Order, viz: [F]inding the grounds relied upon by the oppositor to be meritorious and considering further that there are several motions to be resolved yet by the court, the Motion for Reconsideration is GRANTED, the order of this court dated October 20, 2000 is set aside and the ex-parte proceedings is hereby nullified and set aside. The Preliminary Injunction previously issued is reinstated.11 Consequently, it was respondent PCI’s turn to file a Motion for Reconsideration. In an Order dated 30 August 2001, the RTC stood pat on its position that the Opposition filed by herein petitioner CGP raised issues that needed to be heard in the presence of both parties. Said Order stated: This resolves the Motion for Reconsideration filed by petitioner on the order of this court dated March 27, 2001, which granted the motion for reconsideration filed by Oppositor to the Order dated November 15, 2000. There is basis to the pending motion of petitioner insofar as the reinstatement of preliminary injunction earlier issued by this court and submission for resolution of motions are concerned, as they all refer to Civil Case No. 99-234. This Court recognizes the snafu brought about by the several pleadings and pending incidents both in the instant case and Civil Case No. 99-234 which involved the same parties and the same subject matter. Be that as it may, this court, after a careful review of the verified opposition of the oppositor, including it annexes, is not inclined to grant the ex-parte proceedings as asserted by the petitioner. This court reviewed the grounds of oppositor in its motion for reconsideration of the order dated November 15, 2000, which allowed ex-parte presentation of evidence in this case. These grounds are: (a) Presence on record of a verified opposition to the petition and (b) there was an injunction earlier issued by this court on September 3, 1999 on the complaint for annulment of foreclosure proceedings of the subject properties filed by oppositor in Civil Case No. 99-234 also before this court. It is the considered view of this court that the verified opposition on record joined issues that need to be heard in the presence of both parties, a basic requirement of due process. The general rule frowns [on] ex-parte proceedings. When this court issued a writ of injunction in Civil Case No. 99-234, taking into consideration the allegations in the complaint it was convinced that there was a need for a status quo between the parties until all the issues joined therein are heard and disposed. On technical ground, the complaint in Civil Case No. 99-234 was dismissed by this court. Although it may be too late for this court to say, there were indeed pending incidents that needed to be resolved in Civil Case No. 99-234. Precisely, when this court mentioned of pending motions, it was actually referring to the pending incidents in Civil Case No. 99-234, as correctly pointed out by the Oppositor, petitioner at the time of the dismissal of the complaint in Civil Case No. 99-234, it has not filed yet its answer to the complaint in intervention of the plaintiff-intervenor. Petitioner, apparently, took advantage of the inadvertence in the issuance of the order of dismissal in Civil Case No. 99-234 when it kept silent of the fact that it has not filed yet an answer to the complaint in intervention. This court is cognizant of the rule that the dismissal of the complaint on the merits automatically dissolves the injunction issued therein even if the decision or order of dismissal is on appeal. The dismissal of this court however, of the complaint in Civil Case No. 99-234 was not the result of trial on the merits but rather on mere technicality. It is in this light that this court believes that considering that the dissolution of the injunction was the consequence of the order of dismissal of the complaint in Civil Case No. 99-234, which was not the result of a trial on the merits, and the said order of dismissal is now the subject of appeal, there is a need to suspend the proceedings in this case until the said appeal is disposed.12 Aggrieved, respondent PCI filed before this Court, a Petition for Certiorari under Rule 65 of the Revised Rules of Court, premised on the following grounds: 1. THE PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION, WHEN IT NULLIFIED AND SET ASIDE THE EX PARTE PROCEEDINGS IN THE CASE A QUO. 2. THE PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION, WHEN IT REINSTATED IN THE CASE A QUO THE PRELIMINARY INJUNCTION
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EXCESS OF JURISDICTION, WHEN IT REINSTATED IN THE CASE A QUO THE PRELIMINARY INJUNCTION WHICH WAS ISSUED IN ANOTHER CASE (CIVIL CASE NO. 99-234). 3. THE PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION, WHEN IT SET ASIDE IN THE CASE A QUO THE ORDER DATED 20 OCTOBER 2000 WHICH WAS ISSUED IN CIVIL CASE NO. 99-234. 4. THE PUBLIC RESPONDENT ACTED WITH GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION, WHEN IT SUSPENDED THE PROCEEDINGS A QUO UNTIL THE APPEAL IN CIVIL CASE NO. 99-234 IS RESOLVED.13 The petition (G.R. No. 150483) was, however, referred to the Court of Appeals by this Court for appropriate action in a Resolution,14 dated 3 December 2001, pursuant to Section 6, Rule 56 of the 1997 Revised Rules of Civil Procedure, factual issues being involved. In response to the referral, the Court of Appeals docketed the petition as CA G.R. SP No. 68528. In its Decision promulgated on 26 March 2004, the Court of Appeals granted herein respondent PCI’s petition and set aside the RTC Order dated 30 August 2001. The dispositive portion reads: WHEREFORE, the instant petition is hereby GRANTED. The orders dated March 27, 2001 and August 28 (sic), 2001 of the Regional Trial Court, Branch 256, Muntinlupa City, in LRC Case No. 99-020 are SET ASIDE. Further, the public respondent judge is ordered to continue with the proceedings and to decide the case with dispatch.15 The appellate court found public respondent RTC Judge to have gravely abused his discretion amounting to lack or excess of jurisdiction in suspending the proceedings in LRC Case No. 99-020 relating to the writ of possession asked for by herein respondent PCI. The Court of Appeals did not favor the RTC Judge who, "in effect took cognizance of the proceedings in Civil Case No. 99-234, an action for annulment of foreclosure proceedings filed by"16 herein petitioner CGP – one that is entirely separate from the case earlier filed. Moreover, "[w]ith the dismissal of the main case, (an) injunction (issued therein) is automatically lifted and the dissolution thereof is not appealable." The Court of Appeals then clarified that though the preceding principle is the general rule, the circumstances surrounding the reinstatement of the subject writ of preliminary injunction do not necessarily entitle the application of the exception stated in Section 4, Rule 39 of the 1997 Revised Rules of Civil Procedure, which states: SEC. 4. Judgments not stayed by appeal. – Judgments in actions for injunction, receivership, accounting and support, and such other judgments as are now or may hereafter be declared to be immediately executory, shall be enforceable after their rendition and shall not be stayed by an appeal taken therefrom, unless otherwise ordered by the trial court. On appeal therefrom, the appellate court in its discretion may make an order suspending, modifying, restoring or granting the injunction, receivership, accounting, or award of support. The stay of execution shall be upon such terms as to bond or otherwise as may be considered proper for the security or protection of the rights of the adverse party. It likewise noted that the fact that there was no dispute vis-à-vis herein petitioner CGP’s failure to redeem the foreclosed real properties within the period, herein respondent PCI’s right to possession thereof is quite patent and absolute; and that "any question regarding the validity of the mortgage or its foreclosure cannot be a legal ground for refusing the issuance of a writ of possession xxx."17 On 13 July 2004, the Court of Appeals denied the motion for reconsideration filed by herein petitioner CGP. Hence, this Petition for Review on Certiorari filed under Rule 45 of the 1997 Revised Rules of Civil Procedure. Petitioner CGP does not question at all the substantive aspect of the decision of the Court of Appeals. It’s petition is predicated solelyon the issue of "whether or not the Honorable Court of Appeals gravely erred in giving due course to the petition for certiorari of respondent, there being already a final finding by this Honorable Court in its Resolution dated December 3, 2001, in G.R. No. 150483, that the said petition raised questions of facts and therefore not proper for petition for certiorari."18 In its one page argument, Petitioner CGP contends, in whole, that: It is undisputed that this Honorable Court in its resolution dated December 3, 2001 in G.R. No. 150483 has found that issues of facts are raised in the petition filed therein. That these conclusion and finding of this Honorable Court are final and therefore no court for that matter, including the Court of Appeals, can disturb the same. [In fact and in truth, the factual issues are pending for resolution in the case before the Court of Appeals, in the case entitled CGP TRANSPORTATION AND SERVICES CORPORATION,

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Plaintiff-appellant versus PCI LEASING AND FINANCE CORPORATION, defendant-appellee docketed as C.A. G.R. No. 69466.] With this factual backdrop, petitioner honestly believes, that there can be no other fate on the said petition [of respondent] but the dismissal, it being a settled jurisprudence that in a petition for review, only questions of law can be raised. Even the Honorable Court of Appeals agree on this point when it says in its aforequoted decision, citing the doctrine laid down by this Honorable Court in BCI Employees & Workers Union v. Marcos, 39 SCRA 178, that "It is however basic that when facts are disputed, certiorari is not an appropriate remedy".19 Respondent PCI, in contrast, maintains that in rendering its assailed Decision, the "… Honorable Court of Appeals simply discharged the duty assigned to it by this Honorable Court," apropos the latter’s 3 December 2001 Resolution. We sustain respondent PCI’s importunings and dismiss petitioner CGP’s petition. Although the form or mode of the original petition filed by herein respondent PCI from the Order of the RTC was a special civil action for certiorari, an incorrect mode of appeal there being questions of fact as assigned errors, i.e., the existence and relevancy of specific surrounding circumstance, their relation to each other and to the whole situation,20 this Court, in order to serve the demands of substantial justice, considers and disposes of the case as an appeal by certiorari instead. In an appeal by certiorari under Rule 45, only questions of law may be raised.21 In petitions such as the one filed in G.R. No. 150483, questions of fact may not be the proper subject of appeal under Rule 45 as this mode of appeal is generally confined to questions of law.22 Well entrenched is the rule that this Court is not a trier of facts.23 The resolution of factual issues is the function of lower courts, whose findings on these matters are received with respect and are in fact binding on us subject to certain exceptions.24 Cases where an appeal involved questions of fact, of law, or both fall within the exclusive appellate jurisdiction of the Court of Appeals.25 This is attested to by Section 15, Rule 44 of the 1997 Revised Rules of Civil Procedure. The section reads: SEC. 15. Questions that may be raised on appeal. – x x x he may include in his assignment of errors any question of law or fact that has been raised in the court below and which is within the issues framed by the parties. It was on this score that we referred the subject petition to the appellate court. Under Section 5(f) of Rule 56 of the 1997 Revised Rules of Civil Procedure, an appeal may be dismissed on the ground of erroneous choice or mode of appeal. Said section reads: SEC. 5. Grounds for dismissal of appeal. – The appeal MAY be dismissed motu proprio or on motion of the respondent on the following grounds: xxx x (f) Error in the choice or mode of appeal. This notwithstanding, the Court may refer the case to the Court of Appeals under par. 2, Section 6 of the same rule. Said section states: SEC. 6. Disposition of improper appeal. – x x x An appeal by certiorari taken to the Supreme Court from the Regional Trial Court submitting issues of fact may be referred to the Court of Appeals for decision or appropriate action. The determination of the Supreme Court on whether or not issues of fact are involved shall be final. [Emphasis supplied.] This Court’s discretion to refer the case to the Court of Appeals is by reason of the term "may" in both sections. Such term denotes discretion on our part in dismissing an appeal or referring one to the Court of Appeals. Besides, it must be borne in mind that procedural rules are intended to ensure proper administration of law and justice. The rules of procedure ought not to be applied in a very rigid, technical sense, for they are adopted to help secure, not override, substantial justice.26 A deviation from its rigid enforcement may thus be allowed to attain its prime objective, for after all, the dispensation of justice is the core reason for the existence of the courts. In the case at bar, substantial ends of justice warranted the referral of the case to the appellate court for further appropriate proceedings. WHEREFORE, premises considered, the instant petition is hereby DENIED. The assailed 26 March 2004 Decision and 13 July 2004 Resolution, both of the Court of Appeals, in CA G.R. SP No. 68528 entitled "PCI Leasing and Finances, Inc. v. Hon. Alberto L. Lerma, In His Capacity as Presiding Judge of Branch 256 of the Regional Trial Court of Muntinlupa City and CGP Transportation and Services Corporation," are AFFIRMED.
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AFFIRMED. No costs.
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RA 9282
Sunday, November 14, 2010 11:21 PM

Republic of the Philippines Congress of the Philippines Metro Manila Twelfth Congress Third Regular Session Begun and held in Metro Manila, on Monday, the twenty-eight day of July, two thousand three. Republic Act No. 9282 March 30 2004 AN ACT EXPANDING THE JURISDICTION OF THE COURT OF TAX APPEALS (CTA), ELEVATING ITS RANK TO THE LEVEL OF A COLLEGIATE COURT WITH SPECIAL JURISDICTION AND ENLARGING ITS MEMBERSHIP, AMENDING FOR THE PURPOSE CERTAIN SECTIONS OR REPUBLIC ACT NO. 1125, AS AMENDED, OTHERWISE KNOWN AS THE LAW CREATING THE COURT OF TAX APPEALS, AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: Section 1. Section 1 of Republic Act No. 1125, as amended is hereby further amended to read as follows: "SECTION 1. Court; Justices; Qualifications; Salary; Tenure. - There is hereby created a Court of Tax Appeals (CTA) which shall be of the same level as the Court of Appeals, possessing all the inherent powers of a Court of Justice, and shall consist of a Presiding Justice and five (5) Associate Justices. The incumbent Presiding Judge and Associate Judges shall continue in office and bear the new titles of Presiding Justice and Associate Justices. The Presiding Justice and the most Senior Associate Justice shall serve as chairmen of the two (2) Divisions. The additional three (3) Justices and succeeding members of the Court shall be appointed by the President upon nomination by the Judicial and Bar Council. The Presiding Justice shall be so designated in his appointment, and the Associate Justices shall have precedence according to the date of their respective appointments, or when the appointments of two (2) or more of them shall bear the same date, according to the order in which their appointments were issued by the President. They shall have the same qualifications, rank, category, salary, emoluments and other privileges, be subject to the same inhibitions and disqualifications, and enjoy the same retirements and other benefits as those provided for under existing laws for the Presiding Justice and Associate Justices of the Court of Appeals. "Whenever the salaries of the Presiding Justice and the Associate Justices of the Court of Appeals are increased, such increases in salaries shall be deemed correspondingly extended to and enjoyed by the Presiding Justice and Associate Justices of the CTA. "The Presiding Justice and Associate Justices shall hold office during good behavior, until they reach the age of seventy (70), or become incapacitated to discharge the duties of their office, unless sooner removed for the same causes and in the same manner provided by law for members of the judiciary of equivalent rank." Section 2. Section 2 of the same Act is hereby amended to read as follows: "SEC. 2. Sitting En Banc or Division; Quorum; Proceedings. - The CTA may sit en banc or in two (2) Divisions, each Division consisting of three (3) Justices. "Four (4) Justices shall constitute a quorum for sessions en banc and two (2) Justices for sessions of a Division: Provided, That when the required quorum cannot be constituted due to any vacancy, disqualification, inhibition, disability, or any other lawful cause, the Presiding Justice shall designate any Justice of other Divisions of the Court to sit temporarily therein. "The affirmative votes of four (4) members of the Court en banc or two (2) members of a Division, as the case may be, shall be necessary for the rendition of a decision or resolution." Section 3. Section 3 of the same Act is hereby amended to read as follows: "SEC. 3. Clerk of Court; Division Clerks of Court; Appointment; Qualification; Compensation. - The CTA shall have a Clerk of Court and three (3) Division Clerks of Court who shall be appointed by the Supreme Court. No person shall be appointed Clerk of Court or Division Clerk of Court unless he is duly authorized to practice law in the Philippines. The Clerk of Court and Division Clerks of Court shall exercise the same powers and perform the same duties in regard to all matters within the Court's jurisdiction, as are
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exercised and performed by the Clerk of Court and Division Clerks of Court of the Court of Appeals, in so far as the same may be applicable or analogous; and in the exercise of those powers and the performance of those duties they shall be under the direction of the Court. The Clerk of Court and the Division Clerks of Court shall have the same rank, privileges, salary, emoluments, retirement and other benefits as those provided for the Clerk of Court and Division Clerks of Court of the Court of Appeals, respectively.' Section 4. Section 4 of the same Act is hereby amended to read as follows: "SEC. 4. Other Subordinate Employees. - The Supreme Court shall appoint all officials and employees of the CTA, in accordance with the Civil Service Law. The Supreme Court shall fix their salaries and prescribe their duties." Section 5. Section 5 of the same Act is hereby amended to read as follows: "SEC. 5. Disqualifications. - No Justice or other officer or employee of the CTA shall intervene, directly or indirectly, in the management or control of any private enterprise which in any way may be affected by the functions of the Court. Justices of the Court shall be disqualified from sitting in any case on the same grounds provided under Rule one hundred thirty-seven of the Rules of Court for the disqualification of judicial officers. No person who has once served in the Court in a permanent capacity, either as Presiding Justice or as Associate Justice thereof, shall be qualified to practice as counsel before the Court for a period of one (1) year from his retirement or resignation." Section 6. Section 6 of the same Act is hereby amended to read as follows: "SEC. 6. Place of Office. - The CTA shall have its principal office in Metro Manila and shall hold hearings at such time and place as it may, by order in writing, designate." Section 7. Section 7 of the same Act is hereby amended to read as follows: "Sec. 7. Jurisdiction. - The CTA shall exercise: "a. Exclusive appellate jurisdiction to review by appeal, as herein provided: "1. Decisions of the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue or other laws administered by the Bureau of Internal Revenue; "2. Inaction by the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relations thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue, where the National Internal Revenue Code provides a specific period of action, in which case the inaction shall be deemed a denial; "3. Decisions, orders or resolutions of the Regional Trial Courts in local tax cases originally decided or resolved by them in the exercise of their original or appellate jurisdiction; "4. Decisions of the Commissioner of Customs in cases involving liability for customs duties, fees or other money charges, seizure, detention or release of property affected, fines, forfeitures or other penalties in relation thereto, or other matters arising under the Customs Law or other laws administered by the Bureau of Customs; "5. Decisions of the Central Board of Assessment Appeals in the exercise of its appellate jurisdiction over cases involving the assessment and taxation of real property originally decided by the provincial or city board of assessment appeals; "6. Decisions of the Secretary of Finance on customs cases elevated to him automatically for review from decisions of the Commissioner of Customs which are adverse to the Government under Section 2315 of the Tariff and Customs Code; "7. Decisions of the Secretary of Trade and Industry, in the case of nonagricultural product, commodity or article, and the Secretary of Agriculture in the case of agricultural product, commodity or article, involving dumping and countervailing duties under Section 301 and 302, respectively, of the Tariff and Customs Code, and safeguard measures under Republic Act No. 8800, where either party may appeal the decision to impose or not to impose said duties. "b. Jurisdiction over cases involving criminal offenses as herein provided: "1. Exclusive original jurisdiction over all criminal offenses arising from violations of the National Internal Revenue Code or Tariff and Customs Code and other laws administered by the Bureau of Internal Revenue or the Bureau of Customs: Provided, however, That offenses or felonies mentioned in this paragraph where the principal amount o taxes and fees, exclusive of charges and penalties, claimed is less than One million pesos (P1,000,000.00) or where there is no specified amount claimed shall be tried
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less than One million pesos (P1,000,000.00) or where there is no specified amount claimed shall be tried by the regular Courts and the jurisdiction of the CTA shall be appellate. Any provision of law or the Rules of Court to the contrary notwithstanding, the criminal action and the corresponding civil action for the recovery of civil liability for taxes and penalties shall at all times be simultaneously instituted with, and jointly determined in the same proceeding by the CTA, the filing of the criminal action being deemed to necessarily carry with it the filing of the civil action, and no right to reserve the filling of such civil action separately from the criminal action will be recognized. "2. Exclusive appellate jurisdiction in criminal offenses: "a. Over appeals from the judgments, resolutions or orders of the Regional Trial Courts in tax cases originally decided by them, in their respected territorial jurisdiction. "b. Over petitions for review of the judgments, resolutions or orders of the Regional Trial Courts in the exercise of their appellate jurisdiction over tax cases originally decided by the Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in their respective jurisdiction. "c. Jurisdiction over tax collection cases as herein provided: "1. Exclusive original jurisdiction in tax collection cases involving final and executory assessments for taxes, fees, charges and penalties: Provided, however, That collection cases where the principal amount of taxes and fees, exclusive of charges and penalties, claimed is less than One million pesos (P1,000,000.00) shall be tried by the proper Municipal Trial Court, Metropolitan Trial Court and Regional Trial Court. "2. Exclusive appellate jurisdiction in tax collection cases: "a. Over appeals from the judgments, resolutions or orders of the Regional Trial Courts in tax collection cases originally decided by them, in their respective territorial jurisdiction. "b. Over petitions for review of the judgments, resolutions or orders of the Regional Trial Courts in the Exercise of their appellate jurisdiction over tax collection cases originally decided by the Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts, in their respective jurisdiction." Section 8. Section 10 of the same Act is hereby amended to read as follows: "SEC. 10. Power to Administer Oaths; Issue Subpoena; Punish for Contempt. - The Court shall have the power to administer oaths, receive evidence, summon witnesses by subpoena duces tecum, subject in all respects to the same restrictions and qualifications as applied in judicial proceedings of a similar nature. The Court shall, in accordance with Rule seventy-one of the Rules of Court, have the power to punish for contempt for the same causes, under the same procedure and with the same penalties provided therein." Section 9. Section 11 of the same Act is hereby amended to read as follows: "SEC. 11. Who May Appeal; Mode of Appeal; Effect of Appeal. - Any party adversely affected by a decision, ruling or inaction of the Commissioner of Internal Revenue, the Commissioner of Customs, the Secretary of Finance, the Secretary of Trade and Industry or the Secretary of Agriculture or the Central Board of Assessment Appeals or the Regional Trial Courts may file an appeal with the CTA within thirty (30) days after the receipt of such decision or ruling or after the expiration of the period fixed by law for action as referred to in Section 7(a)(2) herein. "Appeal shall be made by filing a petition for review under a procedure analogous to that provided for under Rule 42 of the 1997 Rules of Civil Procedure with the CTA within thirty (30) days from the receipt of the decision or ruling or in the case of inaction as herein provided, from the expiration of the period fixed by law to act thereon. A Division of the CTA shall hear the appeal: Provided, however, That with respect to decisions or rulings of the Central Board of Assessment Appeals and the Regional Trial Court in the exercise of its appellate jurisdiction appeal shall be made by filing a petition for review under a procedure analogous to that provided for under rule 43 of the 1997 Rules of Civil Procedure with the CTA, which shall hear the case en banc. "All other cases involving rulings, orders or decisions filed with the CTA as provided for in Section 7 shall be raffled to its Divisions. A party adversely affected by a ruling, order or decision of a Division of the CTA may file a motion for reconsideration of new trial before the same Division of the CTA within fifteens (15) days from notice thereof: Provide, however, That in criminal cases, the general rule applicable in regular Courts on matters of prosecution and appeal shall likewise apply. "No appeal taken to the CTA from the decision of the Commissioner of Internal Revenue or the Commissioner of Customs or the Regional Trial Court, provincial, city or municipal treasurer or the Secretary of Finance, the Secretary of Trade and Industry and Secretary of Agriculture, as the case may
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Secretary of Finance, the Secretary of Trade and Industry and Secretary of Agriculture, as the case may be shall suspend the payment, levy, distraint, and/or sale of any property of the taxpayer for the satisfaction of his tax liability as provided by existing law: Provided, however, That when in the opinion of the Court the collection by the aforementioned government agencies may jeopardize the interest of the Government and/or the taxpayer the Court any stage of the proceeding may suspend the said collection and require the taxpayer either to deposit the amount claimed or to file a surety bond for not more than double the amount with the Court. "In criminal and collection cases covered respectively by Section 7(b) and (c) of this Act, the Government may directly file the said cases with the CTA covering amounts within its exclusive and original jurisdiction." Section 10. Section 13 of the same Act is hereby amended to read as follows: "SEC. 13. Decision, Maximum Period for Termination of Cases. - Cases brought before the Court shall be decided in accordance with Section 15, paragraph (1), Article VIII (Judicial Department) of the 1987 Constitution. Decisions of the Court shall be in writing, stating clearly and distinctly the facts and the law on which they are based, and signed by the Justices concurring therein. The Court shall provide for the publication of its decision in the Official Gazette in such form and manner as may best be adopted for public information and use. "The Justices of the Court shall each certify on their applications for leave, and upon salary vouchers presented by them for payment, or upon the payrolls under which their salaries are paid, that all proceedings, petitions and motions which have been submitted to the Court for determination or decision for a period required by the law or the Constitution, as the case may be, have been determined or decided by the Court on or before the date of making the certificate, and no leave shall be granted and no salary shall be paid without such certificate." Section 11. Section 18 of the same Act is hereby amended as follows: "SEC. 18. Appeal to the Court of Tax Appeals En Banc. - No civil proceeding involving matter arising under the National Internal Revenue Code, the Tariff and Customs Code or the Local Government Code shall be maintained, except as herein provided, until and unless an appeal has been previously filed with the CTA and disposed of in accordance with the provisions of this Act. "A party adversely affected by a resolution of a Division of the CTA on a motion for reconsideration or new trial, may file a petition for review with the CTA en banc." "SEC. 19. Review by Certiorari. - A party adversely affected by a decision or ruling of the CTA en banc may file with the Supreme Court a verified petition for review on certiorari pursuant to Rule 45 of the 1997 Rules of Civil Procedure." Section 13. Distraint of Personal Property and/or Levy on Real Property. - Upon the issuance of any ruling, order or decision by the CTA favorable to the national government, the CTA shall issue an order authorizing the Bureau of Internal Revenue, through the Commissioner to seize and distraint any goods, chattels, or effects, and the personal property, including stocks and other securities, debts, credits, bank accounts, and interests in and rights to personal property and/or levy the real property of such persons in sufficient quantity to satisfy the tax or charge together with any increment thereto incident to delinquency. This remedy shall not be exclusive and shall not preclude the Court from availing of other means under the Rules of Court. Section 14. Retention of Personnel; Security of Tenure; Upgrading of Positions and Salaries. - All existing permanent personnel of the CTA shall not be adversely affected by this Act. They shall continue in office and shall not be removed or separated from the service except for cause as provided for by existing laws. Further, the present positions and salaries of personnel shall be upgraded to the level of their counterparts in the Court of Appeals. Section 15. Transitory Provisions. - In consonance with the above provision, the incumbent Presiding Judge and Associate Judges shall comprise a Division pending the constitution of the entire Court. Section 16. Appropriations. - The amount necessary to carry out the provisions of this Act shall be included in the General Appropriations Act of the year following its enactment into law and thereafter. Section 17. Repealing Clause. - All laws, executive orders, executive issuances or letter of instructions, or any part thereof, inconsistent with or contrary to the provisions of this Act are hereby deemed repealed, amended or modified accordingly. Section 18. Separability Clause. - If for any reason, any section or provision of this Act shall be declared unconstitutional or invalid, the other parts thereof not affected thereby shall remain valid.
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unconstitutional or invalid, the other parts thereof not affected thereby shall remain valid. Section 19. Effectivity Clause - This Act shall take effect after fifteen (15) days following its publication in at least (2) newspapers of general circulation. Approved,

FRANKLIN DRILON JOSE DE VENECIA JR. President of the Senate Speaker of the House of Representatives This Act which is a consolidation of Senate Bill No. 2712 and House Bill No. 6673 was finally passed by the Senate and the House of Representatives on December 8, 2003 and February 2, 2004, respectively. OSCAR G. YABES ROBERTO P. NAZARENO Secretary of Senate Secretary General House of Represenatives Approved: March 30 2004 GLORIA MACAPAGAL-ARROYO President of the Philippines
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RA 8249
Sunday, November 14, 2010 11:21 PM

Republic Act No. 8249 February 5, 1997 AN ACT FURTHER DEFINING THE JURISDICTION OF THE SANDIGANBAYAN, AMENDING FOR THE PURPOSE PRESIDENTIAL DECREE NO. 1606, AS AMENDED, PROVIDING FUNDS THEREFOR, AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:: Section 1. The first paragraph of Section 1 of Presidential Decree No. 1606, as amended, is hereby further amended to read as follows: "SECTION 1. Sandiganbayan; Composition, Qualifications; Tenure; Removal and Compensation. - A special court, of the same level as the Court of Appeals and possessing all the inherent powers of a court ofjustice, to be known as the Sandiganbayan is hereby created composed of a presiding justice and fourteen associate justices who shall be appointed by the President." Section 2. Section 2 of the same decree is hereby further amended to read as follows: "SECTION 2. Official Station; Place of Holding Sessions. - The Sandiganbayan shall have its principal office in the Metro Manila area and shall hold sessions thereat for the trial and determination of cases filed with it: Provided, however, That cases originating from the principal geographical regions of the country, that is, from Luzon, Visayas or Mindanao, shall be heard in their respective regions of origin except only when the greater convenience of the accused and of the witnesses, or other compelling considerations require the contrary, in which instance a case originating from one geographical region may be heard in another geographical region: Provided, further, That for this purpose the presiding justice shall authorize any divisions of the court to hold sessions at any time and place outside Metro Manila and, where the interest of justice so requires, outside the territorial boundaries of the Philippines. The Sandiganbayan may require the services of the personnel and the use of facilities of the courts or other government offices where any of the divisions is holding sessions and the personnel of such courts or offices shall be subject to the orders of the Sandiganbayan." Section 3. The second paragraph of Section 3 of the same decree is hereby deleted. Section 4. Section 4 of the same decree is hereby further amended to read as follows: "a. Violations of Republic Act No. 3019, as amended, otherwise known as the Anti-graft and Corrupt Practices Act, Republic Act No. 1379, and Chapter II, Section 2, Title VII, Book II of the Revised Penal Code, where one or more of the accused are officials occupying the following positions in the government whether in a permanent, acting or interim capacity, at the time of the commission of the offense: "(1) Officials of the executive branch occupying the positions of regional director and higher, otherwise classified as Grade '27' and higher, of the Compensation and Position Classification Act of 1989 (Republic Act No. 6758), specifically including: "(a) Provincial governors, vice-governors, members of the sangguniang panlalawigan and provincial treasurers, assessors, engineers and other provincial department heads; "(b) City mayors, vice-mayors, members of the sangguniang panlungsod, city treasurers, assessors engineers and other city department heads; "(c) Officials of the diplomatic service occupying the position of consul and higher; "(d) Philippine army and air force colonels, naval captains, and all officers of higher rank; "(e) Officers of the Philippine National Police while occupying the position of provincial director and those holding the rank of senior superintendent or higher; "(f) City and provincial prosecutors and their assistants, and officials and prosecutors in the Office of the Ombudsman and special prosecutor; "(g) Presidents, directors or trustees, or managers of government-owned or -controlled corporations, state universities or educational institutions or foundations; "(2) Members of Congress and officials thereof classified as Grade'27'and up under the Compensation and Position Classification Act of 1989; "(3) Members of the judiciary without prejudice to the provisions of the Constitution;
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"(3) Members of the judiciary without prejudice to the provisions of the Constitution; "(4) Chairmen and members of Constitutional Commissions, without prejudice to the provisions of the Constitution; and "(5) All other national and local officials classified as Grade'27'and higher under the Compensation and Position Classification Act of 1989. "b. Other offenses orfelonies whether simple or complexed with other crimes committed by the public officials and employees mentioned in subsection a of this section in relation to their office. "c. Civil and criminal cases filed pursuant to and in connection with Executive Order Nos. 1, 2, 14 and 14A, issued in 1986. "In cases where none of the accused are occupying positions corresponding to salary grade '27' or higher, as prescribed in the said Republic Act No. 6758, or military or PNP officers mentioned above, exclusive original jurisdiction thereof shall be vested in the proper regional trial court, metropolitan trial court, municipal trial court and municipal circuit trial court ' as the case may be, pursuant to their respective jurisdiction as provided in Batas Pambansa Blg. 129, as amended. "The Sandiganbayan shall exercise exclusive appellate jurisdiction over final judgments, resolutions or orders or regional trial courts whether in the exercise of their own original jurisdiction orof their appellate jurisdiction as herein provided. "The Sandiganbayan shall have exclusive original jurisdiction over petitions for the issuance of the writs of mandamus, prohibition, certiorari, habeas corpus, injunctions, and other ancillary writs and processes in aid of its appellate jurisdiction and over petitions of similar nature, including quo warranto, arising or that may arise in cases filed or which may be filed under Executive Order Nos. 1,2,14 and 14-A, issued in 1986: Provided, That the jurisdiction over these petitions shall not be exclusive of the Supreme Court. The procedure prescribed in Batas Pambansa Blg. 129, as well as the implementing rules that the Supreme Court has promulgated and may hereafter promulgate, relative to appeals/petitions for review to the Court of Appeals, shall apply to appeals and petitions for review filed with the Sandiganbayan. In all cases elevated to the Sandiganbayan and from the Sandiganbayan to the Supreme Court, the Office of the Ombudsman, through its special prosecutor, shall represent the People of the Philippines, except in cases filed pursuant to Executive Order Nos. 1, 2, 14 and 14-A, issued in 1986. "In case private individuals are charged as co-principals, accomplices or accessories with the public officers or employees, including those employed in govemment-owned or controlled corporations, they shall be tried jointly with said public officers and employees in the proper courts which shall exercise exclusive jurisdiction over them. "Any provisions of law or Rules of Court to the contrary notwithstanding, the criminal action and the corresponding civil action for the recovery of civil liability shall at all times be simultaneously instituted with, and jointly determined in, the same proceeding by the Sandiganbayan or the appropriate courts, the filing of the criminal action being deemed to necessarily carry with it the filing of the civil action, and no right to reserve the filing of such civil action separately from the criminal action shall be recognized: Provided, however, That where the civil action had therefore been filed separately but judgment therein has not yet been rendered, and the criminal case is hereafter filed with the Sandiganbayan or the appropriate court, said civil action shall be transferred to the Sandiganbayan or the appropriate court, as the case may be, for consolidation and joint determination with the criminal action, otherwise the separate civil action shall be deemed abandoned." Section 5. Section 7 of the same decree is hereby further amended to read as follows: 'SECTION 7. Form, Finality and Enforcement of Decisions. - All decisions and final orders determining the merits of a case or finally disposing of the action or proceedings of the Sandijanbayan shall contain complete findings of the facts and the law on which they are based, on all issues properly raised before it and necessary in deciding the case. "A petition for reconsideration of any final order or decision may be filed within fifteen (15) days from promulgation or notice of the final order on judgment, and such motion for reconsideration shall be decided within thirty (30) days from submission thereon. "Decisions and final orders ofthe Sandiganbyan shall be appealable to the Supreme Court by petition for review on certiorari raising pure questions of law in accordance with Rule 45 of the Rules of Court. Whenever, in any case decided by the Sandiganbayan, the penalty of reclusion perpetua, life imprisonment or death is imposed, the decision shall be appealable to the Supreme Court in the manner prescribed in the Rules of Court.
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prescribed in the Rules of Court. "Judgments and orders of the Sandiganbayan shall be executed and enforced in the manner provided by law. "Decisions and final orders of other courts in cases cognizable by said courts under this decree as well as those rendered by them in the exercise of their appellate jurisdiction shall be appealable to, or be reviewable by, the Sandiganbayan in the manner provided by Rule 122 of the Rules of the Court. "In case, however, the imposed penalty by the Sandiganbayan or the regional trial court in the proper exercise of their respective jurisdictions, is death, review by the Supreme Court shall be automatic, whether or not accused files an appeal." Section 6. Appropriations. - The amount necessary to carry out the initial implementation of this Act shall be charged against the current fiscal year appropriations of the Sandiganbayan. Thereafter, such sums as may be needed for its continued implementation shall be included in the annual General Appropriations Act. Section 7. Transitory Provision. - This Act shall apply to all cases pending in any court over which trial has not begun as of the approval hereof Section 8. Separability of Provisions. - If for any reason any provision of this Act is declared unconstitutional or invalid, such parts or portions not affected thereby shall remain in full force and effect. Section 9. Repealing Clause. - All acts, decrees, general orders and circulars, or parts thereof inconsistent with the provisions of this Act are hereby repealed or modified accordingly. Section 10. Effectivity. - This Act shall take effect fifteen (15) days after its complete publication in at least two (2) newspapers of general circulation. Approved: (Sgd.) ERNESTO M. MACEDA (Sgd.) JOSE DE VENECIA, JR. President of the Senate Speaker of the House of Representatives This Act which is a consolidation of House Bill No. 5323 and Senate Bill No. 844 was finally passed by the House of Representatives and the Senate on January 28,1997 and January 29, 1997, respectively. (Sgd.) LORENZO E. LEYNES, JR. (Sgd.) ROBERTO P. NAZARENO Secretary of Senate Secretary General House of Represenatives Approved: February 5, 1997 (Sgd.) FIDEL V. RAMOS President of the Philippines
Pasted from <http://www.lawphil.net/statutes/repacts/ra1997/ra_8249_1997.html>

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BP 129, as amended by RA 7691, Sec. 5
Sunday, November 14, 2010 11:21 PM

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Bokingco v. CA, GR No. 161739, May 4, 2006
Sunday, November 14, 2010 11:22 PM

G.R. No. 161739 May 4, 2006 ALFREDO BOKINGO vs. CA, HEIRS OF CELESTINO BUSA, represented by FELICIDAD BUSA-PANAL and ERNESTO M. CAMPOS CALLEJO, SR., J.: Before the Court is the petition for review on certiorari filed by Alfredo Bokingo seeking to reverse and set aside the Decision1 dated December 17, 2003 of the Court of Appeals (CA) in CA-G.R. SP No. 71510 which dismissed his petition for certiorari filed therewith. The factual and procedural antecedents are as follows: Petitioner Alfredo Bokingo is one of the defendants in the complaint for injunction and damages filed by Ernesto Campos, the Heirs of Celestino Busa,2 the Heirs of Felicidad Busa-Panal 3 and the Heirs of Concordia Busa.4 The complaint was filed with the Regional Trial Court (RTC) of Butuan City, Branch 3 thereof, and docketed as Civil Case No. 1003. The complaint alleged as follows: CAUSE OF ACTION 3. Plaintiffs [herein respondents] are co-owners of the land subject matter. By virtue of the right of representation, the heirs of FELICIDAD BUSA-PANAL and CONCORDIA S. BUSA and REYNALDO S. BUSA, respectively; 4. Defendants in this case are heirs of MIGUEL BOKINGO; 5. Defendants ALFREDO BOKINGO [herein petitioner], WENCESLAO B. AMBRAY, JR., ROSA B. AMBRAY, CELIA A. ALMORA and JOSELITO B. AMBRAY, filed an application for titling of a parcel of land before the Department of Environment and Natural Resources, Office of the CENRO, Ochoa Avenue, Butuan City; 6. The land subject matter of the application of defendants is a parcel of land located at Baan (Buhangin), Butuan City, containing an area of 2.1600 hectares, more or less; 7. The land subject matter of the application for titling of defendants is a parcel of land inherited by plaintiffs from their father, the late CELESTINO BUSA. This parcel of land is described particularly as: TAX DECLARATION NO. GR.-10-002-0189-A "A parcel of land covered by Tax Declaration No. GR-10-002-0189-A, situated in Buhangin, Butuan City, containing an area of 2.1600 HAS., more or less. Bounded on the North – Elisa Busa, South Pastor Ago, East – Ho. Miguel Bokingo and on the West – Baan River." 8. When plaintiffs knew of defendants’ application, plaintiffs filed a protest against defendants’ application on February 5, 1996. Attached as Annex A is the Protest; 9. On November 24, 1998, the Provincial Environment and Natural Resources Officer, HUGO I. BAÑOSIA, resolved the Protest in favor of Plaintiffs-the protestant in the DENR case. Attached as Annex B is the order; 10. On January 6, 1999, the Provincial Environment and Natural Resources Officer, HUGO T. BAÑOSIA, issued a certification stating that the order dated November 24, 1998 has become final and executory. Attached as Annex C is the machine copy of the Certification; 11. On September 9, 1999, the same DENR Officer HUGO T. BAÑOSIA issued an Order of Execution which states that: In complying herewith, the Land Management Officer III concerned should be instructed to set forth the whole proceeding in writing signed by the parties and witnesses, if possible, submit and return to this Office within sixty (60) days from receipt hereof, to be used as evidence should it be necessary to institute any action, criminal or otherwise, against any party who may refuse to obey the same. SO ORDERED, Butuan City, September 9, 1999. 12. Plaintiffs requested on June 23, 1999, for a Survey Authority to survey the land subject matter of this case before the CENRO Office of Butuan City. Attached as Annex D is the Survey Application; 13. On July 30, 1999, A Survey Authority was issued by the CENRO of Butuan City, authorizing plaintiff ENGR. ERNESTO M. CAMPOS, JR., to survey the land subject matter of the DENR case and the case at bar. Attached as Annex E is the Survey Authority;
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the case at bar. Attached as Annex E is the Survey Authority; 14. On November 18, 1999 at 11:00 A.M., FELICIDAD BUSA-PANAL, MILAGROS BUSA SIMOGAN, TERESITA BUSA LINAO, JIMMY BUSA-PANAL, son of Felicidad Busa-Panal, ALFREDO BUSA-PANAL, son-in-law of Concordia S. Busa, personnel of the Butuan PNP and the personnel of ENGR. ERNESTO M. CAMPOS went to the area subject matter of this case to survey the land. Unfortunately, Defendant SPO3 FERDINAND B. DACILLO and Defendant ALFREDO BOKINGO, representatives of defendants, told the survey group to stop and not to enter the area subject matter of this case. Attached as Annex F is the report of CENRO Officer who [was] present during the November 18, 1999 survey which was stopped by SPO3 FERDINAND B. DACILLO and ALFREDO BOKINGO; 15. Plaintiff[s] availed of the Barangay Justice System to resolve the controversy regarding the survey but to no avail, defendants still refused to allow plaintiffs to survey the area. Thus, a Certificate to File Action was issued by the Lupong Tagapamayapa. Copy of the same is hereto attached as Annex G; 16. The defendants did not exercise honesty and good faith in their acts which is a violation of Article 19 of the New Civil Code, and which entitles the plaintiffs for damages; 17. The acts of defendants constrained the plaintiff*s+ to litigate and to incur attorney’s fees in the amount of PhP10,000.00 plus litigation expenses estimated at PhP10,000.00. PRAYER Wherefore, premises considered, it is respectfully prayed that after hearing, this Honorable Court: 1) Enjoin permanently the illegal acts of defendants of preventing the survey of the land subject matter of this case by ENGR. ERNESTO M. CAMPOS; 2) Order defendants to pay plaintiffs the sum of P10,000.00 as attorney’s fees, P10,000.00 as litigation expenses; 3) Order defendants to pay damages to plaintiff; 4) Such other reliefs just and reasonable under the circumstances. 5 Petitioner Bokingo, as one of the defendants in the above complaint, filed with the court a quo a motion to dismiss alleging that the latter has no jurisdiction over the subject matter of the claim. Specifically, petitioner Bokingo contended that it could be gleaned from the complaint that the issue between the parties involved the possession of the land. As such, the assessed value of the land was crucial to determine the court’s jurisdiction over the subject matter in accordance with either Section 19(2) 6 or Section 33(3) 7 of Batasang Pambansa Blg. 1298 as amended by Republic Act No. 7691. If the assessed value thereof is P20,000.00 or less, then the Municipal Trial Court (MTC) has jurisdiction over the subject matter. Otherwise, jurisdiction is with the RTC. Petitioner Bokingo pointed out in his Motion to Dismiss that the assessed value of the land subject matter of the complaint was not indicated. Nonetheless, he proffered that based on his father’s tax declaration covering the subject land, its assessed value was only P14,410.00. Consequently, it was allegedly clear that the court a quo, a Regional Trial Court, had no jurisdiction over the subject matter of the complaint filed by the respondents. Rather, in view of the assessed value of the subject land which was allegedly less than the P15,000.00, jurisdiction properly belonged to the MTC. Petitioner Bokingo thus urged the court a quo to dismiss the complaint filed by the respondents for lack of jurisdiction over the subject matter thereof. Acting thereon, the court a quo issued the Order dated March 13, 2002 denying the motion to dismiss. It pointed out that the complaint’s allegation is that the respondents, as plaintiffs, are entitled to have the subject land surveyed after petitioner Bokingo’s and his co-claimants’ application for the titling of the subject land was dismissed by the Provincial Environment and Natural Resources Officer (PENRO) and the respondents were declared to have a better right to file a public land application covering the same. Further, the relief being sought in the complaint is injunction in order that the respondents’ right to survey the subject land would not be defeated. Based on these allegations, the court a quo held that it had jurisdiction over the subject matter of the claim under Section 2 of Rule 58 of the Rules of Court which provides in part that "[a] preliminary injunction may be granted by the court where the action or proceeding is pending." It accordingly denied petitioner Bokingo’s motion to dismiss the complaint for lack of jurisdiction.1avvphil.net Petitioner Bokingo forthwith filed with the Court of Appeals a petition for certiorari alleging grave abuse of discretion on the part of the court a quo in denying his motion to dismiss.
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of discretion on the part of the court a quo in denying his motion to dismiss. On December 17, 2003, the CA rendered the assailed Decision dismissing the said petition for lack of merit, in fact and in law. It ruled that the remedy of certiorari is unavailing to petitioner Bokingo because "an order denying a motion to dismiss is interlocutory and cannot be the subject of the extraordinary petition for certiorari or mandamus."9 It was noted that the records fail to disclose that petitioner Bokingo filed a motion for reconsideration of the order of the court a quo. According to the CA, such omission warranted the outright dismissal of the petition for certiorari. Finally, it was not shown or even alleged in the petition that the court a quo, in issuing the assailed order, acted with grave abuse of discretion amounting to lack of jurisdiction. The issue raised by petitioner Bokingo, the CA held, was proper for an appeal but not a petition for certiorari. Aggrieved, petitioner Bokingo now comes to the Court seeking the reversal of the said decision of the CA which dismissed his petition for certiorari filed therewith. He insists that the complaint filed by the respondents with the court a quo is a possessory action. To determine which court, the RTC or MTC, has primary jurisdiction, petitioner Bokingo theorizes that it is necessary that the assessed value of the land be alleged in the initiatory complaint. Absent such allegation, the court where the case was filed should allegedly preliminarily determine the assessed value of the subject property to determine whether or not it has jurisdiction over the subject matter of the claim. In the present case, according to petitioner Bokingo, the assessed value of the subject land is only P14,410.00; hence, jurisdiction thereof properly belongs to the MTC in accordance with Section 19(2) or 33(3) of BP Blg. 129 as amended by RA 7691. The petition is bereft of merit. Preliminarily, the Court finds no reversible error in the dismissal by the CA of petitioner Bokingo’s petition for certiorari filed therewith. As correctly held by the CA, the mere fact that he failed to move for the reconsideration of the court a quo’s order denying his motion to dismiss was sufficient cause for the outright dismissal of the said petition. Certiorari as a special civil action will not lie unless a motion for reconsideration is first filed before the respondent court to allow it an opportunity to correct its errors, if any.10 Petitioner Bokingo did not proffer any compelling reason to warrant deviation by the CA from this salutary rule. As further observed by the CA, petitioner Bokingo failed to even allege grave abuse of discretion on the part of the court a quo in rendering the order denying his motion to dismiss. In any case, the present petition lacks substantive merit. It is axiomatic that the nature of the action and which court has original and exclusive jurisdiction over the same is determined by the material allegations of the complaint, the type of relief prayed for by the plaintiff, and the law in effect when the action is filed, irrespective of whether the plaintiffs are entitled to some or all of the claims asserted therein.11 The caption of the complaint is not determinative of the nature of the action. Nor does the jurisdiction of the court depend upon the answer of the defendant or agreement of the parties, or to the waiver or acquiescence of the parties.12 A careful perusal of the respondents’ complaint, quoted earlier, shows that it alleges that per the Order dated November 24, 1998 of PENRO of Butuan City, petitioner Bokingo’s and his co-claimants’ application for titling of the subject land was rejected. On the other hand, in the same order it was declared that the respondents, if qualified, may file an appropriate public land application covering the same land. It was further alleged that the said order became final and executory, and in connection therewith, the respondents were authorized by the City Environment and Natural Resources Officer (CENRO) of Butuan City to conduct a survey on the subject land. However, petitioner Bokingo, through his representatives, unjustly prevented the conduct of the said survey. Even when the matter regarding the survey was submitted to the Lupong Tagapamayapa, petitioner Bokingo still allegedly refused to allow the respondents to survey the subject land. Hence, the Complaint for Injunction filed by the respondents where the principal relief sought is to enjoin permanently the illegal acts of the defendants therein, including petitioner Bokingo, of preventing the survey of the land subject matter of the case. In this connection, it is well to note that the Court had the occasion to explain that "in determining whether an action is one the subject matter of which is not capable of pecuniary estimation, the nature of the principal action, or remedy sought must first be ascertained. If it is primarily for the recovery of a sum of money, the claim is considered capable of pecuniary estimation, and jurisdiction over the action will depend on the amount of the claim. However, where the basic issue is something other than the right to recover a sum of money, where the money claim is purely incidental to, or a consequence of, the principal relief sought, the action is one where the subject of litigation may not be estimated in
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the principal relief sought, the action is one where the subject of litigation may not be estimated in terms of money, which is cognizable exclusively by Regional Trial Courts."13 As gleaned from the complaint, the principal relief sought by the respondents in their complaint is for the court a quo to issue an injunction against petitioner Bokingo and his representatives to permanently enjoin them from preventing the survey of the subject land. For clarity, the prayer of the complaint reads: Wherefore, premises considered, it is respectfully prayed that after hearing, this Honorable Court: 1) Enjoin permanently the illegal acts of defendants of preventing the survey of the land subject matter of this case by ENGR. ERNESTO M. CAMPOS; 2) Order defendants to pay plaintiffs the sum of P10,000.00 as attorney’s fees, P10,000.00 as litigation expenses; 3) Order defendants to pay damages to plaintiff; 4) Such other reliefs just and reasonable under the circumstances. 14 Contrary to the view posited by petitioner Bokingo, the cause of action of the respondents’ complaint is not, as yet, to recover the possession of the subject land. There are three kinds of actions to judicially recover possession of real property and these are distinguished in this wise: What really distinguishes an action for unlawful detainer from a possessory action (accion publiciana) and from a reinvindicatory action (accion reinvindicatoria) is that the first is limited to the question of possession de facto. An unlawful detainer suit (accion interdictal) together with forcible entry are the two forms of an ejectment suit that may be filed to recover possession of real property. Aside from the summary action of ejectment, accion publiciana or the plenary action to recover the right of possession and accion reinvindicatoria or the action to recover ownership which includes recovery of possession, make up the three kinds of actions to judicially recover possession.15 Significantly, the respondents’ complaint has not sought to recover the possession or ownership of the subject land. Rather, it is principally an action to enjoin petitioner Bokingo and his representatives from committing acts that would tend to prevent the survey of the subject land. It cannot be said therefore that it is one of a possessory action. The respondents, as plaintiffs in the court a quo, to be entitled to the injunctive relief sought, need to establish the following requirements: (1) the existence of a right to be protected; and (2) that the acts against which the injunction is to be directed are violative of the said right. As such, the subject matter of litigation is incapable of pecuniary estimation and properly cognizable exclusively by the court a quo, a Regional Trial Court under Section 19 (1) of BP Blg. 129, as amended by RA 7691: SEC. 19. Jurisdiction in Civil Cases. – Regional Trial Courts shall exercise exclusive original jurisdiction: (1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation; xxx Hence, the court a quo did not err in denying petitioner Bokingo’s motion to dismiss. WHEREFORE, premises considered, the petition is DENIED and the assailed Decision dated December 17, 2003 of the Court of Appeals in CA-G.R. SP No. 71510 is AFFIRMED in toto.
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RCP v. CA GR 136109 Aug 1, 2002;
Sunday, November 14, 2010 11:22 PM

[G.R. No. 136109. August 1, 2002] RADIO COMMUNICATIONS OF THE PHILIPPINES, INC., vs. COURT OF APPEALS and MANUEL DULAWON YNARES-SANTIAGO, J.: This is a petition for review of the decision of the Court of Appeals in CA-G.R. SP No. 45987 dated April 30, 1998 and its resolution dated October 15, 1998 denying the motion for reconsideration. On June 18, 1997, private respondent Manuel Dulawon filed with the Regional Trial Court of Tabuk, Kalinga, Branch 25, a complaint for breach of contract of lease with damages against petitioner Radio Communications of the Philippines, Inc. (RCPI). Petitioner filed a motion to dismiss the complaint for lack of jurisdiction contending that it is the Municipal Trial Court which has jurisdiction as the complaint is basically one for collection of unpaid rentals in the sum of P84,000.00, which does not exceed the jurisdictional amount of P100,000.00 for Regional Trial Courts. The trial court denied the motion to dismiss, as well as petitioner’s motion for reconsideration. Hence, petitioner went to the Court of Appeals on a petition for certiorari. On April 30, 1998, the Court of Appeals dismissed the petition. The dispositive portion thereof reads: WHEREFORE, the petition is hereby DENIED DUE COURSE and is DISMISSED. Costs against petitioner. SO ORDERED. The motion for reconsideration of the foregoing decision was denied on October 15, 1998. Hence, this petition. The issue for resolution in this petition is whether or not the Regional Trial Court has jurisdiction over the complaint filed by private respondent. Pertinent portion of Batas Pambansa Blg. 129, as amended by Republic Act No. 7691, provides: SEC. 19. Jurisdiction in civil cases. – Regional Trial Courts shall exercise exclusive original jurisdiction: (1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation; xxx xx x xxx (8) In all other cases in which the demand, exclusive of interest, damages of whatever kind, attorney’s fees, litigation expenses, and costs or the value of the property in controversy exceeds One hundred thousand pesos (P100,000.00) or, in such other cases in Metro Manila, where the demand, exclusive of the abovementioned items exceeds Two hundred thousand pesos (P200,000.00). Corollary thereto, Administrative Circular No. 09-94, states: xxx xx x xxx 2. The exclusion of the term “damages of whatever kind” in determining the jurisdictional amount under Section 19 (8) and Section 33 (1) of B.P. 129, as amended by R.A. No. 7691, applies to cases where the damages are merely incidental to or a consequence of the main cause of action. However, in cases where the claim for damages is the main cause of action, or one of the causes of action, the amount of such claim shall be considered in determining the jurisdiction of the court. xxx xx x x x x. In Russell, et al., v. Vestil, et al., the Court held that in determining whether an action is one the subject matter of which is not capable of pecuniary estimation, the nature of the principal action or remedy sought must first be ascertained. If it is primarily for the recovery of a sum of money, the claim is considered capable of pecuniary estimation, and jurisdiction over the action will depend on the amount of the claim. However, where the basic issue is something other than the right to recover a sum of money, where the money claim is purely incidental to, or a consequence of, the principal relief sought, the action is one where the subject of the litigation may not be estimated in terms of money, which is cognizable exclusively by Regional Trial Courts. It is axiomatic that jurisdiction over the subject matter of a case is conferred by law and is determined by the allegations in the complaint and the character of the relief sought, irrespective of whether the plaintiff is entitled to all or some of the claims asserted therein. In the case at bar, the allegations in the complaint plainly show that private respondent’s cause of action is breach of contract. The pertinent portion of the complaint recites: xxx xx x xxx
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is breach of contract. The pertinent portion of the complaint recites: xxx xx x xxx 2. That sometime during the end of the year 1995, defendant through its appropriate officials negotiated with plaintiff the lease of a portion of the latter’s building x x x 3. That the lease contract was effective for a period of three (3) years of from January 1, 1996 to January 1, 1998 with advance payment for the year 1996. The advance was not however given in lump sum but on installment. One check that was given in payment of one month’s rental for 1996 was even stale and had to be changed only after demand; 4. That as per contract the monthly rental for 1997 was P3,300.00 while for 1998, it is P3,700.00; 5. That the defendant surreptitiously removed its equipments and other personalities from the leased premises and failed to pay rentals due for the months of January to March 1997 to the damage and prejudice of plaintiff; that this failure and refusal on the part of plaintiff accelerated the payment of all rentals for each month for the years 1997 and 1998; 6. That the acts of defendant amounts to a breach of contract which is unlawful and malicious, as in fact, it caused plaintiff serious anxiety, emotional stress, and sleepless nights for which he is entitled to moral damages; 7. That plaintiff conveyed his feelings to Mr. Ronald C. Manalastas as evidenced by a letter dated January 7, 1997 a copy of which is hereto attached to form part hereof as Annex “B”. This was later followed by a letter of plaintiff’s counsel a machine copy of which is hereto attached to form part hereof and marked as Annex “C”. Both these letters landed on deaf ears thereby aggravating the worries/anxieties of plaintiff; 8. That the period agreed is for the benefit of both parties and any unilateral termination constitutes breach of contract; 9. That defendant actually used the leased premises during the year 1996; that had it not been for the contract, plaintiff could have leased the premises to other persons for business purposes; that this unlawful and malicious breach of contract cannot be lawfully countenanced hence defendant must be taught a lesson by being ordered to pay exemplary damages; xxx xx x x x x. It is settled that a breach of contract is a cause of action either for specific performance or rescission of contracts. In Manufacturer’s Distributors, Inc. v. Siu Liong, the Court held that actions for specific performance are incapable of pecuniary estimation and therefore fall under the jurisdiction of the Regional Trial Court. Here, the averments in the complaint reveal that the suit filed by private respondent was primarily one for specific performance as it was aimed to enforce their three-year lease contract which would incidentally entitle him to monetary awards if the court should find that the subject contract of lease was breached. As alleged therein, petitioner’s failure to pay rentals due for the period from January to March 1997, constituted a violation of their contract which had the effect of accelerating the payment of monthly rentals for the years 1997 and 1998. The same complaint likewise implied a premature and unilateral termination of the term of the lease with the closure of and removal all communication equipment in the leased premises. Under the circumstances, the court has to scrutinize the facts and the applicable laws in order to determine whether there was indeed a violation of their lease agreement that would justify the award of rentals and damages. The prayer, therefore, for the payment of unpaid rentals in the amount of P84,000.00 plus damages consequent to the breach is merely incidental to the main action for specific performance. Similarly, in Manufacturer’s Distributor’s Inc., the Court explained – xxx xx x xxx That plaintiff’s complaint also sought the payment by the defendant of P3,376.00, plus interest and attorney’s fees, does not give a pecuniary estimation to the litigation, for the payment of such amounts can only be ordered as a consequence of the specific performance primarily sought. In other words, such payment would be but an incident or consequence of defendant's liability for specific performance. If no such liability is judicially declared, the payment can not be awarded. Hence, the amounts sought do not represent the value of the subject of litigation. “Subject matter over which jurisdiction can not be conferred by consent, has reference, not to the res or property involved in the litigation nor to a particular case, but to the class of cases, the purported subject of litigation, the nature of the action and of the relief sought (Appeal of Maclain, 176 NW. 817).” Specifically, it has been held that: “The Court has no jurisdiction of a suit for specific performance of a contract, although the damages
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“The Court has no jurisdiction of a suit for specific performance of a contract, although the damages alleged for its breach, if permitted, are within the amount of which that court has jurisdiction.” (Mebane Cotton Breeding Station. vs. Sides, 257 SW. 302; 21 C.J.S. 59, note). xxx xx x xxx Clearly, the action for specific performance case, irrespective of the amount of rentals and damages sought to be recovered, is incapable of pecuniary estimation, hence cognizable exclusively by the Regional Trial Court. The trial court, therefore, did not err in denying petitioner’s motion to dismiss. WHEREFORE, in view of all the foregoing, the petition is DENIED and the assailed decision of the Court of Appeals in CA-G.R. SP No. 45987 is AFFIRMED.
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Honorio Bernardo v. Heirs of Eusebio Villegas GR 183357 Mar 15, 2010;
Sunday, November 14, 2010 11:22 PM

HONORIO BERNARDO, Petitioner, vs. HEIRS OF EUSEBIO VILLEGAS, Respondents. DE C I S I O N PEREZ, J.: This petition for review on certiorari under Rule 45 of the Rules of Court seeks to assail the validity of the Decision1 dated 21 April 2008 of the Court of Appeals, which affirmed the judgment of the Regional Trial Court (RTC) of Binangonan, Rizal in Civil Case No. R-00-035. This controversy stemmed from a Complaint dated 14 November 2000 for accion publiciana filed by respondent Heirs of Eusebio Villegas against petitioner Honorio Bernardo, Romeo Gaza (Gaza) and Monina Francisco (Francisco). Respondents had earlier filed an ejectment case against the trio, docketed as Civil Case No. 99-065 with the Municipal Trial Court (MTC) of Binangonan, Rizal, which case was dismissed on the ground of lack of jurisdiction for having been filed beyond the one-year prescriptive period for filing a forcible entry case.2 Respondents alleged in the Complaint that their father, Eusebio Villegas, is the registered owner of a parcel of land covered by Transfer Certificate of Title (TCT) No. 46891 with an area of 18,369 square meters and situated in Barangay Pag-asa, Binangonan, Rizal; that petitioner, by stealth and in the guise of merely grazing his cattle, surreptitiously entered into possession of a portion of respondents’ land; that petitioner conspired and confederated with Gaza and Francisco by illegally constructing their own houses on the subject land; that the issue of possession was brought to the barangay for conciliation but no settlement was reached by the parties; and that petitioner, Gaza and Francisco had forcibly, unlawfully and unjustly possessed and continue to possess the subject property and had refused to vacate the same. In his Answer, petitioner denied taking possession of any portion of the property of respondents. He argued that the cause of action is barred by the judgment in the ejectment case. He claimed that he had been in possession of his land since the early 1950s.3 As he did before the MTC, petitioner also alleged lack of jurisdiction on the part of the RTC. Gaza alleged that he has been occupying an abandoned river bed adjacent to the property allegedly owned by respondents.4 Gaza averred that he entered into a written agreement with petitioner, who claimed to own the land and allowed him to build a nipa hut thereon.5 An ocular inspection was conducted by the trial court judge. On 5 March 2007, the trial court rendered judgment in favor of respondents and ordered petitioner, Gaza and Francisco to vacate the subject land covered by TCT No. 46891 and to pay jointly and severally respondents the amount of P30,000.00 as attorney’s fees and the cost of suit.6 The trial court held that the suit, being an accion publiciana, falls within its jurisdiction. It found that the houses of petitioner and Gaza were inside the titled property of respondents. Its findings were based on the testimony of one of the respondents, Estelito Villegas; the relocation plan prepared by Engineer Rico J. Rasay; and the Technical Report on Verification Survey submitted by Engineer Robert C. Pangyarihan, petitioner’s own witness.7 The trial court noted that petitioner failed to present any title or tax declaration to prove ownership or possessory right.8 On appeal, the Court of Appeals affirmed the ruling of the trial court. In his appeal, petitioner questioned the jurisdiction of the trial court over the subject matter and argued that in their complaint, the respondents failed to state the assessed value of the property in dispute. The appellate court ruled that petitioner is estopped from raising the issue of jurisdiction because he failed to file a motion to dismiss on such ground and, instead, actively participated in the proceedings before the trial court. With respect to the argument that being indispensable parties, all of the heirs of Eusebio Villegas should have been impleaded as parties, the appellate court disagreed and invoked Article 487 of the Civil Code,
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have been impleaded as parties, the appellate court disagreed and invoked Article 487 of the Civil Code, which provides that any one of the co-owners may bring an action for ejectment. The appellate court construed said provision to cover all kinds of actions for recovery of possession.9 The appellate court sustained the trial court’s finding that the portions of the land occupied by petitioner and Gaza are owned by respondents. The appellate court likewise ruled that respondents could not be guilty of laches considering that Estelito Villegas, upon seeing for the first time in 1996 that petitioner was already building his house on the premises, verbally asked him to discontinue the construction.10 His motion for reconsideration having been denied, petitioner filed the instant petition. Petitioner insists that the trial court had no jurisdiction over the subject matter of the action for failure of respondents to allege the assessed value of the property involved in their complaint. Petitioner belies the ruling of the appellate court that he failed to raise objections before the trial court. Petitioner reiterates that he raised the defense of lack of jurisdiction as early as in his Answer filed before the trial court. Moreover, he argues that even if he did not raise the defense of lack of jurisdiction, the trial court should have dismissed the complaint motu proprio. Petitioner disputes the application to him of the doctrine of estoppel by laches in Tijam v. Sibonghanoy.11 Petitioner avers that unlike in Tijam, he raised the issue of jurisdiction, not only in his answer, but also in his appeal. 12 Respondents defend the ruling of the Court of Appeals and maintain that petitioner is estopped from challenging the jurisdiction of the trial court.13 The issue presented before this Court is simple: Whether or not estoppel bars petitioner from raising the issue of lack of jurisdiction. Under Batas Pambansa Bilang 129, the plenary action of accion publiciana must be brought before the regional trial courts. With the modifications introduced by Republic Act No. 769114 in 1994, the jurisdiction of the regional trial courts was limited to real actions where the assessed value exceeds P20,000.00, and P50,000.00 where the action is filed in Metro Manila, thus: SEC. 19. Jurisdiction in civil cases. — Regional Trial Courts shall exercise exclusive original jurisdiction: xxx x (2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, where the assessed value of the property involved exceeds Twenty thousand pesos (P20,000.00) or, for civil actions in Metro Manila, where such value exceeds Fifty thousand pesos (P50,000.00) except actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts. Under the law as modified, jurisdiction is determined by the assessed value of the property. A reading of the complaint shows that respondents failed to state the assessed value of the disputed land. The averments read: xxx x 3. EUSEBIO VILLEGAS, deceased father of hte plaintiffs, is the registered owner of a parcel of land situated in Barangay Pag-asa (formerly Barangay Tayuman), Binangonan, Rizal with a land area of 18,369 square meters. The same is covered by and embraced in Transfer Certificate of Title No. 46891 of the Registry of Deeds for the Province of Rizal. x x x. 4. Plaintiffs are the legal heirs of EUSEBIO VILLEGAS and succeeded to the subject parcel of land by virtue of their inheritance rights as compulsory heirs of said deceased Eusebio Villegas and upon his death, immediately took over and were enjoying the peaceful possession of the said parcel of land and exercising said rights of possession and ownership thereof; 5. That sometime in 1996, defendant Honorio Bernardo, by stealth and in guise of merely grazing his cattle, without the consent of the plaintiffs, surreptitiously entered into the possession of a portion of the subject parcel of land. Employing threats and intimidations, he claimed later that the area he illegally occupied is purportedly not part and parcel of the land owned by the plaintiff’s predecessor, Eusebio Villegas, and forcibly fenced and built his house on the portion of land he illegally occupied; 6. Not being content with his own forcible and unlawful invasion, usurpation and incursion into the plaintiffs’ parcel of land, and in furtherance of his desire to forcibly exclude the plaintiffs of their lawful and for possession of the subject portion of plaintiffs’ parcel of land, defendant Bernardo, conspired and confederated with defendants Romeo Gaza and Monina Francisco by surreptitiously and illegally constructing their own houses on the subject parcel of land through stealth and intimidation;
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constructing their own houses on the subject parcel of land through stealth and intimidation; 7. That the issue of the possession of the subject parcel of land was brought under the Barangay Justice System in 1996 for conciliation but, no settlement was reached by the parties. Copies of the Certifications issued by the Barangay for that matter is hereto attached and marked as Annex "B"; 8. That the defendants have forcibly, unlawfully, and unjustly dispossessed and still continues to forcibly, unlawfully, and unjustly dispossesses the plaintiffs of their lawful rights of possession and ownership on a portion of the subject property since 1966 up to the present; 9. Because of the unjust refusal of the defendants to vacate the premises, plaintiffs were constrained to engage the services of counsel to protect their interest on the property for an agreed attorney’s fee of P50,000.00, and have incurred litigation expenses[;] 10. By reason of the unlawful and forcible invasion by the defendants of the property of the plaintiffs which was accompanied by threats and intimidation, the plaintiffs have suffered and continue to suffer anxiety and sleepless nights for which the defendants should be made to indemnify by way of moral damages in the amount of at least P100,000.00; 11. To serve as an example to others who might be minded to commit similar wanton and unlawful acts, defendants should be held answerable for exemplary damages of not less than P50,000.00.15 This fact was noted by the Court of Appeals in its Decision but it proceeded to rule in this wise: Records show that at the time plaintiffs-appellees filed their complaint below, R.A. No. 7691 which amended Batas Pambansa Blg. 129 was already in effect. However, the complaint failed to allege the assessed value of the real property involved. Although appellant indeed raised the issue of jurisdiction in his answer, he had not filed a motion to dismiss on this ground nor reiterated the matter thereafter but actively participated in the proceedings after the denial of his demurrer to evidence anchored on the failure of the plaintiffs to identify in their complaint all the heirs of the registered owner and supposed lack of technical description of the property in the certificate of title. Indeed, appellant is now estopped to question the trial court’s jurisdiction over the subject matter and nature of the case having actively pursued throughout the trial, by filing various pleadings and presenting all relevant documentary and testimonial evidence, his theory that the portion occupied by him is not covered by the torrens title of Eusebio Villegas.16 We agree. As already shown, nowhere in the complaint was the assessed value of the subject property ever mentioned. There is no showing on the face of the complaint that the RTC has jurisdiction exclusive of the MTC. Indeed, absent any allegation in the complaint of the assessed value of the property, it cannot readily be determined which of the two trial courts had original and exclusive jurisdiction over the case.17 The general rule is that the jurisdiction of a court may be questioned at any stage of the proceedings.18 Lack of jurisdiction is one of those excepted grounds where the court may dismiss a claim or a case at any time when it appears from the pleadings or the evidence on record that any of those grounds exists, even if they were not raised in the answer or in a motion to dismiss. 19 The reason is that jurisdiction is conferred by law, and lack of it affects the very authority of the court to take cognizance of and to render judgment on the action.20 However, estoppel sets in when a party participates in all stages of a case before challenging the jurisdiction of the lower court. One cannot belatedly reject or repudiate its decision after voluntarily submitting to its jurisdiction, just to secure affirmative relief against one's opponent or after failing to obtain such relief. The Court has, time and again, frowned upon the undesirable practice of a party submitting a case for decision and then accepting the judgment, only if favorable, and attacking it for lack of jurisdiction when adverse.21 In Tijam, the Court held that it is iniquitous and unfair to void the trial court’s decision for lack of jurisdiction considering that it was raised only after fifteen (15) years of tedious litigation, thus: The facts of this case show that from the time the Surety became a quasi-party on July 31, 1948, it could have raised the question of the lack of jurisdiction of the Court of First Instance of Cebu to take cognizance of the present action by reason of the sum of money involved which, according to the law then in force, was within the original exclusive jurisdiction of inferior courts. It failed to do so. Instead, at several stages of the proceedings in the court a quo as well as in the Court of Appeals, it invoked the jurisdiction of said courts to obtain affirmative relief and submitted its case for a final adjudication on the merits. It was only after an adverse decision was rendered by the Court of Appeals that it finally
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the merits. It was only after an adverse decision was rendered by the Court of Appeals that it finally woke up to raise the question of jurisdiction. Were we to sanction such conduct on its part, We would in effect be declaring as useless all the proceedings had in the present case since it was commenced on July 19, 1948 and compel the judgment creditors to go up their Calvary once more. The inequity and unfairness of this is not only patent but revolting.22 The principle of justice and equity as espoused in Tijam should be applied in this case. The MTC dismissed the ejectment case upon its ruling that the case is for accion publiciana. It did not assert jurisdiction over the case even if it could have done so based on the assessed value of the property subject of the accion publiciana. And there was no showing, indeed, not even an allegation, that the MTC was not aware of its jurisdictional authority over an accion publiciana involving property in the amount stated in the law. Moreover, petitioner did not bring up the issue of jurisdictional amount that would have led the MTC to proceed with the trial of the case. Petitioner obviously considered the dismissal to be in his favor. When, as a result of such dismissal, respondents brought the case as accion publiciana before the RTC, petitioner never brought up the issue of jurisdictional amount. What petitioner mentioned in his Answer before the RTC was the generally phrased allegation that "the Honorable Court has no jurisdiction over the subject matter and the nature of the action in the aboveentitled case."23 This general assertion, which lacks any basis, is not sufficient. Clearly, petitioner failed to point out the omission of the assessed value in the complaint. Petitioner actively participated during the trial by adducing evidence and filing numerous pleadings, none of which mentioned any defect in the jurisdiction of the RTC. It was only on appeal before the Court of Appeals, after he obtained an adverse judgment in the trial court, that petitioner, for the first time, came up with the argument that the decision is void because there was no allegation in the complaint about the value of the property. Clearly, petitioner is estopped from questioning the jurisdiction of the RTC. We note that the decisions of the RTC and of the Court of Appeals discussed extensively the merits of the case, which has been pending for nearly ten (10) years. It was handled by two (2) judges and its records had to be reconstituted after the fire that gutted the courthouse. 24 If we were to accede to petitioner’s prayer, all the effort, time and expenses of parties who participated in the litigation would be wasted. Quite obviously, petitioner wants a repetition of the process hoping for the possibility of a reversal of the decision. The Court will not countenance such practice. Significantly, the Technical Report on Verification Survey25 by Engineer Robert C. Pangyarihan, which was attached to and formed part of the records, contained a tax declaration26 indicating that the subject property has an assessed value of P110,220.00. It is basic that the tax declaration indicating the assessed value of the property enjoys the presumption of regularity as it has been issued by the proper government agency.27 Under Republic Act No. 7691, the RTC in fact has jurisdiction over the subject matter of the action.1avvphi1> Taking into consideration the decision of the MTC proclaiming that the case is one for accion publiciana and the assessed value of the property as evidenced by the case records, jurisdiction pertains, rightfully so, with the RTC. Perforce, the petition should be denied. WHEREFORE, the decision of the Court of Appeals dated 21 April 2008, affirming the judgment of the Regional Trial Court of Binangonan, Rizal dated 5 March 2007, is AFFIRMED. SO ORDERED.
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Encarnacion v. Amigo, GR No. 169793 Sep 15, 2006
Sunday, November 14, 2010 11:22 PM

G.R. No. 169793 September 15, 2006 VICTORIANO M. ENCARNACION vs. NIEVES AMIGO YNARES-SANTIAGO, J.: This petition for review assails the June 30, 2005 Decision1 of the Court of Appeals in CA-G.R. SP No. 73857, ordering the remand of Civil Case No. Br. 20-1194 to the Regional Trial Court of Cauayan, Isabela, Branch 20, for further proceedings. The antecedent facts are as follows: Petitioner Victoriano M. Encarnacion is the registered owner of Lot No. 2121-B-1, consisting of 100 square meters and covered by TCT No. T-256650; and Lot No. 2121-B-2 consisting of 607 square meters with TCT No. T-256651, located at District 1, National Hi-way, Cauayan, Isabela. Said two lots originally form part of Lot No. 2121, a single 707 square meter track of land owned by Rogelio Valiente who sold the same to Nicasio Mallapitan on January 18, 1982. On March 21, 1985, Mallapitan sold the land to Victoriano Magpantay. After the death of the latter in 1992, his widow, Anita N. Magpantay executed an Affidavit of Waiver2 on April 11, 1995 waving her right over the property in favor of her son-in-law, herein petitioner, Victoriano Encarnacion. Thereafter, the latter caused the subdivision of the land into two lots3 and the issuance of titles in his name on July 18, 1996.4 Respondent Nieves Amigo allegedly entered the premises and took possession of a portion of the property sometime in 1985 without the permission of the then owner, Victoriano Magpantay. Said occupation by respondent continued even after TCT Nos. T-256650 and T-256651 were issue to petitioner. Consequently, petitioner, through his lawyer sent a letter5 dated Febuary 1, 2001 demanding that the respondent vacate the subject property. As evidenced by the registry return receipt, the demand letter was delivered by registered mail to the respondent on February 12, 2001. Notwithstanding receipt of the demand letter, respondent still refused to vacate the subject property. Thereafter, on March 2, 2001, petitioner filed a complaint6 for ejectment, damages with injunction and prayer for restraining order with the Municipal Trial Court in Cities of Isabela which was docketed as CV-01-030. In his Answer, respondent alleged that he has been in actual possession and occupation of a portion of the subject land since 1968 and that the issuance of Free Patent and titles in the name of petitioner was tainted with irregularities.7 On October 24, 2001, the Municipal Trial Court in Cities rendered judgment, which reads: WHERE[FO]RE, there being a preponderance of evidence, a JUDGMENT is hereby rendered in favor of the plaintiff VICTORIANO M. ENCARNACION and against the defendant NIEVES AMIGOE (sic) as follows: a) ORDERING the defendant to vacate the portion of the parcels of land described in Transfer Certificates of Title Nos. T-256650 and T-256651 he is now occupying and surrender it to the plaintiff; b) ORDERING the defendant to pay the plaintiff the sum of FIVE THOUSAND PESOS (P5,000) as attorney's fees, and c) ORDERING the defendant to pay rentals equivalent [to] P500.00 per month from February, 2001 until the portion of the land occupied by him is surrendered to the plaintiff. COSTS against the defendant. SO ORDERED.8 On appeal, the Regional Trial Court of Cauayan, Isabela, Branch 20, ruled as follows: WHEREFORE, judgment is hereby rendered dismissing the case on the ground that as the Municipal Court had no jurisdiction over the case, this Court acquired no appellate jurisdiction thereof. Costs against plaintiff-appellee. SO ORDERED.9 Aggrieved, petitioner filed a petition for review10 under Rule 42 of the Rules of Court before the Court of Appeals which promulgated the assailed Decision remanding the case to the Regional Trial Court. The
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Appeals which promulgated the assailed Decision remanding the case to the Regional Trial Court. The dispositive portion thereof reads: WHEREFORE, premises considered, this case is hereby REMANDED to Branch 20, Regional Trial Court of Cauayan, Isabela for further proceedings. No costs. SO ORDERED.11 Hence the present petition raising the sole issue: [WHETHER] THE COURT OF APPEALS ERRED IN HOLDING THAT THE PROPER ACTION IN THIS CASE IS ACCION PUBLICIANA AND NOT UNLAWFUL DETAINER AS DETERMINED BY THE ALLEGATIONS IN THE COMPLAINT FILED BY PETITIONER. 12 The petition lacks merit. In this jurisdiction, the three kinds of actions for the recovery of possession of real property are: 1. Accion interdictal, or an ejectment proceeding which may be either that for forcible entry (detentacion) or unlawful detainer (desahucio), which is a summary action for recovery of physical possession where the dispossession has not lasted for more than one year, and should be brought in the proper inferior court; 2. Accion publiciana or the plenary action for the recovery of the real right of possession, which should be brought in the proper Regional Trial Court when the dispossession has lasted for more than one year; and 3. Accion reinvindicatoria or accion de reivindicacion, which is an action for the recovery of ownership which must be brought in the proper Regional Trial Court. 13 Based on the foregoing distinctions, the material element that determines the proper action to be filed for the recovery of the possession of the property in this case is the length of time of dispossession. Under the Rules of Court, the remedies of forcible entry and unlawful detainer are granted to a person deprived of the possession of any land or building by force, intimidation, threat, strategy, or stealth, or a lessor, vendor, vendee, or other person against whom the possession of any land or building is unlawfully withheld after the expiration or termination of the right to hold possession by virtue of any contract, express or implied, or the legal representatives or assigns of any such lessor, vendor, vendee, or other person. These remedies afford the person deprived of the possession to file at any time within one year after such unlawful deprivation or withholding of possession, an action in the proper Municipal Trial Court against the person or persons unlawfully withholding or depriving of possession, or any person or persons claiming under them, for the restitution of such possession, together with damages and costs.14 Thus, if the dispossession has not lasted for more than one year, an ejectment proceeding is proper and the inferior court acquires jurisdiction. On the other hand, if the dispossession lasted for more than one year, the proper action to be filed is an accion publiciana which should be brought to the proper Regional Trial Court. After a careful evaluation of the evidence on record of this case, we find that the Court of Appeals committed no reversible error in holding that the proper action in this case is accion publiciana; and in ordering the remand of the case to the Regional Trial Court of Cauayan, Isabela, Branch 20, for further proceedings. Well settled is the rule that jurisdiction of the court over the subject matter of the action is determined by the allegations of the complaint at the time of its filing, irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein. What determines the jurisdiction of the court is the nature of the action pleaded as appearing from the allegations in the complaint. The averments therein and the character of the relief sought are the ones to be consulted.15 On its face, the complaint must show enough ground for the court to assume jurisdiction without resort to parol testimony.16 From the allegations in the complaint, it appears that the petitioner became the owner of the property on April 11, 1995 by virtue of the waiver of rights executed by his mother-in-law. He filed the complaint for ejectment on March 2, 2001 after his February 1, 2001 letter to the respondent demanding that the latter vacate the premises remained unheeded. While it is true that the demand letter was received by the respondent on February 12, 2001, thereby making the filing of the complaint for ejectment fall within the requisite one year from last demand for complaints for unlawful detainer, it is also equally true that petitioner became the owner of the subject lot in 1995 and has been since that time deprived possession of a portion thereof. From the date of the petitioner's dispossession in 1995 up to his filing of his complaint for ejectment in 2001, almost 6 years have elapsed. The length of time that the petitioner
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his complaint for ejectment in 2001, almost 6 years have elapsed. The length of time that the petitioner was dispossessed of his property made his cause of action beyond the ambit of an accion interdictal and effectively made it one for accion publiciana. After the lapse of the one-year period, the suit must be commenced in the Regional Trial Court via an accion publiciana which is a suit for recovery of the right to possess. It is an ordinary civil proceeding to determine the better right of possession of realty independently of title. It also refers to an ejectment suit filed after the expiration of one year from the accrual of the cause of action or from the unlawful withholding of possession of the realty. 17 Previously, we have held that if the owner of the land knew that another person was occupying his property way back in 1977 but the said owner only filed the complaint for ejectment in 1995, the proper action would be one for accion publiciana and not one under the summary procedure on ejectment. As explained by the Court: We agree with the Court of Appeals that if petitioners are indeed the owners of the subject lot and were unlawfully deprived of their right of possession, they should present their claim before the regional trial court in an accion publiciana or an accion reivindicatoria, and not before the metropolitan trial court in a summary proceeding for unlawful detainer or forcible entry. For even if one is the owner of the property, the possession thereof cannot be wrested from another who had been in physical or material possession of the same for more than one year by resorting to a summary action for ejectment. 18 Hence, we agree with the Court of Appeals when it declared that: The respondent's actual entry on the land of the petitioner was in 1985 but it was only on March 2, 2001 or sixteen years after, when petitioner filed his ejectment case. The respondent should have filed an accion publiciana case which is under the jurisdiction of the RTC. However, the RTC should have not dismissed the case. Section 8, Rule 40 of the Rules of Court provides: SECTION 8. Appeal from orders dismissing case without trial; lack of jurisdiction. — If an appeal is taken from an order of the lower court dismissing the case without a trial on the merits, the Regional Trial Court may affirm or reverse it, as the case may be. In case of affirmance and the ground of dismissal is lack of jurisdiction over the subject matter, the Regional Trial Court, if it has jurisdiction thereover, shall try the case on the merits as if the case was originally filed with it. In case of reversal, the case shall be remanded for further proceedings. If the case was tried on the merits by the lower court without jurisdiction over the subject matter, the Regional Trial Court on appeal shall not dismiss the case if it has original jurisdiction thereof, but shall decide the case in accordance with the preceding section, without prejudice to the admission of amended pleadings and additional evidence in the interest of justice. The RTC should have taken cognizance of the case. If the case is tried on the merits by the Municipal Court without jurisdiction over the subject matter, the RTC on appeal may no longer dismiss the case if it has original jurisdiction thereof. Moreover, the RTC shall no longer try the case on the merits, but shall decide the case on the basis of the evidence presented in the lower court, without prejudice to the admission of the amended pleadings and additional evidence in the interest of justice.19 WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated June 30, 2005 in CAG.R. SP No. 73857 ordering the remand of Civil Case No. Br. 20-1194 to the Regional Trial Court of Cauayan, Isabela, Branch 20, for further proceedings, is AFFIRMED.
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Planters Products v. Fertiphil GR 166006 Mar 14, 2008
Sunday, November 14, 2010 11:28 PM

[G.R. No. 166006, March 14, 2008] PLANTERS PRODUCTS, INC. vs. FERTIPHIL CORPORATION,

FACTS:
Petitioner PPI and private respondent Fertiphil are private corporations incorporated under Philippine laws.[3] They are both engaged in the importation and distribution of fertilizers, pesticides and agricultural chemicals.

On June 3, 1985, then President Ferdinand Marcos, exercising his legislative powers, issued LOI No. 1465 which provided, among others, for the imposition of a capital recovery component (CRC) on the domestic sale of all grades of fertilizers in the Philippines.[4] The LOI provides: 3. The Administrator of the Fertilizer Pesticide Authority to include in its fertilizer pricing formula a capital contribution component of not less than P10 per bag. This capital contribution shall be collected until adequate capital is raised to make PPI viable. Such capital contribution shall be applied by FPA to all domestic sales of fertilizers in the Philippines.[5] Pursuant to the LOI, Fertiphil paid P10 for every bag of fertilizer it sold in the domestic market to the Fertilizer and Pesticide Authority (FPA). FPA then remitted the amount collected to the Far East Bank and Trust Company, the depositary bank of PPI. Fertiphil paid P6,689,144 to FPA from July 8, 1985 to January 24, 1986.
After the 1986 Edsa Revolution, FPA voluntarily stopped the imposition of the P10 levy. With the return of democracy, Fertiphil demanded from PPI a refund of the amounts it paid under LOI No. 1465, but PPI refused to accede to the demand.[7] Fertiphil filed a complaint for collection and damages[8] against FPA and PPI with the RTC in Makati. It questioned the constitutionality of LOI No. 1465 for being unjust, unreasonable, oppressive, invalid and an unlawful imposition that amounted to a denial of due process of law.[9] Fertiphil alleged that the LOI solely favored PPI, a privately owned corporation, which used the proceeds to maintain its monopoly of the fertilizer industry. In its Answer,[10] FPA, through the Solicitor General, countered that the issuance of LOI No. 1465 was a valid exercise of the police power of the State in ensuring the stability of the fertilizer industry in the country. It also averred that Fertiphil did not sustain any damage from the LOI because the burden imposed by the levy fell on the ultimate consumer, not the seller. HELD: On Locus Standi

Whether or not the complaint for collection is characterized as a private or public suit, Fertiphil has locus standi to file it. Fertiphil suffered a direct injury from the enforcement of LOI No. 1465. It was required, and it did pay, the P10 levy imposed for every bag of fertilizer sold on the domestic market. It may be true that Fertiphil has passed some or all of the levy to the ultimate consumer, but that does not disqualify it from attacking the constitutionality of the LOI or from seeking a refund. As seller, it bore the ultimate burden of paying the levy. It faced the possibility of severe sanctions for failure to pay the levy. The fact of payment is sufficient injury to Fertiphil.
On theJurisdiction of the RTC It is settled that the RTC has jurisdiction to resolve the constitutionality of a statute, presidential decree or an executive order. This is clear from Section 5, Article VIII of the 1987 Constitution, which provides: SECTION 5. The Supreme Court shall have the following powers:
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SECTION 5. The Supreme Court shall have the following powers: (2) Review, revise, reverse, modify, or affirm on appeal orcert i o ra ri, as the law or the Rules of Court may provide, final judgments and orders of lower courtsin: (a) All cases in which the constitutionality or validity of any treaty, international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in question. The P10 levy under LOI No. 1465 is an exercise of the power of taxation.

We agree with the RTC that the imposition of the levy was an exercise by the State of its taxation power. While it is true that the power of taxation can be used as an implement of police power,[41] the primary purpose of the levy is revenue generation. If the purpose is primarily revenue, or if revenue is, at least, one of the real and substantial purposes, then the exaction is properly called a tax. The P10 levy under LOI No. 1465 is too excessive to serve a mere regulatory purpose. The levy, no doubt, was a big burden on the seller or the ultimate consumer. It increased the price of a bag of fertilizer by as much as five percent.[45] A plain reading of the LOI also supports the conclusion that the levy was for revenue generation. The LOI expressly provided that the levy was imposed â¼ until adequate capital is raised to make PPI viable. Taxes are exacted only for a public purpose. The P10 levy is unconstitutional because it was not for a public purpose. The levy was imposed to give undue benefit to PPI. The purpose of a law is evident from its text or inferable from other secondary sources. Here, We agree with the RTC and that CA that the levy imposed under LOI No. 1465 was not for a public purpose. First, the LOI expressly provided that the levy be imposed to benefit PPI, a private company. The purpose is explicit from Clause 3 of the law, thus: The Administrator of the Fertilizer Pesticide Authority to include in its fertilizer pricing formula a capital contribution component of not less than P10 per bag. This capital contribution shall be collected until adequate capital is raised to make PPI viable. Such capital contribution shall be applied by FPA to all domestic sales of fertilizers in the Philippines. It is clear from the Letter of Understanding that the levy was imposed precisely to pay the corporate debts of PPI. We cannot agree with PPI that the levy was imposed to ensure the stability of the fertilizer industry in the country. The letter of understanding and the plain text of the LOI clearly indicate that the levy was exacted for the benefit of a private corporation. The LOI is still unconstitutional even if enacted under the police power; it did not promote public interest.
Even if We consider LOI No. 1695 enacted under the police power of the State, it would still be invalid for failing to comply with the test of â¼ lawful subjectsâ¼ and â¼ lawful means.â¼ Jurisprudence states the test as follows: (1) the interest of the public generally, as distinguished from those of particular class, requires its exercise; and (2) the means employed are reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals.

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REYES, R.T., J.: THE Regional Trial Courts (RTC) have the authority and jurisdiction to consider the constitutionality of statutes, executive orders, presidential decrees and other issuances. The Constitution vests that power not only in the Supreme Court but in all Regional Trial Courts. The principle is relevant in this petition for review on certiorari of the Decision[1] of the Court of Appeals (CA) affirming with modification that of the RTC in Makati City,[2] finding petitioner Planters Products, Inc. (PPI) liable to private respondent Fertiphil Corporation (Fertiphil) for the levies it paid under Letter of Instruction (LOI) No. 1465. The Facts Petitioner PPI and private respondent Fertiphil are private corporations incorporated under Philippine laws.[3] They are both engaged in the importation and distribution of fertilizers, pesticides and agricultural chemicals. On June 3, 1985, then President Ferdinand Marcos, exercising his legislative powers, issued LOI No. 1465 which provided, among others, for the imposition of a capital recovery component (CRC) on the domestic sale of all grades of fertilizers in the Philippines.[4] The LOI provides: 3. The Administrator of the Fertilizer Pesticide Authority to include in its fertilizer pricing formula a capital contribution component of not less than P10 per bag. This capital contribution shall be collected until adequate capital is raised to make PPI viable. Such capital contribution shall be applied by FPA to all domestic sales of fertilizers in the Philippines.[5] (Underscoring supplied) Pursuant to the LOI, Fertiphil paid P10 for every bag of fertilizer it sold in the domestic market to the Fertilizer and Pesticide Authority (FPA). FPA then remitted the amount collected to the Far East Bank and Trust Company, the depositary bank of PPI. Fertiphil paid P6,689,144 to FPA from July 8, 1985 to January 24, 1986.[6] After the 1986 Edsa Revolution, FPA voluntarily stopped the imposition of the P10 levy. With the return of democracy, Fertiphil demanded from PPI a refund of the amounts it paid under LOI No. 1465, but PPI refused to accede to the demand.[7] Fertiphil filed a complaint for collection and damages[8] against FPA and PPI with the RTC in Makati. It questioned the constitutionality of LOI No. 1465 for being unjust, unreasonable, oppressive, invalid and an unlawful imposition that amounted to a denial of due process of law.[9] Fertiphil alleged that the LOI solely favored PPI, a privately owned corporation, which used the proceeds to maintain its monopoly of the fertilizer industry. In its Answer,[10] FPA, through the Solicitor General, countered that the issuance of LOI No. 1465 was a valid exercise of the police power of the State in ensuring the stability of the fertilizer industry in the country. It also averred that Fertiphil did not sustain any damage from the LOI because the burden imposed by the levy fell on the ultimate consumer, not the seller.

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RTC Disposition On November 20, 1991, the RTC rendered judgment in favor of Fertiphil, disposing as follows: WHEREFORE, in view of the foregoing, the Court hereby renders judgment in favor of the plaintiff and against the defendant Planters Product, Inc., ordering the latter to pay the former: 1) the sum of P6,698,144.00 with interest at 12% from the time of judicial demand; 2) the sum of P100,000 as attorney’s fees; 3) the cost of suit. SO ORDERED.[11] Ruling that the imposition of the P10 CRC was an exercise of the State’s inherent power of taxation, the RTC invalidated the levy for violating the basic principle that taxes can only be levied for public purpose, viz.: It is apparent that the imposition of P10 per fertilizer bag sold in the country by LOI 1465 is purportedly in the exercise of the power of taxation. It is a settled principle that the power of taxation by the state is plenary. Comprehensive and supreme, the principal check upon its abuse resting in the responsibility of the members of the legislature to their constituents. However, there are two kinds of limitations on the power of taxation: the inherent limitations and the constitutional limitations. One of the inherent limitations is that a tax may be levied only for public purposes: The power to tax can be resorted to only for a constitutionally valid public purpose. By the same token, taxes may not be levied for purely private purposes, for building up of private fortunes, or for the redress of private wrongs. They cannot be levied for the improvement of private property, or for the benefit, and promotion of private enterprises, except where the aid is incident to the public benefit. It is well-settled principle of constitutional law that no general tax can be levied except for the purpose of raising money which is to be expended for public use. Funds cannot be exacted under the guise of taxation to promote a purpose that is not of public interest. Without such limitation, the power to tax could be exercised or employed as an authority to destroy the economy of the people. A tax, however, is not held void on the ground of want of public interest unless the want of such interest is clear. (71 Am. Jur. pp. 371-372) In the case at bar, the plaintiff paid the amount of P6,698,144.00 to the Fertilizer and Pesticide Authority pursuant to the P10 per bag of fertilizer sold imposition under LOI 1465 which, in turn, remitted the amount to the defendant Planters Products, Inc. thru the latter’s depository bank, Far East Bank and Trust Co. Thus, by virtue of LOI 1465 the plaintiff, Fertiphil Corporation, which is a private domestic corporation, became poorer by the amount of P6,698,144.00 and the defendant, Planters Product, Inc., another private domestic corporation, became richer by the amount of P6,698,144.00. Tested by the standards of constitutionality as set forth in the afore-quoted jurisprudence, it is quite evident that LOI 1465 insofar as it imposes the amount of P10 per fertilizer bag sold in the country and orders that the said amount should go to the defendant Planters Product, Inc. is unlawful because it violates the mandate that a tax can be levied only for a public purpose and not to benefit, aid and promote a private enterprise such as Planters Product, Inc.[12] PPI moved for reconsideration but its motion was denied.[13] PPI then filed a notice of appeal with the RTC but it failed to pay the requisite appeal docket fee. In a separate but related proceeding, this Court[14] allowed the appeal of PPI and remanded the case to the CA for proper disposition. CA Decision On November 28, 2003, the CA handed down its decision affirming with modification that of the RTC, with the following fallo: IN VIEW OF ALL THE FOREGOING, the decision appealed from is hereby AFFIRMED, subject to the MODIFICATION

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IN VIEW OF ALL THE FOREGOING, the decision appealed from is hereby AFFIRMED, subject to the MODIFICATION that the award of attorney’s fees is hereby DELETED.[15] In affirming the RTC decision, the CA ruled that the lis mota of the complaint for collection was the constitutionality of LOI No. 1465, thus: The question then is whether it was proper for the trial court to exercise its power to judicially determine the constitutionality of the subject statute in the instant case. As a rule, where the controversy can be settled on other grounds, the courts will not resolve the constitutionality of a law (Lim v. Pacquing, 240 SCRA 649 [1995]). The policy of the courts is to avoid ruling on constitutional questions and to presume that the acts of political departments are valid, absent a clear and unmistakable showing to the contrary. However, the courts are not precluded from exercising such power when the following requisites are obtaining in a controversy before it: First, there must be before the court an actual case calling for the exercise of judicial review. Second, the question must be ripe for adjudication. Third, the person challenging the validity of the act must have standing to challenge. Fourth, the question of constitutionality must have been raised at the earliest opportunity; and lastly, the issue of constitutionality must be the very lis mota of the case (Integrated Bar of the Philippines v. Zamora, 338 SCRA 81 [2000]). Indisputably, the present case was primarily instituted for collection and damages. However, a perusal of the complaint also reveals that the instant action is founded on the claim that the levy imposed was an unlawful and unconstitutional special assessment. Consequently, the requisite that the constitutionality of the law in question be the very lis mota of the case is present, making it proper for the trial court to rule on the constitutionality of LOI 1465.[16] The CA held that even on the assumption that LOI No. 1465 was issued under the police power of the state, it is still unconstitutional because it did not promote public welfare. The CA explained: In declaring LOI 1465 unconstitutional, the trial court held that the levy imposed under the said law was an invalid exercise of the State’s power of taxation inasmuch as it violated the inherent and constitutional prescription that taxes be levied only for public purposes. It reasoned out that the amount collected under the levy was remitted to the depository bank of PPI, which the latter used to advance its private interest. On the other hand, appellant submits that the subject statute’s passage was a valid exercise of police power. In addition, it disputes the court a quo’s findings arguing that the collections under LOI 1465 was for the benefit of Planters Foundation, Incorporated (PFI), a foundation created by law to hold in trust for millions of farmers, the stock ownership of PPI. Of the three fundamental powers of the State, the exercise of police power has been characterized as the most essential, insistent and the least limitable of powers, extending as it does to all the great public needs. It may be exercised as long as the activity or the property sought to be regulated has some relevance to public welfare (Constitutional Law, by Isagani A. Cruz, p. 38, 1995 Edition). Vast as the power is, however, it must be exercised within the limits set by the Constitution, which requires the concurrence of a lawful subject and a lawful method. Thus, our courts have laid down the test to determine the validity of a police measure as follows: (1) the interests of the public generally, as distinguished from those of a particular class, requires its exercise; and (2) the means employed are reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals (National Development Company v. Philippine Veterans Bank, 192 SCRA 257 [1990]). It is upon applying this established tests that We sustain the trial court’s holding LOI 1465 unconstitutional. To be sure, ensuring the continued supply and distribution of fertilizer in the country is an undertaking imbued with public interest. However, the method by which LOI 1465 sought to achieve this is by no means a measure that will promote the public welfare. The government’s commitment to support the successful rehabilitation and continued viability of PPI, a private corporation, is an unmistakable attempt to mask the subject statute’s impartiality. There is no way to treat the self-interest of a favored entity, like PPI, as identical with the general interest of the country’s farmers or even the Filipino people in general. Well to stress, substantive due process exacts fairness and equal protection disallows distinction where none is needed. When a statute’s public

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exacts fairness and equal protection disallows distinction where none is needed. When a statute’s public purpose is spoiled by private interest, the use of police power becomes a travesty which must be struck down for being an arbitrary exercise of government power. To rule in favor of appellant would contravene the general principle that revenues derived from taxes cannot be used for purely private purposes or for the exclusive benefit of private individuals.[17] The CA did not accept PPI’s claim that the levy imposed under LOI No. 1465 was for the benefit of Planters Foundation, Inc., a foundation created to hold in trust the stock ownership of PPI. The CA stated: Appellant next claims that the collections under LOI 1465 was for the benefit of Planters Foundation, Incorporated (PFI), a foundation created by law to hold in trust for millions of farmers, the stock ownership of PFI on the strength of Letter of Undertaking (LOU) issued by then Prime Minister Cesar Virata on April 18, 1985 and affirmed by the Secretary of Justice in an Opinion dated October 12, 1987, to wit: “2. Upon the effective date of this Letter of Undertaking, the Republic shall cause FPA to include in its fertilizer pricing formula a capital recovery component, the proceeds of which will be used initially for the purpose of funding the unpaid portion of the outstanding capital stock of Planters presently held in trust by Planters Foundation, Inc. (Planters Foundation), which unpaid capital is estimated at approximately P206 million (subject to validation by Planters and Planters Foundation) (such unpaid portion of the outstanding capital stock of Planters being hereafter referred to as the ‘Unpaid Capital’), and subsequently for such capital increases as may be required for the continuing viability of Planters. The capital recovery component shall be in the minimum amount of P10 per bag, which will be added to the price of all domestic sales of fertilizer in the Philippines by any importer and/or fertilizer mother company. In this connection, the Republic hereby acknowledges that the advances by Planters to Planters Foundation which were applied to the payment of the Planters shares now held in trust by Planters Foundation, have been assigned to, among others, the Creditors. Accordingly, the Republic, through FPA, hereby agrees to deposit the proceeds of the capital recovery component in the special trust account designated in the notice dated April 2, 1985, addressed by counsel for the Creditors to Planters Foundation. Such proceeds shall be deposited by FPA on or before the 15th day of each month. The capital recovery component shall continue to be charged and collected until payment in full of (a) the Unpaid Capital and/or (b) any shortfall in the payment of the Subsidy Receivables, (c) any carrying cost accruing from the date hereof on the amounts which may be outstanding from time to time of the Unpaid Capital and/or the Subsidy Receivables and (d) the capital increases contemplated in paragraph 2 hereof. For the purpose of the foregoing clause (c), the ‘carrying cost’ shall be at such rate as will represent the full and reasonable cost to Planters of servicing its debts, taking into account both its peso and foreign currency-denominated obligations.” (Records, pp. 42-43) Appellant’s proposition is open to question, to say the least. The LOU issued by then Prime Minister Virata taken together with the Justice Secretary’s Opinion does not preponderantly demonstrate that the collections made were held in trust in favor of millions of farmers. Unfortunately for appellant, in the absence of sufficient evidence to establish its claims, this Court is constrained to rely on what is explicitly provided in LOI 1465 – that one of the primary aims in imposing the levy is to support the successful rehabilitation and continued viability of PPI.[18] PPI moved for reconsideration but its motion was denied.[19] It then filed the present petition with this Court. Issues Petitioner PPI raises four issues for Our consideration, viz.: I THE CONSTITUTIONALITY OF LOI 1465 CANNOT BE COLLATERALLY ATTACKED AND BE DECREED VIA A DEFAULT JUDGMENT IN A CASE FILED FOR COLLECTION AND DAMAGES WHERE THE ISSUE OF CONSTITUTIONALITY IS NOT THE VERY LIS MOTA OF THE CASE. NEITHER CAN LOI 1465 BE CHALLENGED BY ANY PERSON OR ENTITY WHICH HAS NO STANDING TO DO SO. II

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II LOI 1465, BEING A LAW IMPLEMENTED FOR THE PURPOSE OF ASSURING THE FERTILIZER SUPPLY AND DISTRIBUTION IN THE COUNTRY, AND FOR BENEFITING A FOUNDATION CREATED BY LAW TO HOLD IN TRUST FOR MILLIONS OF FARMERS THEIR STOCK OWNERSHIP IN PPI CONSTITUTES A VALID LEGISLATION PURSUANT TO THE EXERCISE OF TAXATION AND POLICE POWER FOR PUBLIC PURPOSES. III THE AMOUNT COLLECTED UNDER THE CAPITAL RECOVERY COMPONENT WAS REMITTED TO THE GOVERNMENT, AND BECAME GOVERNMENT FUNDS PURSUANT TO AN EFFECTIVE AND VALIDLY ENACTED LAW WHICH IMPOSED DUTIES AND CONFERRED RIGHTS BY VIRTUE OF THE PRINCIPLE OF “OPERATIVE FACT” PRIOR TO ANY DECLARATION OF UNCONSTITUTIONALITY OF LOI 1465. IV THE PRINCIPLE OF UNJUST VEXATION (SHOULD BE ENRICHMENT) FINDS NO APPLICATION IN THE INSTANT CASE.[20] (Underscoring supplied)

Our Ruling We shall first tackle the procedural issues of locus standi and the jurisdiction of the RTC to resolve constitutional issues. Fertiphil has locus standi because it suffered direct injury; doctrine of standing is a mere procedural technicality which may be waived. PPI argues that Fertiphil has no locus standi to question the constitutionality of LOI No. 1465 because it does not have a “personal and substantial interest in the case or will sustain direct injury as a result of its enforcement.â €*21+ It asserts that Fertiphil did not suffer any damage from the CRC imposition because â œincidence of the € levy fell on the ultimate consumer or the farmers themselves, not on the seller fertilizer company.”*22+ We cannot agree. The doctrine of locus standi or the right of appearance in a court of justice has been adequately discussed by this Court in a catena of cases. Succinctly put, the doctrine requires a litigant to have a material interest in the outcome of a case. In private suits, locus standi requires a litigant to be a “real party in interest,â € which is defined as â œthe party who stands to be benefited or injured by the judgment in the suit or the party € entitled to the avails of the suit.”*23+ In public suits, this Court recognizes the difficulty of applying the doctrine especially when plaintiff asserts a public right on behalf of the general public because of conflicting public policy issues. [24] On one end, there is the right of the ordinary citizen to petition the courts to be freed from unlawful government intrusion and illegal official action. At the other end, there is the public policy precluding excessive judicial interference in official acts, which may unnecessarily hinder the delivery of basic public services. In this jurisdiction, We have adopted the “direct injury test” determine locus standi in public suits. In to People v. Vera,*25+ it was held that a person who impugns the validity of a statute must have “a personal and substantial interest in the case such that he has sustained, or will sustain direct injury as a result.” The â €œdirect injury test” public suits is similar to the “real party in interest” in rule for private suits under Section 2, Rule 3 of the 1997 Rules of Civil Procedure.[26] Recognizing that a strict application of the “direct injury” may hamper public interest, this Court relaxed test the requirement in cases of “transcendental importance” with “far reaching implications.” Being a or mere procedural technicality, it has also been held that locus standi may be waived in the public interest.[27] Whether or not the complaint for collection is characterized as a private or public suit, Fertiphil has locus standi to file it. Fertiphil suffered a direct injury from the enforcement of LOI No. 1465. It was required, and it did pay, the

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file it. Fertiphil suffered a direct injury from the enforcement of LOI No. 1465. It was required, and it did pay, the P10 levy imposed for every bag of fertilizer sold on the domestic market. It may be true that Fertiphil has passed some or all of the levy to the ultimate consumer, but that does not disqualify it from attacking the constitutionality of the LOI or from seeking a refund. As seller, it bore the ultimate burden of paying the levy. It faced the possibility of severe sanctions for failure to pay the levy. The fact of payment is sufficient injury to Fertiphil. Moreover, Fertiphil suffered harm from the enforcement of the LOI because it was compelled to factor in its product the levy. The levy certainly rendered the fertilizer products of Fertiphil and other domestic sellers much more expensive. The harm to their business consists not only in fewer clients because of the increased price, but also in adopting alternative corporate strategies to meet the demands of LOI No. 1465. Fertiphil and other fertilizer sellers may have shouldered all or part of the levy just to be competitive in the market. The harm occasioned on the business of Fertiphil is sufficient injury for purposes of locus standi. Even assuming arguendo that there is no direct injury, We find that the liberal policy consistently adopted by this Court on locus standi must apply. The issues raised by Fertiphil are of paramount public importance. It involves not only the constitutionality of a tax law but, more importantly, the use of taxes for public purpose. Former President Marcos issued LOI No. 1465 with the intention of rehabilitating an ailing private company. This is clear from the text of the LOI. PPI is expressly named in the LOI as the direct beneficiary of the levy. Worse, the levy was made dependent and conditional upon PPI becoming financially viable. The LOI provided that “the capital contribution shall be collected until adequate capital is raised to make PPI viable.” The constitutionality of the levy is already in doubt on a plain reading of the statute. It is Our constitutional duty to squarely resolve the issue as the final arbiter of all justiciable controversies. The doctrine of standing, being a mere procedural technicality, should be waived, if at all, to adequately thresh out an important constitutional issue. RTC may resolve constitutional issues; the constitutional issue was adequately raised in the complaint; it is the lis mota of the case. PPI insists that the RTC and the CA erred in ruling on the constitutionality of the LOI. It asserts that the constitutionality of the LOI cannot be collaterally attacked in a complaint for collection.[28] Alternatively, the resolution of the constitutional issue is not necessary for a determination of the complaint for collection.[29] Fertiphil counters that the constitutionality of the LOI was adequately pleaded in its complaint. It claims that the constitutionality of LOI No. 1465 is the very lis mota of the case because the trial court cannot determine its claim without resolving the issue.[30] It is settled that the RTC has jurisdiction to resolve the constitutionality of a statute, presidential decree or an executive order. This is clear from Section 5, Article VIII of the 1987 Constitution, which provides: SECTION 5. The Supreme Court shall have the following powers: xx xx (2) Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the Rules of Court may provide, final judgments and orders of lower courts in: (a) All cases in which the constitutionality or validity of any treaty, international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in question. (Underscoring supplied) In Mirasol v. Court of Appeals,[31] this Court recognized the power of the RTC to resolve constitutional issues, thus: On the first issue. It is settled that Regional Trial Courts have the authority and jurisdiction to consider the constitutionality of a statute, presidential decree, or executive order. The Constitution vests the power of judicial review or the power to declare a law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or regulation not only in this Court, but in all Regional Trial Courts.[32]

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In the recent case of Equi-Asia Placement, Inc. v. Department of Foreign Affairs,[33] this Court reiterated: There is no denying that regular courts have jurisdiction over cases involving the validity or constitutionality of a rule or regulation issued by administrative agencies. Such jurisdiction, however, is not limited to the Court of Appeals or to this Court alone for even the regional trial courts can take cognizance of actions assailing a specific rule or set of rules promulgated by administrative bodies. Indeed, the Constitution vests the power of judicial review or the power to declare a law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or regulation in the courts, including the regional trial courts.[34] Judicial review of official acts on the ground of unconstitutionality may be sought or availed of through any of the actions cognizable by courts of justice, not necessarily in a suit for declaratory relief. Such review may be had in criminal actions, as in People v. Ferrer[35] involving the constitutionality of the now defunct Anti-Subversion law, or in ordinary actions, as in Krivenko v. Register of Deeds[36] involving the constitutionality of laws prohibiting aliens from acquiring public lands. The constitutional issue, however, (a) must be properly raised and presented in the case, and (b) its resolution is necessary to a determination of the case, i.e., the issue of constitutionality must be the very lis mota presented.[37] Contrary to PPI’s claim, the constitutionality of LOI No. 1465 was properly and adequately raised in the complaint for collection filed with the RTC. The pertinent portions of the complaint allege: 6. The CRC of P10 per bag levied under LOI 1465 on domestic sales of all grades of fertilizer in the Philippines, is unlawful, unjust, uncalled for, unreasonable, inequitable and oppressive because: xx xx (c) It favors only one private domestic corporation, i.e., defendant PPPI, and imposed at the expense and disadvantage of the other fertilizer importers/distributors who were themselves in tight business situation and were then exerting all efforts and maximizing management and marketing skills to remain viable; xx xx (e) It was a glaring example of crony capitalism, a forced program through which the PPI, having been presumptuously masqueraded as “the” fertilizer industry itself, was the sole and anointed beneficiary; 7. The CRC was an unlawful; and unconstitutional special assessment and its imposition is tantamount to illegal exaction amounting to a denial of due process since the persons of entities which had to bear the burden of paying the CRC derived no benefit therefrom; that on the contrary it was used by PPI in trying to regain its former despicable monopoly of the fertilizer industry to the detriment of other distributors and importers.[38] (Underscoring supplied) The constitutionality of LOI No. 1465 is also the very lis mota of the complaint for collection. Fertiphil filed the complaint to compel PPI to refund the levies paid under the statute on the ground that the law imposing the levy is unconstitutional. The thesis is that an unconstitutional law is void. It has no legal effect. Being void, Fertiphil had no legal obligation to pay the levy. Necessarily, all levies duly paid pursuant to an unconstitutional law should be refunded under the civil code principle against unjust enrichment. The refund is a mere consequence of the law being declared unconstitutional. The RTC surely cannot order PPI to refund Fertiphil if it does not declare the LOI unconstitutional. It is the unconstitutionality of the LOI which triggers the refund. The issue of constitutionality is the very lis mota of the complaint with the RTC. The P10 levy under LOI No. 1465 is an exercise of the power of taxation. At any rate, the Court holds that the RTC and the CA did not err in ruling against the constitutionality of the LOI. PPI insists that LOI No. 1465 is a valid exercise either of the police power or the power of taxation. It claims that the LOI was implemented for the purpose of assuring the fertilizer supply and distribution in the country and for benefiting a foundation created by law to hold in trust for millions of farmers their stock ownership in PPI. Fertiphil counters that the LOI is unconstitutional because it was enacted to give benefit to a private company. The

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Fertiphil counters that the LOI is unconstitutional because it was enacted to give benefit to a private company. The levy was imposed to pay the corporate debt of PPI. Fertiphil also argues that, even if the LOI is enacted under the police power, it is still unconstitutional because it did not promote the general welfare of the people or public interest. Police power and the power of taxation are inherent powers of the State. These powers are distinct and have different tests for validity. Police power is the power of the State to enact legislation that may interfere with personal liberty or property in order to promote the general welfare,[39] while the power of taxation is the power to levy taxes to be used for public purpose. The main purpose of police power is the regulation of a behavior or conduct, while taxation is revenue generation. The “lawful subjects” “lawful means” and tests are used to determine the validity of a law enacted under the police power.[40] The power of taxation, on the other hand, is circumscribed by inherent and constitutional limitations. We agree with the RTC that the imposition of the levy was an exercise by the State of its taxation power. While it is true that the power of taxation can be used as an implement of police power,[41] the primary purpose of the levy is revenue generation. If the purpose is primarily revenue, or if revenue is, at least, one of the real and substantial purposes, then the exaction is properly called a tax.[42] In Philippine Airlines, Inc. v. Edu,[43] it was held that the imposition of a vehicle registration fee is not an exercise by the State of its police power, but of its taxation power, thus: It is clear from the provisions of Section 73 of Commonwealth Act 123 and Section 61 of the Land Transportation and Traffic Code that the legislative intent and purpose behind the law requiring owners of vehicles to pay for their registration is mainly to raise funds for the construction and maintenance of highways and to a much lesser degree, pay for the operating expenses of the administering agency. x x x Fees may be properly regarded as taxes even though they also serve as an instrument of regulation. Taxation may be made the implement of the state's police power (Lutz v. Araneta, 98 Phil. 148). If the purpose is primarily revenue, or if revenue is, at least, one of the real and substantial purposes, then the exaction is properly called a tax. Such is the case of motor vehicle registration fees. The same provision appears as Section 59(b) in the Land Transportation Code. It is patent therefrom that the legislators had in mind a regulatory tax as the law refers to the imposition on the registration, operation or ownership of a motor vehicle as a “tax or fee.”x x x Simply put, if the exaction under Rep. Act 4136 were merely a regulatory fee, the imposition in Rep. Act 5448 need not be an “additional” Rep. Act 4136 also speaks of other “fees” tax. such as the special permit fees for certain types of motor vehicles (Sec. 10) and additional fees for change of registration (Sec. 11). These are not to be understood as taxes because such fees are very minimal to be revenue-raising. Thus, they are not mentioned by Sec. 59(b) of the Code as taxes like the motor vehicle registration fee and chauffeurs’ license fee. Such fees are to go into the expenditures of the Land Transportation Commission as provided for in the last proviso of Sec. 61.[44] (Underscoring supplied) The P10 levy under LOI No. 1465 is too excessive to serve a mere regulatory purpose. The levy, no doubt, was a big burden on the seller or the ultimate consumer. It increased the price of a bag of fertilizer by as much as five percent.[45] A plain reading of the LOI also supports the conclusion that the levy was for revenue generation. The LOI expressly provided that the levy was imposed “until adequate capital is raised to make PPI viable.” Taxes are exacted only for a public purpose. The P10 levy is unconstitutional because it was not for a public purpose. The levy was imposed to give undue benefit to PPI. An inherent limitation on the power of taxation is public purpose. Taxes are exacted only for a public purpose. They cannot be used for purely private purposes or for the exclusive benefit of private persons.[46] The reason for this is simple. The power to tax exists for the general welfare; hence, implicit in its power is the limitation that it should be used only for a public purpose. It would be a robbery for the State to tax its citizens and use the funds generated for a private purpose. As an old United States case bluntly put it: “To lay with one hand, the power of the government on the property of the citizen, and with the other to bestow it upon favored individuals to aid private enterprises and build up private fortunes, is nonetheless a robbery because it is done under the forms of law and is called taxation.”*47+

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The term “public purpose” not defined. It is an elastic concept that can be hammered to fit modern is standards. Jurisprudence states that “public purpose” should be given a broad interpretation. It does not only pertain to those purposes which are traditionally viewed as essentially government functions, such as building roads and delivery of basic services, but also includes those purposes designed to promote social justice. Thus, public money may now be used for the relocation of illegal settlers, low-cost housing and urban or agrarian reform. While the categories of what may constitute a public purpose are continually expanding in light of the expansion of government functions, the inherent requirement that taxes can only be exacted for a public purpose still stands. Public purpose is the heart of a tax law. When a tax law is only a mask to exact funds from the public when its true intent is to give undue benefit and advantage to a private enterprise, that law will not satisfy the requirement of â €œpublic purpose.” The purpose of a law is evident from its text or inferable from other secondary sources. Here, We agree with the RTC and that CA that the levy imposed under LOI No. 1465 was not for a public purpose. First, the LOI expressly provided that the levy be imposed to benefit PPI, a private company. The purpose is explicit from Clause 3 of the law, thus: 3. The Administrator of the Fertilizer Pesticide Authority to include in its fertilizer pricing formula a capital contribution component of not less than P10 per bag. This capital contribution shall be collected until adequate capital is raised to make PPI viable. Such capital contribution shall be applied by FPA to all domestic sales of fertilizers in the Philippines.[48] (Underscoring supplied) It is a basic rule of statutory construction that the text of a statute should be given a literal meaning. In this case, the text of the LOI is plain that the levy was imposed in order to raise capital for PPI. The framers of the LOI did not even hide the insidious purpose of the law. They were cavalier enough to name PPI as the ultimate beneficiary of the taxes levied under the LOI. We find it utterly repulsive that a tax law would expressly name a private company as the ultimate beneficiary of the taxes to be levied from the public. This is a clear case of crony capitalism. Second, the LOI provides that the imposition of the P10 levy was conditional and dependent upon PPI becoming financially “viable.” This suggests that the levy was actually imposed to benefit PPI. The LOI notably does not fix a maximum amount when PPI is deemed financially “viable.” Worse, the liability of Fertiphil and other domestic sellers of fertilizer to pay the levy is made indefinite. They are required to continuously pay the levy until adequate capital is raised for PPI. Third, the RTC and the CA held that the levies paid under the LOI were directly remitted and deposited by FPA to Far East Bank and Trust Company, the depositary bank of PPI.[49] This proves that PPI benefited from the LOI. It is also proves that the main purpose of the law was to give undue benefit and advantage to PPI. Fourth, the levy was used to pay the corporate debts of PPI. A reading of the Letter of Understanding[50] dated May 18, 1985 signed by then Prime Minister Cesar Virata reveals that PPI was in deep financial problem because of its huge corporate debts. There were pending petitions for rehabilitation against PPI before the Securities and Exchange Commission. The government guaranteed payment of PPI’s debts to its foreign creditors. To fund the payment, President Marcos issued LOI No. 1465. The pertinent portions of the letter of understanding read: Republic of the Philippines Office of the Prime Minister Manila LETTER OF UNDERTAKING May 18, 1985 TO: THE BANKING AND FINANCIAL INSTITUTIONS LISTED IN ANNEX A HERETO WHICH ARE CREDITORS (COLLECTIVELY, THE “CREDITORS” OF PLANTERS PRODUCTS, INC. (“PLANTERS” ) ) Gentlemen:

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This has reference to Planters which is the principal importer and distributor of fertilizer, pesticides and agricultural chemicals in the Philippines. As regards Planters, the Philippine Government confirms its awareness of the following: (1) that Planters has outstanding obligations in foreign currency and/or pesos, to the Creditors, (2) that Planters is currently experiencing financial difficulties, and (3) that there are presently pending with the Securities and Exchange Commission of the Philippines a petition filed at Planters’ own behest for the suspension of payment of all its obligations, and a separate petition filed by Manufacturers Hanover Trust Company, Manila Offshore Branch for the appointment of a rehabilitation receiver for Planters. In connection with the foregoing, the Republic of the Philippines (the “Republic”confirms that it considers ) and continues to consider Planters as a major fertilizer distributor. Accordingly, for and in consideration of your expressed willingness to consider and participate in the effort to rehabilitate Planters, the Republic hereby manifests its full and unqualified support of the successful rehabilitation and continuing viability of Planters, and to that end, hereby binds and obligates itself to the creditors and Planters, as follows: xx xx

2. Upon the effective date of this Letter of Undertaking, the Republic shall cause FPA to include in its fertilizer pricing formula a capital recovery component, the proceeds of which will be used initially for the purpose of funding the unpaid portion of the outstanding capital stock of Planters presently held in trust by Planters Foundation, Inc. (“Planters Foundation” which unpaid capital is estimated at approximately P206 million ), (subject to validation by Planters and Planters Foundation) such unpaid portion of the outstanding capital stock of Planters being hereafter referred to as the “Unpaid Capital” and subsequently for such capital increases as ), may be required for the continuing viability of Planters. xx xx

The capital recovery component shall continue to be charged and collected until payment in full of (a) the Unpaid Capital and/or (b) any shortfall in the payment of the Subsidy Receivables, (c) any carrying cost accruing from the date hereof on the amounts which may be outstanding from time to time of the Unpaid Capital and/or the Subsidy Receivables, and (d) the capital increases contemplated in paragraph 2 hereof. For the purpose of the foregoing clause (c), the “carrying cost” shall be at such rate as will represent the full and reasonable cost to Planters of servicing its debts, taking into account both its peso and foreign currency-denominated obligations. REPUBLIC OF THE PHILIPPINES By: (signed) CESAR E. A. VIRATA Prime Minister and Minister of Finance[51] It is clear from the Letter of Understanding that the levy was imposed precisely to pay the corporate debts of PPI. We cannot agree with PPI that the levy was imposed to ensure the stability of the fertilizer industry in the country. The letter of understanding and the plain text of the LOI clearly indicate that the levy was exacted for the benefit of a private corporation. All told, the RTC and the CA did not err in holding that the levy imposed under LOI No. 1465 was not for a public purpose. LOI No. 1465 failed to comply with the public purpose requirement for tax laws. The LOI is still unconstitutional even if enacted under the police power; it did not promote public interest. Even if We consider LOI No. 1695 enacted under the police power of the State, it would still be invalid for failing to comply with the test of “lawful subjects” “lawful means.” and Jurisprudence states the test as follows: (1) the interest of the public generally, as distinguished from those of particular class, requires its exercise; and (2) the means employed are reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals.[52]

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upon individuals.[52] For the same reasons as discussed, LOI No. 1695 is invalid because it did not promote public interest. The law was enacted to give undue advantage to a private corporation. We quote with approval the CA ratiocination on this point, thus: It is upon applying this established tests that We sustain the trial court’s holding LOI 1465 unconstitutional. To be sure, ensuring the continued supply and distribution of fertilizer in the country is an undertaking imbued with public interest. However, the method by which LOI 1465 sought to achieve this is by no means a measure that will promote the public welfare. The government’s commitment to support the successful rehabilitation and continued viability of PPI, a private corporation, is an unmistakable attempt to mask the subject statute’s impartiality. There is no way to treat the self-interest of a favored entity, like PPI, as identical with the general interest of the country’s farmers or even the Filipino people in general. Well to stress, substantive due process exacts fairness and equal protection disallows distinction where none is needed. When a statute’s public purpose is spoiled by private interest, the use of police power becomes a travesty which must be struck down for being an arbitrary exercise of government power. To rule in favor of appellant would contravene the general principle that revenues derived from taxes cannot be used for purely private purposes or for the exclusive benefit of private individuals. (Underscoring supplied) The general rule is that an unconstitutional law is void; the doctrine of operative fact is inapplicable. PPI also argues that Fertiphil cannot seek a refund even if LOI No. 1465 is declared unconstitutional. It banks on the doctrine of operative fact, which provides that an unconstitutional law has an effect before being declared unconstitutional. PPI wants to retain the levies paid under LOI No. 1465 even if it is subsequently declared to be unconstitutional. We cannot agree. It is settled that no question, issue or argument will be entertained on appeal, unless it has been raised in the court a quo.[53] PPI did not raise the applicability of the doctrine of operative fact with the RTC and the CA. It cannot belatedly raise the issue with Us in order to extricate itself from the dire effects of an unconstitutional law. At any rate, We find the doctrine inapplicable. The general rule is that an unconstitutional law is void. It produces no rights, imposes no duties and affords no protection. It has no legal effect. It is, in legal contemplation, inoperative as if it has not been passed.[54] Being void, Fertiphil is not required to pay the levy. All levies paid should be refunded in accordance with the general civil code principle against unjust enrichment. The general rule is supported by Article 7 of the Civil Code, which provides: ART. 7. Laws are repealed only by subsequent ones, and their violation or non-observance shall not be excused by disuse or custom or practice to the contrary. When the courts declare a law to be inconsistent with the Constitution, the former shall be void and the latter shall govern. The doctrine of operative fact, as an exception to the general rule, only applies as a matter of equity and fair play.[55] It nullifies the effects of an unconstitutional law by recognizing that the existence of a statute prior to a determination of unconstitutionality is an operative fact and may have consequences which cannot always be ignored. The past cannot always be erased by a new judicial declaration.[56] The doctrine is applicable when a declaration of unconstitutionality will impose an undue burden on those who have relied on the invalid law. Thus, it was applied to a criminal case when a declaration of unconstitutionality would put the accused in double jeopardy[57] or would put in limbo the acts done by a municipality in reliance upon a law creating it.[58] Here, We do not find anything iniquitous in ordering PPI to refund the amounts paid by Fertiphil under LOI No. 1465. It unduly benefited from the levy. It was proven during the trial that the levies paid were remitted and deposited to its bank account. Quite the reverse, it would be inequitable and unjust not to order a refund. To do so would unjustly enrich PPI at the expense of Fertiphil. Article 22 of the Civil Code explicitly provides that “every person who, through an act of performance by another comes into possession of something at the expense of the

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person who, through an act of performance by another comes into possession of something at the expense of the latter without just or legal ground shall return the same to him.” We cannot allow PPI to profit from an unconstitutional law. Justice and equity dictate that PPI must refund the amounts paid by Fertiphil. WHEREFORE, the petition is DENIED. The Court of Appeals Decision dated November 28, 2003 is AFFIRMED.

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Badillo v. CA GR 131903 June 26, 2008
Sunday, November 14, 2010 11:28 PM

[G.R. No. 131903, June 26, 2008] OSCAR R. BADILLO, GIOVANNI C. ONG, EDGAR A. RAGASA REPRESENTED BY HEIRS CYNTHIA G. RAGASA, AND THEIR CHILDREN JOSEPH, CATHERINE AND CHARMAINE ALL SURNAMED RAGASA, ROLANDO SANCADA, AND DIONISIO UMBALIN VS. COURT OF APPEALS, REGISTER OF DEEDS OF QUEZON CITY, GOLDKEY DEVELOPMENT CORPORATION, JOSEFA CONEJERO, IGNACIO D. SONORON, PEDRO DEL ROSARIO, AND DOWAL REALTY AND MANAGEMENT SYSTEM COMPANY CARPIO, J.: The Case This petition for certiorari[1] assails the 17 September 1997 Decision[2] of the Court of Appeals in CA-G.R. CV No. 50035. The Court of Appeals dismissed the appeal filed by petitioners Oscar R. Badillo, Giovanni C. Ong, Edgar A. Ragasa, Rolando Sancada, and Dionisio Umbalin (petitioners) questioning the 5 June 1995 Order[3] of Branch 222 of the Regional Trial Court of Quezon City in Civil Case No. Q-91-10510 for Annulment of Documents with Prayer for Issuance of Prohibitory and Mandatory Injunction and Damages. The Facts Petitioners alleged that they are the registered owners of several lots adjoining a road lot known as Lot 369-A-29 or Apollo Street of subdivision plan Psd-37971 (road lot). The road lot is a short access road which connects petitioners' properties to the main road known as Road 20. The road lot is covered by Transfer Certificate of Title (TCT) No. RT-20895 (22682) and registered in the name of respondent Pedro del Rosario (del Rosario). Annotated at the back of TCT No. RT-20895 is a court-ordered Entry No. 605/T-22655 which reads as follows: "It is hereby made of record that as per order of the Court, the street lot covered by this title shall not be closed or disposed of by the registered owner without previous approval of the court."[4] Petitioners alleged that in gross violation of the court order, del Rosario sold an unsegregated portion of the road lot to his co-respondents Josefa Conejero (Conejero) and Ignacio Sonoron (Sonoron) without obtaining prior court approval. Del Rosario, Conejero, and Sonoron then entered into a partition agreement to divide the road lot into four lots which resulted in the partial cancellation of TCT No. RT-20895 and the subsequent issuance of TCT Nos. 35899 and 35100 in the name of Conejero, TCT No. 35101 in the name of del Rosario, and TCT No. 35102 in the name of Sonoron.[5] Petitioners stated that del Rosario sold TCT No. 35101 to Goldkey Development Corporation (Goldkey).[6] Petitioners alleged that the Register of Deeds violated the court order when it allowed the registration of the sales and the subsequent issuance of new titles without first obtaining judicial approval. Petitioners claimed that Goldkey had built cement fences on the lot, thus blocking the ingress and egress of petitioners.[7] Petitioners prayed that the sales made in favor of Conejero, Sonoron, and Goldkey and the partition of the road lot be declared void.[8] In its Comment, Goldkey alleged that the Housing and Land Use Regulatory Board (HLURB) has exclusive jurisdiction over the cases mentioned in Section 1 of Presidential Decree No. (PD) 1344.[9] Goldkey argued that the Court of Appeals correctly dismissed petitioners' appeal because petitioners merely assigned an error involving a pure question of law. Goldkey added that petitioners are using the present petition as a substitute for an already lost appeal since petitioners' counsel had received the decision on 17 October 1997 and the present petition was posted only on 16 December 1997.[10] In May 1991, petitioners filed an initial complaint with the Office of the Building Official (building official) of Quezon City, docketed as Building Case No. R-10-91-006 entitled Giovanni C. Ong, et al. v. Manuel Chua (building case).[11] Petitioners, who initiated the building case when Goldkey started putting up fences in some portions of the property, claimed that the parcel of land was a road lot.[12] On 10 September 1991, the HLURB issued a Development Permit to Goldkey allowing it to develop the land into residential townhouse units. The permit also mentioned that the project is classified as "Residential Townhouse Subdivision" and, as evaluated, the same is "in accordance with the Zoning Ordinance of Quezon City."[13] REMLAW Page 137

Subdivision" and, as evaluated, the same is "in accordance with the Zoning Ordinance of Quezon City."[13] On 4 November 1991,[14] petitioners filed a case for Annulment of Title and Damages[15] with the Regional Trial Court of Quezon City. Subsequently, the building official of Quezon City resolved the building case against petitioners and this decision became final and executory.[16] The ruling held that the property is not a road lot but a residential lot.[17] On 5 June 1995, Branch 222 of the Regional Trial Court (trial court) of Quezon City issued an order dismissing the case for lack of jurisdiction over the subject matter. The Ruling of the Trial Court The trial court dismissed petitioners' case for lack of jurisdiction over the subject matter. The trial court pointed out that there was a decision rendered by the building official of Quezon City declaring the disputed property a residential lot and not a road lot; hence, the building official issued a building permit. The HLURB also issued a permit for the development of the land into a townhouse project. Petitioners did not appeal both rulings. The trial court stated that petitioners' contention that the property is a road lot had been rendered moot by the finding of the building official which made the contrary declaration. If petitioners had any objection to the ruling, they should have appealed the same to the Secretary of Public Works and Highways as provided in Section 307 of Executive Order No. (EO) 1096. The findings of administrative agencies which have expertise are generally accorded not only respect but even finality. The trial court also stated that the property had been approved by the HLURB for development into a townhouse project. The subject land was therefore removed from the jurisdiction of the regular courts. The HLURB's decision was also not appealed to the Office of the President as provided in Section 4 of PD 1344 which gave the HLURB quasi-judicial powers. The Ruling of the Appellate Court On 17 September 1997, the Court of Appeals dismissed the appeal on the ground that it has no jurisdiction to entertain the same. The appellate court stated that the original and amended complaints filed by petitioners were both premised on the claim that the subject parcels of land were subdivision road lots that were illegally converted into residential lots and thereafter disposed by del Rosario, the subdivision developer. Therefore, petitioners' complaints were filed for the purpose of enforcing a contractual and statutory obligation of del Rosario to preserve a subdivision road lot for street purposes. As such, the agency with jurisdiction is the HLURB, pursuant to the provisions of PD 957, 1216, and 1344, EO 648 dated 7 February 1981 and EO 90 dated 17 December 1986. Further, the appellate court ruled that the error assigned by petitioners involves the issue on what law will apply to determine the jurisdiction of a tribunal over the subject matter of the complaints. Petitioners' assigned error involves a pure question of law; hence, petitioners appealed to the wrong forum. Petitioners should have elevated their appeal to the Supreme Court and not to the Court of Appeals by way of a simple appeal. Hence, this petition. The Issues Petitioners raise three issues in this petition: 1. Whether the appellate court acted without or in excess of jurisdiction or with grave abuse of discretion by dismissing petitioners' appeal on the ground that jurisdiction does not lie with the regular courts but with the HLURB; 2. Whether the Court of Appeals acted without or in excess of jurisdiction or grave abuse of discretion by dismissing petitioners' appeal on the ground that petitioners did not assign any error of fact; and 3. Whether a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure is the proper remedy for petitioners. The Ruling of the Court The petition lacks merit. The HLURB is the sole regulatory body for housing and land development.[18] The extent to which an administrative agency may exercise its powers depends on the provisions of the statute creating such agency.[19] Courts will not determine a controversy where the issues for resolution demand the exercise of sound administrative discretion.[20] Jurisdiction Lies with the HLURB PD 957,[21] otherwise known as "The Subdivision and Condominium Buyers' Protective Decree," granted the National

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PD 957,[21] otherwise known as "The Subdivision and Condominium Buyers' Protective Decree," granted the National Housing Authority (NHA) the exclusive jurisdiction to regulate the real estate business. The scope of the regulatory authority lodged in the NHA is indicated in the second whereas clause which states: "WHEREAS, numerous reports reveal that many real estate subdivision owners, developers, operators, and/or sellers have reneged on their representations and obligations to provide and maintain properly subdivision roads, drainage, sewerage, water systems, lighting systems, and other similar basic requirements, thus endangering the health and safety of home and lot buyers," (Emphasis supplied) Thus, Section 22 of PD 957 provides: Sec. 22. Alteration of Plans. - No owner or developer shall change or alter the roads, open spaces, infrastructures, facilities for public use and/or other form of subdivision development as contained in the approved subdivision plan and/or represented in its advertisements, without the permission of the Authority and the written conformity or consent of the duly organized homeowners association, or in the absence of the latter, by the majority of the lot buyers in the subdivision. (Emphasis supplied) PD 1344[22] amended PD 957 by empowering the NHA to issue writs of execution in the enforcement of its decisions. Section 1 of PD 1344 states: Section 1. In the exercise of its functions to regulate the real estate trade and business and in addition to its powers provided for in Presidential Decree No. 957, the National Housing Authority shall have exclusive jurisdiction to hear and decide cases of the following nature: a. Unsound real estate business practices; b. Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the project owner, developer, dealer, broker or salesman; and c. Cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lot or condominium unit against the owner, developer, dealer, broker or salesman.(Emphasis supplied) Under EO 648,[23] the NHA's functions were transferred to the Human Settlement Regulatory Commission. Section 8 of EO 648 provides: Section 8. Transfer of Functions. - The regulatory functions of the National Housing Authority pursuant to Presidential Decrees No. 957, 1216, 1344 and other related laws are hereby transferred to the Commission, together with such applicable personnel, appropriation, records, equipment and property necessary for the enforcement and implementation of such functions. Among these regulatory functions are: (1) Regulation of the real estate trade and business; (2) Registration of subdivision lots and condominium projects; (3) Issuance of license to sell subdivision lots and condominium units in the registered units; (4) Approval of performance bond and the suspension of license to sell; (5) Registration of dealers, brokers and salesmen engaged in the business of selling subdivision lots or condominium units; (6) Revocation of registration of dealers, brokers and salesmen; (7) Approval or mortgage on any subdivision lot or condominium unit made by the owner or developer; (8) Granting of permits for the alteration of plans and the extension of period for completion of subdivision or condominium projects; (9) Approval of the conversion to other purposes of roads and open spaces found within the project which have been donated to the city or municipality concerned; (10) Regulation of the relationship between lessors and lessees; and (11) Hear and decide cases on unsound real estate business practices; claims involving refund filed against project owners, developers, dealers, brokers or salesmen and cases of specific performance. (Emphasis supplied) EO 90 [24] renamed the Human Settlement Regulatory Commission the Housing and Land Use Regulatory Board. The HLURB retained the regulatory and adjudicatory functions of the NHA. Clearly, the scope and limitation of the HLURB's jurisdiction are well-defined. The HLURB's jurisdiction to hear and decide cases is determined by the nature of the cause of action, the subject matter or property involved, and the parties.[25] In the present case, petitioners are the registered owners of several lots adjoining a subdivision road lot connecting their properties to the main road. Petitioners allege that the subdivision lot owners sold the road lot to a developer who is now constructing cement fences, thus blocking the passageway from their lots to the main road. In sum, petitioners are enforcing their statutory and contractual rights against the subdivision owners. This is a specific performance case which falls under the HLURB's exclusive jurisdiction. In Osea v. Ambrosio,[26] the Court held that the provisions of PD 957 were intended to encompass all questions relating to subdivisions. This intention was aimed to provide for an appropriate government agency, which is the HLURB, to which all parties aggrieved in the implementation of provisions and the enforcement of contractual rights with respect to said category of real estate may take recourse. Petitioners claim that respondents violated the annotation at the back of TCT No. RT-20895 by selling an unsegregated portion of the lot without obtaining prior court approval. The date of entry of this annotation is 18 August 1953. When PD 957, PD 1344, and EO 648 were enacted in 1976, 1978, and 1981, respectively, this annotation was impliedly modified such that the conversion of the road lot in the subdivision plan would fall under the HLURB's jurisdiction pursuant to these laws.

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pursuant to these laws. Petitioners argue that they can file a specific performance case to compel respondents to comply with their contractual and statutory obligation to maintain the road lot. However, petitioners can only be granted complete relief if the subject sales are declared void and the subsequent partition is declared illegal. Petitioners further contend that the HLURB, having only the jurisdiction to hear and decide specific performance cases, can only compel petitioners to file a case for annulment of title and prosecute the action. Petitioners insist that in the final analysis, a case for annulment of title would still have to be filed with the ordinary courts.[27] In Peña v. GSIS,[28] the Court ruled that when an administrative agency is conferred quasi-judicial functions, all controversies relating to the subject matter pertaining to its specialization are deemed to be included within its jurisdiction. Split jurisdiction is not favored. As observed in C.T. Torres Enterprises, Inc. v. Hibionada:[29] The argument that only courts of justice can adjudicate claims resoluble under the provisions of the Civil Code is out of step with the fast-changing times. There are hundreds of administrative bodies now performing this function by virtue of a valid authorization from the legislature. This quasi-judicial function, as it is called, is exercised by them as an incident of the principal power entrusted to them of regulating certain activities falling under their particular expertise. In the Solid Homes case for example the Court affirmed the competence of the Housing and Land Use Regulatory Board to award damages although this is an essentially judicial power exercisable ordinarily only by the courts of justice. This departure from the traditional allocation of governmental powers is justified by expediency, or the need of the government to respond swiftly and competently to the pressing problems of the modern world. Finally, in Cristobal v. Court of Appeals,[30] we held that "questions relating to non-compliance with the requisites for conversion of subdivision lots are properly cognizable by the NHA, now the HLURB, pursuant to Section 22 of PD 957 and not by the regular courts." Appeal by Certiorari Involving Questions of Law Section 2, Rule 41 of the Rules of Court states: Sec. 2. Mode of appeal.(a) Ordinary Appeal. - The appeal to the Court of Appeals in cases decided by the Regional Trial Court in the exercise of its original jurisdiction shall be taken by filing a notice of appeal with the court which rendered the judgment or final order appealed from and serving a copy thereof upon the adverse party. No record on appeal shall be required except in special proceedings and other cases of multiple or separate appeals where the law or these Rules so require. In such cases, the record on appeal shall be filed and served in like manner. (b) Petition for Review. - The appeal to the Court of Appeals in cases decided by the Regional Trial Court in the exercise of its appellate jurisdiction shall be by petition for review in accordance with Rule 42. (c) Appeal by certiorari. - In all cases where only questions of law are raised or involved, the appeal shall be to the Supreme Court by petition for review on certiorari in accordance with Rule 45.(Emphasis supplied) In Sevilleno v. Carilo,[31] citing Macawiwili Gold Mining and Development Co., Inc. v. Court of Appeals, this Court summarized the rule on appeals: (1) In all cases decided by the RTC in the exercise of its original jurisdiction, appeal may be made to the Court of Appeals by mere notice of appeal where the appellant raises questions of fact or mixed questions of fact and law; (2) In all cases decided by the RTC in the exercise of its original jurisdiction where the appellant raises only questions of law, the appeal must be taken to the Supreme Court on a petition for review on certiorari under Rule 45. (3) All appeals from judgments rendered by the RTC in the exercise of its appellate jurisdiction, regardless of whether the appellant raises questions of fact, questions of law, or mixed questions of fact and law, shall be brought to the Court of Appeals by filing a petition for review under Rule 42. (Emphasis supplied) In First Bancorp, Inc. v. Court of Appeals,[32] this Court also explained the two modes of appeal from a final order of the trial court in the exercise of its original jurisdiction: (1) by writ of error under Section 2(a), Rule 41 of the Rules of Court if questions of fact or questions of fact and law are raised or involved; or (2) appeal by certiorari under Section 2(c), Rule 41, in relation to Rule 45, where only questions of law are raised or involved. (Emphasis supplied) In the present case, petitioners raised only one issue in their Appellants' Brief - whether "the Honorable Trial Court a quo seriously erred in holding that it has no jurisdiction over the subject matter of the case when in fact it has already

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seriously erred in holding that it has no jurisdiction over the subject matter of the case when in fact it has already acquired jurisdiction over the persons of the defendants and the subject matter of the case." The question on jurisdiction is undoubtedly one of law. We have held that "a question of law exists when the doubt or controversy concerns the correct application of law or jurisprudence to a certain set of facts; or when the issue does not call for an examination of the probative value of the evidence presented, the truth or falsehood of facts being admitted."[33] Consequently, it is not disputed that the issue brought by petitioners to the Court of Appeals involves solely the trial court's jurisdiction over the subject matter of the case. The appellate court can determine the issue raised without reviewing or evaluating the evidence. As petitioners' appeal solely involves a question of law, the appellate court did not err in dismissing the appeal on the ground of lack of jurisdiction pursuant to Section 2, Rule 50 of the Rules of Court which provides: Sec. 2. Dismissal of improper appeal to the Court of Appeals. - An appeal under Rule 41 taken from the Regional Trial Court to the Court of Appeals raising only questions of law shall be dismissed, issues purely of law not being reviewable by said court. Similarly, an appeal by notice of appeal instead of by petition for review from the appellate judgment of a Regional Trial Court shall be dismissed. An appeal erroneously taken to the Court of Appeals shall not be transferred to the appropriate court but shall be dismissed outright. (Emphasis supplied) Rule 65 is not a remedy for lost appeal. Petitioners should have directly taken their appeal to this Court by filing a petition for review on certiorari under Rule 45 and not an ordinary appeal with the Court of Appeals under Rule 41 nor a petition for certiorari with this Court under Rule 65. As held in Balayan v. Acorda,[34] "the special civil action for certiorari is a limited form of review and is a remedy of last recourse." It lies only where there is no appeal or plain, speedy, and adequate remedy in the ordinary course of law. In the present case, petitioners chose the wrong mode of appeal. Hence, the instant petition cannot prevail since a petition for certiorari is not a substitute for a lost appeal, especially if the loss or lapse was an error in petitioners' choice of remedy. We have held in David v. Cordova[35] that: A petition for certiorari cannot be a substitute for an appeal from a lower court decision. Where appeal is available to the aggrieved party, the action for certiorari will not be entertained. The remedies of appeal (including petitions for review) and certiorari are mutually exclusive, not alternate or successive. Hence, certiorari is not and cannot be a substitute for an appeal, especially if one's own negligence or error in one's choice of remedy occasioned such loss or lapse. One of the requisites of certiorari is that there be no available appeal or any plain, speedy and adequate remedy. Where an appeal is available, certiorari will not prosper, even if the ground therefore is grave abuse of discretion. (Emphasis supplied) There were instances when the Court has relaxed the rule on the special civil action for certiorari as a substitute for failure to file a timely petition for review on certiorari under Rule 45 such as where the application of this rule would result in a manifest failure or miscarriage of justice.[36] Although the Court has the discretion to treat a petition for certiorari as having been filed under Rule 45, there is nothing in the present case to warrant a liberal application of the rules. WHEREFORE, we DISMISS the petition. We AFFIRM the 17 September 1997 Decision of the Court of Appeals. Costs against petitioners.

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Fort Bonifacio v Domingo GR 180768 Feb 27, 2009
Sunday, November 14, 2010 11:29 PM

G.R. No. 180765 February 27, 2009 FORT BONIFACIO DEVELOPMENT CORPORATION vs. MANUEL N. DOMINGO CHICO-NAZARIO, J.: Before this Court is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court, filed by petitioner Fort Bonifacio Development Corporation, seeking to reverse and set aside the Decision dated 19 July 20071 and the Resolution dated 10 December 20072 of the Court of Appeals in CA-G.R. SP No. 97731. The appellate court, in its assailed Decision, affirmed the Order3 of the Regional Trial Court (RTC) of Pasay City, Branch 109, in Civil Case No. 06-2000-CFM, denying the Motion to Dismiss of petitioner; and in its assailed Resolution, refused to reconsider its decision. Petitioner, a domestic corporation duly organized under Philippine laws, is engaged in the real estate development business. Respondent is the assignee of L and M Maxco Specialist Engineering Construction (LMM Construction) of its receivables from petitioner. On 5 July 2000, petitioner entered into a Trade Contract with LMM Construction for partial structural and architectural works on one of its projects, the Bonifacio Ridge Condominium. According to the said Contract, petitioner had the right to withhold the retention money equivalent to 5% of the contract price for a period of one year after the completion of the project. Retention money is a portion of the contract price, set aside by the project owner, from all approved billings and retained for a certain period to guarantee the performance by the contractor of all corrective works during the defect-liability period.4 Due to the defect and delay in the work of LMM Construction on the condominium project, petitioner unilaterally terminated the Trade Contract5 and hired another contractor to finish the rest of the work left undone by LMM Construction. Despite the pre-termination of the Trade Contract, petitioner was liable to pay LMM Construction a fraction of the contract price in proportion to the works already performed by the latter.6 On 30 July 2004, petitioner received the first Notice of Garnishment against the receivables of LMM Construction issued by the Construction Industry Arbitration Commission (CIAC) in connection with CIAC Case No. 11-2002 filed by Asia-Con Builders against LMM Construction, wherein LMM Construction was adjudged liable to Asia-Con Builders for the amount of P5,990,927.77. On 30 April 2005, petitioner received a letter dated 18 April 2005 from respondent inquiring on the retention money supposedly due to LMM Construction and informing petitioner that a portion of the amount receivable by LMM Construction therefrom was already assigned to him as evidenced by the Deed of Assignment executed by LMM Construction in respondent’s favor on 28 February 2005. LMM Construction assigned its receivables from petitioner to respondent to settle the alleged unpaid obligation of LMM Construction to respondent amounting to P804,068.21. Through its letter dated 11 October 2005, addressed to respondent, petitioner acknowledged that LMM Construction did have receivables still with petitioner, consisting of the retention money; but petitioner also advised respondent that the retention money was not yet due and demandable and may be ascertained only after the completion of the corrective works undertaken by the new contractor on the condominium project. Petitioner also notified respondent that part of the receivables was also being garnished by the other creditors of LMM Construction. Unsatisfied with the reply of petitioner, respondent sent another letter dated 14 October 2005 asserting his ownership over a portion of the retention money assigned to him and maintaining that the amount thereof pertaining to him can no longer be garnished to satisfy the obligations of LMM Construction to other persons since it already ceased to be the property of LMM Construction by virtue of the Deed of Assignment. Attached to respondent’s letter was the endorsement of LMM Construction dated 17 January 2005 approving respondent’s claim upon petitioner in the amount of P804,068.21 chargeable against the retention money that may be received by LMM Construction from the petitioner. Before respondent’s claim could be fully addressed, petitioner, on 6 June 2005, received the second Notice of Garnishment against the receivables of LMM Construction, this time, issued by the National Labor Relations Commission (NLRC) to satisfy the liability of LMM Construction to Nicolas Consigna in NLRC Case No. 00-07-05483-2003.
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NLRC Case No. 00-07-05483-2003. On 13 July 2005, petitioner received an Order of Delivery of Money issued by the Office of the Clerk of Court and Ex-Officio Sheriff enforcing the first Notice of Garnishment and directing petitioner to deliver to Asia-Con Builders, through the Sheriff, the amount of P5,990,227.77 belonging to LMM Construction. In compliance with the said Order, petitioner was able to deliver to Asia-Con Builders on 22 July 2005 and on 11 August 2005 partial payments amounting to P1,170,601.81, covered by the appropriate Acknowledgement Receipts. A third Notice of Garnishment against the receivables of LMM Construction, already accompanied by an Order of Delivery of Money, both issued by the RTC of Makati, Branch 133, was served upon petitioner on 26 January 2006. The Order enjoined petitioner to deliver the amount of P558,448.27 to the Sheriff to answer for the favorable judgment obtained by Concrete Masters, Inc. (Concrete Masters) against LMM Construction in Civil Case No. 05-164. Petitioner, in a letter dated 31 January 2006, categorically denied respondent’s claim on the retention money, reasoning that after the completion of the rectification works on the condominium project and satisfaction of the various garnishment orders, there was no more left of the retention money of LMM Construction. It would appear, however, that petitioner fully satisfied the first Notice of Garnishment in the amount of P5,110,833.44 only on 31 January 2006,7 the very the same date that it expressly denied respondent’s claim. Also, petitioner complied with the Notice of Garnishment and its accompanying Order of Delivery of Money in the amount of P558,448.27 on 8 February 2006, a week after its denial of respondent’s claim.8 The foregoing events prompted respondent to file a Complaint for collection of sum of money, against both LMM Construction and petitioner, docketed as Civil Case No. 06-0200-CFM before the RTC of Pasay City, Branch 109. Instead of filing an Answer, petitioner filed a Motion to Dismiss Civil Case No. 06-0200-CFM on the ground of lack of jurisdiction over the subject matter. Petitioner argued that since respondent merely stepped into the shoes of LMM Construction as its assignor, it was the CIAC and not the regular courts that had jurisdiction over the dispute as provided in the Trade Contract. On 6 June 2006, the RTC issued an Order denying the Motion to Dismiss of petitioner, ruling that a fullblown trial was necessary to determine which one between LMM Construction and petitioner should be made accountable for the sum due to respondent. Petitioner sought remedy from the Court of Appeals by filing a Petition for Certiorari, docketed as CAG.R. SP No. 97731, challenging the RTC Order dated 6 June 2006 for having been rendered by the trial court with grave abuse of discretion. In its Decision promulgated on 19 July 2007, the Court of Appeals dismissed the Petition for Certiorari and affirmed the 6 June 2006 Order of the RTC denying the Motion to Dismiss of petitioner. The appellate court rejected the argument of petitioner that respondent, as the assignee of LMM Construction, was bound by the stipulation in the Trade Contract that disputes arising therefrom should be brought before the CIAC. The Court of Appeals declared that respondent was not privy, but a third party, to the Trade Contract; and money claims of third persons against the contractor, developer, or owner of the project are lodged in the regular courts and not in the CIAC. Similarly ill-fated was petitioner’s Motion for Reconsideration, which was denied by the Court of Appeals in its Resolution dated 10 December 2007. Petitioner now comes to this Court via this instant Petition for Review on Certiorari praying for the reversal of the 19 July 2007 Decision of the Court of Appeals and 6 June 2006 Order of the RTC and, ultimately, for the dismissal of Civil Case No. 06-0200-CFM pending before the RTC. For the resolution of this Court is the sole issue of: WHETHER OR NOT THE RTC HAS JURISDICTION OVER CIVIL CASE NO. 06-0200-CFM. The jurisdiction of CIAC is defined under Executive Order No. 1008 as follows: SECTION 4. Jurisdiction.—The CIAC shall have original and exclusive jurisdiction over disputes arising from, or connected with, contracts entered into by parties involved in construction in the Philippines, whether the disputes arises before or after the completion of the contract, or after the abandonment or breach thereof. These disputes may involve government or private contracts. For the Board to acquire jurisdiction, the parties to a dispute must agree to submit the same to voluntary arbitration. The jurisdiction of the CIAC may include but is not limited to violation of specifications for materials and
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jurisdiction, the parties to a dispute must agree to submit the same to voluntary arbitration. The jurisdiction of the CIAC may include but is not limited to violation of specifications for materials and workmanship; violation of the terms of agreement; interpretation and/or application of contractual provisions; amount of damages and penalties; commencement time and delays; maintenance and defects; payment default of employer or contractor and changes in contract cost. Excluded from the coverage of this law are disputes arising from employer-employee relationships which shall continue to be covered by the Labor Code of the Philippines. In assailing the 19 July 2007 Decision of the Court of Appeals, petitioner invoked Article 1311 of the Civil Code on relativity of contracts. According to said provision, all contracts shall only take effect between the contracting parties, their assigns and heirs except when the rights and obligations arising from the contract are not transmissible. Petitioner argues that the appellate court, in recognizing the existence of the Deed of Assignment executed by LMM Construction -- in favor of respondent -- of its receivables under the Trade Contract, should have considered the concomitant result thereof, i.e., that respondent became a party to the Trade Contract and, therefore, bound by the arbitral clause therein. Respondent counters that the CIAC is devoid of jurisdiction over money claims of third persons against the contractor, developer or owner of the project. The jurisdiction of the CIAC is limited to settling disputes arising among contractors, developers and/or owners of construction projects. It does not include the determination of who among the many creditors of the contractor should enjoy preference in payment of its receivables from the developer/owner. It is an elementary rule of procedural law that jurisdiction of the court over the subject matter is determined by the allegations of the complaint, irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein. As a necessary consequence, the jurisdiction of the court cannot be made to depend upon the defenses set up in the answer or upon the motion to dismiss; for otherwise, the question of jurisdiction would almost entirely depend upon the defendant. What determines the jurisdiction of the court is the nature of the action pleaded as appearing from the allegations in the complaint. The averments therein and the character of the relief sought are the ones to be consulted.9 Accordingly, the issues in the instant case can only be properly resolved by an examination and evaluation of respondent’s allegations in his Complaint in Civil Case No. 06-0200-CFM. The allegations in respondent’s Complaint are clear and simple: That LMM Construction had an outstanding obligation to respondent in the amount of P804,068.21; that in payment of the said amount, LMM Construction assigned to respondent its receivables from petitioner, which assignment was properly made known to petitioner as early as 18 April 2005; that despite due notice of such assignment, petitioner still refused to deliver the amount assigned to respondent, giving preference, instead, to the garnishing creditors of LMM Construction; that at the time petitioner was notified of the assignment, only one notice of garnishment, the first Notice of Garnishment, was received by it; that had petitioner properly recognized respondent’s right as an assignee of a portion of the receivables of LMM Construction, there could have been sufficient residual amounts to satisfy respondent’s claim; and that, uncertain over which one between LMM Construction and petitioner he may resort to for payment, respondent named them both as defendants in Civil Case No. 06-0200-CFM. A scrupulous examination of the aforementioned allegations in respondent’s Complaint unveils the fact that his cause of action springs not from a violation of the provisions of the Trade Contract, but from the non-payment of the monetary obligation of LMM Construction to him. A cause of action is a party’s act or omission that violates the rights of the other.10 The right of the respondent that was violated, prompting him to initiate Civil Case No. 06-0200-CFM, was his right to receive payment for the financial obligation incurred by LMM Construction and to be preferred over the other creditors of LMM Construction, a right which pre-existed and, thus, was separate and distinct from the right to payment of LMM Construction under the Trade Contract. Petitioner’s unceasing reliance on Article 131111 of the Civil Code on relativity of contracts is unavailing. It is true that respondent, as the assignee of the receivables of LMM Construction from petitioner under the Trade Contract, merely stepped into the shoes of LMM Construction. However, it bears to emphasize that the right of LMM Construction to such receivables from petitioner under the Trade Contract is not even in dispute in Civil Case No. 06-0200-CFM. What respondent puts in issue before the RTC is the purportedly arbitrary exercise of discretion by the petitioner in giving preference to the claims of the other creditors of LMM Construction over the receivables of the latter. It is encouraged that disputes arising from construction contracts be referred first to the CIAC for their arbitration and settlement, since such cases would often require expertise and technical knowledge in
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arbitration and settlement, since such cases would often require expertise and technical knowledge in construction. Hence, some of the matters over which the CIAC may exercise jurisdiction, upon agreement of the parties to the construction contract, "include but [are] not limited to violation of specifications for materials and workmanship; violation of the terms of agreement; interpretation and/or application of contractual provisions; amount of damages and penalties; commencement time and delays; maintenance and defects; payment default of employer or contractor and changes in contract cost."12 Although the jurisdiction of the CIAC is not limited to the afore-stated enumeration, other issues which it could take cognizance of must be of the same or a closely related kind or species applying the principle of ejusdem generis in statutory construction. Respondent’s claim is not even construction-related at all. Construction is defined as referring to all onsite works on buildings or altering structures, from land clearance through completion including excavation, erection and assembly and installation of components and equipment.13 Petitioner’s insistence on the application of the arbitration clause of the Trade Contract to respondent is clearly anchored on an erroneous premise that respondent is seeking to enforce a right under the same. Again, the right to the receivables of LMM Construction from petitioner under the Trade Contract is not being impugned herein. In fact, petitioner readily conceded that LMM Construction still had receivables due from petitioner, and respondent did not even have to refer to a single provision in the Trade Contract to assert his claim. What respondent is demanding is that a portion of such receivables amounting to P804,068.21 should have been paid to him first before the other creditors of LMM Construction, which, clearly, does not require the CIAC’s expertise and technical knowledge of construction. The adjudication of Civil Case No. 06-0200-CFM necessarily involves the application of pertinent statutes and jurisprudence to matters such as obligations, contracts of assignment, and, if appropriate, even preference of credits, a task more suited for a trial court to carry out after a full-blown trial, than an arbitration body specifically devoted to construction contracts. This Court recognizes the laudable objective of voluntary arbitration to provide a speedy and inexpensive method of settling disputes by allowing the parties to avoid the formalities, delay, expense and aggravation which commonly accompany ordinary litigation, especially litigation which goes through the entire hierarchy of courts. It cannot, however, altogether surrender to arbitration those cases, such as the one at bar, the extant facts of which plainly call for the exercise of jurisdiction by the regular courts for their resolution. WHEREFORE, premises considered, the instant Petition is DENIED. The Decision dated 19 July 2007 and the Resolution dated 10 December 2007 of the Court of Appeals in CA-G.R. SP No. 97731 are hereby AFFIRMED in toto. Costs against the petitioner.
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Land Bank v. Ralla Balista GR 164631 Jun 26, 2009
Sunday, November 14, 2010 11:29 PM

G.R. No. 164631 June 26, 2009 LAND BANK OF THE PHILIPPINES vs. RENE RALLA BELISTA PERALTA, J.: Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court filed by Land Bank of the Philippines (petitioner), seeking to annul and set aside the May 26, 2004 Decision1 and the July 28, 2004 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 81096. The antecedent facts and proceedings, as narrated by the CA, are as follows: It appears that spouses Pablo Ralla and Carmen Munoz Ralla had donated their eight (8) parcels of lot located in Ligao, Albay to their daughter, Rene Ralla Belista, the herein private respondent. The eight (8) parcels of lot were placed by the Department of Agrarian Reform (DAR, for brevity) under the coverage of the Comprehensive Agrarian Reform Program (Presidential Decree No. 27 and Executive Order No. 228). Consequently, private respondent claimed payment of just compensation over said agricultural lands. It further appears that the DAR's evaluation of the subject farms was only P227,582.58, while petitioner Land Bank of the Philippines (LBP, for brevity) assessed the same at P317,259.31. Believing that her lots were grossly underestimated, private respondent, on 11 November 2002, filed a Petition for Valuation and Payment of Just Compensation against petitioning bank before the DARABRegional Adjudicator for Region V (RARAD-V) docketed as DCN D-05-02-VC-005. On 07 July 2003, the RARAD-V issued a Decision, in favor of herein private respondent, the fallo of which reads: Wherefore, just compensation for the subject areas is hereby preliminarily fixed at TWO MILLION EIGHT HUNDRED NINETY-SIX THOUSAND and FOUR HUNDRED EIGHT & 91/100 (P2,896,408.91) PESOS. Land Bank of the Philippines, Legaspi City, is hereby ordered to pay herein petitioner said amount pursuant to existing rules and guidelines, minus the sum already remitted per Order dated January 2, 2003. SO ORDERED. As both parties interposed their respective motions for reconsideration, the RARAD-V eventually issued an Order dated 8 October 2003, the decretal portion of which reads: Wherefore, the Decision dated July 7, 2003 is MODIFIED, fixing the valuation claim of petitioner herein with respect to her due share in the above lots to the tune of Two Million Five Hundred Forty Thousand, Two Hundred Eleven and 58/100 (P2,540,211.58) Pesos. Land Bank Legaspi City is hereby ordered to pay herein petitioner said amount pursuant to existing rules and guidelines, minus the sum already paid per Order dated January 2, 2003. SO ORDERED. Aggrieved, petitioner Bank, on 28 October 2003, filed an original Petition for Determination of Just Compensation at the same sala of the RTC, docketed as Agrarian Case No. 03-06. The court a quo motu propio dismissed the case when it issued the herein first assailed Order dated 12 November 2003 "for failure to exhaust administrative remedies and/or comply with Sections 5, 6, and 7, Rule XIX, 2003 DARAB Rules of Procedure. Petitioner LBP lodged a Motion for Reconsideration arguing, inter alia, "that the DARAB 2003 Rules of Procedure does not apply to SAC nor its precursor DARAB Case and that the ground for dismissal of the case is not among the instances when a court may dismiss a case on its motion." As the court a quo denied its Motion for Reconsideration in an Order dated 28 November 2003, petitioner LBP elevated the case before the Tribunal through the present Petition for Review, theorizing: I. WHETHER OR NOT THE SAC A QUO ERRED IN DISMISSING THE CASE MOTU PROPIO ON THE GROUND OF PLAINTIFF'S FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES. II. WHETHER OR NOT SECTIONS 5, 6, AND 7, RULE XIX OF THE DARAB 2003 RULES OF PROCEDURE APPLY TO CASES FILED AND PENDING BEFORE THE DARAB OR ITS ADJUDICATORS PRIOR TO ITS EFFECTIVITY AND TO CASES FILED AND PENDING WITH THE SPECIAL AGRARIAN COURTS.3 On May 26, 2004, the CA rendered its assailed Decision dismissing the petition. The CA ruled that under Section 5, Rule XIX of the 2003 DARAB Rules of Procedure, an appeal from the adjudicator's resolution shall be filed before the DARAB and not before the RTC; that petitioner's filing of the case before the RTC without first seeking the intervention of the DARAB is violative of the doctrine of nonREMLAW Page 146

case before the RTC without first seeking the intervention of the DARAB is violative of the doctrine of nonexhaustion of administrative remedies. The CA found that petitioner's petition for determination of just compensation was filed in the RTC on October 28, 2003 when the 2003 DARAB Rules of Procedure was already in effect, i.e., on February 8, 2003, and under its transitory provision, it is provided that the 2003 Rules shall govern all cases filed on or after its effectivity; and, since an appeal from the adjudicator's resolution should first be filed with the DARAB, the RTC, sitting as a Special Agrarian Court (SAC), did not err in dismissing petitioner's petition. Petitioner filed a motion for reconsideration, which was denied in a Resolution dated July 28, 2004. Petitioner is now before the Court raising the following arguments: 1. THE COURT OF APPEALS ERRED IN LAW IN DISMISSING THE PETITION FOR REVIEW CONSIDERING THAT THE LBP DID NOT VIOLATE THE "DOCTRINE OF NON-EXHAUSTION OF ADMINISTRATIVE REMEDIES" WHEN IT FILED THE ORIGINAL PETITION FOR DETERMINATION OF JUST COMPENSATION BEFORE THE COURT A QUO WITHOUT FIRST SEEKING THE INTERVENTION OF THE DARAB. 2. THE COURT OF APPEALS ERRED IN DECLARING THAT THE APPLICABLE RULE IS THE 2003 DARAB RULES OF PROCEDURE, DESPITE THE FACT THAT THE PETITION (FOR VALUATION AND PAYMENT OF JUST COMPENSATION) WAS FILED BEFORE THE RARAD ON NOVEMBER 11, 2002.4 Petitioner contends that the petition for valuation and payment of just compensation was filed with the DARAB- Regional Adjudicator for Region V (RARAD) on November 11, 2002, long before the effectivity of the 2003 Rules of Procedure; that under the transitory provision of the 2003 DARAB Rules, all cases pending with the Board and the adjudicators prior to the date of the Rules' effectivity shall be governed by the DARAB Rules prevailing at the time of their filing; that clear from the transitory provision that it is the proceeding of the DARAB which is governed by the 2003 DARAB Rules of Procedure, thus, it is the date of filing of the petition with the DARAB or any of its adjudicators which is the reckoning date of the applicability of the 2003 DARAB Rules and not the date of filing with the SAC; that under the 1994 DARAB Rules prevailing at the time of the filing of the respondent's claim for just compensation, the Rules provided that the decision of the adjudicator on land valuation and preliminary determination of just compensation shall not be appealable to the Board, but shall be brought directly to the RTC; that it was in the observance of the 1994 DARAB Rules that petitioner brought the adjudicator's decision to the RTC sitting as SAC. In his Comment, respondent claims that petitioner's petition with the RTC is an original action and, since the case was filed at a time when appeal to the DARAB Central Office was already provided in the 2003 DARAB Rules before resorting to judicial action, the RTC correctly dismissed the petition, which was correctly affirmed by the CA. Petitioner filed a Reply reiterating its arguments in the petition. The issue for resolution is whether it is necessary that in cases involving claims for just compensation under Republic Act (RA) No. 6657 that the decision of the Adjudicator must first be appealed to the DARAB before a party can resort to the RTC sitting as SAC. The court rules in the negative. Sections 50 and 57 of RA No. 6657 provide: Section 50. Quasi-judicial Powers of the DAR. – The DAR is hereby vested with primary jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving the implementation of agrarian reform, except those falling under the exclusive jurisdiction of the Department of Agriculture (DA) and the Department of Environment and Natural Resources (DENR) x x x Section 57. Special Jurisdiction. – The Special Agrarian Court shall have original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners, and the prosecution of all criminal offenses under this Act. x x x The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction within thirty (30) days from submission of the case for decision. Clearly, under Section 50, DAR has primary jurisdiction to determine and adjudicate agrarian reform matters and exclusive original jurisdiction over all matters involving the implementation of agrarian reform, except those falling under the exclusive jurisdiction of the DA and the DENR. Further exception to the DAR's original and exclusive jurisdiction are all petitions for the determination of just compensation to landowners and the prosecution of all criminal offenses under RA No. 6657, which are within the jurisdiction of the RTC sitting as a Special Agrarian Court. Thus, jurisdiction on just compensation cases for the taking of lands under RA No. 6657 is vested in the courts. In Republic v. CA,5 the Court explained:
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6657 is vested in the courts. In Republic v. CA, 5 the Court explained: Thus, Special Agrarian Courts, which are Regional Trial Courts, are given original and exclusive jurisdiction over two categories of cases, to wit: (1) "all petitions for the determination of just compensation to landowners" and (2) "the prosecution of all criminal offenses under *R.A. No. 6657+." The provisions of §50 must be construed in harmony with this provision by considering cases involving the determination of just compensation and criminal cases for violations of R.A. No. 6657 as excepted from the plenitude of power conferred on the DAR. Indeed, there is a reason for this distinction. The DAR is an administrative agency which cannot be granted jurisdiction over cases of eminent domain (for such are takings under R.A. No. 6657) and over criminal cases. Thus, in EPZA v. Dulay and Sumulong v. Guerrero - we held that the valuation of property in eminent domain is essentially a judicial function which cannot be vested in administrative agencies, while in Scoty’s Department Store v. Micaller, we struck down a law granting the then Court of Industrial Relations jurisdiction to try criminal cases for violations of the Industrial Peace Act.6 In a number of cases, the Court has upheld the original and exclusive jurisdiction of the RTC, sitting as SAC, over all petitions for determination of just compensation to landowners in accordance with Section 57 of RA No. 6657. In Land Bank of the Philippines v. Wycoco,7 the Court upheld the RTC's jurisdiction over Wycoco's petition for determination of just compensation even where no summary administrative proceedings was held before the DARAB which has primary jurisdiction over the determination of land valuation. The Court held: In Land Bank of the Philippines v. Court of Appeals, the landowner filed an action for determination of just compensation without waiting for the completion of DARAB’s re-evaluation of the land. This, notwithstanding, the Court held that the trial court properly acquired jurisdiction because of its exclusive and original jurisdiction over determination of just compensation, thus – … It is clear from Sec. 57 that the RTC, sitting as a Special Agrarian Court, has "original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners." This "original and exclusive" jurisdiction of the RTC would be undermined if the DAR would vest in administrative officials original jurisdiction in compensation cases and make the RTC an appellate court for the review of administrative decisions. Thus, although the new rules speak of directly appealing the decision of adjudicators to the RTCs sitting as Special Agrarian Courts, it is clear from Sec. 57 that the original and exclusive jurisdiction to determine such cases is in the RTCs. Any effort to transfer such jurisdiction to the adjudicators and to convert the original jurisdiction of the RTCs into an appellate jurisdiction would be contrary to Sec. 57 and, therefore, would be void. Thus, direct resort to the SAC [Special Agrarian Court] by private respondent is valid. In the case at bar, therefore, the trial court properly acquired jurisdiction over Wycoco’s complaint for determination of just compensation. It must be stressed that although no summary administrative proceeding was held before the DARAB, LBP was able to perform its legal mandate of initially determining the value of Wycoco's land pursuant to Executive Order No. 405, Series of 1990.8 x x x In Land Bank of the Philippines v. Natividad,9 wherein Land Bank questioned the alleged failure of private respondents to seek reconsideration of the DAR's valuation, but instead filed a petition to fix just compensation with the RTC, the Court said: At any rate, in Philippine Veterans Bank v. CA, we held that there is nothing contradictory between the DAR’s primary jurisdiction to determine and adjudicate agrarian reform matters and exclusive original jurisdiction over all matters involving the implementation of agrarian reform, which includes the determination of questions of just compensation, and the original and exclusive jurisdiction of regional trial courts over all petitions for the determination of just compensation. The first refers to administrative proceedings, while the second refers to judicial proceedings.1avvphi1 In accordance with settled principles of administrative law, primary jurisdiction is vested in the DAR to determine in a preliminary manner the just compensation for the lands taken under the agrarian reform program, but such determination is subject to challenge before the courts. The resolution of just compensation cases for the taking of lands under agrarian reform is, after all, essentially a judicial function. Thus, the trial court did not err in taking cognizance of the case as the determination of just compensation is a function addressed to the courts of justice. 10 In Land Bank of the Philippines v. Celada,11 where the issue was whether the SAC erred in assuming jurisdiction over respondent's petition for determination of just compensation despite the pendency of the administrative proceedings before the DARAB, the Court stated that: It would be well to emphasize that the taking of property under RA No. 6657 is an exercise of the power of eminent domain by the State. The valuation of property or determination of just compensation in eminent domain proceedings is essentially a judicial function which is vested with the courts and not with administrative agencies. Consequently, the SAC properly took cognizance of respondent's petition for
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administrative agencies. Consequently, the SAC properly took cognizance of respondent's petition for determination of just compensation.12 The RTC dismissed petitioner's petition for determination of just compensation relying on Sections 5, 6 and 7 of Article XIX of the 2003 DARAB Rules of Procedure, to wit: Section 5. Appeal. A party who disagrees with the resolution of the Adjudicator may bring the matter to the Board by filing with the Adjudicator concerned a Notice of Appeal within fifteen (15) days from receipt of the resolution. The filing of a Motion for Reconsideration of said resolution shall interrupt the period herein fixed. If the motion is denied, the aggrieved party may file the appeal within the remaining period, but in no case shall it be less than five (5) days. Section 6. When Resolution Deemed Final. Failure on the part of the aggrieved party to contest the resolution of the Adjudicator within the aforecited reglementary period provided shall be deemed a concurrence by such party with the land valuation, hence said valuation shall become final and executory. Section 7. Filing of Original Action with the Special Agrarian Court for Final Determination. The party who disagrees with the decision of the Board may contest the same by filing an original action with the Special Agrarian Court (SAC) having jurisdiction over the subject property within fifteen (15) days from his receipt of the Board's decision. Notably, the above-mentioned provisions deviated from Section 11, Rule XIII of the 1994 DARAB Rules of Procedure which provides: Section 11. Land Valuation and Preliminary Determination and Payment of Just Compensation – The decision of the Adjudicator on land valuation and preliminary determination and payment of just compensation shall not be appealable to the Board, but shall be brought directly to the Regional Trial Courts designated as Special Agrarian Courts within fifteen (15) days from receipt of the notice thereof. Any party shall be entitled to only one motion for reconsideration. where DARAB acknowledges that the decision of just compensation cases for the taking of lands under RA 6657 is a power vested in the courts.13 Although Section 5, Rule XIX of the 2003 DARAB Rules of Procedure provides that the land valuation cases decided by the adjudicator are now appealable to the Board, such rule could not change the clear import of Section 57 of RA No. 6657 that the original and exclusive jurisdiction to determine just compensation is in the RTC. Thus, Section 57 authorizes direct resort to the SAC in cases involving petitions for the determination of just compensation.14 In accordance with the said Section 57, petitioner properly filed the petition before the RTC and, hence, the RTC erred in dismissing the case. Jurisdiction over the subject matter is conferred by law.15 Only a statute can confer jurisdiction on courts and administrative agencies while rules of procedure cannot.16 WHEREFORE, the petition for review on certiorari is GRANTED. The Decision dated May 26, 2004 and the Resolution dated July 28, 2004, of the Court of Appeals in CA-G.R. SP No. 81096, are REVERSED and SET ASIDE. The Regional Trial Court, Branch 3, Legaspi City, sitting as Special Agrarian Court, is directed to hear without delay petitioner's petition for the determination of just compensation.

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Mun of Pateros v. CA GR 157714 Jun 16, 2009
Sunday, November 14, 2010 11:29 PM

G.R. No. 157714 June 16, 2009 MUNICIPALITY OF PATEROS vs. THE HONORABLE COURT OF APPEALS, THE MUNICIPALITY OF MAKATI, THE DIRECTOR OF LANDS, and THE DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES NACHURA, J.: Before this Court is a Petition1 for Review on Certiorari under Rule 45 of the Rules of Civil Procedure, seeking the reversal of the Court of Appeals (CA) Decision2 dated January 22, 2003, which denied the appeal of petitioner Municipality of Pateros (Pateros) for undertaking a wrong mode of appeal. Subject of the appeal was the Order3 of the Regional Trial Court (RTC) of Makati City, Branch 139, dated June 14, 1996, which dismissed petitioner’s complaint for lack of jurisdiction. The Facts The property subject of this case consists of portions of then Fort William McKinley, now known as Fort Bonifacio (subject property), currently comprising Barangays Cembo, South Cembo, West Rembo, East Rembo, Comembo, Pembo, and Pitogo (entire property). The subject property is allegedly situated within the territorial jurisdiction of respondent Municipality (now City) of Makati (Makati) per Proclamation No. 24754 issued on January 7, 1986 (Proclamation No. 2475) by former President Ferdinand E. Marcos (President Marcos). Subsequently, on January 31, 1990, former President Corazon C. Aquino (President Aquino) issued Proclamation No. 518, 5 amending Proclamation No. 2475. Parenthetically, it may be noted that a similar boundary dispute over the entire property exists between the Municipality (now City) of Taguig and Makati, docketed as Civil Case No. 63896 and pending before the RTC of Pasig City, Branch 153. As Proclamation Nos. 2475 and 518 respectively stated that the entire property is situated in Makati, Pateros, on January 18, 1991, filed an action6 for Judicial Declaration of the Territorial Boundaries of Pateros against Makati before the RTC of Pasig City, Branch 154 (Pasig RTC). The case was, however, dismissed for lack of jurisdiction inasmuch as the subject property is located in Makati and it should have been filed before the Makati RTC.7 Heeding the directive of the Pasig RTC, Pateros, on December 8, 1993, filed with the RTC of Makati a Complaint8 against Makati and co-respondents, Director of Lands and the Department of Environment and Natural Resources (DENR), for the Judicial Declaration of the Territorial Boundaries of Pateros with a prayer for the issuance of a writ of Preliminary Injunction and Temporary Restraining Order (TRO). Pateros claimed that, based on historical and official records, it had an original area of one thousand thirty-eight (1,038) hectares, more or less. However, when a cadastral mapping was conducted by the Bureau of Lands in 1978, Pateros was appalled to learn that its territorial boundaries had been substantially reduced to merely one hundred sixty-six (166) hectares. Pateros opined that this disparity was brought about by the issuance of Proclamation Nos. 2475 and 518. Thus, Pateros prayed that the RTC judicially declare the territorial boundaries of Pateros based on supporting pieces of evidence, and that it nullify Proclamation No. 2475. Makati filed a Motion to Dismiss,9 contending that the issue was not the nullification of Proclamation No. 2475; that the RTC had no jurisdiction over the subject matter of the action because original jurisdiction to resolve boundary disputes among municipalities situated in Metro Manila is vested in the Metropolitan Manila Authority (MMA); that the RTC's jurisdiction is merely appellate; that the complaint failed to state a cause of action as Pateros failed to exhaust administrative remedies by failing to settle the dispute amicably; and that Pateros' claims had already been barred by laches because Makati, throughout the years, had already developed the subject property and had spent millions on such development. Makati also filed a Motion to Suspend Proceedings,10 arguing that the bill converting Makati into a city was pending approval before the Senate and portions of the subject property are included in the proposed charter. Makati, thus, opined that the continuation of the RTC proceedings would create a conflict between the judicial and the legislative branches. In its Order11 dated October 21, 1994, the RTC granted Makati’s Motion. On July 19, 1994, Republic Act No. 785412 was enacted into law, converting Makati into a highly urbanized city. Pateros then moved for the revival of the proceedings before the RTC,13 which it granted in its Order14 dated March 17, 1995. However, due to the pending Motion to Dismiss earlier filed by Makati, the RTC required the parties to submit their respective Memoranda. The RTC's Ruling On June 14, 1996, the RTC issued an Order, dismissing the case on the ground of lack of jurisdiction. The RTC
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On June 14, 1996, the RTC issued an Order, dismissing the case on the ground of lack of jurisdiction. The RTC held that Proclamation No. 2475 specifically declared that the subject property is within the territorial jurisdiction of Makati and, inasmuch as the Proclamation was not declared unconstitutional, the same is a valid and subsisting law. In the main, citing Sections 1015 and 11, 16 Article X of the 1987 Constitution, and pursuant to this Court's ruling in Municipality of Sogod v. Rosal, 17 the RTC held that the modification or substantial alteration of boundaries of municipalities can be done only through a law enacted by Congress which shall be subject to approval by a majority of the votes cast in a plebiscite in the political units directly affected. Hence, the RTC opined that it is without jurisdiction to fix the territorial boundaries of the parties. Pateros filed a Motion for Reconsideration18 which was, however, denied by the RTC in its Order19 dated August 30, 1996. Aggrieved, Pateros appealed to the CA. 20 The CA's Ruling On January 22, 2003, the CA denied Pateros' appeal. The CA held that the RTC did not make any findings of fact but merely applied various provisions of law and jurisprudence. Thus, the case presented a pure question of law, which Pateros should have brought directly to the Supreme Court, pursuant to Section 5(2),21 Article VIII of the 1987 Constitution and Section 2,22 Rule 41 of the Revised Rules of Civil Procedure. The CA also held that it would amount to grave abuse of discretion amounting to lack of jurisdiction if the CA insisted on resolving the issues raised therein. Thus, by undertaking a wrong mode of appeal and citing Section 2,23 Rule 50 of the Revised Rules of Civil Procedure, the CA denied Pateros' appeal. Pateros filed a Motion for Reconsideration, 24 which the CA denied in its Resolution25 dated March 27, 2003. The Issue Hence, this Petition based on the sole ground that the CA committed grave abuse of discretion in dismissing the appeal for lack of jurisdiction.26 Pateros asseverates that the issues raised before the CA involved mixed questions of fact and law, because Pateros sought the determination of its territorial boundaries and the nullification of Proclamation No. 2475; that Pateros does not seek the alteration, modification, or creation of another or a new local government unit (LGU), but is concerned only with its territorial boundaries which, according to existing records, consisted of 1,038 hectares; that non-presentation of evidence before the RTC does not make the appeal purely a question of law, because the parties were prevented from presenting any evidence due to the RTC's erroneous dismissal of the case based on lack of jurisdiction; that Proclamation Nos. 2475 and 518 suffer from Constitutional infirmity; that the alteration or modification of the boundaries of municipalities or cities can only be made by a law enacted by Congress and approved by the majority of the votes cast in a plebiscite in the political units directly affected; that Proclamation No. 2475, although issued by then President Marcos during the Marcos era, was not a legislative enactment, pursuant to Section 6 of the 1976 Amendment to the Constitution; and granting, without admitting, that Proclamation No. 2475 is a law, it should be subject to approval by the majority of the votes cast in a plebiscite in the political units directly affected. Thus, Pateros prays that the assailed CA Decision be reversed and set aside, and that the RTC be directed to proceed with the trial of the instant case.27 On the other hand, Makati claims that the sole issue in Pateros' appeal before the CA is jurisdiction and as the question of jurisdiction is a question of law and as the CA lacks jurisdiction over pure questions of law, therefore, Pateros resorted to a wrong mode of appeal. The issues raised by Pateros do not consist of questions of fact as the RTC rendered the assailed Order based on Makati's Motion to Dismiss and no trial on the merits was ever conducted. Makati points out that the CA quoted the decision of the RTC's discourse in order to show that only a question of law was involved in Pateros' appeal. Thus, Makati posits that Pateros defies the rules on trial, evidence, and jurisdiction in a desperate bid to extricate itself from its mistake in taking a wrong mode of appeal, i.e., by notice of appeal to the CA rather than a petition for review on certiorari under Rule 45 of the Revised Rules of Civil Procedure filed before this Court. Makati submits that the dismissal of Pateros' appeal was proper, as mandated by Section 2, Rule 50 of the said Rules. Due to the availment of the wrong mode of appeal, the RTC's Order dismissing the case already attained finality.28 The Director of Lands and the DENR, through the Office of the Solicitor General (OSG), share the stand and arguments of Makati. The OSG stresses that the parties never presented any evidence before the RTC which resolved the case based on the parties' undisputed factual submissions and the application thereto of the pertinent laws, Rules of Civil Procedure, and jurisprudence. Hence, the OSG concludes that the appeal before the CA involved a pure question of law.29 Our Ruling We agree that Pateros indeed committed a procedural infraction. It is clear that the issue raised by Pateros to the CA involves the jurisdiction of the RTC over the subject matter of the case. The jurisdiction of a court over the subject matter of the action is a matter of law; it is conferred by the Constitution or by law.
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the subject matter of the action is a matter of law; it is conferred by the Constitution or by law. Consequently, issues which deal with the jurisdiction of a court over the subject matter of a case are pure questions of law. As Pateros' appeal solely involves a question of law, it should have directly taken its appeal to this Court by filing a petition for review on certiorari under Rule 45, not an ordinary appeal with the CA under Rule 41. The CA did not err in holding that Pateros pursued the wrong mode of appeal.30 However, in the interest of justice and in order to write finis to this controversy, we opt to relax the rules. Our ruling in Atty. Ernesto A. Tabujara III and Christine S. Dayrit v. People of the Philippines and Daisy Afable31 provides us with ample justification, viz.: While it is true that rules of procedure are intended to promote rather than frustrate the ends of justice, and while the swift unclogging of the dockets of the courts is a laudable objective, it nevertheless must not be met at the expense of substantial justice. The Court has allowed some meritorious cases to proceed despite inherent procedural defects and lapses. This is in keeping with the principle that rules of procedure are mere tools designed to facilitate the attainment of justice, and that strict and rigid application of rules which would result in technicalities that tend to frustrate rather than promote substantial justice must always be avoided. It is a far better and more prudent cause of action for the court to excuse a technical lapse and afford the parties a review of the case to attain the ends of justice, rather than dispose of the case on technicality and cause grave injustice to the parties, giving a false impression of speedy disposal of cases while actually resulting in more delay, if not a miscarriage of justice.1avvphi1 In those rare cases to which we did not stringently apply the procedural rules, there always existed a clear need to prevent the commission of a grave injustice. Our judicial system and the courts have always tried to maintain a healthy balance between the strict enforcement of procedural laws and the guarantee that every litigant is given the full opportunity for a just and proper disposition of his cause. The emerging trend in the rulings of this Court is to afford every party litigant the amplest opportunity for the proper and just determination of his cause, free from the constraints of technicalities. Time and again, we have consistently held that rules must not be applied so rigidly as to override substantial justice. Given the circumstances surrounding the instant case, we find sufficient reason to relax the rules. Thus, we now resolve the sole issue of whether the RTC has jurisdiction to entertain the boundary dispute between Pateros and Makati. Apart from the doctrine that the jurisdiction of a tribunal over the subject matter of an action is conferred by law, it is also the rule that the court’s exercise of jurisdiction is determined by the material allegations of the complaint or information and the law applicable at the time the action was commenced. Lack of jurisdiction of the court over an action or the subject matter of an action cannot be cured by the silence, by acquiescence, or even by express consent of the parties. Thus, the jurisdiction of a court over the nature of the action and the subject matter thereof cannot be made to depend upon the defenses set up in court or upon a motion to dismiss for, otherwise, the question of jurisdiction would depend almost entirely on the defendant. Once jurisdiction is vested, the same is retained up to the end of the litigation.32 It is worth stressing that, at the time the instant case was filed, the 1987 Constitution and the Local Government Code (LGC) of 1991 were already in effect. Thus, the law in point is Section 118 of the LGC, which provides: Section. 118. Jurisdictional Responsibility for Settlement of Boundary Disputes. — Boundary disputes between and among local government units shall, as much as possible, be settled amicably. To this end: (a) Boundary disputes involving two (2) or more barangays in the same city or municipality shall be referred for settlement to the sangguniang panlungsod or sangguniang bayan concerned. (b) Boundary disputes involving two (2) or more municipalities within the same province shall be referred for settlement to the sangguniang panlalawigan concerned. (c) Boundary disputes involving municipalities or component cities of different provinces shall be jointly referred for settlement to the sanggunians of the province concerned. (d) Boundary disputes involving a component city or municipality on the one hand and a highly urbanized city on the other, or two (2) or more highly urbanized cities, shall be jointly referred for settlement to the respective sanggunians of the parties. (e) In the event the sanggunian fails to effect an amicable settlement within sixty (60) days from the date the dispute was referred thereto, it shall issue a certification to that effect. Thereafter, the dispute shall be formally tried by the sanggunian concerned which shall decide the issue within sixty (60) days from the date of the certification referred to above. 33 Notably, when Pateros filed its complaint with the RTC of Makati, Makati was still a municipality. We take judicial notice of the fact that there was no Sangguniang Panlalawigan that could take cognizance of the boundary dispute, as provided in Section 118(b) of the LGC. Neither was it feasible to apply Section 118(c) or
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boundary dispute, as provided in Section 118(b) of the LGC. Neither was it feasible to apply Section 118(c) or Section 118(d), because these two provisions clearly refer to situations different from that obtaining in this case. Also, contrary to Makati's postulation, the former MMA did not also have the authority to take the place of the Sangguniang Panlalawigan because the MMA's power was limited to the delivery of basic urban services requiring coordination in Metropolitan Manila. The MMA's governing body, the Metropolitan Manila Council, although composed of the mayors of the component cities and municipalities, was merely given the power of: (1) formulation of policies on the delivery of basic services requiring coordination and consolidation; and (2) promulgation of resolutions and other issuances, approval of a code of basic services, and exercise of its rule-making power.34 Thus, there is no merit in Makati’s argument that Pateros failed to exhaust administrative remedies inasmuch as the LGC is silent as to the governing body in charge of boundary disputes involving municipalities located in the Metropolitan Manila area. However, now that Makati is already a highly urbanized city, the parties should follow Section 118(d) of the LGC and should opt to amicably settle this dispute by joint referral to the respective sanggunians of the parties. This has become imperative because, after all, no attempt had been made earlier to settle the dispute amicably under the aegis of the LGC. The specific provision of the LGC, now made applicable because of the altered status of Makati, must be complied with. In the event that no amicable settlement is reached, as envisioned under Section 118(e) of the LGC, a certification shall be issued to that effect, and the dispute shall be formally tried by the Sanggunian concerned within sixty (60) days from the date of the aforementioned certification. In this regard, Rule III of the Rules and Regulations Implementing the LGC shall govern. 35 Only upon failure of these intermediary steps will resort to the RTC follow, as specifically provided in Section 119 of the LGC: Section 119. Appeal. — Within the time and manner prescribed by the Rules of Court, any party may elevate the decision of the sanggunian concerned to the proper Regional Trial Court having jurisdiction over the area in dispute. The Regional Trial Court shall decide the appeal within one (1) year from the filing thereof. Pending final resolution of the disputed area prior to the dispute shall be maintained and continued for all legal purposes. On this score, the jurisdiction of the RTC over boundary disputes among LGUs was settled in National Housing Authority v. Commission on the Settlement of Land Problems,36 where this Court recognized the appellate jurisdiction of the proper RTC. The jurisdiction of the RTC was clarified in Municipality of Kananga v. Judge Madrona, 37 where this Court held that, even in the absence of any specific provision of law, "RTCs have general jurisdiction to adjudicate all controversies except those expressly withheld from their plenary powers. They have the power not only to take judicial cognizance of a case instituted for judicial action for the first time, but also to do so to the exclusion of all other courts at that stage. Indeed, the power is not only original, but also exclusive." Corollarily, we feel obliged to inform Congress of the need to pass a law specifically delineating the metes and bounds of the disputing LGUs. In Mariano, Jr. v. COMELEC, 38 we held that the existence of a boundary dispute does not per se present an unsurmountable difficulty which will prevent Congress from defining with reasonable certitude the territorial jurisdiction of an LGU. Congress, by virtue of the powers vested in it by the Constitution, could very well put an end to this dispute. We reiterate what we already said about the importance and sanctity of the territorial jurisdiction of an LGU: The importance of drawing with precise strokes the territorial boundaries of a local unit of government cannot be overemphasized. The boundaries must be clear for they define the limits of the territorial jurisdiction of a local government unit. It can legitimately exercise powers of government only within the limits of its territorial jurisdiction. Beyond these limits, its acts are ultra vires. Needless to state, any uncertainty in the boundaries of local government units will sow costly conflicts in the exercise of governmental powers which ultimately will prejudice the people's welfare. This is the evil sought to be avoided by the Local Government Unit in requiring that the land area of a local government unit must be spelled out in metes and bounds, with technical descriptions.39 WHEREFORE, the instant Petition is DENIED, having been mooted by the conversion of respondent Municipality of Makati into a highly urbanized city. The parties are hereby DIRECTED to comply with Section 118(d) and (e) of the Local Government Code, and Rule III of the Rules and Regulations Implementing the Local Government Code of 1991 without prejudice to judicial recourse, as provided in the Local Government Code. No costs.

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Tricorp v. CA GR 165742 Jun 30, 2009
Sunday, November 14, 2010 11:29 PM

G.R. No. 165742 June 30, 2009 TRI-CORP LAND & DEVELOPMENT, INC., represented by SOLITA S. JIMENEZ-PAULINO, Petitioner, vs. COURT OF APPEALS and GREYSTONE CORPORATION, Respondents. DE C I S I O N QUISUMBING, J.: This petition for certiorari under Rule 65 of the Rules of Court assails the Decision1 dated June 9, 2004 and Resolution2 dated September 21, 2004 of the Court of Appeals in CA-G.R. CV No. 71285. The Court of Appeals affirmed the Orders dated November 15, 20003 and June 11, 20014 of the Regional Trial Court (RTC) of Makati City, Branch 139 in LRC Case No. M-4086 dismissing the complaint filed by petitioner Tri-Corp Land and Development, Inc. (Tri-Corp) against respondent Greystone Corporation (Greystone) for lack of jurisdiction. The facts, culled from the records, are as follows: On February 12, 1998, Greystone executed in favor of Tri-Corp a Contract to Sell 5 whereby Tri-Corp agreed to pay the purchase price, exclusive of interest, in the amount of P13,500,000 and payable in installments, of a unit of Casa Madeira, a residential condominium project located at Fatima Street, San Miguel Village, Makati City. Said unit, covered by Condominium Certificate of Title (CCT) No. 512326 was to be used as a family residence of Tri-Corp’s officers and stockholders. However, when Tri-Corp applied for membership with the San Miguel Village Homeowner’s Association (SMVHA), it was denied and not given gate passes for its vehicles. The reason cited by SMVHA for Tri-Corp’s denial of application was that the construction of the Casa Madeira condominium project was in violation of village restrictions annotated as Entry No. 319767 and inscribed on October 9, 1961 at the back of Transfer Certificates of Title Nos. 2058278 and 2058289 covering the lots on which the condominium project was constructed. SMVHA filed a case against Greystone for this violation and prayed for the cancellation of the CCTs of the Casa Madeira condominium project before the Housing and Land Use Regulatory Board (HLURB). The case was docketed as HLURB Case No. REM-10045. Upon learning of the pending case, Tri-Corp filed a Complaint-in-Intervention10 in said case for suspension of payments until the issue of violation of the village restriction and validity of the CCT to the condominium unit sold shall have been resolved. TriCorp, likewise, filed a petition11 dated September 28, 2000, against Greystone before the HLURB for Suspension and Cancellation of Certificate of Registration and License to Sell of Greystone. Greystone, in turn, filed an ejectment suit against Tri-Corp before the Metropolitan Trial Court of Makati City, for failure to pay under the Contract to Sell. The complaint was docketed as Civil Case No. 63308. Tri-Corp was ejected by the Sheriff in the said case for its refusal to pay the supersedeas bond. Civil Case No. 63308 is still pending on appeal.12 Tri-Corp also filed before the RTC of Makati City, sitting as a Land Registration Court, a Petition for Correction of Error /Misrepresentation in the Master Deed entered as Memorandum on TCTs Nos. 205827 and 205828 with prayer for Temporary Restraining Order and Injunction.13 The case was docketed as LRC Case No. M-4086. Tri-Corp alleged in its petition that Greystone used different descriptions of the condominium project in order to circumvent existing laws, rules and regulations on registration of real estate projects, to wit: [1] Thus, to obtain approval of the San Miguel Village Association Construction and Permits Committee, it styled its project as a "2-Unit Duplex Residence, to conform with association rules. [2] To obtain approval of Barangay Poblacion, Makati City, and the issuance of Certificate of Registration and Clearance No. 2758 on the same project, it dubbed the same project as a "3storey townhouse", to suit barangay guidelines. [3] To obtain from the City of Makati Building Permit No. C1096-01259, it called the same project a "4-unit Residential Bldg." "Two-storey duplex", to comply with zoning ordinances. [4] To obtain from the HLURB the Preliminary Approval of Condominium Plan, it described Casa Madeira as a "Condominium Project", for the purpose of complying with PD 957 and its
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Madeira as a "Condominium Project", for the purpose of complying with PD 957 and its implementing rules. [5] To obtain from the HLURB the Final Approval, it called the project a Condominium Plan/Subdivision Townhouse, for the same purpose. [6] To obtain from the HLURB a development permit, it called the project a condominium for the same purpose. [7] To obtain from the HLURB a Certificate of Locational Viability for the same project, it was designated as a "2 Storey with Attic Residential Condominium", for the same purpose. [8] To obtain from the Department of Environment and Natural Resources, National Capital Region an Environmental Compliance Certificate (ECC) it designated the project as "four units, two storey with attic townhouse project", to comply with the requirement of law. [9] To obtain from the HLURB Certificate of Registration No. 97-09-3003, it called Casa Madeira a condominium project, for the purpose of complying with PD 957 and its implementing rules. [10] These misrepresentations misled the petitioner as buyer and also mis[led] the buying public as to the real nature of [the] project. 14 [Emphasis supplied.] During the hearing on Tri-Corp’s application for a Writ of Preliminary Injunction on September 28, 2000, Greystone raised the issue of jurisdiction. Greystone contended in its Memorandum15 that the RTC had no jurisdiction to try and decide the case because it involves an unsound real estate practice within the jurisdiction of the HLURB, Tri-Corp is not a party in interest, and same issues had been raised by Tri-Corp in the HLURB. In an Order dated November 15, 2000, the RTC dismissed the case for lack of jurisdiction. The dispositive portion of the order states: IN VIEW OF THE FOREGOING PREMISES, based on law and jurisprudence, the COURT hereby ORDERS that: (a) The prayer for Temporary Restraining Order and/or Writ of Preliminary Injunction is hereby DENIED for lack of merit. (b) The Complaint dated 19 September 1990 (sic) is hereby DISMISSED, the same being within the exclusive jurisdiction of [the] HLURB pursuant to PD[s] 987 and 1344. SO ORDERED.16 Tri-Corp filed a motion for reconsideration but it was denied by the RTC in an Order dated June 11, 2001. Tri-Corp appealed to the Court of Appeals. In a Decision promulgated on June 9, 2004, the Court of Appeals affirmed the orders of the RTC. The dispositive portion of the decision states: UPON THE VIEW WE TAKE OF THIS CASE, THUS, the appealed orders dated November 15, 2000 and June 11, 2001 must be, as they hereby, are AFFIRMED. Without costs in this instance. SO ORDERED.17 Tri-Corp filed a motion for reconsideration but it was denied by the Court of Appeals in a Resolution promulgated on September 21, 2004 for being filed out of time and for being without merit. Alleging that the Court of Appeals committed grave abuse of discretion in affirming the orders of the RTC, Tri-Corp filed this original action for certiorari under Rule 65. Tri-Corp alleges that: I. THE APPELLATE COURT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT DECLARED THE MOTION FOR RECONSIDERATION AS HAVING BEEN FILED OUT OF TIME DESPITE PROOFS OF TRAVEL. II. THE APPELLATE COURT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF OR EXCESS OF JURISDICTION IN DECLARING THAT HEREIN PETITIONER IS NOT A PARTY IN INTEREST. III. THE APPELLATE COURT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF OR EXCESS OF JURISDICTION WHEN IT RESOLVED THE INSTANT CASE IN FAVOR OF RESPONDENT GREYSTONE WITHOUT DUE REGARD TO THE PROTECTIVE MANTLE ENSHRINED UNDER PD 957 TOWARDS BUYERS OF CONDOMINIUM UNITS.18 In sum, the issue is, did the Court of Appeals act with grave abuse of discretion in denying Tri-Corp’s motion for reconsideration for being filed out of time, in declaring Tri-Corp as not a party in interest, and in affirming the RTC’s Order dismissing the case for lack of jurisdiction?
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in affirming the RTC’s Order dismissing the case for lack of jurisdiction? In its Memorandum,19 Tri-Corp asserts that it disagrees with the findings of the appellate court that its motion for reconsideration was filed out of time since it would be absurd to consider receipt by its mailbox as receipt by Tri-Corp when its representative, Solita S. Jimenez-Paulino, was not physically present in the Philippines.20 Tri-Corp further argues that the conclusion that Tri-Corp is not a party in interest is also absurd since Tri-Corp stands to lose an enormous amount at the instance of Greystone who stands to gain without giving anything of value.21 Tri-Corp also argues that the Court of Appeals overlooked the fact that the case is one for cancellation of inscriptions and cancellation of the CCT, which is within the ambit of the Register of Deeds to perform, and the case is not a simple buyer-seller of condominium relationship but one which seeks the alteration of annotations and cancellation of titles with the jurisdiction of the RTC sitting as a Land Registration Court.22 On the other hand, Greystone, in its Memorandum,23 argues that it is clear that since Tri-Corp’s mailbox, MBE Center, received a copy of the decision of the Court of Appeals on June 16, 2004, it had until July 1, 2004 within which to file a motion for reconsideration. Its motion for reconsideration, which was filed only on July 13, 200424 was clearly filed out of time. As defined, grave abuse of discretion means such capricious and whimsical exercise of judgment as is equivalent to lack or excess of jurisdiction or, where the power is exercised in an arbitrary manner by reason of passion, prejudice, or personal hostility, and it must be so patent or gross as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law.25 After review, we find that the Court of Appeals did not act with grave abuse of discretion because of the following reasons: First, the petitioner in this case is Tri-Corp and not Solita Jimenez-Paulino. The reckoning time therefore to count the period to file Tri-Corp’s motion for reconsideration was the date the decision was received by Tri-Corp’s mailbox and not the date when it was received by its representative, Solita S. JimenezPaulino.1avvphi1 Second, the Court of Appeals, in ruling that Tri-Corp is not a party in interest, pointed out in its decision that the contract to sell entered into by both parties contains a stipulation that in case of default or nonpayment of the stipulated amortizations and the rentals, Greystone has the option to rescind the contract and forfeit all amounts paid as liquidated damages. Greystone rescinded the contract.26 As the contract to sell has been rescinded, there is legal basis to hold that Tri-Corp is no longer a party in interest. Third, the Court of Appeals decision affirming the trial court’s Orders dismissing Tri-Corp’s petition on the ground that it does not have jurisdiction over the case, has legal basis. Section 1 of Presidential Decree No. 134427 entitled "Empowering the National Housing Authority to Issue Writ of Execution in the Enforcement of its Decisions under Presidential Decree No. 957" provides: SECTION 1. In the exercise of its functions to regulate the real estate trade and business and in addition to its powers provided for in Presidential Decree No. 957, the National Housing Authority shall have exclusive jurisdiction to hear and decide cases of the following nature: A. Unsound real estate business practices; B. Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the project owner, developer, dealer, broker or salesman; and C. Cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lot or condominium unit against the owner, developer, dealer, or salesman. [Emphasis supplied.] In this case, Tri-Corp’s chief quest is the cancellation of Entry No. 31976 from TCTs Nos. 205827 and 205828, and the cancellation of the CCT of the unit sold to it, and it alludes to Greystone’s use of different descriptions of the condominium project in order to circumvent existing laws, rules and regulations on registration of real estate projects in its petition. Under these circumstances, Tri-Corp is alluding to steps allegedly taken by Greystone in consummating an alleged unsound real estate business practice. The HLURB has the technical expertise to resolve this technical issue. Jurisdiction therefore properly pertains to the HLURB. In view of the foregoing, it cannot be said that the Court of Appeals, in affirming the RTC Orders dismissing the case for lack of jurisdiction, acted with grave abuse of discretion that would warrant the filing of a petition for certiorari under Rule 65 against it.
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filing of a petition for certiorari under Rule 65 against it. WHEREFORE, the instant petition is DISMISSEDfor lack of merit. Costs against petitioner.
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?Ma. Luisa Dazon v. Kenneth Yap and People Jan 15, 2010
Sunday, November 14, 2010 11:29 PM

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Sec 5, RA 8369 Family Courts Act of 1997
Sunday, November 14, 2010 11:29 PM

REPUBLIC ACT NO. 8369 AN ACT ESTABLISHING FAMILY COURTS, GRANTING THEM EXCLUSIVE ORIGINAL JURISDICTION OVER CHILD AND FAMILY CASES, AMENDING BATAS PAMBANSA BILANG 129,AS AMENDED, OTHERWISE KNOWN AS ACT OF 1980, APPROPRIATING FUNDS THEREFOR AND FOR OTHER PURPOSES. Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: Section 1. Title. - This Act shall be known as the "Family Courts Act of 1997".

Sec. 2. Statement of National Policies. - The State shall protect the rights and promote the welfare of children in keeping with the mandate of the Constitution and the precepts of the United Nations Convention on the rights of the Child. The State shall provide a system of adjudication for youthful offenders which takes into account their peculiar circumstances.
The State recognizes the sanctity of family life and shall protect and strengthen the family as a basic autonomous social institution. The courts shall preserve the solidarity of the family, provide procedures for the reconciliation of spouses and the amicable settlement of family controversy. Sec. 3. Establishment of Family Courts. - There shall be established a Family Court in every province and city in the country. In case where the city is the capital of the province, the Family Court shall be established in the municipality which has the highest population. Sec. 4. Qualification and Training of Family Court Judges. - Sec. 15 of Batas Pambansa Blg. 129, as amended, is hereby further amended to read as follows: "Sec. 15. (a) Qualification. - No person shall be appointed Regional Trial Judge or Presiding Judge of the Family Court unless he is a natural-born citizen of the Philippines, at least thirty-five (35) years of age, and, for at least ten (10) years, has been engaged in the practice of law in the Philippines or has held a public office in the Philippines requiring admission to the practice of law as indispensable requisite. "(b) Training of Family Court Judges. - The Presiding Judge, as well as the court personnel of the Family Courts, shall undergo training and must have the experience and demonstrated ability in dealing with child and family cases. "The Supreme Court shall provide a continuing education program on child and family laws, procedure and other related disciplines to judges and personnel of such courts." Sec. 5. Jurisdiction offamily Courts. - The Family Courts shall have exclusive original jurisdiction to hear and decide the following cases: a) Criminal cases where one or more of the accused is below eighteen (18) years of age but not less than nine (9) years of age but not less than nine (9) years of age or where one or more of the victims is a minor at the time of the commission of the offense: Provided, That if the minor is found guilty, the court shall promulgate sentence and ascertain any civil liability which the accused may have incurred. The sentence, however, shall be suspended without need of application pursuant to Ptesidential Decree No. 603, otherwise known as the "Child and Youth Welfare Code"; b) Petitions for guardianship, custody of children, habeas corpus in relation to the latter; c) Petitions for adoption of children and the revocation thereof; d) Complaints for annulment of marriage, declaration of nullity of marriage and those relating to marital status and property relations of husband and wife or those living together under different status and agreements, and petitions for dissolution of conjugal partnership of gains;
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different status and agreements, and petitions for dissolution of conjugal partnership of gains; e) Petitions for support and/or acknowledgment; f) Summary judicial proceedings brought under the provisions of Executive Order No. 209, otherwise known as the "Family Code of the Philippines"; g) Petitions for declaration of status of children as abandoned, dependent o neglected children, petitions for voluntary or involuntary commitment of children; the suspension, termination, or restoration of parental authority and other cases cognizable under Presidential Decree No. 603, Executive Order No. 56, (Series of 1986), and other related laws; h) Petitions for the constitution of the family home; i) Cases against minors cognizable under the Dangerous Drugs Act, as amended; j) Violations of Republic Act No. 7610, otherwise known as the "Special Protection of Children Against Child Abuse, Exploitation and Discrimination Act," as amended by Republic Act No. 7658; and
k) Cases of domestic violence against: 1) Women - which are acts of gender based violence that results, or are likely to result in physical, sexual or psychological harm or suffering to women; and other forms of physical abuse such as battering or threats and coercion which violate a woman's personhood, integrity and freedom movement; and

2) Children - which include the commission of all forms of abuse, neglect, cruelty, exploitation, violence, and discrimination and all other conditions prejudicial to their development. If an act constitutes a criminal offense, the accused or batterer shall be subject to criminal proceedings and the corresponding penalties.
If any question involving any of the above matters should arise as an incident in any case pending in the regular courts, said incident shall be determined in that court. Sec. 6. Use of Income. - All Family Courts shall be allowed the use of ten per cent (10%) of their income derived from filing and other court fees under Rule 141 of the Rules of Court for research and other operating expenses including capital outlay: Provided, That this benefit shall likewise be enjoyed by all courts of justice.

The Supreme Court shall promulgate the necessary guidelines to effectively implement the provisions of this Sec. Sec. 7. Special Provisional Remedies. - In cases of violence among immediate family members living in the same domicile or household, the Family Court may issue a restraining order against the accused of defendant upon verified application by the complainant or the victim for relief from abuse. The court may order the temporary custody of children in all civil actions for their custody. The court may also order support pendente lite, including deduction from the salary and use of conjugal home and other properties in all civil actions for support.
Sec. 8. Supervision of Youth Detention Homes. - The judge of the Family Court shall have direct control and supervision of the youth detention home which the local government unit shall establish to separate the youth offenders from adult criminals: Provided, however, That alternatives to detention and institutional care shall be made available to the accused including counseling, recognizance, bail, community continuum, or diversions from the justice system: Provided, further, That the human rights of the accused are fully respected in a manner appropriate to their well-being. Sec. 9. Social Services and Counseling Division. - Under the guidance ofthe Department of Social Welfare and Development (DSWD), a Social Services and Counseling Division (SSCD) shall be established in each judicial region as the Supreme Court shall deem necessary based on the number of
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established in each judicial region as the Supreme Court shall deem necessary based on the number of juvenile and family cases existing in such jurisdiction. It shall provide appropriate social services to all juvenile and family cases filed with the court and recommend the proper social action. It shall also develop programs, formulate uniform policies and procedures, and provide technical supervision and monitoring of all SSCD in coordination with the judge. Sec. 10. Social Services and Counseling Division Staff. - The SSCD shall have a staff composed of qualified social workers and other personnel with academic preparation in behavioral sciences to carry out the duties'of conducting intake assessment, social case studies, casework and counseling, and othersocial services that may be needed in connection with cases filed with the court: Provided, however, That in adoption cases and in petitions for declaration of abandonment, the case studies may be prepared by social workers of duly licensed child caring or child placement agencies, or the DSWD. When warranted, the division shall recommend that the court avail itself of consultative services of psychiatrists, psychologists, and other qualified specialists presently employed in other departments of the government in connection with its cases.

The position of Social Work Adviser shall be created under the Office of the Court Administrator, who shall monitor and supervise the SSCD ofthe Regional Trial Court.
Sec. 11. Alternative Social Services. - In accordance with Sec. 17 of this Act, in areas where no Family Court has been established or no Regional Trial Court was designated by the Supreme Court due to the limited number of cases, the DSWD shall designate and assign qualified, trained, and DSWD accredited social workers of the local government units to handle juvenile and family cases filed in the designated Regional Trial Court of the place. Sec. 12. Privacy and Confidentiality of Proceedings. - All hearings and conciliation of the child and family cases shall be treated in a manner consistent with the promotion of the child's and the family's dignity and worth, and shall respect their privacy at all stages of the proceedings. Records of the cases shall be dealt with utmost confidentiality and the identity of parties shall not be divulged unless necessary and with authority of the judge. Sec. 13. Special Rules of Procedure. - The Supreme Court shall promulgate special rules of procedure for the transfer of cases to the new courts during the transition period and for the disposition of family cases with the best interests of the child and the protection of the family as primary consideration taking into account the United Nations Convention on the Rights of the Child. Sec. 14. Appeals. - Decisions and orders of the court shall be appealed in the same manner and subject to the same conditions as appeals from the ordinary Regional Trial Courts. Sec. 15. Appropriations. - The amount necessary to carry out the provisions of this Act shall be included in the General Appropriations Act of the year following in its enactment into law and thereafter. Sec. 16. Implementing Rules and Regulations. - The Supreme Court, in coordination with the DSWD, shall formulate the necessary rules and regulations for the effective implementation of the social aspects of this Act. Sec. 17. Transitory Provisions. - Pending the establishment of such Family Courts, the Supreme Court shall designate from among the branches ofthe Regional Trial Court at least one Family Court in each of the cities of Manila, Quezon, Pasay, Caloocan, Makati, Pasig, Mandaluyong, Muntinlupa, Laoag, Baguio, Santiago, Dagupan, Olongapo, Cabanatuan, San Jose, Angeles, Cavite, Batangas, Lucena, Naga, Iriga, Legazpi, Roxas, Iloilo, Bacolod, Dumaguete, Tacloban, Cebu, Mandaue, Tagbilaran, Surigao, Butuan, Cagayan de Oro, Davao, General Santos, Oroquieta, Ozamis, Dipolog, Zamboanga, Pagadian, Iligan, and in such other places as the Supreme Court may deem necessary. Additional cases other than those provided in Sec. 5 may be assigned to the Family Courts when their
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Additional cases other than those provided in Sec. 5 may be assigned to the Family Courts when their dockets permit: Provided, That such additional cases shall not be heard on the same day family cases are heard. In areas where there are no Family Courts, the cases referred to in Sec. 5 of this Act shall be adjudicated by the Regional Trial Court. Sec. 18. Separability Clause. - In case any provision of this Act is declared unconstitutional, the other provisions shall remain in effect. Sec. 19. Repealing Clause. - All other laws, decrees, executive orders, rules or regulations inconsistent herewith are hereby repealed, amended or modified accordingly.

Sec. 20. Effectivity. - This Act shall take effect fifteen (15) days after its publication in at least two (2) national newspapers of general circulation. Approved October 28, 1997.
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A.M. No. 02-11-10-SC Rules on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable Marriages
Sunday, November 14, 2010 11:29 PM

A.M. No. 02-11-10-SC March 4, 2003 RE: PROPOSED RULE ON DECLARATION OF ABSOLUTE NULLITY OF VOID MARRIAGES AND ANNULMENT OF VOIDABLE MARRIAGES RESOL UTI ON Acting on the letter of the Chairman of the Committee on Revision of the Rules of Court submitting for this Court's consideration and approval the Proposed Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable Marriages, the Court Resolved to APPROVE the same. The Rule shall take effect on March 15, 2003 following its publication in a newspaper of general circulation not later than March 7, 2003 March 4, 2003 Davide, C.J. Bellosillo, Puno, Vitug Mendoza, Panganiban, Quisumbing, Sandoval-Gutierrez, Carpio, Austria-Martinez, Carpio Morales, Callejo, Sr. and Azcuna Ynares-Santiago, on leave Corona, on official leave RULE ON DECLARATION OF ABSOLUTE NULLITY OF VOID MARIAGES AND ANNULMENT OF VOIDABLE MARRIAGES Section 1. Scope - This Rule shall govern petitions for declaration of absolute nullity of void marriages and annulment of voidable marriages under the Family Code of te Philippines. The Rules of Court shall apply suppletorily. Section 2. Petition for declaration of absolute nullity of void marriages. (a) Who may file. - A petition for declaration of absolute nullity of void marriage may be filed solely by the husband or the wife. (n) (b) Where to file. - The petition shal be filed in the Family Court. (c) Imprecriptibility ofaction or defense. - An Action or defense for the declaration of absolute nullity of void marriage shall not prescribe. (d) What to allege. - A petition under Article 36 of Family Code shall specially allege te complete facts showing the either or both parties were psychologically incapacitated from complying with the essential marital obligations of marriages at the time of the celebration of marriage even if such incapacity becomes manifest only after its celebration. The complete facts should allege the physical manifestations, if any, as are indicative of psychological incapacity at the time of the celebration of the marriage but expert opinion need not be alleged. Section 3. Petition for annulment of voidable marriages. (a) Who may file. - The following persons may file a petition for annulment of voidable marriage based on any of the grounds under article 45 of the Family Code and within the period herein indicated: (1) The contracting party whose parent, or guardian, or person exercising substitute parental authority did not give his or her consent, within five years after attaining the age of twenty-one unless, after attaining the age of twenty-one, such party freely cohabitated with the other as husband or wife; or the parent, guardian or person having legal charge of the contracting party , at any time before such party has reached the age of twenty-one; (2) The sane spouse who had no knowledge of the other's insanity; or by any relative, guardian, or person having legal charge of the insane, at any time before the death of either party; or by the insane spouse during the a lucid interval or after regaining sanity, provided that the petitioner , after coming to reason, has not freely cohabited with the other as husband or wife; (3) The injured party whose consent was obtained by fraud, within five years after the discovery of the fraud, provided that said party, with full knowledge of the facts constituting the fraud, has not freely cohabited with the other as husband or wife; (4) The injured party whose consent was obtained by force, intimidation, or undue influence, within five
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cohabited with the other as husband or wife; (4) The injured party whose consent was obtained by force, intimidation, or undue influence, within five years from the time the force intimidation, or undue influence disappeared or ceased, provided that the force, intimidation, or undue influence having disappeared or ceased, said party has not thereafter freely cohabited with the other as husband or wife; (5) The injured party where the other spouse is physically incapable of consummating the marriage with the other and such incapability continues and appears to be incurable, within five years after the celebration of marriage; and (6) Te injured party where the other party was afflicted with a sexually-transmissible disease found to be serious and appears to be incurable, within five years after the celebration of marriage. (b) Where to file. - The petition shall be filed in the Family Court. Section 4. Venue. - The Petition shall be filed in the Family Court of the province or city where the petitioner or the respondent has been residing for at least six months prior to the date of filing. Or in the case of non-resident respondent, where he may be found in the Philippines, at the election of the petitioner. Section 5. Contents and form of petition. - (1) The petition shall allege the complete facts constituting the cause of action. (2) It shall state the names and ages of the common children of the parties and specify the regime governing their property relations, as well as the properties involved. If there is no adequate provision in a written agreement between the parties, the petitioner may apply for a provisional order for spousal support, the custody and support of common children, visitation rights, administration of community or conjugal property, and other matters similarly requiringurgent action. (3) It must be verified and accompanied celebration of marriage. (b) Where to file.-The petition shall be filed in the Family Court. Section 4. Venue. - The petition shall be filed in the Family Court of the province or city where the petitioner or the respondent has been residing for at least six months prior to the date of filing, or in the case of a non-resident respondent, where he may be found in the Philippines at the election of the petitioner. Section 5. Contents and form of petition. - (1) The petition shall allege the complete facts constituting the cause of action. (2) it shall state the names and ages of the common children of the parties and specify the regime governing their property relations, as well as the properties involved. If there is no adequate provision in a written agreement between the parties, the petitioner may apply for a provisional order for spousal support, custody and support of common children, visitation rights, administration of community or conjugal property, and other matters similarly requiring urgent action. (3) it must be verified and accompanied by a certification against forum shopping. The verification and certification must be signed personally by me petitioner. No petition may be filed solely by counsel or through an attorney-in-fact. If the petitioner is in a foreign country, the verification and certification against forum shopping shall be authenticated by the duly authorized officer of the Philippine embassy or legation, consul general, consul or vice-consul or consular agent in said country. (4) it shall be filed in six copies. The petitioner shall serve a copy of the petition on the Office of the Solicitor General and the Office of the City or Provincial Prosecutor, within five days from the date of its filing and submit to the court proof of such service within the same period. Failure to comply with any of the preceding requirements may be a ground for immediate dismissal of the petition. Section 6. Summons. - The service of summons shall be governed by Rule 14 of the Rules of Court and by the following rules: (1) Where the respondent cannot be located at his given address or his whereabouts are unknown and cannot be ascertained by diligent inquiry, service of summons may, by leave of court, be effected upon him by publication once a week for two consecutive weeks in a newspaper of general circulation in the Philippines and in such places as the court may order In addition, a copy of the summons shall be served on the respondent at his last known address by registered mail or any other means the court may deem

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sufficient. (2) The summons to be published shall be contained in an order of the court with the following data: (a) title of the case; (b) docket number; (c) nature of the petition; (d) principal grounds of the petition and the reliefs prayed for; and (e) a directive for the respondent to answer within thirty days from the last issue of publication. Section 7. Motion to dismiss. - No motion to dismiss the petition shall be allowed except on the ground of lack of jurisdiction over the subject matter or over the parties; provided, however, that any other ground that might warrant a dismissal of the case may be raised as an affirmative defense in an answer. Section 8. Answer. - (1) The respondent shall file his answer within fifteen days from service of summons, or within thirty days from the last issue of publication in case of service of summons by publication. The answer must be verified by the respondent himself and not by counsel or attorney-infact. (2) If the respondent fails to file an answer, the court shall not declare him or her in default. (3) Where no answer is filed or if the answer does not tender an issue, the court shall order the public prosecutor to investigate whether collusion exists between the parties. Section 9. Investigation report of public prosecutor. - (1) Within one month after receipt of the court order mentioned in paragraph (3) of Section 8 above, the public prosecutor shall submit a report to the court stating whether the parties are in collusion and serve copies thereof on the parties and their respective counsels, if any. (2) If the public prosecutor finds that collusion exists, he shall state the on the finding of collusion within ten days from receipt of a copy of a report The court shall set the report for hearing and If convinced that the parties are in collusion, it shall dismiss the petition. (3) If the public prosecutor reports that no collusion exists, the court shall set the case for pre-trial. It shall be the duty of the public prosecutor to appear for the State at the pre-trial. Section 10. Social worker. - The court may require a social worker to conduct a case study and submit the corresponding report at least three days before the pre-trial. The court may also require a case study at any stage of the case whenever necessary. Section 11. Pre-trial. (1) Pre-trial mandatory. - A pre-trial is mandatory. On motion or motu proprio, the court shall set the pre-trial after the last pleading has been served and filed, or upon receipt of the report of the public prosecutor that no collusion exists between the parties. (2) Notice of pre-trial. - (a) The notice of pre-trial shall contain: (1) the date of pre-trial conference; and (2) an order directing the parties to file and serve their respective pre-trial briefs in such manner as shall ensure the receipt thereof by the adverse party at least three days before the date of pre-trial. (b) The notice shall be served separately on the parties and their respective counsels as well as on the public prosecutor. It shall be their duty to appear personally at the pre-trial. (c) Notice of pre-trial shall be sent to the respondent even if he fails to file an answer. In case of summons by publication and the respondent failed to file his answer, notice of pre-trial shall be sent to respondent at his last known address. Section 12. Contents of pre-trial brief. - The pre-trial brief shall contain the following: (a) A statement of the willingness of the parties to enter into agreements as may be allowed by law, indicating the desired terms thereof; (b) A concise statement of their respective claims together with the applicable laws and authorities; (c) Admitted facts and proposed stipulations of facts, as well as the disputed factual and legal issues; (d) All the evidence to be presented, including expert opinion, if any, briefly stating or describing the nature and purpose thereof; (e) The number and names of the witnesses and their respective affidavits; and (f) Such other matters as the court may require. Failure to file the pre-trial brief or to comply with its required contents shall have the same effect as failure to appear at the pre-trial under the succeeding paragraphs. Section 13. Effect of failure to appear at the pre-trial. - {a) If the petitioner fails to appear personally, the case shall be dismissed unless his counsel or a duly authorized representative appears in court and proves a valid excuse for the non-appearance of the petitioner. (b) If the respondent has filed his answer but fails to appear, the court shall proceed with the pre-trial
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(b) If the respondent has filed his answer but fails to appear, the court shall proceed with the pre-trial and require the public prosecutor to investigate the non-appearance of the respondent and submit within fifteen days thereafter a report to the court stating whether his non-appearance is due to any collusion between the parties. If there Is no collusion, the court shall require the public prosecutor to intervene for the State during the trial on the merits to prevent suppression or fabrication of evidence. Section 14. Pre-trial conference. -At the pre-trial conference, the court: (a) May refer the issues to a mediator who shall assist the parties in reaching an agreement on matters not prohibited by law. The mediator shall render a report within one month from referral which, for good reasons, the court may extend for a period not exceeding one month. (b) In case mediation is not availed of or where it fails, the court shall proceed with the pre-trial conference, on which occasion it shall consider the advisability of receiving expert testimony and such other makers as may aid in the prompt disposition of the petition. Section 15. Pre-trial order. - {a) The proceedings in the pre-trial shall be recorded. Upon termination of the pre-trial, the court shall Issue a pre-trial order which shall recite in detail the matters taken up In the conference, the action taken thereon, the amendments allowed on the pleadings, and except as to the ground of declaration of nullity or annulment, the agreements or admissions made by the parties on any of the matters considered, including any provisional order that may be necessary or agreed upon by the parties. (b) Should the action proceed to trial, the order shall contain a recital of the following; (1) Facts undisputed, admitted, and those which need not be proved subject to Section 16 of this Rule; (2) Factual and legal issues to be litigated; (3) Evidence, including objects and documents, that have been marked and will be presented; (4) Names of witnesses who will be presented and their testimonies in the form of affidavits; and (5) Schedule of the presentation of evidence. (c) The pre-trial order shall also contain a directive to the public prosecutor to appear for the State and take steps to prevent collusion between the parties at any stage of the proceedings and fabrication or suppression of evidence during the trial on the merits. (d) The parlies shall not be allowed to raise issues or present witnesses and evidence other than those stated in the pre-trial order. The order shall control the trial of the case, unless modified by the court to prevent manifest injustice. (e) The parties shall have five days from receipt of the pre-trial order to propose corrections or modifications. Section 16. Prohibited compromise. - The court-shall not allow compromise on prohibited matters, such as the following: (a) The civil status of persons; (b) The validity of a marriage or of a legal separation; (c) Any ground for legal separation; (d) Future support; (e) The jurisdiction of courts; and (f) Future legitime. Section 17. Trial. - (1) The presiding judge shall personally conduct the trial of the case. No delegation of the reception of evidence to a commissioner shall be allowed except as to matters involving property relations of the spouses. (2) The grounds for declaration of absolute nullity or annulment of marriage must be proved. No judgment on the pleadings, summary judgment, or confession of judgment shall be allowed. (3) The court may order the exclusion from the courtroom of all persons, including members of the press, who do not have a direct interest in the case. Such an order may be made if the court determines on the record that requiring a party to testify in open court would not enhance the ascertainment of truth; would cause to the party psychological harm or inability to effectively communicate due to embarrassment, fear, or timidity; would violate the right of a party to privacy; or would be offensive to decency or public morals. (4) No copy shall be taken nor any examination or perusal of the records of the case or parts thereof be made by any person other than a party or counsel of a party, except by order of the court. Section 18. Memoranda. - The court may require the parties and the public prosecutor, in consultation
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Section 18. Memoranda. - The court may require the parties and the public prosecutor, in consultation with the Office of the Solicitor General, to file their respective memoranda support of their claims within fifteen days from the date the trial is terminated. It may require the Office of the Solicitor General to file its own memorandum if the case is of significant interest to the State. No other pleadings or papers may be submitted without leave of court. After the lapse of the period herein provided, the case will be considered submitted for decision, with or without the memoranda. Section 19. Decision. - (1) If the court renders a decision granting the petition, it shall declare therein that the decree of absolute nullity or decree of annulment shall be issued by the court only after compliance with Article 50 and 51 of the Family Code as implemented under the Rule on Liquidation, Partition and Distribution of Properties. (2) The parties, including the Solicitor General and the public prosecutor, shall be served with copies of the decision personally or by registered mail. If the respondent summoned by publication failed to appear in the action, the dispositive part of the decision shall be published once in a newspaper of general circulation. (3) The decision becomes final upon the expiration of fifteen days from notice to the parties. Entry of judgment shall be made if no motion for reconsideration or new trial, or appeal Is filed by any of the parties the public prosecutor, or the Solicitor General. (4) Upon the finality of the decision, the court shall forthwith issue the corresponding decree if the parties have no properties. If the parties have properties, the court shall observe the procedure prescribed in Section 21 of this Rule. The entry of judgment shall be registered in the Civil Registry where the marriage was recorded and In the Civil Registry where the Family Court'granting the petition for declaration of absolute nullity or annulment of marriage is located. Section 20. Appeal. (1) Pre-condition. - No appeal from the decision shall be allowed unless the appellant has filed a motion for reconsideration or new trial within fifteen days from notice of judgment. (2) Notice of appeal. - An aggrieved party or the Solicitor General may appeal from the decision by filing a Notice of Appeal within fifteen days from notice of denial of the motion for reconsideration or new trial. The appellant shall serve a copy of the notice of appeal on the adverse parties. Section 21. Liquidation, partition and distribution, custody, support of common children and delivery of their presumptive iegltimes. - Upon entry of the judgment granting the petition, or, in case of appeal, upon receipt of the entry of judgment of the appellate court granting the petition, the Family Court, on motion of either party, shall proceed with the liquidation, partition and distribution of the properties of the spouses, including custody, support of common children and delivery of their presumptive legitimes pursuant to Articles 50 and 51 of the Family Code unless such matters had been adjudicated in previous judicial proceedings. Section 22. Issuance of Decree of Declaration of Absolute Nullity or Annulment of Marriage." (a) The court shall issue the Decree after; (1) Registration of the entry of judgment granting the petition for declaration of nullity or annulment of marriage in the Civil Registry where the marriage was celebrated and in the Civil Registry of the place where the Family Court is located; (2) Registration of the approved partition and distribution of the properties of the spouses, in the proper Register of Deeds where the real properties are located; and (3) The delivery of the children's presumptive legitimes in cash, property, or sound securities. (b) The court shall quote in the Decree the dispositive portion of the judgment entered and attach to the Decree the approved deed of partition. Except in the case of children under Articles 36 and 53 of the Family Code, the court shall order the Local Civil Registrar to issue an amended birth certificate indicating the new civil status of the children affected. Section 23. Registration and publication of the decree; decree as best evidence. - (a) The prevailing party shall cause the registration of the Decree in the Civil Registry where the marriage was registered, the Civil Registry of the place where the Family Court is situated, and in the National Census and Statistics Office. He shall report td the court compliance with this requirement within thirty days from receipt of the copy of the Decree.
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the copy of the Decree. (b) In case service of summons was made by publication, the parties shall cause the publication of the Decree once in a newspaper of general circulation. (c) The registered Decree shall be the best evidence to prove the declaration of absolute nullity or annulment of marriage and shall serve as notice to third persons concerning the properties of petitioner and respondent as well as the properties or presumptive legitimes delivered to their common children. Section 24. Effect of death of a party; duty of the Family Court or Appellate Court. - (a) In case a party dies at any stage of the proceedings before the entry of judgment, the court shall order the case closed and terminated, without prejudice to the settlement of the estate in proper proceedings in the regular courts. (b) If the party dies after the entry of judgment of nullity or annulment, the judgment shall be binding upon the parties and their successors in interest in the settlement of the estate in the regular courts. Section 25. Effectlvity. - This Rule shall take effect on March 15, 2003 following its publication in a newspaper of general circulation not later than March 7, 2003.
Pasted from <http://www.lawphil.net/courts/supreme/am/am_02-11-10-sc_2003.html>

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A.M. No. 02-11-11 Rule on Legal Separation
Sunday, November 14, 2010 11:29 PM

A.M. No. 02-11-11-SC March 4, 2003 RE: PROPOSED RULE ON LEGAL SEPARATION RESOL UTI ON Acting on the letter of the Chairman of the Committee on Revision of the Rules of Court submitting for this Court's consideration and approval the Proposed Rule on Legal Separation, the Court Resolved to APPROVED the same. The Rule shall take effect on March 15, 2003 following its publication in a newspaper of general circulation not later than March 7, 2003 March 4, 2003 Davide Jr. C.J., Bellosillo, Puno, Vitug, Mendoza, Panganiban, Quisumbing, Sandoval Gutierrez, Carpio, Austria-Martinez, Carpio-Morales, Callejo, Sr. and Azcuna, JJ. Ynares-Santiago, on leave, Corona, officially on leave. RULE ON LEGAL SEPARATION Section 1. Scope. - This Rule shall govern petitions for legal separation under the Family Code of the Philippines. The Rules of Court shall apply suppletorily. Section 2. Petition. - (a) Who may and when to file. - (1) A petition for legal separation may be filed only by the husband or the wife, as the case may be within five years from the time of the occurrence of any of the following causes: (a) Repeated physical violence or grossly abusive conduct directed against the petitioner, a common child, or a child of the petitioner; (b) Physical violence or moral pressure to compel the petitioner to change religious or political affiliation; (c) Attempt of respondent to corrupt or induce the petitioner, a common child, or a child of the petitioner, to engage in prostitution, or connivance in such corruption or inducement; (d) Final judgment sentencing the respondent to imprisonment of more than six years, even if pardoned; (e) Drug addiction or habitual alcoholism of the respondent; (f) Lesbianism or homosexuality of the respondent; (g) Contracting by the respondent of a subsequent bigamous marriage, whether in or outside the Philippines; (h) Sexual infidelity or perversion of the respondent; (i) Attempt on the life of petitioner by the respondent; or (j) Abandonment of petitioner by respondent without justifiable cause for more than one year. (b) Contents and form. - The petition for legal separation shall: (1) Allege the complete facts constituting the cause of action. (2) State the names and ages of the common children of the parties, specify the regime governing their property relations, the properties involved, and creditors, if any. If there is no adequate provision in a written agreement between the parties, the petitioner may apply for a provisional order for spousal support, custody and support of common children, visitation rights, administration of community or conjugal property, and other similar matters requiring urgent action, (3) Be verified and accompanied by a certification against forum shopping. The verification and certification must be personally signed by the petitioner. No petition may be filed solely by counsel or through an attorney-in-fact. If the petitioner is in a foreign country, the verification and certification against forum shopping shall be authenticated by the duly authorized officer of the Philippine embassy or legation, consul general, consul or vice-consul or consular agent in said country (4) Be filed in six copies. The petitioner shall, within five days from such filing, furnish a copy of the petition to the City or Provincial Prosecutor and the creditors, if any, and submit to the court proof of such service within the same period. Failure to comply with the preceding requirements may be a ground for immediate dismissal of
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such service within the same period. Failure to comply with the preceding requirements may be a ground for immediate dismissal of the petition. (c) Venue. - The petition shall be filed in the Family Court of the province or city where the petitioner or the respondent has been residing for at least six months prior to the date of filing "or in The case of a non-resident respondent, where he may be found in the Philippines, at the election of the petitioner. Section 3. Summons. - The service of summons shall be governed by Rule 14 of the Rules of Court and by the following rules: (a) Where the respondent cannot be located at his given address or his whereabouts are unknown and cannot be ascertained by diligent inquiry, service of summons may, by leave of court, be effected upon him by publication once a week for two consecutive weeks in a newspaper of general circulation in the Philippines and in such place as the court may order. In addition, a copy of the summons shall be served on respondent at his last known address by registered mail or by any other means the court may deem sufficient. (b) The summons to be published shall be contained in an order of the court with the following data; (1) title of the case; (2) docket number; (3) nature of the petition; (4) principal grounds of the petition and the reliefs prayed for, and (5) a directive for respondent to answer within thirty days from the last issue of publication. Section 4. Motion to Dismiss. - No motion to dismiss the petition shall be allowed except on the ground of lack of jurisdiction over the subject matter or over the parties; provided, however, that any other ground that might warrant a dismissal of the case may be raised as an affirmative defense in an answer. Section 5. Answer. - (a) The respondent shall file his answer within fifteen days from receipt of summons, or within thirty days from the last issue of publication in case of service of summons by publication. The answer must be verified by respondent himself and not by counsel or attorney-in-fact. (b) If the respondent fails to file an answer, the court shall not declare him in default. (c) Where no answer is filed/or if the answer does not tender an issue the court shall order the public prosecutor to investigate whether collusion exists between the parties. Section 6. Investigation Report of Public Prosecutor. - (a) Within one one month after receipt of the court order mentioned in paragraph (c) of the preceeding section, the public prosecutor shall submit a report to the court on whether the parties are in collusion and serve copies on the parties and their respective counsels, if any. (b) If the public prosecutor finds that collusion exists, he shall state the basis thereof in his report. The parties shall file their respective comments on the finding of collusion within ten days from receipt of copy of the report. The court shall set the report for hearing and if convinced that parties are in collusion,-it shall dismiss the petition. (c) If the public prosecutor reports that no collusion exists, the court shall set the case for pre-trial. It shall be the duty of the public prosecutor to appear for the State at the pre-trial. Section 7. Social Worker. - The court may require a social worker to conduct a case study and to submit the corresponding report at least three days before the pre-trial. The court may also require a case study at any stage of the case whenever necessary, Section 8. Pre-trial. (a) Pre-trial mandatory.-A pre-trial is mandatory. On motion or motu proprio, the court shall set the pretrial after the last pleading has been served and filed, or upon receipt of the report of the public prosecutor that no collusion exists between the parties on a date not earlier than six months from date of the filing of the petition. (b) Notice of Pre-trial.-(1) The notice of pre-trial shall contain: (a) the date of pre-trial conference; and (b) an order directing the parties to file and serve their respective pre-trial briefs in such manner as shall ensure the receipt thereof by the adverse party at least three days before the date of pre-trial. (2) The notice shall be served separately on the parties and their respective counsels as well as on the public prosecutor. It shall be their duty to appear personally at the pre-trial. (3) Notice of pre-trial shall be sent to the respondent even if he fails to file an answer. In case of summons by publication and the respondent failed to file his answer, notice of pre-trial shall be sent to respondent at his last known address. Section 9. Contents of pre-trial brief. - The pre-trial brief shall contain the following: (1) A statement of the willingness of the parties to enter into agreements as may be allowed by law,
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Section 9. Contents of pre-trial brief. - The pre-trial brief shall contain the following: (1) A statement of the willingness of the parties to enter into agreements as may be allowed by law, indicating the desired terms thereof; (2) A concise statement of their respective claims together with the applicable laws and authorities; (3) Admitted facts and proposed stipulations of facts, as well as the disputed factual and legal issues; (4) All the evidence to be presented, including expert opinion, if any, briefly stating or describing the nature and purpose thereof; (5) The number and names of the witnesses and their respective affidavits; and (6) Such other matters as the court may require. Failure to file the pre-trial brief or to comply with its required contents shall have the same effect as failure to appear at the pre-trial under the succeeding section. Section 10. Effect of failure to appear at the pre-trial. - (1) If the petitioner fails to appear personally, the case shall be dismissed unless his counsel or a duly authorized representative appears in court and proves a valid excuse for the non-appearance of the petitioner. (2) If the respondent filed his answer but fails to appear, the court shall proceed with the pre-trial and require the public prosecutor to investigate the non-appearance of the respondent and submit within fifteen days a report to the court stating whether his non-appearance is due to any collusion between the parties/ If there is no collusion the court shall require the public prosecutor to intervene for the State during the trial on the.merits to prevent suppression or fabrication of evidence. Section 11. Pre-trial conference. - At the pre-trial conference, the court may refer the issues to a mediator who shall assist the parties in reaching an agreement on matters not prohibited by law. The mediator shall render a report within one month from referral which, for good reasons, the court may extend for a period not exceeding one month. In case mediation is not availed of or where it fails, the court shall proceed with the pre-trial conference, on which occasion it shall consider the advisability of receiving expert testimony and such other matters as may aid in the prompt disposition of the petition. Section 12. Pre-trial order. - (a) The proceedings in the pre-trial shall be recorded. Upon termination of the pre-trial, the court shall issue a pre-trial order which shall recite in detail the matters taken up in the conference, the action taken thereon, the amendments allowed on the pleadings, and, except as to the ground of legal separation, the agreements or admissions made by the parties on any of the matters considered, including any provisional order that may be necessary or agreed upon by the parties. (b) Should the action proceed to trial, the order shall contain a recital of the following: (1) Facts undisputed, admitted, and those which need not be proved subject to Section 13 of this Rule; (2) Factual and legal issues to be litigated; (3) Evidence, including objects and documents, that have been marked and will be presented; (4) Names of witnesses who will be presented and their testimonies in the form of affidavits; and (5) Schedule of the presentation of evidence. The pre-trial order shall also contain a directive to the public prosecutor to appear for the State and take steps to prevent collusion between the parties at any stage of the proceedings and fabrication or suppression of evidence during the trial on the merits. (c) The parties shall not be allowed to raise issues or present witnesses and evidence other than those stated in the pre-trial order. The order shall control the trial of the case unless modified by the court to prevent manifest injustice. (d) The parties shall have five days from receipt of the pre-trial order to propose corrections or modifications. Section 13. Prohibited compromise. - The court shall not allow compromise on prohibited matters, such as the following: (1) The civil status of persons; (2) The validity of a marriage or of a legal separation; (3) Any ground lor legal separation; (4) Future support; (5) The jurisdiction of courts; and (6) Future legitime. Section 14. Trial. - (a) The presiding judge shall personally conduct the trial of the case. No delegation of the reception of evidence to a commissioner shall be allowed except as to matters involving property relations of the spouses.
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relations of the spouses. (b) The grounds for legal separation must be proved. No judgment on the pleadings, summary judgment, or confession of judgment shall be allowed. (c) The court may order the exclusion from the courtroom of all persons, including members of the press, who do not have a direct interest in the case. Such an order may be made if the court determines on the record othat requiring a party to testify in open court would not enhance the ascertainment of truth; would cause to the party psychological harm or inability to effectively communicate due to embarrassment, fear, or timidity; would violate the party's right to privacy; or would be offensive to decency (d) No copy shall be taken nor any examination or perusal of the records of the case or parts thereof be made by any person other than a party or counsel of a party, except by order of the court. Section 15. Memoranda. - The court may require the parties and the public prosecutor to file their respective memoranda in support of their claims within fifteen days from the date the trial is terminated. No other pleadings or papers may be submitted without leave of court. After the lapse of the period herein provided, the case will be considered submitted for decision, with or without the memoranda. Section 16. Decision. - (a) The court shall deny the petition on any of the following grounds: (1) The aggrieved party has condoned the offense or act complained of or has consented to the commission of the offense or act complained of; (2) There is connivance in the commission of the offense-or act constituting the ground for legal separation; (3) Both parties have given ground for legal separation; (4) There is collusion between the parties to obtain the decree of legal separation; or (5) The action is barred by prescription. (b) If the court renders a decision granting the petition, it shall declare therein that the Decree of Legal Separation shall be issued by the court only after full compliance with liquidation under the Family Code. However, in the absence of any property of.the parties, the court shall forthwith issue a Decree of Legal Separation which shall be registered in the Civil Registry where the marriage was recorded and in the Civil Registry where the Family Court granting the legal separation is located. (c) The decision shall likewise declare that: (1) The spouses are entitled to live separately from each other but the marriage bond is not severed; (2) The obligation of mutual support between the spouses ceases; and (3) The offending spouse is disqualified from inheriting from the innocent spouse by intestate succession, and provisions in favor of the offending spouse made in the will of the innocent spouse are revoked by operation of law. (d) The parties, including the Solicitor General and the public prosecutor, shall be served with copies of the decision personally or by registered mail. If the respondent summoned by publication failed to appear in the action, the dispositive part of the decision shall also be published once in a newspaper of general circulation. Section 17. Appeal. (a) Pre-condition. - No appeal from the decision shall be allowed unless the appellant has filed a motion for reconsideration or new trial within fifteen days from notice of judgment. (b) Notice of Appeal - An aggrieved party or the Solicitor General may appeal from the decision by filing a Notice of Appeal within fifteen days from notice of denial of the motion for reconsideration or new trial. The appellant shall serve a copy of the notice of appeal upon the adverse parties. Section 18. Liquidation, partition and distribution, custody, and support of minor children. - Upon entry of the judgment granting the petition, or, in case of appeal, upon receipt of the entry of judgment of the appellate court granting the petition, the Family Court, on motion of either party, shall proceed with the liquidation, partition and distribution of the properties of the spouses, including custody and support of common children, under the Family Code unless such matters had been adjudicated in previous judicial proceedings. Section 19. Issuance of Decree of Legal Separation. - (a) The court shall issue the Decree of Legal Separation after: (1) registration of the entry of judgment granting the petition tor legal separation in the Civil Registry where the marriage was celebrated and in the Civil Registry where the Family Court is located; and
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where the marriage was celebrated and in the Civil Registry where the Family Court is located; and (2) registration of the approved partition and distribution of the properties of the spouses, in the proper Register of Deeds where the real properties are located. (b) The court shall quote in the Decree the dispositive portion of the judgment entered and attach to the Decree the approved deed of partition. Section 20. Registration and publication of the Decree of Legal Separation; decree as best evidence. (a) Registration of decree.-The prevailing party shall cause the registration of the Decree in the Civil Registry where the marriage was registered, in the Civil Registry of the place where the Family Court is situated, and in the National Census and Statistics Office. He shall report to the court compliance with this requirement within thirty days iron receipt of the copy of the Decree. (b) Publication of decree.-- In case service of summons was made by publication, the parties shall cause the publication of the Decree once in a newspaper of general circulation. (c) Best evidence.-The registered Decree shall be the best evidence to prove the legal separation of the parties and shall serve as notice to third persons concerning the properties of petitioner and respondent. Section 21. Effect of death of a party; duty of the Family Court or Appellate Court. - (a) In case a party dies at any stage of me proceedings before the entry of judgment, the court shall order the case closed and terminated without prejudice to the settlement of estate proper proceedings in the regular courts. (b) If the party dies after the entry of judgment, the same shall be binding upon the parties and their successors in interest in the settlement of the estate in the regular courts. Section 22. Petition for revocation of donations. - (a) Within five (5) years from the date the decision granting the petition for legal separation has become final, the innocent spouse may file a petition under oath the same proceeding for legal separation to revoke the donations in favor of the offending spouse. (b)The revocation of the donations shall be recorded in the Register of Deeds of Deeds in the places where the properties are located. (c)Alienations, liens, and encumbrances registered in good faith. before the recording of the petition for revocation in the registries of property shall be respected. (d)After the issuance of the Decree of Legal Separation, the innocent spouse may revoke the designation of the offending spouse as a beneficiary in any insurance policy even if such designation be stipulated as irrevocable. The revocation or change shall take effect upon written notification thereof to the insurer. Section 23. Decree of Reconciliation. - (a) If the spouses had reconciled, a joint manifestation under oath, duly signed by the spouses, may be filed in the same proceeding for legal separation. (b) If the reconciliation occurred while the proceeding for legal separation is pending, the court shall immediately issue an order terminating the proceeding. (c) If the reconciliation occurred after the rendition of the judgment granting the petition for legal separation but before the issuance of the Decree, the spouses shall express in their manifestation whether or not they agree to revive the former regime of their property relations or choose a new regime. The court shall immediately issue a Decree of Reconciliation declaring that the legal separation proceeding is set aside and specifying the regime of property relations under which the spouses shall be covered. (d) If the spouses reconciled after the issuance of the Decree, the court, upon proper motion, shall issue a decree of reconciliation declaring therein that the Decree is set aside but the separation of property and any forfeiture of the share of the guilty spouse already effected subsists, unless the spouses have agreed to revive their former regime of property relations or adopt a new regime. (e) In case of paragraphs (b), (c), and (d). if the reconciled spouses choose to adopt a regime of property relations different from that which they had prior to the filing of the petition for legal separation, the spouses shall comply with Section 24 hereof. (f) The decree of reconciliation shall be recorded in the Civil Registries where the marriage and the Decree had been registered. Section 24. Revival of property regime or adoption of another. (a) In case of reconciliation under Section 23, paragraph (c) above, the parties shall file a verified motion for revival of regime of property relations or the adoption of another regime of property relations in the same proceeding for legal separation attaching to said motion their agreement for the approval of the
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same proceeding for legal separation attaching to said motion their agreement for the approval of the court. (b) The agreement which shall be verified shall specify the following: (1) The properties to be contributed to the restored or new regime; (2) Those to be retained as separate properties of each spouse; and (3) The names of all their known creditors, their addresses, and the amounts owing to each. (c) The creditors shall be furnished with copies of the motion and the agreement. (d) The court shall require the spouses to cause the publication of their verified motion for two consecutive weeks in a newspaper of general circulation. (e) After due hearing, and the court decides to grant the motion, it shall issue an order directing the parties to record the order in the proper registries of property within thirty days from receipt of a copy of the order and submit proof of compliance within the same period. Section 25. Effectivity. - This Rule shall take effect on March 15,2003 following its publication in a newspaper of general circulation not later than March 7, 2003.
Pasted from <http://www.lawphil.net/courts/supreme/am/am_02-11-11-sc_2003.html>

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A.M. No. 02-11-12 Rule on Provisional Orders
Sunday, November 14, 2010 11:29 PM

A.M. No. 02-11-12-SC March 4, 2003 RE: PROPOSED RULE ON PROVISIONAL ORDERS RESOL UTI ON Acting on the letter of the Chairman of the Committee on Revision of the Rules of Court submitting for this Court's consideration and approval the Proposed Rule on Provisional Orders, the Court Resolved to APPROVED the same. The Rule shall take effect on March 15, 2003 following its publication in a newspaper of general circulation not later than March 7, 2003 March 4, 2003 Davide Jr. C.J., Bellosillo, Puno, Vitug, Mendoza, Panganiban, Quisumbing, Sandoval Gutierrez, Carpio, Austria-Martinez, Carpio-Morales, Callejo, Sr. and Azcuna, JJ. Ynares-Santiago, on leave, Corona, officially on leave. RULE ON PROVISIONAL ORDERS Section 1. When Issued, - Upon receipt of a verified petition for declaration of absolute nullity of void marriage or for annulment of voidable marriage, or for legal separation, and at any time during the proceeding, the court, motu proprio or upon application under oath of any of the parties, guardian or designated custodian, may issue provisional orders and protection orders with or without a hearing. These orders may be enforced immediately, with or without a bond, and for such period and under such terms" and conditions as the court may deem necessary. Section 2. Spousal Support. - In determining support for the spouses, the court may be guided by the following rules: (a) In the absence of adequate provisions in a written agreement between the spouses, the spouses may be supported from the properties of the absolute community or the conjugal partnership. (b) The court may award support to either spouse in such amount and for such period of time as the court may deem just and reasonable based on their standard of living during the marriage. (c) The court may likewise consider the following factors: (1) whether the spouse seeking support is the custodian of a child whose circumstances make it appropriate for that spouse not to seek outside employment; (2) the time necessary to acquire sufficient education and training to enable the spouse seeking support to find appropriate employment, and that spouse's future earning capacity; (3) theduration of the marriage; (4) the comparative financial resources of the spouses, including their comparative earning abilities in the labor market; (5) the needs and obligations of each spouse; (6) the contribution of each spouse to the marriage, including services rendered in home-making, child care, education, and career building of the other spouse; (7) the age and health of the spouses; (8) the physical and emotional conditions of the spouses; (9) the ability of the supporting spouse to give support, taking into account that spouse's earning capacity, earned and unearned income, assets, and standard of living; and (10) any other factor the court may deem just and equitable. (d) The Family Court may direct the deduction of the provisional support from the salary of the spouse. Section 3. Child Support. - The common children of the spouses shall be supported from the properties of the absolute community or the conjugal partnership. Subject to the sound discretion of the court, either parent or both may be ordered to give an amount necessary for the support, maintenance, and education of the child. It shall be in proportion to the resources or means of the giver and to the necessities of the recipient. In determining the amount of provisional support, the court may likewise consider the following factors: (1) the financial resources of the custodial and non-custodial parent and those of the child; (2) the physical and emotional health of the child and his or her special needs and aptitudes; (3) the standard of living the child has been accustomed to; (4) the non-monetary contributions that the parents will make toward the care and well-being of the child.
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parents will make toward the care and well-being of the child. The Family Court may direct the deduction of the provisional support from the salary of the parent. Section 4. Child Custody. - In determining the right party or person to whom the custody of the child of the parties may be awarded pending the petition, the court shall consider the best interests of the child and shall give paramount consideration to the material and moral welfare of the child. The court may likewise consider the following factors: (a) the agreement of the parties; (b) the desire and ability of each parent to foster an open and loving relationship between the child and the other parent; (c) the child's health, safety, and welfare; (d) any history of child or spousal abase by the person seeking custody or who has had any filial relationship with the child, including anyone courting the parent; (e) the nature and frequency of contact with both parents; (f) habitual use of alcohol or regulated substances; (g) marital misconduct; (h) the most suitable physical, emotional, spiritual, psychological and educational environment; and (i) the preference of the child, if over seven years of age and of sufficient discernment, unless the parent chosen is unfit. The court may award provisional custody in the following order of preference: (1) to both parents jointly; (2) to either parent taking into account all relevant considerations under the foregoing paragraph, especially the choice of the child over seven years of age, unless the parent chosen is unfit; (3} to the surviving grandparent, or if there are several of them, to the grandparent chosen by the child over seven years of age and of sufficient discernment, unless the grandparent is unfit or disqualified; (4) to the eldest brother or sister over twenty-one years of age, unless he or she is unfit or disqualified; (5) to the child's actual custodian over twenty-one years of age, unless unfit or disqualified; or (6) to any other person deemed by the court suitable to provide proper care and guidance for the child. The custodian temporarily designated by the" court shall give the court and the parents five days notice of any plan to change the residence of the child or take him out of his residence for more than three days provided it does not prejudice the visitation rights of the parents. Section 5. Visitation Rights. - Appropriate visitation rights shall be provided to the parent who is not awarded provisional custody unless found unfit or disqualified by the court. . Section 6. Hold Departure Order. - Pending resolution of the petition, no child of the parties shall be brought out of the country without prior order from the court. The court, motu proprio or upon application under oath, may issue ex-parte a hold departure order, addressed to the Bureau of Immigration and Deportation, directing it not to allow the departure of the child from the Philippines without the permission of the court. The Family Court issuing the hold departure order shall furnish the Department of Foreign Affairs and the Bureau of Immigration and Deportation of the Department of Justice a copy of the hold departure order issued within twenty-four hours from the time of its issuance and through the fastest available means of transmittal. The hold-departure order shall contain the following information: (a) the complete name (including the middle name), the date and place of birth, and the place of last residence of the person against whom a hold-departure order has been issued or whose departure from the country has been enjoined; (b) the complete title and docket number of the case in which the hold departure was issued; (c) the specific nature of the case; and (d) the date of the hold-departure order. If available, a recent photograph of the person against whom a hold-departure order has been issued or whose departure from the country has been enjoined should also be included. The court may recall the order. motu proprio or upon verified motion of any of the parties after summary hearing, subject to such terms and conditions as may be necessary for the best interests of the child. Section 7. Order of Protection. - The court may issue an Order of Protection requiring any person: (a) to stay away from the home, school, business, or place of employment of the child, other parent or any other party, and to stay away from any other specific place designated by the court; (b) to refrain from harassing, intimidating, or threatening such child or the other parent or any person to whom custody of the child is awarded; (c) to refrain from acts of commission or omission that create an unreasonable risk to the health, safety, or welfare of the child;
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or welfare of the child; (d) to permit a parent, or a person entitled to visitation by a court order or a separation agreement, to visit the child at stated periods; (e) to permit a designated party to enter the residence during a specified period of time in order to take persona! belongings not contested in a proceeding pending with the Family Court; (f) to comply with such other orders as are necessary for the protection of the child. Section 8. Administration of Common Property. - If a spouse without just cause abandons the other orfails to comply with his or her obligations to the family, the court may, upon application of the aggrieved party under oath, issue a provisional order appointing the applicant or a third person as receiver or sole administrator of the common property subject to such precautionary conditions it may impose. The receiver or administrator may not dispose of or encumber any common property or specific separate property of either spouse without prior authority of the court. The provisional order issued by the court shall be registered in the proper Register of Deeds and annotated in all titles of properties subject of the receivership or administration. Section 9. Effectivity. - This Rule shall take effect on March 15, 2003 following its publication in a newspaper of general circulation not later than March 7, 2003.
Pasted from <http://www.lawphil.net/courts/supreme/am/am_02-11-12-sc_2003.html>

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A.M. No. 03-04-04-SC Rule on Custody of Minors and Writ of Habeas Corpus in Relation to Custody of Minors
Sunday, November 14, 2010 11:29 PM

A.M. No. 03-04-04-SC April 22, 2003 RE: PROPOSED RULE ON CUSTODY OF MINORS AND WRIT OF HABEAS CORPUS IN RELATION TO CUSTODY OF MINORS RESOLUTION Acting on the letter of the Chairman of the Committee on Revision of the Rules of Court submitting for this Court’s consideration and approval the Proposed Rule on custody of Minors and Writ of Habeas Corpus in Relation to Custody of Minors, the Court Resolved to APPROVE the same. The Rule shall take effect on May 15, 2003 following its publication in a newspaper of general circulation not later than April 30, 2003. April 22, 2003 Davide, Jr., C.J., Bellosillo, Puno, Vitug, Panganiban, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr., and Azcuna, JJ., concur. Quisumbing, J., on official leave. RULE ON CUSTODY OF MINORS AND WRIT OF HABEAS CORPUS IN RELATION TO CUSTODY OF MINORS SECTION 1. Applicability. - This rule shall apply to petitions for custody of minors and writs of habeas corpus in relation thereto. The Rules of Court shall apply suppletorily. Section 2. Petition for custody of minors; who may file.- A verified petition for the rightful custody of a minor may be filed by any person claiming such right. The party against whom it may be filed shall be designated as the respondent. Section 3. Where to file petition. - The petition for custody of minors shall be filed with the Family Court of the province or city where the petitioner resides or where the minor may be found. Section 4. Contents of petition. - The verified petition shall allege the following: (a) The personal circumstances of the petitioner and of the respondent; (b) The name, age and present whereabouts of the minor and his or her relationship to the petitioner and the respondent; (c) The material operative facts constituting deprivation of custody; and (d) Such other matters which are relevant to the custody of the minor. The verified petition shall be accompanied by a certificate against forum shopping, which the petitioner must sign personally. Section 5. Summons; personal service on respondent. - If the court is satisfied that the petition is sufficient in form and substance, it shall direct the clerk of court to issue summons, which shall be served together with a copy of the petition personally on the respondent. Section 6. Motion to Dismiss. - A motion to dismiss the petition is not allowed except on the ground of lack of jurisdiction over the subject matter or over the parties. Any other ground that might warrant the dismissal of the petition may be raised as an affirmative defense in the answer. Section 7. Verified Answer. - The respondent shall file an answer to the petition, personally verified by him, within five days after service of summons and a copy of the petition. Section 8. Case study; duty of social worker. - Upon the filing of the verified answer or the expiration of the period to file it, the court may order a social worker to make a case study of the minor and the parties and to submit a report and recommendation to the court at least three days before the scheduled pre-trial. Section 9. Notice of mandatory pre-trial. - Within fifteen days after the filing of the answer or the expiration of the period to file answer, the court shall issue an order: (1) fixing a date for the pre-trial conference; (2) directing the parties to file and serve their respective pre-trial briefs in such manner as shall ensure receipt thereof by the adverse party at least three days before the date of pre-trial; and (3) requiring the respondent to present the minor before the court.
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requiring the respondent to present the minor before the court. The notice of its order shall be served separately on both the parties and their respective counsels. The pre-trial is mandatory. Section 10. Contents of pre-trial brief. - The pre-trial brief shall contain the following: (a) A statement of the willingness of the parties to enter into agreements that may be allowed by law, indicating its terms; (b) A concise statement of their respective claims together with the applicable laws and authorities; (c) Admitted facts and proposed stipulations of facts; (d) The disputed factual and legal issues; (e) All the evidence to be presented, briefly stating or describing its nature and purpose; (f) The number and names of the witnesses and their respective affidavits which shall serve as the affiant's testimony on direct examination; and (g) Such other matters as the court may require to be included in the pre-trial brief. Failure to file the pre-trial brief or to comply with its required contents shall have the same effect as failure to appear at the pre-trial. Section 11. Effect of failure to appear at the pre-trial.-(a) If the petitioner fails to appear personally at the pre-trial, the case shall be dismissed, unless his counsel or a duly authorized representative appears in court and proves a valid excuse for the non-appearance of the petitioner. (b) If the respondent has filed his answer but fails to appear at the pre-trial, the petitioner shall be allowed to present his evidence ex parte. The court shall then render judgment on the basis of the pleadings and the evidence thus presented. Section 12. What may be done at pre-trial. - At the pre-trial, the parties may agree on the custody of the minor. If the parties fail to agree, the court may refer the matter to a mediator who shall have five days to effect an agreement between the parties. If the issue is not settled through mediation, the court shall proceed with the pre-trial conference, on which occasion it shall consider such other matters as may aid in the prompt disposition of the petition. Section 13. Provisional order awarding custody. - After an answer has been filed or after expiration of the period to file it, the court may issue a provisional order awarding custody of the minor. As far as practicable, the following order of preference shall be observed in the award of custody: (a) Both parents jointly; (b) Either parent, taking into account all relevant considerations, especially the choice of the minor over seven years of age and of sufficient discernment, unless the parent chosen is unfit; (c) The grandparent, or if there are several grandparents, the grandparent chosen by the minor over seven years of age and of sufficient discernment, unless the grandparent chosen is unfit or disqualified; (d) The eldest brother or sister over twenty-one years of age, unless he or she is unfit or disqualified; (e) The actual custodian of the minor over twenty-one years of age, unless the former is unfit or disqualified; or (f) Any other person or institution the court may deem suitable to provide proper care and guidance for the minor. Section 14. Factors to consider in determining custody. - In awarding custody, the court shall consider the best interests of the minor and shall give paramount consideration to his material and moral welfare. The best interests of the minor refer to the totality of the circumstances and conditions as are most congenial to the survival, protection, and feelings of security of the minor encouraging to his physical, psychological and emotional development. It also means the least detrimental available alternative for safeguarding the growth and development of the minor. The court shall also consider the following: (a) Any extrajudicial agreement which the parties may have bound themselves to comply with respecting the rights of the minor to maintain direct contact with the non custodial parent on a regular basis, except when there is an existing threat or danger of physical, mental, sexual or emotional violence which endangers the safety and best interests of the minor; (b) The desire and ability of one parent to foster an open and loving relationship between the minor and the other parent; (c) The health, safety and welfare of the minor; (d) Any history of child or spousal abuse by the person seeking custody or who has had any filial relationship with the minor, including anyone courting the parent;
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relationship with the minor, including anyone courting the parent; (e) The nature and frequency of contact with both parents; (f) Habitual use of alcohol, dangerous drugs or regulated substances; (g) Marital misconduct; (h) The most suitable physical, emotional, spiritual, psychological and educational environment for the holistic development and growth of the minor; and (i) The preference of the minor over seven years of age and of sufficient discernment, unless the parent chosen is unfit. Section 15. Temporary visitation rights. - The court shall provide in its order awarding provisional custody appropriate visitation rights to the non-custodial parent or parents, unless the court finds said parent or parents unfit or disqualified. The temporary custodian shall give the court and non custodial parent or parents at least five days' notice of any plan to change the residence of the minor or take him out of his residence for more than three days provided it does not prejudice the visitation rights of the non-custodial parent or parents. Section 16. Hold Departure Order. - The minor child subject of the petition shall not be brought out of the country without prior order from the court while the petition is pending. The court, motu proprio or upon application under oath, may issue ex parte a hold departure order, addressed to the Bureau of Immigration and Deportation, directing it not to allow the departure of the minor from the Philippines without the permission of the court. The Family Court issuing the hold departure order shall furnish the Department of Foreign Affairs and the Bureau of Immigration and Deportation of the Department of Justice a copy of the hold departure order within twenty-four hours from its issuance and through the fastest available means of transmittal. The hold departure order shall contain the following information: (a) The complete name (including the middle name), the date and place of birth, the nationality and the place of last residence of the person against whom a hold departure order has been issued or whose departure from the country has been enjoined; (b) The complete title and docket number of the case in which the hold departure order was issued; (c) The specific nature of the case; (d) The date of the hold departure order; and (e) A recent photograph, if available, of the party against whom a hold departure order has been issued or whose departure from the country has been enjoined. The court may recall the hold departure order motu proprio, or upon verified motion of any of the parties after summary hearing, subject to such terms and conditions as may be necessary for the best interests of the minor. Section 17. Protection Order. - The court may issue a Protection Order requiring any person: (a) To stay away from the home, school, business, or place of employment of the minor, other parent or any other party, or from any other specific place designated by the court; (b) To cease and desist from harassing, intimidating, or threatening such minor or the other parent or any person to whom custody of the minor is awarded; (c) To refrain from acts of commission or omission that create an unreasonable risk to the health, safety, or welfare of the minor; (d) To permit a parent, or a party entitled to visitation by a court order or a separation agreement, to visit the minor at stated periods; (e) To permit a designated party to enter the residence during a specified period of time in order to take personal belongings not contested in a proceeding pending with the Family Court; and (f) To comply with such other orders as are necessary for the protection of the minor. Section 18. Judgment. - After trial, the court shall render judgment awarding the custody of the minor to the proper party considering the best interests of the minor. If it appears that both parties are unfit to have the care and custody of the minor, the court may designate either the paternal or maternal grandparent of the minor, or his oldest brother or sister, or any reputable person to take charge of such minor, or commit him to any suitable home for children. In its judgment, the court may order either or both parents to give an amount necessary for the support, maintenance and education of the minor, irrespective of who may be its custodian. In determining the amount of support, the court may consider the following factors: (1) the financial resources of the custodial and non-custodial parent and those of the minor; (2) the physical and emotional health,
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custodial and non-custodial parent and those of the minor; (2) the physical and emotional health, special needs, and aptitude of the minor; (3) the standard of living the minor has been accustomed to; and (4) the non-monetary contributions that the parents would make toward the care and well-being of the minor. The court may also issue any order that is just and reasonable permitting the parent who is deprived of the care and custody of the minor to visit or have temporary custody. Section 19. Appeal. - No appeal from the decision shall be allowed unless the appellant has filed a motion for reconsideration or new trial within fifteen days from notice of judgment. An aggrieved party may appeal from the decision by filing a Notice of Appeal within fifteen days from notice of the denial of the motion for reconsideration or new trial and serving a copy thereof on the adverse parties. Section 20. Petition for writ of habeas corpus. - A verified petition for a writ of habeas corpus involving custody of minors shall be filed with the Family Court. The writ shall be enforceable within its judicial region to which the Family Court belongs. However, the petition may be filed with the regular court in the absence of the presiding judge of the Family Court, provided, however, that the regular court shall refer the case to the Family Court as soon as its presiding judge returns to duty. The petition may also be filed with the appropriate regular courts in places where there are no Family Courts. The writ issued by the Family Court or the regular court shall be enforceable in the judicial region where they belong. The petition may likewise be filed with the Supreme Court, Court of Appeals, or with any of its members and, if so granted, the writ shall be enforceable anywhere in the Philippines. The writ may be made returnable to a Family Court or to any regular court within the region where the petitioner resides or where the minor may be found for hearing and decision on the merits. Upon return of the writ, the court shall decide the issue on custody of minors. The appellate court, or the member thereof, issuing the writ shall be furnished a copy of the decision. Section 21. Confidentiality of proceedings. - The hearings on custody of minors may, at the discretion of the court, be closed to the public and the records of the case shall not be released to non-parties without its approval. Section 22. Effectivity. - This Rule shall take effect on May 15, 2003 following its publication in a newspaper of general circulation not later than April 30, 2003.
Pasted from <http://www.lawphil.net/courts/supreme/am/am_03_04_04_sc_2003.html>

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A.M. No. 03-02-05-SC Rule on Guardianship of Minors
Sunday, November 14, 2010 11:29 PM

[A.M. No. 03-02-05-SC 2003-05-01]

RE: PROPOSED RULE ON GUARDIANSHIP OF MINORS RESOL UTI ON
Acting on the letter of the Chairman of the Committee on Revision of the Rules of Court submitting for this Court’s consideration and approval the Proposed Rule on Guardianship of Minors, the Court Resolved to APPROVE the same.

The Rule shall take effect on May 1, 2003 following its publication in a newspaper of general circulation not later than April 15, 2003.
April 1, 2003. <>I>Davide, Jr. C.J., Bellosillo, Puno, Vitug, Mendoza, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Carpio-Moralez,Callejo Sr., Azcuna, JJ., concur RULE ON GUARDIANSHIP OF MINORS Section 1. Applicability of the Rule. – This Rule shall apply to petitions for guardianship over the person or property, or both, of a minor. The father and the mother shall jointly exercise legal guardianship over the person and property of their unemancipated common child without the necessity of a court appointment. In such case, this Rule shall be suppletory to the provisions of the Family Code on guardianship. Sec. 2. Who may petition for appointment of guardian. – On grounds authorized by law, any relative or other person on behalf of a minor, or the minor himself if fourteen years of age or over, may petition the Family Court for the appointment of a general guardian over the person or property, or both, of such minor. The petition may also be filed by the Secretary of Social Welfare and Development and by the Secretary of Health in the case of an insane minor who needs to be hospitalized. Sec. 3. Where to file petition. – A petition for guardianship over the person or property, or both, of a minor may be filed in the Family Court of the province or city where the minor actually resides. If he resides in a foreign country, the petition shall be flied with the Family Court of the province or city where his property or any part thereof is situated.

Sec. 4. Grounds of petition.-The grounds for the appointment of a guardian over the person or property, or both, of a minor are the following:
(a) death, continued absence, or incapacity of his parents; (b) suspension, deprivation or termination of parental authority;

(c) remarriage of his surviving parent, if the latter Is found unsuitable to exercise parental authority; or
(d) when the best interests of the minor so require.

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Sec. 5. Qualifications of guardians. – In appointing a guardian, the court shall consider the guardian’s: (a) moral character; (b) physical, mental and psychological condition; (c) financial status;

(d) relationship of trust with the minor;
(e) availability to exercise the powers and duties of a guardian for the full period of the guardianship; (f) lack of conflict of interest with the minor; and

(g) ability to manage the property of the minor.
Sec. 6. Who may be appointed guardian of the person or property, or both, of a minor. – In default of parents or a court-appointed guardian, the court may appoint a guardian of the person or property, or both, of a minor, observing as far as practicable, the following order of preference: (a) the surviving grandparent and In case several grandparents survive, the court shall select any of them taking Into account all relevant considerations; (b) the oldest brother or sister of the minor over twenty-one years of age, unless unfit or disqualified; (c) the actual custodian of the minor over twenty-one years of age, unless unfit or disqualified; and (d) any other person, who in the sound discretion of the court, would serve the best interests of the minor.

Sec. 7. Contents of petition. – A petition for the appointment of a general guardian must allege the following: (a) The jurisdictional facts;
(b) The name, age and residence of the prospective ward;

(c) The ground rendering the appointment necessary or convenient;
(d) The death of the parents of the minor or the termination, deprivation or suspension of their parental authority; (e) The remarriage of the minor’s surviving parent;

(f) The names, ages, and residences of relatives within the 4th civil degree of the minor, and of persons having him in their care and custody;
(g) The probable value, character and location of the property of the minor; and (h) The name, age and residence of the person for whom letters of guardianship are prayed.

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The petition shall be verified and accompanied by a certification against forum shopping. However, no defect in the petition or verification shall render void the issuance of letters of guardianship. Sec. 8. Time and notice of hearing. – When a petition for the appointment of a general guardian is filed, the court shall fix a time and place for its hearing, and shall cause reasonable notice to be given to the persons mentioned in the petition, including the minor if he is fourteen years of age or over, and may direct other general or special notice to be given.

Sec. 9. Case study report. – The court shall order a social worker to conduct a case study of the minor and all the prospective guardians and submit his report and recommendation to the court for its guidance before the scheduled hearing. The social worker may intervene on behalf of the minor if he finds that the petition for guardianship should be denied.
Sec. 10. Opposition to petition. – Any interested person may contest the petition by filing a written opposition based on such grounds as the majority of the minor or the unsuitability of the person for whom letters are prayed, and pray that the petition be denied, or that letters of guardianship issue to himself, or to any suitable person named in the opposition. Sec. 11. Hearing and order for letters to issue. – At the hearing of the petition, it must be shown that the requirement of notice has been complied with. The prospective ward shall be presented to the court. The court shall hear the evidence of the parties in support of their respective allegations. If warranted, the court shall appoint a suitable guardian of the person or property, or both, of the minor. At the discretion of the court, the hearing on guardianship may be closed to the public and the records of the case shall not be released without its approval.

Sec. 12. When and how a guardian of the property for non-resident minor is appointed; notice. – When the minor resides outside the Philippines but has property in the Philippines, any relative or friend of such minor, or any one interested in his property, in expectancy or otherwise, may petition the Family Court for the appointment of a guardian over the property.
Notice of hearing of the petition shall be given to the minor by publication or any other means as the court may deem proper. The court may dispense with the presence of the non-resident minor. If after hearing the court is satisfied that such non-resident is a minor and a guardian is necessary or convenient, it may appoint a guardian over his property. Sec. 13. Service of final and executory judgment or order. – The final and executory judgment or order shall be served upon the Local Civil Registrar of the municipality or city where the minor resides and the Register of Deeds of the place where his property or part thereof is situated shall annotate the same in the corresponding title, and report to the court his compliance within fifteen days from receipt of the order.

Sec. 14. Bond of guardian; amount; conditions.-Before he enters upon the execution of his trust, or letters of guardianship issue, an appointed guardian may be required to post a bond in such sum as the court shall determine and conditioned as follows: (a) To make and return to the court, within three months after the issuance of his letters of guardianship, a true and complete Inventory of all the property, real and personal, of his ward which shall come to his possession or knowledge or to the possession or knowledge of any other person in his behalf;
(b) To faithfully execute the duties of his trust, to manage and dispose of the property according to this rule for the best interests of the ward, and to provide for his proper care, custody and education;
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rule for the best interests of the ward, and to provide for his proper care, custody and education;

(c) To render a true and Just account of all the property of the ward in his hands, and of all proceeds or interest derived therefrom, and of the management and disposition of the same, at the time designated by this rule and such other times as the court directs; and at the expiration of his trust, to settle his accounts with the court and deliver and pay over all the property, effects, and monies remaining in his hands, or due from him on such settlement, to the person lawfully entitled thereto; and
(d) To perform all orders of the court and such other duties as may be required by law. Sec. 15. Where to file the bond; action thereon. – The bond posted by a guardian shall be filed in the Family Court and, In case of breach of any of its conditions, the guardian may be prosecuted in the same proceeding for the benefit of the ward or of any other person legally interested in the property. Whenever necessary, the court may require the guardian to post a new bond and may discharge from further liability the sureties on the old bond after due notice to interested persons, if no injury may result therefrom to those interested in the property. Sec. 16. Bond of parents as guardians of property of minor. – lf the market value of the property or the annual Income of the child exceeds P50,000.00, the parent concerned shall furnish a bond In such amount as the court may determine, but in no case less than ten per centurn of the value of such property or annual income, to guarantee the performance of the obligations prescribed for general guardians. A verified petition for approval of the bond shall be flied in the Family Court of the place where the child resides or, if the child resides in a foreign country, in the Family Court of the place where the property or any part thereof is situated. The petition shall be docketed as a summary special proceeding In which all incidents and issues regarding the performance of the obligations of a general guardian shall be heard and resolved. Sec. 17. General duties of guardian. – A guardian shall have the care and custody of the person of his ward and the management of his property, or only the management of his property. The guardian of the property of a nonresident minor shall have the management of all his property within the Philippines. A guardian shall perform the following duties:

(a) To pay the just debts of the ward out of the personal property and the income of the real property of the ward, If the same is sufficient; otherwise, out of the real property of the ward upon obtaining an order for its sale or encumbrance; (b) To settle all accounts of his ward, and demand, sue for, receive all debts due him, or may, with the approval of the court, compound for the same and give discharges to the debtor on receiving a fair and just dividend of the property and effects; and to appear for and represent the ward in all actions and special proceedings, unless another person is appointed for that purpose;
(c) To manage the property of the ward frugally and without waste, and apply the income and profits thereon, insofar as may be necessary, to the comfortable and suitable maintenance of the ward; and if such income and profits be insufficient for that purpose, to sell or encumber the real or personal property, upon being authorized by the court to do so; (d) To consent to a partition of real or personal property owned by the ward jointly or in common with others upon authority granted by the court after hearing, notice to relatives of the ward, and a careful investigation as to the necessity and propriety of the proposed action;

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(e) To submit to the court a verified inventory of the property of his ward within three months after his appointment, and annually thereafter, the rendition of which may be required upon the application of an interested person; (f) To report to the court any property of the ward not included in the inventory which is discovered, or succeeded to, or acquired by the ward within three months after such discovery, succession, or acquisition; and

(g) To render to the court for its approval an accounting of the property one year from his appointment, and every year thereafter or as often as may be required.
Sec. 18. Power and duty of the court – The court may: (a) Request the assistance of one or more commissioners in the appraisal of the property of the ward reported in the initial and subsequent inventories; (b) Authorize reimbursement to the guardian, other than a parent, of reasonable expenses incurred in the execution of his trust, and allow payment of compensation for his services as the court may deem just, not exceeding ten per centum of the net income of the ward, if any; otherwise, in such amount the court determines to be a reasonable compensation for his services; and

(c) Upon complaint of the guardian or ward, or of any person having actual or prospective interest in the property at the ward, require any person suspected of having embezzled, concealed, or disposed of any money, goods or interest, or a written instrument belonging to the ward or his property to appear for examination concerning any thereof and issue such orders as would secure the property against such embezzlement, concealment or conveyance.
Sec. 19. Petition to sell or encumber property.-When the income of a property under guardianship is insufficient to maintain and educate the ward, or when it is for his benefit that his personal or real property or any part thereof be sold, mortgaged or otherwise encumbered, and the proceeds invested in safe and productive security, or in the improvement or security of other real property, the guardian may file a verified petition setting forth such facts, and praying that an order issue authorizing the sale or encumbrance of the property. Sec. 20. Order to show cause. – If the sale or encumbrance is necessary or would be beneficial to the ward, the court shall order his next of kin and all person/s interested in the property to appear at a reasonable time and place therein specified and show cause why the petition should not be granted. Sec. 21. Hearing on return of order; costs. – At the time and place designated in the order to show cause, the court shall hear the allegations and evidence of the petitioner and next of kin, and other persons interested, together with their witnesses, and grant or deny the petition as the best interests of the ward may require. Sec. 22. Contents of order for sale or encumbrance and its duration; bond. – If, after full examination, it is necessary, or would be beneficial to the ward, to sell or encumber the property, or some portion of it, the court shall order such sale or encumbrance the proceeds of which shall be expended for the maintenance or the education of the ward, or invested as the circumstances may require. The order shall specify the grounds for the sale or encumbrance and may direct that the property ordered sold be disposed of at public sale, subject to such conditions as to the time and manner of payment, and security where a part of the payment is deferred. The original bond of the guardian shall stand as security for the proper appropriation of the proceeds of the sale or encumbrance, but the court may, if deemed expedient, require an additional bond as a condition for the sale or encumbrance. The authority to sell or encumber shall not extend beyond one year, unless renewed by the court.
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to sell or encumber shall not extend beyond one year, unless renewed by the court. Sec. 23. Court may order investment of proceeds and direct management of property. – The court may authorize and require the guardian to invest the proceeds of sales or encumbrances, and any other money of his ward in his hands, in real or personal property, for the best interests of the ward, and may make such other orders for the management, investment, and disposition of the property and effects, as circumstances may warrant.
Sec. 24. Grounds for removal or resignation of guardian. – When a guardian becomes insane or otherwise incapable of discharging his trust or is found thereafter to be unsuitable, or has wasted or mismanaged the property of the ward, or has failed to render an account or make a return for thirty days after it is due, the court may, upon reasonable notice to the guardian, remove him as such and require him to surrender the property of the ward to the person found to be lawfully entitled thereto. The court may allow the guardian to resign for justifiable causes.

Upon the removal or resignation of the guardian, the court shall appoint a new one.
No motion for removal or resignation shall be granted unless the guardian has submitted the proper accounting of the property of the ward and the court has approved the same. Sec. 25. Ground for termination of guardianship. – The court motu proprio or upon verified motion of any person allowed to file a petition for guardianship may terminate the guardianship on the ground that the ward has come of age or has died. The guardian shall notify the court of such fact within ten days of its occurrence. Sec. 26. Service of final and executory judgment or order. – The final and executory judgment or order shall be served upon the Local Civil Registrar of the municipality or city where the minor resides and the Register of Deeds of the province or city where his property or any part thereof is situated. Both the Local Civil Registrar and’ the Register of Deeds shall enter the final and executory judgment or order in the appropriate books in their offices. Sec. 27. Effect of the rule. – This Rule amends Rules 92 to 97 inclusive of the Rules of Court on guardianship of minors. Guardianship of incompetents who are not minors shall continue to be under the jurisdiction of the regular courts and governed by the Rules of Court. Sec. 28. Effectivity. - This Rule shall take effect on May 1, 2003 following its publication in a newspaper of general circulation not later than April 15, 2003.
Pasted from <http://elibrary.judiciary.gov.ph/index6.php?doctype=Amendments%20to%20the%20Rules%20of% 20Court&docid=a45475a11ec72b843d74959b60fd7bd6456477e8a4088>

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A.M. No. 02-6-02-SC Rule on Adoption
Sunday, November 14, 2010 11:29 PM

[A.m. No. 02-6-02-SC 2002-08-02]

RULE ON ADOPTION A. DOMESTIC ADOPTION

Section 1. Applicability of the Rule. – This Rule covers the domestic adoption of Filipino children. Sec. 2. Objectives. – (a) The best interests of the child shall be the paramount consideration in all matters relating to his care, custody and adoption, in accordance with Philippine laws, the United Nations (UN) Convention on the Rights of the Child, UN Declaration on Social and Legal Principles Relating to the Protection and Welfare of Children with Special Reference to Foster Placement and Adoption, Nationally and Internationally, and the Hague Convention on the Protection of Children and Cooperation in Respect of Inter-country Adoption. (b) The State shall provide alternative protection and assistance through foster care or adoption for every child who is a foundling, neglected, orphaned, or abandoned. To this end, the State shall: (i) (i) ensure that every child remains under the care and custody of his parents and is provided with love, care, understanding and security for the full and harmonious development of his personality. Only when such efforts prove insufficient and no appropriate placement or adoption within the child’s extended family is available shall adoption by an unrelated person be considered. (ii) safeguard the biological parents from making hasty decisions in relinquishing their parental authority over their child;

(iii) (iii) prevent the child from unnecessary separation from his biological parents;
(iv) conduct public information and educational campaigns to promote a positive environment for adoption; (v) ensure that government and private sector agencies have the capacity to handle adoption inquiries, process domestic adoption applications and offer adoption-related services including, but not limited to, parent preparation and post-adoption education and counseling; (vi) encourage domestic adoption so as to preserve the child’s identity and culture in his native land, and only when this is not available shall inter-country adoption be considered as a last resort; and (vii) protect adoptive parents from attempts to disturb their parental authority and custody over their adopted child. Any voluntary or involuntary termination of parental authority shall be administratively or judicially declared so as to establish the status of the child as “legally available for adoption” and his custody transferred to the Department of Social Welfare and Development or to any duly licensed and accredited child-placing or child-caring agency, which entity shall be authorized to take steps for the permanent placement of the child.

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Sec. 3. Definition of Terms. – For purposes of this Rule:
(a) (a) “Child” is a person below eighteen (18) years of age at the time of the filing of the petition for adoption. (b) (b) “A child legally available for adoption” refers to a child who has been voluntarily or involuntarily committed to the Department or to a duly licensed and accredited child-placing or child-caring agency, freed of the parental authority of his biological parents, or in case of rescission of adoption, his guardian or adopter(s). (c) (c) “Voluntarily committed child” is one whose parents knowingly and willingly relinquish parental authority over him in favor of the Department. (d) (d) “Involuntarily committed child” is one whose parents, known or unknown, have been permanently and judicially deprived of parental authority over him due to abandonment; substantial, continuous or repeated neglect and abuse; or incompetence to discharge parental responsibilities.

(e) (e) “Foundling” refers to a deserted or abandoned infant or child whose parents, guardian or relatives are unknown; or a child committed to an orphanage or charitable or similar institution with unknown facts of birth and parentage and registered in the Civil Register as a “foundling.”
(f) (f) “Abandoned child” refers to one who has no proper parental care or guardianship or whose parents have deserted him for a period of at least six (6) continuous months and has been judicially declared as such. (g) (g) “Dependent child” refers to one who is without a parent, guardian or custodian or one whose parents, guardian or other custodian for good cause desires to be relieved of his care and custody and is dependent upon the public for support. (h) (h) “Neglected child” is one whose basic needs have been deliberately not attended to or inadequately attended to, physically or emotionally, by his parents or guardian. (i) (i) “Physical neglect” occurs when the child is malnourished, ill-clad and without proper shelter.

(j) (j) “Emotional neglect” exists when a child is raped, seduced, maltreated, exploited, overworked or made to work under conditions not conducive to good health or made to beg in the streets or public places, or placed in moral danger, or exposed to drugs, alcohol, gambling, prostitution and other vices.
(k) (k) “Child-placement agency” refers to an agency duly licensed and accredited by the Department to provide comprehensive child welfare services including, but not limited to, receiving applications for adoption, evaluating the prospective adoptive parents and preparing the adoption home study report. (l) (l) “Child-caring agency” refers to an agency duly licensed and accredited by the Department that provides 24-hour residential care services for abandoned, orphaned, neglected or voluntarily committed children. (m) (m) “Department” refers to the Department of Social Welfare and Development. (n) (n) “Deed of Voluntary Commitment” refers to the written and notarized instrument relinquishing parental authority and committing the child to the care and custody of the
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relinquishing parental authority and committing the child to the care and custody of the Department executed by the child’s biological parents or in their absence, mental incapacity or death, by the child’s legal guardian, to be witnessed by an authorized representative of the Department after counseling and other services have been made available to encourage the biological parents to keep the child. (o) (o) “Child Study Report” refers to a study made by the court social worker of the child’s legal status, placement history, psychological, social, spiritual, medical, ethno-cultural background and that of his biological family needed in determining the most appropriate placement for him. (p) (p) “Home Study Report” refers to a study made by the court social worker of the motivation and capacity of the prospective adoptive parents to provide a home that meets the needs of a child. (q) (q) “Supervised trial custody” refers to the period of time during which a social worker oversees the adjustment and emotional readiness of both adopters and adoptee in stabilizing their filial relationship. (r) (r) “Licensed Social Worker” refers to one who possesses a degree in bachelor of science in social work as a minimum educational requirement and who has passed the government licensure examination for social workers as required by Republic Act No. 4373. (s) (s) “Simulation of birth” is the tampering of the civil registry to make it appear in the birth records that a certain child was born to a person who is not his biological mother, thus causing such child to lose his true identity and status. (t) (t) “Biological Parents” refer to the child’s mother and father by nature. (u) (u) “Pre-Adoption Services” refer to psycho-social services provided by professionally-trained social workers of the Department, the social services units of local governments, private and government health facilities, Family Courts, licensed and accredited child-caring and childplacement agencies and other individuals or entities involved in adoption as authorized by the Department.

(v) (v) “Residence” means a person’s actual stay in the Philippines for three (3) continuous years immediately prior to the filing of a petition for adoption and which is maintained until the adoption decree is entered. Temporary absences for professional, business, health, or emergency reasons not exceeding sixty (60) days in one (1) year does not break the continuity requirement.
(w) (w) “Alien” refers to any person, not a Filipino citizen, who enters and remains in the Philippines and is in possession of a valid passport or travel documents and visa. SEC. 4. Who may adopt. – The following may adopt:

(1) Any Filipino citizen of legal age, in possession of full civil capacity and legal rights, of good moral character, has not been convicted of any crime involving moral turpitude; who is emotionally and psychologically capable of caring for children, at least sixteen (16) years older than the adoptee, and who is in a position to support and care for his children in keeping with the means of the family. The requirement of a 16-year difference between the age of the adopter and adoptee may be waived when the adopter is the biological parent of the adoptee or is the spouse of the adoptee’s parent;
(2) Any alien possessing the same qualifications as above-stated for Filipino nationals: Provided, That his country has diplomatic relations with the Republic of the Philippines, that he has been living in the Philippines for at least three (3) continuous years prior to the filing of the petition for
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living in the Philippines for at least three (3) continuous years prior to the filing of the petition for adoption and maintains such residence until the adoption decree is entered, that he has been certified by his diplomatic or consular office or any appropriate government agency to have the legal capacity to adopt in his country, and that his government allows the adoptee to enter his country as his adopted child. Provided, further, That the requirements on residency and certification of the alien’s qualification to adopt in his country may be waived for the following: (i) a former Filipino citizen who seeks to adopt a relative within the fourth (4th) degree of consanguinity or affinity; or (ii) one who seeks to adopt the legitimate child of his Filipino spouse; or (iii) one who is married to a Filipino citizen and seeks to adopt jointly with his spouse a relative within the fourth (4th) degree of consanguinity or affinity of the Filipino spouse. (3) The guardian with respect to the ward after the termination of the guardianship and clearance of his financial accountabilities. Husband and wife shall jointly adopt, except in the following cases:

(i) if one spouse seeks to adopt the legitimate child of one spouse by the other spouse; or
(ii) if one spouse seeks to adopt his own illegitimate child: Provided, however, That the other spouse has signified his consent thereto; or (iii) if the spouses are legally separated from each other.

In case husband and wife jointly adopt or one spouse adopts the illegitimate child of the other, joint parental authority shall be exercised by the spouses.

SEC. 5. Who may be adopted. – The following may be adopted: (1) (1) Any person below eighteen (18) years of age who has been voluntarily committed to the Department under Articles 154, 155 and 156 of P.D. No. 603 or judicially declared available for adoption;

(2) (2) The legitimate child of one spouse, by the other spouse;
(3) (3) An illegitimate child, by a qualified adopter to raise the status of the former to that of legitimacy; (4) (4) A person of legal age regardless of civil status, if, prior to the adoption, said person has been consistently considered and treated by the adopters as their own child since minority; (5) (5) A child whose adoption has been previously rescinded; or (6) (6) A child whose biological or adoptive parents have died: Provided, That no proceedings shall be initiated within six (6) months from the time of death of said parents. (7) (7) A child not otherwise disqualified by law or these rules.

Sec. 6. Venue. – The petition for adoption shall be filed with the Family Court of the province or city
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Sec. 6. Venue. – The petition for adoption shall be filed with the Family Court of the province or city where the prospective adoptive parents reside.

Sec. 7. Contents of the Petition. – The petition shall be verified and specifically state at the heading of the initiatory pleading whether the petition contains an application for change of name, rectification of simulated birth, voluntary or involuntary commitment of children, or declaration of child as abandoned, dependent or neglected.

1) 1) If the adopter is a Filipino citizen, the petition shall allege the following:
(a) (a) The jurisdictional facts;

(b) (b) That the petitioner is of legal age, in possession of full civil capacity and legal rights; is of good moral character; has not been convicted of any crime involving moral turpitude; is emotionally and psychologically capable of caring for children; is at least sixteen (16) years older than the adoptee, unless the adopter is the biological parent of the adoptee or is the spouse of the adoptee’s parent; and is in a position to support and care for his children in keeping with the means of the family and has undergone pre-adoption services as required by Section 4 of Republic Act No. 8552.
2) 2) If the adopter is an alien, the petition shall allege the following:

(a) (a) The jurisdictional facts;
(b) (b) Sub-paragraph 1(b) above;

(c) (c) That his country has diplomatic relations with the Republic of the Philippines;
(d) (d) That he has been certified by his diplomatic or consular office or any appropriate government agency to have the legal capacity to adopt in his country and his government allows the adoptee to enter his country as his adopted child and reside there permanently as an adopted child; and

(e) (e) That he has been living in the Philippines for at least three (3) continuous years prior to the filing of the petition and he maintains such residence until the adoption decree is entered.
The requirements of certification of the alien’s qualification to adopt in his country and of residency may be waived if the alien:

(i) is a former Filipino citizen who seeks to adopt a relative within the fourth degree of consanguinity or affinity; or (ii) seeks to adopt the legitimate child of his Filipino spouse; or
(iii) is married to a Filipino citizen and seeks to adopt jointly with his spouse a relative within the fourth degree of consanguinity or affinity of the Filipino spouse. 3) 3) If the adopter is the legal guardian of the adoptee, the petition shall allege that guardianship had been terminated and the guardian had cleared his financial accountabilities. 4) 4) If the adopter is married, the spouse shall be a co-petitioner for joint adoption except if: (a) one spouse seeks to adopt the legitimate child of the other, or
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(a) one spouse seeks to adopt the legitimate child of the other, or

(b) if one spouse seeks to adopt his own illegitimate child and the other spouse signified written consent thereto, or
(c) if the spouses are legally separated from each other. 5) 5) If the adoptee is a foundling, the petition shall allege the entries which should appear in his birth certificate, such as name of child, date of birth, place of birth, if known; sex, name and citizenship of adoptive mother and father, and the date and place of their marriage. 6) 6) If the petition prays for a change of name, it shall also state the cause or reason for the change of name. In all petitions, it shall be alleged:

(a) The first name, surname or names, age and residence of the adoptee as shown by his record of birth, baptismal or foundling certificate and school records.
(b) That the adoptee is not disqualified by law to be adopted. (c) The probable value and character of the estate of the adoptee.

(d) The first name, surname or names by which the adoptee is to be known and registered in the Civil Registry.
A certification of non-forum shopping shall be included pursuant to Section 5, Rule 7 of the 1997 Rules of Civil Procedure.

Sec. 8. Rectification of Simulated Birth. – In case the petition also seeks rectification of a simulated of birth, it shall allege that:
(a) (a) Petitioner is applying for rectification of a simulated birth; (b) (b) The simulation of birth was made prior to the date of effectivity of Republic Act No. 8552 and the application for rectification of the birth registration and the petition for adoption were filed within five years from said date; (c) (c) The petitioner made the simulation of birth for the best interests of the adoptee; and

(d) (d) The adoptee has been consistently considered and treated by petitioner as his own child.

Sec. 9. Adoption of a foundling, an abandoned, dependent or neglected child. – In case the adoptee is a foundling, an abandoned, dependent or neglected child, the petition shall allege:
(a) (a) The facts showing that the child is a foundling, abandoned, dependent or neglected; (b) (b) The names of the parents, if known, and their residence. If the child has no known or living parents, then the name and residence of the guardian, if any; (c) (c) The name of the duly licensed child-placement agency or individual under whose care the child is in custody; and

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child is in custody; and
(d) (d) That the Department, child-placement or child-caring agency is authorized to give its consent.

Sec. 10. Change of name. – In case the petition also prays for change of name, the title or caption must contain: (a) (a) The registered name of the child; (b) (b) Aliases or other names by which the child has been known; and (c) (c) The full name by which the child is to be known.

Sec. 11. Annexes to the Petition. – The following documents shall be attached to the petition: A. Birth, baptismal or foundling certificate, as the case may be, and school records showing the name, age and residence of the adoptee;

B. Affidavit of consent of the following:
1. The adoptee, if ten (10) years of age or over; 2. The biological parents of the child, if known, or the legal guardian, or the child-placement agency, child-caring agency, or the proper government instrumentality which has legal custody of the child; 3. The legitimate and adopted children of the adopter and of the adoptee, if any, who are ten (10) years of age or over; 4. The illegitimate children of the adopter living with him who are ten (10) years of age or over; and

5. The spouse, if any, of the adopter or adoptee.
C. Child study report on the adoptee and his biological parents; D. If the petitioner is an alien, certification by his diplomatic or consular office or any appropriate government agency that he has the legal capacity to adopt in his country and that his government allows the adoptee to enter his country as his own adopted child unless exempted under Section 4(2); E. Home study report on the adopters. If the adopter is an alien or residing abroad but qualified to adopt, the home study report by a foreign adoption agency duly accredited by the Inter-Country Adoption Board; and F. Decree of annulment, nullity or legal separation of the adopter as well as that of the biological parents of the adoptee, if any.

Sec. 12. Order of Hearing. – If the petition and attachments are sufficient in form and substance, the court shall issue an order which shall contain the following: (1) the registered name of the adoptee in the birth certificate and the names by which the
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(1) the registered name of the adoptee in the birth certificate and the names by which the adoptee has been known which shall be stated in the caption; (2) the purpose of the petition; (3) the complete name which the adoptee will use if the petition is granted; (4) the date and place of hearing which shall be set within six (6) months from the date of the issuance of the order and shall direct that a copy thereof be published before the date of hearing at least once a week for three successive weeks in a newspaper of general circulation in the province or city where the court is situated; Provided, that in case of application for change of name, the date set for hearing shall not be within four (4) months after the last publication of the notice nor within thirty (30) days prior to an election. The newspaper shall be selected by raffle under the supervision of the Executive Judge.

(5) a directive to the social worker of the court, the social service office of the local government unit or any child-placing or child-caring agency, or the Department to prepare and submit child and home study reports before the hearing if such reports had not been attached to the petition due to unavailability at the time of the filing of the latter; and
(6) a directive to the social worker of the court to conduct counseling sessions with the biological parents on the matter of adoption of the adoptee and submit her report before the date of hearing. At the discretion of the court, copies of the order of hearing shall also be furnished the Office of the Solicitor General through the provincial or city prosecutor, the Department and the biological parents of the adoptee, if known. If a change in the name of the adoptee is prayed for in the petition, notice to the Solicitor General shall be mandatory.

Sec. 13. Child and Home Study Reports. – In preparing the child study report on the adoptee, the concerned social worker shall verify with the Civil Registry the real identity and registered name of the adoptee. If the birth of the adoptee was not registered with the Civil Registry, it shall be the responsibility of the social worker to register the adoptee and secure a certificate of foundling or late registration, as the case may be. The social worker shall establish that the child is legally available for adoption and the documents in support thereof are valid and authentic, that the adopter has sincere intentions and that the adoption shall inure to the best interests of the child. In case the adopter is an alien, the home study report must show the legal capacity to adopt and that his government allows the adoptee to enter his country as his adopted child in the absence of the certification required under Section 7(b) of Republic Act No. 8552. If after the conduct of the case studies, the social worker finds that there are grounds to deny the petition, he shall make the proper recommendation to the court, furnishing a copy thereof to the petitioner.

Sec. 14. Hearing. – Upon satisfactory proof that the order of hearing has been published and jurisdictional requirements have been complied with, the court shall proceed to hear the petition. The petitioner and the adoptee must personally appear and the former must testify before the presiding
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petitioner and the adoptee must personally appear and the former must testify before the presiding judge of the court on the date set for hearing.
The court shall verify from the social worker and determine whether the biological parent has been properly counseled against making hasty decisions caused by strain or anxiety to give up the child; ensure that all measures to strengthen the family have been exhausted; and ascertain if any prolonged stay of the child in his own home will be inimical to his welfare and interest.

Sec. 15. Supervised Trial Custody. – Before issuance of the decree of adoption, the court shall give the adopter trial custody of the adoptee for a period of at least six (6) months within which the parties are expected to adjust psychologically and emotionally to each other and establish a bonding relationship. The trial custody shall be monitored by the social worker of the court, the Department, or the social service of the local government unit, or the child-placement or child-caring agency which submitted and prepared the case studies. During said period, temporary parental authority shall be vested in the adopter.
The court may, motu proprio or upon motion of any party, reduce the period or exempt the parties if it finds that the same shall be for the best interests of the adoptee, stating the reasons therefor.

An alien adopter however must complete the 6-month trial custody except the following:
a) a former Filipino citizen who seeks to adopt a relative within the fourth (4th) degree of consanguinity or affinity; or b) one who seeks to adopt the legitimate child of his Filipino spouse; or

c) one who is married to a Filipino citizen and seeks to adopt jointly with his or her spouse the latter’s relative within the fourth (4th) degree of consanguinity or affinity. If the child is below seven (7) years of age and is placed with the prospective adopter through a preadoption placement authority issued by the Department, the court shall order that the prospective adopter shall enjoy all the benefits to which the biological parent is entitled from the date the adoptee is placed with him.
The social worker shall submit to the court a report on the result of the trial custody within two weeks after its termination.

Sec. 16. Decree of Adoption. – If the supervised trial custody is satisfactory to the parties and the court is convinced from the trial custody report and the evidence adduced that the adoption shall redound to the best interests of the adoptee, a decree of adoption shall be issued which shall take effect as of the date the original petition was filed even if the petitioners die before its issuance. The decree shall: A. State the name by which the child is to be known and registered;

B. Order:
1) the Clerk of Court to issue to the adopter a certificate of finality upon expiration of the 15-day reglementary period within which to appeal; 2) the adopter to submit a certified true copy of the decree of adoption and the certificate of finality to the Civil Registrar where the child was originally registered within thirty (30) days from
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finality to the Civil Registrar where the child was originally registered within thirty (30) days from receipt of the certificate of finality. In case of change of name, the decree shall be submitted to the Civil Registrar where the court issuing the same is situated. 3) 3) the Civil Registrar of the place where the adoptee was registered: a. to annotate on the adoptee’s original certificate of birth the decree of adoption within thirty (30) days from receipt of the certificate of finality;

b. to issue a certificate of birth which shall not bear any notation that it is a new or amended certificate and which shall show, among others, the following: registry number, date of registration, name of child, sex, date of birth, place of birth, name and citizenship of adoptive mother and father, and the date and place of their marriage, when applicable;
c. to seal the original certificate of birth in the civil registry records which can be opened only upon order of the court which issued the decree of adoption; and d. to submit to the court issuing the decree of adoption proof of compliance with all the foregoing within thirty days from receipt of the decree.

If the adoptee is a foundling, the court shall order the Civil Registrar where the foundling was registered, to annotate the decree of adoption on the foundling certificate and a new birth certificate shall be ordered prepared by the Civil Registrar in accordance with the decree.

Sec. 17. Book of Adoptions. – The Clerk of Court shall keep a book of adoptions showing the date of issuance of the decree in each case, compliance by the Civil Registrar with Section 16(B)(3) and all incidents arising after the issuance of the decree.

Sec. 18. Confidential Nature of Proceedings and Records. –All hearings in adoption cases, after compliance with the jurisdictional requirements shall be confidential and shall not be open to the public. All records, books and papers relating to the adoption cases in the files of the court, the Department, or any other agency or institution participating in the adoption proceedings shall be kept strictly confidential.
If the court finds that the disclosure of the information to a third person is necessary for security reasons or for purposes connected with or arising out of the adoption and will be for the best interests of the adoptee, the court may, upon proper motion, order the necessary information to be released, restricting the purposes for which it may be used.

Sec. 19. Rescission of Adoption of the Adoptee. – The petition shall be verified and filed by the adoptee who is over eighteen (18) years of age, or with the assistance of the Department, if he is a minor, or if he is over eighteen (18) years of age but is incapacitated, by his guardian or counsel. The adoption may be rescinded based on any of the following grounds committed by the adopter:

1) repeated physical and verbal maltreatment by the adopter despite having undergone counseling;
2) attempt on the life of the adoptee; 3) sexual assault or violence; or

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3) sexual assault or violence; or 4) abandonment or failure to comply with parental obligations. Adoption, being in the best interests of the child, shall not be subject to rescission by the adopter. However, the adopter may disinherit the adoptee for causes provided in Article 919 of the Civil Code.

Sec. 20. Venue. – The petition shall be filed with the Family Court of the city or province where the adoptee resides.

Sec. 21. Time within which to file petition. – The adoptee, if incapacitated, must file the petition for rescission or revocation of adoption within five (5) years after he reaches the age of majority, or if he was incompetent at the time of the adoption, within five (5) years after recovery from such incompetency.

Sec. 22. Order to Answer. – The court shall issue an order requiring the adverse party to answer the petition within fifteen (15) days from receipt of a copy thereof. The order and copy of the petition shall be served on the adverse party in such manner as the court may direct.

Sec. 23. Judgment. – If the court finds that the allegations of the petition are true, it shall render judgment ordering the rescission of adoption, with or without costs, as justice requires. The court shall order that the parental authority of the biological parent of the adoptee, if known, or the legal custody of the Department shall be restored if the adoptee is still a minor or incapacitated and declare that the reciprocal rights and obligations of the adopter and the adoptee to each other shall be extinguished. The court shall further declare that successional rights shall revert to its status prior to adoption, as of the date of judgment of judicial rescission. Vested rights acquired prior to judicial rescission shall be respected.

It shall also order the adoptee to use the name stated in his original birth or foundling certificate.
The court shall further order the Civil Registrar where the adoption decree was registered to cancel the new birth certificate of the adoptee and reinstate his original birth or foundling certificate.

Sec. 24. Service of Judgment. – A certified true copy of the judgment together with a certificate of finality issued by the Branch Clerk of the Court which rendered the decision in accordance with the preceding Section shall be served by the petitioner upon the Civil Registrar concerned within thirty (30) days from receipt of the certificate of finality. The Civil Registrar shall forthwith enter the rescission decree in the register and submit proof of compliance to the court issuing the decree and the Clerk of Court within thirty (30) days from receipt of the decree. The Clerk of Court shall enter the compliance in accordance with Section 17 hereof.

SEC. 25. Repeal. - This supersedes Rule 99 on Adoption and Rule 100 of the Rules of Court.

B. Inter-Country Adoption

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B. Inter-Country Adoption

Sec. 26. Applicability. – The following sections apply to inter-country adoption of Filipino children by foreign nationals and Filipino citizens permanently residing abroad.

SEC. 27. Objectives. – The State shall:
a) a) consider inter-country adoption as an alternative means of child care, if the child cannot be placed in a foster or an adoptive family or cannot, in any suitable manner, be cared for in the Philippines; b) ensure that the child subject of inter-country adoption enjoys the same protection accorded to children in domestic adoption; and c) take all measures to ensure that the placement arising therefrom does not result in improper financial gain for those involved.

Sec. 28. Where to File Petition. – A verified petition to adopt a Filipino child may be filed by a foreign national or Filipino citizen permanently residing abroad with the Family Court having jurisdiction over the place where the child resides or may be found.

It may be filed directly with the Inter-Country Adoption Board.

Sec. 29. Who may be adopted. – Only a child legally available for domestic adoption may be the subject of inter-country adoption. Sec. 30. Contents of Petition. – The petitioner must allege: a) a) his age and the age of the child to be adopted, showing that he is at least twenty-seven (27) years of age and at least sixteen (16) years older than the child to be adopted at the time of application, unless the petitioner is the parent by nature of the child to be adopted or the spouse of such parent, in which case the age difference does not apply; b) b) if married, the name of the spouse who must be joined as co-petitioner except when the adoptee is a legitimate child of his spouse; c) c) that he has the capacity to act and assume all rights and responsibilities of parental authority under his national laws, and has undergone the appropriate counseling from an accredited counselor in his country; d) d) that he has not been convicted of a crime involving moral turpitude;

e) e) that he is eligible to adopt under his national law;
f) f) that he can provide the proper care and support and instill the necessary moral values and example to all his children, including the child to be adopted; g) g) that he agrees to uphold the basic rights of the child, as embodied under Philippine laws and the U. N. Convention on the Rights of the Child, and to abide by the rules and regulations issued to implement the provisions of Republic Act No. 8043; h) h) that he comes from a country with which the Philippines has diplomatic relations and whose
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h) h) that he comes from a country with which the Philippines has diplomatic relations and whose government maintains a similarly authorized and accredited agency and that adoption of a Filipino child is allowed under his national laws; and i) i) that he possesses all the qualifications and none of the disqualifications provided in this Rule, in Republic Act No. 8043 and in all other applicable Philippine laws.

Sec. 31. Annexes. - The petition for adoption shall contain the following annexes written and officially translated in English: a) a) Birth certificate of petitioner;

b) b) Marriage contract, if married, and, if applicable, the divorce decree, or judgment dissolving the marriage; c) c) Sworn statement of consent of petitioner’s biological or adopted children above ten (10) years of age;
d) d) Physical, medical and psychological evaluation of the petitioner certified by a duly licensed physician and psychologist; e) e) Income tax returns or any authentic document showing the current financial capability of the petitioner; f) f) Police clearance of petitioner issued within six (6) months before the filing of the petitioner;

g) g) Character reference from the local church/minister, the petitioner’s employer and a member of the immediate community who have known the petitioner for at least five (5) years; h) h) Full body postcard-size pictures of the petitioner and his immediate family taken at least six (6) months before the filing of the petition.

Sec. 32. Duty of Court. – The court, after finding that the petition is sufficient in form and substance and a proper case for inter-country adoption, shall immediately transmit the petition to the Inter-Country Adoption Board for appropriate action.

SEC. 33. Effectivity. - This Rule shall take effect on August 22, 2002 following its publication in a newspaper of general circulation.
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Summary Proceedings under the Family Code, Title XI, Chapters 1 to 3
Sunday, November 14, 2010 11:30 PM

TITLE XI SUMMARY JUDICIAL PROCEEDINGS IN THE FAMILY LAW Chapter 1. Prefatory Provisions Art. 238. Until modified by the Supreme Court, the procedural rules provided for in this Title shall apply as regards separation in fact between husband and wife, abandonment by one of the other, and incidents involving parental authority. (n) Chapter 2. Separation in Fact Art. 239. When a husband and wife are separated in fact, or one has abandoned the other and one of them seeks judicial authorization for a transaction where the consent of the other spouse is required by law but such consent is withheld or cannot be obtained, a verified petition may be filed in court alleging the foregoing facts. The petition shall attach the proposed deed, if any, embodying the transaction, and, if none, shall describe in detail the said transaction and state the reason why the required consent thereto cannot be secured. In any case, the final deed duly executed by the parties shall be submitted to and approved by the court. (n) Art. 240. Claims for damages by either spouse, except costs of the proceedings, may be litigated only in a separate action. (n) Art. 241. Jurisdiction over the petition shall, upon proof of notice to the other spouse, be exercised by the proper court authorized to hear family cases, if one exists, or in the regional trial court or its equivalent sitting in the place where either of the spouses resides. (n) Art. 242. Upon the filing of the petition, the court shall notify the other spouse, whose consent to the transaction is required, of said petition, ordering said spouse to show cause why the petition should not be granted, on or before the date set in said notice for the initial conference. The notice shall be accompanied by a copy of the petition and shall be served at the last known address of the spouse concerned. (n) Art. 243. A preliminary conference shall be conducted by the judge personally without the parties being assisted by counsel. After the initial conference, if the court deems it useful, the parties may be assisted by counsel at the succeeding conferences and hearings. (n) Art. 244. In case of non-appearance of the spouse whose consent is sought, the court shall inquire into the reasons for his failure to appear, and shall require such appearance, if possible. (n) Art. 245. If, despite all efforts, the attendance of the non-consenting spouse is not secured, the court may proceed ex parte and render judgment as the facts and circumstances may warrant. In any case, the judge shall endeavor to protect the interests of the non-appearing spouse. (n) Art. 246. If the petition is not resolved at the initial conference, said petition shall be decided in a summary hearing on the basis of affidavits, documentary evidence or oral testimonies at the sound discretion of the court. If testimony is needed, the court shall specify the witnesses to be heard and the subject-matter of their testimonies, directing the parties to present said witnesses. (n) Art. 247. The judgment of the court shall be immediately final and executory. (n) Art. 248. The petition for judicial authority to administer or encumber specific separate property of the abandoning spouse and to use the fruits or proceeds thereof for the support of the family shall also be governed by these rules. (n) Chapter 3. Incidents Involving Parental Authority Art. 249. Petitions filed under Articles 223, 225 and 235 of this Code involving parental authority shall be verified.. (n) Art. 250. Such petitions shall be verified and filed in the proper court of the place where the child resides. (n) Art. 251. Upon the filing of the petition, the court shall notify the parents or, in their absence or
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Art. 251. Upon the filing of the petition, the court shall notify the parents or, in their absence or incapacity, the individuals, entities or institutions exercising parental authority over the child. (n) Art. 252. The rules in Chapter 2 hereof shall also govern summary proceedings under this Chapter insofar as they are applicable. (n)
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Chapter 4
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Art. 51(action of a child for presumptive legitime), Art. 69 (judicial declaration of family domicile in case of disagreement of the spouses), Art. 73 (spouse’s objection to the profession of the other spouse), Arts. 96 and 124 (annulment of husband’s decision in the administration and enjoyment of community or conjugal property; appointment of spouse as sole administrator except cases of “incompetent” other spouse which shall be under Rules 93 and 95) and Art. 217 (entrusting children to homes and orphanages).

Art. 41. A marriage contracted by any person during subsistence of a previous marriage shall be null and void, unless before the celebration of the subsequent marriage, the prior spouse had been absent for four consecutive years and the spouse present has a well-founded belief that the absent spouse was already dead. In case of disappearance where there is danger of death under the circumstances set forth in the provisions of Article 391 of the Civil Code, an absence of only two years shall be sufficient. For the purpose of contracting the subsequent marriage under the preceding paragraph the spouse present must institute a summary proceeding as provided in this Code for the declaration of presumptive death of the absentee, without prejudice to the effect of reappearance of the absent spouse. (83a) Art. 51. In said partition, the value of the presumptive legitimes of all common children, computed as of the date of the final judgment of the trial court, shall be delivered in cash, property or sound securities, unless the parties, by mutual agreement judicially approved, had already provided for such matters. The children or their guardian or the trustee of their property may ask for the enforcement of the judgment. The delivery of the presumptive legitimes herein prescribed shall in no way prejudice the ultimate successional rights of the children accruing upon the death of either of both of the parents; but the value of the properties already received under the decree of annulment or absolute nullity shall be considered as advances on their legitime. (n)
Art. 69. The husband and wife shall fix the family domicile. In case of disagreement, the court shall decide. The court may exempt one spouse from living with the other if the latter should live abroad or there are other valid and compelling reasons for the exemption. However, such exemption shall not apply if the same is not compatible with the solidarity of the family. (110a) Art. 73. Either spouse may exercise any legitimate profession, occupation, business or activity without the consent of the other. The latter may object only on valid, serious, and moral grounds. In case of disagreement, the court shall decide whether or not: (1) The objection is proper, and (2) Benefit has occurred to the family prior to the objection or thereafter. If the benefit accrued prior to the objection, the resulting obligation shall be enforced against the separate property of the spouse who has not obtained consent. The foregoing provisions shall not prejudice the rights of creditors who acted in good faith. (117a) Section 4. Ownership, Administrative, Enjoyment and Disposition of the Community Property Art. 96. The administration and enjoyment of the community property shall belong to both spouses jointly. In case of disagreement, the husband's decision shall prevail, subject to recourse to the court by the wife for proper remedy, which must be availed of within five years from the date of the contract implementing such decision. In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the common properties, the other spouse may assume sole powers of administration. These powers do not include disposition or encumbrance without authority of the court or the written consent of the other spouse. In the absence of such authority or consent, the disposition or encumbrance shall be void. However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by either or both offerors. (206a) Section 5. Administration of the Conjugal Partnership Property Art. 124. The administration and enjoyment of the conjugal partnership shall belong to both spouses jointly. In case of disagreement, the husband's decision shall prevail, subject to recourse to the court by the wife for proper remedy, which must be availed of within five years from the date of the contract implementing such decision. In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the conjugal properties, the other spouse may assume sole powers of administration. These powers do not include disposition or encumbrance without authority of the court or the written consent of the other spouse. In the absence of such authority or consent, the disposition or encumbrance shall be void. However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by either or both offerors. (165a) Art. 217. In case of foundlings, abandoned neglected or abused children and other children similarly situated, parental authority shall be entrusted in summary judicial proceedings to heads of children's homes, orphanages and similar institutions duly accredited by the proper government agency. (314a)

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Madrinan v. Madrinan GR 159374 Jul 12, 2007
Sunday, November 14, 2010 11:30 PM

FELIPE N. MADRIÑAN, G.R. No. 159374 Petitioner, Present: PUNO, C.J., Chairperson, SANDOVAL-GUTIERREZ,* - v e r s u s - CORONA, AZCUNA and GARCIA,** JJ. FRANCISCA R. MADRIÑAN, Respondent. Promulgated: July 12, 2007 x-- - - - -- - - - -- - - - -- - - - -- - - - -- - - - - -- - - - -- - - - - x DE C I S I O N CORONA, J.: When a family breaks up, the children are always the victims. The ensuing battle for custody of the minor children is not only a thorny issue but also a highly sensitive and heart-rending affair. Such is the case here. Even the usually technical subject of jurisdiction became emotionally charged. Petitioner Felipe N. Madriñan and respondent Francisca R. Madriñan were married on July 7, 1993 in Parañaque City. They resided in San Agustin Village, Brgy. Moonwalk, Parañaque City. Their union was blessed with three sons and a daughter: Ronnick, born on January 30, 1994; Phillip, born on November 19, 1996; Francis Angelo, born on May 12, 1998 and Krizia Ann, born on December 12, 2000. After a bitter quarrel on May 18, 2002, petitioner allegedly left their conjugal abode and took their three sons with him to Ligao City, Albay and subsequently to Sta. Rosa, Laguna. Respondent sought the help of her parents and parents-in-law to patch things up between her and petitioner to no avail. She then brought the matter to the Lupong Tagapamayapa in their barangay but this too proved futile. Thus respondent filed a petition for habeas corpus of Ronnick, Phillip and Francis Angelo in the Court of Appeals, alleging that petitioner’s act of leaving the conjugal dwelling and going to Albay and then to Laguna disrupted the education of their children and deprived them of their mother’s care. She prayed that petitioner be ordered to appear and produce their sons before the court and to explain why they should not be returned to her custody. Petitioner and respondent appeared at the hearing on September 17, 2002. They initially agreed that petitioner would return the custody of their three sons to respondent. Petitioner, however, had a change of heart[1] and decided to file a memorandum. On September 3, 2002, petitioner filed his memorandum[2] alleging that respondent was unfit to take custody of their three sons because she was habitually drunk, frequently went home late at night or in the wee hours of the morning, spent much of her time at a beer house and neglected her duties as a mother. He claimed that, after their squabble on May 18, 2002, it was respondent who left, taking their daughter with her. It was only then that he went to Sta. Rosa, Laguna where he worked as a tricycle driver. He submitted a certification from the principal of the Dila Elementary School in Sta. Rosa, Laguna that Ronnick and Phillip were enrolled there. He also questioned the jurisdiction of the Court of Appeals claiming that under Section 5(b) of RA 8369 (otherwise known as the “Family Courts Act of 1997”) family
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claiming that under Section 5(b) of RA 8369 (otherwise known as the “Family Courts Act of 1997”) family courts have exclusive original jurisdiction to hear and decide the petition for habeas corpus filed by respondent.[3] For her part, respondent averred that she did not leave their home on May 18, 2002 but was driven out by petitioner. She alleged that it was petitioner who was an alcoholic, gambler and drug addict. Petitioner’s alcoholism and drug addiction impaired his mental faculties, causing him to commit acts of violence against her and their children. The situation was aggravated by the fact that their home was adjacent to that of her in-laws who frequently meddled in their personal problems.[4] On October 21, 2002, the Court of Appeals[5] rendered a decision[6] asserting its authority to take cognizance of the petition and ruling that, under Article 213 of the Family Code, respondent was entitled to the custody of Phillip and Francis Angelo who were at that time aged six and four, respectively, subject to the visitation rights of petitioner. With respect to Ronnick who was then eight years old, the court ruled that his custody should be determined by the proper family court in a special proceeding on custody of minors under Rule 99 of the Rules of Court. Petitioner moved for reconsideration of the Court of Appeals decision but it was denied. Hence, this recourse.

Petitioner challenges the jurisdiction of the Court of Appeals over the petition for habeas corpus and insists that jurisdiction over the case is lodged in the family courts under RA 8369. He invokes Section 5(b) of RA 8369:
Section 5. Jurisdiction of Family Courts. – The Family Courts shall have exclusive original jurisdiction to hear and decide the following cases: xxx x xx x xx b) Petitions for guardianship, custody of children, habeas corpus in relation to the latter; xxx x xx x xx

Petitioner is wrong. In Thornton v. Thornton,*7+ this Court resolved the issue of the Court of Appeals’ jurisdiction to issue writs of habeas corpus in cases involving custody of minors in the light of the provision in RA 8369 giving family courts exclusive original jurisdiction over such petitions:
The Court of Appeals should take cognizance of the case since there is nothing in RA 8369 that revoked its jurisdiction to issue writs of habeas corpus involving the custody of minors. xxx x xx x xx We rule therefore that RA 8369 did not divest the Court of Appeals and the Supreme Court of their jurisdiction over habeas corpus cases involving the custody of minors. xxx x xx x xx The provisions of RA 8369 reveal no manifest intent to revoke the jurisdiction of the Court of Appeals and Supreme Court to issue writs of habeas corpus relating to the custody of minors. Further, it cannot be said that the provisions of RA 8369, RA 7092 [An Act Expanding the Jurisdiction of the Court of Appeals] and BP 129 [The Judiciary Reorganization Act of 1980] are absolutely incompatible since RA 8369 does not prohibit the Court of Appeals and the Supreme Court from issuing writs of habeas corpus in cases involving the custody of minors. Thus, the provisions of RA 8369 must be read in harmony with RA 7029 and BP 129 – that family courts have concurrent jurisdiction with the Court of Appeals and the Supreme Court in petitions for habeas corpus where the custody of minors is at issue.[8] (emphases supplied) The jurisdiction of the Court of Appeals over petitions for habeas corpus was further affirmed by A.M. No. 03-03-04-SC (April 22, 2004) in Re: Rule on Custody of Minors and Writ of Habeas Corpus in Relation to Custody of Minors:
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to Custody of Minors:

In any case, whatever uncertainty there was has been settled with the adoption of A.M. No. 03-03-04-SC Re: Rule on Custody of Minors and Writ of Habeas Corpus in Relation to Custody of Minors. Section 20 of the rule provides that:
Section 20. Petition for writ of habeas corpus. – A verified petition for a writ of habeas corpus involving custody of minors shall be filed with the Family Court. The writ shall be enforceable within its judicial region to which the Family Court belongs. xxx x xx x xx The petition may likewise be filed with the Supreme Court, Court of Appeals, or with any of its members and, if so granted, the writ shall be enforceable anywhere in the Philippines. The writ may be made returnable to a Family Court or to any regular court within the region where the petitioner resides or where the minor may be found for hearing and decision on the merits.

From the foregoing, there is no doubt that the Court of Appeals and Supreme Court have concurrent jurisdiction with family courts in habeas corpus cases where the custody of minors is involved.[9] (emphases supplied) We note that after petitioner moved out of their Parañaque residence on May 18, 2002, he twice transferred his sons to provinces covered by different judicial regions. This situation is what the Thornton interpretation of RA 8369’s provision on jurisdiction precisely addressed:
[The reasoning that by giving family courts exclusive jurisdiction over habeas corpus cases, the lawmakers intended them to be the sole courts which can issue writs of habeas corpus] will result in an iniquitous situation, leaving individuals like [respondent] without legal recourse in obtaining custody of their children. Individuals who do not know the whereabouts of minors they are looking for would be helpless since they cannot seek redress from family courts whose writs are enforceable only in their respective territorial jurisdictions. Thus, if a minor is being transferred from one place to another, which seems to be the case here, the petitioner in a habeas corpus case will be left without legal remedy. This lack of recourse could not have been the intention of the lawmakers when they passed [RA 8369].[10] Moreover, a careful reading of Section 5(b) of RA 8369 reveals that family courts are vested with original exclusive jurisdiction in custody cases, not in habeas corpus cases. Writs of habeas corpus which may be issued exclusively by family courts under Section 5(b) of RA 8369 pertain to the ancillary remedy that may be availed of in conjunction with a petition for custody of minors under Rule 99 of the Rules of Court. In other words, the issuance of the writ is merely ancillary to the custody case pending before the family court. The writ must be issued by the same court to avoid splitting of jurisdiction, conflicting decisions, interference by a co-equal court and judicial instability.

The rule therefore is: when by law jurisdiction is conferred on a court or judicial officer, all auxiliary writs, processes and other means necessary to carry it into effect may be employed by such court or officer.[11] Once a court acquires jurisdiction over the subject matter of a case, it does so to the exclusion of all other courts, including related incidents and ancillary matters.
Accordingly, the petition is hereby DENIED.
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Yu v Yu GR 164915 Mar 10, 2006
Sunday, November 14, 2010 11:30 PM

G.R. No. 164915 March 10, 2006 ERIC JONATHAN YU, Petitioner, vs. CAROLINE T. YU, Respondent. DE C I S I O N CARPIO MORALES, J.: On January 11, 2002, Eric Jonathan Yu (petitioner) filed a petition for habeas corpus before the Court of Appeals alleging that his estranged wife Caroline Tanchay-Yu (respondent) unlawfully withheld from him the custody of their minor child Bianca. The petition, which included a prayer for the award to him of the sole custody of Bianca, was docketed as CA-G.R. SP No. 68460. Subsequently or on March 3, 2002, respondent filed a petition against petitioner before the Pasig Regional Trial Court (RTC) for declaration of nullity of marriage and dissolution of the absolute community of property. The petition included a prayer for the award to her of the sole custody of Bianca and for the fixing of schedule of petitioner’s visiting rights "subject only to the final and executory judgment of the Court of Appeals in CA-G.R. SP No. 68460." In the meantime, the appellate court, by Resolution of March 21, 2002, awarded petitioner full custody of Bianca during the pendency of the habeas corpus case, with full visitation rights of respondent. Petitioner and respondent later filed on April 5, 2002 before the appellate court a Joint Motion to Approve Interim Visitation Agreement which was, by Resolution of April 24, 2002, approved. On April 18, 2002, respondent filed before the appellate court a Motion for the Modification of her visiting rights under the Interim Visitation Agreement. To the Motion, petitioner filed an Opposition with Motion to Cite Respondent for Contempt of Court in light of her filing of the petition for declaration of nullity of marriage before the Pasig RTC which, so he contended, constituted forum shopping. By Resolution of July 5, 2002, the appellate court ordered respondent and her counsel to make the necessary amendment in her petition for declaration of nullity of marriage before the Pasig City RTC in so far as the custody aspect is concerned, under pain of contempt. In compliance with the appellate court’s Resolution of July 5, 2002, respondent filed a Motion to Admit Amended Petition before the Pasig RTC. She, however, later filed in December 2002 a Motion to Dismiss her petition, without prejudice, on the ground that since she started residing and conducting business at her new address at Pasay City, constraints on resources and her very busy schedule rendered her unable to devote the necessary time and attention to the petition. The Pasig RTC granted respondent’s motion and accordingly dismissed the petition without prejudice, by Order of March 28, 2003. On June 12, 2003, petitioner filed his own petition for declaration of nullity of marriage and dissolution of the absolute community of property before the Pasig RTC, docketed as JDRC Case No. 6190, with prayer for the award to him of the sole custody of Bianca, subject to the final resolution by the appellate court of his petition for habeas corpus. The appellate court eventually dismissed the habeas corpus petition, by Resolution of July 3, 2003, for having become moot and academic, "the restraint on the liberty of the person alleged to be in restraint [having been] lifted." In the meantime, respondent filed on July 24, 2003 before the Pasay RTC a petition for habeas corpus, which she denominated as "Amended Petition," praying for, among other things, the award of the sole custody to her of Bianca or, in the alternative, pending the hearing of the petition, the issuance of an order "replicating and reiterating the enforceability of the Interim Visiting Agreement" which was approved by the appellate court. The petition was docketed as SP Proc. No. 03-0048. Not to be outdone, petitioner filed on July 25, 2003 before the Pasig RTC in his petition for declaration of nullity of marriage an urgent motion praying for the custody of Bianca for the duration of the case. Acting on respondent’s petition, Branch 113 of the Pasay RTC issued a Writ of Habeas Corpus, a Hold Departure Order and Summons addressed to petitioner, drawing petitioner to file a motion to dismiss the petition on the ground of lack of jurisdiction, failure to state a cause of action, forum shopping and litis pendentia, he citing the pending petition for declaration of nullity of marriage which he filed before
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the Pasig RTC. The Pasay RTC, in the meantime, issued an Order of August 12, 2003 declaring that pending the disposition of respondent’s petition, Bianca should stay with petitioner from Sunday afternoon to Saturday morning and "with the company of her mother from Saturday 1:00 in the afternoon up to Sunday 1:00 in the afternoon." To this Order, petitioner filed a Motion for Reconsideration, arguing that the Pasay RTC did not have jurisdiction to issue the same. He likewise filed a Manifestation of August 14, 2003 stating that he was constrained to submit to the said court’s order but with the reservation that he was not submitting the issue of custody and himself to its jurisdiction. Respondent soon filed her Answer with Counter-Petition on the nullity case before the Pasig RTC wherein she also prayed for the award of the sole custody to her of Bianca, subject to the final disposition of the habeas corpus petition which she filed before the Pasay RTC. By Omnibus Order of October 30, 2003, the Pasig RTC asserted its jurisdiction over the custody aspect of the petition filed by petitioner and directed the parties to comply with the provisions of the Interim Visitation Agreement, unless they agreed to a new bilateral agreement bearing the approval of the court; and granted custody of Bianca to petitioner for the duration of the case. The Pasay RTC in the meantime denied, by Order of November 27, 2003, petitioner’s motion to dismiss. The court, citing Sombong v. Court of Appeals,1 held that in custody cases involving minors, the question of illegal and involuntary restraint of liberty is not the underlying rationale for the availability of a writ of habeas corpus as a remedy; rather, a writ of habeas corpus is prosecuted for the purpose of determining the right of custody over the child.2 And it further held that the filing before it of the habeas corpus case by respondent, who is a resident of Pasay, is well within the ambit of the provisions of A.M. No. 03-04-04-SC.3 On the issue of forum shopping, the Pasay RTC held that it is petitioner, not respondent, who committed forum shopping, he having filed (on June 12, 2003) the petition for declaration of nullity of marriage before the Pasig RTC while his petition for habeas corpus before the Court of Appeals was still pending.4 The Pasay RTC held that assuming arguendo that petitioner’s filing before the Pasig RTC of the declaration of nullity of marriage case did not constitute forum shopping, it (the Pasay RTC) acquired jurisdiction over the custody issue ahead of the Pasig RTC, petitioner not having amended his petition before the Pasig RTC as soon as the Court of Appeals dismissed his petition for habeas corpus5 (on July 3, 2003). Finally, the Pasay RTC held that there was no litis pendentia because two elements thereof are lacking, namely, 1) identity of the rights asserted and reliefs prayed for, the relief being founded on the same facts, and 2) identity with respect to the two preceding particulars in the two cases such that any judgment that may be rendered in the pending case, regardless of which party is successful, would amount to res judicata in the other case.6 Petitioner thereupon assailed the Pasay RTC’s denial of his Motion to Dismiss via Petition for Certiorari, Prohibition and Mandamus before the appellate court wherein he raised the following issues: A. RESPONDENT JUDGE COMMITTED GRAVE ABUSE OF DISCRETION BY DENYING PETITIONER’S MOTION TO DISMISS DESPITE THE EVIDENT LACK OF JURISDICTION OVER THE SUBJECT MATTER OF CUSTODY, LITIS PENDENTIA, AND DELIBERATE AND WILLFUL FORUM-SHOPPING ON THE PART OF RESPONDENT CAROLINE T. YU. 7 B. RESPONDENT JUDGE ACTED WHIMSICALLY, CAPRICIOUSLY AND ARBITRARILY IN ISSUING THE AUGUST 12, 2003 ORDER GRANTING RESPONDENT CAROLINE T. YU OVERNIGHT VISITATION RIGHTS OVER THE MINOR CHILD BIANCA AND DENYING PETITIONER’S URGENT MOTION FOR RECONSIDERATION OF THE SAID ORDER. 8 (Underscoring supplied) By Decision of August 10, 2004,9 the appellate court denied petitioner’s petition, it holding that the assumption of jurisdiction by the Pasay RTC over the habeas corpus case does not constitute grave abuse of discretion; the filing by respondent before the Pasay RTC of a petition for habeas corpus could not be considered forum shopping in the strictest sense of the word as before she filed it after petitioner’s petition for habeas corpus filed before the appellate court was dismissed; and it was petitioner who committed forum shopping when he filed the declaration of nullity of marriage case while his habeas corpus petition was still pending before the appellate court. In fine, the appellate court held that since respondent filed the petition for declaration of nullity of marriage before the Pasig RTC during the pendency of the habeas corpus case he filed before the appellate court, whereas respondent filed the habeas corpus petition before the Pasay RTC on July 24,
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appellate court, whereas respondent filed the habeas corpus petition before the Pasay RTC on July 24, 2003 after the dismissal on July 3, 2003 by the appellate court of petitioner’s habeas corpus case, jurisdiction over the issue custody of Bianca did not attach to the Pasig RTC. As for the questioned order of the Pasay RTC which modified the Interim Visiting Agreement, the appellate court, noting that the proper remedy for the custody of Bianca was filed with the Pasay RTC, held that said court had the authority to issue the same. Hence, the present petition filed by petitioner faulting the appellate court for I. . . . DECLARING THAT PETITIONER ERIC YU COMMITTED FORUM-SHOPPING IN FILLING THE PETITION FOR DECLARATION OF NULLITY OF MARRIAGE WITH PRAYER FOR CUSTODY BEFORE THE PASIG FAMILY COURT AND THAT THE LATTER COURT WAS BARRED FROM ACQUIRING JURISDICTION OVER THE CUSTODY ASPECT OF THE NULLITY CASE IN RECKLESS DISREGARD OF THE PRINCIPLE THAT THE FILING OF A PETITION FOR NULLITY OF MARRIAGE BEFORE THE FAMILY COURTS VESTS THE LATTER WITH EXCLUSIVE JURISDICTION TO DETERMINE THE NECESSARY ISSUE OF CUSTODY. II. . . . APPL[YING] THE LAW OF THE CASE DOCTRINE BY RULING THAT THE PASIG FAMILY COURT HAS NO JURISDICTION OVER THE CUSTODY ASPECT OF THE NULLITY CASE ON THE BASIS OF THE JULY 5, 2002 RESOLUTION OF THE COURT OF APPEALS IN CA GR SP NO. 68460 WHEN THE SAID RESOLUTION CLEARLY APPLIES ONLY TO THE NULLITY CASE FILED BY PRIVATE RESPONDENT ON MARCH 7, 2002 DOCKETED AS JDRC CASE NO. 5745 AND NOT TO HEREIN PETITIONER’S JUNE 12, 2003 PETITION FOR NULLITY DOCKETED AS JDRC CASE NO. 6190. III. . . . DECLARING THAT THE PASIG FAMILY COURT MUST YIELD TO THE JURISDICTION OF THE PASAY COURT INSOFAR AS THE ISSUE OF CUSTODY IS CONCERNED IN GRAVE VIOLATION OF THE DOCTRINE OF JUDICIAL STABILITY AND NON-INTERFERENCE. IV. . . . RULING THAT PRIVATE RESPONDENT CAROLINE DID NOT COMMIT FORUM-SHOPING IN FILING THE HABEAS CORPUS CASE WITH PRAYER FOR CUSTODY BEFORE THE RESPONDENT PASAY COURT DESPITE THE FACT THAT AN EARLIER FILED PETITION FOR DECLARATION OF NULLITY OF MARRIAGE WITH PRAYER FOR CUSTODY IS STILL PENDING BEFORE THE PASIG FAMILY COURT WHEN THE FORMER CASE WAS INSTITUTED. V. . . . RULING THAT RESPONDENT CAROLINE YU DID NOT SUBMIT TO THE JURISDICTION OF THE PASIG FAMILY COURT BASED ON AN ERRONEOUS FACTUAL FINDING THAT SHE FILED ON AUGUST 25, 2003 AN OMNIBUS OPPOSITION IN PETITIONER’S ACTION FOR NULLITY BEFORE THE PASIG COURT.10 (Underscoring supplied) The petition is impressed with merit. The main issue raised in the present petition is whether the question of custody over Bianca should be litigated before the Pasay RTC or before the Pasig RTC. Judgment on the issue of custody in the nullity of marriage case before the Pasig RTC, regardless of which party would prevail, would constitute res judicata on the habeas corpus case before the Pasay RTC since the former has jurisdiction over the parties and the subject matter. There is identity in the causes of action in Pasig and Pasay because there is identity in the facts and evidence essential to the resolution of the identical issue raised in both actions11 – whether it would serve the best interest of Bianca to be in the custody of petitioner rather than respondent or vice versa. Since the ground invoked in the petition for declaration of nullity of marriage before the Pasig RTC is respondent’s alleged psychological incapacity to perform her essential marital obligations12 as provided in Article 36 of the Family Code, the evidence to support this cause of action necessarily involves evidence of respondent’s fitness to take custody of Bianca. Thus, the elements of litis pendentia, to wit: a) identity of parties, or at least such as representing the same interest in both actions; b) identity of rights asserted and reliefs prayed for, the relief being founded on the same facts; and c) the identity in the two cases should be such that the judgment that may be rendered in the pending case would, regardless of which party is successful, amount to res judicata in the other,13 are present. Respondent argues in her Comment to the petition at bar that the Pasig RTC never acquired jurisdiction over the custody issue raised therein. "[T]he subsequent dismissal of the habeas corpus petition by the Court of Appeals on 3 July 2003 could not have the effect of conferring jurisdiction over the issue on the Pasig court. For the Pasig court to acquire jurisdiction over the custody issue after the dismissal of the habeas corpus petition before the Court of Appeals, the rule is that petitioner must furnish the occasion for the acquisition of jurisdiction by repleading his cause of action for custody and invoking said cause anew."14 (Emphasis and
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by repleading his cause of action for custody and invoking said cause anew."14 (Emphasis and underscoring supplied) And respondent cites Caluag v. Pecson,15 wherein this Court held: Jurisdiction of the subject matter of a particular case is something more than the general power conferred by law upon a court to take cognizance of cases of the general class to which the particular case belongs. It is not enough that a court has power in abstract to try and decide the class litigations [sic] to which a case belongs; it is necessary that said power be properly invoked, or called into activity, by the filing of a petition, or complaint or other appropriate pleading. (Underscoring supplied by Caroline.) 16 Specific provisions of law govern the case at bar, however. Thus Articles 49 and 50 of the Family Code provide: Art. 49. During the pendency of the action [for annulment or declaration of nullity of marriage] and in the absence of adequate provisions in a written agreement between the spouses, the Court shall provide for the support of the spouses and the custody and support of their common children. x x x It shall also provide for appropriate visitation rights of the other parent. (Emphasis and underscoring supplied)17 Art. 50. x x x x The final judgment in such cases [for the annulment or declaration of nullity of marriage] shall provide for the liquidation, partition and distribution of the properties of the spouses, the custody and support of the common children, and the delivery of their presumptive legitimes, unless such other matters had been adjudicated in previous judicial proceedings." (Emphasis and underscoring added) By petitioner’s filing of the case for declaration of nullity of marriage before the Pasig RTC he automatically submitted the issue of the custody of Bianca as an incident thereof. After the appellate court subsequently dismissed the habeas corpus case, there was no need for petitioner to replead his prayer for custody for, as above-quoted provisions of the Family Code provide, the custody issue in a declaration of nullity case is deemed pleaded. That that is so gains light from Section 21 of the "Rule on Declaration Of Absolute Nullity Of Void Marriages and Annulment of Voidable Marriages"18 which provides: Sec. 21. Liquidation, partition and distribution, custody, support of common children and delivery of their presumptive legitimes.–Upon entry of the judgment granting the petition, or, in case of appeal, upon receipt of the entry of judgment of the appellate court granting the petition, the Family Court, on motion of either party, shall proceed with the liquidation, partition and distribution of the properties of the spouses, including custody, support of common children and delivery of their presumptive legitimes pursuant to Articles 50 and 51 of the Family Code unless such matters had been adjudicated in previous judicial proceedings. (Emphasis and underscoring supplied) Since this immediately-quoted provision directs the court taking jurisdiction over a petition for declaration of nullity of marriage to resolve the custody of common children, by mere motion of either party, it could only mean that the filing of a new action is not necessary for the court to consider the issue of custody of a minor.19 The only explicit exception to the earlier-quoted second paragraph of Art. 50 of the Family Code is when "such matters had been adjudicated in previous judicial proceedings," which is not the case here. The elements of litis pendentia having been established, the more appropriate action criterion guides this Court in deciding which of the two pending actions to abate.20 The petition filed by petitioner for the declaration of nullity of marriage before the Pasig RTC is the more appropriate action to determine the issue of who between the parties should have custody over Bianca in view of the express provision of the second paragraph of Article 50 of the Family Code. This must be so in line with the policy of avoiding multiplicity of suits.21 The appellate court thus erroneously applied the law of the case doctrine when it ruled that in its July 5, 2002 Resolution that the pendency of the habeas corpus petition in CA-G.R. SP No. 68460 prevented the Pasig RTC from acquiring jurisdiction over the custody aspect of petitioner’s petition for declaration of nullity. The factual circumstances of the case refelected above do not justify the application of the law of the case doctrine which has been defined as follows: Law of the case has been defined as the opinion delivered on a former appeal. It is a term applied to an established rule that when an appellate court passes on a question and remands the case to the lower court for further proceedings, the question there settled becomes the law of the case upon
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court for further proceedings, the question there settled becomes the law of the case upon subsequent appeal. It means that whatever is once irrevocably established as the controlling legal rule or decision between the same parties in the same case continues to be the law of the case, whether correct on general principles or not, so long as the facts on which such decision was predicated continue to be the facts of the case before the court." (Emphasis and underscoring supplied, italics in the original) 22 WHEREFORE, the petition is GRANTED. The August 10, 2004 decision of the Court of Appeals is REVERSED and SET ASIDE,and another is entered DISMISSING Pasay City Regional Trial Court Sp. Proc. No. 03-0048-CFM and ordering Branch 69 of Pasig City Regional Trial Court to continue, with dispatch, the proceedings in JDRC No. 6190.
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Sec. 5.2, RA 8799
Sunday, November 14, 2010 11:30 PM

Section 5. Powers and Functions of the Commission.– 5.2. The Commission’s jurisdiction over all cases enumerated under section 5 of Presidential Decree No. 902-A is hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial Court: Provided, That the Supreme Court in the exercise of its authority may designate the Regional Trial Court branches that shall exercise jurisdiction over the cases. The Commission shall retain jurisdiction over pending cases involving intra-corporate disputes submitted for final resolution which should be resolved within one (1) year from the enactment of this Code. The Commission shall retain jurisdiction over pending suspension of payment/rehabilitation cases filed as of 30 June 2000 until finally disposed.
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A.M. No. 01-2-04-SC Interim Rules of Procedure Governing Intracorporate Controversies
Sunday, November 14, 2010 11:31 PM

The Lawphil Project - Arellano Law Foundation A.M. No. 01-2-04-SC. March 13, 2001

A.M. No. 01-2-04-SC. March 13, 2001 Re: PROPOSED INTERIM RULES OF PROCEDURE GOVERNING INTRA-CORPORATE CONTROVERSIES UNDER R. A. NO. 8799 RESOLUTION INTERIM RULES OF PROCEDURE FOR INTRA-CORPORATE CONTROVERSIES RULE 1 GENERAL PROVISIONS SECTION 1. (a) Cases covered. – These Rules shall govern the procedure to be observed in civil cases involving the following: 1. Devices or schemes employed by, or any act of, the board of directors, business associates, officers or partners, amounting to fraud or misrepresentation which may be detrimental to the interest of the public and/or of the stockholders, partners, or members of any corporation, partnership, or association; 2. Controversies arising out of intra-corporate, partnership, or association relations, between and among stockholders, members, or associates; and between, any or all of them and the corporation, partnership, or association of which they are stockholders, members, or associates, respectively; 3. Controversies in the election or appointment of directors, trustees, officers, or managers of corporations, partnerships, or associations; 4. Derivative suits; and 5. Inspection of corporate books. (b) prohibition against nuisance and harassment suits. - Nuisance and harassment suits are prohibited. In determining whether a suit is a nuisance or harassment suit, the court shall consider, among others, the following: 1. The extent of the shareholding or interest of the initiating stockholder or member; 2. Subject matter of the suit; 3. Legal and factual basis of the complaint; 4. Availability of appraisal rights for the act or acts complained of; and 5. Prejudice or damage to the corporation, partnership, or association in relation to the relief sought. In case of nuisance or harassment suits, the court may, moto proprio or upon motion, forthwith dismiss the case. SEC. 2. Suppletory application of the Rules of Court. – The Rules of Court, in so far as they may be applicable and are not inconsistent with these Rules, are hereby adopted to form an integral part of these Rules. 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. SEC. 4. Executory nature of decisions and orders. – All decisions and orders issued under these Rules shall immediately be executory. No appeal or petition taken therefrom shall stay the enforcement or implementation of the decision or order, unless restrained by an appellate court. Interlocutory orders shall not be subject to appeal.
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shall not be subject to appeal. SEC. 5. Venue. – All actions covered by these Rules shall be commenced and tried in the Regional Trial Court which has jurisdiction over the principal office of the corporation, partnership, or association concerned. Where the principal office of the corporation, partnership or association is registered in the Securities and Exchange Commission as Metro Manila, the action must be filed in the city or municipality where the head office is located. SEC. 6. Service of pleadings. – When so authorized by the court, any pleading and/or document required by these Rules may be filed with the court and/or served upon the other parties by facsimile transmission (tax) or electronic mail (e-mail. In such cases, the date of transmission shall be deemed to be prima facie the date of service. SEC. 7. Signing of pleadings, motions and other papers. – Every pleading, motion, and other paper of a party represented by an attorney shall be signed by at least one attorney of record in the attorney’s individual name, whose address shall be stated. A party who is not represented by an attorney shall sign the pleading, motion, or other paper and state his address. The signature of an attorney or party constitutes a certification by the signer that he has read the pleading, motion, or other paper; that to the best of his knowledge, information, and belief formed after reasonable inquiry, it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing jurisprudence; and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation. If a pleading, motion, or other paper is not signed, it shall be stricken off the record unless it is promptly signed by the pleader or movant, after he is notified of the omission. SEC. 8. Prohibited pleadings. – The following pleadings are prohibited: 1. Motion to dismiss; 2. Motion for a bill of particulars; 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. SEC. 9. Assignment of cases. – All cases filed under these Rules shall be tried by judges designated by the Supreme Court to hear and decide cases transferred from the Securities and Exchange Commission to the Regional Trial Courts and filed directly with said courts pursuant to Republic Act No. 8799, otherwise known as the Securities and Regulation Cod RULE 2 COMMENCEMENT OF ACTION AND PLEADINGS SECTION 1. Commencement of action. – An action under these Rules is commenced by the filing of a verified complaint with the proper Regional Trial Court. 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. SEC. 3. Verification. – The complaint and the answer shall be verified by an affidavit stating that the affiant has read the pleading and the allegations therein are true and correct based on his own personal knowledge or on authentic records. SEC. 4. Complaint. – The complaint shall state or contain: 1. the names, addresses, and other relevant personal or juridical circumstances of the parties; 2. all facts material and relevant to the plaintiff’s cause or causes of action, which shall be supported by affidavits of the plaintiff or his witnesses and copies of documentary and other evidence supportive of such cause or causes of action; 3. the law, rule, or regulation relied upon, violated, or sought to be enforced; 4. a certification that (a) the plaintiff has not theretofore commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency, and, to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such other action or claim, a complete statement of the present status thereof; and (c) if he
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other action or claim, a complete statement of the present status thereof; and (c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall report that fact within five (5) days therefrom to the court; and 5. the relief sought. SEC. 5. Summons. – The summons and the complaint shall be served together not later than five (5) days from the date of filing of the complaint. a. Service upon domestic private juridical entities. – If the defendant is a domestic corporation, service shall be deemed adequate if made upon any of the statutory or corporate officers as fixed by the by-laws or their respective secretaries. If the defendant is a partnership, service shall be deemed adequate if made upon any of the managing or general partners or upon their respective secretaries. If the defendant is an association, service shall be deemed adequate if made upon any of its officers or their respective secretaries. b. Service upon foreign private juridical entity. – When the defendant is a foreign private juridical entity which is transacting or has transacted business in the Philippines, service may be made on its resident agent designated in accordance with law for that purpose, or, if there be no such agent, on the government official designated by law to that effect, or on any of its officers or agents within the Philippines. SEC. 6. Answer. – The defendant shall file his answer to the complaint, serving a copy thereof on the plaintiff, within fifteen (15) days from service of summons. In the answer, the defendant shall: 1. Specify each material allegation of fact the truth of which he admits; 2. Specify each material allegation of fact the truth of which he does not admit. Where the defendant desires to deny only a part of an averment, he shall specify so much of it as true and material and shall deny only the remainder; 3. Specify each material allegation of fact as to which truth he has no knowledge or information sufficient to form a belief, and this shall have the effect of a denial; 4. State the defenses, including grounds for a motion to dismiss under the Rules of Court; 5. State the law, rule, or regulation relied upon; 6. Address each of the causes of action stated in the complaint; 7. State the facts upon which he relies for his defense, including affidavits of witnesses and copies of documentary and other evidence supportive of such cause or causes of action; 8. State any compulsory counterclaim/s and cross-claim/s; and 9. State the relief sought. The answer to counterclaims or cross-claims shall be filed within ten (10) days from service of the answer in which they are pleaded. SEC. 7. Effect of failure to answer. – If the defendant fails to answer within the period above provided, he shall be considered in default. Upon motion or motu proprio, the court shall render judgment either dismissing the complaint or granting the relief prayed for as the records may warrant. In no case shall the court award a relief beyond or different from that prayed for. SEC. 8. Affidavits, documentary and other evidence. – Affidavits shall be based on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify on the matters stated therein. The affidavits shall be in question and answer form, and shall comply with the rules on admissibility of evidence. Affidavits of witnesses as well as documentary and other evidence shall be attached to the appropriate pleading; Provided, however, that affidavits, documentary and other evidence not so submitted may be attached to the pre-trial brief required under these Rules. Affidavits and other evidence not so submitted shall not be admitted in evidence, except in the following cases: 1. Testimony of unwilling, hostile, or adverse party witnesses. A witness is presumed prima facie hostile if he fails or refuses to execute an affidavit after a written request therefor; 2. If the failure to submit the evidence is for meritorious and compelling reasons; and 3. Newly discovered evidence. In case of (2) and (3) above, the affidavit and evidence must be submitted not later than five (5) days prior to its introduction in evidence. RULE 3
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RULE 3 MODES OF DISCOVERY SECTION 1. In general. – A party can only avail of any of the modes of discovery not later than fifteen (15) days from the joinder of issues. SEC. 2. Objections. – Any mode of discovery such as interrogatories, request for admission, production or inspection of documents or things, may be objected to within ten (10) days from receipt of the discovery device and only on the ground that the matter requested is patently incompetent, immaterial, irrelevant or privileged in nature. The court shall rule on the objections not later than fifteen (15) days from the filing thereof. SEC. 3. Compliance. –Compliance with any mode of discovery shall be made within ten (10) days from receipt of the discovery device, or if there are objections, from receipt of the ruling of the court. SEC. 4. Sanctions. – The sanctions prescribed in the Rules of Court for failure to avail of, or refusal to comply with, the modes of discovery shall apply. In addition, the court may, upon motion, declare a party non-suited or as in default, as the case may be, if the refusal to comply with a mode of discovery is patently unjustified.

RULE 4 PRE-TRIAL SECTION 1. Pre-trial conference; mandatory nature. – Within five (5) days after the period for availment of, and compliance with, the modes of discovery prescribed in Rule 3 hereof, whichever comes later, the court shall issue and serve an order immediately setting the case for pre-trial conference and directing the parties to submit their respective pre-trial briefs. The parties shall file with the court and furnish each other copies of their respective pre-trial brief in such manner as to ensure its receipt by the court and the other party at least five (5) days before the date set for the pre-trial. The parties shall set forth in their pre-trial briefs, among other matters, the following: 1. Brief statement of the nature of the case, which shall summarize the theory or theories of the party in clear and concise language; 2. Allegations expressly admitted by either or both parties; 3. Allegations deemed admitted by either or both parties; 4. Documents not specifically denied under oath by either or both parties; 5. Amendments to the pleadings; 6. Statement of the issues, which shall separately summarize the factual and legal issues involved in the case; 7. Names of witnesses to be presented and the summary of their testimony as contained in their affidavits supporting their positions on each of the issues; 8. All other pieces of evidence, whether documentary or otherwise and their respective purposes; 9. Specific proposals for an amicable settlement; 10. Possibility of referral to mediation or other alternative modes of dispute resolution; 11. Proposed schedule of hearings; and 12. Such other matters as may aid in the just and speedy disposition of the case. SEC. 2. Nature and purpose of pre-trial conference. – During the pre-trial conference, the court shall, with its active participation, ensure that the parties consider in detail all of the following: 1. The possibility of an amicable settlement; 2. Referral of the dispute to mediation or other forms of dispute resolution; 3. Facts that need not be proven, either because they are matters of judicial notice or expressly or deemed admitted; 4. Amendments to the pleadings; 5. The possibility of obtaining stipulations and admissions of facts and documents; 6. Objections to the admissibility of testimonial, documentary and other evidence; 7. Objections to the form or substance of any affidavit, or part thereof; 8. Simplification of the issues; 9. The possibility of submitting the case for decision on the basis of position papers, affidavits, documentary and real evidence; 10. A complete schedule of hearing dates; and
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10. A complete schedule of hearing dates; and 11. Such other matters as may aid in the speedy and summary disposition of the case. SEC. 3. Termination. – The preliminary conference shall be terminated not later than ten (10) days after its commencement, whether or not the parties have agreed to settle amicably. SEC. 4. Judgment before pre-trial. – If, after submission of the pre-trial briefs, the court determines that, upon consideration of the pleadings, the affidavits and other evidence submitted by the parties, a judgment may be rendered, the court may order the parties to file simultaneously their respective memoranda within a non-extendible period of twenty (20) days from receipt of the order. Thereafter, the court shall render judgment, either full or otherwise, not later than ninety (90) days from the expiration of the period to file the memoranda. SEC. 5. Pre-trial order; judgment after pre-trial. – The proceedings in the pre-trial shall be recorded. Within ten (10) days after the termination of the pre-trial, the court shall issue an order which shall recite in detail the matters taken up in the conference, the actions taken thereon, the amendments allowed in the pleadings, and the agreements or admissions made by the parties as to any of the matters considered. The court shall rule on all objections to or comments on the admissibility of any documentary or other evidence, including any affidavit or any part thereof. Should the action proceed to trial, the order shall explicitly define and limit the issues to be tried and shall strictly follow the form set forth in Annex "A" of these Rules. The contents of the order shall control the subsequent course of the action, unless modified before trial to prevent manifest injustice. After the pre-trial, the court may render judgment, either full or partial, as the evidence presented during the pre-trial may warrant.

RULE 5 TRIAL SECTION 1. Witnesses. – If the court deems necessary to hold hearings to determine specific factual matters before rendering judgment, it shall, in the pre-trial order, set the case for trial on the dates agreed upon by the parties. Only persons whose affidavits were submitted may be presented as witnesses, except in cases specified in section 8, Rule 2 of these Rules. The affidavits of the witnesses shall serve as their direct testimonies, subject to cross-examination in accordance with existing rules on evidence. SEC. 2. Trial schedule. – Unless judgment is rendered pursuant to Rule 4 of these Rules, the initial hearing shall be held not later than thirty (30) days from the date of the pre-trial order. The hearings shall be completed not later than sixty (60) days from the date of the initial hearing, thirty (30) days of which shall be allotted to the plaintiffs and thirty (30) days to the defendants in the manner prescribed in the rep-trial order. The failure of a party to present a witness on a scheduled hearing date shall be deemed a waiver of such hearing date. However, a party may present such witness or witnesses within his remaining allotted hearing dates. SEC. 3. Written offer of evidence. – Evidence not otherwise admitted by the parties or ruled upon by the court during the pre-trial conference shall be offered in writing not later than five (5) days from the completion of the presentation of evidence of the party concerned. The opposing party shall have five (5) days from receipt of the offer to file his comments or objections. The court shall make its ruling on the offer within five (5) days from the expiration of the period to file comments or objections. SEC. 4. Memoranda. – Immediately after ruling on the last offer of evidence, the court shall order the parties to simultaneously file, within thirty (30) days from receipt of the order, their respective memoranda. The memoranda shall contain the following: 1. A "Statement of the Case," which is a clear and concise statement of the nature of the action and a summary of the proceedings; 2. A "Statement of the Facts," which is a clear and concise statement in narrative form of the established facts, with reference to the testimonial, documentary or other evidence in support thereof; 3. A "Statement of the issues," which is a clear and concise statement of the issues presented to the court for resolution; 4. The "Arguments," which is a clear and concise presentation of the argument in support of each issue; and
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each issue; and 5. The "Relief," which is a specification of the order or judgment which the party seeks to obtain. No reply memorandum shall be allowed. SEC. 5. Decision after trial. – The court shall render a decision not later than (90) days from the lapse of the period to file the memoranda, with or without said pleading having been filed. RULE 6 ELECTION CONTESTS SECTION 1. Cases covered. – The provisions of this rule shall apply to election contests in stock and nonstock corporations. SEC. 2. Definition. – An election contest refers to any controversy or dispute involving title or claim to any elective office in a stock or non-stock corporation, the validation of proxies, the manner and validity of elections, and the qualifications of candidates, including the proclamation of winners, to the office of director, trustee or other officer directly elected by the stockholders in a close corporation or by members of a non-stock corporation where the articles of incorporation or by-laws so provide. SEC. 3. Complaint. –In addition to the requirements in section 4, Rule 2 of these Rules, the complaint in an election contest must state the following: 1. The case was filed within fifteen (15) days from the date of the election if the by-laws of the corporation do not provide for a procedure for resolution of the controversy, or within fifteen (15) days from the resolution of the controversy by the corporation as provided in its by-laws; and 2. The plaintiff has exhausted all intra-corporate remedies in election cases as provided for in the by-laws of the corporation. SEC. 4. Duty of the court upon the filing of the complaint. – Within two (2) days from the filing of the complaint, the court, upon a consideration of the allegations thereof, may dismiss the complaint outright if it is not sufficient in form and substance, or, if it is sufficient, order the issuance of summons which shall be served, together with a copy of the complaint, on the defendant within two (2) days from its issuance. SEC. 5. Answer. – The defendant shall file his answer to the complaint, serving a copy thereof on the plaintiff, within ten (10) days from service of summons and the complaint. The answer shall contain the matters required in section 6, Rule 2 of these Rules. SEC. 6. Affidavits, documentary and other evidence. – The parties shall attach to the complaint and answer the affidavits of witnesses, documentary and other evidence in support thereof, if any. Acting on the Memorandum of the Committee on SEC Cases submitting for this Court’s consideration and approval the Proposed Interim Rules of Procedure for Intra-Corporate Controversies, the Court Resolved to APPROVE the same. The Interim Rules shall take effect on April 1, 2001 following its publication in two (2) newspapers of general circulation. March 13, 2001, Manila. (Sgd.) HILARIO G. DAVIDE, JR., Chief Justice (Sgd.) JOSUE N. BELLOSILLO, Associate Justice (Sgd.) JOSE A. R. MELO, Associate Justice (Sgd.) REYNATO S. PUNO, Associate Justice (Sgd.) JOSE C. VITUG, Associate Justice (Sgd.) SANTIAGO M. KAPUNAN, Associate Justice (Sgd.) VICENTE V. MENDOZA, Associate Justice (Sgd.) ARTEMIO V. PANGANIBAN, Associate Justice (Sgd.) LEONARDO A. QUISUMBING, Associate Justice

(Sgd.) (Sgd.) BERNARDO P. PARDO ARTURO B. BUENA Associate Justice Associate Justice

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(Sgd.) (Sgd.) MINERVA P. GONZAGA-REYES CONSUELO YNARES-SANTIAGO Associate Justice Associate Justice (Sgd). (Sgd.) SABINO R. DE LEON, JR. ANGELINA SANDOVAL-GUTIERREZ Associate Justice Associate Justice The Lawphil Project - Arellano Law Foundation

Pasted from <http://www.lawphil.net/courts/supreme/am/am_2_04_2001.html>

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A.M. 00-8-10-SC Interim Rules of Procedure on Corporate Rehabilitation (note FRIA)
Sunday, November 14, 2010 11:31 PM

EN BANC Agenda for December 2, 2008 Item No. 76 EN BANC A.M. NO. 00-8-10-SC RULES OF PROCEDURE ON CORPORATE REHABILITATION RESOLUTION Acting on the recommendation of The Subcommittee on Special Rules for Special Commercial Courts, submitting for the consideration and approval of the Court the proposed “Rules of Procedure on Corporate Rehabilitation (2008),” the Court Resolved to APPROVE the same. The Rule shall take effect on January 16, 2009 following its publication in two (2) newspapers of general circulation. December 2, 2008. ——————— RULES OF PROCEDURE ON CORPORATE REHABILITATION (2008) RULE 1 COVERAGE SECTION 1. Scope.—These Rules shall apply to petitions for rehabilitation of corporations, partnerships and associations pursuant to Presidential Decree No. 902-A, as amended. SEC. 2. Applicability to Rehabilitation Cases Transferred from the Securities and Exchange Commission. — Cases for rehabilitation transferred from the Securities and Exchange Commission to the Regional Trial Courts pursuant to Republic Act No. 8799, otherwise known as The Securities Regulation Code, shall likewise be governed by these Rules. RULE 2 DEFINITION OF TERMS AND CONSTRUCTION SEC. 1. Definition of Terms.—For purposes of these Rules: “Administrative Expenses” shall refer to (a) reasonable and necessary expenses that are incurred in connection with the filing of the petition; (b) expenses incurred in the ordinary course of business after the issuance of the stay order, excluding interest payable to the creditors for loans and credit accommodations existing at the time of the issuance of the stay order; and (c) other expenses that are authorized under these Rules. “Affidavit of General Financial Condition” shall refer to a verified statement on the general financial condition of the debtor required in Section 2, Rule 4 of these Rules. “Affiliate” is a corporation that directly or indirectly, through one or more intermediaries, is controlled by, or is under the common control of another corporation, which thereby becomes its parent corporation. “Asset” is anything of value that can be in the form of money, such as cash at the bank or amounts owed; fixed assets such as property or equipment; or intangibles including intellectual property, the book value of which is shown in the last three audited financial statements immediately preceding the filing of the petition. In case the debtor is less than three years in operation, it is sufficient that the book value is based on the audited financial statement/s for the two years or year immediately preceding the filing of the petition, as the case may be. “Board of Directors” shall include the executive committee or the management of a partnership or association. “Claim” shall include all claims or demands of whatever nature or character against a debtor or its property, whether for money or otherwise. “Control” is the power of a parent corporation to direct or govern the financial and operating policies of an enterprise so as to obtain benefits from its activities. Control is presumed to exist when the parent
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an enterprise so as to obtain benefits from its activities. Control is presumed to exist when the parent owns, directly or indirectly through subsidiaries, more than one–half (1/2) of the voting power of an enterprise unless, in exceptional circumstances, it can clearly be demonstrated that such ownership does not constitute control. Control also exists even when the parent owns one-half (1/2) or less of the voting power of an enterprise when there is power: (a) Over more than one-half (1/2) of the voting rights by virtue of an agreement with investors; (b) To direct or govern the financial and operating policies of the enterprise under a statute or an agreement; (c) To appoint or remove the majority of the members of the board of directors or equivalent governing body; or (d) To cast the majority votes at meetings of the board of directors or equivalent governing body. “Creditor” shall mean any holder of a Claim. “Court” shall refer to the proper Regional Trial Court designated to hear and decide the cases contemplated under these Rules. “Days” shall refer to calendar days unless otherwise provided in these Rules. “Debtor” shall mean any corporation, partnership or association or a group of companies, whether supervised or regulated by the Securities and Exchange Commission or other government agencies, on whose behalf a petition for rehabilitation has been filed under these Rules. “Foreign court” means a judicial or other authority competent to control or supervise a foreign proceeding. “Foreign proceeding” means a collective judicial or administrative proceeding in a foreign State, including an interim proceeding, pursuant to a law relating to insolvency in which proceeding the assets and affairs of the debtor are subject to control or supervision by a foreign court, for the purpose of rehabilitation or re-organization. “Foreign representative” means a person or entity, including one appointed on an interim basis, authorized in a foreign proceeding to administer the reorganization or rehabilitation of the debtor or to act as a representative of the foreign proceeding. “Group of companies” refers to, and can cover only, corporations that are financially related to one another as parent corporations, subsidiaries and affiliates. When the petition covers a group of companies, all reference under these Rules to “debtor” shall include and apply to the group of companies. “Liabilities” shall refer to monetary claims against the debtor, including stockholder’s advances that have been recorded in the debtor’s audited financial statements as advances for future subscriptions. “Parent” is a corporation which has control over another corporation directly or indirectly through one or more intermediaries. “Rehabilitation” shall mean the restoration of the debtor to a position of successful operation and solvency, if it is shown that its continuance of operation is economically feasible and its creditors can recover by way of the present value of payments projected in the plan, more if the corporation continues as a going concern than if it is immediately liquidated. “Secured claim” shall refer to any claim whose payment or fulfillment is secured by contract or by law, including any claim or credit enumerated under Articles 2241 and 2242 of the Civil Code and Article 110, as amended, of the Labor Code of the Philippines. “Subsidiary” means a corporation more than fifty percent (50%) of the voting stock of which is owned or controlled directly or indirectly through one or more intermediaries by another corporation, which thereby becomes its parent corporation. “Unsecured claim” shall mean any claim other than a secured claim. SEC. 2. Construction. — These Rules shall be liberally construed to carry out the objectives of Sections 5(d), 6(c) and 6(d) of Presidential Decree No. 902-A, as amended, and to assist the parties in obtaining a just, expeditious and inexpensive determination of cases. Where applicable, the Rules of Court shall apply suppletorily to proceedings under these Rules. RULE 3 GENERAL PROVISIONS SEC. 1. Nature of Proceedings.—Any proceeding initiated under these Rules shall be considered in rem. Jurisdiction over all persons affected by the proceedings shall be considered as acquired upon
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Jurisdiction over all persons affected by the proceedings shall be considered as acquired upon publication of the notice of the commencement of the proceedings in any newspaper of general circulation in the Philippines in the manner prescribed by these Rules. The proceedings shall also be summary and non-adversarial in nature. The following pleadings are prohibited: (a) Motion to dismiss; (b) Motion for a bill of particulars; (c) Petition for relief; (d) Motion for extension; (e) Motion for postponement; (f) Third-party complaint; (g) Intervention; (h) Motion to hear affirmative defenses; and (i) Any pleading or motion which is similar to or of like effect as any of the foregoing. Any pleading, motion, opposition, defense or claim filed by any interested party shall be supported by verified statements that the affiant has read the same and that the factual allegations therein are true and correct of his personal knowledge or based on authentic records, and shall contain as annexes such documents as may be deemed by the party submitting the same as supportive of the allegations in the affidavits. The court may decide matters on the basis of affidavits and other documentary evidence. Where necessary, the court shall conduct clarificatory hearings before resolving any matter submitted to it for resolution. SEC. 2. Venue. — Petitions for rehabilitation pursuant to these Rules shall be filed in the regional trial court which has jurisdiction over the principal office of the debtor as specified in its articles of incorporation or partnership. Where the principal office of the corporation, partnership or association is registered in the Securities and Exchange Commission as Metro Manila, the action must be filed in the regional trial court of the city or municipality where the head office is located. A joint petition by a group of companies shall be filed in the Regional Trial Court which has jurisdiction over the principal office of the parent company, as specified in its Articles of Incorporation. SEC. 3. Service of Pleadings and Documents.— When so authorized by the court, any pleading and/or document required by these Rules may be filed with the court and/or served upon the other parties by facsimile transmission (fax) or electronic mail (e-mail). In such cases, the date of transmission shall be deemed to be the date of service. Where the pleading or document is voluminous, the court may, upon motion, waive the requirement of service; provided that a copy thereof together with all its attachments is duly filed with the court and is made available for examination and reproduction by any party, and provided, further, that a notice of such filing and availability is duly served on the parties. SEC. 4. Trade Secrets and Other Confidential Information. — Upon motion, the court may issue an order to protect trade secrets or other confidential research, development or commercial information belonging to the debtor. SEC. 5. Executory Nature of Orders. — Any order issued by the court under these Rules is immediately executory. A petition to review the order shall not stay the execution of the order unless restrained or enjoined by the appellate court. Unless otherwise provided in these Rules, the review of any order or decision of the court or an appeal therefrom shall be in accordance with the Rules of Court; provided, however, that the reliefs ordered by the trial or appellate courts shall take into account the need for resolution of proceedings in a just, equitable and speedy manner. SEC. 6. Nullification of Illegal Transfers and Preferences. — Upon motion the court may nullify any transfer of property or any other conveyance, sale, payment or agreement made in violation of its stay order or in violation of these Rules. SEC. 7. Stay Order. — If the court finds the petition to be sufficient in form and substance, it shall, not later than five (5) working days from the filing of the petition, issue an order: (a) appointing a rehabilitation receiver and fixing his bond; (b) staying enforcement of all claims, whether for money or otherwise and whether such enforcement is by court action or otherwise, against the debtor, its guarantors and persons not solidarily liable with the debtor; provided, that the stay order shall not cover claims against letters of credit and similar security arrangements issued by a third party to secure the payment of the debtor’s obligations; provided, further, that the stay order shall not cover foreclosure by a creditor of property not belonging to a debtor under corporate rehabilitation; provided,
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foreclosure by a creditor of property not belonging to a debtor under corporate rehabilitation; provided, however, that where the owner of such property sought to be foreclosed is also a guarantor or one who is not solidarily liable, said owner shall be entitled to the benefit of excussion as such guarantor; (c) prohibiting the debtor from selling, encumbering, transferring, or disposing in any manner any of its properties except in the ordinary course of business; (d) prohibiting the debtor from making any payment of its liabilities except as provided in items (e), (f) and (g) of this Section or when ordered by the court pursuant to Section 10 of Rule 3; (e) prohibiting the debtor’s suppliers of goods or services from withholding supply of goods and services in the ordinary course of business for as long as the debtor makes payments for the services and goods supplied after the issuance of the stay order; (f) directing the payment in full of all administrative expenses incurred after the issuance of the stay order; (g) directing the payment of new loans or other forms of credit accommodations obtained for the rehabilitation of the debtor with prior court approval; (h) fixing the dates of the initial hearing on the petition not earlier than forty-five (45) days but not later than sixty (60) days from the filing thereof; (i) directing the petitioner to publish the Order in a newspaper of general circulation in the Philippines once a week for two (2) consecutive weeks; (j) directing the petitioner to furnish a copy of the petition and its annexes, as well as the stay order, to the creditors named in the petition and the appropriate regulatory agencies such as, but not limited to, the Securities and Exchange Commission, the Bangko Sentral ng Pilipinas, the Insurance Commission, the National Telecommunications Commission, the Housing and Land Use Regulatory Board and the Energy Regulatory Commission; (k) directing the petitioner that foreign creditors with no known addresses in the Philippines be individually given a copy of the stay order at their foreign addresses; (l) directing all creditors and all interested parties (including the regulatory agencies concerned) to file and serve on the debtor a verified comment on or opposition to the petition, with supporting affidavits and documents, not later than fifteen (15) days before the date of the first initial hearing and putting them on notice that their failure to do so will bar them from participating in the proceedings; and (m) directing the creditors and interested parties to secure from the court copies of the petition and its annexes within such time as to enable themselves to file their comment on or opposition to the petition and to prepare for the initial hearing of the petition. The issuance of a stay order does not affect the right to commence actions or proceedings insofar as it is necessary to preserve a claim against the debtor. SEC. 8. Service of Stay Order on Rehabilitation Receiver. — The petitioner shall immediately serve a copy of the stay order on the rehabilitation receiver appointed by the court, who shall manifest his acceptance or non-acceptance of his appointment not later than ten (10) days from receipt of the order. SEC. 9. Period of Stay Order. — The stay order shall be effective from the date of its issuance until the approval of the rehabilitation plan or the dismissal of the petition. SEC. 10. Relief from, Modification, or Termination of Stay Order. — (a) The court may, upon motion, terminate, modify, or set conditions for the continuance of the stay order, or relieve a claim from the coverage thereof upon showing that (1) any of the allegations in the petition, or any of the contents of any attachment, or the verification thereof has ceased to be true; (2) a creditor does not have adequate protection over property securing its claim; (3) the debtor’s secured obligation is more than the fair market value of the property subject of the stay and such property is not necessary for the rehabilitation of the debtor; or (4) the property covered by the stay order is not essential or necessary to the rehabilitation and the creditor’s failure to enforce its claim will cause more damage to the creditor than to the debtor. (b) For purposes of this Section, the creditor lacks adequate protection if it can be shown that: (1) The debtor fails or refuses to honor a pre-existing agreement with the creditor to keep the property insured; (2) The debtor fails or refuses to take commercially reasonable steps to maintain the property; or (3) The property has depreciated to an extent that the creditor is undersecured. (c) Upon showing of the creditor’s lack of adequate protection, the court shall order the rehabilitation receiver to (1) make arrangements to provide for the insurance or maintenance of the property, or (2) to make payments or otherwise provide additional or replacement security such that the obligation is fully secured. If such arrangements are not feasible, the court shall modify the stay order to allow the secured creditor lacking adequate protection to enforce its claim against the debtor; provided, however, that the court may deny the creditor the remedies in this paragraph if such remedies would prevent the continuation of the debtor as a going concern or otherwise prevent the approval and implementation of
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continuation of the debtor as a going concern or otherwise prevent the approval and implementation of a rehabilitation plan. SEC. 11. Qualifications of Rehabilitation Receiver. — (a) In the appointment of the rehabilitation receiver, the following qualifications shall be taken into consideration by the court: (1) Expertise and acumen to manage and operate a business similar in size and complexity to that of the debtor; (2) Knowledge in management, finance and rehabilitation of distressed companies; (3) General familiarity with the rights of creditors in suspension of payments or rehabilitation, and general understanding of the duties and obligations of a rehabilitation receiver; (4) Good moral character, independence and integrity; (5) Lack of conflict of interest as defined in this Section; and (6) Willingness and ability to file a bond in such amount as may be determined by the court. (b) Without limiting the generality of the following, a rehabilitation receiver may be deemed to have a conflict of interest if: (1) He is a creditor or stockholder of the debtor; (2) He is engaged in a line of business which competes with the debtor; (3) He is, or was within two (2) years from the filing of the petition, a director, officer, or employee of the debtor or any of its present creditors, or the auditor or accountant of the debtor; (4) He is or was within two (2) years from the filing of the petition, an underwriter of the outstanding securities of the debtor; (5) He is related by consanguinity or affinity within the fourth civil degree to any creditor, stockholder, director, officer, employee, or underwriter of the debtor; or (6) He has any other direct or indirect material interest in the debtor or any creditor. SEC. 12. Powers and Functions of Rehabilitation Receiver. — The rehabilitation receiver shall not take over the management and control of the debtor but shall closely oversee and monitor the operations of the debtor during the pendency of the proceedings. For this purpose, the rehabilitation receiver shall have the powers, duties and functions of a receiver under Presidential Decree No. 902-A, as amended, and the Rules of Court. The rehabilitation receiver shall be considered as an officer of the court. He shall be primarily tasked to study the best way to rehabilitate the debtor and to ensure that the value of the debtor’s property is reasonably maintained pending the determination of whether or not the debtor should be rehabilitated, as well as implement the rehabilitation plan after its approval. Accordingly, he shall have the following powers and functions: (a) To verify the accuracy of the petition, including its annexes such as the Schedule of Debts and Liabilities and the Inventory of Assets submitted in support of the petition; (b) To accept and incorporate, when justified, amendments to the Schedule of Debts and Liabilities; (c) To recommend to the court the disallowance of claims and rejection of amendments to the Schedule of Debts and Liabilities that lack sufficient proof and justification; (d) To submit to the court and make available for review by the creditors, a revised Schedule of Debts and Liabilities; (e) To investigate the acts, conduct, properties, liabilities and financial condition of the debtor, the operation of its business and the desirability of the continuance thereof; and, any other matter relevant to the proceeding or to the formulation of a rehabilitation plan; (f) To examine under oath the directors and officers of the debtor and any other witnesses that he may deem appropriate; (g) To make available to the creditors documents and notices necessary for them to follow and participate in the proceedings; (h) To report to the court any fact ascertained by him pertaining to the causes of the debtor’s problems, fraud, preferences, dispositions, encumbrances, misconduct, mismanagement and irregularities committed by the stockholders, directors, management, or any other person against the debtor; (i) To employ such person or persons such as lawyers, accountants, appraisers and staff as are necessary in performing his functions and duties as rehabilitation receiver; (j) To monitor the operations of the debtor and to immediately report to the court any material adverse change in the debtor’s business;
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change in the debtor’s business; (k) To evaluate the existing assets and liabilities, earnings and operations of the debtor; (l) To determine and recommend to the court the best way to salvage and protect the interests of the creditors, stockholders and the general public; (m) To study the rehabilitation plan proposed by the debtor or any rehabilitation plan submitted during the proceedings, together with any comments made thereon; (n) To prohibit and report to the court any encumbrance, transfer or disposition of the debtor’s property outside of the ordinary course of business or what is allowed by the court; (o) To prohibit and report to the court any payments outside of the ordinary course of business; (p) To have unlimited access to the debtor’s employees, premises, books, records and financial documents during business hours; (q) To inspect, copy, photocopy or photograph any document, paper, book, account or letter, whether in the possession of the debtor or other persons; (r) To gain entry into any property for the purpose of inspecting, measuring, surveying or photographing it or any designated relevant object or operation thereon; (s) To take possession, control and custody of the debtor’s assets; (t) To notify counterparties and the court as to contracts that the debtor has decided to continue to perform or breach; (u) To be notified of and to attend all meetings of the board of directors and stockholders of the debtor; (v) To recommend any modification of an approved rehabilitation plan as he may deem appropriate; (w) To bring to the attention of the court any material change affecting the debtor’s ability to meet the obligations under the rehabilitation plan; (x) To recommend the appointment of a management committee in the cases provided for under Presidential Decree No. 902-A, as amended; (y) To recommend the termination of the proceedings and the dissolution of the debtor if he determines that the continuance in business of such entity is no longer feasible or profitable or no longer works to the best interest of the stockholders, parties-litigants, creditors or the general public; (z) To apply to the court for any order or directive that he may deem necessary or desirable to aid him in the exercise of his powers and performance of his duties and functions; and (aa) To exercise such other powers as may from time to time be conferred upon him by the court. SEC. 13. Oath and Bond. — Before entering upon his powers, duties and functions, the rehabilitation receiver must be sworn in to perform them faithfully, and must post a bond executed in favor of the debtor in such sum as the court may direct, to guarantee that he will faithfully discharge his duties and obey the orders of the court. If necessary, he shall also declare under oath that he will perform the duties of a trustee of the assets of the debtor, will act honestly and in good faith, and deal with the assets of the debtor in a commercially reasonable manner. SEC. 14. Fees and Expenses. — The rehabilitation receiver and the persons hired by him shall be entitled to reasonable professional fees and reimbursement of expenses which shall be considered as administrative expenses. SEC. 15. Immunity from Suit. — The rehabilitation receiver shall not be subject to any action, claim or demand in connection with any act done or omitted by him in good faith in the exercise of his functions and powers herein conferred. SEC. 16. Reports. — The rehabilitation receiver shall file a written report every three (3) months to the court or as often as the court may require on the general condition of the debtor. The report shall include, at the minimum, interim financial statements of the debtor. SEC. 17. Dismissal of Rehabilitation Receiver. — A rehabilitation receiver may, upon motion, be dismissed by the court on the following grounds: (a) if he fails, without just cause, to perform any of his powers and functions under these Rules; or (b) on any of the grounds for removing a trustee under the general principles of trusts. SEC. 18. Rehabilitation Plan. — The rehabilitation plan shall include (a) the desired business targets or goals and the duration and coverage of the rehabilitation; (b) the terms and conditions of such rehabilitation which shall include the manner of its implementation, giving due regard to the interests of secured creditors such as, but not limited, to the non-impairment of their security liens or interests; (c) the material financial commitments to support the rehabilitation plan; (d) the means for
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interests; (c) the material financial commitments to support the rehabilitation plan; (d) the means for the execution of the rehabilitation plan, which may include debt to equity conversion, restructuring of the debts, dacion en pago or sale or exchange or any disposition of assets or of the interest of shareholders, partners or members; (e) a liquidation analysis setting out for each creditor that the present value of payments it would receive under the plan is more than that which it would receive if the assets of the debtor were sold by a liquidator within a six-month period from the estimated date of filing of the petition; and (f) such other relevant information to enable a reasonable investor to make an informed decision on the feasibility of the rehabilitation plan. SEC. 19. Repayment Period. — If the rehabilitation plan extends the period for the debtor to pay its contractual obligations, the new period should not extend beyond fifteen (15) years from the expiration of the stipulated term existing at the time of filing of the petition. SEC. 20. Effects of Rehabilitation Plan. — The approval of the rehabilitation plan by the court shall result in the following: (a) The plan and its provisions shall be binding upon the debtor and all persons who may be affected thereby, including the creditors, whether or not such persons have participated in the proceedings or opposed the plan or whether or not their claims have been scheduled; (b) The debtor shall comply with the provisions of the plan and shall take all actions necessary to carry out the plan; (c) Payments shall be made to the creditors in accordance with the provisions of the plan; (d) Contracts and other arrangements between the debtor and its creditors shall be interpreted as continuing to apply to the extent that they do not conflict with the provisions of the plan; and (e) Any compromises on amounts or rescheduling of timing of payments by the debtor shall be binding on creditors regardless of whether or not the plan is successfully implemented. SEC. 21. Revocation of Rehabilitation Plan on Grounds of Fraud. — Upon motion, within ninety (90) days from the approval of the rehabilitation plan, and after notice and hearing, the court may revoke the approval thereof on the ground that the same was secured through fraud. SEC. 22. Alteration or Modification of Rehabilitation Plan. — An approved rehabilitation plan may, upon motion, be altered or modified if, in the judgment of the court, such alteration or modification is necessary to achieve the desired targets or goals set forth therein. SEC. 23. Termination of Proceedings. — The court shall, upon motion or upon recommendation of the rehabilitation receiver, terminate the proceeding in any of the following cases: (a) Dismissal of the petition; (b) Failure of the debtor to submit the rehabilitation plan; (c) Disapproval of the rehabilitation plan by the court; (d) Failure to achieve the desired targets or goals as set forth in the rehabilitation plan; (e) Failure of the debtor to perform its obligations under the plan; (f) Determination that the rehabilitation plan may no longer be implemented in accordance with its terms, conditions, restrictions or assumptions; or (g) Successful implementation of the rehabilitation plan. SEC. 24. Discharge of Rehabilitation Receiver. — Upon termination of the rehabilitation proceedings, the rehabilitation receiver shall submit his final report and accounting within such period of time as the court will allow him. Upon approval of his report and accounting, the court shall order his discharge. RULE 4 DEBTOR-INITIATED REHABILITATION SEC. 1. Who May Petition. — Any debtor who foresees the impossibility of meeting its debts when they respectively fall due, may petition the proper regional trial court for rehabilitation. A group of companies may jointly file a petition for rehabilitation under these Rules when one or more of its constituent corporations foresee the impossibility of meeting debts when they respectively fall due, and the financial distress would likely adversely affect the financial condition and/or operations of the other member companies of the group and/or the participation of the other member companies of the group is essential under the terms and conditions of the proposed rehabilitation plan. SEC. 2. Contents of Petition. — (a) The petition filed by the debtor must be verified and must set forth with sufficient particularity all the following material facts: (1) the name and business of the debtor; (2) the nature of the business of the debtor; (3) the history of the debtor; (4) the cause of its inability to pay its debts; (5) all the pending
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the debtor; (3) the history of the debtor; (4) the cause of its inability to pay its debts; (5) all the pending actions or proceedings known to the debtor and the courts or tribunals where they are pending; (6) threats or demands to enforce claims or liens against the debtor; and (7) the manner by which the debtor may be rehabilitated and how such rehabilitation may benefit the general body of creditors, employees and stockholders. (b) The petition shall be accompanied by the following documents: (1) An audited financial statement of the debtor at the end of its last fiscal year; (2) Interim financial statements as of the end of the month prior to the filing of the petition; (3) A Schedule of Debts and Liabilities which lists all the creditors of the debtor, indicating the name and last address of record of each creditor; the amount of each claim as to principal, interest, or penalties due as of the date of filing; the nature of the claim; and any pledge, lien, mortgage judgment or other security given for the payment thereof; (4) An Inventory of Assets which must list with reasonable specificity all the assets of the debtor, stating the nature of each asset, the location and condition thereof, the book value or market value of the asset, and attaching the corresponding certificate of title therefor in case of real property, or the evidence of title or ownership in case of movable property, the encumbrances, liens or claims thereon, if any, and the identities and addresses of the lienholders and claimants. The Inventory shall include a Schedule of Accounts Receivable which must indicate the amount of each, the persons from whom due, the date of maturity and the degree of collectibility categorizing them as highly collectible to remotely collectible; (5) A rehabilitation plan which conforms with the minimal requirements set out in Section 18 of Rule 3; (6) A Schedule of Payments and Disposition of Assets which the debtor may have effected within three (3) months immediately preceding the filing of the petition; (7) A Schedule of Cash Flow of the debtor for three (3) months immediately preceding the filing of the petition, and a detailed schedule of the projected cash flow for the succeeding three (3) months; (8) A Statement of Possible Claims by or against the debtor which must contain a brief statement of the facts which might give rise to the claim and an estimate of the probable amount thereof; (9) An Affidavit of General Financial Condition which shall contain answers to the questions or matters prescribed in Annex “A” hereof; (10) At least three (3) nominees for the position of rehabilitation receiver as well as their qualifications and addresses, including but not limited to their telephone numbers, fax numbers and e-mail address; and (11) A certificate attesting under oath that (i) the filing of the petition has been duly authorized; and (ii) the directors and stockholders of the debtor have irrevocably approved and/or consented to, in accordance with existing laws, all actions or matters necessary and desirable to rehabilitate the debtor including, but not limited to, amendments to the articles of incorporation and by-laws or articles of partnership; increase or decrease in the authorized capital stock; issuance of bonded indebtedness; alienation, transfer, or encumbrance of assets of the debtor; and modification of shareholders’ rights. (c) Five (5) copies of the petition shall be filed with the court. SEC. 3. Verification by Debtor. — The petition filed by the debtor must be verified by an affidavit of a responsible officer of the debtor and shall be in a form substantially as follows: “I, _________________, (position) of (name of petitioner), do solemnly swear that the petitioner has been duly authorized to file the petition and that the stockholders and board of directors (or governing body) have approved and/or consented to, in accordance with law, all actions or matters necessary or desirable to rehabilitate the debtor. The petition is being filed to protect the interests of the debtor, the stockholders, the investors and the creditors of the debtor, which warrant the appointment of a rehabilitation receiver. There is no petition for insolvency filed with any other body, court or tribunal affecting the petitioner. The Inventory of Assets and the Schedule of Debts and Liabilities contains a full, correct and true description of all debts and liabilities and of all goods, effects, estate and property of whatever kind or class belonging to petitioner. The Inventory also contains a full, correct and true statement of all debts owing or due to petitioner, or to any person or persons in trust for petitioner and of all securities and contracts whereby any money may hereafter become due or payable to petitioner or by or through which any benefit or advantage may accrue to petitioner. The petition contains a concise statement of the facts giving rise, or which might give rise, to any cause of action in favor of petitioner. Petitioner has no land, money, stock, expectancy, or property of any kind,
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action in favor of petitioner. Petitioner has no land, money, stock, expectancy, or property of any kind, except those set forth in the Inventory of Assets. Petitioner has, in no instance, created or acknowledged a debt for a greater sum than the true and correct amount. Petitioner, its officers, directors and stockholders have not, directly or indirectly, concealed, fraudulently sold or otherwise fraudulently disposed of, any part of petitioner’s real or personal property, estate, effects or rights of action, and petitioner, its officers, directors and stockholders have not in any way compounded with any of its creditors in order to give preference to such creditors, or to receive or to accept any profit or advantage therefrom, or to defraud or deceive in any manner any creditor to whom petitioner is indebted. Petitioner, its officers, directors, and stockholders have been acting in good faith and with due diligence. SEC. 4. Opposition to or Comment on Petition. — Every creditor of the debtor or any interested party shall file his verified opposition to or comment on the petition not later than fifteen (15) days before the date of the initial hearing fixed in the stay order. After such time, no creditor or interested party shall be allowed to file any comment thereon or opposition thereto without leave of court. If the Schedule of Debts and Liabilities omits a claim or liability, the creditor concerned shall attach to its comment or opposition a verified statement of the obligations allegedly due it. SEC. 5. Initial Hearing. — (a) On or before the initial hearing set in the order mentioned in Section 7 of Rule 3, the petitioner shall file a publisher’s affidavit showing that the publication requirements and a petitioner’s affidavit showing that the notification requirement for foreign creditors had been complied with, as required in the stay order. (b) Before proceeding with the initial hearing, the court shall determine whether the jurisdictional requirements set forth above had been complied with. After finding that such requirements are met, the court shall ensure that the parties consider in detail all of the following: (1) Amendments to the rehabilitation plan proposed by the debtor; (2) Simplification of the issues; (3) The possibility of obtaining stipulations and admission of facts and documents, including resort to request for admission under Rule 26 of the Rules of Court; (4) The possibility of amicably agreeing on any issue brought up in the comments on, or opposition to, the petition; (5) Referral of any accounting, financial and other technical issues to an expert; (6) The possibility of submitting the petition for decision on the basis of the comments, opposition, affidavits and other documents on record; (7) The possibility of a new rehabilitation plan voluntarily agreed upon by the debtor and its creditors; and (8) Such other matters as may aid in the speedy and summary disposition of the case. SEC. 6. Additional Hearings. — The court may hold additional hearings as part of the initial hearing contemplated in these Rules but the initial hearing must be concluded not later than ninety (90) days from the initial date of the initial hearing fixed in the stay order. SEC. 7. Order After Initial Hearing. — (a) Within twenty (20) days after the last hearing, the court shall issue an order which shall: (1) Give due course to the petition and immediately refer the petition and its annexes to the rehabilitation receiver who shall evaluate the rehabilitation plan and submit his recommendations to the court not later than ninety (90) days from the date of the last initial hearing, if the court is satisfied that there is merit to the petition, otherwise the court shall immediately dismiss the petition; and (2) Recite in detail the matters taken up in the initial hearing and the actions taken thereon, including a substitute rehabilitation plan contemplated in Sections 5 (b)(7) and (8) of this Rule; (b) If the debtor and creditors agree on a new rehabilitation plan pursuant to Section 5 (b)(7) of this Rule, the order shall so state the fact and require the rehabilitation receiver to supply the details of the plan and submit it for the approval of the court not later than sixty (60) days from the date of the last initial hearing. The court shall approve the new rehabilitation plan not later than ninety (90) days from the date of the last initial hearing upon concurrence of the following: (1) Approval or endorsement of creditors holding at least two-thirds (2/3) of the total liabilities of the debtor including secured creditors holding more than fifty percent (50%) of the total secured claims of
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debtor including secured creditors holding more than fifty percent (50%) of the total secured claims of the debtor and unsecured creditors holding more than fifty percent (50%) of the total unsecured claims of the debtor; (2) The rehabilitation plan complies with the requirements specified in Section 18 of Rule 3; (3) The rehabilitation plan would provide the objecting class of creditors with payments whose present value projected in the plan would be greater than that which they would have received if the assets of the debtor were sold by a liquidator within a six (6)-month period from the date of filing of the petition; and (4) The rehabilitation receiver has recommended approval of the plan. The approval by the court of the new rehabilitation plan shall have the same effect as approval of a rehabilitation plan under Section 20 of Rule 3. SEC. 8. Creditors’ Meetings. — If no new rehabilitation plan is agreed upon by the debtor and the creditors, the rehabilitation receiver, at any time before he submits his evaluation on the debtorproposed rehabilitation plan to the court as prescribed in Section 7(a)(1) of this Rule, shall, either alone or with the debtor, meet with the creditors or any interested party to discuss the plan with a view to clarifying or resolving any matter connected therewith. SEC. 9. Comments on or Opposition to Rehabilitation Plan. — Any creditor or interested party of record may file comments on or opposition to the proposed rehabilitation plan, with a copy given to the rehabilitation receiver, not later than sixty (60) days from the date of the last initial hearing. The court shall conduct summary and non-adversarial proceedings to receive evidence, if necessary, in hearing the comments on and opposition to the plan. SEC. 10. Modification of Proposed Rehabilitation Plan. — The debtor may modify its rehabilitation plan in the light of the comments of the rehabilitation receiver and creditors or any interested party and submit a revised or substitute rehabilitation plan for the final approval of the court. Such rehabilitation plan must be submitted to the court not later than ten (10) months from the date of the date of filing of the petition. SEC. 11. Approval of Rehabilitation Plan. — The court may approve a rehabilitation plan even over the opposition of creditors of the debtor if, in its judgment, the rehabilitation of the debtor is feasible and the opposition of the creditors is manifestly unreasonable. The opposition of the creditors is manifestly unreasonable if the following are present: (a) The rehabilitation plan complies with the requirements specified in Section 18 of Rule 3; (b) The rehabilitation plan would provide the objecting class of creditors with payments whose present value projected in the plan would be greater than that which they would have received if the assets of the debtor were sold by a liquidator within a six (6)month period from the date of filing of the petition; and (c) The rehabilitation receiver has recommended approval of the plan. In approving the rehabilitation plan, the court shall ensure that the rights of the secured creditors are not impaired. The court shall also issue the necessary orders or processes for its immediate and successful implementation. It may impose such terms, conditions, or restrictions as the effective implementation and monitoring thereof may reasonably require, or for the protection and preservation of the interests of the creditors should the plan fail. SEC. 12. Period to Decide Petition. — The court shall decide the petition within one (1) year from the date of filing of the petition, unless the court, for good cause shown, is able to secure an extension of the period from the Supreme Court. RULE 5 CREDITOR-INITIATED REHABILITATION SEC. 1. Who May Petition. — Any creditor or creditors holding at least twenty percent (20%) of the debtor’s total liabilities may file a petition with the proper regional trial court for rehabilitation of a debtor that cannot meet its debts as they respectively fall due. SEC. 2. Requirements for Creditor-Initiated Petitions. — Where the petition is filed by a creditor or creditors under this Rule, it is sufficient that the petition is accompanied by a rehabilitation plan and a list of at least three (3) nominees to the position of rehabilitation receiver and verified by a sworn statement that the affiant has read the petition and that its contents are true and correct of his personal knowledge or based on authentic records and that the petition is being filed to protect the interests of

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the debtor, the stockholders, the investors and the creditors of the debtor. SEC. 3. Applicability of Provisions Relating to Debtor-Initiated Rehabilitation. — The provisions of Sections 5 to 12 of Rule 4 shall apply to rehabilitation under this Rule. RULE 6 PRE-NEGOTIATED REHABILITATION SEC. 1. Pre-negotiated Rehabilitation Plan. — A debtor that foresees the impossibility of meeting its debts as they fall due may, by itself or jointly with any of its creditors, file a verified petition for the approval of a pre-negotiated rehabilitation plan. The petition shall comply with Section 2 of Rule 4 and be supported by an affidavit showing the written approval or endorsement of creditors holding at least two-thirds (2/3) of the total liabilities of the debtor, including secured creditors holding more than fifty percent (50%) of the total secured claims of the debtor and unsecured creditors holding more than fifty percent (50%) of the total unsecured claims of the debtor. SEC. 2. Issuance of Order. — If the court finds the petition sufficient in form and substance, it shall, not later than five (5) working days from the filing of the petition, issue an order which shall: (a) Identify the debtor, its principal business or activity/ies and its principal place of business; (b) Direct the publication of the order in a newspaper of general circulation once a week for at least two (2) consecutive weeks, with the first publication to be made within seven (7) days from the time of its issuance; (c) Direct the service by personal delivery of a copy of the petition on each creditor who is not a petitioner holding at least five percent (5%) of the total liabilities of the debtor, as determined in the schedule attached to the petition, within three (3) days; (d) Direct the petitioner to furnish a copy of the petition and its annexes, as well as the stay order, to the relevant regulatory agency; (e) State that copies of the petition and the rehabilitation plan are available for examination and copying by any interested party; (f) Direct creditors and other parties interested (including the Securities and Exchange Commission and the relevant regulatory agencies such as, but not limited to, the Bangko Sentral ng Pilipinas, the Insurance Commission, the National Telecommunications Commission, the Housing and Land Use Regulatory Board and the Energy Regulatory Commission) in opposing the petition or rehabilitation plan to file their verified objections thereto or comments thereon within a period of not later than twenty (20) days from the second publication of the order, with a warning that failure to do so will bar them from participating in the proceedings; (g) Appoint the rehabilitation receiver named in the plan, unless the court finds that he is not qualified under these Rules in which case it may appoint a qualified rehabilitation receiver of its choice; (h) Stay enforcement of all claims, whether for money or otherwise and whether such enforcement is by court action or otherwise, against the debtor, its guarantors and persons not solidarily liable with the debtor; provided, that the stay order shall not cover claims against letters of credit and similar security arrangements issued by a third party to secure the payment of the debtor’s obligations; provided further, that the stay order shall not cover foreclosure by a creditor of property not belonging to a debtor under corporate rehabilitation; provided, however, that where the owner of such property sought to be foreclosed is also a guarantor or one who is not solidarily liable, said owner shall be entitled to the benefit of excussion as such guarantor; (i) Prohibit the debtor from selling, encumbering, transferring, or disposing in any manner any of its properties except in the ordinary course of business; (j) Prohibit the debtor from making any payment of its liabilities outstanding as of the date of filing of the petition; (k) Prohibit the debtor’s suppliers of goods or services from withholding supply of goods and services in the ordinary course of business for as long as the debtor makes payments for the services and goods supplied after the issuance of the stay order; (l) Direct the payment in full of all administrative expenses incurred after the issuance of the stay order; and (m) Direct the payment of new loans or other forms of credit accommodations obtained for the rehabilitation of the debtor with prior court approval. SEC. 3. Approval of Plan. — Within ten (10) days from the date of the second publication of the order referred to in Section 2 of this Rule, the court shall approve the rehabilitation plan unless a creditor or
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referred to in Section 2 of this Rule, the court shall approve the rehabilitation plan unless a creditor or other interested party submits a verified objection to it in accordance with the next succeeding section. SEC. 4. Objection to Petition or Rehabilitation Plan. — Any creditor or other interested party may submit to the court a verified objection to the petition or the rehabilitation plan. The objections shall be limited to the following: (a) The petition or the rehabilitation plan or their attachments contain material omissions or are materially false or misleading; (b) The terms of rehabilitation are unattainable; or (c) The approval or endorsement of creditors required under Section 1 of this Rule has not been obtained Copies of any objection to the petition or the rehabilitation plan shall be served on the petitioning debtor and/or creditors. SEC. 5. Hearing on Objections. — The court shall set the case for hearing not earlier than ten (10) days and no later than twenty (20) days from the date of the second publication of the order mentioned in Section 2 of this Rule on the objections to the petition or rehabilitation plan. If the court finds that the objection is in accordance with the immediately preceding section, it shall direct the petitioner to cure the defect within a period fifteen (15) days from receipt of the order. SEC. 6. Period for Approval of Rehabilitation Plan. — The court shall decide the petition not later than one hundred twenty (120) days from the date of the filing of the petition. If the court fails to do so within said period, the rehabilitation plan shall be deemed approved SEC. 7. Effects of Approval of Rehabilitation Plan. — Approval of the rehabilitation plan under this Rule shall have the same legal effect as approval of a rehabilitation plan under Section 20 of Rule 3. SEC. 8. Revocation of Approved Rehabilitation Plan. — Not later than thirty (30) days from the approval of a rehabilitation plan under this Rule, the plan may, upon motion and after notice and hearing, be revoked on the ground that the approval was secured by fraud or that the petitioner has failed to cure the defect ordered by the court pursuant to Section 5 of this Rule. SEC. 9. Effect of Rule on Pending Petitions. — Any pending petition for rehabilitation that has not undergone the initial hearing prescribed under the Interim Rules of Procedure for Corporate Rehabilitation at the time of the effectivity of these Rules may be converted into a rehabilitation proceeding under this Rule. RULE 7 RECOGNITION OF FOREIGN PROCEEDINGS SEC. 1. Scope of Application. — This Rule applies where (a) assistance is sought in a Philippine court by a foreign court or a foreign representative in connection with a foreign proceeding; (b) assistance is sought in a foreign State in connection with a domestic proceeding governed by these Rules; or (c) a foreign proceeding and a domestic proceeding are concurrently taking place. The sole fact that a petition is filed pursuant to this Rule does not subject the foreign representative or the foreign assets and affairs of the debtor to the jurisdiction of the local courts for any purpose other than the petition. SEC. 2. Non-Recognition of Foreign Proceeding. — Nothing in this Rule prevents the court from refusing to take an action governed by this Rule if (a) the action would be manifestly contrary to the public policy of the Philippines; and (b) if the court finds that the country of which the petitioner is a national does not grant recognition to a Philippine rehabilitation proceeding in a manner substantially in accordance with this Rule. SEC. 3. Petition for Recognition of Foreign Proceeding. — A foreign representative may apply with the Regional Trial Court where the debtor resides for recognition of the foreign proceeding in which the foreign representative has been appointed. A petition for recognition shall be accompanied by: (a) A certified copy of the decision commencing the foreign proceeding and appointing the foreign representative; or (b) A certificate from the foreign court affirming the existence of the foreign proceeding and of the appointment of the foreign representative; or (c) In the absence of evidence referred to in subparagraphs (a) and (b), any other evidence acceptable to the court of the existence of the foreign proceeding and of the appointment of the foreign representative.
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representative. SEC. 4. Recognition of Foreign Proceeding. — A foreign proceeding shall be recognized if: (a) The proceeding is a foreign proceeding as defined herein; (b) The person or body applying for recognition is a foreign representative as defined herein; and (c) The petition meets the requirements of Section 3 of this Rule; SEC. 5. Period to Recognize Foreign Proceeding. — A petition for recognition of a foreign proceeding shall be decided within thirty (30) days from the filing thereof. SEC. 6. Notification to Court. — From the time of filing the petition for recognition of the foreign proceeding, the foreign representative shall inform the court promptly of: (a) Any substantial change in the status of the foreign proceeding or the status of the foreign representative’s appointment; and (b)Any other foreign proceeding regarding the same debtor that becomes known to the foreign representative. SEC. 7. Provisional Relief that May be Granted upon Application for Recognition of Foreign Proceeding. — From the time of filing a petition for recognition until the same is decided upon, the court may, upon motion of the foreign representative where relief is urgently needed to protect the assets of the debtor or the interests of the creditors, grant relief of a provisional nature, including: (a) Staying execution against the debtor’s assets; (b) Entrusting the administration or realization of all or part of the debtor’s assets located in the Philippines to the foreign representative or another person designated by the court in order to protect and preserve the value of assets that, by their nature or because of other circumstances, are perishable, susceptible to devaluation or otherwise in jeopardy; (c) Any relief mentioned in Sections 9(a)(1), (2) and (7) of this Rule. SEC. 8. Effects of Recognition of Foreign Proceeding. — Upon recognition of a foreign proceeding: (a) Commencement or continuation of individual actions or individual proceedings concerning the debtor’s assets, rights, obligations or liabilities is stayed; provided, that such stay does not affect the right to commence individual actions or proceedings to the extent necessary to preserve a claim against the debtor. (b) Execution against the debtor’s assets is stayed; and (c) The right to transfer, encumber or otherwise dispose of any assets of the debtor is suspended. SEC. 9. Relief That May be Granted After Recognition of Foreign Proceeding. — (a) Upon recognition of a foreign proceeding, where necessary to protect the assets of the debtor or the interests of the creditors, the court may, upon motion of the foreign representative, grant any appropriate relief including: (1) Staying the commencement or continuation of individual actions or individual proceedings concerning the debtor’s assets, rights, obligations or liabilities to the extent they have not been stayed under Section 8(a) of this Rule; (2) Staying execution against the debtor’s assets to the extent it has not been stayed under Section 8(b) of this Rule; (3) Suspending the right to transfer, encumber or otherwise dispose of any assets of the debtor to the extent this right has not been suspended under Section 8(c) of this Rule; (4) Providing for the examination of witnesses, the taking of evidence or the delivery of information concerning the debtor’s assets, affairs, rights, obligations or liabilities; (5) Entrusting the administration or realization of all or part of the debtor’s assets located in the Philippines to the foreign representative or another person designated by the court; (6) Extending the relief granted under Section 7 of this Rule; (7) Granting any additional relief that may be available to the rehabilitation receiver under these laws. (b) Upon recognition of a foreign proceeding, the court may, at the request of the foreign representative, entrust the distribution of all or part of the debtor’s assets located in the Philippines to the foreign representative or another person designated by the court; provided that the court is satisfied that the interests of local creditors are adequately protected. SEC. 10. Protection of Creditors and Other Interested Persons. — (a) In granting or denying relief under this Rule or in modifying or terminating the relief under paragraph (c) of this Section, the court must be satisfied that the interests of the creditors and other interested persons, including the debtor, are adequately protected.
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persons, including the debtor, are adequately protected. (b) The court may subject the relief granted under Section 7 or Section 9 of this Rule to conditions it considers appropriate. (c) The court may, upon motion of the foreign representative or a person affected by the relief granted under Section 7 or Section 9 of this Rule, or on its own motion, modify or terminate such relief. SEC. 11. Actions to Avoid Acts Detrimental to Creditors. — Upon recognition of a foreign proceeding, the foreign representative acquires the standing to initiate actions to avoid or otherwise render ineffective acts detrimental to creditors that are available under these Rules. SEC. 12. Intervention by Foreign Representative in Philippine Proceedings. — Upon recognition of a foreign proceeding, the foreign representative may intervene in any action or proceeding in the Philippines in which the debtor is a party. SEC. 13. Cooperation and Direct Communication with Foreign Courts and Foreign Representatives. — In matters covered by this Rule, the court shall cooperate to the maximum extent possible with foreign courts or foreign representatives. The court is entitled to communicate directly with, or request information or assistance directly from, foreign courts or foreign representatives. SEC. 14. Forms of Cooperation. — Cooperation may be implemented by any appropriate means, including but not limited to the following: (a) Appointment of a person or body to act at the discretion of the court; (b) Communication of information by any means considered appropriate by the court; (c) Coordination of the administration and supervision of the debtor’s assets and affairs; (d) Approval or implementation by courts of agreements concerning the coordination of proceedings; (e) Coordination of concurrent proceedings regarding the same debtor; (f) Suspension of proceedings against the debtor; (g) Limiting the relief to assets that should be administered in a foreign proceeding pending in a jurisdiction other than the place where the debtor has its principal place of business (foreign non-main proceeding) or information required in that proceeding; and (h) Implementation of rehabilitation or re-organization plan for the debtor. Nothing in this Rule limits the power of the court to provide additional assistance to the foreign representative under other applicable laws. SEC. 15. Commencement of Local Proceeding after Recognition of Foreign Proceeding. — After the recognition of a foreign proceeding, a local proceeding under these Rules may be commenced only if the debtor is doing business in the Philippines, the effects of the proceedings shall be restricted to the assets of the debtor located in the country and, to the extent necessary to implement cooperation and coordination under Sections 13 and 14 of this Rule, to the other assets of the debtor that, under local laws, must be administered in that proceeding. SEC. 16. Local and Foreign Proceedings. — Where a foreign proceeding and a local proceeding are taking place concurrently regarding the same debtor, the court shall seek cooperation and coordination under Sections 13 and 14 of this Rule. Any relief granted to the foreign proceeding must be made consistent with the relief granted in the local proceeding. RULE 8 PROCEDURAL REMEDIES SEC. 1. Motion for Reconsideration. — A party may file a motion for reconsideration of any order issued by the court prior to the approval of the rehabilitation plan. No relief can be extended to the party aggrieved by the court’s order on the motion through a special civil action for certiorari under Rule 65 of the Rules of Court. Such order can only be elevated to the Court of Appeals as an assigned error in the petition for review of the decision or order approving or disapproving the rehabilitation plan. An order issued after the approval of the rehabilitation plan can be reviewed only through a special civil action for certiorari under Rule 65 of the Rules of Court. SEC. 2. Review of Decision or Order on Rehabilitation Plan. — An order approving or disapproving a rehabilitation plan can only be reviewed through a petition for review to the Court of Appeals under Rule 43 of the Rules of Court within fifteen (15) days from notice of the decision or order. RULE 9 FINAL PROVISIONS SEC. 1. Severability. — If any provision or section of these Rules is held invalid, the other provisions or
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SEC. 1. Severability. — If any provision or section of these Rules is held invalid, the other provisions or sections shall not be affected thereby. SEC. 2. Transitory Provision. — Unless the court orders otherwise to prevent manifest injustice, any pending petition for rehabilitation that has not undergone the initial hearing prescribed under the Interim Rules of Procedure for Corporate Rehabilitation at the time of the effectivity of these Rules shall be governed by these Rules. SEC. 3. Effectivity. — These Rules shall take effect on 16 January 2009 following its publication in two (2) newspapers of general circulation in the Philippines.
Pasted from <http://blog.pinoy-business.com/rules-of-procedure-on-corporate-rehabilitation-2008/>

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Oscar Reyes v. RTC Makati GR 165744 Aug 11, 2008
Sunday, November 14, 2010 11:31 PM

[G.R. No. 165744, August 11, 2008] OSCAR C. REYES, PETITIONER, VS. HON. REGIONAL TRIAL COURT OF MAKATI, BRANCH 142, ZENITH INSURANCE CORPORATION, AND RODRIGO C. REYES, RESPONDENTS. DE CI S I ON BRION, J.: This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to set aside the Decision of the Court of Appeals (CA)[1] promulgated on May 26, 2004 in CA-G.R. SP No. 74970. The CA Decision affirmed the Order of the Regional Trial Court (RTC), Branch 142, Makati City dated November 29, 2002[2] in Civil Case No. 00-1553 (entitled "Accounting of All Corporate Funds and Assets, and Damages") which denied petitioner Oscar C. Reyes' (Oscar) Motion to Declare Complaint as Nuisance or Harassment Suit. BACKGROUND FACTS Oscar and private respondent Rodrigo C. Reyes (Rodrigo) are two of the four children of the spouses Pedro and Anastacia Reyes. Pedro, Anastacia, Oscar, and Rodrigo each owned shares of stock of Zenith Insurance Corporation (Zenith), a domestic corporation established by their family. Pedro died in 1964, while Anastacia died in 1993. Although Pedro's estate was judicially partitioned among his heirs sometime in the 1970s, no similar settlement and partition appear to have been made with Anastacia's estate, which included her shareholdings in Zenith. As of June 30, 1990, Anastacia owned 136,598 shares of Zenith; Oscar and Rodrigo owned 8,715,637 and 4,250 shares, respectively.[3] On May 9, 2000, Zenith and Rodrigo filed a complaint[4] with the Securities and Exchange Commission (SEC) against Oscar, docketed as SEC Case No. 05-00-6615. The complaint stated that it is "a derivative suit initiated and filed by the complainant Rodrigo C. Reyes to obtain an accounting of the funds and assets of ZENITH INSURANCE CORPORATION which are now or formerly in the control, custody, and/or possession of respondent [herein petitioner Oscar] and to determine the shares of stock of deceased spouses Pedro and Anastacia Reyes that were arbitrarily and fraudulently appropriated [by Oscar] for himself [and] which were not collated and taken into account in the partition, distribution, and/or settlement of the estate of the deceased spouses, for which he should be ordered to account for all the income from the time he took these shares of stock, and should now deliver to his brothers and sisters their just and respective shares."[5] [Emphasis supplied.] In his Answer with Counterclaim,[6] Oscar denied the charge that he illegally acquired the shares of Anastacia Reyes. He asserted, as a defense, that he purchased the subject shares with his own funds from the unissued stocks of Zenith, and that the suit is not a bona fide derivative suit because the requisites therefor have not been complied with. He thus questioned the SEC's jurisdiction to entertain the complaint because it pertains to the settlement of the estate of Anastacia Reyes. When Republic Act (R.A.) No. 8799[7] took effect, the SEC's exclusive and original jurisdiction over cases enumerated in Section 5 of Presidential Decree (P.D.) No. 902-A was transferred to the RTC designated as a special commercial court.[8] The records of Rodrigo's SEC case were thus turned over to the RTC, Branch 142, Makati, and docketed as Civil Case No. 00-1553. On October 22, 2002, Oscar filed a Motion to Declare Complaint as Nuisance or Harassment Suit.[9] He claimed that the complaint is a mere nuisance or harassment suit and should, according to the Interim Rules of Procedure for IntraCorporate Controversies, be dismissed; and that it is not a bona fide derivative suit as it partakes of the nature of a petition for the settlement of estate of the deceased Anastacia that is outside the jurisdiction of a special commercial court. The RTC, in its Order dated November 29, 2002 (RTC Order), denied the motion in part and declared: A close reading of the Complaint disclosed the presence of two (2) causes of action, namely: a) a derivative suit for accounting of the funds and assets of the corporation which are in the control, custody, and/or possession of the respondent [herein petitioner Oscar] with prayer to appoint a management committee; and b) an action for determination of the shares of stock of deceased spouses Pedro and Anastacia Reyes allegedly taken by respondent, its

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determination of the shares of stock of deceased spouses Pedro and Anastacia Reyes allegedly taken by respondent, its accounting and the corresponding delivery of these shares to the parties' brothers and sisters. The latter is not a derivative suit and should properly be threshed out in a petition for settlement of estate. Accordingly, the motion is denied. However, only the derivative suit consisting of the first cause of action will be taken cognizance of by this Court.[10] Oscar thereupon went to the CA on a petition for certiorari, prohibition, and mandamus[11] and prayed that the RTC Order be annulled and set aside and that the trial court be prohibited from continuing with the proceedings. The appellate court affirmed the RTC Order and denied the petition in its Decision dated May 26, 2004. It likewise denied Oscar's motion for reconsideration in a Resolution dated October 21, 2004. Petitioner now comes before us on appeal through a petition for review on certiorari under Rule 45 of the Rules of Court. ASSIGNMENT OF ERRORS Petitioner Oscar presents the following points as conclusions the CA should have made: 1. that the complaint is a mere nuisance or harassment suit that should be dismissed under the Interim Rules of Procedure of Intra-Corporate Controversies; and 2. that the complaint is not a bona fide derivative suit but is in fact in the nature of a petition for settlement of estate; hence, it is outside the jurisdiction of the RTC acting as a special commercial court. Accordingly, he prays for the setting aside and annulment of the CA decision and resolution, and the dismissal of Rodrigo's complaint before the RTC. THE COURT'S RULING We find the petition meritorious. The core question for our determination is whether the trial court, sitting as a special commercial court, has jurisdiction over the subject matter of Rodrigo's complaint. To resolve it, we rely on the judicial principle that "jurisdiction over the subject matter of a case is conferred by law and is determined by the allegations of the complaint, irrespective of whether the plaintiff is entitled to all or some of the claims asserted therein."[12] Jurisdiction of Special Commercial Courts P.D. No. 902-A enumerates the cases over which the SEC (now the RTC acting as a special commercial court) exercises exclusive jurisdiction: SECTION 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over corporations, partnership, and other forms of associations registered with it as expressly granted under existing laws and decrees, it shall have original and exclusive jurisdiction to hear and decide cases involving: a) Devices or schemes employed by or any acts of the board of directors, business associates, its officers or partners, amounting to fraud and misrepresentation which may be detrimental to the interest of the public and/or of the stockholders, partners, members of associations or organizations registered with the Commission. b) Controversies arising out of intra-corporate or partnership relations, between and among stockholders, members, or associates; between any or all of them and the corporation, partnership or association of which they are stockholders, members, or associates, respectively; and between such corporation, partnership or association and the State insofar as it concerns their individual franchise or right to exist as such entity; and c) Controversies in the election or appointment of directors, trustees, officers, or managers of such corporations, partnerships, or associations. The allegations set forth in Rodrigo's complaint principally invoke Section 5, paragraphs (a) and (b) above as basis for the exercise of the RTC's special court jurisdiction. Our focus in examining the allegations of the complaint shall therefore be on these two provisions. Fraudulent Devices and Schemes The rule is that a complaint must contain a plain, concise, and direct statement of the ultimate facts constituting the plaintiff's cause of action and must specify the relief sought.[13] Section 5, Rule 8 of the Revised Rules of Court provides that in all averments of fraud or mistake, the circumstances constituting fraud or mistake must be stated with particularity.[14] These rules find specific application to Section 5(a) of P.D. No. 902-A which speaks of corporate devices or schemes that amount to fraud or misrepresentation detrimental to the public and/or to the stockholders.

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In an attempt to hold Oscar responsible for corporate fraud, Rodrigo alleged in the complaint the following: 3. This is a complaint...to determine the shares of stock of the deceased spouses Pedro and Anastacia Reyes that were arbitrarily and fraudulently appropriated for himself [herein petitioner Oscar] which were not collated and taken into account in the partition, distribution, and/or settlement of the estate of the deceased Spouses Pedro and Anastacia Reyes, for which he should be ordered to account for all the income from the time he took these shares of stock, and should now deliver to his brothers and sisters their just and respective shares with the corresponding equivalent amount of P7,099,934.82 plus interest thereon from 1978 representing his obligations to the Associated Citizens' Bank that was paid for his account by his late mother, Anastacia C. Reyes. This amount was not collated or taken into account in the partition or distribution of the estate of their late mother, Anastacia C. Reyes. 3.1. Respondent Oscar C. Reyes, through other schemes of fraud including misrepresentation, unilaterally, and for his own benefit, capriciously transferred and took possession and control of the management of Zenith Insurance Corporation which is considered as a family corporation, and other properties and businesses belonging to Spouses Pedro and Anastacia Reyes. xxxx 4.1. During the increase of capitalization of Zenith Insurance Corporation, sometime in 1968, the property covered by TCT No. 225324 was illegally and fraudulently used by respondent as a collateral. xxxx 5. The complainant Rodrigo C. Reyes discovered that by some manipulative scheme, the shareholdings of their deceased mother, Doña Anastacia C. Reyes, shares of stocks and [sic] valued in the corporate books at P7,699,934.28, more or less, excluding interest and/or dividends, had been transferred solely in the name of respondent. By such fraudulent manipulations and misrepresentation, the shareholdings of said respondent Oscar C. Reyes abruptly increased to P8,715,637.00 [sic] and becomes [sic] the majority stockholder of Zenith Insurance Corporation, which portion of said shares must be distributed equally amongst the brothers and sisters of the respondent Oscar C. Reyes including the complainant herein. xxxx 9.1 The shareholdings of deceased Spouses Pedro Reyes and Anastacia C. Reyes valued at P7,099,934.28 were illegally and fraudulently transferred solely to the respondent's [herein petitioner Oscar] name and installed himself as a majority stockholder of Zenith Insurance Corporation [and] thereby deprived his brothers and sisters of their respective equal shares thereof including complainant hereto. xxxx 10.1 By refusal of the respondent to account of his [sic] shareholdings in the company, he illegally and fraudulently transferred solely in his name wherein [sic] the shares of stock of the deceased Anastacia C. Reyes [which] must be properly collated and/or distributed equally amongst the children, including the complainant Rodrigo C. Reyes herein, to their damage and prejudice. xxxx 11.1 By continuous refusal of the respondent to account of his [sic] shareholding with Zenith Insurance Corporation[,] particularly the number of shares of stocks illegally and fraudulently transferred to him from their deceased parents Sps. Pedro and Anastacia Reyes[,] which are all subject for collation and/or partition in equal shares among their children. [Emphasis supplied.] Allegations of deceit, machination, false pretenses, misrepresentation, and threats are largely conclusions of law that, without supporting statements of the facts to which the allegations of fraud refer, do not sufficiently state an effective cause of action.[15] The late Justice Jose Feria, a noted authority in Remedial Law, declared that fraud and mistake are required to be averred with particularity in order to enable the opposing party to controvert the particular facts allegedly constituting such fraud or mistake.[16] Tested against these standards, we find that the charges of fraud against Oscar were not properly supported by the required factual allegations. While the complaint contained allegations of fraud purportedly committed by him, these allegations are not particular enough to bring the controversy within the special commercial court's jurisdiction; they are not statements of ultimate facts, but are mere conclusions of law: how and why the alleged appropriation of shares can

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not statements of ultimate facts, but are mere conclusions of law: how and why the alleged appropriation of shares can be characterized as "illegal and fraudulent" were not explained nor elaborated on. Not every allegation of fraud done in a corporate setting or perpetrated by corporate officers will bring the case within the special commercial court's jurisdiction. To fall within this jurisdiction, there must be sufficient nexus showing that the corporation's nature, structure, or powers were used to facilitate the fraudulent device or scheme. Contrary to this concept, the complaint presented a reverse situation. No corporate power or office was alleged to have facilitated the transfer of the shares; rather, Oscar, as an individual and without reference to his corporate personality, was alleged to have transferred the shares of Anastacia to his name, allowing him to become the majority and controlling stockholder of Zenith, and eventually, the corporation's President. This is the essence of the complaint read as a whole and is particularly demonstrated under the following allegations: 5. The complainant Rodrigo C. Reyes discovered that by some manipulative scheme, the shareholdings of their deceased mother, Doña Anastacia C. Reyes, shares of stocks and *sic+ valued in the corporate books at P7,699,934.28, more or less, excluding interest and/or dividends, had been transferred solely in the name of respondent. By such fraudulent manipulations and misrepresentation, the shareholdings of said respondent Oscar C. Reyes abruptly increased to P8,715,637.00 [sic] and becomes [sic] the majority stockholder of Zenith Insurance Corporation, which portion of said shares must be distributed equally amongst the brothers and sisters of the respondent Oscar C. Reyes including the complainant herein. xxxx 9.1 The shareholdings of deceased Spouses Pedro Reyes and Anastacia C. Reyes valued at P7,099,934.28 were illegally and fraudulently transferred solely to the respondent's [herein petitioner Oscar] name and installed himself as a majority stockholder of Zenith Insurance Corporation [and] thereby deprived his brothers and sisters of their respective equal shares thereof including complainant hereto. [Emphasis supplied.] In ordinary cases, the failure to specifically allege the fraudulent acts does not constitute a ground for dismissal since such defect can be cured by a bill of particulars. In cases governed by the Interim Rules of Procedure on Intra-Corporate Controversies, however, a bill of particulars is a prohibited pleading.[17] It is essential, therefore, for the complaint to show on its face what are claimed to be the fraudulent corporate acts if the complainant wishes to invoke the court's special commercial jurisdiction. We note that twice in the course of this case, Rodrigo had been given the opportunity to study the propriety of amending or withdrawing the complaint, but he consistently refused. The court's function in resolving issues of jurisdiction is limited to the review of the allegations of the complaint and, on the basis of these allegations, to the determination of whether they are of such nature and subject that they fall within the terms of the law defining the court's jurisdiction. Regretfully, we cannot read into the complaint any specifically alleged corporate fraud that will call for the exercise of the court's special commercial jurisdiction. Thus, we cannot affirm the RTC's assumption of jurisdiction over Rodrigo's complaint on the basis of Section 5(a) of P.D. No. 902-A.[18] Intra-Corporate Controversy A review of relevant jurisprudence shows a development in the Court's approach in classifying what constitutes an intracorporate controversy. Initially, the main consideration in determining whether a dispute constitutes an intra-corporate controversy was limited to a consideration of the intra-corporate relationship existing between or among the parties.[19] The types of relationships embraced under Section 5(b), as declared in the case of Union Glass & Container Corp. v. SEC,[20] were as follows: a) between the corporation, partnership, or association and the public; b) between the corporation, partnership, or association and its stockholders, partners, members, or officers; c) between the corporation, partnership, or association and the State as far as its franchise, permit or license to operate is concerned; and d) among the stockholders, partners, or associates themselves. [Emphasis supplied.] The existence of any of the above intra-corporate relations was sufficient to confer jurisdiction to the SEC, regardless of the subject matter of the dispute. This came to be known as the relationship test. However, in the 1984 case of DMRC Enterprises v. Esta del Sol Mountain Reserve, Inc.,[21]the Court introduced the nature of the controversy test. We declared in this case that it is not the mere existence of an intra-corporate relationship that gives rise to an intra-corporate controversy; to rely on the relationship test alone will divest the regular courts of their jurisdiction for the sole reason that the dispute involves a corporation, its directors, officers, or stockholders. We saw that there is no legal sense in disregarding or minimizing the value of the nature of the transactions which gives rise to the dispute.

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the dispute. Under the nature of the controversy test, the incidents of that relationship must also be considered for the purpose of ascertaining whether the controversy itself is intra-corporate.[22] The controversy must not only be rooted in the existence of an intra-corporate relationship, but must as well pertain to the enforcement of the parties' correlative rights and obligations under the Corporation Code and the internal and intra-corporate regulatory rules of the corporation. If the relationship and its incidents are merely incidental to the controversy or if there will still be conflict even if the relationship does not exist, then no intra-corporate controversy exists. The Court then combined the two tests and declared that jurisdiction should be determined by considering not only the status or relationship of the parties, but also the nature of the question under controversy.[23] This two-tier test was adopted in the recent case of Speed Distribution, Inc. v. Court of Appeals:[24] To determine whether a case involves an intra-corporate controversy, and is to be heard and decided by the branches of the RTC specifically designated by the Court to try and decide such cases, two elements must concur: (a) the status or relationship of the parties; and (2) the nature of the question that is the subject of their controversy. The first element requires that the controversy must arise out of intra-corporate or partnership relations between any or all of the parties and the corporation, partnership, or association of which they are stockholders, members or associates; between any or all of them and the corporation, partnership, or association of which they are stockholders, members, or associates, respectively; and between such corporation, partnership, or association and the State insofar as it concerns their individual franchises. The second element requires that the dispute among the parties be intrinsically connected with the regulation of the corporation. If the nature of the controversy involves matters that are purely civil in character, necessarily, the case does not involve an intra-corporate controversy. Given these standards, we now tackle the question posed for our determination under the specific circumstances of this case: Application of the Relationship Test Is there an intra-corporate relationship between the parties that would characterize the case as an intra-corporate dispute? We point out at the outset that while Rodrigo holds shares of stock in Zenith, he holds them in two capacities: in his own right with respect to the 4,250 shares registered in his name, and as one of the heirs of Anastacia Reyes with respect to the 136,598 shares registered in her name. What is material in resolving the issues of this case under the allegations of the complaint is Rodrigo's interest as an heir since the subject matter of the present controversy centers on the shares of stocks belonging to Anastacia, not on Rodrigo's personally-owned shares nor on his personality as shareholder owning these shares. In this light, all reference to shares of stocks in this case shall pertain to the shareholdings of the deceased Anastacia and the parties' interest therein as her heirs. Article 777 of the Civil Code declares that the successional rights are transmitted from the moment of death of the decedent. Accordingly, upon Anastacia's death, her children acquired legal title to her estate (which title includes her shareholdings in Zenith), and they are, prior to the estate's partition, deemed co-owners thereof.[25] This status as coowners, however, does not immediately and necessarily make them stockholders of the corporation. Unless and until there is compliance with Section 63 of the Corporation Code on the manner of transferring shares, the heirs do not become registered stockholders of the corporation. Section 63 provides: Section 63. Certificate of stock and transfer of shares. - The capital stock of stock corporations shall be divided into shares for which certificates signed by the president or vice-president, countersigned by the secretary or assistant secretary, and sealed with the seal of the corporation shall be issued in accordance with the by-laws. Shares of stock so issued are personal property and may be transferred by delivery of the certificate or certificates indorsed by the owner or his attorney-in-fact or other person legally authorized to make the transfer. No transfer, however, shall be valid, except as between the parties, until the transfer is recorded in the books of the corporation so as to show the names of the parties to the transaction, the date of the transfer, the number of the certificate or certificates, and the number of shares transferred. [Emphasis supplied.] No shares of stock against which the corporation holds any unpaid claim shall be transferable in the books of the corporation. Simply stated, the transfer of title by means of succession, though effective and valid between the parties involved (i.e., between the decedent's estate and her heirs), does not bind the corporation and third parties. The transfer must be registered in the books of the corporation to make the transferee-heir a stockholder entitled to recognition as such both by the corporation and by third parties.[26] We note, in relation with the above statement, that in Abejo v. Dela Cruz[27] and TCL Sales Corporation v. Court of

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We note, in relation with the above statement, that in Abejo v. Dela Cruz[27] and TCL Sales Corporation v. Court of Appeals[28] we did not require the registration of the transfer before considering the transferee a stockholder of the corporation (in effect upholding the existence of an intra-corporate relation between the parties and bringing the case within the jurisdiction of the SEC as an intra-corporate controversy). A marked difference, however, exists between these cases and the present one. In Abejo and TCL Sales, the transferees held definite and uncontested titles to a specific number of shares of the corporation; after the transferee had established prima facie ownership over the shares of stocks in question, registration became a mere formality in confirming their status as stockholders. In the present case, each of Anastacia's heirs holds only an undivided interest in the shares. This interest, at this point, is still inchoate and subject to the outcome of a settlement proceeding; the right of the heirs to specific, distributive shares of inheritance will not be determined until all the debts of the estate of the decedent are paid. In short, the heirs are only entitled to what remains after payment of the decedent's debts;[29] whether there will be residue remains to be seen. Justice Jurado aptly puts it as follows: No succession shall be declared unless and until a liquidation of the assets and debts left by the decedent shall have been made and all his creditors are fully paid. Until a final liquidation is made and all the debts are paid, the right of the heirs to inherit remains inchoate. This is so because under our rules of procedure, liquidation is necessary in order to determine whether or not the decedent has left any liquid assets which may be transmitted to his heirs.[30] [Emphasis supplied.] Rodrigo must, therefore, hurdle two obstacles before he can be considered a stockholder of Zenith with respect to the shareholdings originally belonging to Anastacia. First, he must prove that there are shareholdings that will be left to him and his co-heirs, and this can be determined only in a settlement of the decedent's estate. No such proceeding has been commenced to date. Second, he must register the transfer of the shares allotted to him to make it binding against the corporation. He cannot demand that this be done unless and until he has established his specific allotment (and prima facie ownership) of the shares. Without the settlement of Anastacia's estate, there can be no definite partition and distribution of the estate to the heirs. Without the partition and distribution, there can be no registration of the transfer. And without the registration, we cannot consider the transferee-heir a stockholder who may invoke the existence of an intra-corporate relationship as premise for an intra-corporate controversy within the jurisdiction of a special commercial court. In sum, we find that - insofar as the subject shares of stock (i.e., Anastacia's shares) are concerned - Rodrigo cannot be considered a stockholder of Zenith. Consequently, we cannot declare that an intra-corporate relationship exists that would serve as basis to bring this case within the special commercial court's jurisdiction under Section 5(b) of PD 902-A, as amended. Rodrigo's complaint, therefore, fails the relationship test. Application of the Nature of Controversy Test The body rather than the title of the complaint determines the nature of an action.[31] Our examination of the complaint yields the conclusion that, more than anything else, the complaint is about the protection and enforcement of successional rights. The controversy it presents is purely civil rather than corporate, although it is denominated as a "complaint for accounting of all corporate funds and assets." Contrary to the findings of both the trial and appellate courts, we read only one cause of action alleged in the complaint. The "derivative suit for accounting of the funds and assets of the corporation which are in the control, custody, and/or possession of the respondent [herein petitioner Oscar]" does not constitute a separate cause of action but is, as correctly claimed by Oscar, only an incident to the "action for determination of the shares of stock of deceased spouses Pedro and Anastacia Reyes allegedly taken by respondent, its accounting and the corresponding delivery of these shares to the parties' brothers and sisters." There can be no mistake of the relationship between the "accounting" mentioned in the complaint and the objective of partition and distribution when Rodrigo claimed in paragraph 10.1 of the complaint that: 10.1 By refusal of the respondent to account of [sic] his shareholdings in the company, he illegally and fraudulently transferred solely in his name wherein [sic] the shares of stock of the deceased Anastacia C. Reyes [which] must be properly collated and/or distributed equally amongst the children including the complainant Rodrigo C. Reyes herein to their damage and prejudice. We particularly note that the complaint contained no sufficient allegation that justified the need for an accounting other than to determine the extent of Anastacia's shareholdings for purposes of distribution. Another significant indicator that points us to the real nature of the complaint are Rodrigo's repeated claims of illegal and fraudulent transfers of Anastacia's shares by Oscar to the prejudice of the other heirs of the decedent; he cited these allegedly fraudulent acts as basis for his demand for the collation and distribution of Anastacia's shares to the heirs. These claims tell us unequivocally that the present controversy arose from the parties' relationship as heirs of Anastacia and not as shareholders of Zenith. Rodrigo, in filing the complaint, is enforcing his rights as a co-heir and not as a stockholder of Zenith. The injury he seeks to remedy is one suffered by an heir (for the impairment of his successional rights) and not by the corporation nor by Rodrigo as a shareholder on record.

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rights) and not by the corporation nor by Rodrigo as a shareholder on record. More than the matters of injury and redress, what Rodrigo clearly aims to accomplish through his allegations of illegal acquisition by Oscar is the distribution of Anastacia's shareholdings without a prior settlement of her estate - an objective that, by law and established jurisprudence, cannot be done. The RTC of Makati, acting as a special commercial court, has no jurisdiction to settle, partition, and distribute the estate of a deceased. A relevant provision - Section 2 of Rule 90 of the Revised Rules of Court - that contemplates properties of the decedent held by one of the heirs declares: Questions as to advancement made or alleged to have been made by the deceased to any heir may be heard and determined by the court having jurisdiction of the estate proceedings; and the final order of the court thereon shall be binding on the person raising the questions and on the heir. [Emphasis supplied.] Worth noting are this Court's statements in the case of Natcher v. Court of Appeals:[32] Matters which involve settlement and distribution of the estate of the decedent fall within the exclusive province of the probate court in the exercise of its limited jurisdiction. xxxx It is clear that trial courts trying an ordinary action cannot resolve to perform acts pertaining to a special proceeding because it is subject to specific prescribed rules. [Emphasis supplied.] That an accounting of the funds and assets of Zenith to determine the extent and value of Anastacia's shareholdings will be undertaken by a probate court and not by a special commercial court is completely consistent with the probate court's limited jurisdiction. It has the power to enforce an accounting as a necessary means to its authority to determine the properties included in the inventory of the estate to be administered, divided up, and distributed. Beyond this, the determination of title or ownership over the subject shares (whether belonging to Anastacia or Oscar) may be conclusively settled by the probate court as a question of collation or advancement. We had occasion to recognize the court's authority to act on questions of title or ownership in a collation or advancement situation in Coca v. Pangilinan[33] where we ruled: It should be clarified that whether a particular matter should be resolved by the Court of First Instance in the exercise of its general jurisdiction or of its limited probate jurisdiction is in reality not a jurisdictional question. In essence, it is a procedural question involving a mode of practice "which may be waived." As a general rule, the question as to title to property should not be passed upon in the testate or intestate proceeding. That question should be ventilated in a separate action. That general rule has qualifications or exceptions justified by expediency and convenience. Thus, the probate court may provisionally pass upon in an intestate or testate proceeding the question of inclusion in, or exclusion from, the inventory of a piece of property without prejudice to its final determination in a separate action. Although generally, a probate court may not decide a question of title or ownership, yet if the interested parties are all heirs, or the question is one of collation or advancement, or the parties consent to the assumption of jurisdiction by the probate court and the rights of third parties are not impaired, the probate court is competent to decide the question of ownership. [Citations omitted. Emphasis supplied.] In sum, we hold that the nature of the present controversy is not one which may be classified as an intra-corporate dispute and is beyond the jurisdiction of the special commercial court to resolve. In short, Rodrigo's complaint also fails the nature of the controversy test. DERIVATIVE SUIT Rodrigo's bare claim that the complaint is a derivative suit will not suffice to confer jurisdiction on the RTC (as a special commercial court) if he cannot comply with the requisites for the existence of a derivative suit. These requisites are: a. the party bringing suit should be a shareholder during the time of the act or transaction complained of, the number of shares not being material; b. the party has tried to exhaust intra-corporate remedies, i.e., has made a demand on the board of directors for the appropriate relief, but the latter has failed or refused to heed his plea; and c. the cause of action actually devolves on the corporation; the wrongdoing or harm having been or being caused to the corporation and not to the particular stockholder bringing the suit. [34] Based on these standards, we hold that the allegations of the present complaint do not amount to a derivative suit. First, as already discussed above, Rodrigo is not a shareholder with respect to the shareholdings originally belonging to Anastacia; he only stands as a transferee-heir whose rights to the share are inchoate and unrecorded. With respect to his own individually-held shareholdings, Rodrigo has not alleged any individual cause or basis as a shareholder on record to proceed against Oscar. Second, in order that a stockholder may show a right to sue on behalf of the corporation, he must allege with some

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Second, in order that a stockholder may show a right to sue on behalf of the corporation, he must allege with some particularity in his complaint that he has exhausted his remedies within the corporationby making a sufficient demand upon the directors or other officers for appropriate relief with the expressed intent to sue if relief is denied.[35] Paragraph 8 of the complaint hardly satisfies this requirement since what the rule contemplates is the exhaustion of remedies within the corporate setting: 8. As members of the same family, complainant Rodrigo C. Reyes has resorted [to] and exhausted all legal means of resolving the dispute with the end view of amicably settling the case, but the dispute between them ensued. Lastly, we find no injury, actual or threatened, alleged to have been done to the corporation due to Oscar's acts. If indeed he illegally and fraudulently transferred Anastacia's shares in his own name, then the damage is not to the corporation but to his co-heirs; the wrongful transfer did not affect the capital stock or the assets of Zenith. As already mentioned, neither has Rodrigo alleged any particular cause or wrongdoing against the corporation that he can champion in his capacity as a shareholder on record.[36] In summary, whether as an individual or as a derivative suit, the RTC - sitting as special commercial court - has no jurisdiction to hear Rodrigo's complaint since what is involved is the determination and distribution of successional rights to the shareholdings of Anastacia Reyes. Rodrigo's proper remedy, under the circumstances, is to institute a special proceeding for the settlement of the estate of the deceased Anastacia Reyes, a move that is not foreclosed by the dismissal of his present complaint. WHEREFORE, we hereby GRANT the petition and REVERSE the decision of the Court of Appeals dated May 26, 2004 in CA-G.R. SP No. 74970. The complaint before the Regional Trial Court, Branch 142, Makati, docketed as Civil Case No. 00-1553, is ordered DISMISSED for lack of jurisdiction. SO ORDERED.

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BP 129, as amended by RA 7691, Secs. 2 to 4
Sunday, November 14, 2010 11:31 PM

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?Sps Fajardo v. Anita Flores GR 167891 Jan 15, 2010
Sunday, November 14, 2010 11:31 PM

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Vda De Barrera et al v. Heirs of Vicente Legaspi GR 174346 Sept 12, 2008;
Sunday, November 14, 2010 11:31 PM

[G.R. No. 174346, September 12, 2008] FERNANDA GEONZON VDA. DE BARRERA AND JOHNNY OCO, JR., PETITIONERS, VS. HEIRS OF VICENTE LEGASPI, REPRESENTED BY PEDRO LEGASPI, RESPONDENTS. DE C I SI O N
CARPIO MORALES, J.: Under review before this Court is the July 31, 2006 Decision of the Court of Appeals, [1 ] which affirmed that of the Regional Trial Court, Branch 16, of Tangub City in Civil Case No. TC-97-001, ordering the defendants-petitioners herein, Fernanda Geonzon vda. de Barrera and Johnny Oco. Jr. to return possession of the subject property to the plaintiffs-herein respondents, Heirs of Vicente Legaspi. On October 1, 1996, petitioner Johnny Oco Jr. (Oco), said to be a "peace officer connected with the PNP," accompanied by "unidentified CAFGU members," forced his way into respondents' 0.9504-hectare irrigated farmland located at Liloan, Bonifacio, Misamis Occidental. After dispossessing respondents of the property, Oco and company used a tractor to destroy the planted crops, took possession of the land, and had since tended it. [2 ] Respondents thus filed on February 7, 1997 a complaint before the Regional Trial Court of Tangub City for Reconveyance of Possession with Preliminary Mandatory Injunction and Damages[3 ] against petitioners. In their Answer, petitioners claimed that the subject land forms part of a three-hectare property described in OCT No. P-447 issued on February 10, 1956 in the name of Andrea Lacson who sold a 2-hectare portion thereof to Eleuterio Geonzon who, in turn, sold 1.1148 thereof to his sister petitioner Fernanda Geonzon vda. de Barrera (Fernanda). [4 ] Respondents, on the other hand, asserted that the land was occupied, possessed and cultivated by their predecessor-in-interest Vicente Legaspi and his wife Lorenza since 1935;[5 ] after a subdivision survey was conducted in November 30, 1976, it was found out that the land formed part of the titled property of Andrea Lacson;[6 ] and despite this discovery, they never filed any action to recover ownership thereof since they were left undisturbed in their possession,[7 ] until October 1, 1996 when petitioners forced their way into it. Petitioners raised the issue of ownership as a special affirmative defense. [8 ] In their Memorandum, however, they questioned the jurisdiction of the RTC over the subject matter of the complaint, the assessed value of the land being only P11,160,[9 ] as reflected in Tax Declaration No. 7565.[1 0 ] By Decision of November 27, 1998, the trial court found for respondents, disposing as follows: WHEREFORE, judgment is hereby rendered in favor of the plaintiffs [herein respondents] and against the defendants [-herein petitioners]: Ordering the latter to return the possession of the land in question to the plaintiffs and Ordering the latter to desist from further depriving and disturbing plaintiffs' peaceful possession thereof, unless there be another court judgment to the contrary. SO ORDERED.

1. 2.

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SO ORDERED. On the issue of jurisdiction over the subject matter, the trial court, maintaining that it had, held: The Court is not persuaded by [the defendants'] arguments. What determines the nature of the action as well as the jurisdiction of the [c]ourt are the facts alleged in the complaint and not those alleged in the answer of the defendants. xxx x In [p]ar. 2 of plaintiffs' complaint, the land in question was described as a riceland "situated at Liloan, Bonifacio, Misamis Occ. and declared under [T]ax [D]eclaration No. 7564 in the name of Vicente Legaspi and bounded on the north by a creek, on the east Sec. 12, on the south Lot No. 007 and on the west also by Lot No. 007 which tax declaration cancels former [T]ax [D]eclaration No. 12933 under the name of Lorenza Bacul Legaspi which likewise cancels [T]ax [D]eclaration No. 5454 covering the bigger portion of the land under which the land described under [T]ax [D]eclaration No. 7565 is part and parcel thereof [sic]; the present estimated value being P50,000."[1 1 ] (Emphasis and underscoring supplied) Petitioners thereupon appealed to the Court of Appeals which affirmed the trial court's disposition of the issue of jurisdiction over the subject matter. On the merits, the appellate court affirmed too the trial court's decision, finding that "both testimonial and documentary evidence on record established that appellees, through their predecessors-in-interest, have been in peaceful, continuous, public and actual possession of the property in dispute even before the year 1930."[1 2 ] The appellate court emphasized that in an accion publiciana, the only issue involved is the determination of possession de jure.[1 3 ] Hence, the present petition for review which raises the following issues: I. . . . WHETHER OWNERSHIP AND TITLE CANNOT BE AN ISSUE TO DETERMINE WHO HAS A BETTER RIGHT [TO] THE PORTION LITIGATED; AND II. WHETHER . . . THE NATURE OF THE ACTION AS WELL AS THE JURISDICTION OF THE COURT DEPEND ON THE FACTS AS ALLEGED IN THE COMPLAINT.[1 4 ] For obvious reasons, the issue of lack of jurisdiction over the subject matter shall be first considered. Section 33 of Batas Pambansa Bilang 129, (the Judiciary Reorganization Act of 1980), as amended by Republic Act No. 7691 provides for the jurisdiction of metropolitan trial courts, municipal trial courts and municipal circuit trial courts, to wit: xxx x (3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of, real property, or any interest therein where the assessed value of the property or interest therein does not exceed Twenty thousand pesos (P20,000.00) or, in civil actions in Metro Manila, where such assessed value does not exceed Fifty thousand pesos (P50,000.00) exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses and costs: Provided, That in cases of land not declared for taxation purposes, the value of such property shall be determined by the assessed value of the adjacent lots. (Emphasis, italics and underscoring supplied) Before the amendments introduced by Republic Act No. 7691, the plenary action of accion publiciana was to be brought before the regional trial court. [1 5 ] With the modifications introduced by R.A. No. 7691 in 1994, the jurisdiction of the first level courts has been expanded to include jurisdiction over other real actions where the assessed value does not exceed P20,000, P50,000 where the action is filed in Metro Manila. The first level courts thus have exclusive original jurisdiction over accion publiciana and accion reivindicatoria where the assessed value of the real property does not exceed the aforestated amounts. Accordingly, the jurisdictional element is the assessed value of the property. Assessed value is understood to be "the worth or value of property established by taxing

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Assessed value is understood to be "the worth or value of property established by taxing authorities on the basis of which the tax rate is applied. Commonly, however, it does not represent the true or market value of the property."[1 6 ] The subject land has an assessed value of P11,160 as reflected in Tax Declaration No. 7565, a common exhibit of the parties. The bare claim of respondents that it has a value of P50,000 thus fails. The case, therefore, falls within the exclusive original jurisdiction of the municipal trial court. It was error then for the RTC to take cognizance of the complaint based on the allegation that "the present estimated value [of the land is] P50,000," which allegation is, oddly, handwritten on the printed pleading. The estimated value, commonly referred to as fair market value,[1 7 ] is entirely different from the assessed value of the property. Lack of jurisdiction is one of those excepted grounds where the court may dismiss a claim or a case at any time when it appears from the pleadings or the evidence on record that any of those grounds exists, even if they were not raised in the answer or in a motion to dismiss.[1 8 ] That the issue of lack of jurisdiction was raised by petitioners only in their Memorandum filed before the trial court did not thus render them in estoppel. En passant, the Court notes that respondents' cause of action - accion publiciana is a wrong mode. The dispossession took place on October 1, 1996 and the complaint was filed four months thereafter or on February 7, 1997. Respondents' exclusion from the property had thus not lasted for more than one year to call for the remedy of accion publiciana. In fine, since the RTC has no jurisdiction over the complaint filed by respondents, all the proceedings therein as well as the Decision of November 27, 1998, are null and void. The complaint should perforce be dismissed. This leaves it unnecessary to still dwell on the first issue. WHEREFORE, the petition is hereby GRANTED. The challenged July 31, 2006 Decision of the Court of Appeals is SET ASIDE. The decision of Branch 16 of the Regional Trial Court of Tangub City in Civil Case No. TC-97-001 is declared NULL and VOID for lack of jurisdiction.

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Ouano v. PGTT Gr No. 134230 July 7, 2002;
Sunday, November 14, 2010 11:31 PM

G.R. No. 134230 July 17, 2002 JOVENAL OUANO, petitioner, vs. PGTT INTERNATIONAL INVESTMENT CORPORATION and HON. JUDGE RAMON G. CODILLA, JR., respondents. SANDOVAL-GUTIERREZ, J.: PGTT International Investment Corporation (PGTT), respondent, is a corporation duly organized under existing laws, with address at YASCO Bldg., M. J. Cuenco Ave., Cebu City. On December 11, 1997, PGTT filed with the Regional Trial Court (RTC), Branch 20, Cebu City, a verified complaint against Jovenal Ouano, petitioner, docketed as Civil Case No. CEB- 21319, entitled "PGTT INTERNATIONAL INVESTMENT CORPORATION, Plaintiff, vs. JUVENAL OUANO, Defendant," for "Recovery of Ownership and Possession of Real Property and Damages."1 In its complaint, PGTT alleged that it is the owner of Lot Nos. 1-10, Block 2 of the Sunnymeade Crescent Subdivision located at Pit-os, Talamban, Cebu City. Sometime in October of 1996, PGTT found that Ouano uprooted the concrete monuments of the said lots, plowed them and planted corn thereon. Despite PGTT’s demand that he vacate the lots and restore them to their original condition, Ouano refused, claiming he is the owner and lawful possessor of the 380 square meters he occupied. Due to Ouano’s wrongful act, PGTT was deprived of the use of its property and suffered damages in the amount of P100,000.00 a year. Likewise, PGTT was constrained to file the subject action and hired the services of his counsel for P100,000.00. PGTT prayed: "WHEREFORE, in view of all the foregoing, it is most respectfully prayed that after due notice and hearing, judgment be rendered ordering defendant (Jovenal Ouano) to vacate the premises and restore the lots to their original condition; pay plaintiff (PGTT) P100,000.00 as damages per year, beginning October, 1996 until he shall have vacated the premises and restored the lots to their original condition; pay P100,000.00 as attorney's fees; and pay P50,000.00 as expenses of litigation. "Plaintiff prays for such other reliefs and remedies, just and equitable under the premises." 2 On February 5, 1998, Ouano filed a motion to dismiss the complaint on the ground that it is the Municipal Trial Court (MTC), not the RTC, which has jurisdiction over it considering that the assessed value of the lots involved is only P2,910, as indicated in the latest tax declaration,3 citing Section 19 (paragraph 2) and Section 33 (paragraph 3) of Batas Pambansa Bilang 129 (The Judiciary Reorganization Act of 1980), as amended by Republic Act No. 7691.4 In its opposition to Ouano’s motion, PGTT contends that the RTC has jurisdiction since the market value of the lots is P49,760.00.5 Besides, the complaint is not only an action for recovery of ownership and possession of real property, but also for damages exceeding P100,000.00, over which claim the RTC has exclusive original jurisdiction under Section 19 (paragraph 8) of the same law. On March 6, 1998, the RTC, presided by Judge Ramon G. Codilla, Jr., issued an Order denying the motion to dismiss, holding that: "This court believes that this court has jurisdiction to try this case considering that the real properties consist of ten parcels of land in a subdivision and the court takes note that there is a discrepancy somewhere by the Office of the City Assessor in the Assessment of the parcels of land for only less than P2,000.00 and that the government is very much at a loss by these unrealistic valuation." 6 Ouano filed a motion for reconsideration but was likewise denied by the RTC in its Order dated May 27, 1998. The trial court ruled it has jurisdiction over the case because "(i)t is of judicial knowledge that the real properties situated in Cebu City command a higher valuation than those indicated in the tax declaration. The observation of plaintiff’s (PGTT’s) counsel as to the issue on damages is likewise sustained considering that, being a corporation, it may have incurred damages in the form of unrealized profits."7 Hence the present petition for certiorari filed by Ouano under Rule 65 of the 1997 Rules of Civil Procedure, as amended, assailing the Orders of respondent judge dated March 6, 1998 and May 27, 1998 as having been issued with grave abuse of discretion amounting to lack or excess of jurisdiction. At the outset, it is necessary to stress that a direct recourse to this Court is highly improper, for it violates the established policy of strict observance of the judicial hierarchy of courts.8 We need to reiterate, for the guidance of petitioner, that this Court’s original jurisdiction to issue a writ of certiorari (as well as prohibition, mandamus, quo warranto, habeas corpus and injunction) is concurrent with the Court of Appeals (CA), as in the present case, and with the RTCs in proper cases within their respective regions.9 However, this concurrence of jurisdiction does not grant a party seeking any of the extraordinary writs the absolute freedom to file his petition with the court of his choice. This Court is a court of last resort, and must so remain if it is to satisfactorily perform the functions assigned to it by the Constitution and immemorial tradition.10 The hierarchy of courts determines the appropriate forum for such petitions. Thus, petitions for the issuance of such extraordinary writs against the first level ("inferior") courts should be filed with the RTC, and those against the latter, with the CA.11 A direct invocation of this Court’s original jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition. This

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allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition. This is the established policy. It is a policy that is necessary to prevent inordinate demands upon this Court’s time and attention which are better devoted to those matters within its exclusive jurisdiction, and to prevent further overcrowding of its docket.12 Unfortunately, the instant petition does not allege any special and compelling reason to justify a direct recourse to this Court. However, we deem it more appropriate and practical to resolve the controversy in order to avoid further delay, but only in this instance. The lone issue for our resolution is whether the RTC has jurisdiction over Civil Case No. CEB-21319. The complaint seeks to recover from private respondent the ownership and possession of the lots in question and the payment of damages. Since the action involves ownership and possession of real property, the jurisdiction over the subject matter of the claim is determined by the assessed value, not the market value, thereof, pursuant to Batas Pambansa Blg. 129, as amended by R.A. 7691. Section 33 (paragraph 3) of the said law provides: "Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in Civil Cases. – Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts shall exercise: x x x. (3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of, real property, or any interest therein where the assessed value of the property or interest therein does not exceed Twenty Thousand Pesos (P20,000.00) or, in civil actions in Metro Manila, where such assessed value does not exceed Fifty Thousand Pesos (P50,000.00) exclusive of interest, damages of whatever kind, attorney’s fees, litigation expenses and costs: Provided, That in cases of land not declared for taxation purposes, the value of such property shall be determined by the assessed value of the adjacent lots. x x x." (Emphasis ours) Likewise, Section 19 (paragraph 2) of the same law reads: "Sec. 19. Jurisdiction in civil cases. - The Regional Trial Court shall exercise exclusive original jurisdiction: x x x. (2) In all civil actions, which involve the title to, or possession of, real property, or any interest therein, where the assessed value of the property involved exceeds Twenty Thousand Pesos (P20,000.00) or, for civil actions in Metro Manila, where such value exceeds Fifty Thousand Pesos (P50,000.00) except actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts; x x x." (Emphasis ours) It is undisputed that the assessed value of the property involved, as shown by the corresponding tax declaration, is only P2,910.00. As such, the complaint is well within the MTC’s P20,000.00 jurisdictional limit. The finding of respondent judge that the value of the lots is higher than that indicated in the tax declaration and that, therefore, the RTC has jurisdiction over the case is highly speculative. It is elementary that the tax declaration indicating the assessed value of the property enjoys the presumption of regularity as it has been issued by the proper government agency. Respondent judge further held that since the complaint also seeks the recovery of damages exceeding P100,000.00, then it is within the competence of the RTC pursuant to Section 19 (paragraph 8) of Batas Pambansa Blg. 129, as amended by R.A. 7691, which states: "SEC. 19. Jurisdiction in civil cases. – Regional Trial Courts shall exercise exclusive original jurisdiction: xxx "(8) In all other cases in which the demand, exclusive of interest, damages of whatever kind, attorney’s fees, litigation expenses, and costs or the value of the property in controversy exceeds One Hundred Thousand Pesos (P100,000.00) or, in such other cases in Metro Manila, where the demand, exclusive of the above mentioned items exceeds Two hundred thousand pesos (P200,000.00)." (Emphasis ours) The above provision does not apply to the instant case. It is applicable only to "all other cases" other than an action involving title to, or possession of real property in which the assessed value is the controlling factor in determining the court’s jurisdiction. Besides, the same provision explicitly excludes from the determination of the jurisdictional amount the demand for "interest, damages of whatever kind, attorney’s fees, litigation expenses, and costs". The exclusion of such damages is reiterated in Section 33, paragraph 3 of the same Batas Pambansa Blg. 129, as amended, quoted earlier. The said damages are merely incidental to, or a consequence of, the main cause of action for recovery of ownership and possession of real property. In this connection, this Court issued Administrative Circular No. 09-94 setting the guidelines in the implementation of R.A. 7691. Paragraph 2 states: "2. The exclusion of the term ‘damages of whatever kind’ in determining the jurisdictional amount under Section 19 (8) and Section 33 (1) of B.P. Blg. 129, as amended by R.A. 7691, applies to cases where the damages are merely incidental to or a consequence of the main cause of action. However, in cases where the claim for damages is the main cause of action, or one of the causes of action, the amount of such claim shall be considered in determining the jurisdiction of the court." (Emphasis ours) We thus find that in issuing the assailed orders denying petitioner’s motion to dismiss, thus taking cognizance of the case, the RTC committed grave abuse of discretion. WHEREFORE, the instant petition is GRANTED. The assailed Orders issued by respondent RTC on March 6, 1998 and May 27, 1998 in Civil Case No. CEB-21319 are SET ASIDE. Accordingly, the complaint is ordered DISMISSED. SO ORDERED.

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SO ORDERED.

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RA 7160 (Local Government Code of 1991) Secs 399-422
Sunday, November 14, 2010 11:31 PM

CHAPTER VII Katarungang Pambarangay Section 399. Lupong Tagapamayapa. (a) There is hereby created in each barangay a lupong tagapamayapa, hereinafter referred to as the lupon, composed of the punong barangay, as chairman and ten (10) to twenty (20) members. The lupon shall be constituted every three (3) years in the manner provided herein. (b) Any person actually residing or working, in the barangay, not otherwise expressly disqualified by law, and possessing integrity, impartiality, independence of mind, sense of fairness, and reputation for probity, may be appointed a member of the lupon. (c) A notice to constitute the lupon, which shall include the names of proposed members who have expressed their willingness to serve, shall be prepared by the punong barangay within the first fifteen (15) days from the start of his term of office. Such notice shall be posted in three (3) conspicuous places in the barangay continuously for a period of not less than three (3) weeks; (d) The punong barangay, taking into consideration any opposition to the proposed appointment or any recommendations for appointment as may have been made within the period of posting, shall within ten (10) days thereafter, appoint as members those whom he determines to be suitable therefor. Appointments shall be in writing, signed by the punong barangay, and attested to by the barangay secretary. (e) The list of appointed members shall be posted in three (3) conspicuous places in the barangay for the entire duration of their term of office; and (f) In barangays where majority of the inhabitants are members of indigenous cultural communities, local systems of settling disputes through their councils of datus or elders shall be recognized without prejudice to the applicable provisions of this Code. Section 400. Oath and Term of Office. - Upon appointment, each lupon member shall take an oath of office before the punong barangay. He shall hold office until a new lupon is constituted on the third year following his appointment unless sooner terminated by resignation, transfer of residence or place of work, or withdrawal of appointment by the punong barangay with the concurrence of the majority of all the members of the lupon. Section 401. Vacancies. - Should a vacancy occur in the lupon for any cause, the punong barangay shall immediately appoint a qualified person who shall hold office only for the unexpired portion of the term. Section 402. Functions of the Lupon. - The lupon shall: (a) Exercise administrative supervision over the conciliation panels provided herein; (b) Meet regularly once a month to provide a forum for exchange of ideas among its members and the public on matters relevant to the amicable settlement of disputes, and to enable various conciliation panel members to share with one another their observations and experiences in effecting speedy resolution of disputes; and (c) Exercise such other powers and perform such other duties and functions as may be prescribed by law or ordinance. Section 403. Secretary of the Lupon. - The barangay secretary shall concurrently serve as the secretary of the lupon. He shall record the results of mediation proceedings before the punong barangay and shall submit a report thereon to the proper city or municipal courts. He shall also receive and keep the records of proceedings submitted to him by the various conciliation panels. Section 404. Pangkat ng Tagapagkasundo. (a) There shall be constituted for each dispute brought before the lupon a conciliation panel to be known as the pangkat ng tagapagkasundo, hereinafter referred to as the pangkat, consisting of three (3) members who shall be chosen by the parties to the dispute from the list of members of the lupon. Should the parties fail to agree on the pangkat membership, the same shall be determined by lots drawn by the lupon chairman. (b) The three (3) members constituting the pangkat shall elect from among themselves the chairman and the secretary. The secretary shall prepare the minutes of the pangkat proceedings and submit a copy duly attested to by the chairman to the lupon secretary and to the proper city or municipal court.
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copy duly attested to by the chairman to the lupon secretary and to the proper city or municipal court. He shall issue and cause to be served notices to the parties concerned. The lupon secretary shall issue certified true copies of any public record in his custody that is not by law otherwise declared confidential. Section 405. Vacancies in the Pangkat. - Any vacancy in the pangkat shall be chosen by the parties to the dispute from among the other lupon members. Should the parties fail to agree on a common choice, the vacancy shall be filled by lot to be drawn by the lupon chairman. Section 406. Character of Office and Service of Lupon Members. (a) The lupon members, while in the performance of their official duties or on the occasion thereof, shall be deemed as persons in authority, as defined in the Revised Penal Code. (b) The lupon or pangkat members shall serve without compensation, except as provided for in Section 393 and without prejudice to incentives as provided for in this Section and in Book IV of this Code. The Department of the Interior and Local Government shall provide for a system of granting economic or other incentives to the lupon or pangkat members who adequately demonstrate the ability to judiciously and expeditiously resolve cases referred to them. While in the performance of their duties, the lupon or pangkat members, whether in public or private employment, shall be deemed to be on official time, and shall not suffer from any diminution in compensation or allowance from said employment by reason thereof. Section 407. Legal Advice on Matters Involving Questions of Law. - The provincial, city legal officer or prosecutor or the municipal legal officer shall render legal advice on matters involving questions of law to the punong barangay or any lupon or pangkat member whenever necessary in the exercise of his functions in the administration of the katarungang pambarangay. Section 408. Subject Matter for Amicable Settlement; Exception Thereto. - The lupon of each barangay shall have authority to bring together the parties actually residing in the same city or municipality for amicable settlement of all disputes except: (a) Where one party is the government, or any subdivision or instrumentality thereof; (b) Where one party is a public officer or employee, and the dispute relates to the performance of his official functions; (c) Offenses punishable by imprisonment exceeding one (1) year or a fine exceeding Five thousand pesos (P5,000.00); (d) Offenses where there is no private offended party; (e) Where the dispute involves real properties located in different cities or municipalities unless the parties thereto agree to submit their differences to amicable settlement by an appropriate lupon; (f) Disputes involving parties who actually reside in barangays of different cities or municipalities, except where such barangay units adjoin each other and the parties thereto agree to submit their differences to amicable settlement by an appropriate lupon; (g) Such other classes of disputes which the President may determine in the interest of Justice or upon the recommendation of the Secretary of Justice. The court in which non-criminal cases not falling within the authority of the lupon under this Code are filed may, at any time before trial motu propio refer the case to the lupon concerned for amicable settlement. Section 409. Venue. (a) Disputes between persons actually residing in the same barangay shall be brought for amicable settlement before the lupon of said barangay. (b) Those involving actual residents of different barangays within the same city or municipality shall be brought in the barangay where the respondent or any of the respondents actually resides, at the election of the complaint. (c) All disputes involving real property or any interest therein shall be brought in the barangay where the real property or the larger portion thereof is situated. (d) Those arising at the workplace where the contending parties are employed or at the institution where such parties are enrolled for study, shall be brought in the barangay where such workplace or institution is located. Objections to venue shall be raised in the mediation proceedings before the punong barangay; otherwise, the same shall be deemed waived. Any legal question which may confront the punong barangay in resolving objections to venue herein referred to may be submitted to the Secretary of
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barangay in resolving objections to venue herein referred to may be submitted to the Secretary of Justice, or his duly designated representative, whose ruling thereon shall be binding. Section 410. Procedure for Amicable Settlement. (a) Who may initiate proceeding - Upon payment of the appropriate filing fee, any individual who has a cause of action against another individual involving any matter within the authority of the lupon may complain, orally or in writing, to the lupon chairman of the barangay. (b) Mediation by lupon chairman - Upon receipt of the complaint, the lupon chairman shall within the next working day summon the respondent(s), with notice to the complainant(s) for them and their witnesses to appear before him for a mediation of their conflicting interests. If he fails in his mediation effort within fifteen (15) days from the first meeting of the parties before him, he shall forthwith set a date for the constitution of the pangkat in accordance with the provisions of this Chapter. (c) Suspension of prescriptive period of offenses - While the dispute is under mediation, conciliation, or arbitration, the prescriptive periods for offenses and cause of action under existing laws shall be interrupted upon filing the complaint with the punong barangay. The prescriptive periods shall resume upon receipt by the complainant of the complainant or the certificate of repudiation or of the certification to file action issued by the lupon or pangkat secretary: Provided, however, That such interruption shall not exceed sixty (60) days from the filing of the complaint with the punong barangay. (d) Issuance of summons; hearing; grounds for disqualification - The pangkat shall convene not later than three (3) days from its constitution, on the day and hour set by the lupon chairman, to hear both parties and their witnesses, simplify issues, and explore all possibilities for amicable settlement. For this purpose, the pangkat may issue summons for the personal appearance of parties and witnesses before it. In the event that a party moves to disqualify any member of the pangkat by reason of relationship, bias, interest, or any other similar grounds discovered after the constitution of the pangkat, the matter shall be resolved by the affirmative vote of the majority of the pangkat whose decision shall be final. Should disqualification be decided upon, the resulting vacancy shall be filled as herein provided for. (e) Period to arrive at a settlement - The pangkat shall arrive at a settlement or resolution of the dispute within fifteen (15) days from the day it convenes in accordance with this section. This period shall, at the discretion of the pangkat, be extendible for another period which shall not exceed fifteen (15) days, except in clearly meritorious cases. Section 411. Form of settlement. - All amicable settlements shall be in writing, in a language or dialect known to the parties, signed by them, and attested to by the lupon chairman or the pangkat chairman, as the case may be. When the parties to the dispute do not use the same language or dialect, the settlement shall be written in the language known to them. Section 412. Conciliation. (a) Pre-condition to Filing of Complaint in Court. - No complaint, petition, action, or proceeding involving any matter within the authority of the lupon shall be filed or instituted directly in court or any other government office for adjudication, unless there has been a confrontation between the parties before the lupon chairman or the pangkat, and that no conciliation or settlement has been reached as certified by the lupon secretary or pangkat secretary as attested to by the lupon or pangkat chairman or unless the settlement has been repudiated by the parties thereto. (b) Where Parties May Go Directly to Court. - The parties may go directly to court in the following instances: (1) Where the accused is under detention; (2) Where a person has otherwise been deprived of personal liberty calling for habeas corpus proceedings; (3) Where actions are coupled with provisional remedies such as preliminary injunction, attachment, delivery of personal property and support pendente lite; and (4) Where the action may otherwise be barred by the statute of limitations. (c) Conciliation among members of indigenous cultural communities. - The customs and traditions of indigenous cultural communities shall be applied in settling disputes between members of the cultural communities. Section 413. Arbitration. (a) The parties may, at any stage of the proceedings, agree in writing that they shall abide by the arbitration award of the lupon chairman or the pangkat. Such agreement to arbitrate may be repudiated within five (5) days from the date thereof for the same grounds and in accordance with the procedure
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within five (5) days from the date thereof for the same grounds and in accordance with the procedure hereinafter prescribed. The arbitration award shall be made after the lapse of the period for repudiation and within ten (10) days thereafter. (b) The arbitration award shall be in writing in a language or dialect known to the parties. When the parties to the dispute do not use the same language or dialect, the award shall be written in the language or dialect known to them. Section 414. Proceedings Open to the Public; Exception. - All proceedings for settlement shall be public and informal: Provided, however, That the lupon chairman or the pangkat chairman, as the case may be, may motu proprio or upon request of a party, exclude the public from the proceedings in the interest of privacy, decency, or public morals. Section 415. Appearance of Parties in Person. - In all katarungang pambarangay proceedings, the parties must appear in person without the assistance of counsel or representative, except for minors and incompetents who may be assisted by their next-of-kin who are not lawyers. Section 416. Effect of Amicable Settlement and Arbitration Award. - The amicable settlement and arbitration award shall have the force and effect of a final judgment of a court upon the expiration of ten (10) days from the date thereof, unless repudiation of the settlement has been made or a petition to nullify the award has been filed before the proper city or municipal court. However, this provision shall not apply to court cases settled by the lupon under the last paragraph of Section 408 of this Code, in which case the compromise or the pangkat chairman shall be submitted to the court and upon approval thereof, have the force and effect of a judgment of said court. Section 417. Execution. - The amicable settlement or arbitration award may be enforced by execution by the lupon within six (6) months from the date of the settlement. After the lapse of such time, the settlement may be enforced by action in the appropriate city or municipal court. Section 418. Repudiation. - Any party to the dispute may, within ten (10) days from the date of the settlement, repudiate the same by filing with the lupon chairman a statement to that effect sworn to before him, where the consent is vitiated by fraud, violence, or intimidation. Such repudiation shall be sufficient basis for the issuance of the certification for filing a complaint as hereinabove provided. Section 419. Transmittal of Settlement and Arbitration. - Award to the Court. - The secretary of the lupon shall transmit the settlement or the arbitration award to the appropriate city or municipal court within five (5) days from the date of the award or from the lapse of the ten-day period repudiating the settlement and shall furnish copies thereof to each of the parties to the settlement and the lupon chairman. Section 420. Power to Administer Oaths. - The punong barangay, as chairman of the lupong tagapamayapa, and the members of the pangkat are hereby authorized to administer oaths in connection with any matter relating to all proceedings in the implementation of the katarungang pambarangay. Section 421. Administration; Rules and Regulations. - The city or municipal mayor, as the case may be, shall see to the efficient and effective implementation and administration of the katarungang pambarangay. The Secretary of Justice shall promulgate the rules and regulations necessary to implement this Chapter. Section 422. Appropriations. - Such amount as may be necessary for the effective implementation of the katarungang pambarangay shall be provided for in the annual budget of the city or municipality concerned.
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Leo Wee v. George de Castro et al GR 1764095 Aug 20, 2008;
Sunday, November 14, 2010 11:31 PM

[G.R. No. 176405, August 20, 2008] LEO WEE, PETITIONER, VS. GEORGE DE CASTRO (ON HIS BEHALF AND AS ATTORNEY-IN-FACT OF ANNIE DE CASTRO AND FELOMINA UBAN) AND MARTINIANA DE CASTRO, RESPONDENTS. DE C I SI O N
CHICO-NAZARIO, J.: Before this Court is a Petition for Review on Certiorari[1 ] under Rule 45 of the Revised Rules of Court filed by petitioner Leo Wee, seeking the reversal and setting aside of the Decision[2 ] dated 19 September 2006 and the Resolution[3 ] dated 25 January 2007 of the Court of Appeals in CA-G.R. SP No. 90906. The appellate court, in its assailed Decision, reversed the dismissal of Civil Case. No. 1990, an action for ejectment instituted by respondent George de Castro, on his own behalf and on behalf of Annie de Castro, Felomina de Castro Uban and Jesus de Castro[4 ] against petitioner, by the Municipal Trial Court (MTC) of Alaminos City, which was affirmed by the Regional Trial Court (RTC), Branch 54, Alaminos City, Pangasinan; and, ruling in favor of the respondents, ordered the petitioner to vacate the subject property. In its assailed Resolution dated 25 January 2007, the Court of Appeals refused to reconsider its earlier Decision of 19 September 2006. In their Complaint [5 ] filed on 1 July 2002 with the MTC of Alaminos City, docketed as Civil Case No. 1990, respondents alleged that they are the registered owners of the subject property, a two-storey building erected on a parcel of land registered under Transfer Certificate of Title (TCT) No. 16193 in the Registry of Deeds of Pangasinan, described and bounded as follows: A parcel of land (Lot 13033-D-2, Psd-01550-022319, being a portion of Lot 13033-D, Psd-018529, LRC Rec. No.____) situated in Pob., Alaminos City; bounded on the NW. along line 1-2 by Lot 13035-D-1 of the subdivision plan; on the NE. along line 2-3 by Vericiano St.; on the SE. along line 3-4 by Lot 13033-D-2 of the subdivision plan; on the SW. along line 4-1 by Lot 575, Numeriano Rabago. It is coverd by TCT No. 16193 of the Register of Deeds of Pangasinan (Alaminos City) and declared for taxation purposes per T.D. No. 2075, and assessed in the sum of P93,400.00.[6 ] Respondents rented out the subject property to petitioner on a month to month basis for P9,000.00 per month.[7 ] Both parties agreed that effective 1 October 2001, the rental payment shall be increased from P9,000.00 to P15,000.00. Petitioner, however, failed or refused to pay the corresponding increase on rent when his rental obligation for the month of 1 October 2001 became due. The rental dispute was brought to the Lupon Tagapagpamayapa of Poblacion, Alaminos, Pangasinan, in an attempt to amicably settle the matter but the parties failed to reach an agreement, resulting in the issuance by the Barangay Lupon of a Certification to file action in court on 18 January 2002. On 10 June 2002, respondent George de Castro sent a letter to petitioner terminating their lease agreement and demanding that the latter vacate and turn over the subject property to respondents. Since petitioner stubbornly refused to comply with said demand letter, respondent George de Castro, together with his siblings and co-respondents, Annie de Castro, Felomina de Castro Uban and Jesus de Castro, filed the Complaint for ejectment before the MTC. It must be noted, at this point, that although the Complaint stated that it was being filed by all of the respondents, the Verification and the Certificate of Non-Forum Shopping were signed by respondent George de Castro alone. He would subsequently attach to his position paper filed before the MTC on 28 October 2002 the Special Powers of Attorney (SPAs) executed by his sisters Annie de Castro and Felomina de Castro Uban dated 7 February

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executed by his sisters Annie de Castro and Felomina de Castro Uban dated 7 February 2002 and 14 March 2002 respectively, authorizing him to institute the ejectment case against petitioner. Petitioner, on the other hand, countered that there was no agreement between the parties to increase the monthly rentals and respondents' demand for an increase was exorbitant. The agreed monthly rental was only for the amount of P9,000.00 and he was religiously paying the same every month. Petitioner then argued that respondents failed to comply with the jurisdictional requirement of conciliation before the Barangay Lupon prior to the filing of Civil Case. No. 1990, meriting the dismissal of their Complaint therein. The Certification to file action issued by the Barangay Lupon appended to the respondents' Complaint merely referred to the issue of rental increase and not the matter of ejectment. Petitioner asserted further that the MTC lacked jurisdiction over the ejectment suit, since respondents' Complaint was devoid of any allegation that there was an "unlawful withholding" of the subject property by the petitioner. [8 ] During the Pre-Trial Conference[9 ] held before the MTC, the parties stipulated that in May 2002, petitioner tendered to respondents the sum of P9,000.00 as rental payment for the month of January 2002; petitioner paid rentals for the months of October 2001 to January 2002 but only in the amount of P9,000.00 per month; respondents, thru counsel, sent a letter to petitioner on 10 June 2002 terminating their lease agreement which petitioner ignored; and the Barangay Lupon did issue a Certification to file action after the parties failed to reach an agreement before it. After the submission of the parties of their respective Position Papers, the MTC, on 21 November 2002, rendered a Decision[1 0 ] dismissing respondents' Complaint in Civil Case No. 1990 for failure to comply with the prior conciliation requirement before the Barangay Lupon. The decretal portion of the MTC Decision reads: WHEREFORE, premised considered, judgment is hereby rendered ordering the dismissal of this case. Costs against the [herein respondents]. On appeal, docketed as Civil Case No. A-2835, the RTC of Alaminos, Pangasinan, Branch 54, promulgated its Decision[1 1 ] dated 27 June 2005 affirming the dismissal of respondents' Complaint for ejectment after finding that the appealed MTC Decision was based on facts and law on the matter. The RTC declared that since the original agreement entered into by the parties was for petitioner to pay only the sum of P9.000.00 per month for the rent of the subject property, and no concession was reached by the parties to increase such amount to P15.000.00, petitioner cannot be faulted for paying only the originally agreed upon monthly rentals. Adopting petitioner's position, the RTC declared that respondents' failure to refer the matter to the Barangay court for conciliation process barred the ejectment case, conciliation before the Lupon being a condition sine qua non in the filing of ejectment suits. The RTC likewise agreed with petitioner in ruling that the allegation in the Complaint was flawed, since respondents failed to allege that there was an "unlawful withholding" of possession of the subject property, taking out Civil Case No. 1990 from the purview of an action for unlawful detainer. Finally, the RTC decreed that respondents' Complaint failed to comply with the rule that a co-owner could not maintain an action without joining all the other co-owners. Thus, according to the dispositive portion of the RTC Decision: WHEREFORE the appellate Court finds no cogent reason to disturb the findings of the court a quo. The Decision dated November 21, 2002 appealed from is hereby AFFIRMED IN TOTO.[1 2 ] Undaunted, respondents filed a Petition for Review on Certiorari[1 3 ] with the Court of Appeals where it was docketed as CA-G.R. SP No. 90906. Respondents argued in their Petition that the RTC gravely erred in ruling that their failure to comply with the conciliation process was fatal to their Complaint, since it is only respondent George de Castro who resides in Alaminos City, Pangasinan, while respondent Annie de Castro resides in Pennsylvania, United States of America (USA); respondent Felomina de Castro Uban, in California, USA; and respondent Jesus de Castro, now substituted by his wife, Martiniana, resides in Manila. Respondents further claimed that the MTC was not divested of jurisdiction over their Complaint for ejectment because of the mere absence therein of the term "unlawful withholding" of their subject property, considering that they had sufficiently

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"unlawful withholding" of their subject property, considering that they had sufficiently alleged the same in their Complaint, albeit worded differently. Finally, respondents posited that the fact that only respondent George de Castro signed the Verification and the Certificate of Non-Forum Shopping attached to the Complaint was irrelevant since the other respondents already executed Special Powers of Attorney (SPAs) authorizing him to act as their attorney-in-fact in the institution of the ejectment suit against the petitioner. On 19 September 2006, the Court of Appeals rendered a Decision granting the respondents' Petition and ordering petitioner to vacate the subject property and turn over the same to respondents. The Court of Appeals decreed: WHEREFORE, premises considered, the instant petition is GRANTED. The assailed Decision dated June 27, 2005 issued by the RTC of Alaminos City, Pangasinan, Branch 54, is REVERSED and SET ASIDE. A new one is hereby rendered ordering [herein petitioner] Leo Wee to SURRENDER and VACATE the leased premises in question as well as to pay the sum of P15,000.00 per month reckoned from March, 2002 until he shall have actually turned over the possession thereof to petitioners plus the rental arrearages of P30,000.00 representing unpaid increase in rent for the period from October, 2001 to February, 2002, with legal interest at 6% per annum to be computed from June 7, 2002 until finality of this decision and 12% thereafter until full payment thereof. Respondent is likewise hereby ordered to pay petitioners the amount of P20,000.00 as and for attorney's fees and the costs of suit.[1 4 ] In a Resolution dated 25 January 2007, the appellate court denied the Motion for Reconsideration interposed by petitioner for lack of merit. Petitioner is now before this Court via the Petition at bar, making the following assignment of errors: I. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN DECLARING THAT CONCILIATION PROCESS IS NOT A JURISDICTIONAL REQUIREMENT THAT NON-COMPLIANCE THEREWITH DOES NOT AFFECT THE JURISDICTION IN EJECTMENT CASE; II. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN UPHOLDING THE SUFFICIENCY OF THE ALLEGATIONS IN THE COMPLAINT FOR EJECTMENT DESPITE THE WANT OF ALLEGATION OF "UNLAWFUL WITHOLDING PREMISES" (sic) QUESTIONED BY PETITIONER; III. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN RULING THAT THE FILING OF THE COMPLAINT OF RESPONDENT GEORGE DE CASTRO WITHOUT JOINING ALL HIS OTHER CO-OWNERS OVER THE SUBJECT PROPERTY IS PROPER; IV. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT APPLYING SUPREME COURT CIRCULAR NO. 10 WHICH DIRECTS A PLEADER TO INDICATE IN HIS PLEADINGS HIS OFFICIAL RECEIPT OF HIS PAYMENT OF HIS IBP DUES.[1 5 ] Petitioner avers that respondents failed to go through the conciliation process before the Barangay Lupon, a jurisdictional defect that bars the legal action for ejectment. The Certification to file action dated 18 January 2002 issued by the Barangay Lupon, appended by the respondents to their Complaint in Civil Case No. 1990, is of no moment, for it attested only that there was confrontation between the parties on the matter of rental increase but not on unlawful detainer of the subject property by the petitioner. If it was the intention of the respondents from the very beginning to eject petitioner from the subject property, they should have brought up the alleged unlawful stay of the petitioner on the subject property for conciliation before the Barangay Lupon. The barangay justice system was established primarily as a means of easing up the congestion of cases in the judicial courts. This could be accomplished through a proceeding before the barangay courts which, according to the one who conceived of the system, the

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late Chief Justice Fred Ruiz Castro, is essentially arbitration in character; and to make it truly effective, it should also be compulsory. With this primary objective of the barangay justice system in mind, it would be wholly in keeping with the underlying philosophy of Presidential Decree No. 1508 (Katarungang Pambarangay Law), which would be better served if an out-of-court settlement of the case is reached voluntarily by the parties. [1 6 ] To ensure this objective, Section 6 of Presidential Decree No. 1508 requires the parties to undergo a conciliation process before the Lupon Chairman or the Pangkat ng Tagapagkasundo as a precondition to filing a complaint in court subject to certain exceptions. The said section has been declared compulsory in nature. [1 7 ] Presidential Decree No. 1508 is now incorporated in Republic Act No. 7160 (The Local Government Code), which took effect on 1 January 1992. The pertinent provisions of the Local Government Code making conciliation a precondition to the filing of complaints in court are reproduced below: SEC. 412. Conciliation.- (a) Pre-condition to filing of complaint in court. - No complaint, petition, action, or proceeding involving any matter within the authority of the lupon shall be filed or instituted directly in court or any other government office for adjudication, unless there has been a confrontation between the parties before the lupon chairman or the pangkat, and that no conciliation or settlement has been reached as certified by the lupon secretary or pangkat secretary as attested to by the lupon or pangkat chairman or unless the settlement has been repudiated by the parties thereto. (b) Where parties may go directly to court. - The parties may go directly to court in the following instances: (1) Where the accused is under detention; (2) Where a person has otherwise been deprived of personal liberty calling for habeas corpus proceedings; (3) Where actions are coupled with provisional remedies such as preliminary injunction, attachment, delivery of personal property, and support pendente lite; and (4) Where the action may otherwise be barred by the statute of limitations. (c) Conciliation among members of indigenous cultural communities. - The customs and traditions of indigenous cultural communities shall be applied in settling disputes between members of the cultural communities. SEC. 408. Subject Matter for Amicable Settlement; Exception Thereto. - The lupon of each barangay shall have authority to bring together the parties actually residing in the same city or municipality for amicable settlement of all disputes except: (a) Where one party is the government or any subdivision or instrumentality thereof; (b) Where one party is a public officer or employee, and the dispute relates to the performance of his official functions; (c) Offenses punishable by imprisonment exceeding one (1) year or a fine exceeding Five thousand pesos (P5,000.00); (d) Offenses where there is no private offended party; (e) Where the dispute involves real properties located in different cities or municipalities unless the parties thereto agree to submit their differences to amicable settlement by an appropriate lupon; (f) Disputes involving parties who actually reside in barangays of different cities or

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(f) Disputes involving parties who actually reside in barangays of different cities or municipalities, except where such barangay units adjoin each other and the parties thereto agree to submit their differences to amicable settlement by an appropriate lupon; (g) Such other classes of disputes which the President may determine in the interest of justice or upon the recommendation of the Secretary of Justice. There is no question that the parties to this case appeared before the Barangay Lupon for conciliation proceedings. There is also no dispute that the only matter referred to the Barangay Lupon for conciliation was the rental increase, and not the ejectment of petitioner from the subject property. This is apparent from a perusal of the Certification to file action in court issued by the Barangay Lupon on 18 January 2002, to wit: CERTIFICATION TO FILE COMPLAINTS This is to certify that: There was personal confrontation between parties before the barangay Lupon regarding rental increase of a commercial building but conciliation failed; Therefore, the corresponding dispute of the above-entitled case may now be filed in Court/Government Office.[1 8 ] (Emphasis ours.) The question now to be resolved by this Court is whether the Certification dated 18 January 2002 issued by the Barangay Lupon stating that no settlement was reached by the parties on the matter of rental increase sufficient to comply with the prior conciliation requirement under the Katarungang Pambarangay Law to authorize the respondents to institute the ejectment suit against petitioner. The Court rules affirmatively. While it is true that the Certification to file action dated 18 January 2002 of the Barangay Lupon refers only to rental increase and not to the ejectment of petitioner from the subject property, the submission of the same for conciliation before the Barangay Lupon constitutes sufficient compliance with the provisions of the Katarungang Pambarangay Law. Given the particular circumstances of the case at bar, the conciliation proceedings for the amount of monthly rental should logically and reasonably include also the matter of the possession of the property subject of the rental, the lease agreement, and the violation of the terms thereof. We now proceed to discuss the meat of the controversy. The contract of lease between the parties did not stipulate a fixed period. Hence, the parties agreed to the payment of rentals on a monthly basis. On this score, Article 1687 of the Civil Code provides: Art. 1687. If the period for the lease has not been fixed, it is understood to be from year to year, if the rent agreed upon is annual; from month to month, if it is monthly; from week to week, if the rent is weekly; and from day to day, if the rent is to be paid daily. However, even though a monthly rent is paid, and no period for the lease has been set, the courts may fix a longer term for the lease after the lessee has occupied the premises for over one year. If the rent is weekly, the courts may likewise determine a longer period after the lessee has been in possession for over six months. In case of daily rent, the courts may also fix a longer period after the lessee has stayed in the place for over one month. (Emphasis supplied.) The rentals being paid monthly, the period of such lease is deemed terminated at the end of each month. Thus, respondents have every right to demand the ejectment of petitioners at the end of each month, the contract having expired by operation of law. Without a lease contract, petitioner has no right of possession to the subject property and must vacate the same. Respondents, thus, should be allowed to resort to an action for ejectment before the MTC to recover possession of the subject property from petitioner. Corollarily, petitioner's ejectment, in this case, is only the reasonable consequence of his unrelenting refusal to comply with the respondents' demand for the payment of rental increase agreed upon by both parties. Verily, the lessor's right to rescind the contract of

1.

2.

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lease for non-payment of the demanded increased rental was recognized by this Court in Chua v. Victorio[1 9 ]: The right of rescission is statutorily recognized in reciprocal obligations, such as contracts of lease. In addition to the general remedy of rescission granted under Article 1191 of the Civil Code, there is an independent provision granting the remedy of rescission for breach of any of the lessor or lessee's statutory obligations. Under Article 1659 of the Civil Code, the aggrieved party may, at his option, ask for (1) the rescission of the contract; (2) rescission and indemnification for damages; or (3) only indemnification for damages, allowing the contract to remain in force. Payment of the rent is one of a lessee's statutory obligations, and, upon nonpayment by petitioners of the increased rental in September 1994, the lessor acquired the right to avail of any of the three remedies outlined above. (Emphasis supplied.) Petitioner next argues that respondent George de Castro cannot maintain an action for ejectment against petitioner, without joining all his co-owners. Article 487 of the New Civil Code is explicit on this point: ART. 487. Any one of the co-owners may bring an action in ejectment. This article covers all kinds of action for the recovery of possession, i.e., forcible entry and unlawful detainer (accion interdictal), recovery of possession (accion publiciana), and recovery of ownership (accion de reivindicacion). As explained by the renowned civilist, Professor Arturo M. Tolentino[2 0 ]: A co-owner may bring such an action, without the necessity of joining all the other co-owners as co-plaintiffs, because the suit is deemed to be instituted for the benefit of all. If the action is for the benefit of the plaintiff alone, such that he claims possession for himself and not for the co-ownership, the action will not prosper. (Emphasis added.) In the more recent case of Carandang v. Heirs of De Guzman,[21] this Court declared that a co-owner is not even a necessary party to an action for ejectment, for complete relief can be afforded even in his absence, thus: In sum, in suits to recover properties, all co-owners are real parties in interest. However, pursuant to Article 487 of the Civil Code and the relevant jurisprudence, any one of them may bring an action, any kind of action for the recovery of co-owned properties. Therefore, only one of the co-owners, namely the co-owner who filed the suit for the recovery of the co-owned property, is an indispensable party thereto. The other co-owners are not indispensable parties. They are not even necessary parties, for a complete relief can be afforded in the suit even without their participation, since the suit is presumed to have been filed for the benefit of all co-owners. Moreover, respondents Annie de Castro and Felomina de Castro Uban each executed a Special Power of Attorney, giving respondent George de Castro the authority to initiate Civil Case No. 1990. A power of attorney is an instrument in writing by which one person, as principal, appoints another as his agent and confers upon him the authority to perform certain specified acts or kinds of acts on behalf of the principal. The written authorization itself is the power of attorney, and this is clearly indicated by the fact that it has also been called a "letter of attorney."[2 2 ] Even then, the Court views the SPAs as mere surplusage, such that the lack thereof does not in any way affect the validity of the action for ejectment instituted by respondent George de Castro. This also disposes of petitioner's contention that respondent George de Castro lacked the authority to sign the Verification and the Certificate of Non-Forum Shopping. As the Court ruled in Mendoza v. Coronel[2 3 ]: We likewise hold that the execution of the certification against forum shopping by the attorney-in-fact in the case at bar is not a violation of the requirement that the parties must personally sign the same. The attorney-in-fact, who has authority to file, and who actually filed the complaint as the representative of the plaintiff co-owner, pursuant to a Special Power of Attorney, is a party to the ejectment suit. In fact, Section 1, Rule 70 of the Rules of Court includes the representative of the owner in an ejectment suit

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Rule 70 of the Rules of Court includes the representative of the owner in an ejectment suit as one of the parties authorized to institute the proceedings.(Emphasis supplied.) Failure by respondent George de Castro to attach the said SPAs to the Complaint is innocuous, since it is undisputed that he was granted by his sisters the authority to file the action for ejectment against petitioner prior to the institution of Civil Case No. 1990. The SPAs in his favor were respectively executed by respondents Annie de Castro and Felomina de Castro Uban on 7 February 2002 and 14 March 2002; while Civil Case No. 1990 was filed by respondent George de Castro on his own behalf and on behalf of his siblings only on 1 July 2002, or way after he was given by his siblings the authority to file said action. The Court quotes with approval the following disquisition of the Court of Appeals: Moreover, records show that [herein respondent] George de Castro was indeed authorized by his sisters Annie de Castro and Felomina de Castro Uban, to prosecute the case in their behalf as shown by the Special Power of Attorney dated February 7, 2002 and March 14, 2002. That these documents were appended only to [respondent George de Castro's] position paper is of no moment considering that the authority conferred therein was given prior to the institution of the complaint in July, 2002. x x x. [2 4 ] Respondent deceased Jesus de Castro's failure to sign the Verification and Certificate of Non-Forum Shopping may be excused since he already executed an Affidavit [2 5 ] with respondent George de Castro that he had personal knowledge of the filing of Civil Case No. 1990. In Torres v. Specialized Packaging Development Corporation,[2 6 ] the Court ruled that the personal signing of the verification requirement was deemed substantially complied with when, as in the instant case, two out of 25 real parties-in-interest, who undoubtedly have sufficient knowledge and belief to swear to the truth of the allegations in the petition, signed the verification attached to it. In the same vein, this Court is not persuaded by petitioner's assertion that respondents' failure to allege the jurisdictional fact that there was "unlawful withholding" of the subject property was fatal to their cause of action. It is apodictic that what determines the nature of an action as well as which court has jurisdiction over it are the allegations in the complaint and the character of the relief sought. In an unlawful detainer case, the defendant's possession was originally lawful but ceased to be so upon the expiration of his right to possess. Hence, the phrase "unlawful withholding" has been held to imply possession on the part of defendant, which was legal in the beginning, having no other source than a contract, express or implied, and which later expired as a right and is being withheld by defendant. [2 7 ] In Barba v. Court of Appeals,[2 8 ] the Court held that although the phrase "unlawfully withholding" was not actually used by therein petitioner in her complaint, the Court held that her allegations, nonetheless, amounted to an unlawful withholding of the subject property by therein private respondents, because they continuously refused to vacate the premises even after notice and demand. In the Petition at bar, respondents alleged in their Complaint that they are the registered owners of the subject property;the subject property was being occupied by the petitioner pursuant to a monthly lease contract; petitioner refused to accede to respondents' demand for rental increase; the respondents sent petitioner a letter terminating the lease agreement and demanding that petitioner vacate and turn over the possession of the subject property to respondents; and despite such demand, petitioner failed to surrender the subject property to respondents.[2 9 ] The Complaint sufficiently alleges the unlawful withholding of the subject property by petitioner, constitutive of unlawful detainer, although the exact words "unlawful withholding" were not used. In an action for unlawful detainer, an allegation that the defendant is unlawfully withholding possession from the plaintiff is deemed sufficient, without necessarily employing the terminology of the law. [3 0 ] Petitioner's averment that the Court of Appeals should have dismissed respondents' Petition in light of the failure of their counsel to attach the Official Receipt of his updated payment of Integrated Bar of the Philippines (IBP) dues is now moot and academic, since respondents' counsel has already duly complied therewith. It must be stressed that judicial cases do not come and go through the portals of a court of law by the mere mandate of technicalities. [3 1 ]

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come and go through the portals of a court of law by the mere mandate of technicalities. [3 1 ] Where a rigid application of the rules will result in a manifest failure or miscarriage of justice, technicalities should be disregarded in order to resolve the case. [3 2 ] Finally, we agree in the ruling of the Court of Appeals that petitioner is liable for the payment of back rentals, attorney's fees and cost of the suit. Respondents must be duly indemnified for the loss of income from the subject property on account of petitioner's refusal to vacate the leased premises. WHEREFORE, premises considered, the instant Petition is DENIED. The Decision dated 19 September 2006 and Resolution dated 25 January 2007 of the Court of Appeals in CA-G.R. SP No. 90906 are hereby AFFIRMED in toto. Costs against petitioner.

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Aquino v. Aure, GR 153567 Feb 18, 2008
Sunday, November 14, 2010 11:31 PM

G.R. No. 153567 February 18, 2008 LIBRADA M. AQUINO, petitioner, vs. ERNEST S. AURE1, respondent. DEC I SI O N CHICO-NAZARIO, J.: Before this Court is a Petition for Review on Certiorari2 under Rule 45 of the Revised Rules of Court filed by petitioner Librada M. Aquino (Aquino), seeking the reversal and the setting aside of the Decision3 dated 17 October 2001 and the Resolution 4 dated 8 May 2002 of the Court of Appeals in CA-G.R. SP No. 63733. The appellate court, in its assailed Decision and Resolution, reversed the Decision5 of the Regional Trial Court (RTC) of Quezon City, Branch 88, affirming the Decision6 of the Metropolitan Trial Court (MeTC) of Quezon City, Branch 32, which dismissed respondent Ernesto Aure’s (Aure) complaint for ejectment on the ground, inter alia, of failure to comply with barangay conciliation proceedings. The subject of the present controversy is a parcel of land situated in Roxas District, Quezon City, with an area of 449 square meters and covered by Transfer Certificate of Title (TCT) No. 205447 registered with the Registry of Deeds of Quezon City (subject property).7 Aure and E.S. Aure Lending Investors, Inc. (Aure Lending) filed a Complaint for ejectment against Aquino before the MeTC docketed as Civil Case No. 17450. In their Complaint, Aure and Aure Lending alleged that they acquired the subject property from Aquino and her husband Manuel (spouses Aquino) by virtue of a Deed of Sale8 executed on 4 June 1996. Aure claimed that after the spouses Aquino received substantial consideration for the sale of the subject property, they refused to vacate the same.9 In her Answer,10 Aquino countered that the Complaint in Civil Case No. 17450 lacks cause of action for Aure and Aure Lending do not have any legal right over the subject property. Aquino admitted that there was a sale but such was governed by the Memorandum of Agreement 11 (MOA) signed by Aure. As stated in the MOA, Aure shall secure a loan from a bank or financial institution in his own name using the subject property as collateral and turn over the proceeds thereof to the spouses Aquino. However, even after Aure successfully secured a loan, the spouses Aquino did not receive the proceeds thereon or benefited therefrom. On 20 April 1999, the MeTC rendered a Decision in Civil Case No. 17450 in favor of Aquino and dismissed the Complaint for ejectment of Aure and Aure Lending for non-compliance with the barangay conciliation process, among other grounds. The MeTC observed that Aure and Aquino are residents of the same barangay but there is no showing that any attempt has been made to settle the case amicably at the barangay level. The MeTC further observed that Aure Lending was improperly included as plaintiff in Civil Case No. 17450 for it did not stand to be injured or benefited by the suit. Finally, the MeTC ruled that since the question of ownership was put in issue, the action was converted from a mere detainer suit to one "incapable of pecuniary estimation" which properly rests within the original exclusive jurisdiction of the RTC. The dispositive portion of the MeTC Decision reads: WHEREFORE, premises considered, let this case be, as it is, hereby ordered DISMISSED. [Aquino’s] counterclaim is likewise dismissed. 12 On appeal, the RTC affirmed the dismissal of the Complaint on the same ground that the dispute was not brought before the Barangay Council for conciliation before it was filed in court. In a Decision dated 14 December 2000, the RTC stressed that the barangay conciliation process is a conditio sine qua non for the filing of an ejectment complaint involving residents of the same barangay, and failure to comply therewith constitutes sufficient cause for the dismissal of the action. The RTC likewise validated the ruling of the MeTC that the main issue involved in Civil Case No. 17450 is incapable of pecuniary estimation and cognizable by the RTC. Hence, the RTC ruled: WHEREFORE, finding no reversible error in the appealed judgment, it is hereby affirmed in its entirety.13 Aure’s Motion for Reconsideration was denied by the RTC in an Order 14 dated 27 February 2001. Undaunted, Aure appealed the adverse RTC Decision with the Court of Appeals arguing that the lower court erred in dismissing his Complaint for lack of cause of action. Aure asserted that misjoinder of parties was not a proper ground for dismissal of his Complaint and that the MeTC should have only ordered the exclusion of Aure Lending as plaintiff without prejudice to the

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continuation of the proceedings in Civil Case No. 17450 until the final determination thereof. Aure further asseverated that mere allegation of ownership should not divest the MeTC of jurisdiction over the ejectment suit since jurisdiction over the subject matter is conferred by law and should not depend on the defenses and objections raised by the parties. Finally, Aure contended that the MeTC erred in dismissing his Complaint with prejudice on the ground of non-compliance with barangay conciliation process. He was not given the opportunity to rectify the procedural defect by going through the barangay mediation proceedings and, thereafter, refile the Complaint. 15 On 17 October 2001, the Court of Appeals rendered a Decision, reversing the MeTC and RTC Decisions and remanding the case to the MeTC for further proceedings and final determination of the substantive rights of the parties. The appellate court declared that the failure of Aure to subject the matter to barangay conciliation is not a jurisdictional flaw and it will not affect the sufficiency of Aure’s Complaint since Aquino failed to seasonably raise such issue in her Answer. The Court of Appeals further ruled that mere allegation of ownership does not deprive the MeTC of jurisdiction over the ejectment case for jurisdiction over the subject matter is conferred by law and is determined by the allegations advanced by the plaintiff in his complaint. Hence, mere assertion of ownership by the defendant in an ejectment case will not oust the MeTC of its summary jurisdiction over the same. The decretal part of the Court of Appeals Decision reads: WHEREFORE, premises considered, the petition is hereby GRANTED - and the decisions of the trial courts below REVERSED and SET ASIDE. Let the records be remanded back to the court a quo for further proceedings – for an eventual decision of the substantive rights of the disputants.16 In a Resolution dated 8 May 2002, the Court of Appeals denied the Motion for Reconsideration interposed by Aquino for it was merely a rehash of the arguments set forth in her previous pleadings which were already considered and passed upon by the appellate court in its assailed Decision. Aquino is now before this Court via the Petition at bar raising the following issues: I. WHETHER OR NOT NON-COMPLIANCE WITH THE BARANGAY CONCILIATION PROCEEDINGS IS A JURISDICT IONAL DEFECT THAT WARRANTS THE DISMISSAL OF THE COMPLAINT. II. WHETHER OR NOT ALLEGATION OF OWNERSHIP OUSTS THE MeTC OF ITS JURISDICTION OVER AN EJECTMENT CASE. The barangay justice system was established primarily as a means of easing up the congestion of cases in the judicial courts. This could be accomplished through a proceeding before the barangay courts which, according to the conceptor of the system, the late Chief Justice Fred Ruiz Castro, is essentially arbitration in character, and to make it truly effective, it should also be compulsory. With this primary objective of the barangay justice system in mind, it would be wholly in keeping with the underlying philosophy of Presidential Decree No. 1508, otherwise known as the Katarungang Pambarangay Law, and the policy behind it would be better served if an out-of-court settlement of the case is reached voluntarily by the parties.17 The primordial objective of Presidential Decree No. 1508 is to reduce the number of court litigations and prevent the deterioration of the quality of justice which has been brought by the indiscriminate filing of cases in the courts.18 To ensure this objective, Section 6 of Presidential Decree No. 1508 19 requires the parties to undergo a conciliation process before the Lupon Chairman or the Pangkat ng Tagapagkasundo as a precondition to filing a complaint in court subject to certain exceptions 20 which are inapplicable to this case. The said section has been declared compulsory in nature. 21 Presidential Decree No. 1508 is now incorporated in Republic Act No. 7160, otherwise known as The Local Government Code, which took effect on 1 January 1992. The pertinent provisions of the Local Government Code making conciliation a precondition to filing of complaints in court, read: SEC. 412. Conciliation.- (a) Pre-condition to filing of complaint in court. – No complaint, petition, action, or proceeding involving any matter within the authority of the lupon shall be filed or instituted directly in court or any other government office for adjudication, unless there has been a confrontation between the parties before the lupon chairman or the pangkat, and that no conciliation or settlement has been reached as certified by the lupon secretary or pangkat secretary as attested to by the lupon chairman or pangkat chairman or unless the settlement has been repudiated by the parties thereto. (b) Where parties may go directly to court. – The parties may go directly to court in the following instances: (1) Where the accused is under detention; (2) Where a person has otherwise been deprived of personal liberty calling for habeas corpus proceedings; (3) Where actions are coupled with provisional remedies such as preliminary injunction, attachment, delivery of personal property, and support pendente lite; and
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attachment, delivery of personal property, and support pendente lite; and (4) Where the action may otherwise be barred by the statute of limitations. (c) Conciliation among members of indigenous cultural communities. – The customs and traditions of indigenous cultural communities shall be applied in settling disputes between members of the cultural communities. SEC. 408. Subject Matter for Amicable Settlement; Exception Therein. – The lupon of each barangay shall have authority to bring together the parties actually residing in the same city or municipality for amicable settlement of all disputes except: (a) Where one party is the government or any subdivision or instrumentality thereof; (b) Where one party is a public officer or employee, and the dispute relates to the performance of his official functions; (c) Offenses punishable by imprisonment exceeding one (1) year or a fine exceeding Five thousand pesos (P5,000.00); (d) Offenses where there is no private offended party; (e) Where the dispute involves real properties located in different cities or municipalities unless the parties thereto agree to submit their differences to amicable settlement by an appropriate lupon; (f) Disputes involving parties who actually reside in barangays of different cities or municipalities, except where such barangay units adjoin each other and the parties thereto agree to submit their differences to amicable settlement by an appropriate lupon; (g) Such other classes of disputes which the President may determine in the interest of justice or upon the recommendation of the Secretary of Justice. There is no dispute herein that the present case was never referred to the Barangay Lupon for conciliation before Aure and Aure Lending instituted Civil Case No. 17450. In fact, no allegation of such barangay conciliation proceedings was made in Aure and Aure Lending’s Complaint before the MeTC. The only issue to be resolved is whether non-recourse to the barangay conciliation process is a jurisdictional flaw that warrants the dismissal of the ejectment suit filed with the MeTC. Aquino posits that failure to resort to barangay conciliation makes the action for ejectment premature and, hence, dismissible. She likewise avers that this objection was timely raised during the pre-trial and even subsequently in her Position Paper submitted to the MeTC. We do not agree. It is true that the precise technical effect of failure to comply with the requirement of Section 412 of the Local Government Code on barangay conciliation (previously contained in Section 5 of Presidential Decree No. 1508) is much the same effect produced by non-exhaustion of administrative remedies -- the complaint becomes afflicted with the vice of pre-maturity; and the controversy there alleged is not ripe for judicial determination. The complaint becomes vulnerable to a motion to dismiss.22 Nevertheless, the conciliation process is not a jurisdictional requirement, so that non-compliance therewith cannot affect the jurisdiction which the court has otherwise acquired over the subject matter or over the person of the defendant.23 As enunciated in the landmark case of Royales v. Intermediate Appellate Court24: Ordinarily, non-compliance with the condition precedent prescribed by P.D. 1508 could affect the sufficiency of the plaintiff's cause of action and make his complaint vulnerable to dismissal on ground of lack of cause of action or prematurity; but the same would not prevent a court of competent jurisdiction from exercising its power of adjudication over the case before it, where the defendants, as in this case, failed to object to such exercise of jurisdiction in their answer and even during the entire proceedings a quo. While petitioners could have prevented the trial court from exercising jurisdiction over the case by seasonably taking exception thereto, they instead invoked the very same jurisdiction by filing an answer and seeking affirmative relief from it. What is more, they participated in the trial of the case by cross-examining respondent Planas. Upon this premise, petitioners cannot now be allowed belatedly to adopt an inconsistent posture by attacking the jurisdiction of the court to which they had submitted themselves voluntarily. x x x (Emphasis supplied.) In the case at bar, we similarly find that Aquino cannot be allowed to attack the jurisdiction of the MeTC over Civil Case No. 17450 after having submitted herself voluntarily thereto. We have scrupulously examined Aquino’s Answer before the MeTC in Civil Case No. 17450 and there is utter lack of any objection on her part to any deficiency in the complaint which could oust the MeTC of its jurisdcition. We thus quote with approval the disquisition of the Court of Appeals: Moreover, the Court takes note that the defendant [Aquino] herself did not raise in defense the aforesaid lack of conciliation proceedings in her answer, which raises the exclusive affirmative defense of simulation. By this acquiescence, defendant [Aquino] is deemed to have waived such objection. As held in a case of similar circumstances, the failure of a defendant [Aquino]
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such objection. As held in a case of similar circumstances, the failure of a defendant [Aquino] in an ejectment suit to specifically allege the fact that there was no compliance with the barangay conciliation procedure constitutes a waiver of that defense. x x x. 25 By Aquino’s failure to seasonably object to the deficiency in the Complaint, she is deemed to have already acquiesced or waived any defect attendant thereto. Consequently, Aquino cannot thereafter move for the dismissal of the ejectment suit for Aure and Aure Lending’s failure to resort to the barangay conciliation process, since she is already precluded from doing so. The fact that Aquino raised such objection during the pre-trial and in her Position Paper is of no moment, for the issue of non-recourse to barangay mediation proceedings should be impleaded in her Answer. As provided under Section 1, Rule 9 of the 1997 Rules of Civil Procedure: Sec. 1. Defenses and objections not pleaded. – Defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. However, when it appears from the pleadings or the evidence on record that the court has no jurisdiction over the subject matter, that there is another action pending between the same parties for the same cause, or that the action is barred by a prior judgment or by statute of limitations, the court shall dismiss the claim. (Emphasis supplied.) While the aforequoted provision applies to a pleading (specifically, an Answer) or a motion to dismiss, a similar or identical rule is provided for all other motions in Section 8 of Rule 15 of the same Rule which states: Sec. 8. Omnibus Motion. - Subject to the provisions of Section 1 of Rule 9, a motion attacking a pleading, order, judgment, or proceeding shall include all objections then available, and all objections not so included shall be deemed waived. The spirit that surrounds the foregoing statutory norm is to require the party filing a pleading or motion to raise all available exceptions for relief during the single opportunity so that single or multiple objections may be avoided.26 It is clear and categorical in Section 1, Rule 9 of the Revised Rules of Court that failure to raise defenses and objections in a motion to dismiss or in an answer is deemed a waiver thereof; and basic is the rule in statutory construction that when the law is clear and free from any doubt or ambiguity, there is no room for construction or interpretation. 27 As has been our consistent ruling, where the law speaks in clear and categorical language, there is no occasion for interpretation; there is only room for application. 28 Thus, although Aquino’s defense of non-compliance with Presidential Decree No. 1508 is meritorious, procedurally, such defense is no longer available for failure to plead the same in the Answer as required by the omnibus motion rule. Neither could the MeTC dismiss Civil Case No. 17450 motu proprio. The 1997 Rules of Civil Procedure provide only three instances when the court may motu proprio dismiss the claim, and that is when the pleadings or evidence on the record show that (1) the court has no jurisdiction over the subject matter; (2) there is another cause of action pending between the same parties for the same cause; or (3) where the action is barred by a prior judgment or by a statute of limitations. Thus, it is clear that a court may not motu proprio dismiss a case on the ground of failure to comply with the requirement for barangay conciliation, this ground not being among those mentioned for the dismissal by the trial court of a case on its own initiative. Aquino further argues that the issue of possession in the instant case cannot be resolved by the MeTC without first adjudicating the question of ownership, since the Deed of Sale vesting Aure with the legal right over the subject property is simulated. Again, we do not agree. Jurisdiction in ejectment cases is determined by the allegations pleaded in the complaint. As long as these allegations demonstrate a cause of action either for forcible entry or for unlawful detainer, the court acquires jurisdiction over the subject matter. This principle holds, even if the facts proved during the trial do not support the cause of action thus alleged, in which instance the court -- after acquiring jurisdiction -- may resolve to dismiss the action for insufficiency of evidence. The necessary allegations in a Complaint for ejectment are set forth in Section 1, Rule 70 of the Rules of Court, which reads: SECTION 1. Who may institute proceedings, and when. – Subject to the provisions of the next succeeding section, a person deprived of the possession of any land or building by force, intimidation, threat, strategy, or stealth, or a lessor, vendor, vendee, or other person against whom the possession of any land or building is unlawfully withheld after the expiration or termination of the right to hold possession, by virtue of any contract, express or implied, or the legal representatives or assigns of any such lessor, vendor, vendee, or other person may at any time within one (1) year after such unlawful deprivation or withholding of possession, bring an action in the proper Municipal Trial Court against the person or persons unlawfully withholding or depriving of possession, or any person or persons claiming under them, for the restitution of such possession, together with damages and costs. In the case at bar, the Complaint filed by Aure and Aure Lending on 2 April 1997, alleged as follows: 2. [Aure and Aure Lending] became the owners of a house and lot located at No. 37 Salazar
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In the case at bar, the Complaint filed by Aure and Aure Lending on 2 April 1997, alleged as follows: 2. [Aure and Aure Lending] became the owners of a house and lot located at No. 37 Salazar Street corner Encarnacion Street, B.F. Homes, Quezon City by virtue of a deed of absolute sale executed by [the spouses Aquino] in favor of [Aure and Aure Lending] although registered in the name of x x x Ernesto S. Aure; title to the said property had already been issued in the name of [Aure] as shown by a transfer Certificate of Title , a copy of which is hereto attached and made an integral part hereof as Annex A; 3. However, despite the sale thus transferring ownership of the subject premises to [Aure and Aure Lending] as above-stated and consequently terminating [Aquino’s] right of possession over the subject property, [Aquino] together with her family, is continuously occupying the subject premises notwithstanding several demands made by [Aure and Aure Lending] against [Aquino] and all persons claiming right under her to vacate the subject premises and surrender possession thereof to [Aure and Aure Lending] causing damage and prejudice to [Aure and Aure Lending] and making [Aquino’s] occupancy together with those actually occupying the subject premises claiming right under her, illegal. 29 It can be inferred from the foregoing that Aure, together with Aure Lending, sought the possession of the subject property which was never surrendered by Aquino after the perfection of the Deed of Sale, which gives rise to a cause of action for an ejectment suit cognizable by the MeTC. Aure’s assertion of possession over the subject property is based on his ownership thereof as evidenced by TCT No. 156802 bearing his name. That Aquino impugned the validity of Aure’s title over the subject property and claimed that the Deed of Sale was simulated should not divest the MeTC of jurisdiction over the ejectment case.30 As extensively discussed by the eminent jurist Florenz D. Regalado in Refugia v. Court of Appeals31: As the law on forcible entry and unlawful detainer cases now stands, even where the defendant raises the question of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts nevertheless have the undoubted competence to resolve the issue of ownership albeit only to determine the issue of possession. x x x. The law, as revised, now provides instead that when the question of possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be resolved only to determine the issue of possession. On its face, the new Rule on Summary Procedure was extended to include within the jurisdiction of the inferior courts ejectment cases which likewise involve the issue of ownership. This does not mean, however, that blanket authority to adjudicate the issue of ownership in ejectment suits has been thus conferred on the inferior courts. At the outset, it must here be stressed that the resolution of this particular issue concerns and applies only to forcible entry and unlawful detainer cases where the issue of possession is intimately intertwined with the issue of ownership. It finds no proper application where it is otherwise, that is, where ownership is not in issue, or where the principal and main issue raised in the allegations of the complaint as well as the relief prayed for make out not a case for ejectment but one for recovery of ownership. Apropos thereto, this Court ruled in Hilario v. Court of Appeals32: Thus, an adjudication made therein regarding the issue of ownership should be regarded as merely provisional and, therefore, would not bar or prejudice an action between the same parties involving title to the land. The foregoing doctrine is a necessary consequence of the nature of forcible entry and unlawful detainer cases where the only issue to be settled is the physical or material possession over the real property, that is, possession de facto and not possession de jure." In other words, inferior courts are now "conditionally vested with adjudicatory power over the issue of title or ownership raised by the parties in an ejectment suit." These courts shall resolve the question of ownership raised as an incident in an ejectment case where a determination thereof is necessary for a proper and complete adjudication of the issue of possession. 33 WHEREFORE, premises considered, the instant Petition is DENIED. The Court of Appeals Decision dated 17 October 2001 and its ResolutioResolution dated 8 May 2002 in CA-G.R. SP No. 63733 are hereby AFFIRMED. Costs against the petitioner.

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Makati Ins. V. Reyes et al GR 167403 Aug 6, 2008
Sunday, November 14, 2010 11:31 PM

[G.R. No. 165744, August 11, 2008]

OSCAR C. REYES, PETITIONER, VS. HON. REGIONAL TRIAL COURT OF MAKATI, BRANCH 142, ZENITH INSURANCE CORPORATION, AND RODRIGO C. REYES, RESPONDENTS.
DECIS ION BRION, J.:

This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to set aside the Decision of the Court of Appeals (CA) [1] promulgated on May 26, 2004 in CA-G.R. SP No. 74970. The CA Decision affirmed the Order of the Regional Trial Court (RTC), Branch 142, Makati City dated November 29, 2002[2] in Civil Case No. 00-1553 (entitled "Accounting of All Corporate Funds and Assets, and Damages") which denied petitioner Oscar C. Reyes' (Oscar) Motion to Declare Complaint as Nuisance or Harassment Suit. BACKGROUND FACTS
Oscar and private respondent Rodrigo C. Reyes (Rodrigo) are two of the four children of the spouses Pedro and Anastacia Reyes. Pedro, Anastacia, Oscar, and Rodrigo each owned shares of stock of Zenith Insurance Corporation (Zenith), a domestic corporation established by their family. Pedro died in 1964, while Anastacia died in 1993. Although Pedro's estate was judicially partitioned among his heirs sometime in the 1970s, no similar settlement and partition appear to have been made with Anastacia's estate, which included her shareholdings in Zenith. As of June 30, 1990, Anastacia owned 136,598 shares of Zenith; Oscar and Rodrigo owned 8,715,637 and 4,250 shares, respectively.[3] On May 9, 2000, Zenith and Rodrigo filed a complaint[4] with the Securities and Exchange Commission (SEC) against Oscar, docketed as SEC Case No. 05-00-6615. The complaint stated that it is "a derivative suit initiated and filed by the complainant Rodrigo C. Reyes to obtain an accounting of the funds and assets of ZENITH INSURANCE CORPORATION which are now or formerly in the control, custody, and/or possession of respondent [herein petitioner Oscar] and to determine the shares of stock of deceased spouses Pedro and Anastacia Reyes that were arbitrarily and fraudulently appropriated [by Oscar] for himself [and] which were not collated and taken into account in the partition, distribution, and/or settlement of the estate of the deceased spouses, for which he should be ordered to account for all the income from the time he took these shares of stock, and should now deliver to his brothers and sisters their just and respective shares."[5] [Emphasis supplied.]

In his Answer with Counterclaim,[6] Oscar denied the charge that he illegally acquired the shares of Anastacia Reyes. He asserted, as a defense, that he purchased the subject shares with his own funds from the unissued stocks of Zenith, and that the suit is not a bona fide derivative suit because the requisites therefor have not been complied with. He thus questioned the SEC's jurisdiction to entertain the complaint because it pertains to the settlement of the estate of Anastacia Reyes.
When Republic Act (R.A.) No. 8799[7] took effect, the SEC's exclusive and original jurisdiction over cases enumerated in Section 5 of Presidential Decree (P.D.) No. 902-A was transferred to the RTC designated as a special commercial court.[8] The records of Rodrigo's SEC case were thus turned over to the RTC, Branch 142, Makati, and docketed as Civil Case No. 00-1553.

On October 22, 2002, Oscar filed a Motion to Declare Complaint as Nuisance or Harassment Suit.[9] He claimed that the complaint is a mere nuisance or harassment suit and should, according to the Interim Rules of Procedure for Intra-Corporate Controversies, be dismissed; and that it is not a bona fide
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Rules of Procedure for Intra-Corporate Controversies, be dismissed; and that it is not a bona fide derivative suit as it partakes of the nature of a petition for the settlement of estate of the deceased Anastacia that is outside the jurisdiction of a special commercial court. The RTC, in its Order dated November 29, 2002 (RTC Order), denied the motion in part and declared: A close reading of the Complaint disclosed the presence of two (2) causes of action, namely: a) a derivative suit for accounting of the funds and assets of the corporation which are in the control, custody, and/or possession of the respondent [herein petitioner Oscar] with prayer to appoint a management committee; and b) an action for determination of the shares of stock of deceased spouses Pedro and Anastacia Reyes allegedly taken by respondent, its accounting and the corresponding delivery of these shares to the parties' brothers and sisters. The latter is not a derivative suit and should properly be threshed out in a petition for settlement of estate. Accordingly, the motion is denied. However, only the derivative suit consisting of the first cause of action will be taken cognizance of by this Court.[10]
Oscar thereupon went to the CA on a petition for certiorari, prohibition, and mandamus[11] and prayed that the RTC Order be annulled and set aside and that the trial court be prohibited from continuing with the proceedings. The appellate court affirmed the RTC Order and denied the petition in its Decision dated May 26, 2004. It likewise denied Oscar's motion for reconsideration in a Resolution dated October 21, 2004.

Petitioner now comes before us on appeal through a petition for review on certiorari under Rule 45 of the Rules of Court. ASSIGNMENT OF ERRORS
Petitioner Oscar presents the following points as conclusions the CA should have made: 1. that the complaint is a mere nuisance or harassment suit that should be dismissed under the Interim Rules of Procedure of Intra-Corporate Controversies; and 2. that the complaint is not a bona fide derivative suit but is in fact in the nature of a petition for settlement of estate; hence, it is outside the jurisdiction of the RTC acting as a special commercial court. Accordingly, he prays for the setting aside and annulment of the CA decision and resolut