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G.R. No.

84811 August 29, 1989


SOLID HOMES, INC., petitioner, vs.TERESITA PAYAWAL and COURT OF APPEALS, respondents.
We are asked to reverse a decision of the Court of Appeals sustaining the jurisdiction of the Regional
Trial Court of Quezon City over a complaint filed by a buyer, the herein private respondent, against the
petitioner, for delivery of title to a subdivision lot. The position of the petitioner, the defendant in that
action, is that the decision of the trial court is null and void ab initio because the case should have been
heard and decided by what is now called the Housing and Land Use Regulatory Board.
The complaint was filed on August 31, 1982, by Teresita Payawal against Solid Homes, Inc. before the
Regional Trial Court of Quezon City and docketed as Civil Case No. Q-36119. The plaintiff alleged that the
defendant contracted to sell to her a subdivision lot in Marikina on June 9, 1975, for the agreed price of P
28,080.00, and that by September 10, 1981, she had already paid the defendant the total amount of P
38,949.87 in monthly installments and interests. Solid Homes subsequently executed a deed of sale over
the land but failed to deliver the corresponding certificate of title despite her repeated demands because,
as it appeared later, the defendant had mortgaged the property in bad faith to a financing company. The
plaintiff asked for delivery of the title to the lot or, alternatively, the return of all the amounts paid by her
plus interest. She also claimed moral and exemplary damages, attorney's fees and the costs of the suit.
Solid Homes moved to dismiss the complaint on the ground that the court had no jurisdiction, this being
vested in the National Housing Authority under PD No. 957. The motion was denied. The defendant
repleaded the objection in its answer, citing Section 3 of the said decree providing that "the National
Housing Authority shall have exclusive jurisdiction to regulate the real estate trade and business in
accordance with the provisions of this Decree." After trial, judgment was rendered in favor of the plaintiff
and the defendant was ordered to deliver to her the title to the land or, failing this, to refund to her the
sum of P 38,949.87 plus interest from 1975 and until the full amount was paid. She was also awarded P
5,000.00 moral damages, P 5,000.00 exemplary damages, P 10,000.00 attorney's fees, and the costs of the
suit.
1

Solid Homes appealed but the decision was affirmed by the respondent court,
2
which also berated the
appellant for its obvious efforts to evade a legitimate obligation, including its dilatory tactics during the
trial. The petitioner was also reproved for its "gall" in collecting the further amount of P 1,238.47 from
the plaintiff purportedly for realty taxes and registration expenses despite its inability to deliver the title
to the land.
In holding that the trial court had jurisdiction, the respondent court referred to Section 41 of PD No. 957
itself providing that:
SEC. 41. Other remedies.-The rights and remedies provided in this Decree shall be in
addition to any and all other rights and remedies that may be available under existing laws.
and declared that "its clear and unambiguous tenor undermine(d) the (petitioner's) pretension that the
court a quowas bereft of jurisdiction." The decision also dismissed the contrary opinion of the Secretary
of Justice as impinging on the authority of the courts of justice. While we are disturbed by the findings of
fact of the trial court and the respondent court on the dubious conduct of the petitioner, we nevertheless
must sustain it on the jurisdictional issue.
The applicable law is PD No. 957, as amended by PD No. 1344, entitled "Empowering the National
Housing Authority to Issue Writs of Execution in the Enforcement of Its Decisions Under Presidential
Decree No. 957." Section 1 of the latter decree provides as follows:
SECTION 1. In the exercise of its function 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 contractuala statutory obligations filed by buyers
of subdivision lot or condominium unit against the owner, developer, dealer, broker or
salesman. (Emphasis supplied.)
The language of this section, especially the italicized portions, leaves no room for doubt that "exclusive
jurisdiction" over the case between the petitioner and the private respondent is vested not in the
Regional Trial Court but in the National Housing Authority.
3

The private respondent contends that the applicable law is BP No. 129, which confers on regional trial
courts jurisdiction to hear and decide cases mentioned in its Section 19, reading in part as follows:
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;
(2) In all civil actions which involve the title to, or possession of, real property, or any
interest therein, except actions for forcible entry into and unlawful detainer of lands or
buildings, original jurisdiction over which is conferred upon Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial Courts;
xxx xxx xxx

(8) In all other cases in which the demand, exclusive of interest and cost or the value of the
property in controversy, amounts to more than twenty thousand pesos (P 20,000.00).
It stresses, additionally, that BP No. 129 should control as the later enactment, having been promulgated
in 1981, after PD No. 957 was issued in 1975 and PD No. 1344 in 1978.
This construction must yield to the familiar canon that in case of conflict between a general law and a
special law, the latter must prevail regardless of the dates of their enactment. Thus, it has been held that-
The fact that one law is special and the other general creates a presumption that the special
act is to be considered as remaining an exception of the general act, one as a general law of
the land and the other as the law of the particular case.
4

xxx xxx xxx
The circumstance that the special law is passed before or after the general act does not
change the principle. Where the special law is later, it will be regarded as an exception to,
or a qualification of, the prior general act; and where the general act is later, the special
statute will be construed as remaining an exception to its terms, unless repealed expressly
or by necessary implication.
5

It is obvious that the general law in this case is BP No. 129 and PD No. 1344 the special law.
The argument that the trial court could also assume jurisdiction because of Section 41 of PD No. 957,
earlier quoted, is also unacceptable. We do not read that provision as vesting concurrent jurisdiction on
the Regional Trial Court and the Board over the complaint mentioned in PD No. 1344 if only because
grants of power are not to be lightly inferred or merely implied. The only purpose of this section, as we
see it, is to reserve. to the aggrieved party such other remedies as may be provided by existing law, like a
prosecution for the act complained of under the Revised Penal Code.
6

On the competence of the Board to award damages, we find that this is part of the exclusive power
conferred upon it by PD No. 1344 to hear and decide "claims involving refund and any other claims filed
by subdivision lot or condominium unit buyers against the project owner, developer, dealer, broker or
salesman." It was therefore erroneous for the respondent to brush aside the well-taken opinion of the
Secretary of Justice that-
Such claim for damages which the subdivision/condominium buyer may have against the
owner, developer, dealer or salesman, being a necessary consequence of an adjudication of
liability for non-performance of contractual or statutory obligation, may be deemed
necessarily included in the phrase "claims involving refund and any other claims" used in
the aforequoted subparagraph C of Section 1 of PD No. 1344. The phrase "any other claims"
is, we believe, sufficiently broad to include any and all claims which are incidental to or a
necessary consequence of the claims/cases specifically included in the grant of jurisdiction
to the National Housing Authority under the subject provisions.
The same may be said with respect to claims for attorney's fees which are recoverable
either by agreement of the parties or pursuant to Art. 2208 of the Civil Code (1) when
exemplary damages are awarded and (2) where the defendant acted in gross and evident
bad faith in refusing to satisfy the plaintiff 's plainly valid, just and demandable claim.
xxx xxx xxx
Besides, a strict construction of the subject provisions of PD No. 1344 which would deny the
HSRC the authority to adjudicate claims for damages and for damages and for attorney's fees
would result in multiplicity of suits in that the subdivision condominium buyer who wins a
case in the HSRC and who is thereby deemed entitled to claim damages and attorney's fees
would be forced to litigate in the regular courts for the purpose, a situation which is obviously
not in the contemplation of the law. (Emphasis supplied.)
7

As a result of the growing complexity of the modern society, it has become necessary to create more and
more administrative bodies to help in the regulation of its ramified activities. Specialized in the particular
fields assigned to them, they can deal with the problems thereof with more expertise and dispatch than
can be expected from the legislature or the courts of justice. This is the reason for the increasing vesture
of quasi-legislative and quasi-judicial powers in what is now not unreasonably called the fourth
department of the government.
Statutes conferring powers on their administrative agencies must be liberally construed to enable them
to discharge their assigned duties in accordance with the legislative purpose.
8
Following this policy in
Antipolo Realty Corporation v. National Housing Authority,
9
the Court sustained the competence of the
respondent administrative body, in the exercise of the exclusive jurisdiction vested in it by PD No. 957
and PD No. 1344, to determine the rights of the parties under a contract to sell a subdivision lot.
It remains to state that, contrary to the contention of the petitioner, the case of Tropical Homes v.
National Housing Authority
10
is not in point. We upheld in that case the constitutionality of the
procedure for appeal provided for in PD No. 1344, but we did not rule there that the National Housing
Authority and not the Regional Trial Court had exclusive jurisdiction over the cases enumerated in
Section I of the said decree. That is what we are doing now.
It is settled that any decision rendered without jurisdiction is a total nullity and may be struck down at
any time, even on appeal before this Court.
11
The only exception is where the party raising the issue is
barred by estoppel,
12
which does not appear in the case before us. On the contrary, the issue was raised
as early as in the motion to dismiss filed in the trial court by the petitioner, which continued to plead it in
its answer and, later, on appeal to the respondent court. We have no choice, therefore, notwithstanding
the delay this decision will entail, to nullify the proceedings in the trial court for lack of jurisdiction.
WHEREFORE, the challenged decision of the respondent court is REVERSED and the decision of the
Regional Trial Court of Quezon City in Civil Case No. Q-36119 is SET ASIDE, without prejudice to the filing
of the appropriate complaint before the Housing and Land Use Regulatory Board. No costs.
SO ORDERED.
G.R. No. 72566 April 12, 1988
DELBROS HOTEL CORPORATION, petitioner,
vs.
THE INTERMEDIATE APPELLATE COURT [FIRST SPECIAL CASES DIVISION], HILTON
INTERNATIONAL COMPANY, ACHIM IHLENFELD as successor to RICHARD CHAPMAN and
FLAVIANO MOSQUERA JR., the latter two in their respective capacities as former General Manager
and Comptroller of the Manila Hilton International Hotel, respondents.

FERNAN, J.:
This is a petition for certiorari with urgent prayer for the issuance of a temporary restraining order
and/or writ of preliminary injunction to nullify and resolutions dated September 5, 11 and 24, 1985,
issued by the then Intermediate Appellate court, now Court of Appeals, in AC-G.R. No. SP-07020, entitled
"Hilton Hotels International, Inc, [Hilton International Co.] et al. vs. Hon Abelardo M. Dayrit, et al."
The antecedent facts are as follows:
On February 27,1985, petitioner Delbros Hotel Corporation [DELBROS, for short] filed before the
Regional Trial Court of Manila a complaint for termination of agreement and damages, with prayer for the
issuance of a restraining order and/or writ of preliminary mandatory injunction against private
respondents Hilton Hotels International [now known as Hilton International Company] and Richard
Chapman, in his capacity as General Manager of Manila Hilton. In said complaint, docketed as Civil Case
No. 85-29489 and raffled off to Branch XXIX presided over by Judge Abelardo M. Dayrit, it was alleged
that pursuant to the Agreement and Lease entered into by and between DELBROS and Hilton Hotels
International, Inc. [HILTON] on June 2,1964, later amended into a Management Agreement on June 9,
1966, and its Supplemental Amendments of March 23, 1973 and November 22, 1976, DELBROS financed,
built, furnished and equipped a first-class hotel of approximately 400 rooms, now known as the "Manila
Hilton," the operation and management of which was granted to HILTON; that for their respective
undertakings, DELBROS was to receive a share in the gross operating profit [GOP] of the hotel, as defined
in Article V of the basic agreements, while HILTON was entitled to a management fee equivalent to five
percent [5%] of the gross revenues and an incentive fee equivalent to ten percent [10%] of the GOP of the
hotel; that in violation of the terms of the agreement, HILTON a] refused, despite repeated demands, to
remit to DELBROS its share in the GOP which as of December 31, 1984 amounted to P2,591,165.00 as
well as the excess of the normal working capital; b] transferred, without DELBROS' prior approval, a
portion of the reserve funds to its operating funds; and, c] used said operating funds for capital
expenditures without the consent of DELBROS; that in addition, HILTON grossly mismanaged the hotel
and breached the trust and confidence reposed upon it by DELBROS; thereby causing DELBROS to default
in its amortizations to the GSIS.
1

In their Answer with Compulsory counterclaim, therein defendants HILTON and Chapman specifically
denied the allegations of DELBROS and set forth the following as affirmative defenses: that DELBROS had
no valid and sufficient cause of action for failure to give a five-day notice of termination of the
Management Agreement as required under Article XI thereof; DELBROS' cause or causes of action, if any,
were barred by estoppel or laches; DELBROS' claims or demands had been waived or abandoned; and
that the alleged violations of the Management Agreement were too trivial or insignificant to warrant the
grave penalty of termination of the Management Agreement after it had been in force for 17 years. By
way of compulsory counterclaim, HILTON and Chapman prayed for an award of moral damages in the
amount of P1,000,000.00 each and the same amount each as exemplary damages plus attorney's fees.
2

On March 21, 1985, Judge Dayrit issued a writ of preliminary injunction, enjoining HILTON and Chapman
from:
a] Disposing, removing, tampering, destroying, or otherwise concealing corporate records,
books of accounts, statement of accounts receivables, ledgers, vouchers, invoices, receipts,
purchase orders, job orders, bank statements, returned checks, gate passes, incident
reports, debit/credit memos and/or any other document of similar nature, pertaining to
the operation, management and administration of the business and affairs of the hotel
known as the 'Manila Hilton' located at the United Nations Avenue, Ermita, Manila;
b] Disposing, removing, destroying, dissipating, or otherwise concealing hotel stocks
[consisting of food, beverage, supplies and items of similar nature], furniture, furnishings,
specialized hotel equipment [which term shall mean all equipment required for the
operation of kitchen, laundries, dry cleaning facilities, restaurants, bars, special lighting and
other equipment of similar nature] operating equipment [which term shall include
chinaware, linens, silverware, kitchenwares and other similar items], operating and guest
supplies [which term shall include soaps, cleaning materials, matches, paper supplies,
stationery and other similar items] and such other furnishings equipment and other
personal properties or assets as are normally required for the efficient and continuing
operation of the Manila Hilton;
c] Disbursing, expending and/or dissipating testimonies funds, time deposits, revenues,
and income under the account of Hilton International Company and/or Manila Hilton
without prior approval from this Court, except only as may be necessary to prevent total or
partial disruption of the hotels services;
d] Disbursing funds in payment to Hilton International Company or transferring funds to
Hilton's local bank accounts or offsetting hotel receivables in favor of Hilton International
Company and/or its affiliated companies;
e] Remitting funds from their local bank accounts to their foreign offices.
3

A clarificatory order on this writ was issued on March 28, 1985.
From these orders, HILTON and Chapman went to the Intermediate Appellate Court on a petition for
certiorari docketed as AC-G.R. No. SP-06474. On July 3, 1985, the Third Special Cases Division of the IAC,
to which the petition was assigned, issued a temporary restraining order enjoining the implementation of
the orders of Judge Dayrit. The temporary restraining order was replaced on August 21, 1985 with a writ
of preliminary injunction.
4

Meanwhile, on April 12,1985, DELBROS filed in Civil Case No. 85-29489 a motion to admit Supplemental
Complaint. The Supplemental Complaint impleaded as an additional defendant Flaviano Mosquera, Jr., in
his capacity as Comptroller of the Manila Hilton and sought the confirmation by the trial court of the
termination of the Management Contract effected by DELBROS through the service upon HILTON of the
five-day notice of termination provided thereunder, as well as the payment of DELBROS' share in the GOP
of the hotel for the months of January and February 1985 and other damages.
Over the opposition of HILTON and Chapman, the lower court issued an Order on June 14, 1985,
admitting the Supplemental Complaint, directing summons and copy of the supplemental complaint to be
served on the additional defendant and requiting HILTON and Chapman to answer the supplemental
complaint within five [5] days from notice. Copies of the June 14, 1985 Order were received by the
parties' counsels on June 21, 1985.
On July 6, 1986, an ex-parte motion for an extension of twelve [12] days to answer the supplemental
complaint was filed in behalf of all the three defendants, HILTON, Chapman and Mosquera. Said motion,
sent by registered mail, was not reserved by the trial court until July 16, 1985.
However, earlier, or on July 9, 1985, DELBROS had filed a motion to declare defendants HILTON and
Chapman in default with respect to the supplemental complaint. This was granted on even date and
DELBROS allowed to present its evidence ex-parte in support of its supplemental complaint.
On July 15, 1986, the lower court rendered a judgment by default, confirming as legal and valid the
termination as of March 31, 1985 of the Management Agreement between the parties and ordering,
among others, the defendants to immediately quit and surrender the Manila Hilton International Hotel to
DELBROS' President as well as to pay DELBROS its share in the GOP of the hotel for the months of January
to March, 1985, plus legal interest thereon from the date of the filing of the Supplemental Complaint until
full payment thereof.
5
Copies of the default judgment were served on the parties' counsels in the
morning of July 18, 1985. In the afternoon of the same day, HILTON, et al. filed their Answer to the
Supplemental Complaint, and on July 24, 1985, filed a notice of appeal from the judgment by default.
Meanwhile, on July 19, 1985, DELBROS moved for the execution of the judgment pending appeal.
Although opposed by HILTON, et al., the motion was granted in a Special Order dated September 3, 1985.
A writ of execution was issued and served upon defendants on the same day. The Partial Sheriff s Return
reads as follows:
That on September 3, 1985, copies of the Writ of Execution dated September 3, 1985
together with the Judgment by Default dated July 15, 1985 and the Special Order dated
September 3, 1985, all issued in the above-entitled case, were served and tendered upon
the following:
1. Defendant Hilton International, Inc. [now known as Hilton International Company]
through Achim Ihlenfeld General Manager of Manila Hilton International Hotel; and,
2. Defendant Flaviano Mosquera, Jr. at their given addresses, as evidenced by their
signatures acknowledging receipt of the aforementioned documents, hereto attached,
The aforesaid individuals, after carefully reading the documents served and after
consuIting with their counsel by telephone voluntarily vacated and surrendered their
respective offices at the Manila Hilton International. Thereupon, Delbros Hotel Corporation
took over possession and control over the management and operation of the Hotel as
evidenced by notices of take over of the hotel signed by the President of Delbros Hotel
Corporation and addressed to all officers and employees, posted in strategic places in the
hotel, a copy hereto attached.
The Notices of Garnishment were likewise served on the following banks:
1. Pilipinas Bank, Manila Hilton Branch
2. PNB, Ermita Branch
3. Bank of America, Paseo de Roxas Branch
as evidenced by the rubber stamp mark and signatures appearing on the duplicate original
copies thereof, hereto attached.
The undersigned posted guard in the respective offices of Messrs. Ihlenfeld and Mosquera.
Manila, Philippines, September 3, 1985.
For the Sheriff of
Manila
[Sgd.] Miguelito S.
Navarro
Deputy Sheriff
Branch XXIX, RTC of
Manila.
6

On the following day, September 4, 1985, HILTON, et al. instituted before the then Intermediate Appellate
Court a petition for certiorari with prayer for a restraining order/preliminary injunction, docketed as AC-
G.R. No. SP-07020, to assail the Special Order of September 3, 1985 for allegedly having been issued with
grave abuse of discretion amounting to lack of jurisdiction.
7
As prayed for, the First Special Cases
Division of the IAC, to which the petition was assigned, issued on September 5, 1985 a temporary
restraining order enjoining the implementation and/or enforcement of the Special Order of September 3,
1985.
On September 9, 1985, HILTON, et al. filed in AC-G.R. No. SP-07020 an urgent ex-parte motion to deputize
Manila police authorities to enforce/implement the restraining order of September 5, 1985.
8
This was
opposed by DELBROS.
On September 11, 1985, the First Special Cases Division of the IAC issued a resolution reiterating 'the
continuing efficacy of its restraining order dated September 5, 1985, enjoining the parties to conform to
the restraint against the execution/implementation of the Special Order dated September 3, 1985
..."
9
and on September 24,1985 granted HILTON's motion to deputize Manila police authorities to enforce
the restraining order of September 5, 1985.
10

DELBROS forthwith filed on September 25, 1985 an urgent motion for reconsideration of the resolution
dated September 24, 1985. When more than a month had elapsed without the IAC acting on its motion for
reconsideration, petitioner filed the instant petition assailing as null and void the three orders issued in
AC-G.R. No. SP-07020, and raising the following questions of law:
[1] Can a temporary restraining order,or a writ of preliminary injunction, for that matter,
prohibit an act already performed and accomplished?
[2] Can a party in legal and actual possession and control be deprived of the same by means
of a temporary restraining order?
[3] Can a temporary restraining order continue to be enforced beyond twenty (20) days
from its issuance, contrary to paragraph 8 of the Interim or Transitional Rules and
Guidelines relative to the implementation of the Judiciary Reorganization Act of 1981. (B.P.
Blg. 129)?
11

In their comment, private respondents HILTON, Achim Ihlenfeld [successor of Chapman] and Flaviano
Mosquera, Jr. assailed the veracity of the Partial Sheriffs Return, contending that no take-over of the
hotel's management was ever effected as no advice to surrender their offices was given to either Ihlenfeld
and Mosquera, Jr., and that it is HILTON which continues to run and manage the hotel and which is
recognized by the employees as manager thereof; that the twenty-day lifespan of a temporary restraining
order provided under B.P. 224 does not apply to the Court of Appeals; and that, at any rate, the Special
Order of September 3, 1985 which granted petitioner's motion for execution pending appeal is null and
void, having as its basis an invalid judgment by default.
As aforesaid, the instant petition is focused primarily on the interlocutory orders dated September 5, 11
and 24, 1985 issued in AC-G.R. No. SP-07020. These orders, however, are so inextricably connected with
the default order of July 9, 1985, the default judgment of July 15, 1985 as well as the Special Order dated
September 3, 1985, that to simply limit ourselves to said orders would afford the parties neither
complete relief nor substantial justice, Thus, it becomes imperative that We should delve further back
into the proceedings taken in the trial court and in the process, preempt the jurisdiction of the appellate
court before which the question of legality and propriety of the Special Order of September 3, 1985 had
been brought as well as the appeal filed by private respondents HILTON and Ihlenfeld [as successor to
Chapman] from the judgment by default.
Private respondents HILTON and Chapman were declared in default for failure to file an answer to the
Supplemental Complaint. This is reversible error.
Fundamentally, default orders are taken on the legal presumption that in failing to file an answer, the
defendant does not oppose the allegations and relief demanded in the complaint. In the case at bar,
however, no such presumption can arise vis-a-vis the Answer filed by HILTON and Chapman to the
original complaint; their institution of the certiorari proceedings in AC-G.R. No. SP-06474 in opposition to
petitioner's attempt to interfere with and/or take over the control and management of the hotel pendente
lite; and their vigorous opposition to the admission of the supplemental complaint under consideration.
These factors, of which the trial judge had full knowledge and notice, should have cautioned him from
precipitately rendering the default order as well as the default judgment.
"A supplemental pleading is not like an amended pleading substitute for the original one. It does not
supersede the original, but assumes that the original pleading is to stand, and the issues joined under the
original pleading remain as issues to be tried in the action."
12
While it is conceded that there is authority
in support of a default judgment being predicated upon defendant's failure to answer a supplemental
complaint,
13
the same cannot apply here. The reason is that although in the supplemental complaint, the
relief prayed for was altered from termination of the management contract to judicial confirmation of its
termination, the basic and principal issue of whether or not petitioner was entitled to terminate the
management contract, remained. As this basic issue had been previously traversed and joined by the
Answer filed by HILTON and Chapman, there was no necessity for requiring them to plead further to the
Supplemental Complaint. Consequently, the trial judge did not have a legal ground for declaring them in
default for such failure to plead.
Another factor which the trial judge should have considered is that the supplemental complaint brought
in an additional defendant, Flaviano Mosquera, Jr. On this score, it would have been more prudent under
the liberal construction rule provided in Section 2, Rule 1 of the Rules of Court, for the trial court to have
treated the supplemental complaint as an amended complaint, and the original answer thereto as
sufficient;
14
or otherwise to have waited for the answer of the newly-impleaded defendant before acting
on the motion to declare the original defendants in default and rendering the default judgment,
considering that a common cause of action has been asserted against the three defendants, so that the
answer of Mosquera, Jr. could inure to the benefit of the original defendants.
15
As it turned out, the
Answer filed on July 18, 1985 was for and in behalf of all the defendants. Hence, under Sec. 4 of Rule 18,
the court shall try the case against all upon the answer filed and render judgment upon the evidence
presented.
Indeed, no prejudice wouId result to petitioner had the trial judge taken a more prudent and judicious
course of action as above suggested. Acting as the trial judge did, grave, irreparable and serious damage
caused to private respondents. Such prejudice is compounded by the issuance of the Special Order of
September 3, 1985 decreeing the execution pending appeal of the default judgment at a time when
defendant Mosquera was not yet declared in default. Consequently, any defense set up by him for himself
and for the benefit of his co-defendants was rendered practically inutile by the execution of the default
judgment.
Time ang again, this Court has expressed disfavor toward default judgments
16
for the reason that:
A default judgment does not pretend to be based on the merits of the controversy. Its
existence is justified by expediency. It may, however, amount to a positive and considerable
injustice to the defendant. The possibility of such serious consequences necessarily
requires a careful examination of the circumstances under which a default order was
issued. And when no real injury would result to the interests of the plaintiff by the
reopening of the case, the only objection to such action would, therefore, be solely on a
technicality. On such an infirm foundation, it would be a grevious error to sacrifice the
substantial rights of a litigant.
17

Upon these considerations, the order of default dated July 9, 1985, the default judgment of July 15, 1985
as well as the Special Order dated September 3, 1985, should be, as they are hereby set aside.
With this conclusion, We could very wen write finish to this opinion, were it not for an important legal
issue raised herein that has long awaited resolution by this Court; namely, whether or not paragraph 8 of
the Interim Rules and Guidelines promulgated by this Court relative to the implementation of the
Judiciary Reorganization Act of 1981 applies to the Court of Appeals.
The provision in the Interim Rules and Guidelines adverted to reads in full thus-.
8. Preliminary injunction not granted without notice; issuance of restraining order. No
preliminary injunction shall be granted without notice to the defendant. if it shall appear
from the facts shown by affidavits or by verified complaint, that great or irreparable injury
would result to the applicant before the matter can be heard on notice, the Court to which
the application for preliminary injunction was made, may issue a restraining order to be
effective only for a period of twenty days from date of its issuance, Within said twenty day
period, the court must cause an order to be served on the defendant, requiring him to show
cause, at a specified time and place, why the injunction should not be granted, and
determine within the same period whether or not the preliminary injunction shall be
granted, and shall accordingly issue the corresponding order. In the event that the
application for preliminary injunction is denied, the restraining order is deemed
automatically vacated.
The applicability of the above-quoted provision to the then Intermediate Appellate Court, now the Court
of Appeals, can hardly be doubted. The Interim Rules and Guidelines were promulgated to implement the
Judiciary Reorganization Act of 1981
18
which included the Intermediate Appellate Court among the
courts reorganized thereunder. This is emphasized in the preamble of the Interim Rules which states that
the same shall apply to "all inferior courts according to the Constitution.' The term 'inferior courts' as
used therein refers to all courts except the Supreme Court, the Sandiganbayan and the Court of Tax
Appeals. Thus, paragraphs 14 and 15 of the Interim Rules expressedly provide for "Procedure in the
Intermediate Appellate Court. "
Indeed, if paragraph 8 of the Interim Rules were not intended to apply to temporary restraining orders
issued by the respondent Court, there would have been absolutely no reason for the inclusion of said
paragraph in the Interim Rules. The limited life-span of temporary restraining orders issued by the
regional trial courts and municipal trial courts is already provided for in B.P. Blg. 224. It was precisely to
include the Intermediate Appellate Court within the same limitation as to the effectivity of its temporary
restraining orders that B.P. Blg. 224 was incorporated in the Interim Rules, with the significant change of
the word "judge" to "court", so as to make it clear and unequivocal that the temporary restraining orders
contemplated therein are those issued not only by trial judges but also by justices of the appellate court.
Private respondents argue that it is impractical to apply paragraph 8 of the Interim Rules to the
respondent court because the latter's processes are enforceable throughout the country and there could
be instances when the twenty-day period of the effectivity of a temporary restraining order would lapse
before it is served on the parties concerned. This allegation appears to be more illusory and imaginary
than real. Private respondents have not cited any single, actual instance when such eventuality had
occurred. Its possibility is deemed remote and unlikely considering the present state of fast and efficient
modes of communication as well as the presumed eagerness of a party-litigant who has secured a
temporary restraining order to have the same immediately served on the parties concerned with the
least waste of time.
WHEREFORE, the instant petition is hereby DISMISSED. The default order of July 9, 1985, the default
judgment dated July 15, 1985 and the Special Order of September 3, 1985 issued in Civil Case No. 85-
29489 of the Regional Trial Court of Manila are hereby annulled and set aside. The Answer dated July 18,
1985 filed by herein private respondents in Id case is ordered admitted and the case is remanded for trial
on the merits. No pronouncement as to costs.
SO ORDERED.
Yap, Cruz, Paras, Gancayco, Padilla, Bidin, Sarmiento and Cortes, JJ., concur.
Narvasa, J., took no part;


Separate Opinions

MELENCIO-HERRERA, J.,
I join the Concurring and Dissenting Opinions of Mr. Justice Gutierrez. To settle all doubts, now that the
revisions of the Rules of Court is on going, a categorical rule on the inclusion/exclusion of the Court of
Appeals from the coverage of the 20-day life-span of restraining orders, should be laid down.
TEEHANKEE, C.J., concurring:
The fourteen participating members of the Court are unanimous in their concurrence in the Court's basic
judgment on the merits annulling the trial court's questioned default order and judgment and special
order of execution against respondent-defendant Hilton International Company and remanding the case
back to the trial court for trial on the merits.
Clearly, the trial court exceeded its jurisdiction and acted with grave abuse of discretion in rendering the
default judgment against said respondent-defendant with respect to the supplemental complaint for
failure to answer petitioner-plaintiffs supplemental complaint (which supplemented but did not
supersede the original complaint and merely altered the relief prayed for from termination of the
management contract over the Manila Hilton Hotel tojudicial confirmation of its alleged termination)
when the basic and main issue of whether or not petitioner was entitled to terminate respondent's
management contract as joined by respondent's answer to the original complaint had yet to be tried and
adjudicated on the merits. There was no need for respondent to file yet another answer to the
supplemental complaint, since its answer to the original complaint stood as answer on the self-same
issue raised in the supplemental complaint, in the same way that a plaintiffs original complaint stands as
answer to a compulsory counterclaim filed by defendant with his answer.
There are, however, four dissenting votes in the separate concurring and dissenting opinion filed, vis a vis
the ten-member majority ruling (on the procedural issue raised by petitioner) that the twenty-day period
of effectivity of a temporary restraining order issued ex parte (within which period it must be replaced
with a preliminary injunction issued after prior notice and opportunity given the defendant to show
cause why 91 such injunction should not be granted) is applicable to all lower courts established by law
under the Constitution, including the Court of Appeals.
There is here an O. Henry twist. The majority upholds petitioner's submittal that the lifetime of
temporary restraining order issued ex parte is limited to 20 days if no preliminary injunction is issued
with notice and opportunity for the defendant to be heard in the interval, while the minority sustains the
contrary view, insofar as the Court of Appeals is concerned, i.e. that the. 20-day limit should not apply to
the Court of Appeals. If this issue were not procedural in character, then petitioner should prevail instead
of having its petition at bar dismissed. But as is evident, respondent has instead prevailed,
notwithstanding the rejection of its contrary/view sustained by the minority that the lifetime of the Court
of Appeals' temporary restraining order should be without limit, since the Court has unanimously ruled
on the substantive issue that the Court of Appeals correctly issued the temporary restraining order
against execution of the void default judgment wrongfully issued by the trial judge.
So, the 20-day limitation on the effectivity of the Court of Appeal's temporary restraining order against
enforcement or execution of the default judgment became irrelevant, in view of this Court's unanimous
ruling on the substantive issue that such default judgment was void for having been issued with grave
abuse of discretion and in excess of jurisdiction. Thus, petitioner has won the argument but nevertheless
lost the case.
If petitioner had insisted in the Court of Appeals on its correct stand on the temporary restraining order's
limited 20-day lifetime, all that the Court of Appeals would have had to do was replace the temporary
restraining order with a preliminary injunction with bond, as required by the law (B.P. Blg. 224, approved
April 16,1982) and the Interim Rules (Section 8) of the January 11, 1983. Since petitioner chose not to
await the Court of Appeal's action on its motion for reconsideration and instead to file the petition at bar
with prayer for a temporary restraining order against enforcement of the Court of Appeals' temporary
restraining order against it, this Court's refusal to issue such temporary restraining order indicated that
petitioner had not shown a clear prima facie right thereto and presaged this Court's ultimate ruling at bar
on the merits that the trial court's default judgment on the supplemental complaint was null and void and
its execution had been properly and correctly restrained by the Court of Appeals. In other words, it is as if
this Court, bound by no twenty-day limitation, had itself directly issued a temporary restraining order
against execution of the trial court's void default judgment.
The purpose of this concurrence is simply to place the issue at bar on the applicability of the legislative
twenty-day limitation on the lifetime of temporary restraining orders to the Court of Appeals in proper
balance and perspective, in addition to the sound and valid reasons stated in the Court's decision.
Firstly, the majority ruling in no way indicates a lack of appreciation of the Court of Appeals'
acknowledged importance and worth 'as our partner in the administration of justice" nor does it "equate"
them with municipal courts and regional trial courts, as misperceived in the concurring and dissenting
opinion The fact is that under both the 1935
1
and the 1973
2
Constitutions the legislature was granted
the authority to repeal, alter or supplement the Rules of Court. Pursuant thereto, the Batasang Pambansa
enacted B.P. Blg. 224 amending section 5 of Rule 58 of the Rules of Court "regulating the issuance of
restraining orders" and imposing a twenty-day effectivity period for such restraining orders issued ex
parte, as adopted in section 8 of the Court's Interim Rules and Guidelines. The Batasang Pambansa meant
this legislative amendment of the Rules of Court (approved oil third reading on March 22, 1982 with 111
yeas and no nays or abstentions"
3
) to apply to all courts, including the Supreme Court, as shown in the
response of the bill's (B.P. Blg. 293) author and sponsor Hilario G, Davide, Jr. during the deliberations on
March 9, 1982:
Mr. Seno. If this bill is passed into law, would it apply to restraining orders by the Supreme
Court?
Mr. Davide. Mr. Speaker, it will apply to all courts.
Mr. Seno. Thank you, Mr Speaker. I want to make it of record so that the intention of the bill
will be clear.
4

But the Supreme Court nevertheless has never considered itself bound by such twenty-day limitation of
temporary restraining orders issued by it in the exercise of its certiorari jurisdiction, where such
restriction could be taken as a violation of the fundamental principle of separation of powers or an
interference by the legislature with the Supreme Court's exercise of its judicial power of settling and
adjudicating actual controversies involving rights that are legally demandable and enforceable in much
the same way that this Court would not interfere with the legislative power of enacting the laws of the
land. As stressed by the Court in its decision in PCGG vs. Hon. Emmanuel G. Pena, G.R. No. 77663,
promulgated this month also, "(E)xecutive Order No. 1 thus effectively withholds jurisdiction over cases
against the Commission [PCGG] from all lower courts, including the Court of Appeals, except the
Sandiganbayan in whom is vested original and exclusive jurisdiction and this Court. Early on, in special
civil actions questioning challenged acts of the Commission, its submittal that the cited Executive Order
bars such actions in this Court was given short shrift because this Court, as the third great department of
government vested with the judicial power and as the guardian of the Constitution, cannot be deprived of
its certiorari jurisdiction to pass upon and determine alleged violations of the citizens' constitutional and
legal rights under the Rule of Law.' In other words, the legislature was constitutionally empowered under
the 1935 and 1973 Constitutions to alter or modify the Rules of Court, as it did under B.P. Blg. 224,
subject of this case. But this Court was and is exempt from such legislature made Rule. Manifestly, the
Court could not extend this exemption pertaining to the Supreme Court as a constitutional Court and
repository of the judicial power to a constitutionally lesser court established by law such as the Court of
Appeals.
(Parenthetically, it is noteworthy that the power given to Congress to repeal, alter or supplement the
Rules of Court as promulgated by the Supreme Court has now been deleted and excluded from our new
Constitution [Art. VIII, sec. 5(5), 1987 Constitution 1.)
Secondly, the case at bar serves but to stress once more that the adjudication of cases is not subject to
mathematical formulas or arithmetical timetables. But such periods and deadlines for the filing of
pleadings and effectivity of interlocutory orders are necessary for the orderly administration of justice.
Here, the amendatory law provides the practical alternative that the issuing court (including the Court of
Appeals) must replace the temporary restraining order within the 20-day period, if it finds the plaintiff
entitled to the injunctive relief after notice and hearing the adverse party's side, with a preliminary
injunction with the corresponding injunction bond, which under the Rules of Court, must be in an
adequate amount to indemnify the party enjoined for any loss or damage should the injunction be found
to have been wrongfully issued. But in extreme cases, such as the case at bar, where the legislative
deadline has not been followed (by the Court of Appeals, in this instance), substantial justice will still
prevail over the procedural rule and the injunctive relief against a void default judgment will
nevertheless be granted and made permanent with a decision on the merits.
Lastly, the statement in the concurring and dissenting opinion describing as 'not only gratuitous but false'
the majority opinion's basis for rejecting the argument that the twenty-day life of a temporary restraining
order is impractical and insufficient, as there could be instances when the twenty- day life of the order
would lapse before it is served on the parties concerned, is to be regretted. The rejection has sound basis
in its statement of fact -that not a single actual instance has been cited wherein such eventuality has
occurred in a case of the Court of Appeals. Then, the argument of impracticality and shortness of the time
go to the wisdom, and not the conceded validity, of the legislature's imposition of the twenty-day lifetime
of the restraining order which was beyond the Court's jurisdiction to modify or set aside. Besides, as
above indicated, the law provides a practical alternative, when the twenty-day period is found
inadequatewhich is, to replace the restraining order with a no-time-limit preliminary injunction
covered by an injunction bond.
GUTIERREZ, JR., J.: concurring and dissenting opinion:
I concur in the setting aside of the July 9, 1985 order of default, the July 15,1985 default judgment, and
the September 3, 1985 special order.
I, however, take strong exceptions to and accordingly dissent from the ruling that would bind the Court of
Appeals to the twenty-day life of a restraining order,
The majority opinion blithely discredits the respondents' argument that Court of Appeals processes are
enforceable throughout the country and there could be instances when the twenty-day period would
lapse before the temporary restraining order is served on the parties concerned. According to the
majority opinion, this allegation appears to be more illusory and imaginary than real.
I am sorry to state that such a conclusion is not only gratuitous but false. I served in the Court of Appeals
for almost five and a half years. With more than one thousand decisions and full length resolutions that I
penned for the appellate court, I humbly believe I can claim first hand knowledge of how long it takes to
serve processes in the more distant parts of the country. Twenty days is not enough to serve the
restraining order and get the answer or comments of the private respondent.
The more perceptive and distinguished members of the appellate court, the Justices most affected by our
ruling, have voiced similar sentiments in their decisions. In Roberto T. Marquez v. Hon. Jose P. Castro, et
al. AC- G.R. SP No. 02578, October 18, 1984, the court, through ponente Justice Vicente V. Mendoza, then
Chairman and now Supreme Court Justice Edgardo L. Paras, and Justice Luis A. Javellana, stated:
The respondent spouses impliedly admit the charge but defend themselves on the ground
that the temporary restraining order issued in this case expired on February 27, 1984,
twenty days after its issuance on February 7, 1984, in accordance with BP Blg. 224. The
respondents cite the decision inDionisio v. Court of first Instance, 124 SCRA 222 (1983)
holding that upon the expiration of twenty days a temporary restraining order likewise
expires.
On the other hand, the petitioner argues that BP Blg. 224 applies only to trial courts. He
points out that it would be absurd to apply the twenty-day period, which is counted from
the date of issuance of the temporary restraining order, to appellate courts because of the
possibility at times of serving the order to remote parts of the country before the twentieth
day. No such problem can possibly arise in the case of trial courts whose orders granting
injunctions can be enforced only within the region, in accordance with Rule 3(a) of the
Interim Rules of Court. The petitioner points out that the case of Dionisio, which is invoked
by the respondents, involved a Court of First Instance whose territorial jurisdiction is even
more limited than a region.
There is much to commend the petitioner's interpretation of the law. BP Blg. 224 speaks of
a "judge" not Justice of the Intermediate Appellate Court. While in Rule 8 of the Interim
Rules of Court the word judge was changed to 'court' it is nevertheless plausible to argue
that no substantial change was intended since BP Blg. 224 is an act of the legislature and
cannot possibly be amended by the Supreme Court under its rule making authority. The
Supreme Court may have the primary authority to promulgate a rule of court, but the
power to repeal, alter or supplement it belongs to the Batasan Pambansa under the
Constitution
That is what was done in the case of the rule on injunction. The Supreme Court
promulgated the Rules of Court, Rule 58, Section 5 of which provides for the issuance of
injunctions By means of BP Blg. 224 the Batasan Pambansa amended Rule 58, Section 5. We
do not believe that the Supreme Court can in turn amend the amendatory statute
consistently with the Constitution.
The situation has not changed much since 1982 when I joined this Court on 1984 when
the Marquez decision was promulgated. If at all, communications in the country have worsened. I agree
with the appellate court that B.P. Blg. 224 is intended only for regional trial courts, metropolitan trial
courts, and municipal trial courts not the Court of Appeals. And certainly, not the Supreme Court. I was
also a member of the Supreme Court when the Interim Rules were adopted and no matter how intensely I
rack my memory, I simply cannot remember any deliberations which indicate that it was ever our
intention to include the Court of Appeals in the twenty-day limitation.
My objections to the twenty-day rule for restraining orders of the Court of Appeals are, however, based
on reasons more weighty than mere statutory construction or even the realities of the situation. To my
mind, the ruling indicates a sad neglect on our part to properly appreciate the importance and worth of
the Court of Appeals as our partner in the administration of justice.
Like the Supreme Court, the Court of Appeals is a national court whose jurisdiction embraces the entire
country. The same reasons which impel us to exempt our restraining orders from the twenty-day rule
apply with equal force to the Court of Appeals.
More important, however, it is the Court of Appeals which enables us to function as a 'supreme court" or
a court of cassation.
As this Court stated in Braulio Conde, et al. v. Intermediate Appellate Court, et al. (144 SCRA 144):
There are instances when this Court desires a further review of facts or a detailed analysis
and systematic presentation of issues which the appellate court is in a more favored
position to accomplish. Standing between the trial courts and the Supreme Court, the
appellate court was precisely created to take over much of the work that used to be
previously done by this Court. It has been of great help to the Supreme Court in
synthesizing facts, issues, and rulings in an orderly and intelligible manner and in
Identifying errors which ordinarily might have escaped detection. Statistics will show that
the great majority of petitions to review the decisions of the appellate court have been
denied due course for lack of merit in minute resolutions. The appellate court has,
therefore, freed this Court to better discharge its constitutional duties and perform its most
important work which, in the words of Dean Vicente G. Sinco, is less concerned with the
decision of cases that begin and end with the transient rights and obligations of that
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. (Philippine Political Law, 10th Edition, p. 323. ... (at pp.
149- 150)
Since the Court of Appeals has freed us to better perform our constitutional duties, it is imperative that
we should not deny it the tools with which to discharge its own functions faithfully I and speedily Its
members should be chosen with the same care and scrupulous attention given to the search for Supreme
Court Justices. Their compensation and allowances should not be too different from that given to us. And
instead of being equated with municipal courts and regional trial courts, the Court of Appeals should be
regarded as a court closer to the Supreme Court than any other court.
I am, therefore, constrained to regretfully dissent, in part, from the majority decision.
Melencio-Herrera, J., concurring and dissenting.
To settele all doubts, now that the revisions of the Rules of Court is ongoing, a categorical rule on the
inclusion/exclusion of the Court of Appealss from the coverage of the 20-day life-span of restraining
orders, should be laid down.
Grino Aquino, concurring and dissenting

Separate Opinions
MELENCIO-HERRERA, J.,
I join the Concurring and Dissenting Opinions of Mr. Justice Gutierrez. To settle all doubts, now that the
revisions of the Rules of Court is on going, a categorical rule on the inclusion/exclusion of the Court of
Appeals from the coverage of the 20-day life-span of restraining orders, should be laid down.
TEEHANKEE, C.J., concurring:
The fourteen participating members of the Court are unanimous in their concurrence in the Court's basic
judgment on the merits annulling the trial court's questioned default order and judgment and special
order of execution against respondent-defendant Hilton International Company and remanding the case
back to the trial court for trial on the merits.
Clearly, the trial court exceeded its jurisdiction and acted with grave abuse of discretion in rendering the
default judgment against said respondent-defendant with respect to the supplemental complaint for
failure to answer petitioner-plaintiffs supplemental complaint (which supplemented but did not
supersede the original complaint and merely altered the relief prayed for from termination of the
management contract over the Manila Hilton Hotel tojudicial confirmation of its alleged termination)
when the basic and main issue of whether or not petitioner was entitled to terminate respondent's
management contract as joined by respondent's answer to the original complaint had yet to be tried and
adjudicated on the merits. There was no need for respondent to file yet another answer to the
supplemental complaint, since its answer to the original complaint stood as answer on the self-same
issue raised in the supplemental complaint, in the same way that a plaintiffs original complaint stands as
answer to a compulsory counterclaim filed by defendant with his answer.
There are, however, four dissenting votes in the separate concurring and dissenting opinion filed, vis a vis
the ten-member majority ruling (on the procedural issue raised by petitioner) that the twenty-day period
of effectivity of a temporary restraining order issued ex parte (within which period it must be replaced
with a preliminary injunction issued after prior notice and opportunity given the defendant to show
cause why 91 such injunction should not be granted) is applicable to all lower courts established by law
under the Constitution, including the Court of Appeals.
There is here an O. Henry twist. The majority upholds petitioner's submittal that the lifetime of
temporary restraining order issued ex parte is limited to 20 days if no preliminary injunction is issued
with notice and opportunity for the defendant to be heard in the interval, while the minority sustains the
contrary view, insofar as the Court of Appeals is concerned, i.e. that the. 20-day limit should not apply to
the Court of Appeals. If this issue were not procedural in character, then petitioner should prevail instead
of having its petition at bar dismissed. But as is evident, respondent has instead prevailed,
notwithstanding the rejection of its contrary/view sustained by the minority that the lifetime of the Court
of Appeals' temporary restraining order should be without limit, since the Court has unanimously ruled
on the substantive issue that the Court of Appeals correctly issued the temporary restraining order
against execution of the void default judgment wrongfully issued by the trial judge.
So, the 20-day limitation on the effectivity of the Court of Appeal's temporary restraining order against
enforcement or execution of the default judgment became irrelevant, in view of this Court's unanimous
ruling on the substantive issue that such default judgment was void for having been issued with grave
abuse of discretion and in excess of jurisdiction. Thus, petitioner has won the argument but nevertheless
lost the case.
If petitioner had insisted in the Court of Appeals on its correct stand on the temporary restraining order's
limited 20-day lifetime, all that the Court of Appeals would have had to do was replace the temporary
restraining order with a preliminary injunction with bond, as required by the law (B.P. Blg. 224, approved
April 16,1982) and the Interim Rules (Section 8) of the January 11, 1983. Since petitioner chose not to
await the Court of Appeal's action on its motion for reconsideration and instead to file the petition at bar
with prayer for a temporary restraining order against enforcement of the Court of Appeals' temporary
restraining order against it, this Court's refusal to issue such temporary restraining order indicated that
petitioner had not shown a clear prima facie right thereto and presaged this Court's ultimate ruling at bar
on the merits that the trial court's default judgment on the supplemental complaint was null and void and
its execution had been properly and correctly restrained by the Court of Appeals. In other words, it is as if
this Court, bound by no twenty-day limitation, had itself directly issued a temporary restraining order
against execution of the trial court's void default judgment.
The purpose of this concurrence is simply to place the issue at bar on the applicability of the legislative
twenty-day limitation on the lifetime of temporary restraining orders to the Court of Appeals in proper
balance and perspective, in addition to the sound and valid reasons stated in the Court's decision.
Firstly, the majority ruling in no way indicates a lack of appreciation of the Court of Appeals'
acknowledged importance and worth 'as our partner in the administration of justice" nor does it "equate"
them with municipal courts and regional trial courts, as misperceived in the concurring and dissenting
opinion The fact is that under both the 1935
1
and the 1973
2
Constitutions the legislature was granted
the authority to repeal, alter or supplement the Rules of Court. Pursuant thereto, the Batasang Pambansa
enacted B.P. Blg. 224 amending section 5 of Rule 58 of the Rules of Court "regulating the issuance of
restraining orders" and imposing a twenty-day effectivity period for such restraining orders issued ex
parte, as adopted in section 8 of the Court's Interim Rules and Guidelines. The Batasang Pambansa meant
this legislative amendment of the Rules of Court (approved oil third reading on March 22, 1982 with 111
yeas and no nays or abstentions"
3
) to apply to all courts, including the Supreme Court, as shown in the
response of the bill's (B.P. Blg. 293) author and sponsor Hilario G, Davide, Jr. during the deliberations on
March 9, 1982:
Mr. Seno. If this bill is passed into law, would it apply to restraining orders by the Supreme
Court?
Mr. Davide. Mr. Speaker, it will apply to all courts.
Mr. Seno. Thank you, Mr Speaker. I want to make it of record so that the intention of the bill
will be clear.
4

But the Supreme Court nevertheless has never considered itself bound by such twenty-day limitation of
temporary restraining orders issued by it in the exercise of its certiorari jurisdiction, where such
restriction could be taken as a violation of the fundamental principle of separation of powers or an
interference by the legislature with the Supreme Court's exercise of its judicial power of settling and
adjudicating actual controversies involving rights that are legally demandable and enforceable in much
the same way that this Court would not interfere with the legislative power of enacting the laws of the
land. As stressed by the Court in its decision in PCGG vs. Hon. Emmanuel G. Pena, G.R. No. 77663,
promulgated this month also, "(E)xecutive Order No. 1 thus effectively withholds jurisdiction over cases
against the Commission [PCGG] from all lower courts, including the Court of Appeals, except the
Sandiganbayan in whom is vested original and exclusive jurisdiction and this Court. Early on, in special
civil actions questioning challenged acts of the Commission, its submittal that the cited Executive Order
bars such actions in this Court was given short shrift because this Court, as the third great department of
government vested with the judicial power and as the guardian of the Constitution, cannot be deprived of
its certiorari jurisdiction to pass upon and determine alleged violations of the citizens' constitutional and
legal rights under the Rule of Law.' In other words, the legislature was constitutionally empowered under
the 1935 and 1973 Constitutions to alter or modify the Rules of Court, as it did under B.P. Blg. 224,
subject of this case. But this Court was and is exempt from such legislature made Rule. Manifestly, the
Court could not extend this exemption pertaining to the Supreme Court as a constitutional Court and
repository of the judicial power to a constitutionally lesser court established by law such as the Court of
Appeals.
(Parenthetically, it is noteworthy that the power given to Congress to repeal, alter or supplement the
Rules of Court as promulgated by the Supreme Court has now been deleted and excluded from our new
Constitution [Art. VIII, sec. 5(5), 1987 Constitution 1.)
Secondly, the case at bar serves but to stress once more that the adjudication of cases is not subject to
mathematical formulas or arithmetical timetables. But such periods and deadlines for the filing of
pleadings and effectivity of interlocutory orders are necessary for the orderly administration of justice.
Here, the amendatory law provides the practical alternative that the issuing court (including the Court of
Appeals) must replace the temporary restraining order within the 20-day period, if it finds the plaintiff
entitled to the injunctive relief after notice and hearing the adverse party's side, with a preliminary
injunction with the corresponding injunction bond, which under the Rules of Court, must be in an
adequate amount to indemnify the party enjoined for any loss or damage should the injunction be found
to have been wrongfully issued. But in extreme cases, such as the case at bar, where the legislative
deadline has not been followed (by the Court of Appeals, in this instance), substantial justice will still
prevail over the procedural rule and the injunctive relief against a void default judgment will
nevertheless be granted and made permanent with a decision on the merits.
Lastly, the statement in the concurring and dissenting opinion describing as 'not only gratuitous but false'
the majority opinion's basis for rejecting the argument that the twenty-day life of a temporary restraining
order is impractical and insufficient, as there could be instances when the twenty- day life of the order
would lapse before it is served on the parties concerned, is to be regretted. The rejection has sound basis
in its statement of fact -that not a single actual instance has been cited wherein such eventuality has
occurred in a case of the Court of Appeals. Then, the argument of impracticality and shortness of the time
go to the wisdom, and not the conceded validity, of the legislature's imposition of the twenty-day lifetime
of the restraining order which was beyond the Court's jurisdiction to modify or set aside. Besides, as
above indicated, the law provides a practical alternative, when the twenty-day period is found
inadequatewhich is, to replace the restraining order with a no-time-limit preliminary injunction
covered by an injunction bond.
GUTIERREZ, JR., J.: concurring and dissenting opinion:
I concur in the setting aside of the July 9, 1985 order of default, the July 15,1985 default judgment, and
the September 3, 1985 special order.
I, however, take strong exceptions to and accordingly dissent from the ruling that would bind the Court of
Appeals to the twenty-day life of a restraining order,
The majority opinion blithely discredits the respondents' argument that Court of Appeals processes are
enforceable throughout the country and there could be instances when the twenty-day period would
lapse before the temporary restraining order is served on the parties concerned. According to the
majority opinion, this allegation appears to be more illusory and imaginary than real.
I am sorry to state that such a conclusion is not only gratuitous but false. I served in the Court of Appeals
for almost five and a half years. With more than one thousand decisions and full length resolutions that I
penned for the appellate court, I humbly believe I can claim first hand knowledge of how long it takes to
serve processes in the more distant parts of the country. Twenty days is not enough to serve the
restraining order and get the answer or comments of the private respondent.
The more perceptive and distinguished members of the appellate court, the Justices most affected by our
ruling, have voiced similar sentiments in their decisions. In Roberto T. Marquez v. Hon. Jose P. Castro, et
al. AC- G.R. SP No. 02578, October 18, 1984, the court, through ponente Justice Vicente V. Mendoza, then
Chairman and now Supreme Court Justice Edgardo L. Paras, and Justice Luis A. Javellana, stated:
The respondent spouses impliedly admit the charge but defend themselves on the ground
that the temporary restraining order issued in this case expired on February 27, 1984,
twenty days after its issuance on February 7, 1984, in accordance with BP Blg. 224. The
respondents cite the decision inDionisio v. Court of first Instance, 124 SCRA 222 (1983)
holding that upon the expiration of twenty days a temporary restraining order likewise
expires.
On the other hand, the petitioner argues that BP Blg. 224 applies only to trial courts. He
points out that it would be absurd to apply the twenty-day period, which is counted from
the date of issuance of the temporary restraining order, to appellate courts because of the
possibility at times of serving the order to remote parts of the country before the twentieth
day. No such problem can possibly arise in the case of trial courts whose orders granting
injunctions can be enforced only within the region, in accordance with Rule 3(a) of the
Interim Rules of Court. The petitioner points out that the case of Dionisio, which is invoked
by the respondents, involved a Court of First Instance whose territorial jurisdiction is even
more limited than a region.
There is much to commend the petitioner's interpretation of the law. BP Blg. 224 speaks of
a "judge" not Justice of the Intermediate Appellate Court. While in Rule 8 of the Interim
Rules of Court the word judge was changed to 'court' it is nevertheless plausible to argue
that no substantial change was intended since BP Blg. 224 is an act of the legislature and
cannot possibly be amended by the Supreme Court under its rule making authority. The
Supreme Court may have the primary authority to promulgate a rule of court, but the
power to repeal, alter or supplement it belongs to the Batasan Pambansa under the
Constitution
That is what was done in the case of the rule on injunction. The Supreme Court
promulgated the Rules of Court, Rule 58, Section 5 of which provides for the issuance of
injunctions By means of BP Blg. 224 the Batasan Pambansa amended Rule 58, Section 5. We
do not believe that the Supreme Court can in turn amend the amendatory statute
consistently with the Constitution.
The situation has not changed much since 1982 when I joined this Court on 1984 when
the Marquez decision was promulgated. If at all, communications in the country have worsened. I agree
with the appellate court that B.P. Blg. 224 is intended only for regional trial courts, metropolitan trial
courts, and municipal trial courts not the Court of Appeals. And certainly, not the Supreme Court. I was
also a member of the Supreme Court when the Interim Rules were adopted and no matter how intensely I
rack my memory, I simply cannot remember any deliberations which indicate that it was ever our
intention to include the Court of Appeals in the twenty-day limitation.
My objections to the twenty-day rule for restraining orders of the Court of Appeals are, however, based
on reasons more weighty than mere statutory construction or even the realities of the situation. To my
mind, the ruling indicates a sad neglect on our part to properly appreciate the importance and worth of
the Court of Appeals as our partner in the administration of justice.
Like the Supreme Court, the Court of Appeals is a national court whose jurisdiction embraces the entire
country. The same reasons which impel us to exempt our restraining orders from the twenty-day rule
apply with equal force to the Court of Appeals.
More important, however, it is the Court of Appeals which enables us to function as a 'supreme court" or
a court of cassation.
As this Court stated in Braulio Conde, et al. v. Intermediate Appellate Court, et al. (144 SCRA 144):
There are instances when this Court desires a further review of facts or a detailed analysis
and systematic presentation of issues which the appellate court is in a more favored
position to accomplish. Standing between the trial courts and the Supreme Court, the
appellate court was precisely created to take over much of the work that used to be
previously done by this Court. It has been of great help to the Supreme Court in
synthesizing facts, issues, and rulings in an orderly and intelligible manner and in
Identifying errors which ordinarily might have escaped detection. Statistics will show that
the great majority of petitions to review the decisions of the appellate court have been
denied due course for lack of merit in minute resolutions. The appellate court has,
therefore, freed this Court to better discharge its constitutional duties and perform its most
important work which, in the words of Dean Vicente G. Sinco, is less concerned with the
decision of cases that begin and end with the transient rights and obligations of that
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. (Philippine Political Law, 10th Edition, p. 323. ... (at pp.
149- 150)
Since the Court of Appeals has freed us to better perform our constitutional duties, it is imperative that
we should not deny it the tools with which to discharge its own functions faithfully I and speedily Its
members should be chosen with the same care and scrupulous attention given to the search for Supreme
Court Justices. Their compensation and allowances should not be too different from that given to us. And
instead of being equated with municipal courts and regional trial courts, the Court of Appeals should be
regarded as a court closer to the Supreme Court than any other court.
I am, therefore, constrained to regretfully dissent, in part, from the majority decision.
Melencio-Herrera, J., concurring and dissenting.
To settele all doubts, now that the revisions of the Rules of Court is ongoing, a categorical rule on the
inclusion/exclusion of the Court of Appealss from the coverage of the 20-day life-span of restraining
orders, should be laid down.
G.R. No. 90478 November 21, 1991
REPUBLIC OF THE PHILIPPINES (PRESIDENTIAL COMMISSION ON GOOD
GOVERNMENT), petitioner,
vs.
SANDIGANBAYAN, BIENVENIDO R. TANTOCO, JR. and DOMINADOR R. SANTIAGO, respondents.
Dominador R. Santiago for and in his own behalf and as counsel for respondent Tantoco, Jr.

NARVASA, J.:p
Private respondents Bienvenido R. Tantoco, Jr. and Dominador R. Santiago together with Ferdinand E.
Marcos, Imelda R. Marcos, Bienvenido R. Tantoco, Sr., Gliceria R. Tantoco, and Maria Lourdes Tantoco-
Pineda-are defendants in Civil Case No. 0008 of the Sandiganbayan. The case was commenced on July 21,
1987 by the Presidential Commission on Good Government (PCGG) in behalf of the Republic of the
Philippines. The complaint which initiated the action was denominated one "for reconveyance, reversion,
accounting, restitution and damages," and was avowedly filed pursuant to Executive Order No. 14 of
President Corazon C. Aquino.
After having been served with summons, Tantoco, Jr. and Santiago, instead of filing their answer, jointly
filed a "MOTION TO STRIKE OUT SOME PORTIONS OF THE COMPLAINT AND FOR BILL OF PARTICULARS
OF OTHER PORTIONS" dated Nov. 3, 1987. 1 The PCGG filed an opposition thereto, 2 and the movants, a
reply to the opposition. 3 By order dated January 29, 1988, the Sandiganbayan, in order to expedite
proceedings and accommodate the defendants, gave the PCGG forty-five (45) days to expand its
complaint to make more specific certain allegations. 4
Tantoco and Santiago then presented a "motion for leave to file interrogatories under Rule 25 of the
Rules of Court" dated February 1, 1988, and "Interrogatories under Rule 25." 5 Basically, they sought an
answer to the question: "Who were the Commissioners of the PCGG (aside from its Chairman, Hon. Ramon
Diaz, who verified the complaint) who approved or authorized the inclusion of Messrs. Bienvenido
R. Tantoco, Jr. and Dominador R. Santiago as defendants in the . . case?" 6 The PCGG responded by filing a
motion dated February 9, 1988 to strike out said motion and interrogatories as being impertinent,
"queer," "weird," or "procedurally bizarre as the purpose thereof lacks merit as it is improper,
impertinent and irrelevant under any
guise." 7
On March 18, 1988, in compliance with the Order of January 29, 1988, the PCGG filed an Expanded
Complaint. 8As this expanded complaint, Tantoco and Santiago reiterated their motion for bill of
particulars, through a Manifestation dated April 11, 1988. 9
Afterwards, by Resolution dated July 4, 1988, 10 the Sandiganbayan denied the motion to strike out, for
bill of particulars, and for leave to file interrogatories, holding them to be without legal and factual basis.
Also denied was the PCGG's motion to strike out impertinent pleading dated February 9, 1988. The
Sandiganbayan declared inter alia the complaint to be "sufficiently definite and clear enough," there are
adequate allegations . . which clearly portray the supposed involvement and/or alleged participation of
defendants-movants in the transactions described in detail in said Complaint," and "the other matters
sought for particularization are evidentiary in nature which should be ventilated in the pre-trial or trial
proper . ." It also opined that "(s)ervice of interrogatories before joinder of issue and without leave of
court is premature . . (absent) any special or extraordinary circumstances . . which would justify . . (the
same)."
Tantoco and Santiago then filed an Answer with Compulsory Counterclaim under date of July 18,
1988. 11 In response, the PCGG presented a "Reply to Answer with Motion to Dismiss Compulsory
Counterclaim " 12
The case was set for pre-trial on July 31, 1989. 13 On July 25, 1989, the PCGG submitted its PRE-
TRIAL. 14 The pre-trial was however reset to September 11, 1989, and all other parties were required to
submit pre-trial briefs on or before that date. 15
On July 27, 1989 Tantoco and Santiago filed with the Sandiganbayan a pleading denominated
"Interrogatories to Plaintiff," 16 and on August 2, 1989, an "Amended Interrogatories to Plaintiff"' 17 as
well as a Motion for Production and Inspection of Documents. 18
The amended interrogatories chiefly sought factual details relative to specific averments of PCGG's
amended complaint, through such questions, for instance, as
1. In connection with the allegations . . in paragraph 1 . ., what specific property or properties
does the plaintiff claim it has the right to recover from defendants Tantoco, Jr. and Santiago
for being ill-gotten?
3. In connection with the allegations . . in paragraph 10 (a) . . what specific act or acts . . were
committed by defendants Tantoco, Jr. and Santiago in "concert with" defendant Ferdinand
Marcos and in furtherance or pursuit, of the alleged systematic plan of said defendant Marcos
to accumulate ill-gotten wealth?"
5. In connection with . . paragraph 13 . ., what specific act or acts of the defendants Tantoco,
Jr. and Santiago . . were committed by said defendants as part, or in furtherance, of the
alleged plan to conceal assets of defendants Ferdinand and Imelda Marcos?
7. In connection with . . paragraph 15(c) . . is it plaintiff's position or theory of the case that
Tourist Duty Free Shops, Inc., including all the assets of said corporation, are beneficially
owned by either or both defendants Ferdinand and Imelda Marcos and that the defendants
Tantoco, Jr. and Santiago, as well as, the other stockholders of record of the same corporation
are mere "dummies" of said defendants Ferdinand and /or Imelda R. Marcos?
On the other hand, the motion for production and inspection of documents prayed for examination and
copying of
1) the "official records and other evidence" on the basis of which the verification of the
Amended Complaint asserted that the allegations thereof are "true and correct;"
2) the documents listed in PCGG's Pre-Trial Brief as those "intended to be presented and . .
marked as exhibits for the plaintiff;" and
3) "the minutes of the meeting of the PCGG which chronicles the discussion (if any) and the
decision (of the Chairman and members) to file the complaint" in the case at bar.
By Resolutions dated August 21, 1989 and August 25, 1989, the Sandiganbayan admitted the Amended
Interrogatories and granted the motion for production and inspection of documents (production being
scheduled on September 14 and 15, 1989), respectively.
On September 1, 1989, the PCGG filed a Motion for Reconsideration of the Resolution of August 25, 1989
(allowing production and inspection of documents). It argued that
1) since the documents subject thereof would be marked as exhibits during the pre-trial on September
11, 1989 anyway, the order for "their production and inspection on September 14 and 15, are
purposeless and unnecessary;"
2) movants already know of the existence and contents of the document which "are clearly described . .
(in) plaintiff's Pre-Trial Brief;"
3) the documents are "privileged in character" since they are intended to be used against the PCGG
and/or its Commissioners in violation of Section 4, Executive Order No. 1, viz.:
(a) No civil action shall lie against the Commission or any member thereof for anything
done or omitted in the discharge of the task contemplated by this Order.
(b) No member or staff of the Commission shall be required to testify or produce evidence
in any judicial, legislative, or administrative proceeding concerning matters within its
official cognizance.
It also filed on September 4, 1989 an opposition to the Amended Interrogatories, 19 which the
Sandiganbayan treated as a motion for reconsideration of the Resolution of August 21, 1989 (admitting
the Amended Interrogatories). The opposition alleged that
1) the interrogatories "are not specific and do not name the person to whom they are propounded . .," or
"who in the PCGG, in particular, . . (should) answer the interrogatories;"
2) the interrogatories delve into "factual matters which had already been decreed . . as part of the proof
of the Complaint upon trial . .;"
3) the interrogatories "are frivolous" since they inquire about "matters of fact . . which defendants . .
sought to . . (extract) through their aborted Motion for Bill of Particulars;"
4) the interrogatories "are really in the nature of a deposition, which is prematurely filed and irregularly
utilized . . (since) the order of trial calls for plaintiff to first present its evidence."
Tantoco and Santiago filed a reply and opposition on September 18, 1989.
After hearing, the Sandiganbayan promulgated two (2) Resolutions on September 29, 1989, the first,
denying reconsideration (of the Resolution allowing production of documents), and the second,
reiterating by implication the permission to serve the amended interrogatories on the plaintiff
(PCGG). 20
Hence, this petition for certiorari.
The PCGG contends that said orders, both dated September 29, 1989, should be nullified because
rendered with grave abuse of discretion amounting to excess of jurisdiction. More particularly, it claims

a) as regards the order allowing the amended interrogatories to the plaintiff PCGG:
1) that said interrogatories are not specific and do not name the particular individuals to
whom they are propounded, being addressed only to the PCGG;
2) that the interrogatories deal with factual matters which the Sandiganbayan (in denying
the movants' motion for bill of particulars) had already declared to be part of the PCGG's
proof upon trial; and
3) that the interrogatories would make PCGG Commissioners and officers witnesses, in
contravention of Executive Order No. 14 and related issuances; and
b) as regards the order granting the motion for production of documents:
1) that movants had not shown any good cause therefor;
2) that some documents sought to be produced and inspected had already been presented
in Court and marked preliminarily as PCGG's exhibits, and the movants had viewed,
scrutinized and even offered objections thereto and made comments thereon; and
3) that the other documents sought to be produced are either
(a) privileged in character or confidential in nature and their
use is proscribed by the immunity provisions of Executive
Order No. 1, or
(b) non-existent, or mere products of the movants' suspicion
and fear.
This Court issued a temporary restraining order on October 27, 1989, directing the Sandiganbayan to
desist from enforcing its questioned resolutions of September 29, 1989 in Civil Case No. 0008. 21
After the issues were delineated and argued at no little length by the parties, the Solicitor General
withdrew "as counsel for plaintiff . . with the reservation, however, conformably with Presidential Decree
No. 478, the provisions of Executive Order No. 292, as well as the decisional law of 'Orbos v. Civil Service
Commission, et al.,' (G.R. No. 92561, September 12, 1990) 22 to submit his comment/observation on
incidents/matters pending with this . . Court if called for by circumstances in the interest of the
Government or if he is so required by the Court." 23 This, the Court allowed by Resolution dated January
21, 1991. 24
Subsequently, PCGG Commissioner Maximo A. Maceren advised the Court that the cases from which the
Solicitor General had withdrawn would henceforth be under his (Maceren's) charge "and/or any of the
following private attorneys: Eliseo B. Alampay, Jr., Mario E. Ongkiko, Mario Jalandoni and such other
attorneys as it may later authorize." 25
The facts not being in dispute, and it appearing that the parties have fully ventilated their respective
positions, the Court now proceeds to decide the case.
Involved in the present proceedings are two of the modes of discovery provided in the Rules of Court:
interrogatories to parties , 26 and production and inspection of documents and things. 27 Now, it
appears to the Court that among far too many lawyers (and not a few judges), there is, if not a regrettable
unfamiliarity and even outright ignorance about the nature, purposes and operation of the modes of
discovery, at least a strong yet unreasoned and unreasonable disinclination to resort to them which is
a great pity for the intelligent and adequate use of the deposition-discovery mechanism, coupled with
pre-trial procedure, could, as the experience of other jurisdictions convincingly demonstrates, effectively
shorten the period of litigation and speed up adjudication. 28 Hence, a few words about these remedies is
not at all inappropriate.
The resolution of controversies is, as everyone knows, the raison d'etre of courts. This essential function
is accomplished by first, the ascertainment of all the material and relevant facts from the pleadings and
from the evidence adduced by the parties, and second, after that determination of the facts has been
completed, by the application of the law thereto to the end that the controversy may be settled
authoritatively, definitely and finally.
It is for this reason that a substantial part of the adjective law in this jurisdiction is occupied with
assuring that all the facts are indeed presented to the Court; for obviously, to the extent that adjudication
is made on the basis of incomplete facts, to that extent there is faultiness in the approximation of
objective justice. It is thus the obligation of lawyers no less than of judges to see that this objective is
attained; that is to say, that there no suppression, obscuration, misrepresentation or distortion of the
facts; and that no party be unaware of any fact material a relevant to the action, or surprised by any
factual detail suddenly brought to his attention during the trial. 29
Seventy-one years ago, in Alonso v. Villamor, 30 this Court described the nature and object of litigation
and in the process laid down the standards by which judicial contests are to be conducted in this
jurisdiction. It said:
A litigation is not a game of technicalities in which one, more deeply schooled and skilled in
the subtle art of movement and position, entraps and destroys the other. It is, rather a
contest in which each contending party fully and fairly lays before the court the facts in issue
and then brushing aside as wholly trivial and indecisive all imperfections of form and
technicalities of procedure, asks that justice be done on the merits. Lawsuits, unlike duels, are
not to be won by a rapier's thrust. Technicality, when it deserts its proper office as an aid to
justice and becomes its great hindrance and chief enemy, deserves scant consideration
from courts. There should be no vested right in technicalities. . . .
The message is plain. It is the duty of each contending party to lay before the court the facts in issue-fully
and fairly; i.e., to present to the court all the material and relevant facts known to him, suppressing or
concealing nothing, nor preventing another party, by clever and adroit manipulation of the technical
rules of pleading and evidence, from also presenting all the facts within his knowledge.
Initially, that undertaking of laying the facts before the court is accomplished by the pleadings filed by the
parties; but that, only in a very general way. Only "ultimate facts" are set forth in the pleadings; hence,
only the barest outline of the facfual basis of a party's claims or defenses is limned in his pleadings. The
law says that every pleading "shall contain in a methodical and logical form, a plain, concise and direct
statement of the ultimate factson which the party pleading relies for his claim or defense, as the case may
be, omitting the statement of mere evidentiary facts." 31
Parenthetically, if this requirement is not observed, i.e., the ultimate facts are alleged too generally or "not
averred with sufficient definiteness or particularity to enable . . (an adverse party) properly to prepare
his responsive pleading or to prepare for trial," a bill of particulars seeking a "more definite statement"
may be ordered by the court on motion of a party. The office of a bill of particulars is, however, limited to
making more particular or definite the ultimate facts in a pleading It is not its office to supply evidentiary
matters. And the common perception is that said evidentiary details are made known to the parties and
the court only during the trial, when proof is adduced on the issues of fact arising from the pleadings.
The truth is that "evidentiary matters" may be inquired into and learned by the parties before the trial.
Indeed, it is the purpose and policy of the law that the parties before the trial if not indeed even before
the pre-trial should discover or inform themselves of all the facts relevant to the action, not only those
known to them individually, but also those known to adversaries; in other words, the desideratum is that
civil trials should not be carried on in the dark; and the Rules of Court make this ideal possible through
the deposition-discovery mechanism set forth in Rules 24 to 29. The experience in other jurisdictions has
been that ample discovery before trial, under proper regulation, accomplished one of the most necessary
of modern procedure: it not only eliminates unessential issue from trials thereby shortening them
considerably, but also requires parties to play the game with the cards on the table so that the possibility
of fair settlement before trial is measurably increased. . ." 32
As just intimated, the deposition-discovery procedure was designed to remedy the conceded inadequacy
and cumbersomeness of the pre-trial functions of notice-giving, issue-formulation and fact revelation
theretofore performed primarily by the pleadings.
The various modes or instruments of discovery are meant to serve (1) as a device, along with the pre-trial
hearing under Rule 20, to narrow and clarify the basic issues between the parties, and (2) as a device for
ascertaining the facts relative to those issues. The evident purpose is, to repeat, to enable parties,
consistent with recognized privileges, to obtain the fullest possible knowledge of the issues and facts
before trials and thus prevent that said trials are carried on in the dark. 33
To this end, the field of inquiry that may be covered by depositions or interrogatories is as broad as when
the interrogated party is called as a witness to testify orally at trial. The inquiry extends to all facts which
are relevant, whether they be ultimate or evidentiary, excepting only those matters which are privileged.
The objective is as much to give every party the fullest possible information of all the relevant facts
before the trial as to obtain evidence for use upon said trial. The principle is reflected in Section 2, Rule
24 (governing depositions) 34 which generally allows the examination of a deponent
1) "regarding any matter, not privileged, which is relevant to the subject of the pending
action, whether relating to the claim or defense of any other party;"
2) as well as:
(a) "the existence, description, nature, custody, condition and location of any books,
documents, or other tangible things" and
(b) "the identity and location of persons having knowledge of relevant facts."
What is chiefly contemplated is the discovery of every bit of information which may be useful in the
preparation for trial, such as the identity and location of persons having knowledge of relevant facts;
those relevant facts themselves; and the existence, description, nature, custody, condition, and location of
any books, documents, or other tangible things. Hence, "the deposition-discovery rules are to be accorded
a broad and liberal treatment. No longer can the time-honored cry of "fishing expedition" serve to
preclude a party from inquiring into the facts underlying his opponent's case. Mutual knowledge of all the
relevant facts gathered by both parties is essential to proper litigation. To that end, either party may
compel the other to disgorge whatever facts he has in his possession. The deposition-discovery
procedure simply advances the stage at which the disclosure can be compelled from the time of trial to
the period preceding it, thus reducing the possibility, of surprise, . . . 35
In line with this principle of according liberal treatment to the deposition-discovery mechanism, such
modes of discovery as (a) depositions (whether by oral examination or written interrogatories) under
Rule 24, (b) interrogatories to parties under Rule 25, and (c) requests for admissions under Rule 26, may
be availed of without leave of court, and generally, without court intervention. The Rules of Court
explicitly provide that leave of court is not necessary to avail of said modes of discovery after an answer
to the complaint has been served. 36 It is only when an answer has not yet been filed (but after
jurisdiction has been obtained over the defendant or property subject of the action) that prior leave of
court is needed to avail of these modes of discovery, the reason being that at that time the issues are not
yet joined and the disputed facts are not clear. 37
On the other hand, leave of court is required as regards discovery by (a) production or inspection of
documents or things in accordance with Rule 27, or (b) physical and mental examination of persons
under Rule 28, which may be granted upon due application and a showing of due cause.
To ensure that availment of the modes of discovery is otherwise untrammeled and efficacious, the law
imposes serious sanctions on the party who refuses to make discovery, such as dismissing the action or
proceeding or part thereof, or rendering judgment by default against the disobedient party; contempt of
court, or arrest of the party or agent of the party; payment of the amount of reasonable expenses incurred
in obtaining a court order to compel discovery; taking the matters inquired into as established in
accordance with the claim of the party seeking discovery; refusal to allow the disobedient party support
or oppose designated claims or defenses; striking out pleadings or parts thereof; staying further
proceedings. 38
Of course, there are limitations to discovery, even when permitted to be undertaken without leave and
without judicial intervention. "As indicated by (the) Rules . . ., limitations inevitably arise when it can be
shown that the examination is being conducted in bad faith or in such a manner as to annoy, embarass, or
oppress the person subject to the inquiry. 39 And . . . further limitations come into existence when the
inquiry touches upon the irrelevant or encroaches upon the recognized domains of privilege." 40
In fine, the liberty of a party to make discovery is well nigh unrestricted if the matters inquired into are
otherwise relevant and not privileged, and the inquiry is made in good faith and within the bounds of the
law.
It is in light of these broad principles underlying the deposition-discovery mechanism, in relation of
course to the particular rules directly involved, that the issues in this case will now be resolved.
The petitioner's objections to the interrogatories served on it in accordance with Rule 25 of the Rules of
Court cannot be sustained.
It should initially be pointed out as regards the private respondents "Motion for Leave to File
Interrogatories" dated February 1, 1988 41 that it was correct for them to seek leave to serve
interrogatories, because discovery was being availed of before an answer had been served. In such a
situation, i.e., "after jurisdiction has been obtained over any defendant or over property subject of the
action" but before answer, Section 1 of Rule 24 (treating of depositions), in relation to Section 1 of Rule
25 (dealing with interrogatories to parties) explicitly requires "leave of court." 42 But there was no need
for the private respondents to seek such leave to serve their "Amended Interrogatories to Plaintiff"
(dated August 2, 1989 43) after they had filed their answer to the PCGG's complaint, just as there was no
need for the Sandiganbayan to act thereon.
1. The petitioner's first contention that the interrogatories in question are defective because they (a)
do not name the particular individuals to whom they are propounded, being addressed only to the PCGG,
and (b) are "fundamentally the same matters . . (private respondents) sought to be clarified through their
aborted Motion . . for Bill of Particulars" are untenable and quickly disposed of.
The first part of petitioner's submission is adequately confuted by Section 1, Rule 25 which states that if
the party served with interrogatories is a juridical entity such as "a public or private corporation or a
partnership or association," the same shall be "answered . . by any officer thereof competent to testify in
its behalf." There is absolutely no reason why this proposition should not be applied by analogy to the
interrogatories served on the PCGG. That the interrogatories are addressed only to the PCGG, without
naming any specific commissioner o officer thereof, is utterly of no consequence, and may not be invoked
as a reason to refuse to answer. As the rule states, the interrogatories shall be answered "by any officer
thereof competent to testify in its behalf."
That the matters on which discovery is desired are the same matters subject of a prior motion for bill of
particulars addressed to the PCGG's amended complaint and denied for lack of merit is beside the
point. Indeed, as already pointed out above, a bill of particulars may elicit only ultimate facts, not so-
called evidentiary facts. The latter are without doubt proper subject of discovery. 44
Neither may it be validly argued that the amended interrogatories lack specificity. The merest glance at
them disproves the argument. The interrogatories are made to relate to individual paragraphs of the
PCGG's expanded complaint and inquire about details of the ultimate facts therein alleged. What the
PCGG may properly do is to object to specific items of the interrogatories, on the ground of lack of
relevancy, or privilege, or that the inquiries are being made in bad faith, or simply to embarass or oppress
it. 45 But until such an objection is presented and sustained, the obligation to answer subsists.
2. That the interrogatories deal with factual matters which will be part of the PCGG's proof upon trial, is
not ground for suppressing them either. As already pointed out, it is the precise purpose of discovery to
ensure mutual knowledge of all the relevant facts on the part of all parties even before trial, this being
deemed essential to proper litigation. This is why either party may compel the other to disgorge
whatever facts he has in his possession; and the stage at which disclosure of evidence is made is
advanced from the time of trial to the period preceding it.
3. Also unmeritorious is the objection that the interrogatories would make PCGG Commissioners and
officers witnesses, in contravention of Executive Order No. 14 and related issuances. In the first place,
there is nothing at all wrong in a party's making his adversary his witness .46 This is expressly allowed
by Section 6, Rule 132 of the Rules of Court, viz.:
Sec. 6. Direct examination of unwilling or hostile witnesses. A party may . . . call an
adverse party or an officer, director, or managing agent of a public or private corporation
or of a partnership or association which is an adverse party, and interrogate him by leading
questions and contradict and impeach him in all respects as if he had been called by the
adverse party, and the witness thus called may be contradicted and impeached by or on
behalf of the adverse party also, and may be cross-examined by the adverse party only
upon the subject-matter of his examination in chief.
The PCGG insinuates that the private respondents are engaged on a "fishing expedition," apart from the
fact that the information sought is immaterial since they are evidently meant to establish a claim against
PCGG officers who are not parties to the action. It suffices to point out that "fishing expeditions" are
precisely permitted through the modes of discovery. 47 Moreover, a defendant who files a counterclaim
against the plaintiff is allowed by the Rules to implead persons (therefore strangers to the action) as
additional defendants on said counterclaim. This may be done pursuant to Section 14, Rule 6 of the Rules,
to wit:
Sec. 14. Bringing new parties. When the presence of parties other than those to the
original action is required for the granting of complete relief in the determination of
a counterclaim or cross-claim, the court shall order them to be brought in as defendants, if
jurisdiction over them can be obtained."
The PCGG's assertion that it or its members are not amenable to any civil action "for anything done or
omitted in the discharge of the task contemplated by . . (Executive) Order (No. 1)," is not a ground to
refuse to answer the interrogatories. The disclosure of facto relevant to the action and which are not self-
incriminatory or otherwise privileged is one thing; the matter of whether or not liability may arise from
the facts disclosed in light of Executive Order
No. 1, is another. No doubt, the latter proposition may properly be set up by way of defense in the action.
The apprehension has been expressed that the answers to the interrogatories may be utilized as
foundation for a counterclaim against the PCGG or its members and officers. They will be. The private
respondents have made no secret that this is in fact their intention. Withal, the Court is unable to uphold
the proposition that while the PCGG obviously feels itself at liberty to bring actions on the basis of its
study and appreciation of the evidence in its possession, the parties sued should not be free to file
counterclaims in the same actions against the PCGG or its officers for gross neglect or ignorance, if not
downright bad faith or malice in the commencement or initiation of such judicial proceedings, or that in
the actions that it may bring, the PCGG may opt not to be bound by rule applicable to the parties it has
sued, e.g., the rules of discovery.
So, too, the PCGG's postulation that none of its members may be "required to testify or produce evidence
in any judicial . . proceeding concerning matters within its official cognizance," has no application to a
judicial proceeding it has itself initiated. As just suggested, the act of bringing suit must entail a waiver of
the exemption from giving evidence; by bringing suit it brings itself within the operation and scope of all
the rules governing civil actions, including the rights and duties under the rules of discovery. Otherwise,
the absurd would have to be conceded, that while the parties it has impleaded as defendants may be
required to "disgorge all the facts" within their knowledge and in their possession, it may not itself be
subject to a like compulsion.
The State is, of course, immune from suit in the sense that it cannot, as a rule, be sued without its consent.
But it is axiomatic that in filing an action, it divests itself of its sovereign character and sheds its immunity
from suit, descending to the level of an ordinary litigant. The PCGG cannot claim a superior or preferred
status to the State, even while assuming to represent or act for the State. 48
The suggestion 49 that the State makes no implied waiver of immunity by filing suit except when in so
doing it acts in, or in matters concerning, its proprietary or non-governmental capacity, is unacceptable;
it attempts a distinction without support in principle or precedent. On the contrary
The consent of the State to be sued may be given expressly or impliedly. Express consent
may be manifested either through a general law or a special law. Implied consent is
given when the State itself commences litigation or when it enters into a contract. 50
The immunity of the State from suits does not deprive it of the right to sue private parties
in its own courts. The state as plaintiff may avail itself of the different forms of actions open
to private litigants. In short, by taking the initiative in an action against the private parties,
the state surrenders its privileged position and comes down to the level of the defendant.
The latter automatically acquires, within certain limits, the right to set up whatever claims
and other defenses he might have against the state. . . . (Sinco, Philippine Political Law,
Tenth E., pp. 36-37, citing U.S. vs. Ringgold, 8 Pet. 150, 8 L. ed. 899)" 51
It can hardly be doubted that in exercising the right of eminent domain, the State exercises its jus
imperii, as distinguished from its proprietary rights or jus gestionis. Yet, even in that area, it has been held
that where private property has been taken in expropriation without just compensation being paid, the
defense of immunity from suit cannot be set up by the State against an action for payment by the
owner. 52
The Court also finds itself unable to sustain the PCGG's other principal contention, of the nullity of the
Sandiganbayan's Order for the production and inspection of specified documents and things allegedly in
its possession.
The Court gives short shrift to the argument that some documents sought to be produced and inspected
had already been presented in Court and marked preliminarily as PCGG's exhibits, the movants having in
fact viewed, scrutinized and even offered objections thereto and made comments thereon. Obviously,
there is nothing secret or confidential about these documents. No serious objection can therefore be
presented to the desire of the private respondents to have copies of those documents in order to study
them some more or otherwise use them during the trial for any purpose allowed by law.
The PCGG says that some of the documents are non-existent. This it can allege in response to the
corresponding question in the interrogatories, and it will incur no sanction for doing so unless it is
subsequently established that the denial is false.
The claim that use of the documents is proscribed by Executive Order No. 1 has already been dealt with.
The PCGG is however at liberty to allege and prove that said documents fall within some other privilege,
constitutional or statutory.
The Court finally finds that, contrary to the petitioner's theory, there is good cause for the production and
inspection of the documents subject of the motion dated August 3, 1989. 53 Some of the documents are,
according to the verification of the amended complaint, the basis of several of the material allegations of
said complaint. Others, admittedly, are to be used in evidence by the plaintiff. It is matters such as these
into which inquiry is precisely allowed by the rules of discovery, to the end that the parties may
adequately prepare for pre-trial and trial. The only other documents sought to be produced are needed in
relation to the allegations of the counterclaim. Their relevance is indisputable; their disclosure may not
be opposed.
One last word. Due no doubt to the deplorable unfamiliarity respecting the nature, purposes and
operation of the modes of discovery earlier
mentioned, 54 there also appears to be a widely entertained idea that application of said modes is a
complicated matter, unduly expensive and dilatory. Nothing could be farther from the truth. For example,
as will already have been noted from the preceding discussion, all that is entailed to activate or put in
motion the process of discovery by interrogatories to parties under Rule 25 of the Rules of Court, is
simply the delivery directly to a party of a letter setting forth a list of least questions with the request that
they be answered individually. 55 That is all. The service of such a communication on the party has the
effect of imposing on him the obligation of answering the questions "separately and fully in writing
underoath," and serving "a copy of the answers on the party submitting the interrogatories within fifteen
(15) days after service of the interrogatories . . ." 56 The sanctions for refusing to make discovery have
already been mentioned. 57 So, too, discovery under Rule 26 is begun by nothing more complex than the
service on a party of a letter or other written communication containing a request that specific facts
therein set forth and/or particular documents copies of which are thereto appended, be admitted in
writing. 58 That is all. Again, the receipt of such a communication by the party has the effect of imposing
on him the obligation of serving the party requesting admission with "a sworn statement either denying
specifically the matters of which an admission is requested or setting forth in detail the reasons why he
cannot truthfully either admit or deny those matters," failing in which "(e)ach of the matters of which
admission is requested shall be deemed admitted." 59 The taking of depositions in accordance with Rule
24 (either on oral examination or by written interrogatories) while somewhat less simple, is nonetheless
by no means as complicated as seems to be the lamentably extensive notion.
WHEREFORE, the petition is DENIED, without pronouncement as to costs. The temporary restraining
order issued on October 27, 1989 is hereby LIFTED AND SET ASIDE.
SO ORDERED.
REPUBLIC OF THE PHILIPPINES, PETITIONER, VS SANDIGANBAYAN (FOURTH DIVISION), JOSE L.
AFRICA (SUBSTITUTED BY HIS HEIRS), MANUEL H. NIETO, JR., FERDINAND E. MARCOS
(SUBSTITUTED BY HIS HEIRS), IMELDA R. MARCOS, FERDINAND R. MARCOS, JR., JUAN PONCE
ENRILE, AND POTENCIANO ILUSORIO (SUBSTITUTED BY HIS HEIRS), RESPONDENTS.

FACTS: On July 22, 1987, the petitioner Republic of the Philippines, through the Presidential Commission
on Good Government (PCGG), filed a complaint against Jose L. Africa, Manuel H. Nieto, Jr., Ferdinand E.
Marcos, Imelda R. Marcos, Ferdinand R. Marcos, Jr., Juan Ponce Enrile, and Potenciano Ilusorio
(collectively, the respondents) for reconveyance, reversion, accounting, restitution,and damages before
the Sandiganbayan. The petitioner alleged that the respondents illegally manipulated the purchase of the
major shareholdings of Cable and Wireless Limited in Eastern Telecommunications Philippines, Inc.
(ETPI), which shareholdings respondents Jose Africa and Manuel Nieto, Jr. held for themselves and,
through their holdings and the corporations they organized, beneficially for respondents Ferdinand E.
Marcos and Imelda R. Marcos. This case docketed as Civil Case No. 0009. Victor Africa (Africa), son of the
late Jose L. Africa, was not impleaded in and so is plainly not a party to Civil Case No. 0009. Civil Case No.
0009 spawned numerous incidental cases, among them, Civil Case No. 0130. The present respondents
were not made parties in Civil Case No. 0130.
Africa, as an ETPI stockholder, filed a petition for certiorari, with prayer for a temporary
restraining order/preliminary injunction with the Sandiganbayan (docketed as Civil Case No. 0130),
seeking to nullify the order of the Sandiganbayan for the former to account for his sequestered shares in
ETPI and to cease and desist from exercising voting rights. During the pendency of Africas petition, Civil
Case No. 0130, Africa filed a motion with the Sandiganbayan, alleging that the PCGG had been illegally
exercising the rights of stockholders of ETPI, especially in the election of the members of the board of
directors and prayed for the issuance of an order for the calling and holding of [ETPI] annual
stockholders meeting under the courts control and supervision. Sandiganbayan favored Africas motion.
The PCGG assailed this resolution before this Court via a petition for certiorari docketed as G.R.
No. 107789 (PCGGs petition), imputing grave abuse of discretion on the Sandiganbayan for holding,
inter alia, that the registered stockholders of ETPI had the right to vote.
[14]
In our November 26, 1992
Resolution, we enjoined the Sandiganbayan from implementing its assailed resolution.
The Sandiganbayan ordered for the consolidation of Civil Cases Nos. 0009 and 0130, with the
former as the main case and the latter as an incident.
During the pendency of PCGGs petition (G.R. No. 107789), A Very Urgent Petition for Authority
to Hold Special Stockholders Meeting for the Sole Purpose of Increasing [ETPIs] Authorized Capital
Stock (Urgent Petition) was filed by PCGG. In our May 7, 1996 Resolution, we referred this Urgent
Petition to the Sandiganbayan for reception of evidence and immediate resolution which will be in Civil
Case No. 0130.
To resolve the Urgent Petition, the testimony of Mr. Maurice V. Bane (former director and
treasurer-in-trust of ETPI) was taken at the petitioners instance for the purpose for Bane to identify
and testify on the facts in his affidavit so as to prove the ownership issue in favor of the petitioner and/or
establish the prima facie factual foundation for sequestration of ETPIs Class A stock in support of the
Urgent Petition. The notice also states that the petitioner shall use the Bane deposition in evidence in
the main case of Civil Case No. 0009. On the scheduled deposition date, only Africa was present and he
cross-examined Bane.

The Sandiganbayan granted the Urgent Petition hence, Africa went to this Court via a petition for
certiorari docketed as G.R. No. 147214 (Africas petition). The court resolved the PCGG and Africas
petition and were REFERRED to the Sandiganbayan for reception of evidence and to decide it within 60
days from receipt of this resolution.
In Civil case 0009, the pre trial conference was scheduled and concluded only on November 29,
1996 and March 17, 1997. Among the witnesses offered was Maurice V. Bane representative of Cable
and Wireless Limited (C & W) at the time ETPI was organized. After the trial of Civil Case No. 009, the
petitioner filed a motion to adopt the testimonies of the witnesses in Civil Case No. 0130, including Bane.
The Sandiganbayan promulgated the 1998 Resolution which denied the adoption of oral deposition of
Bane because he was not available for cross-examination.

The petitioners did not question the 1998 resolution, and instead they made its Formal Offer of Evidence.
Significantly, the Bane deposition was not included as part of its offered exhibits. In order to correct this,
they filed a second motion with prayer for re-opening of the case for the purpose of introducing
additional evidence and requested the court to take judicial notice of the facts established by the Bane
deposition. This was denied by the Sandiganbayan in its November 6, 2000 resolution. A third motion
was filed by the petitioners on November 16, 2001 seeking once more to admit the Bane deposition
which the Sandiganbayan for the reason that without plaintiff having moved for reconsideration within
the reglementary period, the resolution has attained finality and its effect cannot be undone by the
simple expedient of filing a motion.

ISSUE:
Whether or not the Sandiganbayan committed grave abuse of jurisdiction on holding that the
1998 resolution already attained finality and that the 3
rd
motion for reconsideration of the petitioner is
prohibited.

HELD:

A judgment or order is considered final if the order disposes of the action or proceeding
completely, or terminates a particular stage of the same action; in such case, the remedy available to an
aggrieved party is appeal. If the order or resolution, however, merely resolves incidental matters and
leaves something more to be done to resolve the merits of the case, the order is interlocutory

and the
aggrieved partys remedy is a petition for certiorari under Rule 65. Therefore, the 1998 resolution is
interlocutory. The Sandiganbayans denial of the petitioners 1st motion through the 1998 Resolution
came at a time when the petitioner had not even concluded the presentation of its evidence. Plainly, the
denial of the motion did not resolve the merits of the case, as something still had to be done to achieve
this end.
the Sandiganbayans 1998 resolution which merely denied the adoption of the Bane deposition as part
of the evidence in Civil Case No. 0009 could not have attained finality.
The Sandiganbayan undoubtedly erred on a question of law in its ruling, but this legal error did
not necessarily amount to a grave abuse of discretion in the absence of a clear showing that its action was
a capricious and whimsical exercise of judgment affecting its exercise of jurisdiction.
[62]
Without this
showing, the Sandiganbayans erroneous legal conclusion was only an error of judgment, or, at best,
an abuse of discretion but not a grave one.
The 3
rd
motion could not also be considered as a prohibited motion because Section 5, Rule 37 of
the Rules of Court clearly provides, the proscription against a second motion for reconsideration is
directed against a judgment or final order. But a second motion for reconsideration of an interlocutory
order can be denied on the ground that it is discusses again the arguments already passed upon and
resolved by the court. In this case, the latter is the reason cited by the respondents for the denial of the
motion

CHARLES N. UY, complainant, vs. JUDGE NELIDA S. MEDINA, PRESIDING JUDGE OF THE MUNICIPAL
TRIAL COURT OF ILOILO, BRANCH 2,respondent.
D E C I S I O N
PUNO, J.:
Before this Court is a verified complaint filed by Charles N. Uy against respondent Judge Nelida S.
Medina of the Municipal Trial Court of Iloilo, Branch 2 for grave abuse of discretion, gross ignorance of
the law, knowingly rendering unjust judgment, partiality and grave abuse of judicial authority relative to
Civil Case No. 367(97) entitled "Charles N. Uy vs. Sps. Carlos F. Uy and Nelia N. Uy.
The records show that complainant filed a complaint
[1]
against his parents, spouses Carlos and Nelia
Uy, for recovery of personal property with prayer for replevin of the owner's duplicate copy of Transfer
Certificate of Title No. T-107085. The case was raffled to the sala of respondent judge.
Complainant alleges that he is the registered owner of a parcel of land located in Bo. Buhang, District
of Jaro, City of Iloilo, Island of Panay under TCT No. T-107085 which was then in the possession of his
parents. Defendants spouses Uy filed their Answer with Counterclaim,
[2]
wherein they alleged, among
others, that they are the owners of the property covered by the subject title and that the property is the
subject of Civil Case No. 23792 pending before Branch 30, Regional Trial Court of Iloilo entitled Carlos F.
Uy and Nelia Uy vs. Charles N. Uy and Register of Deeds of Iloilo City for reconveyance, annulment of
title, recovery of possession and damages.
Complainant executed an affidavit pursuant to Section 2, Rule 60 of the Rules of Court, paid the
replevin bond in the amount of P100.00 and moved for the issuance of the writ of replevin. In an Order
dated November 10, 1997, respondent judge denied complainant's prayer for the issuance of the writ of
replevin for insufficiency of the replevin bond.
A Preliminary Conference Order
[3]
was issued on January 8, 1998 after the termination of the
preliminary conference. On February 13, 1998, defendants served a copy of their Position Paper
[4]
upon
the complainant by registered mail and filed its original copy with the trial court. An Affidavit of
Service/Filing was attached to the said Position Paper with an explanation that personal service was not
resorted to because of time constraint, lack of manpower and in order to minimize
expenses.
[5]
Complainant's Position Paper, on the other hand, was personally served upon the defendants
and filed with the court on February 16, 1998.
[6]

Complainant filed a Motion to Consider Defendants' Position Paper as Not Filed for their alleged
failure to comply with Section 11, Rule 13 of the Rules of Court.
[7]
Respondent judge denied the motion in
an Order dated March 25, 1998.
[8]

On March 27, 1998, complainant filed an Ex-Parte Motion for Early Decision
[9]
which was granted by
the trial court in an Order dated April 3, 1998.
[10]
On June 2, 1998, complainant filed a 2nd (Ex-Parte)
Motion for Early Resolution.
[11]

On May 29, 1998, respondent judge rendered a decision dismissing the complaint and ordering the
complainant to pay the defendants the amount of P5,000.00 as attorney's fees.
[12]

Complainant appealed the assailed decision to the Regional Trial Court of Iloilo which was raffled to
Branch 39 and docketed as Civil Case No. 25254 [MTC Case No. 367(97)]. During the pendency of the
complaint at bar, complainant and the defendants in Civil Case No. 25254 submitted a Compromise
Agreement for the approval of the trial court. The Regional Trial Court of Iloilo, Branch 39 rendered a
decision,
[13]
the dispositive portion of which provides, thus:
"WHEREFORE, finding the Compromise filed on September 8, 1998 not being contrary to law, morals or
public policy, the court hereby approves the same and renders judgment in accordance therewith. The
parties are enjoined to comply strictly with its terms and stipulations.
SO ORDERED."
In his present complaint, complainant raises the following grounds, to wit:
"G R O U N D S
1. Respondent judge Medina is guilty of gross ignorance of the law, if not evident bad faith and malice,
and partiality in denying the writ of replevin due to insufficiency of the bond;
2. The respondent judge committed grave abuse of discretion and gross ignorance of the law, and ruled
with partiality and bad faith in denying the motion to consider defendants position paper as not filed
despite the gross and patent violation of Section 11, Rule 13 of the Rules of Court.
3. The trial court showed gross ignorance of the law in holding that the Owner's Duplicate Copy of
Transfer Certificate of Title No. T-107085 is not a personal property.
4. The trial court committed grave abuse of discretion and of judicial authority, manifested (sic) gross
ignorance of the law, malice and bad faith in completely disregarding and departing, sans explanation
despite due citation, from the ruling of the Supreme Court in Verceles vs. Bacani, 156 SCRA 108.
5. Respondent Judge Medina is guilty of grave abuse of judicial authority and gross inefficiency in the
performance of her duties in resolving Civil Case No. 367(97) beyond the mandatory period of thirty (30)
days from date of submission."
[14]

In its 1st Indorsement dated October 29, 1998, the Office of the Court Administrator referred the
complaint to respondent judge for her Comment. Respondent judge contends that the complainant
erroneously based the bond on the value of the unfilled form of the transfer certificate of title which is a
mere piece of paper. The replevin bond should be based on the value of the property inscribed in the said
title such that the P100.00 replevin bond cannot therefore answer for the damages which the defendants
may suffer.
[15]

The respondent judge also found defendants' explanation as to why they resorted to service by
registered mail sufficient compliance with Section 11, Rule 13 of the 1997 Rules of Civil Procedure. She
considered the time the Position Paper was filed in court which is 12:00 noon as appearing in the rubber
stamp mark on the upper right hand portion of the said pleading. The window of the Iloilo Hall of Justice
Post Office is only a meter distance from the door of the court room of the respondent judge where the
pleading is to be filed.
[16]

Respondent judge likewise maintains that this Court's ruling in Verceles vs. Bacani
[17]
is not squarely
in point with the case before her. The ownership of the subject property is not an issue in
the Verceles case unlike in the case pending before her.
[18]

Respondent judge attributes the delay in the promulgation of the decision in Civil Case No. 367(97)
to the lack of stenographers who would type the decision, the numerous times when the draft was
corrected and her additional responsibilities as Vice Executive Judge. She stresses the fact that she has
allegedly made a draft of the decision even before the expiration of the 30-day period.
Respondent judge filed a letter dated October 20, 1999 with this Court stating that she was applying
for optional retirement effective October 30, 1999 and that if there is any charge against her in
connection with the present administrative case, she requests that the same be withheld from her
retirement benefits.
On the basis of the recommendation of the Office of the Court Administrator, the Court finds the
respondent judge administratively liable but only for the delay in the disposition of Civil Case No.
367(97).
Sec. 10 of the Revised Rules on Summary Procedure provides that:
"Sec. 10. Rendition of judgment - Within thirty (30) days after receipt of the last affidavits and position
papers, or the expiration of the period for filing the same, the court shall render judgment.
xxx xxx xxx
Applying the aforequoted provision of law, respondent judge is therefore obligated to decide the case
within thirty (30) days from February 16, 1998 which was the date when the position papers of both
parties were filed in court. When the complainant filed on February 19,1998 a Motion to Consider
Defendants' Position Paper as Not Filed, the respondent judge should have simply denied the motion on
the basis of the applicable law and then immediately rule on the merits of the case so as not to defeat the
purpose of the rules on summary procedure. We see no reason why it has to take the respondent judge a
month to resolve a simple motion and more than two (2) months to decide the case.
The excuse proferred by the respondent judge for the delay is flimsy. A judge should diligently
discharge administrative responsibilities, maintain professional competence in court management, and
facilitate the performance of the administrative functions of other judges and court personnel.
[19]

The Revised Rules on Summary Procedure was precisely enacted to achieve an expeditious and
inexpensive determination of cases, and failure to observe the 30-day period within which to render a
judgment subjects the defaulting judge to administrative sanction.
[20]

The other grounds raised by the complainant are devoid of merit. Complainant contends that
respondent judge committed gross ignorance of the law in denying complainant's motion to consider
defendants' position paper as not filed. His reliance on Section 11, Rule 13 of the 1997 Rules of Civil
Procedure is misplaced. Said provision states that:
"Sec. 11. Priorities in modes of service and filing. - Whenever practicable, the service and filing of pleadings
and other papers shall be done personally. Except with respect to papers emanating from the court, a
resort to other modes must be accompanied by a written explanation why the service or filing was not
done personally xxx."
The evidence on record shows that defendants' position paper was accompanied by an explanation
as to why personal service was not resorted to. Defendants found it impractical to personally serve the
pleading to complainant due to time constraint, lack of manpower and in order to minimize expense. In
the March 25, 1998 Order denying complainant's motion, respondent judge opines that "xxx. To mail the
position paper at Iloilo Hall of Justice Post office and immediately file the same with the Court which is an
adjacent door to the Iloilo Hall of Justice Post office is very practical and convenient xxx."
[21]
We reiterate
our ruling in Solar Team Entertainment, Inc. vs. Ricafort
[22]
as to the proper application of Section 11, Rule
13 of the 1997 Rules of Civil Procedure. Thus:
"Pursuant, however, to Section 11 of Rule 13, service and filing of pleadings and other papers must,
whenever practicable, be done personally; and if made through other modes, the party concerned must
provide a written explanation as to why the service or filing was not done personally. xxx
Personal service and filing are preferred for obvious reasons. Plainly, such should expedite action or
resolution on a pleading, motion or other paper; and conversely, minimize, if not eliminate, delays likely
to be incurred if service or filing is done by mail, considering the inefficiency of the postal
service. Likewise, personal service will do away with the practice of some lawyers who, wanting to
appear clever, resort to the following less than ethical practices: (1) serving or filing pleadings by mail to
catch opposing counsel off-guard, thus leaving the latter with little or no time to prepare, for instance,
responsive pleadings or an opposition; or (2) upon receiving notice from the post office that the
registered parcel containing the pleading or other paper from the adverse party may be claimed, unduly
procrastinating before claiming the parcel, or, worse, not claiming it at all, thereby causing undue delay in
the disposition of such pleading or other papers.
If only to underscore the mandatory nature of this innovation to our set of adjective rules requiring
personal service whenever practicable, Section 11 of Rule 13 then gives the court the discretion to
consider a pleading or paper as not filed if the other modes of service or filing were resorted to
and no written explanation was made as to why personal service was not done in the first
place. The exercise of discretion must, necessarily, consider the practicability of personal service,
for Section 11 itself begins with the clause "whenever practicable".
We thus take this opportunity to clarify that under Section 11, Rule 13 of the 1997 Rules of Civil
procedure, personal service and filing is the general rule, and resort to other modes of service or filing,
the exception.Henceforth, whenever personal service or filing is practicable, in light of the
circumstances of time, place and person, personal service or filing is mandatory. Only when personal
service or filing is not practicable may resort to other modes be had, which must then be accompanied by
a written explanation as to why personal service or filing was not practicable to begin with. In adjudging
the plausibility of an explanation, a court shall likewise consider the importance of the subject
matter of the case or the issues involved therein, and the prima facie merit of the pleading sought
to be expunged for violation of Section 11. This Court cannot rule otherwise, lest we allow
circumvention of the innovation introduced by the 1997 Rules in order to obviate delay in the
administration of justice."
[23]
(Emphasis supplied)
The respondent judge found defendants' explanation as to why they did not personally serve their
position paper plausible. We do not find any abuse in the exercise of such discretion properly accorded to
the respondent judge. Complainant received a copy of defendants' Position Paper on February 18, 1998
or five (5) days from the time it was mailed. The slight delay did not cause substantial prejudice to the
complainant. Since the case is governed by the Rules on Summary Procedure, parties are neither required
nor expected to file any more pleading after the submission of their respective position papers and
affidavits for the trial court shall render judgment within thirty (30) days after its receipt of the position
papers and affidavits.
[24]

We likewise find unmeritorious complainant's claim that respondent judge is guilty of ignorance of
the law in denying the application for a writ of replevin due to insufficiency of the bond and in holding
that the owner's duplicate copy of TCT No. T-107085 is not a personal property. The resolution of the
issue clearly pertains to the respondent judge's judicial functions. In the absence of fraud, dishonesty or
corruption, the acts of a judge in his judicial capacity are not subject to disciplinary action, even though
such acts are erroneous.
[25]

It is axiomatic that an administrative complaint is not the appropriate remedy for every act of a judge
deemed aberrant or irregular where a judicial remedy exists and is available, such as a motion for
reconsideration or an appeal. Obviously, if subsequent developments prove the judge's challenged act to
be correct, there would be no occasion to proceed against him at all.
[26]

Finally, we note that complainant appealed the case to the Regional Trial Court which rendered a
decision based on the compromise agreement entered into by the parties therein. The pertinent portion
of the said compromise agreement states that:
"1. In Civil Case No. 23792 entitled "Sps. Carlos Uy and Nelia Uy vs. Charles Uy" for reconveyance, the trial
court, the Regional Trial Court of Iloilo, Branch 30, upon motion, rendered a decision based on a
compromise entered into by the parties xxx
2. In the said compromise and the subsequent decision, the above-named plaintiff-appellant is obliged to
reconvey to herein defendants-appellees the property described in and covered by Transfer Certificate of
Title No. T-107085, the subject matter of this suit, xxx
3. The reconveyance of the property to and in favor of the defendants-appellants
[27]
necessitates the
delivery of Transfer Certificate of Title No. T-1207085
[28]
to them in order to effect the transfer of title.
4. Consequently, such reconveyance renders the present appeal moot and academic, the defendants-(sic)
appellants becoming the lawful possessor of the said certificate after constructive delivery."
[29]

The terms of the compromise agreement reconveying the property described in TCT No. T-107085 to
and in favor of the defendants-appellees all the more convince us that there is no sufficient basis to hold
respondent judge guilty of partiality and knowingly rendering unjust judgment. As correctly observed by
the Office of the Court Administrator, the Regional Trial Court made no clear findings upon which the
administrative liability maybe imputed to the respondent judge.
IN VIEW WHEREOF, a FINE of P1,000.00 is imposed on respondent judge for delay in the disposition
of Civil Case No. 367(97).
SO ORDERED.
Davide, Jr., C.J., (Chairman), Kapunan, Pardo, and Ynares-Santiago, JJ., concur.

THIRD DIVISION
[G.R. No. 136283. February 29, 2000]
VIEWMASTER CONSTRUCTION CORPORATION, petitioner, vs. HON. REYNALDO Y. MAULIT in his
official capacity as administrator of the Land Registration Authority; and EDGARDO CASTRO,
acting register of deeds of Las Pias, Metro Manila; respondents.
D E C I S I O N
PANGANIBAN, J.:
A notice of lis pendens may be registered when an action or a proceeding directly affects the title to the
land or the buildings thereon; or the possession, the use or the occupation thereof. Hence, the registration
of such notice should be allowed if the litigation involves the enforcement of an agreement for the co-
development of a parcel of land. h Y
Statement of the Case
Before us is a Petition for Review on Certiorari
[1]
assailing the February 27, 1998 Decision
[2]
of the Court
of Appeals (CA)
[3]
in CA- GR SP No. 39649 and its November 12, 1998 Resolution
[4]
denying
reconsideration. The assailed Decision affirmed the Resolution
[5]
of the Land Registration Authority
(LRA) in Consulta No. 2381, which ruled as follows:
"PREMISES CONSIDERED, this Authority is of the considered view and so holds that the
Notice of Lis Pendens subject of this consulta is not registrable."
[6]

The Facts
The undisputed facts were summarized by the Court of Appeals as follows:
"The subject property is known as the Las Pias property registered in the name of Peltan
Development Inc. (now State Properties Corporation) covered by Transfer Certificate of
Title No. (S-17992) 12473-A situated in Barrio Tindig na Manga, Las Pias, Rizal.
"The Chiong/Roxas family collectively owns and controls State Investment Trust, Inc.
(formerly State Investment House, Inc.) and is the major shareholder of the following
corporations, namely: State Land Investment Corporation, Philippine Development and
Industrial Corporation and Stronghold Realty Development.
"Sometime in 1995, the said family decided to give control and ownership over the said
corporations to only one member of the family, through the process of bidding among the
family members/stockholders of the said companies. It was agreed that the bidder who
acquires 51% or more of the said companies shall be deemed the winner.
"Defendant Allen Roxas, one of the stockholders of State Investment Trust, Inc. applied for
a loan with First Metro Investment, Inc. (First Metro for brevity) in the amount
ofP36,500,000.00 in order to participate in the bidding. Es msc
"First Metro granted Allen Roxas' loan application without collateral provided, however,
that he procure a guarantor/surety/solidary co-debtor to secure the payment of the said
loan.
"Petitioner Viewmaster agreed to act as guarantor for the aforementioned loan in
consideration for its participation in a Joint Venture Project to co-develop the real estate
assets of State Investment Trust, Inc.
"After a series of negotiations, petitioner Viewmaster and defendant Allen Roxas agreed
that should the latter prevail and win in the bidding, he shall sell to petitioner fifty percent
(50%) of the total eventual acquisitions of shares of stock in the State Investment Trust,
Inc., at a purchase price equivalent to the successful bid price per share plus an additiona1
ten percent (10%) per share.
"As a result of the loans granted by First Metro in consideration of and upon the guaranty
of petitioner Viewmaster, defendant Allen Roxas, eventually gained control and ownership
of State Investment Trust, Inc.
"However, notwithstanding the lapse of two (2) years since defendant Allen Roxas became
the controlling stockholder of State Investment Trust, Inc., he failed to take the necessary
action to implement the Joint Venture Project with petitioner Viewmaster to co-develop the
subject properties.
"Thus, petitioner's counsel wrote defendant Allen Roxas, reiterating petitioner's demand to
comply with the agreement to co-develop the Las Pias Property and to set in operation all
the necessary steps towards the realization of the said project.
"On September 8, 1995, petitioner Viewmaster filed a Complaint for Specific Performance,
Enforcement of Implied Trust and Damages against State Investment Trust, Inc. Northeast
Land Development, Inc., State Properties Corporation (formerly Peltan Development, Inc.)
and defendant Allen Roxas, in his capacity as Vice-Chairman of State Investment Trust, Inc.,
and Chairman of Northeast Land Development, Inc., State Properties Corporation, which
was docketed as Civil Case No.65277. Esmm is
"On September 11,1995, petitioner Viewmaster filed a Notice of Lis Pendens with the
Register of Deeds of Quezon City and Las Pias for the annotation of a Notice of Lis
Pendens on Transfer Certificate of Title No. (S-17992) 12473- A, registered in the name of
Peltan Development, Inc. (now State Properties Corporation).
"In a letter dated September 15, 1995, the respondent Register of Deeds of Las Pias
denied the request for annotation of the Notice of Lis Pendens on the following grounds:
1. the request for annotation and the complaint [do] not contain an adequate description of
the subject property;
2. petitioner's action only has an incidental effect on the property in question. Esmso
"On September 20, 1995, petitioner filed an appeal to the respondent Land Registration
Authority, which was docketed as Consulta No. 2381.
"On December 14, 1995, the Respondent Land Registration Authority issued the assailed
Resolution holding that petitioner's 'Notice of Lis Pendens' was not registrable."
[7]

Ruling of the Court of Appeals
In affirming the ruling of the LRA, the Court of Appeals held that petitioner failed to adequately describe
the subject property in the Complaint and in the application for the registration of a notice oflis
pendens. The CA noted that while Transfer Certificate of Title No. (S-17992) 12473-A indicated six parcels
of land, petitioner's application mentioned only one parcel.
Moreover, the CA also ruled that a notice of lis pendens may be registered only when an action directly
affects the title to or possession of the real property. In the present case, the proceedings instituted by
petitioner affected the title or possession incidentally only, not directly.
Hence, this Petition.
[8]

Issues
Petitioner submits for the consideration of the Court the following issues:
"I
Whether or not the petitioner failed to adequately describe the subject property in its
complaint and in the notice of lis pendens Mse sm
II
Whether or not the Las Pias property is directly involved in Civil Case No. 65277."
[9]

The Court's Ruling
The Petition is meritorious.
First Issue: Description of Property
Petitioner contends that the absence of the property's technical description in either the notice of lis
pendens or the Complaint is not a sufficient ground for rejecting its application, because a copy of TCT No.
(S-17992) 12473-A specifically describing the property was attached to and made an integral part of both
documents.
On the other hand, respondents argue that petitioner failed to provide an accurate description of the Las
Pias property, which was merely referred to as a "parcel of land."
The notice of lis pendens described the property as follows:
"A parcel of land situated in the Barrio of Tindig na Manga, Municipality of Las Pias,
Province of Rizal x x x containing an area of Seven Hundred Eighty Six Thousand One
Hundred Sixty Seven (786,167) square meters, more or less."
By itself, the above does not adequately describe the subject property, pursuant to Section 14 of Rule 13
of the Rules of Court and Section 76 of Presidential Decree (PD) No.1529. It does not distinguish the said
property from other properties similarly located in the Barrio of Tindig na Manga, Municipality of Las
Pias, Province of Rizal. Indeed, by the above description alone, it would be impossible to identify the
property.
In the paragraph directly preceding the description quoted above, however, petitioner specifically stated
that the property referred to in the notice of lis pendens was the same parcel of land covered by TCT No.
(S-17992) 12473-A:
"Please be notified that on 08 September 1995, the [p]laintiff in the above-entitled case
filed an action against the above-named [d]efendants for specific performance,
enforcement of an implied trust and damages, now pending in the Regional Trial Court of
Pasig, Branch 166, which action involves a parcel of land covered by Transfer Certificate
Title (TCT) No. (S-17992) 12473-A, registered in the name of Peltan Development
Incorporated which changed its corporate name to State Properties Corporation, one of the
[d]efendants in the aforesaid case. The said parcel of land is more particu1arly described as
follows: Ex sm
'A parcel of land situated in the Barrio of Tindig na Manga, Municipality of
Las Pias, Province of Rizal x x x containing an area of Seven Hundred Eighty
Six Thousand One Hundred Sixty Seven (786,167) square meters, more or
less.'
"Request is therefore made [for] your good office to record this notice of pendency of the
aforementioned action in TCT No. (S-17992) 12473-A for all legal purposes."
[10]

As earlier noted, a copy of the TCT was attached to and made an integral part of both documents.
Consequently, the notice of lis pendens submitted for registration, taken as a whole, leaves no doubt as to
the identity of the property, the technical description of which appears on the attached TCT. We stress
that the main purpose of the requirement that the notice should contain a technical description of the
property is to ensure that the same can be distinguished and readily identified. In this case, we agree with
petitioner that there was substantial compliance with this requirement.
Second Issue: Property Directly Involved
In upholding the LRA, the Court of Appeals held that "the doctrine of lis pendens has no application to a
proceeding in which the only object sought is the recovery of [a] money judgment, though the title [to] or
right or possession [of] a property may be incidentally affected. It is thus essential that the property be
directly affected where the relief sought in the action or suit includes the recovery of possession, or the
enforcement [thereof], or an adjudication between the conflicting claims of title, possession or right of
possession to specific property, or requiring its transfer or sale."
[11]

On the other hand, petitioner contends that the civil case subject of the notice of lis pendens directly
involved the land in question, because it prayed for the enforcement of a prior agreement between herein
petitioner and Defendant Allen Roxas to co-develop the latter's property.
We agree with the petitioner. A notice of lis pendens, which literally means "pending suit," may involve
actions that deal not only with the title or possession of a property, but even with the use or occupation
thereof. Thus, Section 76 of PD 1529 reads: Jjjuris
"Sec. 76. Notice of lis pendens. -- No action to recover possession of real estate, or to quiet
title thereto, or to remove clouds upon the title thereof, or for partition, or other
proceedings of any kind in court directly affecting the title to land or the use or occupation
thereof or the buildings thereon, and no judgment, and no proceeding to vacate or reverse
any judgment, shall have any effect upon registered land as against persons other than the
parties thereto, unless a memorandum or notice stating the institution of such action or
proceeding and the court wherein the same is pending, as well as the date of the institution
thereof, together with a reference to the number of the certificate of title, and an adequate
description of the land affected and the registered owner thereof, shall have been filed and
registered."
In Magdalena Homeowners Association, Inc. v. Court of Appeals,
[12]
the Court did not confine the
availability of lis pendens to cases involving the title to or possession of real property. Thus, it held:
"According to Section 24, Rule 14
[13]
of the Rules of Court and Section 76 of Presidential
Decree No.1529, a notice of lis pendens is proper in the following cases, viz.:
a).......An action to recover possession of real estate;
b).......An action to quiet title thereto;
c).......An action to remove clouds thereon;
d).......An action for partition; and
e).......Any other proceedings of any kind in Court directly affecting the title to the land or the
use or occupation hereof or the buildings thereon."
In Villanueva v. Court of Appeals,
[14]
this Court further declared that the rule of lis pendens applied to suits
brought "to establish an equitable estate, interest, or right in specific real property or to enforce any lien,
charge, or encumbrance against it x x x." Thus, this Court observed that the said notice pertained to the
following: Sjcj
"x x x all suits or actions which directly affect real property and not only those which involve
the question of title, but also those which are brought to establish an equitable estate,
interest, or right, in specific real property or to enforce any lien, charge, or encumbrance
against it, there being in some cases a lis pendens, although at the commencement of the
suit there is no present vested interest, claim, or lien in or on the property which it seeks to
charge. It has also been held to apply in the case of a proceeding to declare an absolute
deed of mortgage, or to redeem from a foreclosure sale, or to establish a trust, or to suits
for the settlement and adjustment of partnership interests."
In the present case, petitioner's Complaint docketed as Civil Case No. 65277 clearly warrants the
registration of a notice of lis pendens. The Complaint prayed for the following reliefs: Scjj
"1. Render judgment ordering the Defendant Allen Roxas to sell fifty percent (50%) of his
shareholdings in Defendant State Investment to Plaintiff at the price equivalent to the
successful bid price per share plus an additional ten percent (10%) per share and directing
Defendants to co-develop with the Plaintiff the subject real properties;
2. Render judgment ordering the Defendant Allen Roxas to:
a. Pay the Plaintiff the amount of at least Twenty Million Pesos (P20,000,000.00) and/or
such other amounts as may be proven during the course of the trial, by way of actual
damages;
b. Pay the Plaintiff the amount of at least One Million Pesos (P1,000,000.00), by way of
moral damages;
c. Pay the Plaintiff the amount of at least One Million Pesos (P1,000,000.00), by way of
exemplary damages;
d. Pay the Plaintiff the amount of Two Hundred Fifty Thousand Pesos (P250,000.00) by
way of attorney's fees; and
e. Pay expenses of litigation and costs of suit."
[15]

Undeniably, the prayer that Defendant Allen Roxas be ordered to sell 50 percent of his shareholdings in
State Investment does not directly involve title to the property and is therefore not a proper subject of a
notice of lis pendens. Neither do the various amounts of damages prayed for justify such annotation.
We disagree, however, with the Court of Appeals and the respondents that the prayer for the co-
development of the land was merely incidental to the sale of shares of defendant company. Jjsc
The Complaint shows that the loan obtained by Allen Roxas (one of the defendants in the civil case) from
First Metro was guaranteed by petitioner for two distinct considerations: (a) to enable it to purchase 50
percent of the stocks that the said defendant may acquire in State Investment and (b) to co-develop with
the defendants the Quezon City and the Las Pias properties of the corporation. In other words, the co-
development of the said properties is a separate undertaking that did not arise from petitioner's
acquisition of the defendant's shares in the corporation. To repeat, the co-development is not merely
auxiliary or incidental to the purchase of the shares; it is a distinct consideration for Viewmaster's
guaranty.
[16]

Hence, by virtue of the alleged agreement with Allen Roxas, petitioner has a direct -- not
merely incidental -- interest in the Las Pias property. Contrary to respondents' contention,
[17]
the action
involves not only the collection of a money judgment, but also the enforcement of petitioner's right to co-
develop and use the property.
The Court must stress that the purpose of lis pendens is (1) to protect the rights of the party causing the
registration thereof
[18]
and (2) to advise third persons who purchase or contract on the subject property
that they do so at their peril and subject to the result of the pending litigation.
[19]
One who deals with
property subject of a notice of lis pendens cannot acquire better rights than those of his predecessors-in-
interest.
[20]
In Tanchoco v. Aquino,
[21]
the Court held:
"x x x. _ The doctrine of lis pendens is founded upon reason of public policy and necessity,
the purpose of which is to keep the subject matter of the litigation within the power of the
court until the judgment or decree shall have been entered; otherwise, by successive
alienations pending the litigation, its judgment or decree shall be rendered abortive and
impossible of execution. Purchasers pendente lite of the property subject of the litigation
after the notice of lis pendens is inscribed in the Office of the Register of Deeds are bound by
the judgment against their predecessors. x x x."
Without a notice of lis pendens, a third party who acquires the property after relying only on the
Certificate of Title would be deemed a purchaser in good faith. Against such third party, the supposed
rights of petitioner cannot be enforced, because the former is not bound by the property owner's
undertakings not annotated in the TCT.
[22]
Kyle
Likewise, there exists the possibility that the res of the civil case would leave the control of the court and
render ineffectual a judgment therein. Indeed, according to petitioner, it was not even informed when
Allen Roxas exchanged the Quezon City property for shares of stock in Northeast Land Development,
Inc.
[23]
Hence, it maintains that there is a clear risk that the same thing would be done with the Las Pias
property.
In this light, the CA ruling left unprotected petitioner's claim of co-development over the Las Pias
property. Hence, until the conflicting rights and interests are threshed out in the civil case pending before
the RTC, it will be in the best interest of the parties and the public at large that a notice of the suit be
given to the whole world.
The Court is not here saying that petitioner is entitled to the reliefs prayed for in its Complaint pending in
the RTC. Verily, there is no requirement that the right to or the interest in the property subject of a lis
pendens be proven by the applicant. The Rule merely requires that an affirmative relief be claimed.
[24]
A
notation of lis pendens neither affects the merits of a case nor creates a right or a lien.
[25]
It merely
protects the applicant's rights, which will be determined during the trial.
WHEREFORE, the Petition is hereby GRANTED and the assailed Decision of the Court of
Appeals REVERSED and SET ASIDE. The Las Pias Register of Deeds is directed to cause the annotation
of lis pendens in TCT No. (S-17992) 12473-A. No costs.
SO ORDERED. Kycalr
Vitug, Purisima, and Gonzaga-Reyes, JJ., concur.
Melo, J., dissents. Peltan or State Properties not offering to have been impleaded.