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EN BANC

[G.R. No. 101783. January 23, 2002]

MANILA ELECTRIC COMPANY, petitioner, vs. PHILIPPINE CONSUMERS FOUNDATION, INC., EDGARDO S. ISIP, HON. JUDGE MANUEL M. CALANOG, JR., and HON. JUDGE TIRSO D'C. VELASCO, respondents. DECISION
SANDOVAL-GUTIERREZ, J.:

Interest republicae ut sit finis litium[1] - it is to the interest of the public that there should be an end to litigation by the same parties and their privies over a subject fully and fairly adjudicated. From this overwhelming concern springs the doctrine of res judicata an obvious rule of reason according stability to judgments. Challenged in this petition for review on certiorari are the a) Decision in Civil Case No. Q-89-3659 dated January 16, 1991 of the Regional Trial Court, Branch 76, Quezon City; [2] and b) its Order dated September 10, 1991[3] denying the motion for reconsideration of the said Decision. The pertinent facts are: On September 11, 1974, former President Ferdinand E. Marcos, with the objective of enabling the grantees of electric franchises to reduce their rates "within the reach of consumers",[4]promulgated Presidential Decree No. 551[5] providing for the reduction from 5% to 2% of the franchise tax paid by electric companies, thus:

SECTION 1. Any provision of law or local ordinance to the contrary notwithstanding, the franchise tax payable by all grantees of franchises to generate, distribute and sell electric current for light, heat and power shall be two (2%) of their gross receipts received from the sale of electric current and from transactions incident to the generation, distribution and sale of electric current.
On February 5, 1982, the Philippine Consumers Foundation, Inc., (PCFI) filed with the Board of Energy (BOE) a "Petition for Specific Performance, Damages and Violation of P. D. No. 551"[6] against the Manila Electric Company (Meralco), docketed as BOE Case No. 82-198. PCFI sought for the immediate refund by Meralco to its customers of all the savings it realized under P.D. No. 551, through the reduction of its franchise tax from 5% to 2%, with interest at the legal rate; and for the payment of damages and a

fine in the amount of P50, 000.00 for violating P.D. 551. It moored its petition on Section 4 of P.D. No. 551 which provides:

Sec. 4. All the savings realized by electric franchise holders from the reduction of the franchise tax under Section 1 and tariff reductions and tax credits under Sections 2 and 3, shall be passed on to the ultimate consumer. The Secretary of Finance shall promulgate rules and regulations and devise a reporting systems to carry out the provisions of this Decree.
In its answer to the petition, Meralco alleged that it was duly authorized by the BOE in its Order dated March 10, 1980 in BOE Case No. 79-692 to retain the disputed savings; and that the said Order had long become final. On November 25, 1982, the BOE issued its Decision dismissing PCFI's petition, declaring that Meralco was indeed authorized by the BOE, in BOE Case No. 79-692, to retain the disputed savings under P.D. 551, thus:

It is at once evident from the foregoing controlling facts and circumstances, particularly the Order of this Board dated March 10, 1980, as confirmed by the reply-letter dated March 3, 1981, that Meralco has been duly authorized to retain the savings realized under the provisions of P.D. 551. The authority granted in the said Order and letter is so clear and unequivocal as to leave any room for contradictory interpretation. This Board, therefore, holds as untenable petitioners claim that respondent Meralco was never authorized under the said Order and letter to hold on to the savings realized under the said decree. "The Board likewise finds to be devoid of merit petitioners contention that pursuant to Opinion No. 140, Series of 1979, of the Minister of Justice, it is absolutely mandatory on the part of respondent Meralco to pass on to its customers the savings under consideration. It must be pointed out that the Order of March 10, 1980 was issued by this Board on the basis of the recommendation contained in the Memorandum dated November 30, 1979 of the Minister of Finance, which was approved by the President of the Philippines in his directive to this Board dated December 11, 1979 issued thru Presidential Executive Assistant Jacobo Clave. This Board believes and so holds that the approval by the President of the Philippines of the aforesaid Finance Ministrys recommendation had the effects of (a) reversing or modifying the aforementioned Opinion of the Minister of Justice; and (b) confirming the promulgation by the Ministry of Finance, conformably with the specific authority granted it under P.D. No. 551, of an additional rule or regulation for the implementation of the said decree for the guidance of this Board. In issuing the Order of March 10, 1980, therefore, the Board has done no more than follow and be guided by the said additional rule or regulation.

"It is noteworthy to mention also that the registered oppositors in BOE Case No. 79-692 (formerly BPW Case No. 72-2146), where the respondent herein originally filed its motion requesting for authority to defer the passing on to its customers of the franchise tax reduction benefits under P.D. No. 551, have done nothing to seek relief from or to appeal to the appropriate forum, the said Order of March 10, 1980. As a consequence, the disposition contained therein have long become final.
xxx xxx

"That Meralco has been authorized to retain the savings resulting from the reduction of the franchise tax under P.D. No. 551 is, therefore beyond question." (Emphasis supplied)
[7]

PCFI filed a motion for reconsideration but was denied by the BOE. Hence, PCFI filed a Petition for Certiorari with this Court, docketed as G.R. No. 63018. In a Resolution dated October 22, 1985, this Court dismissed the petition for lack of merit, holding that:

We see no grave abuse of discretion warranting the setting aside of the BOE order. "P.D. No. 551 ordered the Minister of Finance to issue implementing rules and regulations. The Minister authorized all grantees of electric franchises, not Meralco alone, whose rates of return on their rate bases were below the legal allowable level to either ask for increased rates or to defer the passing on of benefits under the decree to consumers until just and reasonable returns could be had. Lengthy investigations, audits, hearings, and determinations over practically an eight year period preceded the questioned decision. The petitioners failed both below and in this petition to successfully refute the facts ascertained in the audits and examinations. The BOE approved option formed the basis of subsequent determinations of Meralco rates and the adopted formula became the basis of computations. When this petition was filed on January 27, 1983, the November 25, 1982 ruling was already final and executory. Moreover, the March 10, 1980 judgment rendered in BOE Case No. 79-692, where Meralco had filed a motion for authority to defer passing on to customers the savings from the reduction of franchise taxes, was not appealed or questioned by the petitioners. Instead, they filed BOE Case No. 82-198 on February 5, 1982 or almost two years later, raising the same issues against the same parties. BOEs questioned decision in Case No. 82-198 used the facts in BOE Case No. 79-692 for its conclusions. Not only had the March 10, 1980 decision confirmed the findings of the Minister of Finance on Meralcos accounts and finances but in filing the second case, the petitioners were asking for a

readjudication of the same issues in another challenge to these same findings .x x x. (Emphasis supplied)
[8]

Four years thereafter, PCFI and a certain Edgardo S. Isip, private respondents herein, filed with respondent Regional Trial Court, Branch 76, Quezon City, a petition for declaratory relief, docketed as Civil Case No. Q-89-3659. Private respondents prayed for a ruling on who should be entitled to the savings realized by Meralco under P.D. No. 551. Once again, they insisted that pursuant to Section 4 of P.D. No. 551, the savings belong to the ultimate consumers. Meralco, in its answer, prayed for the dismissal of the petition on the ground of res judicata, citing this Court's Resolution in G.R. No. 63018 which affirmed the BOE's Decision in BOE Case No. 82-198. On January 16, 1991, respondent RTC rendered the assailed Decision declaring null and void the Resolution of this Court in G.R. No. 63018 and on the basis of the Dissenting Opinion of the late Justice Claudio Teehankee, held that the disputed savings belong to the consumers, thus:

Respondent Meralcos theory is devoid of merit. As correctly stated in the dissenting opinion of the late Chief Justice Claudio Teehankee in the October 22, 1985 resolution of the Supreme Court in SC G.R. No. 63018, the decision of the Board of Energy is ultra vires, hence, null and void. x x x. "It is a well-settled rule in statutory construction that when the law is clear, it leaves no room for interpretation. The memorandum issued by the Minister of Finance which was made the basis of the decision of the Board of Energy has no legal effect because Sec. 4 of P.D. No. 551 is clear and unequivocal.
xxx xxx

"Since the law is clear, what is left to be done by the administrative body or agency concerned is to enforce the law. There is no room for an administrative interpretation of the law. In the instant case, the Board interpreted PD 551 and chose not only to enforce it but to amend and modify the law on the basis of a Memorandum and the authority issued by the Minister of Finance to all grantees of electric-franchises, not Meralco alone, whose rates of return on their rate basis were below the legal allowable level, to either ask for an increased rates or to defer the passing on of benefits under the decree to consumers, until just and reasonable return could be had. This is beyond the authority granted by PD 551 to the Minister of Finance. PD 551 merely ordered the Minister of Finance to issue implementing rules and regulations. He cannot amend or modify the clear mandate of the law. The act therefore of the Minister of Finance was ultra vires, hence, null and void. Considering that said act became the basis of the Board of Energys decision, it follows that said

decision is likewise null and void and the Supreme Court resolution affirming said decision is also null and void having proceeded from a void judgment, hence, cannot be considered as valid judgment that will be a bar to the present action." (Emphasis supplied)
[9]

Meralco moved for a reconsideration of the above Decision but was denied by respondent court in its Order of September 10, 1991. Hence, Meralco's petition for review on certiorari anchored on the following grounds:
"I

RESPONDENT JUDGES ERRED IN HOLDING THAT CIVIL CASE NO. 893659 IS NOT BARRED BY PRIOR JUDGMENT.
II

RESPONDENT JUDGES ERRED IN DECLARING NULL AND VOID A RESOLUTION OF THIS HONORABLE SUPREME COURT.
III

RESPONDENT JUDGES ERRED IN HOLDING THAT THE REMEDY OF DECLARATORY RELIEF WAS STILL AVAILABLE TO PRIVATE RESPONDENTS.
IV

RESPONDENT JUDGES ERRED IN NOT DISMISSING THE PETITION FOR DECLARATORY RELIEF."
[10]

Meralco contends that Civil Case No. Q -89-3659 is already barred by prior judgments, referring to a) this Courts Resolution in G.R. No. 63018 sustaining the BOE's Decision in BOE Case No. 82-198; and b) the Order dated March 10, 1980 of the same Board in BOE Case No. 79-692, both holding that Meralco is authorized to retain its savings realized under P.D. 551. Meralco likewise argues that respondent RTC cannot annul the Resolution of this Court in G.R. No. 63018 considering that trial courts cannot set aside decisions of a superior court. And lastly, Meralco maintains that private respondents can no longer avail of the remedy of an action for declaratory relief in view of the rule that such action should be filed before a violation of the statute occurred.[11] In their comment,[12] private respondents argue that this Court's Resolution in G.R. No. 63018 cannot be a bar to Civil Case No. Q-89-3659 for declaratory relief considering that it did not delve on the essential issue raised in

the latter case, i.e., who is entitled to the savings. Further, they claim that public interest would be defeated by the application of res judicata. The petition is meritorious. The issue - whether or not Meralco is duly authorized to retain the savings resulting from the reduction of the franchise tax under P.D. No. 551 as long as its rate of return falls below the 12 % allowable rate recognized in this jurisdiction has long been settled. Thus, the relitigation of the same issue in Civil Case No. Q-89-3659 cannot be sanctioned under the principle of res judicata. Res judicata means a matter adjudged, a thing judicially acted upon or decided; a thing or matter settled by judgment.[13] In res judicata, the judgment in the first action is considered conclusive as to every matter offered and received therein, as to any other admissible matter which might have been offered for that purpose, and all other matters that could have been adjudged therein.[14] For a claim of res judicata to prosper, the following requisites must concur: 1) there must be a final judgment or order; 2) the court rendering it must have jurisdiction over the subject matter and the parties; 3) it must be a judgment or order on the merits; and 4) there must be, between the two cases identity of parties, subject matter and causes of action.[15] All the above requisites are extant in the records and thus, beyond dispute. Re: FIRST REQUISITE - there must be a final judgment: It is beyond question that this Courts Resolution dated October 22, 1985 in G.R. No. 63018, sustaining the BOEs Decision dated November 25, 1982 in BOE Case No. 82-198 which dismissed PCFI's petition, attained finality on December 4, 1985. As a matter of fact, this Court had long ago issued an Entry of Judgment stating that the said Resolution "became final and executory and is x x x recorded in the Book of Entries of Judgements." Prior thereto, or on March 10, 1980, the BOE's Order in BOE Case No. 79-672 became final when the oppositors therein did not appeal. Re: SECOND REQUISITE - the court which rendered the final judgment must have jurisdiction over the subject matter and the parties: There is no question that the BOE has jurisdiction over the subject matter and the parties herein. Under P.D. No. 1206,[16] The BOE is the agency authorized to "regulate and fix the power rates to be charged by electric companies." [17] As such, it has jurisdiction over Meralco, an electric company, and over the savings it realized under P.D. No. 551. It bears stressing that P.D. No. 551 was passed precisely to enable the grantees of electric franchises to reduce their rates within the reach of consumers. Clearly, the matter on how the disputed savings should be disposed of in order to realize a reduction of rates is within the competence of the BOE. Re: THIRD REQUISITE - it must be a judgment or order on the merits: The BOE's Decision in BOE Case No. 82-198 is a judgment on the merits. A judgment is on the merits when it determines the rights and liabilities of the parties based on the disclosed facts, irrespective of formal, technical or dilatory objections. After according both parties the opportunities to be heard, the BOE

disposed of the controversy by resolving the rights of the parties under P.D. No. 551. In its Decision, the BOE declared in clear and unequivocal manner that Meralco "has been duly authorized to retain the savings realized under the provisions of P.D. No. 551" and that private respondent PCFIs argument to the contrary is "untenable." The BOE's Decision was upheld by this Court in G.R. No. 63018. Re: FOURTH REQUISITE - there must be between the two cases identity of parties, subject matter and causes of action: There is identity of parties between the two cases. BOE Case No. 82-198 was a contest between private respondent PCFI, as petitioner, and Meralco, as respondent. Civil Case No. Q-89-3659 involves the same contenders, except that respondent Edgardo Isip joined PCFI as a plaintiff. But his inclusion as such plaintiff is inconsequential. A party by bringing forward, in a second case, additional parties cannot escape the effects of the principle of res judicata when the facts remain the same. Res judicata is not defeated by a minor difference of parties, as it does not require absolute but only substantial identity of parties.[18] The subject matters of BOE Case No. 82-198 and Civil Case No. Q-89-3659 are likewise identical since both refer to the savings realized by Meralco from the reduction of the franchise tax under P.D. No. 551. The subject matter of an action refers to the thing, wrongful act, contract or property which is directly involved in the action, concerning which the wrong has been done and with respect to which the controversy has arisen.[19] In both cases, the controversy is how the disputed savings shall be disposed of - whether they shall be retained by Meralco or be passed on to the consumers. With respect to identity of causes of action, this requisite is likewise present. In both cases, the act alleged to be in violation of the legal right of private respondents is Meralco's retention of the savings it realized under P.D. No. 551. While it is true that BOE Case No. 82-198 is one for specific performance, while Civil Case No. Q-89-3659 is for declaratory relief - in the ultimate - both are directed towards only one relief, i.e., the refund of the disputed savings to the consumers. To seek a court's declaration on who should benefit from the disputed savings (whether Meralco or the consumers) will result in the relitigation of an issue fairly and fully adjudicated in BOE Case No. 82-198. Clearly, the test of identity of causes of action lies not in the form of an action. The difference of actions in the aforesaid cases is of no moment. The doctrine of res judicata still applies considering that the parties were litigating for the same thing and more importantly, the same contentions.[20] As can be gleaned from the records, private respondents arguments in Civil Case No. Q-89-3659 bear extreme resemblance with those raised in BOE Case No. 82-198. Respondent RTC's Decision granting PCFI and Isip's petition for declaratory relief is in direct derogation of the principle of res judicata. Twice, it has been settled that Meralco is duly authorized to retain the savings it realized under P.D. No. 551 as long as its rate of return falls below the 12% allowable rate. The pronouncement of the BOE in BOE Case No. 82-198 finding such fact to be "beyond question" is clear and not susceptible of equivocation. This pronouncement was sustained by this Court in G.R.

No. 63018. In finding no grave abuse of discretion on the part of the BOE, this Court saw the wisdom of its assailed Decision. Thus, this Court held: "[I]n dismissing the petition for specific performance, the BOE authorized Meralco, in lieu of increasing its rates to get a more reasonable return on investments while at the same time refunding to consumers the benefit of P.D. No. 551, to instead defer the passing on of benefits but without the planned increases. Instead of giving back money to consumers and then taking back the same in terms of increased rates, Meralco was allowed by the BOE to follow the more simplified and rational procedure."[21] Private respondents now argue that G.R. No. 63018 merely decreed the postponement of the passing of Meralco's savings to the consumers until it could increase its rate charges. On this point, this Court categorically ruled:

"X x x. And finally, as stated by the Solicitor General, if only to put the issue to final rest, BOEs decision authorizing Meralco to retain the savings resulting from the reduction of franchise tax as long as its rate of return falls below the 12% allowable rate is supported by P.D. No. 551, the rules and administrative orders of the Ministry of Finance which had been duly authorized by the decree itself and by directives of the President to carry out the provisions of the decree, and most of all by equitable economic considerations without which the decree would lose its purpose and viability."
[22]

Corollarily, let it not be overlooked that the purpose of an action for declaratory relief is to secure an authoritative statement of the rights and obligations of the parties under a statute, deed, contract etc. for their guidance in the enforcement thereof, or compliance therewith, and not to settle issues arising from an alleged breach thereof. It may be entertained only before the breach or violation of the statute, deed, contract etc., to which it refers.[23] The petition gives a practical remedy in ending controversies which have not reached the stage where other relief is immediately available. It supplies the need for a form of action that will set controversies at rest before they lead to repudiation of obligations, invasion of rights, and the commission of wrongs. [24] Here, private respondents brought the petition for declaratory relief long after the alleged violation of P.D. No. 551. Lastly, we are dismayed by respondent RTC's adherence to the Dissenting Opinion, instead of the Majority Opinion, of the members of this Court in G.R. No. 63018, as well as its temerity to declare a Resolution of this Court "null and void" and "cannot be considered as valid judgment that will be a bar to the present action." A lower court cannot reverse or set aside decisions or orders of a superior court, especially of this Court, for to do so will negate the principle of hierarchy of courts and nullify the essence of review. A final judgment, albeit erroneous, is binding on the whole world. Thus, it is the duty of the lower courts to obey the Decisions of this Court and render obeisance to its status as the apex of the hierarchy of courts. "A becoming modesty of inferior courts demands conscious realization of the position that they occupy in the interrelation and operation of the integrated judicial system of the

nation."[25] "There is only one Supreme Court from whose decisions all other courts should take their bearings," as eloquently declared by Justice J. B. L. Reyes.[26] Respondent RTC, and for this matter, all lower courts, ought to be reminded that a final and executory decision or order can no longer be disturbed or reopened no matter how erroneous it may be. Although judicial determinations are not infallible, judicial error should be corrected through appeals, not through repeated suits on the same claim.[27] In setting aside the Resolution and Entry of Judgment of this Court in G.R. No. 63018, respondent court grossly violated basic rules of civil procedure. In fine, we stress that the rights of Meralco under P.D. No. 551, as determined by the BOE and sustained by this Court, have acquired the character of res judicata and can no longer be challenged. WHEREFORE, the petition is hereby GRANTED. The assailed RTC Decision dated January 16, 1991 and Order dated September 10, 1991 in Civil Case No. Q-89-3659 are REVERSED and SET ASIDE. SO ORDERED. Davide, Jr., C.J., Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Panganiban, Quisumbing, Pardo, Buena, Ynares-Santiago, De Leon, Jr., and Carpio, JJ., concur.

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Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 137794 August 11, 2010

ERLINDA REYES and ROSEMARIE MATIENZO, Petitioners, vs. HON. JUDGE BELEN B. ORTIZ, Presiding, Branch 49, Metropolitan Trial Court, Caloocan City; SPOUSES BERNARD and FLORENCIA PERL, represented by Attorney-in-Fact BENJAMIN MUCIO; HON. JUDGE VICTORIA ISABEL A. PAREDES, Presiding, Branch 124, Regional Trial Court, Caloocan City and SEGUNDO BAUTISTA, Respondents. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 149664 SPS. ALBERTO EMBORES and LOURDES EMBORES, SPS. ROBERTO AND EVELYN PALAD, DENNIS HENOSA and CORAZON LAURENTE, Petitioners, vs. HON. RAYMUNDO G. VALLEGA, Presiding Judge, Branch 52, Metropolitan Trial Court, Caloocan City; HON. ELEANOR R. KWONG, Presiding Judge, Branch 51, Metropolitan Trial Court, Caloocan City; HON. JUDGE BELEN B. ORTIZ, Presiding Judge, Branch 49, Metropolitan Trial Court, Caloocan City; VICTORIA C. SALIRE-ALBIS, represented by her attorney-in-fact MR. MENELIO C. SALIRE; MA. FE R. ROCO, ALFREDO TAN, MANUELITO ESTRELLA; and HON. JUDGE ANTONIO FINEZA, Presiding Judge, Branch 131, Regional Trial Court, Caloocan City, Respondents. DECISION LEONARDO-DE CASTRO, J.: The instant cases are consolidated Petitions1 for Declaratory Relief, Certiorari, and Prohibition. The petitioners in G.R. No. 137794 seek to declare null and void the proceedings in Civil Case No. 23477, an ejectment case, before the Metropolitan Trial Court (MeTC), Caloocan City, Branch 49, and Civil Case No. C-17725, a complaint for Recovery of Possession and Ownership, filed with the Regional Trial Court (RTC), Caloocan City, Branch 124;2while the petitioners in G.R. No. 149664 pray for the nullity of the following ejectment proceedings before the different branches of the Caloocan City MeTC: (1) Civil Case No. 99-25011, Branch 52; (2) Civil Case No. 22559 and Civil Case No. 18575, Branch 49 and its appeal to the RTC, Branch 131; (3) Civil Case No. 00-25892, Branch 51; and (4) Civil Case No. 00-25889, Branch 51.3 G.R. No. 149664 was considered closed and terminated by the Courts Resolution dated August 30, 2006.4 The parcels of land which are the subject matter of these cases are part of the Tala Estate, situated between the boundaries of Caloocan City and Quezon City and encompassing an area of 7,007.9515 hectares more or less.5 In G.R. No. 137794, respondents Segundo Bautista and spouses Bernard and Florencia Perl sought the ouster from the contested lots of Erlinda Reyes, spouses Rene and Rosemarie Matienzo and Sergio Abejero, who are occupants of separate home lots in Camarin, Caloocan City. The first case was commenced on December 11, 1996, by respondent Segundo Bautista, a registered owner of the parcel of land occupied by spouses Rene and Rosemarie Matienzo. The case was a complaint for Recovery of Possession and/or

Ownership of Real Property (Recovery case) against the latter spouses with the RTC Caloocan City, Branch 124.6 This was docketed as Civil Case No. C-17725.7 Shortly thereafter, a separate but related action, was initiated by the Republic of the Philippines, represented by the Director of Lands on December 27, 1996, before the Quezon City RTC, Branch 85 (re-raffled to Branch 93).8This was a complaint for Annulment of Title/Reversion (Annulment/Reversion case) against Biyaya Corporation and the Register of Deeds of the Cities of Pasig, Caloocan, and Quezon, the City of Manila, and the Administrator of the Land Registration Authority involving the Tala Estate. The case, docketed as Civil Case No. Q-96-29810, sought to declare null and void the transfer certificates of title issued in the name of Biyaya Corporation, and all derivative titles emanating therefrom, and to declare the land in suit to be reverted to it as part of the patrimonial property of the State, and the same be awarded to the actual occupants. One of the intervenors therein is Samahan ng Maliliit na Magkakapitbahay (SAMAKABA) of which petitioners Erlinda Reyes and Rosemarie Matienzo are members.9 On May 28, 1997, the Quezon City RTC in the Annulment/Reversion case issued a Preliminary Injunction (Injunction) freezing all ejectment cases involving the Tala Estate pending in the MeTCs of Quezon City and Caloocan City.10 Believing that the Injunction issued by the Quezon City RTC can be beneficial to them in the Recovery case pending before the Caloocan City RTC, on June 27, 1997, spouses Rene and Rosemarie Matienzo filed a motion to suspend the proceedings of the Recovery case.11 On December 8, 1997, the Caloocan City RTC, Branch 124 denied said motion.12 Spouses Matienzo moved for the reconsideration of the motion, but the same was denied on May 14, 1998.13 The spouses received the order denying their motion for reconsideration on June 9, 1998.14Trial on the merits started on December 2, 1998.15 The second case, an ejectment complaint, was commenced by spouses Bernard and Florencia Perl on June 25, 1997, against Erlinda Reyes before the Caloocan City MeTC, Branch 49.16 It was docketed as Civil Case No. 23477. Shortly thereafter, on July 8, 1997, spouses Perl filed the third case, an ejectment action against Sergio Abejero. The case, which was raffled off to Branch 49 of the Caloocan City MeTC, was docketed as Civil Case No. 23519.17 Subsequently, these two ejectment cases were consolidated (Ejectment cases).18 In her Answer and during the preliminary conference, Erlinda Reyes moved for the suspension of the proceedings and/or for the dismissal of these cases citing the Injunction issued in Civil Case No. Q-96-29810.19 In its Order20 dated January 22, 1999, the MeTC did not entertain Reyess motion, instead, it required her to submit a position paper. Erlinda Reyes received the order on March 11, 1999.21 On April 16, 1999, the trial court issued a Decision ordering Erlinda to vacate the contested property.22 The Recovery case and the Ejectment cases converged when petitioners Rosemarie Matienzo and Erlinda Reyes, joined on March 25, 1999 in filing directly with this Court the instant petition denominated as "Declaratory Relief,Certiorari, and Prohibition," mainly assailing the denial of their respective motions for suspension.23 Petitioners Matienzo and Reyes asked that the proceedings in the Ejectment cases and the Recovery case be declared null and void for violating the Injunction order of the Quezon City RTC. This case is docketed as G.R. No. 137794. During the pendency of G.R. No. 137794, certain events supervened when the Ejectment cases ran their course and petitioner Reyes appealed the MeTC decision to the RTC. In the RTC, the Ejectment cases were docketed as Civil Cases Nos. C-1890405.24 Apparently, respondent-spouses Perl moved for the execution of the MeTC decision pending appeal, which the RTC granted as the Writ of Execution was thereafter issued on October 20, 2000.25 Petitioner Erlinda Reyes and company, thus, filed with this Court a motion to suspend the proceedings in the RTC. 26 On October 25, 2000, this Court issued a Temporary Restraining Order restraining the implementation of the said writ of execution.27 G.R. No. 149664, on the other hand, emanated from four distinct ejectment complaints filed against petitioners Corazon Laurente, spouses Alberto and Lourdes Embores, spouses Roberto and Evelyn Palad, and Dennis Henosa.28 The parcels of land from which petitioners were sought to be evicted were located in Camarin, Caloocan City and within the Tala Estate.29 Petitioners were members of Alyansa Ng Mga Naninirahan Sa Tala Friar Lands (ALNATFRAL), an intervenor in the Reversion case.30 These ejectment cases were all filed after the Injunction order was issued on May 28, 1997 by the Quezon City RTC in the Annulment/Reversion case. Thus, petitioners separately invoked the said injunction in seeking the dismissal or suspension of the four ejectment cases. Petitioners motions for suspension were dismissed and the trial court proceeded to render judgments on

these cases. Petitioners resorted directly to this Court in seeking the declaration of nullity of the proceedings of these ejectment cases for violating the prevailing injunction issued by the Quezon City RTC. Meanwhile, on March 4, 2003, the petitioners in G.R. No. 149664 filed a motion for consolidation asking that the said case be consolidated with G.R. No. 137794. On April 28, 2003, this Court resolved to consolidate the two cases. On July 28, 2006, petitioners in G.R. No. 149664 filed a Motion to Withdraw and/or Dismiss Instant Petition31stating that since a decision in the Annulment/Reversion case (Civil Case No. Q-96-29810) was already issued (although they did not attach a copy thereof), the petition is therefore rendered moot and academic as the injunction order was effective only pending determination of the merits. On August 30, 2006, the Court granted the motion to withdraw petition in G.R. No. 149664 and considered the same closed and terminated.32 On October 11, 2006, G.R. No. 149664 became final and executory. What remains to be resolved, therefore, are the issues raised in G.R. No. 137794. In their bid to declare null and void the proceedings in the Recovery case and the Ejectment cases, petitioners argued that the Caloocan City MeTC, where the Ejectment cases were filed, and the Caloocan City RTC where the Recovery case was pending, were divested of jurisdiction since the Quezon City RTC acquired jurisdiction over the subject matter.33 Petitioners specifically alleged that the MeTCs refusal to suspend the Ejectment cases despite the Injunction order is tantamount or amounting to lack of or excess of jurisdiction. As to the Caloocan City RTC, its desistance to heed the Injunction is unjustified and contrary to wellsettled jurisprudence.34 Petitioners were of the view that the interference by the Quezon City RTC was justified since no thirdparty claim is involved.35 The Office of the Solicitor General (OSG) adopts the position of petitioners in praying that the orders denying the motion to suspend proceedings and the proceedings that transpired in the Ejectment cases be set aside for having been issued with grave abuse of discretion.36 Citing Honda Giken Kogyo-Kabushiki Kaisha v. San Diego,37 where it was held that a writ of injunction may be issued to a court by another court superior in rank, the OSG maintains that the Injunction issued by the Quezon City RTC in Civil Case No. Q-96-29810 covers all metropolitan trial courts including the Ejectment cases in Caloocan City MeTC, Branch 49.38 The OSG also maintains that the Injunction was in accordance with the settled jurisprudence where the reversion case is being filed by the State. Respondent Segundo Bautista contends that petitioners resorted to a wrong remedy. He argues that the action for declaratory relief can only prosper if the statute, deed, or contract has not been violated.39 Hence, where the law or contract has already been breached prior to the filing of the declaratory relief, courts can no longer assume jurisdiction since this action is not geared towards the settling of issues arising from breach or violation of the rights and obligations of the parties under a statute, deed, and contract, but rather it is intended to secure an authoritative statement for guidance in their enforcement or compliance of the same.40 Since the Injunction order of the Quezon City RTC had already been violated as early as December 8, 1997 by the Caloocan City RTC in the Recovery case, or before the filing of this instant petition, resort to Rule 63 of the Rules of Court would not lie. Respondent Bautista insists that the instant recourse of petitioner Matienzo was resorted to as a ploy to substitute the filing of certiorari under Rule 65, which she already lost since the 60-day period had already expired.41Respondent points out that direct resort to this Court violates the rule on the hierarchy of courts. Since it was the Caloocan City RTC which denied petitioner Matienzos motion to suspend proceedings, the petition for declaratory relief should have been filed with the Court of Appeals. Direct filing with this Court is not justified as, other than making motherhood statements, petitioner Matienzo failed to state clearly the exceptional and compelling circumstances to justify the exercise of this Courts primary jurisdiction.42 He likewise contends that the Caloocan City RTC did not err in not suspending the proceedings in the Recovery case, notwithstanding the Injunction issued by the Quezon City RTC, since the said injunction applied only to the MeTCs of Quezon City and Caloocan City so the RTC was excluded from the injunction order. He avers that it is the Caloocan City RTC which is vested with the jurisdiction to hear and decide the case until its final conclusion since it had acquired the same ahead of the Quezon City RTC. He states that being co-equal, the Quezon City RTC had no authority to stop by injunction the Caloocan City RTC and even though there are

instances where another court may exercise coordinate jurisdiction in cases where there are justifiable grounds, here, petitioner Matienzo has not alleged any of those circumstances. Petitioners insist that this is mainly a petition for declaratory relief. Section 1, Rule 63 of the 1997 Rules of Court provides: SECTION 1. Who may file petition. Any person interested under a deed, will, contract or other written instrument, or whose rights are affected by a statute, executive order or regulation, ordinance, or any other governmental regulation may, before breach or violation thereof, bring an action in the appropriate Regional Trial Court to determine any question of construction or validity arising, and for a declaration of his rights or duties, thereunder. An action for the reformation of an instrument, to quiet title to real property or remove clouds therefrom, or to consolidate ownership under Article 1607 of the Civil Code, may be brought under this Rule. The foregoing section can be dissected into two parts. The first paragraph concerns declaratory relief, which has been defined as a special civil action by any person interested under a deed, will, contract or other written instrument or whose rights are affected by a statute, ordinance, executive order or regulation to determine any question of construction or validity arising under the instrument, executive order or regulation, or statute and for a declaration of his rights and duties thereunder. The second paragraph pertains to (1) an action for the reformation of an instrument; (2) an action to quiet title; and (3) an action to consolidate ownership in a sale with a right to repurchase.43 The first paragraph of Section 1 of Rule 63 enumerates the subject matter to be inquired upon in a declaratory relief namely, deed, will, contract or other written instrument, a statute, executive order or regulation, or any government regulation. This Court, in Lerum v. Cruz,44 declared that the subject matters to be tested in a petition for declaratory relief are exclusive, viz: Under this rule, only a person who is interested "under a deed, will, contract or other written instrument, and whose rights are affected by a statute or ordinance, may bring an action to determine any question of construction or validity arising under the instrument or statute and for a declaration of his rights or duties thereunder." This means that the subject matter must refer to a deed, will, contract or other written instrument, or to a statute or ordinance, to warrant declaratory relief. Any other matter not mentioned therein is deemed excluded. This is under the principle of expressio unius est exclussio alterius. (Emphasis supplied.) The foregoing holding was reiterated in Natalia Realty, Inc. v. Court of Appeals,45 wherein this Court stressed that court orders or decisions cannot be made the subject matter of a declaratory relief, thus: Judge Querubin's query is not an action for declaratory relief. Section 1 of Rule 64 [now Rule 63] of the Rules of Court provides the requisites of an action for declaratory relief. In interpreting these requisites, the Court has ruled that: xxxx The letter of Judge Querubin pertained to final orders and decisions of the courts that are clearly not the proper subjects of a petition for declaratory relief. Thus, the requisites prescribed by the Rules of Court in an action for declaratory relief are not applicable to the letter of Judge Querubin.46 (Emphasis supplied.) Then again in a recent ruling of this Court, it was emphasized: A petition for declaratory relief cannot properly have a court decision as its subject matter. In Tanda v. Aldaya [98 Phil. 244 (1956)], we ruled that: [A] court decision cannot be interpreted as included within the purview of the words "other written instrument," as contended by appellant, for the simple reason that the Rules of Court already provide for the ways by which an ambiguous or doubtful decision may be corrected or clarified without need of resorting to the expedient prescribed by Rule 66 [now Rule 64].47 (Emphasis supplied.)

In the instant case, petitioners Erlinda Reyes and Rosemarie Matienzo assailed via Declaratory Relief under Rule 63 of the Rules of Court, the orders of the trial courts denying their motions to suspend proceedings. This recourse by petitioners, unfortunately, cannot be countenanced since a court order is not one of those subjects to be examined under Rule 63. The proper remedy that petitioner Erlinda Reyes could have utilized from the denial of her motion to suspend proceedings in the Caloocan City MeTC was to file a motion for reconsideration and, if it is denied, to file a petition for certiorari before the RTC pursuant to Rule 65 of the Rules of Court. On the other hand, petitioner Matienzo should have filed a special civil action on certiorari also under Rule 65 with the Court of Appeals from the denial of her motion by the Caloocan City RTC. The necessity of filing the petition to the RTC in the case of Erlinda Reyes and to the Court of Appeals in the case of Matienzo is dictated by the principle of the hierarchy of courts.48 Both petitions must be filed within 60 days from the receipt or notice of the denial of the motion to suspend proceedings or from the denial of the motion for reconsideration. Section 4 of Rule 65 partly provides: Sec. 4. When and where to file the petition. - The petition shall be filed not later than sixty (60) days from notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely filed, whether such motion is required or not, the petition shall be filed not later than sixty (60) days counted from the notice of the denial of said motion. If the petition relates to an act or an omission of a municipal trial court x x x, it shall be filed with the Regional Trial Court exercising jurisdiction over the territorial area as defined by the Supreme Court. It may also be filed with the Court of Appeals or with the Sandiganbayan, whether or not the same is in aid of the courts appellate jurisdiction. Despite this procedural remedy available to them, petitioners, under the pretext that they were in a quandary as to their rights under the Injunction order of the Quezon City RTC, directly filed the instant case here. Petitioners did not bother to proffer a compelling reason for their direct resort to this Court. This procedural faux pas proves fatal. The Courts exhortation against taking a procedural shortcut cannot be overemphasized. In Ortega v. The Quezon City Government, 49 the Court accentuated: At all events, even if this petition delves on questions of law, there is no statutory or jurisprudential basis for according to this Court original and exclusive jurisdiction over declaratory relief which advances only questions of law. Finally, while a petition for declaratory relief may be treated as one for prohibition if it has far reaching implications and raises questions that need to be resolved, there is no allegation of facts by petitioner tending to show that she is entitled to such a writ. The judicial policy must thus remain that this Court will not entertain direct resort to it, except when the redress sought cannot be obtained in the proper courts or when exceptional and compelling circumstances warrant availment of a remedy within and calling for the exercise of this Court's primary jurisdiction. (Emphasis supplied.) To make matters worse, petitioner Matienzo obviously availed of the instant declaratory relief to substitute for a petition for certiorari, a remedy which she sadly lost by inaction. It must be recalled that on December 8, 1997, the Caloocan City RTC, Branch 124 denied Matienzos motion to suspend proceedings.50 She moved for reconsideration, but the same was denied on May 14, 1998.51 She received the Order denying her motion for reconsideration on June 9, 1998.52 She had 60 days therefrom to question the same before the Quezon City RTC. It was only on March 25, 1999 that petitioner Matienzo assailed the order denying her motion for reconsideration, albeit wrongly before this Court.53 From this, it can be inferred that petitioner Matienzos recourse is a belated attempt designed to salvage her lost opportunity to assail the order denying her motion to suspend proceedings. Also unavailing are the contentions of petitioners that the Caloocan City RTC and MeTC committed grave abuse of discretion when they denied petitioners motions to suspend proceedings. The pertinent portion of the Injunction order of the Quezon City RTC reads: WHEREFORE, premises considered, this Court has to grant, as it hereby grants the application for the issuance of the writ of preliminary injunction. Let a writ of preliminary Injunction be issued ordering defendant representing Biyaya Corporation, its agents, assigns, and transferees, as well as all other persons representing themselves as owners of certain portions of the land in question, otherwise known as the Tala Estate, to immediately cease and desist from doing or causing to do, further acts of disposition of the lots subject of the present complaint, such as the filing of ejectment cases in the Municipal Trial Courts of

Quezon City and Caloocan City and, the demolition and ejectment therefrom of the members of the herein Intervenors. Accordingly, the Metropolitan Trial Courts of Quezon City and Caloocan City are specifically ordered to cease and desist from further conducting trials and proceedings in the ejectment cases filed and to be filed involving the lots of the present complaint, until further orders from this Court.54 (Emphasis supplied.) The foregoing order is not addressed to the Caloocan City RTC. Neither can it be inferred from the language thereof that the Quezon City RTC intended to enjoin the Caloocan City RTC from further proceeding with the Recovery case. The order merely mentions the Caloocan City MeTCs. Nothing more. But more importantly, the Quezon City RTC could not have validly enjoined the Caloocan City RTC without violating the doctrine that no court has the power to interfere by injunction with the judgments or decrees of a court of concurrent or coordinate jurisdiction.55 Spouses Ching v. Court of Appeals56 justifies this rule in this manner: Beginning with the case of Orais v. Escao, down to the subsequent cases of Nuez v. Low, Cabigao v. del Rosario, Hubahib v. Insular Drug Co., Inc., National Power Corp. v. De Veyra, Luciano v. Provincial Governor, De Leon v. Hon. Judge Salvador, Cojuangco v. Villegas, Darwin v. Tokonaga, we laid down the long standing doctrine that no court has the power to interfere by injunction with the judgments or decrees of a court of concurrent or coordinate jurisdiction. The various trial courts of a province or city, having the same or equal authority, should not, cannot, and are not permitted to interfere with their respective cases, much less with their orders or judgments. A contrary rule would obviously lead to confusion and seriously hamper the administration of justice. (Emphasis supplied.) In Compania General de Tabacos de Filipinas v. Court of Appeals,57 two civil cases with identical causes of action were filed in different RTCs, one ahead of the other. The second RTC which acquired jurisdiction over the case issued a preliminary injunction enjoining the proceedings in the RTC which first acquired jurisdiction of the case. Ruling against the injunction issued by the RTC, this Court stressed: Hence, nothing can be clearer than that Judge Rapatalo had indeed issued the questioned writ of preliminary injunction with grave abuse of discretion amounting to excess or lack of jurisdiction for the blatant disregard of the basic precept that no court has the power to interfere by injunction with the judgments or orders of a co-equal and coordinate court of concurrent jurisdiction having the power to grant the relief sought by injunction. This Court explained in Parco vs. Court of Appeals that: x x x Jurisdiction is vested in the court not in any particular branch or judge, and as a corollary rule, the various branches of the Court of First Instance of a judicial district are a coordinate and co-equal courts one branch stands on the same level as the other. Undue interference by one on the proceedings and processes of another is prohibited by law. In the language of this Court, the various branches of the Court of First Instance of a province or city, having as they have the same or equal authority and exercising as they do concurrent and coordinate jurisdiction should not, cannot, and are not permitted to interfere with their respective cases, much less with their orders or judgments x x x. Needless to say, adherence to a different rule would sow confusion and wreak havoc on the orderly administration of justice, and in the ensuing melee, hapless litigants will be at a loss as to where to appear and plead their cause. 58 (Emphasis supplied.)
1avvphi1

While there are recognized exceptions to the foregoing rule, other than citing said cases, 59 petitioners did not explain the applicability of said exceptional cases to their petition. Bereft of merit too is petitioners argument that the Caloocan City MeTC cannot disregard the injunction order of the Quezon City RTC hearing the Annulment/Reversion case. The established rule is that a pending civil action for ownership such as annulment of title shall not ipso facto suspend an ejectment proceeding.60 The Court explained that the rationale for this is that in an ejectment case, the issue is possession, while in an annulment case the issue is ownership.61 In fact, an ejectment case can be tried apart from an annulment case.62 Although there is an exception to this rule, petitioners failed to justify that this case falls within said exception. The words of the Court on this matter are instructive: In the absence of a concrete showing of compelling equitable reasons at least comparable and under circumstances analogous

to Amagan, we cannot override the established rule that a pending civil action for ownership shall not ipso facto suspend an ejectment proceeding. Additionally, to allow a suspension on the basis of the reasons the petitioners presented in this case would create the dangerous precedent of allowing an ejectment suit to be suspended by an action filed in another court by parties who are not involved or affected by the ejectment suit.63 (Emphases supplied.) Hence, petitioners posture that the Ejectment cases should be suspended due to the pendency of the Annulment/Reversion case is not meritorious. WHEREFORE, premises considered, the instant petition is hereby DISMISSED. The Temporary Restraining Order dated October 25, 2000 issued by this Court is LIFTED. SO ORDERED. TERESITA J. LEONARDO-DE CASTRO Associate Justice WE CONCUR: RENATO C. CORONA Chief Justice Chairperson LUCAS P. BERSAMIN* Associate Justice JOSE PORTUGAL PEREZ Associate Justice CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courts Division. RENATO C. CORONA Chief Justice MARIANO C. DEL CASTILLO Associate Justice

Footnotes
*

Per Special Order No. 876 dated August 2, 2010. Petitioners in G.R. No. 137794 insist that their petition is mainly a Declaratory Relief. (See rollo, p. 366.) Rollo (G.R. No. 137794), pp. 3-15. Rollo (G.R. No. 149664), pp. 3-19. Id. at 398.

Id. at 45. Rollo (G.R. No. 137794), p. 543. Id. at 6. Id. at 556. Id. at 299.

10

The motion for reconsideration of the injunction order was denied on October 21, 1997. Apparently no further actions were taken against the said order. (Rollo [G.R. No. 137794], pp. 35-41.)
11

Rollo (G.R. No. 137794), p. 546. Id. at 548. Id. at 551. Id. at 15. Id. at 552. Id. at 299. Id. at 299-300. Id. at 300. Id. at 112. Id. at 76. Id. at 15. Id. at 112. Id. at 3. Id. at 224. Id. at 284. Id. at 267-270. Id. at 283-284. Rollo (G.R. No. 149664), p. 8.

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29

Id. at 6. Id. at 40. Id. at 392. Id. at 398. Id. at 12. Id. Id. at 13. Rollo (G.R. No. 137794), p. 307. G.R. No. L-22756, March 18, 1966, 16 SCRA 406; rollo (G.R. No. 137794), p. 303. Rollo (G.R. No. 137794), p. 303. Id. at 558. Id. Id. at 354-355. Id. at 560-561.

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43

Malana v. Tappa, G.R. No. 181303, September 17, 2009, 600 SCRA 189, 199-200; Atlas Consolidated Mining & Development Corporation v. Court of Appeals, G.R. No. 54305, February 14, 1990, 182 SCRA 166, 177.
44

87 Phil 652, 657 (1950); Declaratory Relief was then under Rule 66 of the 1948 Rules of Court. 440 Phil. 1, 19 (2002). Declaratory Relief was then under Rule 64 of the 1994 Rules of Court.

45

46

47

CJH Development Corporation v. Bureau of Internal Revenue, G.R. No. 172457, December 24, 2008, 575 SCRA 467, 473.
48

Tano v. Socrates, 343 Phil. 670, 700 (1997). 506 Phil. 373, 380-381 (2005). Rollo (G.R. No. 137794), p. 548. Id. at 551. Id. at 15.

49

50

51

52

53

Id. at 3. Id. at 41. Suico Industrial Corporation v. Court of Appeals, 361 Phil. 160, 172 (1999). 446 Phil. 121, 129 (2003). 422 Phil. 405 (2001). Id. at 420-421.

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56

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58

59

Rollo, p. 341. The cases cited are Inter-Regional Development Corporation v. Court of Appeals, 160 Phil. 265, 269 (1975) and Abiera v. Court of Appeals, 150-A Phil. 666, 674-675 (1972), etc.
60

Wilmon Auto Supply Corporation v. Court of Appeals, G.R. No. 97637, April 10, 1992, 208 SCRA 108, 116.

61

Antonio v. Court of Appeals, 237 Phil. 572, 581 (1987); Spouses Barnachea v. Court of Appeals, G.R. No. 150025. July 23, 2008, 559 SCRA 363, 375.
62

Antonio v. Court of Appeals, id. Spouses Barnachea v. Court of Appeals, supra note 61 at 377.

63

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