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[G.R. No. 74833. January 21, 1991.

]
THOMAS C. CHEESMAN, petitioner, vs. INTERMEDIATE APPELLATE COURT and
ESTELITA PADILLA, respondents.
Estanislao L . Cesa, Jr . for petitioner.
Benjamin I . Fernandez for private respondent.
SYLLABUS
1.
REMEDIAL LAW; APPEAL; QUESTION OF FACT DISTINGUISHED FROM
QUESTION OF LAW. As distinguished from a question of law which exists "when
the doubt or difference arises as to what the law is on a certain state of facts"
"there is a question of fact when the doubt or difference arises as to the truth or the
falsehood of alleged facts;" or when the "query necessarily invites calibration of the
whole evidence considering mainly the credibility of witnesses, existence and
relevancy of specific surrounding circumstances, their relation to each other and to
the whole and the probabilities of the situation."
2.
ID.; PETITION FOR REVIEW; ONLY QUESTIONS OF LAW MAY BE RAISED
THEREIN. It is axiomatic that only questions of law, distinctly set forth, may be
raised in a petition for the review on certiorari of a decision of the Court of Appeals
presented to this Court. As everyone knows or ought to know, the appellate
jurisdiction of this Court is limited to reviewing errors of law, accepting as conclusive
the factual findings of the lower court upon its own assessment of the evidence.
3.
ID.; ID.; FINDINGS OF FACT OF BOTH THE TRIAL AND APPELLATE COURTS, NOT
DISTURBED ON APPEAL; CASE AT BAR. Both the Trial Court and the Intermediate
Appellate Court reached the same conclusions on the three (3) factual matters
above set forth, after assessment of the evidence and determination of the
probative value thereof. Both Courts found that the facts on record adequately
proved fraud, mistake or excusable negligence by which Estelita Padilla's rights had
been substantially impaired; that the funds used by Criselda Cheesman was money
she had earned and saved prior to her marriage to Thomas Cheesman, and that
Estelita Padilla did believe in good faith that Criselda Cheesman was the sole owner
of the property in question. Consequently, these determinations of fact will not be
here disturbed, this Court having been cited to no reason for doing so.
4.
ID.; ACTIONS; PETITION FOR RELIEF; ORDER GRANTING RELIEF,
INTERLOCUTORY AND NOT APPEALABLE; FAILURE OF OPPOSITOR TO APPEAL
THEREFROM DOES NOT PRECLUDE HIS RAISING THE SAME QUESTION ON APPEAL
ON THE MERITS OF THE MAIN CASE. An order of a Court of First Instance (now
Regional Trial Court) granting a petition for relief under Rule 38 is interlocutory and
is not appealable. Hence, the failure of the party who opposed the petition to appeal
from said order, or his participation in the proceedings subsequently had, cannot be

construed as a waiver of his objection to the petition for relief so as to preclude his
raising the same question on appeal from the judgment on the merits of the main
case.
5.
CONSTITUTIONAL LAW; 1973 CONSTITUTION; ALIENS CANNOT ACQUIRE OR
HOLD RESIDENTIAL LAND EXCEPT BY HEREDITARY SUCCESSION. The fundamental
law prohibits the sale to aliens of residential land. Section 14, Article XIV of the 1973
Constitution ordains that, "Save in cases of hereditary succession, no private land
shall be transferred or conveyed except to individuals, corporations, or associations
qualified to acquire or hold lands of the public domain."
6.
ID.; ID.; ID.; INDIRECT CONTROVERSION OF THE CONSTITUTIONAL BAN, NOT
PERMITTED; CASE AT BAR. Petitioner Thomas Cheesman was charged with
knowledge of this prohibition. Thus, assuming that it was his intention that the lot in
question be purchased by him and his wife, he acquired no right whatever over the
property by virtue of that purchase; and in attempting to acquire a right or interest
in land, vicariously and clandestinely, he knowingly violated the Constitution; the
sale as to him was null and void. In any event, he had and has no capacity or
personality to question the subsequent sale of the same property by his wife on the
theory that in so doing he is merely exercising the prerogative of a husband in
respect of conjugal property. To sustain such a theory would permit indirect
controversion of the constitutional prohibition. If the property were to be declared
conjugal, this would accord to the alien husband a not insubstantial interest and
right over land, as he would then have a decisive vote as to its transfer or
disposition. This is a right that the Constitution does not permit him to have.
7.
CIVIL LAW; OBLIGATIONS AND CONTRACTS; SALE; PURCHASER IN GOOD
FAITH, ENTITLED TO PROTECTION; CASE AT BAR. Estelita Padilla is a purchaser in
good faith, both the Trial Court and the Appellate Court having found that
Cheesman's own conduct had led her to believe the property to be exclusive
property of the latter's wife, freely disposable by her without his consent or
intervention. An innocent buyer for value, she is entitled to the protection of the law
in her purchase, particularly as against Cheesman, who would assert rights to the
property denied him by both letter and spirit of the Constitution itself.
DECISION
NARVASA, J p:
This appeal concerns the attempt by an American citizen (petitioner Thomas
Cheesman) to annul for lack of consent on his part the sale by his Filipino wife
(Criselda) of a residential lot and building to Estelita Padilla, also a Filipino.
Thomas Cheesman and Criselda P. Cheesman were married on December 4, 1970
but have been separated since February 15, 1981. 1

On June 4, 1974, a "Deed of Sale and Transfer of Possessory Rights" was executed
by Armando Altares conveying a parcel of unregistered land and the house thereon
(at No. 7 Neptune Street, Gordon Heights, Olongapo City) in favor of "Criselda P.
Cheesman, of legal age, Filipino citizen, married to Thomas Cheesman, and residing
at Lot No. 1, Blk. 8, Filtration Road, Sta. Rita, Olongapo City . . ." 2 Thomas
Cheesman, although aware of the deed, did not object to the transfer being made
only to his wife. 3
Thereafter and again with the knowledge of Thomas Cheesman and also without
any protest by him tax declarations for the property purchased were issued in the
name only of Criselda Cheesman and Criselda assumed exclusive management and
administration of said property, leasing it to tenants. 4 On July 1, 1981, Criselda
Cheesman sold the property to Estelita M. Padilla, without the knowledge or consent
of Thomas Cheesman. 5 The deed described Criselda as being" . . . of legal age,
married to an American citizen, . . ." 6
Thirty days later, or on July 31, 1981, Thomas Cheesman brought suit in the Court of
First Instance at Olongapo City against his wife, Criselda, and Estelita Padilla,
praying for the annulment of the sale on the ground that the transaction had been
executed without his knowledge and consent. 7 An answer was filed in the names of
both defendants, alleging that (1) the property said was paraphernal, having been
purchased by Criselda with funds exclusively belonging to her ("her own separate
money"); (2) Thomas Cheesman, being an American, was disqualified to have any
interest or right of ownership in the land; and (3) Estelita Padilla was a buyer in
good faith. 8
During the pre-trial conference, the parties agreed upon certain facts which were
subsequently set out in a pre-trial Order dated October 22, 1981, 9 as follows:
"1.
Both parties recognize the existence of the Deed of Sale over the residential
house located at No. 7 Granada St., Gordon Heights, Olongapo City, which was
acquired from Armando Altares on June 4, 1974 and sold by defendant Criselda
Cheesman to Estelita Padilla on July 12, 1981; and
"2.
That the transaction regarding the transfer of their property took place during
the existence of their marriage as the couple were married on December 4, 1970
and the questioned property was acquired sometime on June 4, 1974."
The action resulted in a judgment dated June 24, 1982, 10 declaring void ab initio
the sale executed by Criselda Cheesman in favor of Estelita M. Padilla, and ordering
the delivery of the property to Thomas Cheesman as administrator of the conjugal
partnership property, and the payment to him of P5,000.00 as attorney's fees and
expenses of litigation. 11
The judgment was however set aside as regards Estelita Padilla on a petition for
relief filed by the latter, grounded on "fraud, mistake and/or excusable negligence"

which had seriously impaired her right to present her case adequately. 12 "After the
petition for relief from judgment was given due course," according to petitioner, "a
new judge presided over the case." 13
Estelita Padilla filed a supplemental pleading on December 20, 1982 as her own
answer to the complaint, and a motion for summary judgment on May 17, 1983.
Although there was initial opposition by Thomas Cheesman to the motion, the
parties ultimately agreed on the rendition by the court of a summary judgment after
entering into a stipulation of facts, at the hearing of the motion on June 21, 1983,
the stipulation being of the following tenor: 14
"(1) that the property in question was bought during the existence of the
marriage between the plaintiff and the defendant Criselda P. Cheesman;
(2)
that the property bought during the marriage was registered in the name of
Criselda Cheesman and that the Deed of Sale and Transfer of Possessory Rights
executed by the former owner-vendor Armando Altares in favor of Criselda
Cheesman made no mention of the plaintiff;
(3)
that the property, subject of the proceedings, was sold by defendant Criselda
Cheesman in favor of the other defendant Estelita M. Padilla, without the written
consent of the plaintiff."
Obviously upon the theory that no genuine issue existed any longer and there was
hence no need of a trial, the parties having in fact submitted, as also stipulated,
their respective memoranda each praying for a favorable verdict, the Trial Court 15
rendered a "Summary Judgment" dated August 3, 1982 declaring "the sale executed
by . . . Criselda Cheesman in favor of . . . Estelita Padilla to be valid," dismissing
Thomas Cheesman's complaint and ordering him "to immediately turn over the
possession of the house and lot subject of . . . (the) case to . . . Estelita Padilla . . .
16
The Trial Court found that
1)
the evidence on record satisfactorily overcame the disputable presumption in
Article 160 of the Civil Code that all property of the marriage belongs to the
conjugal partnership "unless it be proved that it pertains exclusively to the husband
or to the wife" and that the immovable in question was in truth Criselda's
paraphernal property;
2)
that moreover, said legal presumption in Article 160 could not apply
"inasmuch as the husband-plaintiff is an American citizen and therefore disqualified
under the Constitution to acquire and own real properties;" and
3)
that the exercise by Criselda of exclusive acts of dominion with the
knowledge of her husband "had led . . . Estelita Padilla to believe that the properties
were the exclusive properties of Criselda Cheesman and on the faith of such a belief

she bought the properties from her and for value," and therefore, Thomas
Cheesman was, under Article 1473 of the Civil Code, estopped to impugn the
transfer to Estelita Padilla. LLphil
Thomas Cheesman appealed to the Intermediate Appellate Court. There he assailed
the Trial Court acts (1) of granting Estelita Padilla's petition for relief, and its
resolution of matters not subject of said petition; (2) of declaring valid the sale to
Estelita Padilla despite the lack of consent thereto by him, and the presumption of
the conjugal character of the property in question pursuant to Article 160 of the
Civil Code; (3) of disregarding the judgment of June 24, 1982 which, not having
been set aside as against Criselda Cheesman, continued to be binding on her; and
(4) of making findings of fact not supported by evidence. All of these contentions
were found to be without merit by the Appellate Tribunal which, on January 7, 1986,
promulgated a decision (erroneously denominated, "Report") 17 affirming the
"Summary Judgment complained of," "having found no reversible error" therein.
Once more, Thomas Cheesman availed of the remedy of appeal, this time to this
Court. Here, he argues that it was reversible error for the Intermediate Appellate
Court
1)
to find that the presumption that the property in question is conjugal in
accordance with Article 160 had been satisfactorily overcome by Estelita Padilla; 18
2)
to rule that Estelita Padilla was a purchaser of said property in good faith, it
appearing:
a)
that the deed by which the property was conveyed to Criselda Cheesman
described her as "married to Thomas C. Cheesman," as well as the deed by which
the property was later conveyed to Estelita Padilla by Criselda Cheesman also
described her as "married to an American citizen," and both said descriptions had
thus "placed Estelita on knowledge of the conjugal nature of the property;" and
b)
that furthermore, Estelita had admitted to stating in the deed by which she
acquired the property a price much lower than that actually paid "in order to avoid
payment of more obligation to the government;" 19
3)
to decline to declare that the evidence did not warrant the grant of Estelita
Padilla's petition for relief on the ground of "fraud, mistake and/or excusable
negligence;" 20
4)
to hold that Thomas Cheesman had waived his objection to Estelita's petition
for relief by failing to appeal from the order granting the same;
5)
to accord to Estelita Padilla a relief other than that she had specifically
prayed for in her petition for relief, i.e., "the restoration of the purchase price which
Estelita allegedly paid to Criselda;" 21 and

6)
to fail to declare that Thomas Cheesman's citizenship is not a bar to his
action to recover the lot and house for the conjugal partnership. 22
Such conclusions as that (1) fraud, mistake or excusable negligence existed in the
premises justifying relief to Estelita Padilla under Rule 38 of the Rules of Court, or
(2) that Criselda Cheesman had used money she had brought into her marriage to
Thomas Cheesman to purchase the lot and house in question, or (3) that Estelita
Padilla believed in good faith that Criselda Cheesman was the exclusive owner of
the property that she (Estelita) intended to and did in fact buy derived from the
evidence adduced by the parties, the facts set out in the pleadings or otherwise
appearing on record are conclusions or findings of fact. As distinguished from a
question of law which exists "when the doubt or difference arises as to what the
law is on a certain state of facts" "there is a question of fact when the doubt or
difference arises as to the truth or the falsehood of alleged facts;" 23 or when the
"query necessarily invites calibration of the whole evidence considering mainly the
credibility of witnesses, existence and relevancy of specific surrounding
circumstances, their relation to each other and to the whole and the probabilities of
the situation." 24
Now, it is axiomatic that only questions of law, distinctly set forth, may be raised in
a petition for the review on certiorari of a decision of the Court of Appeals presented
to this Court. 25 As everyone knows or ought to know, the appellate jurisdiction of
this Court is limited to reviewing errors of law, accepting as conclusive the factual
findings of the lower court upon its own assessment of the evidence. 26 The
creation of the Court of Appeals was precisely intended to take away from the
Supreme Court the work of examining the evidence, and confine its task to the
determination of questions which do not call for the reading and study of transcripts
containing the testimony of witnesses. 27 The rule of conclusiveness of the factual
findings or conclusions of the Court of Appeals is, to be sure, subject to certain
exceptions, 28 none of which however obtains in the case at bar.
It is noteworthy that both the Trial Court and the Intermediate Appellate Court
reached the same conclusions on the three (3) factual matters above set forth, after
assessment of the evidence and determination of the probative value thereof. Both
Courts found that the facts on record adequately proved fraud, mistake or excusable
negligence by which Estelita Padilla's rights had been substantially impaired; that
the funds used by Criselda Cheesman was money she had earned and saved prior
to her marriage to Thomas Cheesman, and that Estelita Padilla did believe in good
faith that Criselda Cheesman was the sole owner of the property in question.
Consequently, these determinations of fact will not be here disturbed, this Court
having been cited to no reason for doing so. cdll
These considerations dispose of the first three (3) points that petitioner Cheesman
seeks to make in his appeal. They also make unnecessary an extended discussion of

the other issues raised by him. As to them, it should suffice to restate certain
fundamental propositions.
An order of a Court of First Instance (now Regional Trial Court) granting a petition for
relief under Rule 38 is interlocutory and is not appealable. Hence, the failure of the
party who opposed the petition to appeal from said order, or his participation in the
proceedings subsequently had, cannot be construed as a waiver of his objection to
the petition for relief so as to preclude his raising the same question on appeal from
the judgment on the merits of the main case. Such a party need not repeat his
objections to the petition for relief, or perform any act thereafter (e.g., take formal
exception) in order to preserve his right to question the same eventually, on appeal,
it being sufficient for this purpose that he has made of record "the action which he
desires the court to take or his objection to the action of the court and his grounds
therefor." 29
Again, the prayer in a petition for relief from judgment under Rule 38 is not
necessarily the same prayer in the petitioner's complaint, answer or other basic
pleading. This should be obvious. Equally obvious is that once a petition for relief is
granted and the judgment subject thereof set aside, and further proceedings are
thereafter had, the Court in its judgment on the merits may properly grant the relief
sought in the petitioner's basic pleadings, although different from that stated in his
petition for relief.
Finally, the fundamental law prohibits the sale to aliens of residential land. Section
14, Article XIV of the 1973 Constitution ordains that, "Save in cases of hereditary
succession, no private land shall be transferred or conveyed except to individuals,
corporations, or associations qualified to acquire or hold lands of the public
domain." 30 Petitioner Thomas Cheesman was, of course, charged with knowledge
of this prohibition. Thus, assuming that it was his intention that the lot in question
be purchased by him and his wife, he acquired no right whatever over the property
by virtue of that purchase; and in attempting to acquire a right or interest in land,
vicariously and clandestinely, he knowingly violated the Constitution; the sale as to
him was null and void. 31 In any event, he had and has no capacity or personality to
question the subsequent sale of the same property by his wife on the theory that in
so doing he is merely exercising the prerogative of a husband in respect of conjugal
property. To sustain such a theory would permit indirect controversion of the
constitutional prohibition. If the property were to be declared conjugal, this would
accord to the alien husband a not insubstantial interest and right over land, as he
would then have a decisive vote as to its transfer or disposition. This is a right that
the Constitution does not permit him to have.
As already observed, the finding that his wife had used her own money to purchase
the property cannot, and will not, at this stage of the proceedings be reviewed and
overturned. But even if it were a fact that said wife had used conjugal funds to
make the acquisition, the considerations just set out militate, on high constitutional

grounds, against his recovering and holding the property so acquired, or any part
thereof. And whether in such an event, he may recover from his wife any share of
the money used for the purchase or charge her with unauthorized disposition or
expenditure of conjugal funds is not now inquired into; that would be, in the
premises, a purely academic exercise. An equally decisive consideration is that
Estelita Padilla is a purchaser in good faith, both the Trial Court and the Appellate
Court having found that Cheesman's own conduct had led her to believe the
property to be exclusive property of the latter's wife, freely disposable by her
without his consent or intervention. An innocent buyer for value, she is entitled to
the protection of the law in her purchase, particularly as against Cheesman, who
would assert rights to the property denied him by both letter and spirit of the
Constitution itself. LibLex
WHEREFORE, the appealed decision is AFFIRMED, with costs against petitioner.
SO ORDERED.
Cruz, Gancayco, Grio-Aquino and Medialdea, JJ., concur.

[G.R. No. 109645. August 15, 1997.]


ORTIGAS & CO. LTD. PARTNERSHIP, petitioner, vs. JUDGE TIRSO VELASCO and
DOLORES MOLINA, respondents.
[G.R. No. 112564. August 15, 1997.]
DOLORES V. MOLINA, petitioner, vs. HON. PRESIDING JUDGE OF RTC, QUEZON CITY,
BR. 105; and MANILA BANKING CORPORATION, respondents.
RE:
ADMINISTRATIVE PROCEEDINGS FOR DISMISSAL FROM THE JUDICIARY OF
JUDGE TIRSO D.C. VELASCO, BR. 105, REGIONAL TRIAL COURT, QUEZON CITY
Eulogio R. Rodriguez for petitioner in 109645.
Valdez, Sales & Associates for petitioner in 112564.
Villaraza & Cruz for Manila Banking.
Gregorio Bilog, Jr. for respondent Judge Tirso D.C. Velasco.
Justice Sixto A. Domondon/Rodol B. Mapile and Associates for Dolores Molina.
SYNOPSIS
This is an administrative proceedings filed by petitioners Ortigas & Co. Ltd.
Partnership and Manila Banking Corporation against Judge Tirso Velasco accusing
the latter of grievous transgression of quite elementary procedural and jurisdictional
rules praying for the dismissal from the judiciary of the respondent judge. In
response thereto, respondent judge theorized that the recycled petition for his
dismissal had became moot and academic due to the dismissal on October 18, 1995
of the administrative case against him and the entry of the final and executory
judgment of the second division in G.R. No. 109645 and G.R. No. 112564. Due to the
seriousness of the charges and of the penalty corresponding thereto, the instant
case was referred to the Court En Banc.

The Supreme Court En Banc ruled that the dismissal of the complaints filed against
respondent was without prejudice to their revival should the Court in its adjudication
of the case now pending before it pertaining to these cases find the decisions/orders
issued by respondent judges to have been issued in violation of the judicial norms of
conduct warranting disciplinary action. With regard to the specific charges against
respondent judge, the Court said that it is abundantly clear that no notice of the
reconstitution petition was ever given to the owners of the adjoining properties and
other interested parties, and no publication in the Official Gazette or posting in the
indicated places of the petition was made which effectively precluded this court
from acquiring jurisdiction over the reconstitution proceeding and proceeded to act

on the case and preside over a proceeding void ab initio. Moreover, respondent
judge disregarded well-known and firmly established doctrines by dismissing the
appeals of petitioner Ortigas and by the Solicitor General. A rule of long-standing
and uniform application is that dismissals by Regional Trial Courts of appeals are
allowed provided that a motion to dismiss an appeal was filed or no notice of appeal
was made. Aside from this two, the trial court cannot disallow an appeal. In sum,
respondent's acts are so serious and indefensible a character as to call for the
penalty of dismissal from service, especially so when it is considered that the
disciplinary proceeding at bar is not the first initiated against him. In view thereof,
respondent judge is dismissed from the service, with forfeiture of all retirement
benefits and accrued leave credits, and with prejudice to re-employment in any
branch or instrumentality of the government including government-owned or
controlled corporation. DEHcTI
SYLLABUS
1.
JUDICIAL ETHICS; JUDGES; DISMISSED, FOR GROSS IGNORANCE OF THE LAW,
SERIOUS MISCONDUCT PREJUDICIAL TO THE INTEREST OF THE SERVICE, PATENT
BIAS AND PARTIALITY. The first of these accusations is that respondent Judge
acted on and indeed favorably resolved the reconstitution proceeding instituted by
Molina despite full awareness that he had no jurisdiction over it, the pre-requisites
therefor not having been complied with. Judge Velasco was made aware of the
petitioner's failure to comply with the peremptory requirements of Section 13 of
Republic Act No. 26. However, what the Velasco Court actually did, through the
Clerk of Court, was to send notices of the hearing scheduled on July 16, 1992 to
persons OTHER than those mentioned by the law. It is thus abundantly clear that no
notice of the reconstitution petition was ever given to the owners of the adjoining
properties and other interested parties, and no publication in the Official Gazette, or
posting in the indicated public places, of notices of the petition stating the names of
these persons was ever accomplished. Respondent Judge ignored these patent
defects which effectively precluded his Court's acquiring jurisdiction over the
reconstitution proceeding and proceeded to act on the case and preside, in fine,
over a proceeding void ab initio. Respondent Judge moreover disregarded wellknown and firmly established doctrines respecting dismissal of appeals and
execution of judgments, in a manner that clearly favored petitioner Molina. He
dismissed Ortigas' appeal, pronouncing its notice of appeal as a "mere scrap of
paper" because Ortigas allegedly had no material interest in the litigation. Not only
was this contrary to the doctrine just discussed, it also went against relevant facts
and related substantive provisions of law. Judge Velasco also threw out the appeal of
the Office of the Solicitor General. He branded the appeal "sham" because said
Office had "not filed any formal opposition to the petition and neither has it
introduced and/or formally offered any evidence to warrant its dismissal, etc.," and
declared that the appeal was tardily attempted. The next misdeed ascribed to Judge
Velasco concerns his Order of October 14, 1992 by which he authorized the

immediate execution of the judgment rendered by him just twenty-one (21) days
earlier (on September 23, 1992), directing reconstitution of Molina's title.
Respondent Judge's concession to Molina of immediate execution of the judgment in
her favor thus constitutes yet another breach of established principles. Respondent
Judge proceeded with the reconstitution case and rendered judgment despite lack of
jurisdiction, adverse evidence of high ranking officials of LRA, published precedents
re Ortigas' titles and reconstitution proceedings, and reconstitution petition based
on plainly inferior evidence. The disregard by Judge Velasco of these simply cannot
be explained away as an honest mistake of judgment or an innocent error in the
exercise of discretion. It can only be viewed as an attempt through misuse of
judicial processes to give a semblance of merit to a clearly unmeritorious cause and
accord undeserved benefits to the party espousing and promoting said cause.
WHEREFORE, Judge Tirso D. C. Velasco is hereby DISMISSED from the service, with
forfeiture of all retirement benefits and accrued leave credits, and with prejudice to
re-employment in any branch or instrumentality of the government including
government-owned or controlled corporations. Immediately upon service on him of
notice of this adjudgment, he shall be deemed to have VACATED his office, and his
authority to act in any manner whatsoever as Judge shall be considered to have
automatically CEASED. STEacI
2.
CIVIL LAW; REPUBLIC ACT NO. 26 (RECONSTITUTION OF LOST OR DESTROYED
TORRENS CERTIFICATE OF TITLE); REQUISITES FOR COURT TO ACQUIRE
JURISDICTION. Section 13 of Republic Act No. 26 sets down the indispensable
requisites for the acquisition by the court of jurisdiction over a proceeding for
reconstitution of title, these being: 1) publication, at petitioner's expense, of notice
of the petition for reconstitution twice in successive issues of the Official Gazette,
and posting thereof on the main entrance of the provincial building and of the
municipal building of the municipality or city in which the land is situated, at least
thirty days prior to the date of hearing; 2) specific statement in the notice of the
number of the lost or destroyed certificates of title if known, the name of the
registered owner, the name of the occupants or persons in possession of the
property, the owner of the adjoining properties and all other interested parties, the
location, area and boundaries of the property, and the date on which all persons
having any interest therein must appear and file their claim or objection to the
petition; 3) sending, by registered mail or otherwise, at the expense of the
petitioner, of a copy of the notice to every person named therein (i.e., the
occupants or persons in possession of the property, the owner of the adjoining
properties and all other interested parties) whose address is known, at least thirty
days prior to the date of the hearing; and 4) submission by petitioner at the hearing
of proof of the publication, posting and service of the notice as directed by the
court.
3.
REMEDIAL LAW; ACTIONS; APPEAL FROM THE REGIONAL TRIAL COURT;
GROUND FOR DISMISSAL. A rule of long standing and uniform application is that

dismissals by Regional Trial Courts of appeals from their judgments are allowed only
under the conditions stated in Sections 13 and 14, Rule 41 of the Rules of Court.
Section 14 provides that a "motion to dismiss an appeal may be filed prior to the
transmittal of the record to the appellate court," the grounds being limited to those
"mentioned in the preceding section," i.e., Section 13, to wit: "where the notice of
appeal, appeal bond, or record on appeal is not filed within the period of time herein
provided." In other words, the ground for dismissal of an appeal from the Regional
Trial Court is the failure of an appellant to file the notice of appeal, or the record on
appeal in cases of multiple appeals the requirement of an appeal bond having
been eliminated. It has no power to disallow an appeal on any other ground, e.g.,
that it is frivolous, or the case has become moot, etc. The reason is obvious:
otherwise, "the way would be opened for courts to forestall review or reversal of
their decisions by higher courts, no matter how erroneous or improper such
decisions should be."
4.
ID., ID.; APPEALS; EXECUTION PENDING APPEAL; AVAILED OF ONLY IN
EXTRAORDINARY CIRCUMSTANCES. Now, it is axiomatic that execution of
judgments pending appeal is allowed only as an exception to the general rule that
only judgments which have become final and executory may be executed. The
principle is set forth in Section 2, Rule 39 of the Rules of Court. The element that
gives validity to an order of execution pending appeal is the existence of good
reasons, to be stated in a special order. The discretion to authorize immediate
execution is sound discretion, which so authorizes it only where there are good
reasons therefor. Execution pending appeal is not to be availed of and applied
routinely, but only in extraordinary circumstances. Indeed, particularly as regards
land registration or cadastral cases, the rule should be applied with even more
circumspection in light of: (1) the declared inapplicability of the Rules of Court "to
land registration, cadastral and election cases, naturalization and insolvency
proceedings, and other cases not provided for, except by analogy or in a suppletory
character and whenever practicable and convenient"; and (2) the holding in Director
of Lands v. Reyes, 68 SCRA 177 (1975) that "execution pending appeal is not
applicable in a land registration proceeding," for the reason that it "is fraught with
dangerous consequences (as) (i)nnocent purchasers may be misled into purchasing
real properties upon reliance on a judgment which may be reversed on appeal."
5.
ID.; REPUBLIC ACT NO. 26 (RECONSTITUTION OF LOST OR DESTROYED
CERTIFICATE OF TITLE); LANDS ALREADY COVERED BY EXISTING TITLES CANNOT BE
THE SUBJECT THEREOF. Lands already covered by existing titles "cannot be the
subject of petitions for reconstitution of allegedly lost or destroyed titles filed by
third parties without first securing by final judgment the cancellation of such
existing titles"; and that "courts simply have no jurisdiction over petitions by such
third parties for reconstitution of allegedly lost or destroyed titles over lands that
are already covered by duly issued subsisting titles in the names of their duly
registered owners." TSDHCc

RESOLUTION
PER CURIAM p:
I.

The Petitions for Dismissal

Shortly after notice of the judgment of July 25, 1994 in the consolidated cases at bar
was served on counsel of Ortigas & Co. Ltd., it filed a "Motion for Reconsideration
(Re: Dismissal of Respondent Judge)," dated August 15, 1994, pointing out that
while it had been awarded the basic reliefs it sought, the prayer set out in its
Memorandum 1 that Hon. Judge Tirso D.C. Velasco be purged from the judiciary
had not been granted. It made reference to a "litany of glaring errors committed
by respondent Judge" disregarding the mandatory notice requirement in
reconstitution proceedings; "reviving" a long interred petition; disregarding the
Decisions of this Court and its warning to take extra care in reconstitution
proceedings; relying on incredible and unbelievable evidence; bad faith in
disallowing the appeals of Ortigas and the Republic of the Philippines; and allowing
execution pending appeal and argued that collectively, these errors amply
establish Judge Velasco's "gross bad faith and connivance in the fraudulent
reconstitution of the fake titles." 2
The Manila Banking Corporation (TMBC) joined Ortigas in the petition for Velasco's
removal from the Judiciary. 3 In fact, as early as July 12, 1993, it had filed an
administrative complaint against the Judge for gross ignorance of the law, serious
misconduct prejudicial to the interest of the service, patent bias and partiality in
favor of Dolores Molina, and hostility to those opposing her claims involving the
same orders and rulings which were annulled by this Court's Decision of July 25,
1995. The case was docketed as Administrative Matter No. RTJ-93-1108, entitled
"Epimaco V . Oreta (On Behalf of the Manila Banking Corporation) v. Hon. Tirso D.C.
Velasco, etc." It was, however, dismissed without prejudice by the First Division in a
Resolution dated October 18, 1995 principally for being premature. 4 cdasia
II.

Relevant Pleadings Prior to Submission of Case for Resolution

The Court required Judge Velasco to file a comment on the petition for his removal
within ten (10) days, 5 but filing thereof was, at his instance, held in abeyance ". . .
pending resolution of petitioner Molina's motion for reconsideration of the said
decision of July 25, 1994 . . ." 6 That motion for reconsideration was denied with
finality by Resolution of January 23, 1995, which also accordingly ordered Judge
Velasco "to SUBMIT within ten (10) days from notice . . . his comment on the 'Motion
for Reconsideration (Re: Dismissal of Respondent Judge)' . . . dated August 15,
1994." In a subsequent Resolution, 7 the Court directed inter alia that "no further
pleadings, motions or papers be henceforth filed in these cases except only as
regards the issues directly involved in the 'Motion for Reconsideration (Re: Dismissal
of Respondent Judge)' of Ortigas & Co. Ltd., dated August 15, 1994."

Judge Velasco submitted his Comment on March 17, 1995.


By Resolution dated July 24, 1995, the Court declared the consolidated cases at bar
"closed and terminated;" directed entry of judgment; reiterated the order that no
further pleadings, motions or papers be henceforth filed except only as regards the
issues directly involved in the motion for the dismissal of the Judge, dated August
15, 1994; and directed the Clerk of Court to transmit the mittimus in both cases to
the corresponding Courts of origin for appropriate action. Then, after passing upon
and disposing of other incidents, including inter alia the liability of Dolores Molina
and her lawyers for contempt of court, 8 the Court promulgated another Resolution
(dated May 20, 1996) granting the parties thirty (30) days from notice within which
to file memoranda, if they be so minded, in relation to the application for Judge
Velasco's removal from the Judiciary. Judge Velasco filed his memorandum on June
26, 1996; TMBC and Ortigas filed theirs on July 15, 1996 and September 11, 1996,
respectively. No hearing was conducted. The parties did not ask for it. Having raised
no issue of fact requiring presentation of proof, they were evidently disposed to
submit the case for resolution on the basis of their pleadings and memoranda in
relation to the facts on record.

The seriousness of the charges and of the penalty thereto corresponding have
impelled the referral of the case to the Court En Banc.
III.

Judge's Theory that Case Moot and Academic

In his memorandum, Judge Velasco theorizes that "the recycled petition for . . . (his)
dismissal in the THIRD DIVISION of the Supreme Court (had been rendered) moot
and academic" by: (1) the dismissal on October 18, 1995 of the administrative case
against him (Adm. Matter No. RTJ-93-1108), and (2) the entry of the final and
executory judgment of the Second Division "dated July 25, 1994 in G.R. No. 109645
and G.R No. 112564 . . ." The theory is utterly untenable.
The dismissal of the complaints in Adm. Matter No. RTJ-93-1108 was "without
prejudice to their revival should the Court in its adjudication of the cases now
pending before it pertaining to these cases find the Decisions/Orders issued by
respondent Judges to have been issued in violation of judicial norms of conduct
warranting disciplinary action." 9 And other pertinent Resolutions have made clear
that Judge Velasco's administrative liability would be dealt with separately from the
merits of the consolidated cases; that the finality and entry of the consolidated
judgment would have no effect on the determination of said liability; that the
proceedings, in other words, would be kept open solely as regards the petition for
the Judge's removal. The Resolution of January 23, 1995, for instance, which denied
with finality Molina's motion for reconsideration of the consolidated decision of July
25, 1994 (inclusive of said motion's supplements), not only ordered the Judge to
submit his comment on the petition for his dismissal from the service (its filing

having been deferred pending resolution of Molina's aforesaid motion for


reconsideration), but also directed that "no further pleadings, motions or papers
(should) be henceforth filed in these cases except only as regards the issues directly
involved in the 'Motion for Reconsideration (Re: Dismissal of Respondent Judge)' of
Ortigas & Co. Ltd., dated August 15, 1994." indubitably indicating that the inquiry
into Judge Velasco's administrative liability would be pursued despite the attainment
of finality of the judgment, then quite imminent. These dispositions were reiterated
in the Resolutions of March 1, 1995 and July 24, 1995. 10 All this, apart from the
fact that Judge Velasco's administrative liability was never directly in issue in the
proceedings leading to the rendition of the consolidated judgment in the cases at
bar.
IV.

Specific Accusations

At Judge Velasco's door are laid accusations of grievous transgressions of quite


elementary procedural and jurisdictional rules.
A.

Proceeding with Reconstitution Case Without Jurisdiction

The first of these is that he acted on and indeed favorably resolved the
reconstitution proceeding instituted by Molina despite full awareness that he had no
jurisdiction over it, the pre-requisites therefor not having been complied with. The
validity of the accusation cannot but be conceded.
Section 13 of Republic Act No. 26, 11 sets down the indispensable requisites 12 for
the acquisition by the court of jurisdiction over a proceeding for reconstitution of
title, these being:
1)
publication, at petitioner's expense, of notice of the petition for reconstitution
twice in successive issues of the Official Gazette, and posting thereof on the main
entrance of the provincial building and of the municipal building of the municipality
or city in which the land is situated, at least thirty days prior to the date of hearing;
2)
specific statement in the notice of the number of the lost or destroyed
certificates of title if known, the name of the registered owner, the name of the
occupants or persons in possession of the property, the owner of the adjoining
properties and all other interested parties, the location, area and boundaries of the
property, and the date on which all persons having any interest therein must appear
and file their claim or objection to the petition;
3)
sending, by registered mail or otherwise, at the expense of the petitioner, of
a copy of the notice to every person named therein (i.e., the occupants or persons
in possession of the property, the owner of the adjoining properties and all other
interested parties) whose address is known, at least thirty days prior to the date of
the hearing; and

4)
submission by petitioner at the hearing of proof of the publication, posting
and service of the notice as directed by the court.
Judge Velasco was made aware of the petitioner's failure to comply with these
peremptory requirements. In truth, in his Order of July 3, 1992, he confessed his
inability to "declare as of now that . . . (his Court) had already acquired jurisdiction
over . . . (the) case considering the manifestation of . . . (Solicitor) Ma. Eloisa Castro
that the requirement of notice to the other adjacent owners has not as yet been
submitted to the Court . . ." Having thus been put on guard that an essential feature
of the proceeding was fatally flawed essential because it affected his very power
to act thereon he became unavoidably obliged to review the record and, of
course, the legal provisions laying down the germane jurisdictional requirements.
Had he done so, he would have quickly discovered that the notice of the petition for
reconstitution, as published and posted, did not state the names of the occupants or
persons in possession of the property, the owner of the adjoining properties and all
other interested parties, and that petitioner had not (as she could not have) sent
copies of the notice to said persons. These omissions are clearly albeit implicitly
conceded by petitioner herself when she filed an ex parte motion dated July 13,
1992 praying that notices be sent to certain individuals and by His Honor when
he granted that motion by Order dated July 16, 1992. However, what the Velasco
Court actually did, through the Clerk of Court, was to send notices of the hearing
scheduled on July 16, 1992 to persons OTHER than those mentioned by the law,
namely: cdll
1)
the "president of the Corinthian Neighborhood Association or Corinthian
Homeowners Association thru the Barangay Chairman of Barangay Corinthian
because the adjoining property designated as Vicente Madrigal is now part of this
Barangay Corinthian;"
2)
the "Director, Bureau of Lands, Plaza Cervantes, Manila, as adjoining owner
designated as Public Land:" and
3)
the "City Engineer of Quezon City for the adjoining boundaries designated as
Roads or Road Lot." prcd
By no means may these notices be deemed to meet the fundamental prerequisites
for acquisition of jurisdiction in reconstitution cases. For clearly, as this Court said in
its Decision of July 25, 1994, the officers of the neighborhood or homeowners'
association "are not the adjoining owners contemplated by law, on whom notice of
the reconstitution proceedings must be served . . .; nor did they, by their receipt of
notice of the petition (or the process server's admonition) incur the obligation to
transmit such notice to the actual owners of the adjoining lots, assuming they had
knowledge of the latter's identities." 13 Nor may said notices be considered
substantially satisfactory, simply on the basis of respondent Judge's claim of
"honest belief" that notice on the officers of the Corinthian Neighborhood

Association was sufficient because the "occupants or homeowners (whom the law
required to be notified) are themselves, bonafide members of the Association," and
said officers "were specifically charged by the process server to inform their
respective constituents about the notice." The claim is put forth with no little
effrontery, considering its patent puerility, and underscores the Judge's cavalier
attitude towards the stringent jurisdictional requirements of the law.
His Honor advances the equally preposterous theory that since Atty. Ongkiko
appeared "in behalf of the Association" which shows, he says, that the latter had
received the notice of hearing, it was "up to him to make further inquiries . . . (this
being) his own lookout as representative of the Association." Of the same ilk is his
excuse for omitting to serve any notice on Ortigas, i.e., that its "claims can be
properly determined in a separate, ordinary action where the issue of ownership can
be threshed out, and not in a reconstitution proceeding . . ." That excuse is a flimsy
attempt to mask his deliberate refusal to the allegations of the oppositors, including
the government itself, that there was nothing to reconstitute because Molina's title
was fabricated and completely void.
It is thus abundantly clear that no notice of the reconstitution petition was ever
given to the owners of the adjoining properties and other interested parties, and no
publication in the Official Gazette, or posting in the indicated public places, of
notices of the petition stating the names of these persons was ever accomplished.
Respondent Judge ignored these patent defects which effectively precluded his
Court's acquiring jurisdiction over the reconstitution proceeding and proceeded to
act on the case and preside, in fine, over a proceeding void ab initio.
B.

Unwarranted Dismissal of Appeals

Respondent Judge moreover disregarded well-known and firmly established


doctrines respecting dismissal of appeals and execution of judgments, in a manner
that clearly favored petitioner Molina.
A rule of long standing and uniform application is that dismissals by Regional Trial
Courts of appeals from their judgments are allowed only under the conditions stated
in Sections 13 and 14, Rule 41 of the Rules of Court. Section 14 provides that a
"motion to dismiss an appeal may be filed . . . prior to the transmittal of the record
to the appellate court," the grounds being limited to those "mentioned in the
preceding section," i.e., Section 13, to wit: "where the notice of appeal, appeal
bond, or record on appeal is not filed within the period of time herein provided." In
other words, the only ground for dismissal of an appeal from the Regional Trial Court
is the failure of an appellant to file the notice of appeal, or the record on appeal
in cases of multiple appeals the requirement of an appeal bond having been
eliminated.
It has no power to disallow an appeal on any other ground, e.g., that it is frivolous,
or the case has become moot, etc. The reason is obvious: otherwise, "the way

would be opened for courts . . . to forestall review or reversal of their decisions by


higher courts, no matter how erroneous or improper such decisions should be." 14
Neither may the Trial Court dismiss appeals on the grounds mentioned in Rule 50 of
the Rules of Court, or other recognized grounds, e.g., that the cause has become
moot, or the appeal is frivolous or manifestly dilatory for authority to do so "is not
certainly with the court a quo whose decision is in issue, but with the appellate
court." 15
But in defiance of these familiar precepts, respondent Judge dismissed appeals
attempted to be taken from his judgment in favor of Molina by Ortigas and the
Solicitor General.
He dismissed Ortigas' appeal, pronouncing its notice of appeal as a "mere scrap of
paper" because Ortigas allegedly had no material interest in the litigation. Not only
was this contrary to the doctrine just discussed, it also went against relevant facts
and related substantive provisions of law. As observed by this Court in the judgment
of July 25, 1994: 16
"There is in the first place, the conceded fact that Ortigas still retained title to a
considerable number of street lots within the land in question, which it would lose if
the entire area were declared to belong to Molina. Again, the respondent Judge's
acknowledgment of Ortigas' status of vendor of all the subdivision lots covered by
Molina's adverse claim., was implicit recognition of its right and obligation to defend
its vendees' titles being impugned by Molina precisely on the theory that Ortigas'
titles were void, a right and obligation arising from the warranty against eviction
imposed on it by law. The avoidance of liability for eviction is certainly an interest of
sufficient substance to concede to Ortigas capacity to litigate as party in interest in
the reconstitution proceeding, prescinding from its stated intention of preventing
the perpetration of fraud by Molina upon Ortigas' vendees and successors-ininterest and upon the public at large."
Respondent Judge pleads "good faith," saying that when he dismissed Ortigas'
appeal, he had no furtive design, self-interest, ill-will or ulterior purposes in his mind
and heart. The record shows otherwise and precludes acceptance of his plea.
Judge Velasco also threw out the appeal of the Office of the Solicitor General. He
branded the appeal "sham" because said Office had "not filed any formal opposition
to the petition and neither has it introduced and/or formally offered any evidence to
warrant its dismissal, etc.," and declared that the appeal was tardily attempted.
Again, the ruling on the matter in the judgment of July 25, 1994 is relevant and
cogent: 17
"Prescinding from the patent fact that the records do contain (1) the formal
objection of the OSG to Molina's petition for reconstitution on the ground inter alia
that no actual notice had been given to the adjacent owners, an omission that the

Trial Judge had precisely acknowledged, (2) the report of the Land Registration
Authority drawing the Court's attention to irregularities in the petition, e.g., that the
plan relied upon by Molina, Psd-16740 'appears to be derived from two different
surveys, numbered Psu-1148 & Psu-20191, neither of which appear(s) to have been
the subject of original registration; thus it is presumed that no original title had
been issued from which TCT-124088 could have emanated;' that said plan 'is a
portion of (LRC) SWO-15352 which is being applied for registration of title in Land
Reg. Case No. Q-336, LRC Rec. No. N-50589,' etc., (3) the notice of appeal of the
OSG from the judgment of September 23, 1992, (4) the motion of the OSG for
reconsideration of the Order of October 14, 1992 unmistakably indicating the
active opposition of the OSG to the Molina petition for reconstitution the rule, as
already explained, is that Trial Courts have no competence to dismiss appeals on
the stated ground or any other going to the merits thereof. While it may be assumed
that Trial Courts are morally convinced of the correctness of the judgments and
orders that they promulgate, and hence, in most cases, they honestly believe that
appeals from their judgments or final orders are inutile, frivolous, dilatory, this gives
them no warrant to reject appeals on these grounds; otherwise, the right of appeal
would be rendered largely illusory."
A fallacy known in logic as non sequitur is what his Honor offers by way of refutation
of this accusation. He argues that government agencies "directly involved in this
kind of proceeding . . . (were) duly notified" such as "the Land Management
Bureau, the DENR, the Register of Deeds . . . and the City Engineers Office of
Quezon City" and since "they . . . (had) not registered any opposition to the
petition," the Solicitor General's appeal is "sham and unnecessary." The conclusion
does not follow, it has no bearing whatever on the stated premise; and the Judge's
plea of "good faith" founded on such an obviously contrived argument cannot but
be rejected. Furthermore, ranking officials of the Land Registration Authority had in
fact impugned Molina's title, as will shortly be recounted. 18
C.

Unwarranted Order of Execution Pending Appeal

The next misdeed ascribed to Judge Velasco concerns his Order of October 14, 1992
by which he authorized the immediate execution of the judgment rendered by him
just twenty-one (21) days earlier (on September 23, 1992), directing reconstitution
of Molina's title. In that Order he opined that, on the ostensible basis of cited
precedents. Ortigas' appeal was "frivolous and interposed only for purposes of
delay;" hence, immediate execution was warranted not only by Molina's advanced
age, but also to "prevent wastage of (her) income," "avoid the possibility of . . .
judgment becoming illusory or to "prevent further damage" to her or "minimize
damage unduly suffered by . . . (her)." cdpr
Now, it is axiomatic that execution of judgments pending appeal is allowed only as
an exception to the general rule that only judgment which have become final and

executory may be executed. The principle is set forth in Section 2, Rule 39 of the
Rules of Court.
"SEC. 2.
Execution pending appeal. On motion of the prevailing party with
notice to the adverse party the court may, in its discretion, order execution to issue
even before the expiration of the time to appeal, upon good reasons to be stated in
a special order. If a record on appeal is filed thereafter, the motion and the special
order shall be included therein."
The element that gives validity to an order of execution pending appeal, it will be
noted, is the existence of good reasons, to be stated in a special order. The
discretion to authorize immediate execution, is sound discretion, which so
authorizes it only where there are good reasons therefor. 19 Execution pending
appeal is not to be availed of and applied routinely, but only in extraordinary
circumstances. Indeed, particularly as regards land registration or cadastral cases,
the rule should be applied with even more circumspection in light of: (1) the
declared inapplicability of the Rules of Court "to land registration, cadastral and
election cases, naturalization and insolvency proceedings, and other cases not . . .
provided for, except by analogy or in a suppletory character and whenever
practicable and convenient;" and (2) the holding in Director of Lands v. Reyes, 68
SCRA 177 (1975) that "execution pending appeal is not applicable in a land
registration proceeding," for the reason that it "is fraught with dangerous
consequences . . . (as) (i)nnocent purchasers may be misled into purchasing real
properties upon reliance on a judgment which may be reversed on appeal." 20
Respondent Judge's concession to Molina of immediate execution of the judgment in
her favor thus constitutes yet another breach of established principles.
Insofar as immediate execution is premised on the theory that Ortigas' appeal was
"frivolous and interposed only for purposes of delay," such rationalization is
indefensible for the reasons already stated relative to the Judge's disallowance of
Ortigas' appeal. And insofar as it is sought to be justified upon the broad and
general grounds cited by His Honor, i.e., in order "to prevent wastage of income," or
"avoid the possibility of . . . judgment becoming illusory or to minimize damage
unduly suffered by the prevailing party or to prevent further damage," as well as by
Molina's "advanced age" the proffered rationale is just so much gobbledygook. In
the first place, respondent Judge was aware that Molina's title was in conflict with
Ortigas' document of ownership which had been in existence for many, many
years, and had been subject of, and upheld in, several decisions and final
resolutions of the highest court of the land. Any reasonably prudent person in his
shoes should have realized that there could be some serious questions about
Molina's title. Assuming, however, that the Judge had been convinced by Molina's
proofs that Ortigas' titles were gravely flawed, he may not (as this Court's judgment
of July 25, 1996 emphasizes) ascribe "such infallibility to his judgment as to
preclude the possibility of its being overturned on appeal, (and) condemn any

appeal sought to be taken therefrom as idle and merely generative of needless


injury to the prevailing party." Otherwise, the exception would come to be the
general rule; it would then be possible for the prevailing party in every case to bring
about immediate execution by merely alleging that any projected appeal would
result in injury to him because his income would be wasted, or he would be caused
further damage; or, if he should happen to be of advanced age, that he would not
survive an appeal.
Of course as it turned out, respondent Judge's decision was not as invulnerable as
he posited. Indeed, it was riddled with invalidating imperfections, and only the most
biased would have imputed such soundness to it as to spawn optimism of its
affirmance by this Court. All things considered, the gross impropriety of authorizing
that judgment's immediate execution is quite apparent.
D.

Disregard of Factors Cogently Militating Against Reconstitution

Again, respondent Judge proceeded with the reconstitution case and rendered
judgment in disregard, and even in defiance, of powerfully cogent circumstances of
which he was fully aware, deepening the doubt as to the bona fides of his claim, just
discussed, of frivolousness of the appeals from his judgment, and of the existence
of good reasons for its immediate execution.
1.

Lack of Jurisdiction

The first of these circumstances is, as already stressed, the non-fulfillment of the
legal requisites for his Court's acquisition of jurisdiction over the Molina
reconstitution case, a fatal defect he sought to trivialize and evade by ordering
service of notice on inconsequential parties who clearly were not those
contemplated by law or obliged to relay the notice to the proper persons.
2.

Adverse Evidence of High-Ranking Officials of LRA

A second circumstance ignored by His Honor although it obviously made obligatory


the exercise of extreme caution in assessment of the merits of Molina's application,
was the fact that Government agencies and officials directly in charge of
enforcement of land registration laws had pointed to pernicious, if not invalidating,
defects in her title.
At the commencement of the reconstitution proceedings, the Land Registration
Authority presented to the Judge a report explicitly identifying irregularities in
Molina's title. 21 And high-ranking officers of the Land Registration Authority
testified in support of that report: Atty. Benjamin Bustos, Chief of the Reconstitution
Division, who declared that Molina's plans had never been subject of registration
proceedings; Engineer Felino Cortez, Chief of the Ordinary and Cadastral Decree
Division, who said there were discrepancies in the plans and technical description
submitted by Molina; and Mr. Privadi J. G. Dalire, Chief of the Geodetic Surveys

Division of the Land Management Bureau, who testified that the plans of Molina
could not refer to the land allegedly covered thereby.
Atty. Bustos explained, among other things, that the absence of corresponding
registration proceedings indicated that there was no original certificate of title from
which the transfer certificate of title a photocopy of which was presented by
Molina could have emanated. He recommended denial of her application for
reconstitution, stating that every transfer certificate of title regularly issued has a
control number allotted by the Land Registration Authority, and while Molina claims
that her title was issued in 1967, the records show that the number on Molina's title
was not released to the Quezon City Register of Deeds until 1975; and Molina's
alleged title overlapped 19 other genuine titles. cdta
Engineer Cortez testified inter alia that two plans submitted by Molina, dated 1910
and 1918, were suspect because the eastern and western boundaries were parallel,
an unlikely position for land that was probably forested at that time; and that the
record number of one of the plans submitted, 781, referred to property in Palawan,
not Quezon City.
The evidence given by Mr. Dalire of the Land Management Bureau 22 indicates that
the procedure in the assignment of subdivision numbers renders it impossible for
Psd-16740 to be a subdivision survey of both Psu-1148 and Psu-20191 as Molina
submits although both refer to land in Bo. Ugong, Pasig, Rizal. The official record
of approved surveys discloses that Psd-16740 pertains to a survey conducted by a
certain R Guerrero for the Heirs of Jose dela Via over land located in Valle Hermoso,
Negros Oriental (not Quezon City).
3.

Published Precedents Re Ortigas' Titles and Re-constitution Proceedings

Respondent Judge also disregarded precedents laid down by this Court germane to
the issues before him. Admitted on all sides was that Molina's titles overlapped
those of Ortigas. Ortigas had in fact explicitly pleaded such overlapping and drawn
His Honor's attention to this Court's rulings vindicating its titles. It did so, for
instance, in its "Manifestation and Motion" dated September 7, 1992, to which it
appended a copy of this Court's Decision of August 7, 1992 in the so-called WIDORA
Case. 23 His Honor was thus charged with knowledge that Ortigas' titles had more
than once been passed upon and upheld by the highest court of the land. And he
should have known, too as emphasized in this Court's judgment of July 25, 1994
that those relevant precedents 24 operated to put Ortigas' titles over the lands
thereby embraced beyond the pale of further judicial inquiry; and that no court in
the country now has competence to take cognizance of applications for the
registration anew of said lands in the name of persons other than Ortigas or its
predecessor-in-interest, or successors and assigns, or entertain further challenges
to the validity and efficacy of the latter's titles.

He was in the premises, also charged with knowledge of this Court's


pronouncements in Alabang Development Corporation et al. v. Valenzuela, 25 and
other precedents, 26 to the effect that 27
". . . courts must exercise the greatest caution in entertaining . . . petitions for
reconstitution of allegedly lost certificates of title, particularly where the petitions
are filed, as in this case, after an inexplicable delay of 25 years after the alleged
loss. . . . We can take judicial notice of innumerable litigations and controversies
that have been spawned by the reckless and hasty grant of such reconstitution of
alleged lost or destroyed titles as well as of the numerous purchasers who have
been victimized by forged or fake titles or their areas simply 'expanded' through
'table surveys' with the cooperation of unscrupulous officials.
The Court stresses once more that lands already covered by duly issued existing
Torrens titles (which become incontrovertible upon the expiration of one year from
their issuance under section 38 of the Land Registration Act) cannot be the subject
of petitions for reconstitution of allegedly lost or destroyed titles filed by third
parties without first securing by final judgment the cancellation of such existing
titles. (And as the Court reiterated in the recent case of Silvestre vs. Court of
Appeals [G.R. Nos. L-32694 and L-33119, July 16, 1982], 'in cases of annulment
and/or reconveyance of title, a party seeking it should establish not merely by a
preponderance of evidence but by clear and convincing evidence that the land
sought to be reconveyed is his') The courts simply have no jurisdiction over
petitions by such third parties for reconstitution of allegedly lost or destroyed titles
over lands that are already covered by duly issued subsisting titles in the names of
their duly registered owners. The very concept of stability and indefeasibility of
titles covered under the Torrens System of registration rules out as anathema the
issuance of two certificates of title over the same land to two different holders
thereof. A fortiori, such proceedings for 'reconstitution' without actual notice to the
duly registered owners and holders of Torrens Titles to the land are null and void.
Applicants, land officials and judges who disregard these basic and fundamental
principles will be held duly accountable therefor."
and that 28
"Time and again, the integrity and inviolability of Torrens titles issued pursuant to
the Land Registration Act (Act 496) and Presidential Decree No. 1529 have been
shaken by the very courts whose unwavering duty should be to protect the rights
and interests of title holders but instead have favored claimants under the guise of
reconstitution filed after a long lapse of time after the Japanese occupation, alleging
the existence of original and duplicate certificates of title issued pursuant to a court
decree but have subsequently been lost or destroyed including the record of the
land registration case on account of the war and lay claim to valuable parcels of
land previously titled and registered under the Torrens registration system and are
even able to dispose these properties to unsuspecting homelot buyers and

speculating land developers. The courts must be cautious and careful in granting
reconstitution . . . based on documents and decrees made to appear authentic from
mere xerox copies and certification of officials supposedly signed with the seals of
their office affixed thereon, considering the ease and facility with which documents
are made to appear as official and authentic. It is the duty of the court to scrutinize
and verify carefully all supporting documents, deeds and certifications. Each and
every fact, circumstance or incident which corroborates or relates to the existence
and loss of the title should be examined."
Despite all these rulings, some of which bear striking similarities to the
reconstitution case at bar, respondent Judge ignored the binding admonition that
lands already covered by existing titles "cannot be the subject of petitions for
reconstitution of allegedly lost or destroyed titles filed by third parties without first
securing by final judgment the cancellation of such existing titles;" and that "courts
simply have no jurisdiction over petitions by such third parties for reconstitution of
allegedly lost or destroyed titles over lands that are already covered by duly issued
subsisting titles in the names of their duly registered owners." His opinion that
Ortigas should ventilate the issue of ownership, not in the reconstitution
proceeding, but in a separate suit, defied this admonition. What is worse, he
ordered immediate execution of his indefensible judgment, and made it possible for
Molina get title to the property and dispose of it, which she forthwith proceeded to
do. As observed in this Court's judgment of July 25, 1994, 29
". . . Molina succeeded in having her title (TCT No. 124088) reconstituted; and it was
assigned a new number: TCT No. RT-58287. Molina caused the land thereby covered
to be subdivided into five (5) parcels and obtained separate titles for them (the
reconstituted title being, of course, consequently cancelled in the process). These
titles over the five (5) subdivided lots, TCTs Numbered 83163, 83164, 83165, 83166
and 83167, were all issued in the name of Dolores V. Molina. Later, TCT No. 83164
was cancelled and replaced by TCT No. 83869 in the name of Gateway Enterprises
Co., Inc., to which Molina had apparently sold the land therein described for
P24,408,000.00. (Footnote 17: 'Rollo, p. 222. N.B. Ortigas claims that sales by
Molina have grossed something like 750 million pesos.')"
4.

Reconstitution Petition Based on Plainly Inferior Evidence

Molina had nothing but a mere photocopy of a suppositional title as basis for her
application for reconstitution, and nothing but self-contradictory tales as regards her
acquisition of ownership of the land, and of her possession of the corresponding
documents of title. 30
Yet respondent Judge insists his judgment was founded on "concrete, hard-bitten
evidence . . . thoroughly examined." 31 He cites a purported subdivision plan (Psd16740) found in the microfilm files of the Land Management Bureau, on which he
opted to rely; this, despite the candid admission of witness Amado Bangayan the

Assistant Chief of the Record Management Division of the Land Management


Bureau, who, as custodian of all survey plans, was presented by Molina to
authenticate this item of proof that never having seen the original of Psd-16740,
he could not attest to the genuineness or authenticity thereof.
He also points to the evidence given by another witness of Molina, Ernesto Benitez
of the Patent and Reconstitution Section of the Land Registration Authority, who
pronounced correct the technical description of the area set out in a document
entitled "1st Indorsement," which he had prepared and submitted directly to Judge
Velasco. He opted to give credit to such evidence despite the testimony of Benitez's
superior, Atty. Bustos, that Benitez had no authority to issue that certification. 32
cdti
Why His Honor chose to rely on Bangayan and Benitez despite declared
dubiousness of their competence or why their doubtful testimony should be
deemed of superior credibility as against the evidence of no less than three higher
ranking officials of the Land Registration Authority, supra, and the several
judgments and final orders handed down by this Court respecting the titles which
Molina would in effect nullify and supersede is not explained. Indeed, it is difficult
to conceive of a tenable explanation in the premises.
His submission, that Bangayan and Benitez were entitled to the legal presumption
that they acted regularly and were clothed with authority in the performance of
their official functions," is specious for, as just pointed out, Bangayan had candidly
admitted to incompetence to attest to the genuineness or authenticity of the
document depicted in the microfilm subject of his testimony, never having seen the
original; and Benitez' superior officer Atty. Benjamin Bustos, Chief of the
Reconstitution Division, of the Land Registration Authority had categorically
denied Benitez' authority to certify to the correctness of the technical description in
his "1st Indorsement" submitted directly to Judge Velasco. In other words, the
recorded evidence precluded recourse to the presumption of regularity in
performance of official functions. Moreover, there is the unanswered question of
why his Honor should invoke that presumption in respect of Bangayan and Benitez,
and not as regards their superior officials whose testimony was contrary to theirs
the above mentioned Atty. Bustos, and Engineer Felino Cortez, Chief of the Ordinary
and Cadastral Decree Division, and Mr. Privadi J. G. Dalire, Chief of the Geodetic
Surveys Division of the Land Management Bureau.
The obvious flimsiness of the evidence given by Molina's witnesses (Bangayan and
Benitez) magnifies the equally evident feebleness of her own testimony which,
having been dealt with in some detail in the Decision of July 25, 1994, 33 will no
longer be summarized in this opinion. It suffices to point out that Molina's testimony
and her other proofs can hardly be described, as His Honor does, as
"overwhelming," or as "concrete, hard-bitten," or even as "preponderant," and that

with all their defects plainly discernible in the record, respondent Judge
nevertheless chose to rest his opinion on the same.
Equally specious is his argument that the "overturning of his decision should not be
equated with bias, bad faith or gross misconduct, for if at all, a mistake was
committed, . . . it can only be regarded as an honest error of judgment incurred on
complex points of law. . .." 34 The points of law involved, concerning dismissal of
appeals and execution pending appeal are not complex, unsettled or controversial.
They are well established, familiar, uniformly applied legal principles. His was not a
case of not knowing or failing to understand relevant doctrine, but of a deliberate
disregard of them. He wilfully ignored those points of law, just as he ignored the
precedents directly brought to his attention of which, in any case, he was
charged with knowledge as well as the evidence traversing Molina's.
The disregard by Judge Velasco (1) of the palpable absence of jurisdiction on the
part of his Court over the reconstitution case in question, (2) of the adverse
evidence given by LRA officials of higher rank and greater authority than those
employees presented by Molina as her witnesses, (3) of the published precedents (i)
regarding Ortigas' titles and (ii) respecting reconstitution proceedings of which the
general public, and particularly judges, are charged with notice, and (4) of the
patent flaws in Molina's proofs, simply cannot be explained away as an honest
mistake of judgment or an innocent error in the exercise of discretion. It can only be
viewed as an attempt through misuse of judicial processes to give a semblance of
merit to a clearly unmeritorious cause and accord undeserved benefits to the party
espousing and promoting said cause.
V.

Final Disposition

The respondent's acts herein condemned are of so serious and indefensible a


character as to call for the penalty of dismissal from the service, specially so when it
is considered that the disciplinary proceeding at bar is not the first initiated against
him. The record reveals that there have been eight (8) other administrative cases
filed against him, and while six of which of these have been dismissed, 35 one is
still pending, 36 and another resulted in the imposition on him of a fine of
P20,000.00 for ignorance of the law, with a stern warning that a repetition of similar
acts will be dealt with more severely. 37
VI.

Deliberation and Voting by the Court

Pursuant to Section 13, Article VIII of the Constitution, the conclusions in this per
curiam resolution were reached in consultation before the case was assigned to the
writer of the opinion of the Court. Except for four (4) Justices who abstained from
voting on account of their close personal association with a party but whose
identities are not here disclosed, all the Members of the Court whose signatures
appear hereunder concurred in this judgment. One justice took no part because he
was on leave during the deliberations.

WHEREFORE, Judge Tirso D. C. Velasco is hereby DISMISSED from the service, with
forfeiture of all retirement benefits and accrued leave credits, and with prejudice to
re-employment in any branch or instrumentality of the government including
government-owned or controlled corporations. Immediately upon service on him of
notice of this judgment, he shall be deemed to have VACATED his office, and his
authority to act in any manner whatsoever as Judge shall be considered to have
automatically CEASED. llcd
SO ORDERED.
Narvasa, C .J ., Padilla, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug,
Kapunan, Mendoza, Francisco, Hermosisima, Jr., Panganiban and Torres, Jr., JJ .,
concur.
Footnotes
1.

At pp. 43-44.

2.

Rollo of G.R. No. 109645 at 707 et seq.

3.
In its memorandum, it adopted in general terms Ortigas's arguments, and
cited other grounds for disciplinary action against the Judge: (1) taking cognizance
of LRC Case No. Q-5404, notwithstanding non-compliance with the mandatory
notice requirement to the adjacent property owners; (2) reinstating, without
authority, Molina's withdrawn petition; (3) directing reconstitution of title over
properties titled in the name of Manila Interpublic and Breeders Feeds; (4)
disregarding other evidence establishing the nullity of Molina's claims; (5) strikingout the notices of appeal filed, contrary to well-settled jurisprudence; and (6)
ordering immediate execution of his decision pending appeal.
4.
The Court ruled that the complaints should be dismissed because the issues
raised were "subjudice, but . . . (the dismissal) is without prejudice to their revival
should the Court in its adjudication of the cases now pending before it pertaining to
these cases find the Decisions/Orders issued by respondent Judges to have been
issued in violation of judicial norms of conduct warranting disciplinary action."
5.

By Resolution dated Sept. 14, 1994.

6.

By Resolution dated Dec. 7, 1994.

7.

Dated March 1, 1995.

8.
E.g., extended Resolution promulgated on March 4, 1996 by the Third Division
(to which the cases had been transferred in accordance with established procedure)
which found Dolores Molina guilty of contempt for wilful disregard of the orders of
the Court and sentenced her to pay a fine of P1,000.00. SEE also Resolutions of July

25, 1995 and October 25, 1995 treating of the fine of P1,000.00 imposed on one of
Molina's lawyers for contempt of court.
9.

SEE footnote 4, supra.

10.

SEE footnote 7, supra.

11.
"An Act Providing A Special Procedure For The Reconstitution of Torrens
Certificate of Title Lost or Destroyed."
12.

SEE cases collated in footnote 32 of the main decision (234 SCRA 482).

13.

234 SCRA 485 (1994).

14.

SEE Moran, Comments on the Rules, 1979 ed., Vol. 2, p. 433, citing cases.

15.

SEE Moran, op. cit., p. 509; Feria, Civil Procedure, 1969 ed., pp. 728-729.

16.

234 SCRA 495.

17.

234 SCRA 496-497.

18.

SEE footnote 23 and related text, infra.

19.
SEE Heiman v. Cabrera, 73 Phil. 707; de la Rosa, et al. v. City of Baguio, et al.,
91 Phil. 721; Asturias, et al. v. Victoriano, et al., 98 Phil. 581, cited in Feria, Civil
Procedure, 1969 Ed., p. 553.
20.
In this case, the Trial Court rendered judgment granting, over the opposition
of the Director of Lands, the Director of Forestry, and the Armed Forces of the
Philippines, an application for registration of "a vast tract of land, containing an area
of 16,800 hectares, more or less," and thereafter authorized immediate execution of
its decision at the applicant's instance, directing "the issuance of a decree of
registration of the entire land . . . subject to the final outcome of the appeal."
21.
Prepared by Benjamin M. Bustos, Reconstituting Officer and Chief of the
Reconstituting Division of the Land Registration Authority, dated July 17, 1992.
22.
seq.

Annex B, Memorandum of petitioner Ortigas & Co., Ltd., Rollo at pp. 1182, et

23.
"Widows & Orphans Association, Inc. v. Court of Appeals," 212 SCRA 360-390;
See Annex C, Memorandum of petitioner Ortigas (p. 57), Rollo of G.R. No. 109645 at
pp. 1181 et seq.
24.
Cia. Agricola de Ultramar v. Domingo, 6 Phil. 146 (1906) affirming the validity
of Original Decree of Registration No. 1425, issued in G.L.R.O. Record No. 917 on
April 26, 1905 by the Land Registration Court of Manila, in relation to the Hacienda
de Mandaloyon, a tract of land in what is now Manila, Quezon City, and Pasig, in

favor of the Compaia Agricola de Ultramar, predecessor-in-interest of Ortigas,


whose titles, TCTs No. 77652 and 77653 are genuine derivatives of the title of the
Cia. Agricola de Ultramar; Ortigas v. Hon. Ruiz 148 SCRA 326, 331 (1987): additional
affirmation of confirmation by Decree No. 1425 of ownership of Compaia Agricola
de Ultramar of the Hacienda de Mandaloyon; Minute Resolution dated 16 February
1985 in Del Rosario v. Ortigas, G.R No. 66110, refusing review of the judgment of
the Court of Appeals which pertinently ruled that the extant documentary sources of
the boundaries of the Hacienda de Mandaloyon are the technical descriptions
thereof appearing in the initial notice of hearing in G.L.RO. Record No. 917, duly
published in two (2) newspapers of general circulation in 1904, the technical
descriptions of the land covered by TCT Nos. 77652 and 77653 showing that the
land lies within the Hacienda; Minute Resolution in Navarro v. Ortigas, G.R. No.
50156, May 7, 1979 (affirming the decision of the Court of Appeals in CA-G.R. No.
53125-R dated December 13, 1978), and in del Rosario v. Ortigas, G.R No. 66110,
February 16, 1985 (sustaining the judgment of the Court of Appeals in AC-G.R. CV
No. 61456 dated December 29, 1983), both Navarro and del Rosario sustaining the
holding that TCT Nos. 77652 and 77653 had become indefeasible and
incontrovertible.
25.

116 SCRA 261.

26.
Republic v. Court of Appeals, 94 SCRA 865 (1979); Director of Lands v. Court
of Appeals, and Demetria Sta. Maria Vda. de Bernal, etc., 102 SCRA 370; Tahanan
Development Corporation v. Court of Appeals, 118 SCRA 273.
27.
370.

116 SCRA 277-278, citing Director of Lands v. Court of Appeals, 102 SCRA

28.

118 SCRA 273, 313-314.

29.

234 SCRA 470-471.

30.
234 SCRA, pp. 487-489. To recapitulate: (1) On November 14, 1991 she
alleged she was in possession of the owner's duplicate of the title she wished to be
reconstituted. On April 3, 1992, she declared that in mid-September, 1991, she
discovered that said duplicate was missing (so, it could not have been in her
possession in November, 1991). (2) In 1978 she twice alleged that she became
owner of the land subject of the reconstitution case by acquisitive prescription. In
1990, she claimed to be owner thereof by purchase from her husband's relatives.
(3) She testified that she tried to obtain title to the land in the 1960's, and even
sought the help of President Marcos, her "boyfriend." Earlier, she had averred she
could not attend to the titling of the land because she was the sole breadwinner of
her family. (4) She recognized the ownership by the Mormon religious corporation of
land covered by its title (No. 348048), situated within the area being claimed by her.
she thereby admitted ownership of Ortigas over the same, since it was from the
latter that the Mormons had bought the property.

31.

Comment, Rollo, G.R No. 109645, p. 950

32.

See TSN of September 2, 1992 at pp. 6 et seq.

33.

See footnote 30. supra

34.

Comment, id. at p. 905.

35.
RTJ-87-126, RTJ-90-529, RTC-90-641, RTJ-92-810, RTJ-93-1084, RTJ-93-1108,
RTJ-94-1209.
36.

OCA IPI No. 97-287-RTJ.

37.
601.

Buzon, Jr. v. Velasco, A. M. No. RTJ-94-1209, February 13, 1996, 253 SCRA

C o p y r i g h t 1 9 9 4 - 1 9 9 9 C D T e c h n o l o g i e s A s i a, I n c.

A.M. No. P-96-1219 August 15, 1997


Court of Appeals v. Escalante
EN BANC
[A.M. No. P-96-1219. August 15, 1997.]
(Formerly CA-G.R. SP No. 35697)
COURT OF APPEALS, petitioner, vs. Clerk of Court MARCELO ESCALANTE, Regional
Trial Court, Branch 53, Sorsogon, Sorsogon, respondent.
SYNOPSIS
This is an administrative case filed by the Court of Appeals against Marcelo
Escalante, Clerk of Court of the Regional Trial Court of Sorsogon, Sorsogon, Branch
53 in the Office of the Court Administrator for transmitting and certifying two
apparently conflicting photocopies of decedent's last will and testament in a case
appealed before it. Thereafter, in a memorandum dated March 21, 1997, the Office
of the Court Administrator, after conducting an investigation, recommended that
respondent clerk of court be meted a penalty of one month suspension without pay
for being grossly negligent in the performance of his duty by certifying as true copy
a document purporting to be a copy of the last will and testament without first
examining and comparing it with the original in the custody of the court. aCcEHS

The Supreme Court ruled that the findings as well as the recommendation of the
Office of the Court Administrator are well-taken. The Court finds respondent
Escalante remiss in his duty when he certified as true copy a document purporting
to a copy of the last will and testament of Henry Grant without first examining said
document by comparing it with the original on file to determine whether it is indeed
a true and faithful reproduction of the original in custody of the probate court. Such
failure constitutes gross negligence, which warrants disciplinary sanction. In view
thereof, the Court adopted the penalty recommended by the Office of the Court
Administrator.
SYLLABUS
1.
ADMINISTRATIVE LAW; COURT EMPLOYEES; PROPER DECORUM. The
conduct and behavior of everyone connected with an office charged with the
dispensation of justice, from the presiding judge to the lowest clerk, should be
circumscribed with the heavy burden of responsibility. Their conduct at all times,
must not only be characterized by propriety and decorum but above all else must
be above suspicion. (Lloveras vs. Sanchez, 229 SCRA 302 [1994]).
2.
ID.; ID.; CLERK OF COURT; DUTIES; GROSS NEGLIGENCE IN THE
PERFORMANCE THEREOF WARRANTS DISCIPLINARY SANCTION. A clerk of court,
like herein respondent Escalante, is a ranking and essential officer in any judicial
system. His office is the hub of activities. He performs delicate administrative
functions essential to the prompt and proper administration of justice. He keeps the
records and seal, issues processes, enters judgments and orders, and gives, upon
request, certified copies from the records (Juntilla vs. Branch COC-Teresita Calleja
and Court Stenographer-Salome A. Montezon, P-26-1225, prom. Sept. 23, 1996;
Angeles vs. Bantug, et. al., 209 SCRA 413 [1992]). In the present case, the Court
finds respondent Escalante remiss in his duty when he certified as true copy a
document purporting to be a copy of the last will and testament of Henry Grant
without first examining said document by comparing it with the original on file to
determine whether it is indeed a true and faithful reproduction of the original in
custody of the probate court. Such failure constitutes gross negligence which
warrants disciplinary sanction. Respondent's failure to observe due diligence in the
performance of his functions resulted in the introduction of an unfaithful document,
causing confusion as well as the delay in the speedy disposition of the case before
the Court of Appeals. As administration of justice is a sacred duty, this Court has
continuously and assiduously condemned any omission or act which tends to
undermine the faith and trust of the people in the judiciary (Alivia vs. Nieto, 251
SCRA 62 [1995]). IaEACT
DECISION
MELO, J p:

The present administrative case against Marcelo Escalante, Clerk of Court of the
Regional Trial Court of the Fifth Judicial Region, Sorsogon, Sorsogon, Branch 53,
stemmed from a petition for probate of the will of Henry Grant filed by Atty. Jose
Bernabe with said court. LibLex
Henry Grant, an American citizen, died on October 6, 1993, in Legaspi City leaving a
4-page notarial will. Atty. Jose Bernabe, who was designated by Henry Grant to
execute the will, lodged with the above-mentioned court, a petition for probate of
will which was docketed as Special Proceeding No. 93-5936.
The probate court then issued an Order dated March 16, 1994, giving Atty. Bernabe
15 days within which to file his formal written offer of documentary exhibits and
thereafter, the case would be deemed submitted for resolution.
On April 12, 1994, a certain Gloria Sotto filed with the probate court a petition for
relief from the March 16, 1994 Order and an Opposition to the probate of the will,
contending, inter alia, that she was the nearest kin of the deceased and that the
instituted heirs were all American citizens who have no intention of acquiring
property in the Philippines. The probate court denied the petition in an Order dated
June 21, 1994.
Sotto filed motions for reconsideration one after the other which were denied. On
July 8, 1994, the probate court issued an Order allowing the probate of the last will
and testament of Henry Grant.
Sotto then filed with the Court of Appeals a petition for nullification of the allowance
of the last will and testament of Henry Grant (p. 2, Rollo). She prayed that the last
will and testament of Henry Grant be declared to be fatally defective in form as it
lacked the signature of Henry Grant and the three attesting witnesses on the left
margin of the first, second, and fourth pages thereof; that the probate thereof be
declared null and void; and, that the late Henry Grant be disqualified from owning
lands in the Philippines and his testamentary heirs be likewise disqualified from
inheriting said lands (pp. 10-11, Rollo). The petition was docketed as CA-G.R. SP No.
35697.
In resolving the Sotto petition, the Court of Appeals was confronted with two
conflicting photocopies of the last will and testament of Henry Grant.
The first was a photocopy of a true copy, certified by respondent Escalante, without
any date and submitted by Sotto. It had no marginal signatures on the first, second,
and fourth pages, and no exhibit markings. The second was a certified xerox copy,
certified to by Tomas H. Moral for respondent Escalante, dated December 20, 1994,
containing marginal signatures on the first, second, and fourth pages, and exhibit
markings.

Due to such conflicting photocopies, the Court of Appeals issued a Resolution dated
March 15, 1995 ordering respondent Escalante: a) to transmit to the court within
ten days from notice, the original of the last will and testament of Henry Grant; b) to
certify if there was any other copy different from that which was submitted to the
probate court; and c) to explain why he had certified two apparently conflicting
copies of Henry Grant's last will and testament (p. 98, Rollo). In compliance with,
respondent Escalante submitted the original carbon copy of the last will and
testament of Henry Grant, explaining that only an original carbon copy was
submitted to the probate court inasmuch as the original could not be found (p. 99,
Rollo).
The Court of Appeals, in a Resolution dated May 12, 1995, denied the Sotto petition
and made the following findings concerning the apparently tampered photocopy of
the true copy of the last will and testament of Henry Grant which was certified by
respondent Escalante and submitted by Sotto in support of her petition, to wit:
After comparing the photocopies of the Will submitted by the parties us with the
said original carbon copy of the same, we have ascertained that the certified xerox
copy submitted by the private respondent copy matches the carbon original,
whereas the photocopy of a certified true copy submitted by the petitioner does
not. Moreover, a close scrutiny of the photocopy attached by the petitioner to her
Petition reveals marks thereon which indicate that the original thereof actually bore
the necessary marginal signatures, but they were covered with a piece of paper
when photocopied, to make it appear that they were not present. Such act of deceit
and misrepresentation is highly reprehensible.
(p. 109, Rollo.)
In view of such finding, the Court of Appeals ordered Sotto's counsel to show cause
why they should not be disciplined for utilizing an apparently tampered photocopy
of a certified true copy of the last will and testament of Henry Grant in support of
their petition.
In his Compliance dated May 26, 1995, Atty. Ray M. Dorado denied any participation
in tampering with the will, claiming that what he submitted were the very
documents furnished him by his client (p. III, Rollo). Atty. Dorado likewise submitted
the affidavit of Sotto, together with a certified xerox copy of the last will and
testament of Henry Grant dated January 23, 1995 and signed by respondent
Escalante (p. 114, Rollo).
On the other hand, Sotto, in her motion for reconsideration, suggested that a
thorough investigation be made preferably by the NBI to determine who tampered
with the documents, and at the same time to ascertain whether or not the
signatures appearing in the last will and testament of Henry Grant submitted to the
Court of Appeals were made after respondent Escalante had furnished her a copy
thereof (p. 123, Rollo).

In a Resolution dated July 11, 1995, the Court of Appeals admonished Atty. Dorado
and denied Sotto's motion for reconsideration (p. 129, Rollo).
In another Resolution promulgated on the same date, the Court of Appeals referred
the case of the Office of the Court Administrator for investigation and proper action
in view of the confusing situation caused by the certifications of different copies of
the same will made by respondent Escalante. Said Resolution reads as follows:
In the instant case, we have been confronted with four (4) varying copies of the
alleged last will and testament of the deceased Henry Grant, to wit:
(1)
A photo-copy of a Certified True Copy, certified to by Marcelo Escalante, Clerk
of Court, attached as Annex "C" to the Petition (pp. 19-23, Rollo), without marginal
signatures of the testator and his attesting witnesses, but which signatures appear
to have been covered when the document was photocopied;
(2)
A Certified True Copy dated December 20, 1994, certified to by Tomas H.
Moral for Marcelo E. Escalante, Clerk of Court, containing marginal signatures and
exhibit markings (Exhibits "I" to "I-4" and submarkings) submitted by the
respondents (pp. 67-71, Rollo); cdpr
(3)
A carbon original of the said last will and testament, sent to us by Clerk of
Court Marcelo E. Escalante, pursuant to our Resolution dated March 15, 1995, with
marginal signatures but different exhibit markings (Exhs. "J" to "J-4" and
submarkings) (pp. 100-104, Rollo); and
(4)
A Certified Xerox Copy dated January 23, 1995, a Certified True Copy signed
by Marcelo Escalante (pp. 117-121, Rollo) which appears to be the same as No. (1)
above.
In view of this confusing situation which is apparently due to certifications of
different copies of the same will by the Office of the Clerk of Court of the Regional
Trial Court of Sorsogon, Branch 53, either out of malice or negligence, the Division
Clerk is hereby ordered to refer the records of this case to the Office of the Court
Administrator, for such investigation and action as it may deem proper to take.
(pp. 133-134, Rollo.)
In a Memorandum dated January 30, 1996, the Office of the Court Administrator
recommended that the resolutions of the Court of Appeals dated May 12 and July
11, 1995 be treated as an administrative complaint for alleged false certification
against respondent Escalante and that the latter be ordered to show cause why he
should not be administratively dealt with for making certifications on apparently
different and conflicting copies of the last will and testament of deceased Henry
Grant, within ten days from notice (p. 136, Rollo). A Resolution to such effect was
issued by the Court on September 3, 1996 (p. 139, Rollo).

In his explanation dated September 30, 1996, respondent Escalante alleged that:
1.
No false certification was ever committed by him, since the two copies of the
last will and testament certified to by him was copied from one and the same last
will and testament in the custody of the Regional Trial Court Branch 53;
2.
A careful scrutiny of the two copies will reveal that the contents therein are
identical and is a mere reproduction of the original last will and testament in the
custody of the Court;
3.
The undersigned will never do such stupid act of certifying two different
copies of last will and testament, when the original of which is in the custody of the
court attached to the record and is always available to those interested either to
have it copied or merely to subject it to his scrutiny;
4.
One of the copies of the last will and testament alleged to have been falsely
certified by him was photocopied without it being removed from the voluminous
records and the stitches was still intact making it possible to open fully, the reason
why the marginal signatures was not photocopied because the same was blocked
by the nylon stitches;
5.
The undersigned begs the Honorable Court to carefully examine the copies as
well as the original copy in the custody of the Court;
6.

It is never his intention to cause injustice to the parties in this case.

(pp. 140-141, Rollo.)


Said explanation was noted and referred to the Office of the Court Administrator for
evaluation, report, and recommendation by the Court in a Resolution dated
November 19, 1996 (p. 144, Rollo).
In a Memorandum dated March 21, 1997, the Office of the Court Administrator
made the following findings and recommendation to wit:
Records reveal that the original carbon copy of the last will and testament of
deceased Henry Grant submitted by his lawyer, petitioner Atty. Jose Bernabe, to the
probate court, in lieu of the original, contains the marginal signatures of the testator
and his 3 attesting witnesses and the exhibit markings. The same is true with the
copy certified by Tomas H. Moral on December 20, 1994 for Clerk of Court Marcelo
Escalante and the carbon original which was sent to the Court of Appeals by the
respondent Clerk of Court in compliance with the Court of Appeals resolution dated
March 15, 1995. Both copies bear the marginal signatures and the exhibit markings.
It is highly suspicious therefore that a photocopy of the said document was
submitted as evidence to the Court of Appeals without the marginal signatures and
the markings specially so that the one who submitted it was the oppositor in the

probate proceedings and the petitioner in the Appellate Court seeking for the
nullification of the probated will.
To our mind there is more than meets the eye here. This could have been done
intentionally by the petitioner (Gloria Sotto) to mislead the Appellate Court to give
semblance to her claim that the will is void ab initio because it does not have the
signatures of the testator and his 3 attesting witnesses as required by law. As
between a carbon original of the last will and testament and a photocopy or xerox
copy thereof, the former should be given more credence as the truthful and faithful
reproduction of the document. It is of common experience that a copy which is
merely xeroxed or photocopied can be easily tampered with to omit or add
something in the document.
However, we may not find sufficient proof showing that respondent Clerk of Court
had a direct hand in the tampering of the document or that there was ill-motive in
bad faith on his part. Nevertheless, he is still administratively liable for certifying a
tampered document. It is certainly grossly negligent on his part to have certified as
true copy a document purporting to be a copy of the last will and testament without
first examining the said document by comparing it with the original to find out if it is
really the true and faithful reproduction of the original in custody of the court. His
explanation proffered earlier that the records are voluminous and the records could
not be opened fully, the reason why the marginal signatures and exhibit markings
were covered by the stitches on the photocopy shows his carelessness in allowing
such document. As an officer of the court, he ought to know that the document has
become part of the public record and will be used for all legal intent and purposes,
so much so that any copy thereof shall be the true and faithful reproduction of the
original before he makes any certification. His negligence in the performance of his
duty has resulted to an untruthful document.
The principle laid down by the Honorable Court in Bautista vs. Joaquin, Jr., A.M. No.
P-236. July 29, 1977, though not in four squares with the instant case may be
applied, thus:
In the administration of justice, litigants repose their faith and trust in the
authenticity and correctness of court records, and is the bounden duty of officials
and employees of the court to maintain and uphold the confidence of the public.
Any act which tends to undermine and corrode the public trust is a wrong doing
which warrants administrative sanction the severity of which should be
commensurate with the gravity of the act committed.
Under the Civil Service Law, gross neglect of duty is penalized by 6 months
suspension up to dismissal from service. However, this is the first offense of this
nature by the respondent.
WHEREFORE, it is respectfully recommended that respondent Clerk of Court Marcelo
Escalante, RTC, Branch 53, Sorsogon, Sorsogon be meted a penalty of one month

suspension without pay to be effective immediately from notice. He be further


warned that commission of similar negligence in the future will be severely dealt
with.
(pp. 148-150, Rollo.)
The findings as well as the recommendation of the Office of the Court Administrator
are well-taken.
We must once again emphasize that the conduct and behavior of everyone
connected with an office charged with the dispensation of justice, from the presiding
judge to the lowest clerk, should he circumscribed with the heavy burden of
responsibility. Their conduct at all times, must not only be characterized by
propriety and decorum but above all else must be above suspicion (Lloveras vs.
Sanchez, 229 SCRA 302 [1994]). A clerk of court, like herein respondent Escalante,
is a ranking and essential officer in any judicial system. His office is the hub of
activities. He performs delicate administrative functions essential to the prompt and
proper administration of justice. He keeps the records and seal, issues processes,
enters judgments and orders, and gives, upon request, certified copies from the
records (Juntilla vs. Branch COC-Teresita Calleja and Court Stenographer-Salome A.
Montezon, P-96-1225, prom. Sept. 23, 1996; Angeles vs. Bantug, et al., 209 SCRA
413 [1992]).
In the present case, the Court finds respondent Escalante remiss in his duty when
he certified as true copy a document purporting to be a copy of the last will and
testament of Henry Grant without first examining said document by comparing it
with the original on file to determine whether it is indeed a true and faithful
reproduction of the original in custody of the probate court. Such failure constitutes
gross negligence which warrants disciplinary sanction. Respondent Escalante
explains that one of the copies of the last will and testament alleged to have been
falsely certified by him was photocopied without it being taken from the voluminous
stitched records making it impossible to open fully the records and for this reasons,
the marginal signatures were not photocopied because the same were blocked by
the nylon stitches. As correctly observed by the Office of the Court Administrator,
the explanation only shows respondent's negligence and carelessness in permitting
such document to be certified without first examining said document. Before
certifying the document, Escalante should have compared it with the original so as
to determine whether the copy is a faithful reproduction of the original in the
custody of the court, this being the proper way in certifying as a true copy a
particular document. As it is, respondent's failure to observe due diligence in the
performance of his functions resulted in the introduction of an unfaithful document,
causing confusion as well as the delay in the speedy disposition of the case before
the Court of Appeals.

As administration of justice is a sacred duty, this Court has continuously and


assiduously condemned any omission or act which tends to undermine the faith and
trust of the people in the judiciary (Alivia vs. Nieto, 251 SCRA 62 [1995]). Thus,
every employee or officer involved in this task should be circumscribed with the
heavy burden of responsibility and their conduct must, at all times, be above
suspicion (Cunanan vs. Tuazon, 237 SCRA 380 [1994]). cdta
ACCORDINGLY, for gross negligence, respondent Marcelo E. Escalante, Clerk of
Court, Regional Trial Court, Branch 53, Sorsogon, Sorsogon is hereby SUSPENDED
for one month without pay, effective immediately from notice. He is further warned
that a repetition of similar offense shall be dealt with severely.
SO ORDERED.
Narvasa, C .J ., Padilla, Regalado, Davide, Jr., Romero, Bellosillo, Puno, Vitug,
Kapunan, Mendoza, Francisco, Hermosisima, Jr., Panganiban and Torres, Jr., JJ .,
concur.

C o p y r i g h t 1 9 9 4 - 1 9 9 9 C D T e c h n o l o g i e s A s i a, I n c.

G.R. No. 127255 August 14, 1997


Arroyo v. De Venecia
EN BANC
[G.R. No. 127255. August 14, 1997.]
JOKER P. ARROYO, EDCEL C. LAGMAN, JOHN HENRY R. OSMEA, WIGBERTO E.
TAADA, AND RONALDO B. ZAMORA, petitioners, vs. JOSE DE VENECIA, RAUL DAZA,
RODOLFO ALBANO, THE EXECUTIVE SECRETARY, THE SECRETARY OF FINANCE, AND
THE COMMISSIONER OF INTERNAL REVENUE, respondents.
Azcuna, Yorac, Sarmiento, Arroyo & Chua and Rene A.V. Saguisag for petitioners.
Cesar A. Sevilla & Associates for De Venecia.
SYNOPSIS
This is a petition for certiorari and prohibition challenging the validity of Republic
Act No. 8240, which amends certain provisions of the National Internal Revenue
Code by imposing so-called sin taxes on the manufacture and sale of beer and
cigarettes. Petitioners brought this suit against herein respondents claiming that the
latter violated Rule VIII, Section 35, Rule XVII, Section 103, Rule XIX, Section 112,
Rule XVI, Section 97, Rule XX Section 121-122, Rule XXI Section 123 and Rule XVIII

Section 109 of the House Rules. For this matter, petitioners assert that violation of
the House Rules is a violation of the Constitution thereof. AEDISC
In its decision, the Supreme Court finds no ground for holding that congress
committed grave abuse of discretion in enacting Republic Act 8240. It is clear from
the facts of the case that what is alleged to have been violated in the enactment of
R.A. 8240 are merely internal rules of procedure of the House rather than the
constitutional requirement for the enactment of a law, that is, Article VI, Section 2627 of the 1987 Constitution, pertaining to the existence of the quorum. The
established rule is that courts cannot declare an act of the legislature void on
account merely of noncompliance with rules of procedure made by itself. Verily, it
follows that the case at hand does not present a situation in which a branch of the
government has gone beyond the constitutional limit of its jurisdiction so as to call
for the exercise of Article VIII, Section I.
Moreover, under the enrolled bill doctrine, the signing of House No. 7198 by speaker
of the House and President of the Senate and certification by secretaries of both
Houses of Congress that it was passed on November 21, 1996 are conclusive of its
due enactment. In view of the foregoing, the petition for certiorari and prohibition is
dismissed. TAacCE
SYLLABUS
1.
CONSTITUTIONAL LAW; LEGISLATIVE DEPARTMENT; PARLIAMENTARY RULES
ARE MERELY PROCEDURAL AND COURTS HAVE NO CONCERN WITH THEIR
OBSERVANCE; FAILURE TO CONFORM THEREWITH WILL NOT INVALIDATE ACTION
WHEN THE REQUISITE NUMBER OF MEMBERS HAVE AGREED THERETO. Cases,
both here and abroad, in varying forms of expression, all deny to the courts the
power to inquire into allegations that, in enacting a law, a House of Congress failed
to comply with its own rules, in the absence of showing that there was a violation of
a constitutional provision or the rights of private individuals. In Osmea v. Pendatun,
it was held: "At any rate, courts have declared that 'the rules adopted by
deliberative bodies are subject to revocation, modification or waiver at the pleasure
of the body adopting them.' And it has been said that 'Parliamentary rules are
merely procedural, and with their observance, the courts have no concern. They
may be waived or disregarded by the legislative body.' Consequently, 'mere failure
to conform to parliamentary usage will not invalidate the action (taken by a
deliberative body) when the requisite number of members have agreed to a
particular measure.'"
2.
ID.; ID.; ID.; ID.; RULES MUST NOT IGNORE CONSTITUTIONAL RESTRAINTS OR
VIOLATE FUNDAMENTAL RIGHTS. In United States v. Ballin, Joseph & Co., the rule
was stated thus: "The Constitution empowers each house to determine its rules of
proceedings. It may not by its rules ignore constitutional restraints or violate
fundamental rights, and there should be a reasonable relation between the mode or

method of proceeding established by the rule and the result which is sought to be
attained. But within these limitations all matters of method are open to the
determination of the House, and it is no impeachment of the rule to say that some
other way would be better, more accurate, or even more just. It is no objection to
the validity of a rule that a different one has been prescribed and in force for a
length of time. The power to make rules is not one which once exercised is
exhausted. It is a continuous power, always subject to be exercised by the House,
and within the limitations suggested, absolute and beyond the challenge of any
other body or tribunal." CIHAED
3.
ID.; ID.; ID.; ID.; ID.; CASE AT BAR. In this case no rights of private
individuals are involved but only those of a member who, instead of seeking redress
in the House, chose to transfer the dispute to this Court. We have no more power to
look into the internal proceedings of a House than members of that House have to
look over our shoulders, as long as no violation of constitutional provisions is shown.
Petitioners must realize that each of the three departments of our government has
its separate sphere which the others may not invade without upsetting the delicate
balance on which our constitutional order rests. Due regard for the working of our
system of government, more than mere comity, compels reluctance on our part to
enter upon an inquiry into an alleged violation of the rules of the House. We must
accordingly decline the invitation to exercise our power.
4.
REMEDIAL LAW; COURTS; CANNOT DECLARE AN ACT OF LEGISLATURE VOID
FOR NONCOMPLIANCE WITH ITS OWN RULES OF PROCEDURE. If, then, the
established rule is that courts cannot declare an act of the legislature void on
account merely of noncompliance with rules of procedure made by itself, it follows
that such a case does not present a situation in which a branch of the government
has "gone beyond the constitutional limits of its jurisdiction" so as to call for the
exercise of our Art. VIII, 1 power.
5.
CONSTITUTIONAL LAW; LEGISLATIVE DEPARTMENT; HOUSE OF
REPRESENTATIVES; THERE IS NO RULE REQUIRING THAT THE CHAIR MUST RESTATE
THE MOTION AND CONDUCT A VIVA VOCE OR NOMINAL VOTING. No rule of the
House of Representatives has been cited which specifically requires that in cases
such as this involving approval of a conference committee report, the Chair must
restate the motion and conduct a viva voce or nominal voting. On the other hand,
as the Solicitor General has pointed out, the manner in which the conference
committee report on H. No. 7198 was approved was by no means a unique one. It
has basis in legislative practice. It was the way the conference committee report on
the bills which became the Local Government Code of 1991 and the conference
committee report on the bills amending the Tariff and Customs Code were approved.
Indeed, it is no impeachment of the method to say that some other way would be
better, more accurate and even more just. The advantages or disadvantages, the
wisdom or folly of a method do not present any matter for judicial consideration. In
the words of the U.S. Circuit Court of Appeals, "this Court cannot provide a second

opinion on what is the best procedure. Notwithstanding the deference and esteem
that is properly tendered to individual congressional actors, our deference and
esteem for the institution as a whole and for the constitutional command that the
institution be allowed to manage its own affairs precludes us from even attempting
a diagnosis of the problem."
6.
ID.; ID.; ID.; NO CONSTITUTIONAL PROVISION REQUIRING THAT THE YEAS AND
NAYS OF THE MEMBERS BE TAKEN EVERYTIME A HOUSE HAS TO VOTE; EXCEPTIONS.
Nor does the Constitution require that the yeas and the nays of the Members be
taken every time a House has to vote, except only in the following instances: upon
the last and third readings of a bill, at the request of one-fifth of the Members
present, and in repassing a bill over the veto of the President. Indeed, considering
the fact that in the approval of the original bill the votes of the Members by yeas
and nays had already been taken, it would have been sheer tedium to repeat the
process.
7.
ID.; ID.; ID.; PARLIAMENTARY RULES; QUESTION REGARDING MOTION TO
APPROVE AND RATIFY CONFERENCE COMMITTEE REPORT, NOT A QUESTION OF
PRIVILEGE ENTITLED TO PRECEDENCE. Petitioners claim that they were prevented
from seeking reconsideration allegedly as a result of the precipitate suspension and
subsequent adjournment of the session. It would appear, however, that the session
was suspended to allow the parties to settle the problem, because when it resumed
at 3:40 p.m. on that day Rep. Arroyo did not say anything anymore. While it is true
that the Majority Leader moved for adjournment until 4 p.m. of Wednesday of the
following week, Rep. Arroyo could at least have objected if there was anything he
wanted to say. It is thus apparent that petitioners' predicament was largely of their
own making. Instead of submitting the proper motions for the House to act upon,
petitioners insisted on the pendency of Rep. Arroyo's question as an obstacle to the
passage of the bill. But Rep. Arroyo's question was not, in form or substance, a point
of order or a question of privilege entitled to precedence. And even if Rep. Arroyo's
question were so, Rep. Albano's motion to adjourn would have precedence and
would have put an end to any further consideration of the question.
8.
REMEDIAL LAW; SPECIAL CIVIL ACTIONS; CERTIORARI; GRAVE ABUSE OF
DISCRETION, DEFINED. The phrase "grave abuse of discretion amounting to lack
or excess of jurisdiction" has a settled meaning in the jurisprudence of procedure. It
means such capricious and whimsical exercise of judgment by a tribunal exercising
judicial or quasi judicial power as to amount to lack of power. As Chief Justice
Concepcion himself said in explaining this provision, the power granted to the
courts by Art. VIII, 1 extends to cases where "a branch of the government or any of
its officials has acted without jurisdiction or in excess of jurisdiction, or so
capriciously as to constitute an abuse of discretion amounting to excess of
jurisdiction."

9.
CONSTITUTIONAL LAW; LEGISLATIVE DEPARTMENT; HOUSE OF
REPRESENTATIVES; CONTINUED INTERPELLATION OF SPONSOR, AN
ACKNOWLEDGMENT OF PRESENCE OF QUORUM. Here, the matter complained of
concerns a matter of internal procedure of the House with which the Court should
not be concerned. To repeat, the claim is not that there was no quorum but only that
Rep. Arroyo was effectively prevented from questioning the presence of a quorum.
Rep. Arroyo's earlier motion to adjourn for lack of quorum had already been
defeated, as the roll call established the existence of a quorum. The question of
quorum cannot be raised repeatedly especially when the quorum is obviously
present for the purpose of delaying the business of the House. Rep. Arroyo
waived his objection by his continued interpellation of the sponsor for in so doing he
in effect acknowledged the presence of a quorum. CTEaDc
10.
ID.; ID.; ENROLLED BILL DOCTRINE; SIGNING OF HOUSE BILL BY THE SPEAKER
OF THE HOUSE AND PRESIDENT OF THE SENATE AND CERTIFICATION BY THE
SECRETARIES OF BOTH HOUSES, CONCLUSIVE OF ITS DUE ENACTMENT. Under the
enrolled bill doctrine, the signing of H. No. 7198 by the Speaker of the House and
the President of the Senate and the certification by the secretaries of both Houses
of Congress that it was passed on November 21, 1996 are conclusive of its due
enactment. The enrolled bill doctrine, as a rule of evidence, is well established. It is
cited with approval by text writers here and abroad. The enrolled bill rule rests on
the following considerations: . . . As the President has no authority to approve a bill
not passed by Congress, an enrolled Act in the custody of the Secretary of State,
and having the official attestations of the Speaker of the House of Representatives,
of the President of the Senate, and of the President of the United States, carries, on
its face, a solemn assurance by the legislative and executive departments of the
government, charged, respectively, with the duty of enacting and executing the
laws, that it was passed by Congress. The respect due to coequal and independent
departments requires the judicial department to act upon that assurance, and to
accept, as having passed Congress, all bills authenticated in the manner stated;
leaving the court to determine, when the question properly arises, whether the Act,
so authenticated, is in conformity with the Constitution. To overrule the doctrine
now, as the dissent urges, is to repudiate the massive teaching of our cases and
overthrow an established rule of evidence.
11.
ID.; ID.; JOURNAL; CONCLUSIVE WITH RESPECT TO MATTERS THAT ARE
REQUIRED BY THE CONSTITUTION TO BE RECORDED THEREIN. The Journal is
regarded as conclusive with respect to matters that are required by the Constitution
to be recorded therein. With respect to other matters, in the absence of evidence to
the contrary, the Journals have also been accorded conclusive effect. Thus, in
United States v. Pons, this Court spoke of the imperatives of public policy for
regarding the Journals as "public memorials of the most permanent character," thus:
"They should be public, because all are required to conform to them; they should be
permanent, that rights acquired today upon the faith of what has been declared to

be law shall not be destroyed tomorrow, or at some remote period of time, by facts
resting only in the memory of individuals." As already noted, the bill which became
R.A. No. 8240 is shown in the Journal. Hence its due enactment has been duly
proven.
12.
ID.; SUPREME COURT; WITHOUT JURISDICTION TO SET ASIDE LEGISLATIVE
ACTION AS VOID BECAUSE THE COURT THINKS THE HOUSE DISREGARDED ITS OWN
RULES. It would be an unwarranted invasion of the prerogative of a coequal
department for this Court either to set aside a legislative action as void because the
Court thinks the House has disregarded its own rules of procedure, or to allow those
defeated in the political arena to seek a rematch in the judicial forum when
petitioners can find their remedy in that department itself. The Court has not been
invested with a roving commission to inquire into complaints, real or imagined, of
legislative skullduggery. It would be acting in excess of its power and would itself be
guilty of grave abuse of its discretion were it to do so. The suggestion made in a
case may instead appropriately be made here: petitioners can seek the enactment
of a new law or the repeal or amendment of R.A. No. 8240. In the absence of
anything to the contrary, the Court must assume that Congress or any House
thereof acted in the good faith belief that its conduct was permitted by its rules, and
deference rather than disrespect is due the judgment of that body.
ROMERO, J., separate opinion:
1.
POLITICAL LAW; LEGISLATIVE DEPARTMENT; ENROLLED BILL DOCTRINE;
APPLICATION MUST BE LIMITED TO MINOR MATTERS RELATING TO FORM AND
FACTUAL ISSUES WHICH DO NOT MATERIALLY ALTER THE ESSENCE AND SUBSTANCE
OF THE LAW. Reliance on the enrolled bill theory is not to be discontinued but its
application must be limited to minor matters relating more to form and factual
issues which do not materially alter the essence and substance of the law itself.
2.
ID.; ID.; BILL; INTRODUCTION OF SEVERAL PROVISIONS IN THE BICAMERAL
CONFERENCE COMMITTEE REPORT VIOLATED THE CONSTITUTIONAL PROSCRIPTION
AGAINST ANY AMENDMENT UPON THE LAST READING. The introduction of several
provisions in the Bicameral Conference Committee Report did not only violate the
pertinent House and Senate Rules defining the limited power of the conference
committee but that the Constitutional proscription against any amendment upon
the last reading of a bill was likewise breached. Hence, in view of these lapses, I
thought that judicial review would have been proper in order to uphold the
Constitution. This the majority, however, disregarded invoking the same principle
which should have justified the Court in questioning the actuations of the legislative
branch.
PUNO; J.; concurring and dissenting opinion:
1.
REMEDIAL LAW; SUPREME COURT; POWER OF JUDICIAL REVIEW OF
CONGRESSIONAL RULES; BOUNDARIES. In the 1891 case of US. v. Ballin, (144 US

1 [1891]) the US Supreme Court first defined the boundaries of the power of the
judiciary to review congressional rules. Ballin clearly confirmed the jurisdiction of
courts to pass upon the validity of congressional rules, i.e., whether they are
constitutional. Ballin was followed in 1932 by the case of US v. Smith (286 US 6
[1932]). The Court, speaking thru Mr. Justice Brandeis, assumed jurisdiction over the
dispute relying on Ballin. It exercised jurisdiction although "the question primarily at
issue relates to the construction of the applicable rules, not to their
constitutionality." Smith, of course, involves the right of a third person and its ruling
falls within the test spelled out in Ballin. Smith was followed by the 1948 case of
Christoffel v. United States (338 US 89 [1948]). A majority of the Court, with Mr.
Justice Murphy, as ponente, defined the issue as "what rules the House had
established and whether they have been followed." The US Supreme Court pursued
the same line in 1963 in deciding the case of Yellin v. United States (374 US 109
[1963]). In the benchmark case of Baker v. Carr, (369 US 186 [1962]), the US
Supreme Court assumed jurisdiction to hear a petition for re-appointment of the
Tennessee legislature ruling that "the political question doctrine, a tool for
maintenance of government order, will not be so applied as to promote only
disorder" and that "the courts cannot reject as 'no law suit,' a bona fide controversy
as to whether some action denominated 'political' exceeds constitutional authority."
THEDCA
2.
ID.; ID.; ID.; ID. In the Philippine setting, there is more compelling reason
for courts to categorically reject the political question defense when its interposition
will cover up abuse of power. For Section 1, Article VIII of our Constitution was
intentionally cobbled to empower courts ". . . to determine whether or not there has
been a grave abuse of discretion amounting to lack or excess of jurisdiction on the
part of any branch or instrumentality of the government." This power is new and
was not granted to our courts in the 1935 and 1972 Constitutions. It was not also
xeroxed from the US Constitutional or any foreign state constitution. In Tolentino, I
endorsed the view of former, Senator Salonga that this novel provision stretching
the latitude of judicial power is distinctly Filipino and its interpretation should not be
depreciated by undue reliance on inapplicable foreign jurisprudence. In resolving
the case at bar, the lessons of our own history should provide us the light and not
the experience of foreigners.
3.
CONSTITUTIONAL LAW; LEGISLATIVE DEPARTMENT; LAW-MAKING POWER;
ENROLLED BILL, DEFINED. An enrolled bill is one which has been duly introduced,
finally enacted by both Houses, signed by the proper officers of each House and
approved by the President. It is a declaration by the two Houses, through their
presiding officers, to the President that a bill, thus attested, has received in due the
sanction of the legislative branch of the government, and that it is delivered to him
in obedience to the constitutional requirement that all bills which pass Congress
shall be presented to him.

4.
ID.; ID.; ID.; ENROLLED BILL DOCTRINE; RULES. The enrolled bill originated
in England where there is no written Constitution controlling the legislative branch
of the government, and the acts of Parliament, being regarded in their nature as
judicial as emanating from the highest tribunal in the land are placed on the
same footing and regarded with the same veneration as the judgment of the courts
which cannot be collaterally attacked. In England, the conclusiveness of the bill was
premised on the rationale that "an act of parliament thus made is the exercise of
the highest authority that this kingdom acknowledges upon earth. And it cannot be
altered, amended, dispensed with, suspended or repealed, but in the same forms
and by the same authority of parliament; for it is a maxim in law that it requires the
same strength to dissolve as to create an obligation. Over the years, the enrolled
bill theory has undergone important mutations. Some jurisdictions have adopted the
modified entry or affirmative contradiction rule. Under this rule, the presumption in
favor of the enrolled bill is not conclusive. The rule concedes validity to the enrolled
bill unless there affirmatively appears in the journals of the legislature a statement
that there has not been compliance with one or more of the constitutional
requirements. Other jurisdictions have adopted the Extrinsic Evidence Rule which
holds that an enrolled bill is only prima facie evidence that it has been regularly
enacted. The prima facie presumption, however, can be destroyed by clear,
satisfactory and convincing evidence that the constitutional requirements in
enacting a law have been violated. For this purpose, journals and other extrinsic
evidence are allowed to be received. Some limit the use of extrinsic evidence to
issues of fraud or mistakes.
5.
ID.; ID.; ID.; ID.; MODERN RATIONALE. The modern rationale for the
enrolled bill theory was spelled out in Field v. Clark, viz.: . . . "The signing by the
Speaker of the House of Representatives, and, by the President of the Senate, in
open session, of an enrolled bill, is an official attestation by the two houses of such
bill as one that has passed Congress. It is a declaration by the two Houses, through
their presiding officers, to the President, that a bill, thus attested, has received, in
due form, the sanction of the legislative branch of the government, and that it is
delivered to him in obedience to the constitutional requirement that all bills which
pass Congress shall be presented to him. And when a bill, thus attested, receives
his approval, and is deposited in the public archives, its authentication as a bill that
has passed Congress should be deemed complete and unimpeachable. As the
President has no authority to approve a bill not passed by Congress, an enrolled Act
in the custody of the Secretary of State, and having the official attestations of the
Speaker of the House of Representatives, of the President of the Senate, and of the
President of the United States, carries, on its face, a solemn assurance by the
legislative and executive departments of the government, charged, respectively,
with the duty of enacting and executing the laws, that it was passed by Congress.
The respect due to coequal and independent departments requires the judicial
department to act upon the assurance, to accept, as having passed Congress, all
bills authenticated in the manner stated; leaving the courts to determine, when the

question properly arises, whether the Act, so authenticated, is in conformity with


the Constitution.
6.
ID.; ID.; ID.; ID; CONCLUSIVE PRESUMPTION RULE SHOULD BE ABANDONED.
The enrolled bill doctrine no longer enjoys its once unassailable respectability in
United States. Sutherland reveals that starting in the 1940's, ". . . the tendency
seems to be toward the abandonment of the conclusive presumption rule and the
adoption of the third rule leaving only a prima facie presumption of validity which
may be attacked by any authoritative source of information." It is high time we reexamine our preference for the enrolled bill doctrine. It was in the 1947 case of
Mabanag v. Lopez Vito, (78 Phil. 1 [1947]) that this Court, with three (3) Justices
dissenting, first embraced the rule that a duly authenticated bill or resolution
imports absolute verity and is binding on the courts. In the 1969 case of Morales v.
Subido, (27 SCRA 131, 134-135) we reiterated our fidelity to the enrolled bill
doctrine. Significantly, however, Morales diluted the conclusiveness rule of the
enrolled bill doctrine. The ponencia stressed: "All we hold is that with respect to
matters not expressly required to be entered on the journal, the enrolled bill prevails
in the event of any discrepancy." In the 1974 case of Astorga v. Villegas, (56 SCRA
714) we further diluted the enrolled bill doctrine when we refused to apply it after
the Senate President declared his signature on the bill as invalid. We ruled: As far as
Congress itself is concerned, there is nothing sacrosanct in the certification made by
the presiding officers. It is merely a mode of authentication. The law-making process
in Congress ends when the bill is approved by both Houses, and the certification
does not add to the validity of the bill or cure any defect already present upon its
passage. In other words it is the approval by Congress and not the signatures of the
presiding officers that is essential. Finally in 1994 came the case of Tolentino v.
Secretary of Finance, et al., and its companion cases. These cases show that we
have not blindly accepted the conclusiveness of the enrolled bill. Even in Tolentino,
Mr. Justice Mendoza was cautious enough to hold that "no claim is here made that
the enrolled bill is absolute." I respectfully submit that it is now time for the Court to
make a definitive pronouncement that we no longer give our unqualified support to
the enrolled bill doctrine. There are compelling reasons for this suggested change in
stance. For one, the enrolled bill is appropriate only in England where it originated
because in England there is no written Constitution and the Parliament is supreme.
For another, many of the courts in the United States have broken away from the
rigidity and unrealism of the enrolled bill in light of contemporary developments in
lawmaking. And more important, our uncritical adherence to the enrolled bill is
inconsistent with our Constitution, laws and rules. In Mabanag, we relied on Section
313 of the Old Code of Civil Procedure as amended by Act No. 2210 as a principal
reason in embracing the enrolled bill. This section, however has long been repealed
by our Rules of Court. A half glance at our Rules will show that its section on
conclusive presumption does not carry the conclusive presumption we give to an
enrolled bill. But this is not all. The conclusiveness of an enrolled bill which all too
often results in the suppression of truth cannot be justified under the 1987

Constitution. The Preamble of our Constitution demands that we live not only under
a rule of law but also under a regime of truth. Our Constitution also adopted a
national policy requiring full public disclosure of all state transactions involving
public interest. Any rule which will defeat this policy on transparency ought to be
disfavored. And to implement these policies, this Court was given the power to pry
open and to strike down any act of any branch or instrumentality of government if it
amounts to grave abuse of discretion amounting to lack or excess of jurisdiction. It
is time to bury the enrolled bill for its fiction of conclusiveness shuts off truth in
many litigations. We cannot dispense justice based on fiction for the search for
justice is the search for truth. I submit that giving an enrolled bill a mere prima facie
presumption of correctness will facilitate our task of dispensing justice based on
truth. DHSCTI
7.
REMEDIAL LAW; SPECIAL CIVIL ACTIONS; CERTIORARI; GRAVE ABUSE OF
DISCRETION; NEGATED IN CASE AT BAR. I do not find any grave abuse of
discretion committed by the public respondents to justify granting petition. As the
ponencia points out, the petition merely involves the complaint that petitioner was
prevented from raising the question of quorum. The petition does not concern
violation of any rule mandated by the Constitution. Nor does it involve the right of a
non-member of the House which requires constitutional protection. The rules on
how to question the existence of a quorum are procedural in character. They are
malleable by nature for they were drafted to help the House enact laws. As well
stated, these rules are servants, not masters of the House. Their observance or nonobservance is a matter of judgment call on the part of our legislators and it is not
the business of the Court to reverse this judgment when untainted by grave abuse
of discretion amounting to lack or excess of jurisdiction.
VITUG, J., concurring opinion:
1.
CONSTITUTIONAL LAW; SUPREME COURT; WITH POWER TO DETERMINE
WHETHER OR NOT THERE IS GRAVE ABUSE OF DISCRETION ON ANY BRANCH OF
GOVERNMENT; GRAVE ABUSE OF DISCRETION, CONSTRUED. When the 1987
Constitution has embodied, in its circumscription of judicial power under Section 1,
Article VIII, of the Constitution, the determination of whether or not there is grave
abuse of discretion on the part of any branch or instrumentality of government, the
Supreme Court, upon which that great burden has been imposed, could not have
been thought of as likewise being thereby tasked with the awesome responsibility of
overseeing the entire bureaucracy. The term grave abuse of discretion has long
been understood in our jurisprudence as, and confined to, a capricious and
whimsical or despotic exercise of judgment as amounting to lack or excess of
jurisdiction.
2.
ID.; ID.; ID.; CASE AT BAR. Absent a clear case of grave abuse of discretion,
like the patent disregard of a Constitutional proscription, I would respect the
judgment of Congress under whose province the specific responsibility falls and the

authority to act is vested. To do otherwise would be an unwarranted intrusion into


the internal affairs of a co-equal, independent and coordinate branch of
government. At no time, it would seem to me, has it been intended by the framers
of the fundamental law to cause a substantial deviation, let alone departure, from
the time-honored and accepted principle of separation, but balanced, powers of the
three branches of government. There is, of course, a basic variant between the old
rule and the new Charter on the understanding of the term "judicial power." Now,
the Court is under mandate to assume jurisdiction over, and to undertake judicial
inquiry into, what may even be deemed to be political questions provided, however,
that grave abuse of discretion the sole test of justiciability on purely political
issues is shown to have attended the contested act. DEICTS
DECISION
MENDOZA, J p:
This is a petition for certiorari and/or prohibition challenging the validity of Republic
Act No. 8240, which amends certain provisions of the National Internal Revenue
Code by imposing so-called "sin taxes" (actually specific taxes) on the manufacture
and sale of beer and cigarettes.
Petitioners are members of the House of Representatives. They brought this suit
against respondents Jose de Venecia, Speaker of the House of Representatives,
Deputy Speaker Raul Daza, Majority Leader Rodolfo Albano, the Executive
Secretary, the Secretary of Finance, and the Commissioner of Internal Revenue,
charging violation of the rules of the House which petitioners claim are
"constitutionally mandated" so that their violation is tantamount to a violation of the
Constitution. cdphil
The law originated in the House of Representatives as H. No. 7198. This bill was
approved on third reading on September 12, 1996 and transmitted on September
16, 1996 to the Senate which approved it with certain amendments on third reading
on November 17, 1996. A bicameral conference committee was formed to reconcile
the disagreeing provisions of the House and Senate versions of the bill.
The bicameral conference committee submitted its report to the House at 8 a.m. on
November 21, 1996. At 11:48 a.m., after a recess, Rep. Exequiel Javier, chairman of
the Committee on Ways and Means, proceeded to deliver his sponsorship speech,
after which he was interpellated. Rep. Rogelio Sarmiento was first to interpellate. He
was interrupted when Rep. Arroyo moved to adjourn for lack of quorum. Rep.
Antonio Cuenco objected to the motion and asked for a head count. After a roll call,
the Chair (Deputy Speaker Raul Daza) declared the presence of a quorum. 1 Rep.
Arroyo appealed the ruling of the Chair, but his motion was defeated when put to a
vote. The interpellation of the sponsor thereafter proceeded.

Petitioner Rep. Joker Arroyo registered to interpellate. He was fourth in the order,
following Rep. Rogelio Sarmiento, Rep. Edcel C. Lagman and Rep. Enrique Garcia. In
the course of his interpellation, Rep. Arroyo announced that he was going to raise a
question on the quorum, although until the end of his interpellation he never did.
What happened thereafter is shown in the following transcript of the session on
November 21, 1996 of the House of Representatives, as published by Congress in
the newspaper issues of December 5 and 6, 1996:
MR. ALBANO. Mr. Speaker, I move that we now approve and ratify the conference
committee report.
THE DEPUTY SPEAKER (Mr. Daza). Any objection to the motion?
MR. ARROYO. What is that, Mr. Speaker?
THE DEPUTY SPEAKER (Mr. Daza). There being none, approved.
(Gavel)
MR. ARROYO. No, no, no, wait a minute, Mr. Speaker, I stood up. I want to know what
is the question that the Chair asked the distinguished sponsor.
THE DEPUTY SPEAKER (Mr. Daza). There was a motion by the Majority Leader for
approval of the report, and the Chair called for the motion.
MR. ARROYO. Objection, I stood up, so I wanted to object.
THE DEPUTY SPEAKER (Mr. Daza). The session is suspended for one minute.
(It was 3:01 p.m.)
(3:40 p.m., the session was resumed)
THE DEPUTY SPEAKER (Mr. Daza). The session is resumed.
MR. ALBANO. Mr. Speaker, I move to adjourn until four o'clock, Wednesday, next
week.
THE DEPUTY SPEAKER (Mr. Daza). The session is adjourned until four o'clock,
Wednesday, next week.
(It was 3:40 p.m.)
On the same day, the bill was signed by the Speaker of the House of
Representatives and the President of the Senate and certified by the respective
secretaries of both Houses of Congress as having been finally passed by the House
of Representatives and by the Senate on November 21, 1996. The enrolled bill was
signed into law by President Fidel V. Ramos on November 22, 1996.

Petitioners claim that there are actually four different versions of the transcript of
this portion of Rep. Arroyo's interpellation: (1) the transcript of audio-sound
recording of the proceedings in the session hall immediately after the session
adjourned at 3:40 p.m. on November 21, 1996, which petitioner Rep. Edcel C.
Lagman obtained from the operators of the sound system; (2) the transcript of the
proceedings from 3:00 p.m. to 3:40 p.m. of November 21, 1996, as certified by the
Chief of the Transcription Division on November 21, 1996, also obtained by Rep.
Lagman; (3) the transcript of the proceedings from 3:00 p.m. to 3:40 p.m. of
November 21, 1996 as certified by the Chief of the Transcription Division on
November 28, 1996, also obtained by Rep. Lagman; and (4) the published version
abovequoted. According to petitioners, the four versions differ on three points, to
wit: (1) in the audio-sound recording the word "approved," which appears on line 13
in the three other versions, cannot be heard; (2) in the transcript certified on
November 21, 1996 the word "no" on line 17 appears only once, while in the other
versions it is repeated three times; and (3) the published version does not contain
the sentence "(Y)ou better prepare for a quorum because I will raise the question of
the quorum," which appears in the other versions.
Petitioners' allegations are vehemently denied by respondents. However, there is no
need to discuss this point as petitioners have announced that, in order to expedite
the resolution of this petition, they admit, without conceding, the correctness of the
transcripts relied upon by the respondents. Petitioners agree that for purposes of
this proceeding the word "approved" appears in the transcripts.
Only the proceedings of the House of Representatives on the conference committee
report on H. No. 7198 are in question. Petitioners' principal argument is that R.A. No.
8240 is null and void because it was passed in violation of the rules of the House;
that these rules embody the "constitutional mandate" in Art. VI, 16(3) that "each
House may determine the rules of its proceedings" and that, consequently, violation
of the House rules is a violation of the Constitution itself. They contend that the
certification of Speaker De Venecia that the law was properly passed is false and
spurious.
More specifically, petitioners charge that (1) in violation of Rule VIII, 35 and Rule
XVII, 103 of the rules of the House, 2 the Chair, in submitting the conference
committee report to the House, did not call for the yeas or nays, but simply asked
for its approval by motion in order to prevent petitioner Arroyo from questioning the
presence of a quorum; (2) in violation of Rule XIX, 112, 3 the Chair deliberately
ignored Rep. Arroyo's question, "What is that . . . Mr. Speaker?" and did not repeat
Rep. Albano's motion to approve or ratify; (3) in violation of Rule XVI, 97, 4 the
Chair refused to recognize Rep. Arroyo and instead proceeded to act on Rep.
Albano's motion and afterward declared the report approved; and (4) in violation of
Rule XX, 121-122, Rule XXI, 123, and Rule XVIII, 109, 5 the Chair suspended the
session without first ruling on Rep. Arroyo's question which, it is alleged, is a point of
order or a privileged motion. It is argued that Rep. Arroyo's query should have been

resolved upon the resumption of the session on November 28, 1996, because the
parliamentary situation at the time of the adjournment remained upon the
resumption of the session.
Petitioners also charge that the session was hastily adjourned at 3:40 p.m. on
November 21, 1996 and the bill certified by Speaker Jose De Venecia to prevent
petitioner Rep. Arroyo from formally challenging the existence of a quorum and
asking for a reconsideration.
Petitioners urge the Court not to feel bound by the certification of the Speaker of the
House that the law had been properly passed, considering the Court's power under
Art. VIII, 1 to pass on claims of grave abuse of discretion by the other departments
of the government, and they ask for a reexamination of Tolentino v. Secretary of
Finance, 6 which affirmed the conclusiveness of an enrolled bill, in view of the
changed membership of the Court.
The Solicitor General filed a comment in behalf of all respondents. In addition,
respondent De Venecia filed a supplemental comment. Respondents' defense is
anchored on the principle of separation of powers and the enrolled bill doctrine.
They argue that the Court is not the proper forum for the enforcement of the rules
of the House and that there is no justification for reconsidering the enrolled bill
doctrine. Although the Constitution provides in Art. VI, 16(3) for the adoption by
each House of its rules of proceedings, enforcement of the rules cannot be sought in
the courts except insofar as they implement constitutional requirements such as
that relating to three readings on separate days before a bill may be passed. At all
events, respondents contend that, in passing the bill which became R.A. No. 8240,
the rules of the House, as well as parliamentary precedents for approval of
conference committee reports on mere motion, were faithfully observed.
In his supplemental comment, respondent De Venecia denies that his certification of
H. No. 7198 is false and spurious and contends that under the journal entry rule, the
judicial inquiry sought by the petitioners is barred. Indeed, Journal No. 39 of the
House of Representatives, covering the sessions of November 20 and 21, 1996,
shows that "On Motion of Mr. Albano, there being no objection, the Body approved
the Conference Committee Report on House Bill No. 7198." 7 This Journal was
approved on December 2, 1996 over the lone objection of petitioner Rep. Lagman. 8
After considering the arguments of the parties, the Court finds no ground for holding
that Congress committed a grave abuse of discretion in enacting R.A. No. 8240. This
case is therefore dismissed.
First. It is clear from the foregoing facts that what is alleged to have been violated in
the enactment of R.A. No. 8240 are merely internal rules of procedure of the House
rather than constitutional requirements for the enactment of a law, i.e., Art. VI,
26-27. Petitioners do not claim that there was no quorum but only that, by some

maneuver allegedly in violation of the rules of the House, Rep. Arroyo was
effectively prevented from questioning the presence of a quorum. cdrep
Petitioners contend that the House rules were adopted pursuant to the
constitutional provision that "each House may determine the rules of its
proceedings" 9 and that for this reason they are judicially enforceable. To begin
with, this contention stands the principle on its head. In the decided cases, 10 the
constitutional provision that "each House may determine the rules of its
proceedings" was invoked by parties, although not successfully, precisely to support
claims of autonomy of the legislative branch to conduct its business free from
interference by courts. Here petitioners cite the provision for the opposite purpose
of invoking judicial review.
But the cases, both here and abroad, in varying forms of expression, all deny to the
courts the power to inquire into allegations that, in enacting a law, a House of
Congress failed to comply with its own rules, in the absence of showing that there
was a violation of a constitutional provision or the rights of private individuals. In
Osmea v. Pendatun, 11 it was held: "At any rate, courts have declared that 'the
rules adopted by deliberative bodies are subject to revocation, modification or
waiver at the pleasure of the body adopting them.' And it has been said that
'Parliamentary rules are merely procedural, and with their observance, the courts
have no concern. They may be waived or disregarded by the legislative body.'
Consequently, 'mere failure to conform to parliamentary usage will not invalidate
the action (taken by a deliberative body) when the requisite number of members
have agreed to a particular measure.'"
In United States v. Ballin, Joseph & Co., 12 the rule was stated thus: "The
Constitution empowers each house to determine its rules of proceedings. It may not
by its rules ignore constitutional restraints or violate fundamental rights, and there
should be a reasonable relation between the mode or method of proceeding
established by the rule and the result which is sought to be attained. But within
these limitations all matters of method are open to the determination of the House,
and it is no impeachment of the rule to say that some other way would be better,
more accurate, or even more just. It is no objection to the validity of a rule that a
different one has been prescribed and in force for a length of time. The power to
make rules is not one which once exercised is exhausted. It is a continuous power,
always subject to be exercised by the House, and within the limitations suggested,
absolute and beyond the challenge of any other body or tribunal."
In Crawford v. Gilchrist, 13 it was held: "The provision that each House shall
determine the rules of its proceedings does not restrict the power given to a mere
formulation of standing rules, or to the proceedings of the body in ordinary
legislative matters; but in the absence of constitutional restraints, and when
exercised by a majority of a constitutional quorum, such authority extends to a
determination of the propriety and effect of any action as it is taken by the body as

it proceeds in the exercise of any power, in the transaction of any business, or in the
performance of any duty conferred upon it by the Constitution."
In State ex rel. City Loan & Savings Co. v. Moore, 14 the Supreme Court of Ohio
stated: "The provision for reconsideration is no part of the Constitution and is
therefore entirely within the control of the General Assembly. Having made the rule,
it should be regarded, but a failure to regard it is not the subject-matter of judicial
inquiry. It has been decided by the courts of last resort of many states, and also by
the United States Supreme Court, that a legislative act will not be declared invalid
for noncompliance with rules."
In State v. Savings Bank, 15 the Supreme Court of Errors of Connecticut declared
itself as follows: "The Constitution declares that each house shall determine the
rules of its own proceedings and shall have all powers necessary for a branch of the
Legislature of a free and independent state. Rules of proceedings are the servants
of the House and subject to its authority. This authority may be abused, but when
the House has acted in a matter clearly within its power, it would be an
unwarranted invasion of the independence of the legislative department for the
court to set aside such action as void because it may think that the House has
misconstrued or departed from its own rules of procedure."
In McDonald v. State, 16 the Wisconsin Supreme Court held: "When it appears that
an act was so passed, no inquiry will be permitted to ascertain whether the two
houses have or have not complied strictly with their own rules in their procedure
upon the bill, intermediate its introduction and final passage. The presumption is
conclusive that they have done so. We think no court has ever declared an act of
the legislature void for non-compliance with the rules of procedure made by itself ,
or the respective branches thereof, and which it or they may change or suspend at
will. If there are any such adjudications, we decline to follow them."
Schweizer v. Territory 17 is illustrative of the rule in these cases. The 1893 Statutes
of Oklahoma provided for three readings on separate days before a bill may be
passed by each house of the legislature, with the proviso that in case of an
emergency the house concerned may, by two-thirds vote, suspend the operation of
the rule. Plaintiff was convicted in the district court of violation of a law punishing
gambling. He appealed contending that the gambling statute was not properly
passed by the legislature because the suspension of the rule on three readings had
not been approved by the requisite two-thirds vote. Dismissing this contention, the
State Supreme Court of Oklahoma held:
We have no constitutional provision requiring that the legislature should read a bill
in any particular manner. It may, then, read or deliberate upon a bill as it sees fit,
either in accordance with its own rules, or in violation thereof, or without making
any rules. The provision of section 17 referred to is merely a statutory provision for
the direction of the legislature in its action upon proposed measures. It receives its

entire force from legislative sanction, and it exists only at legislative pleasure. The
failure of the legislature to properly weigh and consider an act, its passage through
the legislature in a hasty manner, might be reasons for the governor withholding his
signature thereto; but this alone, even though it is shown to be a violation of a rule
which the legislature had made to govern its own proceedings, could be no reason
for the court's refusing its enforcement after it was actually passed by a majority of
each branch of the legislature, and duly signed by the governor. The courts cannot
declare an act of the legislature void on account of noncompliance with rules of
procedure made by itself to govern its deliberations. McDonald v. State, 80 Wis.
407, 50 N.W. 185; In re Ryan, 80 Wis. 414, 50 N.W. 187; State v. Brown, 33 S.C. 151,
11 S.E. 641; Railway Co. v. Gill, 54 Ark. 101, 15 S.W. 18.
We conclude this survey with the useful summary of the rulings by former Chief
Justice Fernando, commenting on the power of each House of Congress to
determine its rules of proceedings. He wrote:
Rules are hardly permanent in character. The prevailing view is that they are subject
to revocation, modification or waiver at the pleasure of the body adopting them as
they are primarily procedural. Courts ordinarily have no concern with their
observance. They may be waived or disregarded by the legislative body.
Consequently, mere failure to conform to them does not have the effect of nullifying
the act taken if the requisite number of members have agreed to a particular
measure. The above principle is subject, however, to this qualification. Where the
construction to be given to a rule affects persons other than members of the
legislative body the question presented is necessarily judicial in character. Even its
validity is open to question in a case where private rights are involved. 18
In this case no rights of private individuals are involved but only those of a member
who, instead of seeking redress in the House, chose to transfer the dispute to this
Court. We have no more power to look into the internal proceedings of a House than
members of that House have to look over our shoulders, as long as no violation of
constitutional provisions is shown.
Petitioners must realize that each of the three departments of our government has
its separate sphere which the others may not invade without upsetting the delicate
balance on which our constitutional order rests. Due regard for the working of our
system of government, more than mere comity, compels reluctance on our part to
enter upon an inquiry into an alleged violation of the rules of the House. We must
accordingly decline the invitation to exercise our power.
Second. Petitioners, quoting former Chief Justice Roberto Concepcion's sponsorship
in the Constitutional Commission, contend that under Art. VIII, 1, "nothing involving
abuse of discretion [by the other branches of the government] amounting to lack or
excess of jurisdiction is beyond judicial review." 19 Implicit in this statement of the
former Chief Justice, however, is an acknowledgment that the jurisdiction of this

Court is subject to the case and controversy requirement of Art. VIII, 5 and,
therefore, to the requirement of a justiciable controversy before courts can
adjudicate constitutional questions such as those which arise in the field of foreign
relations. For while Art. VIII, 1 has broadened the scope of judicial inquiry into areas
normally left to the political departments to decide, such as those relating to
national security, 20 it has not altogether done away with political questions such as
those which arise in the field of foreign relations. As we have already held, under
Art. VIII, 1, this Court's function is merely [to] check whether or not the
governmental branch or agency has gone beyond the constitutional limits of its
jurisdiction, not that it erred or has a different view. In the absence of a showing . . .
[of] grave abuse of discretion amounting to lack of jurisdiction, there is no occasion
for the Court to exercise its corrective power. . . . It has no power to look into what it
thinks is apparent error. 21
If, then, the established rule is that courts cannot declare an act of the legislature
void on account merely of noncompliance with rules of procedure made by itself, it
follows that such a case does not present a situation in which a branch of the
government has "gone beyond the constitutional limits of its jurisdiction" so as to
call for the exercise of our Art. VIII, 1 power. prcd
Third. Petitioners claim that the passage of the law in the House was "railroaded."
They claim that Rep. Arroyo was still making a query to the Chair when the latter
declared Rep. Albano's motion approved.
What happened is that, after Rep. Arroyo's interpellation of the sponsor of the
committee report, Majority Leader Rodolfo Albano moved for the approval and
ratification of the conference committee report. The Chair called out for objections
to the motion. Then the Chair declared: "There being none, approved." At the same
time the Chair was saying this, however, Rep. Arroyo was asking, "What is that . . .
Mr. Speaker?" The Chair and Rep. Arroyo were talking simultaneously. Thus,
although Rep. Arroyo subsequently objected to the Majority Leader's motion, the
approval of the conference committee report had by then already been declared by
the Chair, symbolized by its banging of the gavel.
Petitioners argue that, in accordance with the rules of the House, Rep. Albano's
motion for the approval of the conference committee report should have been
stated by the Chair and later the individual votes of the Members should have been
taken. They say that the method used in this case is a legislator's nightmare
because it suggests unanimity when the fact was that one or some legislators
opposed the report.
No rule of the House of Representatives has been cited which specifically requires
that in cases such as this involving approval of a conference committee report, the
Chair must restate the motion and conduct a viva voce or nominal voting. On the
other hand, as the Solicitor General has pointed out, the manner in which the

conference committee report on H. No. 7198 was approved was by no means a


unique one. It has basis in legislative practice. It was the way the conference
committee report on the bills which became the Local Government Code of 1991
and the conference committee report on the bills amending the Tariff and Customs
Code were approved.
In 1957, the practice was questioned as being contrary to the rules of the House.
The point was answered by Majority Leader Arturo M. Tolentino and his answer
became the ruling of the Chair. Mr. Tolentino said:
Mr. TOLENTINO. The fact that nobody objects means a unanimous action of the
House. Insofar as the matter of procedure is concerned, this has been a precedent
since I came here seven years ago, and it has been the procedure in this House that
if somebody objects, then a debate follows and after the debate, then the voting
comes in.
xxx

xxx

xxx

Mr. Speaker, a point of order was raised by the gentleman from Leyte, and I wonder
what his attitude is now on his point of order. I should just like to state that I believe
that we have had a substantial compliance with the Rules. The Rule invoked is not
one that refers to statutory or constitutional requirement, and a substantial
compliance, to my mind, is sufficient. When the Chair announces the vote by saying
"Is there any objection?" and nobody objects, then the Chair announces "The bill is
approved on second reading." If there was any doubt as to the vote, any motion to
divide would have been proper. So, if that motion is not presented, we assume that
the House approves the measure. So I believe there is substantial compliance here,
and if anybody wants a division of the House he can always ask for it, and the Chair
can announce how many are in favor and how many are against. 22
Indeed, it is no impeachment of the method to say that some other way would be
better, more accurate and even more just. 23 The advantages or disadvantages, the
wisdom or folly of a method do not present any matter for judicial consideration. 24
In the words of the U.S. Circuit Court of Appeals, "this Court cannot provide a
second opinion on what is the best procedure. Notwithstanding the deference and
esteem that is properly tendered to individual congressional actors, our deference
and esteem for the institution as a whole and for the constitutional command that
the institution be allowed to manage its own affairs precludes us from even
attempting a diagnosis of the problem." 25
Nor does the Constitution require that the yeas and the nays of the Members be
taken every time a House has to vote, except only in the following instances: upon
the last and third readings of a bill, 26 at the request of one-fifth of the Members
present, 27 and in repassing a bill over the veto of the President. 28 Indeed,
considering the fact that in the approval of the original bill the votes of the Members

by yeas and nays had already been taken, it would have been sheer tedium to
repeat the process.
Petitioners claim that they were prevented from seeking reconsideration allegedly
as a result of the precipitate suspension and subsequent adjournment of the
session. 29 It would appear, however, that the session was suspended to allow the
parties to settle the problem, because when it resumed at 3:40 p.m. on that day
Rep. Arroyo did not say anything anymore. While it is true that the Majority Leader
moved for adjournment until 4 p.m. of Wednesday of the following week, Rep.
Arroyo could at least have objected if there was anything he wanted to say. The
fact, however, is that he did not. The Journal of November 21, 1996 of the House
shows:
ADJOURNMENT OF SESSION
On motion of Mr. Albano, there being no objection, the Chair declared the session
adjourned until four o'clock in the afternoon of Wednesday, November 27, 1996.
It was 3:40 p.m. Thursday, November 21, 1996. (Emphasis added)
This Journal was approved on December 2, 1996. Again, no one objected to its
approval except Rep. Lagman.
It is thus apparent that petitioners' predicament was largely of their own making.
Instead of submitting the proper motions for the House to act upon, petitioners
insisted on the pendency of Rep. Arroyo's question as an obstacle to the passage of
the bill. But Rep. Arroyo's question was not, in form or substance, a point of order or
a question of privilege entitled to precedence. 30 And even if Rep. Arroyo's question
were so, Rep. Albano's motion to adjourn would have precedence and would have
put an end to any further consideration of the question. 31
Given this fact, it is difficult to see how it can plausibly be contended that in signing
the bill which became R.A. No. 8240, respondent Speaker of the House acted with
grave abuse of his discretion. Indeed, the phrase "grave abuse of discretion
amounting to lack or excess of jurisdiction" has a settled meaning in the
jurisprudence of procedure. It means such capricious and whimsical exercise of
judgment by a tribunal exercising judicial or quasi judicial power as to amount to
lack of power. As Chief Justice Concepcion himself said in explaining this provision,
the power granted to the courts by Art. VIII, 1 extends to cases where "a branch of
the government or any of its officials has acted without jurisdiction or in excess of
jurisdiction, or so capriciously as to constitute an abuse of discretion amounting to
excess of jurisdiction." 32
Here, the matter complained of concerns a matter of internal procedure of the
House with which the Court should not be concerned. To repeat, the claim is not that
there was no quorum but only that Rep. Arroyo was effectively prevented from

questioning the presence of a quorum. Rep. Arroyo's earlier motion to adjourn for
lack of quorum had already been defeated, as the roll call established the existence
of a quorum. The question of quorum cannot be raised repeatedly especially
when the quorum is obviously present for the purpose of delaying the business of
the House. 33 Rep. Arroyo waived his objection by his continued interpellation of the
sponsor for in so doing he in effect acknowledged the presence of a quorum. 34
At any rate it is noteworthy that of the 111 members of the House earlier found to
be present on November 21, 1996, only the five, i.e. petitioners in this case, are
questioning the manner by which the conference committee report on H. No. 7198
was approved on that day. No one except Rep. Arroyo, appears to have objected to
the manner by which the report was approved. Rep. John Henry Osmea did not
participate in the bicameral conference committee proceedings. 35 Rep. Lagman
and Rep. Zamora objected to the report 36 but not to the manner it was approved;
while it is said that, if voting had been conducted, Rep. Taada would have voted in
favor of the conference committee report. 37
Fourth. Under the enrolled bill doctrine, the signing of H. No. 7198 by the Speaker of
the House and the President of the Senate and the certification by the secretaries of
both Houses of Congress that it was passed on November 21, 1996 are conclusive
of its due enactment. Much energy and learning is devoted in the separate opinion
of Justice Puno, joined by Justice Davide, to disputing this doctrine. To be sure, there
is no claim either here or in the decision in the EVAT cases [Tolentino v. Secretary of
Finance] that the enrolled bill embodies a conclusive presumption. In one case 38
we "went behind" an enrolled bill and consulted the Journal to determine whether
certain provisions of a statute had been approved by the Senate. Cdpr
But, where as here there is no evidence to the contrary, this Court will respect the
certification of the presiding officers of both Houses that a bill has been duly
passed. Under this rule, this Court has refused to determine claims that the threefourths vote needed to pass a proposed amendment to the Constitution had not
been obtained, because "a duly authenticated bill or resolution imports absolute
verity and is binding on the courts." 39 This Court quoted from Wigmore on
Evidence the following excerpt which embodies good, if old-fashioned democratic
theory:
The truth is that many have been carried away with the righteous desire to check at
any cost the misdoings of Legislatures. They have set such store by the Judiciary for
this purpose that they have almost made them a second and higher Legislature. But
they aim in the wrong direction. Instead of trusting a faithful Judiciary to check an
inefficient Legislature, they should turn to improve the Legislature. The sensible
solution is not to patch and mend casual errors by asking the Judiciary to violate
legal principle and to do impossibilities with the Constitution; but to represent
ourselves with competent, careful, and honest legislators, the work of whose hands

on the statute-roll may come to reflect credit upon the name of popular
government. 40
This Court has refused to even look into allegations that the enrolled bill sent to the
President contained provisions which had been "surreptitiously" inserted in the
conference committee:
[W]here allegations that the constitutional procedures for the passage of bills have
not been observed have no more basis than another allegation that the Conference
Committee "surreptitiously" inserted provisions into a bill which it had prepared, we
should decline the invitation to go behind the enrolled copy of the bill. To disregard
the "enrolled bill" rule in such cases would be to disregard the respect due the other
two departments of our government. 41
It has refused to look into charges that an amendment was made upon the last
reading of a bill in violation of Art. VI, 26(2) of the Constitution that "upon the last
reading of a bill, no amendment shall be allowed." 42
In other cases, 43 this Court has denied claims that the tenor of a bill was otherwise
than as certified by the presiding officers of both Houses of Congress.
The enrolled bill doctrine, as a rule of evidence, is well established. It is cited with
approval by text writers here and abroad. 44 The enrolled bill rule rests on the
following considerations:
. . . As the President has no authority to approve a bill not passed by Congress, an
enrolled Act in the custody of the Secretary of State, and having the official
attestations of the Speaker of the House of Representatives, of the President of the
Senate, and of the President of the United States, carries, on its face, a solemn
assurance by the legislative and executive departments of the government,
charged, respectively, with the duty of enacting and executing the laws, that it was
passed by Congress. The respect due to coequal and independent departments
requires the judicial department to act upon that assurance, and to accept, as
having passed Congress, all bills authenticated in the manner stated; leaving the
court to determine, when the question properly arises, whether the Act, so
authenticated, is in conformity with the Constitution. 45
To overrule the doctrine now, as the dissent urges, is to repudiate the massive
teaching of our cases and overthrow an established rule of evidence.
Indeed, petitioners have advanced no argument to warrant a departure from the
rule, except to say that, with a change in the membership of the Court, the three
new members may be assumed to have an open mind on the question of the
enrolled bill rule. Actually, not three but four (Cruz, Feliciano, Bidin, and Quiason,
JJ .) have departed from the Court since our decision in the EVAT cases and their
places have since been taken by four new members (Francisco, Hermosisima,

Panganiban, and Torres, JJ .) Petitioners are thus simply banking on the change in
the membership of the Court.
Moreover, as already noted, the due enactment of the law in question is confirmed
by the Journal of the House of November 21, 1996 which shows that the conference
committee report on H. No. 7198, which became R.A. No. 8240, was approved on
that day. The keeping of the Journal is required by the Constitution. Art. VI, 16(4)
provides:
Each House shall keep a Journal of its proceedings, and from time to time publish
the same, excepting such parts as may, in its judgment, affect national security;
and the yeas and nays on any question shall, at the request of one-fifth of the
Members present, be entered in the Journal.
Each House shall also keep a Record of its proceedings.
The Journal is regarded as conclusive with respect to matters that are required by
the Constitution to be recorded therein. 46 With respect to other matters, in the
absence of evidence to the contrary, the Journals have also been accorded
conclusive effect. Thus, in United States v. Pons, 47 this Court spoke of the
imperatives of public policy for regarding the Journals as "public memorials of the
most permanent character," thus: "They should be public, because all are required
to conform to them; they should be permanent, that rights acquired today upon the
faith of what has been declared to be law shall not be destroyed tomorrow, or at
some remote period of time, by facts resting only in the memory of individuals." As
already noted, the bill which became R.A. No. 8240 is shown in the Journal. Hence
its due enactment has been duly proven.
xxx

xxx

xxx

It would be an unwarranted invasion of the prerogative of a coequal department for


this Court either to set aside a legislative action as void because the Court thinks
the House has disregarded its own rules of procedure, or to allow those defeated in
the political arena to seek a rematch in the judicial forum when petitioners can find
their remedy in that department itself. The Court has not been invested with a
roving commission to inquire into complaints, real or imagined, of legislative
skullduggery. It would be acting in excess of its power and would itself be guilty of
grave abuse of its discretion were it to do so. The suggestion made in a case 48
may instead appropriately be made here: petitioners can seek the enactment of a
new law or the repeal or amendment of R.A. No. 8240. In the absence of anything to
the contrary, the Court must assume that Congress or any House thereof acted in
the good faith belief that its conduct was permitted by its rules, and deference
rather than disrespect is due the judgment of that body. 49 cdtech
WHEREFORE, the petition for certiorari and prohibition is DISMISSED.

SO ORDERED.
Narvasa, C .J ., Padilla, Melo, Kapunan, Francisco and Hermosisima, Jr., JJ ., concur.
Regalado, J ., concurs in the result.
Bellosillo, J ., took no part due to relationship to parties.
Panganiban, J ., took no part; former counsel of a party.
Torres, Jr., J ., took no part; on leave during deliberations.

G.R. No. 157985. December 2, 2005.]


ZENAIDA BUGARIN, VIOLETA ABANO, LIZA ABAYATA, ANTONIO ALEGRE, REMEDIOS
ALEGRE, CHRIS ANASCO, JEFFREY ARQUILLOS, LOURDES BAGARESE, EUGENIA
BARAQUIL, PRECIOS BASOY, RANNY BASOY, FELY BERMEJO, CARLOS BO, JUN BO,
ALEX BORRES, ANNA MARIE CORDOVA, ESPERANZE CORDOVA, EDWIN DEPETILLO,
ROMULO FERRY, LEONISA GABRIEL, MA. FE GABRIEL, SALOME CORDOVA, ELEN
JACOB, JEREMIAS JACOB, OLIVIA LERIN, CRISELDA MADEJA, JOMARI MANONG,
NESTOR MANONG, VALENTIN MANONG, EDMUNDO/FELY MINA, TEDDY PARUAN,
SALVACION PASCUA, ROMMEL POLISTICO, DANIEL/NANCY PRADO, ARMANDO
ROMERO, SANCHO VILLAFUERTE, and FERNANDO YAMID, petitioners, vs. CECILIA B.
PALISOC, MARINA B. MATA and REYNALDO T. NEPOMUCENO, respondents.
RESOLUTION
QUISUMBING, J p:
Before us is a petition for review on certiorari assailing the Order 1 dated April 30,
2003 and the Special Order of Demolition 2 dated May 9, 2003 of the Metropolitan
Trial Court (MeTC) of Paraaque City, Branch 77. Petitioners had applied for the
issuance of a temporary restraining order (TRO) but the Court in a resolution 3
dated May 15, 2003 denied the application. AHcCDI
The facts in this case, culled from the record, are as follows.
The present controversy arose from a complaint for ejectment, docketed as Civil
Case No. 11799, filed before the MeTC by private respondents Cecilia B. Palisoc and
Marina B. Mata. In a decision 4 dated February 27, 2002, the court declared
respondents as the rightful possessors of the properties in dispute. It also ordered
the petitioners to vacate the premises and pay to private respondents the rentals.
Petitioners appealed to the Regional Trial Court (RTC) of Paraaque City, Branch 274
while private respondents moved for execution pending appeal. On January 8, 2003,
the RTC affirmed the MeTC decision with the modification that petitioners must start
paying rentals from the date of the appealed decision. cdtai 2006
On January 28, 2003, petitioners filed a Motion for Reconsideration with Opposition
to the Issuance of a Writ of Execution. In an order dated March 3, 2003, the RTC
denied the motion and granted private respondents' motion for execution for failure
of petitioners to post a supersedeas bond or to pay the back rentals. Thus, a writ of
execution pending appeal was issued. On March 7, 2003, petitioners were served
with the writ and notice to vacate.
On March 11, 2003, petitioners filed a Motion to Defer Implementation of the Writ of
Execution. On March 14, 2003, private respondents filed a Motion to Issue a Special
Order of Demolition since petitioners refused to vacate the premises. The RTC

deferred action on the motions to allow petitioners to exhaust legal remedies


available to them. aTIEcA
Petitioners thereafter filed a Supplement to the Motion to Defer Implementation of
Writ of Execution and Opposition to Motion to Issue Special Order of Demolition,
contending that Section 28 of Republic Act No. 7279 5 was not complied with.
On April 4, 2003, private respondents filed a Motion Reiterating the Motion for
Issuance of Special Order of Demolition. In an order dated April 11, 2003, the RTC
declared the decision denying petitioners' appeal final and executory, and
remanded the records of the case to the MeTC without acting on the motions.
However, on April 10, 2003, petitioners filed a Petition for Certiorari and Prohibition
with Prayer for Preliminary Prohibitory Injunction before the Court of Appeals. They
also filed an Urgent Vigorous Opposition and Motion to Suspend Proceedings on
respondents' Motion Reiterating the Motion for Issuance of Special Order of
Demolition before the MeTC.
The MeTC set the Motion for the Issuance of Special Order of Demolition for hearing.
The court granted said motion on April 30, 2003, but gave petitioners five (5) days
from receipt of its order to voluntarily vacate the premises and remove all
structures and improvements made thereon.
On May 6, 2003, MeTC Branch Sheriff Reynaldo T. Nepomuceno reported that
petitioners refused to vacate the premises. Petitioners instead filed a Motion to
Quash and Recall the Order dated April 30, 2003 and/or Special Order of Demolition.
The MeTC denied the motion and issued the Special Order of Demolition on May 9,
2003.
Hence, this petition where petitioners raise the lone error that
THE COURT A QUO, IN BRUSHING ASIDE REPUBLIC ACT [NO.] 7279 IN THE
RESOLUTION OF THE CASE AGAINST THESE UNDERPRIVILEGED PETITIONERS, HAS
DECIDED A QUESTION OF SUBSTANCE, NOT THERETOFORE DETERMINED BY THE
SUPREME COURT, AND/OR HAS DECIDED IT IN A WAY PROBABLY NOT IN ACCORD
WITH LAW OR WITH THE APPLICABLE DECISIONS OF THE HONORABLE SUPREME
COURT. 6
Simply, the issue is, are the Orders of the MeTC proper?
Petitioners contend that the Orders of the MeTC violated the mandatory
requirements of Section 28 7 of Rep. Act No. 7279 since there was no 30-day notice
prior to the date of eviction or demolition and there had been no consultation on the
matter of resettlement. They also claim that there was neither relocation nor
financial assistance given. They insist that the MeTC orders are patently
unreasonable, impossible and in violation of the law. 8

Private respondents for their part argue that Rep. Act No. 7279 is not applicable.
They aver that there was no proof that petitioners are registered as eligible
socialized housing program beneficiaries in accordance with procedure set forth in
the Implementing Rules and Regulations Governing the Registration of Socialized
Housing Beneficiaries issued by the Department of Interior and Local Government
and the Housing and Urban Development Coordinating Council. They aver that even
if Rep. Act No. 7279 was applicable, the required notices under the law had already
been complied with. According to them, petitioners were already notified on March
7, 2003 of an impending demolition, when the writ of execution was served. 9
We find for respondents.

TAIESD

Under Section 19, 10 Rule 70 of the Revised Rules on Civil Procedure, a judgment on
a forcible entry and detainer action is immediately executory to avoid further
injustice to a lawful possessor, and the court's duty to order the execution is
practically ministerial. 11 The defendant may stay it only by (a) perfecting an
appeal; (b) filing a supersedeas bond; and (c) making a periodic deposit of the
rental or reasonable compensation for the use and occupancy of the property during
the pendency of the appeal. 12 Once the Regional Trial Court decides on the appeal,
such decision is immediately executory under Section 21, 13 Rule 70, without
prejudice to an appeal, via a petition for review, before the Court of Appeals or
Supreme Court. 14
However, petitioners failed to file a petition for review. Records show that
petitioners received on March 12, 2003 the RTC decision denying their motion for
reconsideration. They had until March 27, 2003 to file a petition for review before
the Court of Appeals. Instead, they filed a petition for certiorari and prohibition on
April 10, 2003. In said petition, which is still pending, petitioners contended that the
RTC committed grave abuse of discretion in affirming the MeTC decision and insisted
that the latter court had no jurisdiction over the complaint.
The remedy to obtain reversal or modification of the judgment on the merits in the
instant case is appeal. This holds true even if the error ascribed to the court
rendering the judgment is its lack of jurisdiction over the subject matter, or the
exercise of power in excess thereof, or grave abuse of discretion in the findings of
fact or of law set out in the decision. The existence and availability of the right of
appeal prohibits the resort to certiorari because one of the requirements for the
latter remedy is that "there should be no appeal." 15
Clearly, petitioners' petition for certiorari before the Court of Appeals was filed as a
substitute for the lost remedy of appeal. Certiorari is not and cannot be made a
substitute for an appeal where the latter remedy is available but was lost through
fault or negligence. 16 Thus, the filing of the petition for certiorari did not prevent
the RTC decision from becoming final and executory. 17 The RTC acted correctly

when it remanded the case to the court of origin in the order dated April 11, 2003.
18
Thus, we find that the MeTC cannot be faulted for issuing the assailed orders to
enforce the RTC judgment. Both orders were issued after the requisite notice and
hearing. Moreover, the Court of Appeals did not issue any writ of preliminary
injunction to stay the execution of the judgment. AcIaST
Petitioners tried to stay the execution of the order of demolition by filing a petition
for review with prayer for TRO before us. We earlier denied said prayer for TRO. We
also find petitioners' contention that the said orders violated Rep. Act No. 7279,
particularly Section 28(c), 19 totally without merit. Under the provision, eviction or
demolition may be allowed when there is a court order for eviction and demolition,
as in the case at bar. Moreover, nothing is shown on record that petitioners are
underprivileged and homeless citizens as defined in Section 3(t) of Rep. Act No.
7279. 20 The procedure for the execution of the eviction or demolition order under
Section 28(c) is, in our view, not applicable.
It also appears that the order of demolition had already been executed. Petitioners
had already vacated the area and private respondents now possess the properties
free from all occupants, as evidenced by the sheriff's turn-over of possession dated
May 19, 2003. Thus, the instant case before us has indeed become moot and
academic.
WHEREFORE, the petition for review assailing the Order dated April 30, 2003 and
the Special Order of Demolition dated May 9, 2003 of the Metropolitan Trial Court of
Paraaque City, Branch 77, is DENIED for mootness and lack of merit. AcSCaI
SO ORDERED.
Davide, Jr., C.J., Ynares-Santiago, Carpio and Azcuna, JJ., concur.

G.R. No. 130866. September 16, 1998.]


ST. MARTIN FUNERAL HOME, petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION and BIENVENIDO ARICAYOS, respondents.
Isagani M. Jungco for petitioner.
Sebastinian Office of Legal Aid for private respondent.
SYNOPSIS
This is a case of an illegal dismissal filed by private respondent Bienvenido Aricayos
against St. Martin Funeral Home. The Labor Arbiter ruled in favor of St. Martin
Funeral Home declaring that there was no employer-employee relationship that
existed between the parties, and therefore, his office had no jurisdiction over the
case. On appeal, the National Labor Relations Commission rendered a resolution
setting aside the questioned decision and remanding the case to the labor arbiter
for immediate appropriate proceedings. After the motion for reconsideration of the
herein petitioner was denied, it filed before this Court the instant petition for
certiorari. cdasia
The Court, instead of going to the merits of the case, discussed the mode of judicial
review with respect to decisions of the National Labor Relations Commission
pursuant to the provisions of Presidential Decree No. 442 (Labor Code of the
Philippines) and Batas Pambansa Blg. 129 (The Judiciary Reorganization Act of
1980).
In remanding this case to the Court of Appeals, the Court ruled that while it does not
wish to intrude into the congressional sphere on the matter of the wisdom of a law,
it further observed that there is a growing number of labor cases being elevated to
the court which, not being a trier of facts, has at times been constrained to remand
the case to the NLRC for resolution of unclear or ambiguous factual findings; that
the Court of Appeals is procedurally equipped for that purpose, aside from the
increased number of its component divisions; and that there is undeniably an
imperative need for expeditious action on labor cases as a major aspect of the
constitutional protection to labor.
Therefore, all references in the amended Section 9 of B.P. No. 129 to supposed
appeals from the NLRC to the Supreme Court are interpreted and hereby declared to
mean and refer to petitions for certiorari under Rule 65. Consequently, all such
petitions should henceforth be initially filed in the Court of Appeals in strict
observance of the doctrine on the hierarchy of courts as the appropriate forum for
the relief desired. aECTcA
SYLLABUS

1.
REMEDIAL LAW; SPECIAL CIVIL ACTION; CERTIORARI; REGLEMENTARY PERIOD;
SIXTY DAYS DESPITE LAPSE OF THE 10-DAY PERIOD FOR FINALITY OF THE DECISION
OF THE NLRC. . . . the remedy of the aggrieved party is to timely file a motion for
reconsideration as a precondition for any further or subsequent remedy, and then
seasonably avail of the special civil action of certiorari under Rule 65, for which said
Rule has now fixed the reglementary period of sixty days from notice of the
decision. Curiously, although the 10-day period for finality of the decision of the
NLRC may already have lapsed as contemplated in Section 223 of the Labor Code, it
has been held that this Court may still take cognizance of the petition for certiorari
on jurisdictional and due process considerations if filed within the reglementary
period under Rule 65.
2.
ID.; ID.; ID.; MODE OF JUDICIAL REVIEW OVER DECISIONS OF THE NLRC.
Therefore, all references in the amended Section 9 of B.P. No. 129 to supposed
appeals from the NLRC to the Supreme Court are interpreted and hereby declared to
mean and refer to petitions for certiorari under Rule 65. Consequently, all such
petitions should henceforth be initially filed in the Court of Appeals in strict
observance of the doctrine on the hierarchy of courts as the appropriate forum for
the relief desired. SAEHaC
DECISION
REGALADO, J p:
The present petition for certiorari stemmed from a complaint for illegal dismissal
filed by herein private respondent before the National Labor Relations Commission
(NLRC), Regional Arbitration Branch No. III, in San Fernando, Pampanga. Private
respondent alleges that he started working as Operations Manager of petitioner St.
Martin Funeral Home on February 6, 1995. However, there was no contract of
employment executed between him and petitioner nor was his name included in the
semi-monthly payroll. On January 22, 1996, he was dismissed from his employment
for allegedly misappropriating P38,000.00 which was intended for payment by
petitioner of its value added tax (VAT) to the Bureau of Internal Revenue (BIR). 1
Petitioner on the other hand claims that private respondent was not its employee
but only the uncle of Amelita Malabed, the owner of petitioner St. Martin's Funeral
Home. Sometime in 1995, private respondent, who was formerly working as an
overseas contract worker, asked for financial assistance from the mother of Amelita.
Since then, as an indication of gratitude, private respondent voluntarily helped the
mother of Amelita in overseeing the business.
In January 1996, the mother of Amelita passed away, so the latter then took over
the management of the business. She then discovered that there were arrears in
the payment of taxes and other government fees, although the records purported to
show that the same were already paid. Amelita then made some changes in the
business operation and private respondent and his wife were no longer allowed to

participate in the management thereof. As a consequence, the latter filed a


complaint charging that petitioner had illegally terminated his employment. 2
Cdpr
Based on the position papers of the parties, the labor arbiter rendered a decision in
favor of petitioner on October 25, 1996 declaring that no employer-employee
relationship existed between the parties and, therefore, his office had no jurisdiction
over the case. 3
Not satisfied with the said decision, private respondent appealed to the NLRC
contending that the labor arbiter erred (1) in not giving credence to the evidence
submitted by him; (2) in holding that he worked as a "volunteer and not as an
employee of St. Martin Funeral Home from February 6, 1995 to January 23, 1996, or
a period of about one year; and (3) in ruling that there was no employer-employee
relationship between him and petitioner. 4
On June 13, 1997, the NLRC rendered a resolution setting aside the questioned
decision and remanding the case to the labor arbiter for immediate appropriate
proceedings. 5 Petitioner then filed a motion for reconsideration which was denied
by the NLRC in its resolution dated August 18, 1997 for lack of merit, 6 hence the
present petition alleging that the NLRC committed grave abuse of discretion. 7
Before proceeding further into the merits of the case at bar, the Court feels that it is
now exigent and opportune to reexamine the functional validity and systemic
practicability of the mode of judicial review it has long adopted and still follows with
respect to decisions of the NLRC. The increasing number of labor disputes that find
their way to this Court and the legislative changes introduced over the years into
the provisions of Presidential Decree (P.D.) No. 442 (The Labor Code of the
Philippines and Batas Pambansa Blg. (B.P. No.) 129 (The Judiciary Reorganization Act
of 1980) now stridently call for and warrant a reassessment of that procedural
aspect.
We prefatorily delve into the legal history of the NLRC. It was first established in the
Department of Labor by P.D. No. 21 on October 14, 1972, and its decisions were
expressly declared to be appealable to the Secretary of Labor and, ultimately, to the
President of the Philippines.
On May 1, 1974, P.D. No. 442 enacted the Labor Code of the Philippines, the same
to take effect six months after its promulgation. 8 Created and regulated therein is
the present NLRC which was attached to the Department of Labor and Employment
for program and policy coordination only. 9 Initially, Article 302 (now, Article 223)
thereof also granted an aggrieved party the remedy of appeal from the decision of
the NLRC to the Secretary of Labor, but P.D. No. 1391 subsequently amended said
provision and abolished such appeals. No appellate review has since then been
provided for.

Thus, to repeat, under the present state of the law, there is no provision for appeals
from the decision of the NLRC. 10 The present Section 223, as last amended by
Section 12 of R.A. No. 6715, instead merely provides that the Commission shall
decide all cases within twenty days from receipt of the answer of the appellee, and
that such decision shall be final and executory after ten calendar days from receipt
thereof by the parties.
When the issue was raised in an early case on the argument that this Court has no
jurisdiction to review the decisions of the NLRC, and formerly of the Secretary of
Labor, since there is no legal provision for appellate review thereof, the Court
nevertheless rejected that thesis. It held that there is an underlying power of the
courts to scrutinize the acts of such agencies on questions of law and jurisdiction
even though no right of review is given by statute; that the purpose of judicial
review is to keep the administrative agency within its jurisdiction and protect the
substantial rights of the parties; and that it is that part of the checks and balances
which restricts the separation of powers and forestalls arbitrary and unjust
adjudications. 11
Pursuant to such ruling, and as sanctioned by subsequent decisions of this Court,
the remedy of the aggrieved party is to timely file a motion for reconsideration as a
precondition for any further or subsequent remedy, 12 and then seasonably avail of
the special civil action of certiorari under Rule 65, 13 for which said Rule has now
fixed the reglementary .period of sixty days from notice of the decision. Curiously,
although the 10-day period for finality of the decision of the NLRC may already have
lapsed as contemplated in Section 223 of the Labor Code, it has been held that this
Court may still take cognizance of the petition for certiorari on jurisdictional and due
process considerations if filed within the reglementary period under Rule 65. 14
Turning now to the matter of judicial review of NLRC decisions, B.P. No. 129
originally provided as follows:
SEC. 9.

Jurisdiction. The Intermediate Appellate Court shall exercise:

(1)
Original jurisdiction to issue writs of mandamus, prohibition, certiorari,
habeas corpus, and quo warranto, and auxiliary writs or processes, whether or not
in aid of its appellate jurisdiction;
(2)
Exclusive original jurisdiction over actions for annulment of judgments of
Regional Trial Courts; and
(3)
Exclusive appellate jurisdiction over all final judgments, decisions,
resolutions, orders, or awards of Regional Trial Courts and quasi-judicial agencies,
instrumentalities, boards, or commissions, except those falling within the appellate
jurisdiction of the Supreme Court in accordance with the Constitution, the provisions
of this Act, and of subparagraph (1) of the third paragraph and subparagraph (4) of
the fourth paragraph of Section 17 of the Judiciary Act of 1948.

The Intermediate Appellate Court shall have the power to try cases and conduct
hearings, receive evidence and perform any and all acts necessary to resolve
factual issues raised in cases falling within its original and appellate jurisdiction,
including the power to grant and conduct new trials or further proceedings.
These provisions shall not apply to decisions and interlocutory orders issued under
the Labor Code of the Philippines and by the Central Board of Assessment Appeals.
15
Subsequently, and as it presently reads, this provision was amended by R.A. No.
7902 effective March 18, 1995, to wit:
SEC. 9.

Jurisdiction. The Court of Appeals shall exercise:

(1)
Original jurisdiction to issue writs of mandamus, prohibition, certiorari,
habeas corpus, and quo warranto, and auxiliary writs or processes, whether or not
in aid of its appellate jurisdiction;
(2)
Exclusive original jurisdiction over actions for annulment of judgments of
Regional Trial Courts; and
(3)
Exclusive appellate jurisdiction over all final judgments, decisions,
resolutions, orders or awards of Regional Trial Courts and quasi-judicial agencies,
instrumentalities, boards or commissions, including the Securities and Exchange
Commission, the Social Security Commission, the Employees Compensation
Commission and the Civil Service Commission, except those falling within the
appellate jurisdiction of the Supreme Court in accordance with the Constitution, the
Labor Code of the Philippines under Presidential Decree No. 442, as amended, the
provisions of this Act, and of subparagraph (1) of the third paragraph and
subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948.
The Court of Appeals shall have the power to try cases and conduct hearings
receive evidence and perform any and all acts necessary to resolve factual issues
raised in cases falling within its original and appellate jurisdiction, including the
power to grant and conduct new trials or further proceedings. Trials or hearings in
the Court of Appeals must be continuous and must be completed within, three (3)
months, unless extended by the Chief Justice."
It will readily be observed that, aside from the change in the name of the lower
appellate court, 16 the following amendments of the original provisions of Section 9
of B.P. No. 129 were effected by R.A. No. 7902, viz.:
1.
The last paragraph which excluded its application to the Labor Code of the
Philippines and the Central Board of Assessment Appeals was deleted and replaced
by a new paragraph granting the Court of Appeals limited powers to conduct trials
and hearings in cases within its jurisdiction.

2.
The reference to the Labor Code in that last paragraph was transposed to
paragraph (3) of the section, such that the original exclusionary clause therein now
provides "except those falling within the appellate jurisdiction of the Supreme Court
in accordance with the Constitution, the Labor Code of the Philippines under
Presidential Decree No. 442, as amended, the provisions of this Act, and of
subparagraph (1) of the third paragraph and subparagraph (4) of the fourth
paragraph of Section 17 of the Judiciary Act of 1948." (Emphasis supplied)
3.
Contrarily, however, specifically added to and included among the quasijudicial agencies over which the Court of Appeals shall have exclusive appellate
jurisdiction are the Securities and Exchange Commission, the Social Security
Commission, the Employees Compensation Commission and the Civil Service
Commission.
This, then, brings us to a somewhat perplexing impass, both in point of purpose
and terminology. As earlier explained, our mode of judicial review over decisions of
the NLRC has for some time now been understood to be by a petition for certiorari
under Rule 65 of the Rules of Court. This is, of course, a special original action
limited to the resolution of jurisdictional issues, that is, lack or excess of jurisdiction
and, in almost all cases that have been brought to us, grave abuse of discretion
amounting to lack of jurisdiction.
It will, however, be noted that paragraph (3), Section 9 of B.P. No. 129 now grants
exclusive appellate jurisdiction to the Court of Appeals over all final adjudications of
the Regional Trial Courts and the quasi-judicial agencies generally or specifically
referred to therein except, among others, "those falling within the appellate
jurisdiction of the Supreme Court in accordance with . . . the Labor Code of the
Philippines under Presidential Decree No. 442, as amended, . . ." This would
necessarily contradict what has been ruled and said all along that appeal does not
lie from decisions of the NLRC 17 Yet, under such excepting clause literally
construed, the appeal from the NLRC cannot be brought to the Court of Appeals, but
to this Court by necessary implication.
The same exceptive clause further confuses the situation by declaring that the
Court of Appeals has no appellate jurisdiction over decisions falling within the
appellate jurisdiction of the Supreme Court in accordance with the Constitution, the
provisions of B. P. No. 129, and those specified cases in Section 17 of the Judiciary
Act of 1948. These cases can, of course, be properly excluded from the exclusive
appellate jurisdiction of the Court of Appeals. However, because of the
aforementioned amendment by transposition, also supposedly excluded are cases
falling within the appellate jurisdiction of the Supreme Court in accordance with the
Labor Code. This is illogical and impracticable, and Congress could not have
intended that procedural gaffe, since there are no cases in the Labor Code the
decisions, resolutions, orders or awards wherein are within the appellate jurisdiction
of the Supreme Court or of any other court for that matter. LibLex

A review of the legislative records on the antecedents of R A. No. 7902 persuades us


that there may have been an oversight in the course of the deliberations on the said
Act or an imprecision in the terminology used therein. In fine, Congress did intend to
provide for judicial review of the adjudications of the NLRC in labor cases by the
Supreme Court, but there was an inaccuracy in the term used for the intended
mode of review. This conclusion which we have reluctantly but prudently arrived at
has been drawn from the considerations extant in the records of Congress, more
particularly on Senate Bill No. 1495 and the Reference Committee Report on S. No.
1495/H. No. 10452. 18
In sponsoring Senate Bill No. 1495, Senator Raul S. Roco delivered his sponsorship
speech 19 from which we reproduce the following excerpts:
The Judiciary Reorganization Act, Mr. President, Batas Pambansa Blg. 129,
reorganized the Court of Appeals and at the same time expanded its jurisdiction and
powers. Among others, its appellate jurisdiction was expanded to cover not only
final judgment of Regional Trial Courts, but also all final judgment(s), decisions,
resolutions, orders or awards of quasi-judicial agencies, instrumentalities, boards
and commissions, except those falling within the appellate jurisdiction of the
Supreme Court in accordance with the Constitution, the provisions of BP Blg. 129
and of subparagraph 1 of the third paragraph and subparagraph 4 of Section 17 of
the Judiciary Act of 1948.
Mr. President, the purpose of the law is to ease the workload of the Supreme Court
by the transfer of some of its burden of review of factual issues to the Court of
Appeals. However, whatever benefits that can be derived from the expansion of the
appellate jurisdiction of the Court of Appeals was cut short by the last paragraph of
Section 9 of Batas Pambansa Blg. 129 which excludes from its coverage the
"decisions and interlocutory orders issued under the Labor Code of the Philippines
and by the Central Board of Assessment Appeals."
Among the highest number of cases that are brought up to the Supreme Court are
labor cases. Hence, Senate Bill No. 1495 seeks to eliminate the exceptions
enumerated in Section 9 and, additionally, extends the coverage of appellate review
of the Court of Appeals in the decision(s) of the Securities and Exchange
Commission, the Social Security Commission, and the Employees Compensation
Commission to reduce the number of cases elevated to the Supreme Court.
(Emphases and corrections ours)
xxx

xxx

xxx

Senate Bill No. 1495 authored by our distinguished Colleague from Laguna provides
the ideal situation of drastically reducing the workload of the Supreme Court without
depriving the litigants of the privilege of review by an appellate tribunal.

In closing, allow me to quote the observations of former Chief Justice Teehankee in


1986 in the Annual Report of the Supreme Court:
. . . Amendatory legislation is suggested so as to relieve the Supreme Court of the
burden of reviewing these cases which present no important issues involved beyond
the particular fact and the parties involved, so that the Supreme Court may wholly
devote its time to cases of public interest in the discharge of its mandated task as
the guardian of the Constitution and the guarantor of the people's basic rights and
additional task expressly vested on it now "to determine whether or not there has
been a grave abuse of discretion amounting to lack of jurisdiction on the part of any
branch or instrumentality of the Government."
We used to have 500,000 cases pending all over the land, Mr. President. It has been
cut down to 300,000 cases some five years ago. I understand we are now back to
400,000 cases. Unless we distribute the work of the appellate courts, we shall
continue to mount and add to the number of cases pending.
In view of the foregoing, Mr. President, and by virtue of all the reasons we have
submitted, the Committee on Justice and Human Rights requests the support and
collegial approval of our Chamber.
xxx

xxx

xxx

Surprisingly, however, in a subsequent session, the following Committee


Amendment was introduced by the said sponsor and the following proceedings
transpired: 20
Senator Roco. On page 2, line 5, after the line "Supreme Court in accordance with
the Constitution," add the phrase " THE LABOR CODE OF THE PHILIPPINES UNDER
P.D. 442, AS AMENDED." So that it becomes clear, Mr. President, that issues arising
from the Labor Code will still be appealable to the Supreme Court.
The President. Is there any objection? (Silence) Hearing none, the amendment is
approved.
Senator Roco. On the same page, we move that lines 25 to 30 be deleted. This was
also discussed with our Colleagues in the House of Representatives and as we
understand it, as approved in the House, this was also deleted, Mr. President.
The President. Is there any objection? (Silence) Hearing none, the amendment is
approved.
Senator Roco. There are no further Committee amendments, Mr. President.
Senator Romulo. Mr. President, I move that we close the period of Committee
amendments.

The President. Is there any objection? (Silence) Hearing none, the amendment is
approved. (Emphasis supplied)
xxx

xxx

xxx

Thereafter, since there were no individual amendments, Senate Bill No. 1495 was
passed on second reading and being a certified bill, its unanimous approval on third
reading followed. 21 The Conference Committee Report on Senate Bill No. 1495 and
House Bill No. 10452, having theretofore been approved by the House of
Representatives, the same was likewise approved by the Senate on February 20,
1995, 22 inclusive of the dubious formulation on appeals to the Supreme Court
earlier discussed.
The Court is, therefore, of the considered opinion that ever since appeals from the
NLRC to the Supreme Court were eliminated, the legislative intendment was that
the special civil action of certiorari was and still is the proper vehicle for judicial
review of decisions of the NLRC. The use of the word "appeal" in relation thereto and
in the instances we have noted could have been a lapsus plumae because appeals
by certiorari and the original action for certiorari are both modes of judicial review
addressed to the appellate courts. The important distinction between them,
however, and with which the Court is particularly concerned here is that the special
civil action of certiorari is within the concurrent original jurisdiction of this Court and
the Court of Appeals; 23 whereas to indulge in the assumption that appeals by
certiorari to the Supreme Court are allowed would not subserve, but would subvert,
the intention of Congress as expressed in the sponsorship speech on Senate Bill No.
1495.
Incidentally, it was noted by the sponsor therein that some quarters were of the
opinion that recourse from the NLRC to the Court of Appeals as an initial step in the
process of judicial review would be circuitous and would prolong the proceedings.
On the contrary, as he commendably and realistically emphasized, that procedure
would be advantageous to the aggrieved party on this reasoning:
On the other hand, Mr. President, to allow these cases to be appealed to the Court
of Appeals would give litigants the advantage to have all the evidence on record be
reexamined and reweighed after which the findings of facts and conclusions of said
bodies are correspondingly affirmed, modified or reversed.
Under such guarantee, the Supreme Court can then apply strictly the axiom that
factual findings of the Court of Appeals are final and may not be reversed on appeal
to the Supreme Court. A perusal of the records will reveal appeals which are factual
in nature and may, therefore, be dismissed outright by minute resolutions. 24
While we do not wish to intrude into the Congressional sphere on the matter of the
wisdom of a law, on this score we add the further observations that there is a
growing number of labor cases being elevated to this Court which, not being a trier

of fact, has at times been constrained to remand the case to the NLRC for resolution
of unclear or ambiguous factual findings; that the Court of Appeals is procedurally
equipped for that purpose, aside from the increased number of its component
divisions; and that there is undeniably an imperative need for expeditious action on
labor cases as a major aspect of constitutional protection to labor.
Therefore, all references in the amended Section 9 of B.P. No. 129 to supposed
appeals from the NLRC to the Supreme Court are interpreted and hereby declared to
mean and refer to petitions for certiorari under Rule 65. Consequently, all such
petitions should henceforth be initially filed in the Court of Appeals in strict
observance of the doctrine on the hierarchy of courts as the appropriate forum for
the relief desired.
Apropos to this directive that resort to the higher courts should be made in
accordance with their hierarchical order, this pronouncement in Santiago vs.
Vasquez, et al. 25 should be taken into account:
One final observation. We discern in the proceedings in this case a propensity on
the part of petitioner, and, for that matter, the same may be said of a number of
litigants who initiate recourses before us, to disregard the hierarchy of courts in our
judicial system by seeking relief directly from this Court despite the fact that the
same is available in the lower courts in the exercise of their original or concurrent
jurisdiction, or is even mandated by law to be sought therein. This practice must be
stopped, not only because of the imposition upon the precious time of this Court but
also because of the inevitable and resultant delay, intended or otherwise, in the
adjudication of the case which often has to be remanded or referred to the lower
court as the proper forum under the rules of procedure, or as better equipped to
resolve the issues since this Court is not a trier of facts. We, therefore, reiterate the
judicial policy that this Court will not entertain direct resort to it unless the redress
desired cannot be obtained in the appropriate courts or where exceptional and
compelling circumstances justify availment of a remedy within and calling for the
exercise of our primary jurisdiction.
WHEREFORE, under the foregoing premises, the instant petition for certiorari is
hereby REMANDED, and all pertinent records thereof ordered to be FORWARDED, to
the Court of Appeals for appropriate action and disposition consistent with the views
and ruling herein set forth, without pronouncement as to costs. cdasia
SO ORDERED.
Narvasa, C .J ., Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza,
Panganiban, Martinez, Quisumbing and Purisima, JJ ., concur.

[G.R. No. 70895. May 30, 1986.]


HABALUYAS ENTERPRISES, INC. and PEDRO HABALUYAS, petitioners, vs. JUDGE
MAXIMO M. JAPSON, Manila Regional Trial Court, Branch 36; SHUGO NODA & CO.,
LTD., and SHUYA NODA, respondents.
Norberto J. Quisumbing for respondents.
SYLLABUS
1.
REMEDIAL LAW; CIVIL PROCEDURE; JUDICIARY REORGANIZATION ACT (BATAS
PAMBANSA BLG. 129); PERIOD OF APPEAL, REDUCED TO 15 DAYS. Section 39 of
the Judiciary Reorganization Act, Batas Pambansa Blg. 129, reduced the period for
appeal from final orders or judgments of the Regional Trial Courts (formerly Courts
of First Instance) from thirty (30) to fifteen (15) days and provides a uniform period
of fifteen days for appeal from final orders, resolutions, awards, judgments, or
decisions of any court counted from notice thereof, except in habeas corpus cases
where the period for appeal remains at forty-eight (48) hours.
2.
ID.; ID.; ID.; 30 DAY PERIOD OF APPEAL RETAINED IN SPECIAL PROCEEDINGS
AND IN OTHER CASES WHEREIN MULTIPLE APPEALS ARE ALLOWED; RATIONALE.
To expedite appeals, only a notice of appeal is required and a record on appeal is no
longer required except in appeals in special proceedings under Rule 109 of the Rules
of Court and in other cases wherein multiple appeals are allowed. Section 19 of the
Interim Rules provides that in these exceptional cases, the period for appeal is thirty
(30) days since a record on appeal is required.
3.
ID.; ID.; ID.; FILING OF MOTION FOR EXTENSION OF TIME TO FILE NEW TRIAL
OR RECONSIDERATION NOT EXPRESSLY PROHIBITED OR ALLOWED BY LAW. The
law and the Rules of Court do not expressly prohibit the filing of a motion for
extension of time to file a motion for reconsideration of a final order or judgment. In
the case of Gibbs vs. Court of First Instance (80 Phil. 160), the Court dismissed the
petition for certiorari and ruled that the failure of defendant's attorney to file the
petition to set aside the judgment within the reglementary period was due to
excusable neglect, and, consequently, the record on appeal was allowed. The Court
did not rule that the motion for extension of time to file a motion for new trial or
reconsideration could not be granted. In the case of Roque vs. Gunigundo
(Administrative Case No. 1684, March 30, 1979, 89 SCRA 178), a division of the
Court cited the Gibbs decision to support a statement that a motion to extend the
reglementary period for filing the motion for reconsideration is not authorized or is
not in order. The Intermediate Appellate Court is sharply divided on this issue.
Appeals have been dismissed on the basis of the original decision in this case. After
considering the able arguments of counsels for petitioners and respondents, the
Court resolved that the interest of justice would be better served if the ruling in the

original decision were applied prospectively from the time herein stated. The reason
is that it would be unfair to deprive parties of their right to appeal simply because
they availed themselves of a procedure which was not expressly prohibited or
allowed by the law or the Rules. On the other hand, a motion for new trial or
reconsideration is not a pre-requisite to an appeal, a petition for review or a petition
for review on certiorari; and since the purpose of the amendments above referred to
is to expedite the final disposition of cases, a strict but prospective application of
the said ruling is in order.
4.
ID.; ID.; ID.; GUIDELINES. For the guidance of Bench and Bar, the Court
restates and clarifies the rules on this point, as follows: 1) Beginning one month
after the promulgation of this Resolution, the rule shall be strictly enforced that no
motion for extension of time to file a motion for new trial or reconsideration may be
filed with the Metropolitan or Municipal Trial Courts, the Regional Trial Courts, and
the Intermediate Appellate Court. Such a motion may be filed only in cases pending
with the Supreme Court as the court of last resort, which may in its sound discretion
either grant or deny the extension requested. 2) In appeals in special proceedings
under Rule 109 of the Rules of Court and in other cases wherein multiple appeals
are allowed, a motion for extension of time to file the record on appeal may be filed
within the reglementary period of thirty (30) days. (Moya vs. Barton, 76 Phil. 831;
Heirs of Nantes vs. Court of Appeals, July 25, 1983, 123 SCRA 753.) If the court
denies the motion for extension, the appeal must be taken within the original period
(Bello vs. Fernando, January 30, 1962, 4 SCRA 135), inasmuch as such a motion
does not suspend the period for appeal (Reyes vs. Sta. Maria, November 20, 1972,
48 SCRA 1). The trial court may grant said motion after the expiration of the period
for appeal provided it was filed within the original period. (Valero vs. Court of
Appeals, June 28, 1973, 51 SCRA 467, Berkenkotter vs. Court of Appeals, September
28, 1973, 53 SCRA 228). All appeals heretofore timely taken, after extensions of
time were granted for the filing of a motion for new trial or reconsideration, shall be
allowed and determined on the merits.
RESOLUTION
FERIA, J p:
Respondents have filed a motion for reconsideration of the Decision of the Second
Division of the Court promulgated on August 5, 1985 which granted the petition for
certiorari and prohibition and set aside the order of respondent Judge granting
private respondents' motion for new trial. cdphil
The issue in this case is whether the fifteen-day period within which a party may file
a motion for reconsideration of a final order or ruling of the Regional Trial Court may
be extended.
Section 39 of The Judiciary Reorganization Act, Batas Pambansa Blg. 129, reduced
the period for appeal from final orders or judgments of the Regional Trial Courts

(formerly Courts of First Instance) from thirty (30) to fifteen (15) days and provides
a uniform period of fifteen days for appeal from final orders, resolutions, awards,
judgments, or decisions of any court counted from notice thereof, except in habeas
corpus cases where the period for appeal remains at forty-eight (48) hours. To
expedite appeals, only a notice of appeal is required and a record on appeal is no
longer required except in appeals in special proceedings under Rule 109 of the Rules
of Court and in other cases wherein multiple appeals are allowed. Section 19 of the
Interim Rules provides that in these exceptional cases, the period for appeal is thirty
(30) days since a record on appeal is required. Moreover, Section 18 of the Interim
Rules provides that no appeal bond shall be required for an appeal, and Section 4
thereof disallows a second motion for reconsideration of a final order or judgment.
All these amendments are designed, as the decision sought to be reconsidered
rightly states, to avoid the procedural delays which plagued the administration of
justice under the Rules of Court which are intended to assist the parties in obtaining
a just, speedy and inexpensive administration of justice. LexLib
However, the law and the Rules of Court do not expressly prohibit the filing of a
motion for extension of time to file a motion for reconsideration of a final order or
judgment.
In the case of Gibbs vs. Court of First Instance (80 Phil. 160), the Court dismissed
the petition for certiorari and ruled that the failure of defendant's attorney to file the
petition to set aside the judgment within the reglementary period was due to
excusable neglect, and, consequently, the record on appeal was allowed. The Court
did not rule that the motion for extension of time to file a motion for new trial or
reconsideration could not be granted.
In the case of Roque vs. Gunigundo (Administrative Case No. 1684, March 30, 1979,
89 SCRA 178), a division of the Court cited the Gibbs decision to support a
statement that a motion to extend the reglementary period for filing the motion for
reconsideration is not authorized or is not in order.
The Intermediate Appellate Court is sharply divided on this issue. Appeals have
been dismissed on the basis of the original decision in this case.
After considering the able arguments of counsels for petitioners and respondents,
the Court resolved that the interest of justice would be better served if the ruling in
the original decision were applied prospectively from the time herein stated. The
reason is that it would be unfair to deprive parties of their right to appeal simply
because they availed themselves of a procedure which was not expressly prohibited
or allowed by the law or the Rules. On the other hand, a motion for new trial or
reconsideration is not a pre-requisite to an appeal, a petition for review or a petition
for review on certiorari, and since the purpose of the amendments above referred to
is to expedite the final disposition of cases, a strict but prospective application of

the said ruling is in order. Hence, for the guidance of Bench and Bar, the Court
restates and clarifies the rules on this point, as follows:
1.)
Beginning one month after the promulgation of this Resolution, the rule shall
be strictly enforced that no motion for extension of time to file a motion for new trial
or reconsideration may be filed with the Metropolitan or Municipal Trial Courts, the
Regional Trial Courts, and the Intermediate Appellate Court. Such a motion may be
filed only in cases pending with the Supreme Court as the court of last resort, which
may in its sound discretion either grant or deny the extension requested.
2.)
In appeals in special proceedings under Rule 109 of the Rules of Court and in
other cases wherein multiple appeals are allowed, a motion for extension of time to
file the record on appeal may be filed within the reglementary period of thirty (30)
days. (Moya vs. Barton, 76 Phil. 831; Heirs of Nantes vs. Court of Appeals, July 25,
1983, 123 SCRA 753.) If the court denies the motion for extension, the appeal must
be taken within the original period (Bello vs. Fernando, January 30, 1962, 4 SCRA
135), inasmuch as such a motion does not suspend the period for appeal (Reyes vs.
Sta. Maria, November 20, 1972, 48 SCRA 1). The trial court may grant said motion
after the expiration of the period for appeal provided it was filed within the original
period. (Valero vs. Court of Appeals, June 28, 1973, 51 SCRA 467; Berkenkotter vs.
Court of Appeals, September 28, 1973, 53 SCRA 228).
All appeals heretofore timely taken, after extensions of time were granted for the
filing of a motion for new trial or reconsideration, shall be allowed and determined
on the merits. llcd
WHEREFORE, the motion for reconsideration of, and to set aside, the decision of
August 5, 1985 is granted and the petition is dismissed. No costs.
SO ORDERED.
Teehankee, C.J., Yap, Fernan, Narvasa, Melencio-Herrera, Alampay, Gutierrez, Jr.,
Cruz and Paras, JJ., concur.
Abad Santos, J., no part.

NYK INTERNATIONAL KNITWEAR CORPORATION PHILIPPINES and/or CATHY NG,


petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and VIRGINIA M.
PUBLICO, respondents.
Eufemio Law Offices for petitioners.

Carlo A. Domingo for private respondents.


SYNOPSIS
Private respondent Publico was sewer of petitioner corporation. On May 7, 1997,
Publico went home early despite refusal of petitioner because she was not feeling
well. The next day, she notified petitioner that she was still recovering from her
sickness. On May 9, 1997, however, Publico was refused entry for work and later
informed of her dismissal. The Labor Arbiter and the NLRC both ruled the dismissal
illegal. A special civil action for certiorari was then filed in the Court of Appeals by
petitioner, but the same was dismissed outright because it was not accompanied by
a certified true copy of the assailed NLRC decision, but by a certified xerox copy of
the assailed NLRC decision. DcCHTa
The disputed document although stamped as "certified true copy" is not an
authenticated original of such certified true copy, but only a xerox copy thereof.
Hence, no error may be ascribed to the Court of Appeals for dismissing the petition
outright pursuant to Adm. Circular No. 3-96. At any rate, the Court found no grave
abuse of discretion committed by the NLRC in its assailed decision.
SYLLABUS
1.
REMEDIAL LAW; SPECIAL CIVIL ACTIONS; PETITION FOR CERTIORARI; MUST BE
ACCOMPANIED BY CERTIFIED TRUE COPY OF JUDGMENT OR ORDER SUBJECT
THEREOF. Section 1 of Rule 65, 1997 Rules of Civil Procedure, requires that the
petition shall be accompanied by a certified true copy of the judgment or order
subject thereof, together with copies of all pleadings and documents relevant and
pertinent thereto. The precursor of the Revised Rules of Civil Procedure,
Administrative Circular No. 3-96, which took effect on June 1, 1996, instructs us
what a "certified true copy" is: 1. . . . The "certified true copy" thereof shall be such
other copy furnished to a party at his instance or in his behalf, duly authenticated
by the authorized officers or representatives of the issuing entity as hereinbefore
specified. . . 3. The certified true copy must further comply with all the regulations
therefor of the issuing entity and it is the authenticated original of such certified
true copy, and not a mere xerox copy thereof, which shall be utilized as an annex to
the petition or other initiatory pleadings. . . . Applying the preceding guidepost in
the present case, the disputed document although stamped as "certified true copy"
is not an authenticated original of such certified true copy, but only a xerox copy
thereof, in contravention of paragraph 3 of the above-quoted guidelines. Hence, no
error may be ascribed to the Court of Appeals in dismissing the petition for certiorari
outright pursuant to paragraph 5 of Administrative Circular No. 3-96, which
provides: 5. It shall be the duty and responsibility of the party using the documents
required by Paragraph (3) of Circular No. 1-88 to verify and ensure compliance with
all the requirements therefor as detailed in the preceding paragraphs. Failure to do
so shall result in the rejection of such annexes and the dismissal of the case.

Subsequent compliance shall not warrant any reconsideration unless the court is
fully satisfied that the non-compliance was not in any way attributable to the party,
despite due diligence on his part, and that there are highly justifiable and
compelling reasons for the court to make such other disposition as it may deem just
and equitable. Petitioners are hereby reminded that the right to file a special civil
action of certiorari is neither a natural right nor a part of due process. A writ of
certiorari is a prerogative writ, never demandable as a matter of right, never issued
except in the exercise of judicial discretion. Hence, he who seeks a writ of certiorari
must apply for it only in the manner and strictly in accordance with the provisions of
the law and the Rules. TcDIaA
2.
ID.; EVIDENCE; FINDINGS OF THE NLRC, RESPECTED. Petitioners raise
factual questions which are improper in a petition for review on certiorari. Findings
of facts of the NLRC, particularly in a case where the NLRC and the Labor Arbiter are
in agreement, are deemed binding and conclusive upon this Court. Both bodies
being deemed to have acquired expertise in matters within their jurisdictions, when
sufficiently supported by evidence on record, are accorded respect if not finality,
and are considered binding on this Court. As long as their decisions are devoid of
any unfairness or arbitrariness in the process of their deduction from the evidence
proffered by the parties, all that is left is for the Court to stamp its affirmation and
declare its finality.
3.
LABOR LAW AND SOCIAL LEGISLATION; TERMINATION OF EMPLOYMENT;
ILLEGAL DISMISSAL; SOLIDARY LIABILITY OF CORPORATION AND ITS OFFICERS.
Anent petitioners' assertion that they cannot be solidarily liable in this case as there
was no malice or bad faith on their part has no leg to stand on. What the Court finds
apropos is our disquisition in A.C. Ransom Labor Union-CCLU v. NLRC, which held
that since a corporation is an artificial person, it must have an officer who can be
presumed to be the employer, being the "person acting in the interest of the
employer." In other words the corporation, in the technical sense only, is the
employer. In a subsequent case, we ordered the corporate officers of the employer
corporation to pay jointly and solidarily the private respondents' monetary award.
More recently, a corporation and its president were directed by this Court to jointly
and severally reinstate the illegally dismissed employees to their former positions
and to pay the monetary awards. In this case Cathy Ng, admittedly, is the manager
of NYK. Conformably with our ruling in A. C. Ransom, she falls within the meaning of
an "employer" as contemplated by the Labor Code, who may be held jointly and
severally liable for the obligations of the corporation to its dismissed employees.
Pursuant to prevailing jurisprudence, Cathy Ng, in her capacity as manager and
responsible officer of NYK, cannot be exonerated from her joint and several liability
in the payment of monetary award to private respondent. TEHIaA
DECISION
QUISUMBING, J p:

In this petition for review, petitioners NYK International Knitwear Corporation


Philippines (henceforth NYK, for brevity) and its manager, Cathy Ng, assail the
resolution 1 dated September 15, 2000 of the Court of Appeals in CA-G.R. SP No.
60542, which dismissed their petition for certiorari for non-compliance with Section
1, Rule 65 of the 1997 Rules of Civil Procedure. Also assailed is the appellate court's
resolution 2 of December 5, 2000, which denied the motion for reconsideration.
ETDHSa
The facts, as gleaned from the findings of the Labor Arbiter as affirmed by the
National Labor Relations Commission (NLRC), show that:
On February 8, 1995, herein petitioner NYK hired respondent Virginia Publico as a
sewer. Under the terms and conditions of her employment, Publico was paid on a
piece-rate basis, but required to work from 8:00 A.M. to 12:00 midnight. On the
average, she earned P185.00 daily.
At about 10:00 P.M. of May 7, 1997, Publico requested that she be allowed to leave
the work place early, as she was not feeling well due to a bout of influenza.
Permission was refused but nonetheless, Publico went home.
The following day, Publico called up her employer and notified management that
she was still recovering from her ailment.
On May 9, 1997, Publico reported for work. To her mortification and surprise,
however, the security guard prevented her from entering the NYK premises,
allegedly on management's order. She begged to be allowed inside, but the guard
remained adamant. It was only when Publico declared that she would just complete
the unfinished work she had left on May 7 that the guard let her in.
Once inside the factory, Publico requested to see the owner, one Stephen Ng. Her
request was declined. She was instead asked to come back the following day.
On May 10, 1997, Publico returned to NYK as instructed. After waiting for three and
half (3 1/2) hours, she was finally able to see Stephen Ng. When she inquired why
she was barred from reporting for work, Mr. Ng told her she was dismissed due to
her refusal to render overtime service.
Aggrieved, private respondent filed a complaint for illegal dismissal against
petitioner corporation and its manager, petitioner Cathy Ng, docketed as NLRC NCR
Case No. 00-06-03925-97.
Before the Labor Arbiter, petitioners predictably had a different version of the story.
Allegedly, they took the pains to verify why Publico did not report for work on May 7,
1997 and found out that her husband did not allow her to work at night. As night
work is a must in their line of business, particularly when there are rush orders,
petitioners claimed that given Publico's failure to render overtime work, they were
left with no other recourse but to fire her. cSIACD

On March 19, 1998, the Labor Arbiter held Publico's dismissal to be illegal, disposing
as follows:
WHEREFORE, the respondents are hereby ordered to reinstate the complainant to
her former position with full backwages from the date her salary was withheld until
she is actually reinstated, which amounted to P50,168.30 . . . The respondents are,
likewise, assessed the sum of P5,016.83 representing 10% of the amount awarded
as attorney's fees. The rest of the claims are dismissed for lack of merit.
SO ORDERED. 3
On appeal, the NLRC, in a resolution 4 dated May 17, 2000, affirmed the decision of
the Labor Arbiter in toto.
In due time, petitioners impugned the NLRC decision by way of a special civil action
of certiorari filed before the Court of Appeals, docketed as CA-G.R. SP No. 60542.
Petitioners ascribed grave abuse of discretion amounting to lack or excess of
jurisdiction to public respondent NLRC for affirming the ruling of the Labor Arbiter.
In its resolution of September 15, 2000, the appellate court dismissed the petition
outright. The Court of Appeals pointed out that there was non-compliance with
Section 1 of Rule 65 of the 1997 Rules of Civil Procedure as the petition was merely
accompanied by a certified xerox copy of the assailed NLRC decision, instead of a
certified true copy thereof as required by the Rules of Court. 5 Furthermore,
petitioners failed to attach the other pleadings and documents pertinent and
material to their petition, such as the parties' position papers, their evidence and
the motion for reconsideration in contravention of the said rule. 6
Petitioners duly moved for reconsideration, explaining that they had requested for a
certified true copy of the NLRC's decision but since the original NLRC decision was
printed on onionskin was not legible, the NLRC itself photocopied the resolution and
certified it afterwards. As proof of payment of petitioners' request for a certified true
copy of the NLRC decision, petitioners attached a copy of the official receipts issued
by the NLRC, which described the nature of the entry as "CERT. TRUE COPY." 7
Petitioners, likewise, appended in their motion copies of pertinent pleadings and
documents not previously attached in their petition. cSaATC
On December 5, 2000, the appellate court denied petitioners' motion for
reconsideration. 8
Hence this petition for review.
Before us, petitioners submit the following issues for our resolution:
I

WHETHER OR NOT THE COURT OF APPEALS SHOULD HAVE GIVEN DUE COURSE TO
THE PETITION FOR CERTIORARI.
II
WHETHER OR NOT THERE EXISTS EVIDENCE ON RECORD TO WARRANT THE RULING
THAT COMPLAINANT WAS ILLEGALLY DISMISSED, AND COROLLARY THERETO,
WHETHER OR NOT THERE IS LEGAL JUSTIFICATION TO AWARD BACKWAGES AND
ORDER REINSTATEMENT.
III
WHETHER OR NOT THERE WAS GRAVE ABUSE OF DISCRETION ON THE PART OF THE
PUBLIC RESPONDENT NLRC SO AS TO JUSTIFY A REVERSAL OF ITS RESOLUTIONS
DATED MAY 17, 2000 AND JUNE 30, 2000. 9
Only two issues need resolution, one having to do with adjective law and the other
with substantial law, namely:
(1)
Did the Court of Appeals commit a reversible error in dismissing CA-G.R. SP
No. 60542 on purely technical grounds, i.e., that the attached copy of the NLRC
decision is a mere photocopy of the original decision; and
(2)
Did the Court of Appeals err in refusing to rule on the correctness of the
NLRC's findings that private respondent was illegally dismissed?
On the first issue, petitioners, contend that they have substantially complied with
the requirements of Section 1, Rule 65, hence, in the interests of justice and equity,
the Court of Appeals should have given due course to their special civil action for
certiorari.
Private respondent, on the other hand, maintains that petitioners' wanton disregard
of the Rule warrant the outright dismissal of their petition. She adds that the
present petition raises factual issues that the Court cannot pass upon at the first
instance. EcDTIH
Section 1 of Rule 65, 10 1997 Rules of Civil Procedure, requires that the petition
shall be accompanied by a certified true copy of the judgment or order subject
thereof, together with copies of all pleadings and documents relevant and pertinent
thereto. The precursor of the Revised Rules of Civil Procedure, Administrative
Circular No. 3-96, which took effect on June 1, 1996, instructs us what a "certified
true copy" is:
1.
. . . The "certified true copy" thereof shall be such other copy furnished to a
party at his instance or in his behalf, duly authenticated by the authorized officers
or representatives of the issuing entity as hereinbefore specified.
xxx

xxx

xxx

3.
The certified true copy must further comply with all the regulations therefor
of the issuing entity and it is the authenticated original of such certified true copy,
and not a mere xerox copy hereof, which shall be utilized as an annex to the petition
or other initiatory pleading. (Emphasis supplied.)
xxx

xxx

xxx

Applying the preceding guidepost in the present case, the disputed document
although stamped as "certified true copy" is not an authenticated original of such
certified true copy, but only a xerox copy thereof, in contravention of paragraph 3 of
the above-quoted guidelines. Hence, no error may be ascribed to the Court of
Appeals in dismissing the petition for certiorari outright pursuant to paragraph 5 of
Administrative Circular No. 3-96, which provides:
5.
It shall be the duty and responsibility of the party using the documents
required by Paragraph (3) of Circular No. 1-88 to verify and ensure compliance with
all the requirements therefor as detailed in the preceding paragraphs. Failure to do
so shall result in the rejection of such annexes and the dismissal of the case.
Subsequent compliance shall not warrant any reconsideration unless the court is
fully satisfied that the non-compliance was not in any way attributable to the party,
despite due diligence on his part, and that there are highly justifiable and
compelling reasons for the court to make such other disposition as it may deem just
and equitable. (Emphasis supplied.)
The members of this Court are not unmindful that in exceptional cases and for
compelling reasons, we have disregarded similar procedural defects in order to
correct a patent injustice made. However, petitioners here have not shown any
compelling reason for us to relax the rule. Petitioners are hereby reminded that the
right to file a special civil action of certiorari is neither a natural right nor a part of
due process. A writ of certiorari is a prerogative writ, never demandable as a matter
of right, never issued except in the exercise of judicial discretion. 11 Hence, he who
seeks a writ of certiorari must apply for it only in the manner and strictly in
accordance with the provisions of the law and the Rules. cADEIa
To avoid further delay in resolving the present controversy, we now come to the
second issue. Petitioners contend that private respondent's refusal to render night
work is tantamount to abandonment of duties which constitutes a just ground for
termination of service. They aver that the Labor Arbiter gravely erred in awarding
backwages to private respondent, as there was no illegal dismissal. Petitioners
allege that management did not terminate her services, but in fact asked her to
return to work during the preliminary conferences. Hence, it would be the height of
injustice to award backwages for work, which was never rendered through private
respondent's own choice. Petitioners add that they cannot be held solidarily liable in
this case as there was neither malice nor bad faith.

Petitioners' arguments fail to persuade us. Petitioners raise factual questions which
are improper in a petition for review on certiorari. Findings of facts of the NLRC,
particularly in a case where the NLRC and the Labor Arbiter are in agreement, are
deemed binding and conclusive upon this Court. 12
Hence, petitioners' bare allegations of abandonment cannot stand the unswerving
conclusion by both quasi-judicial agencies below that private respondent was
unlawfully dismissed. We find no reason to deviate from the consistent findings of
the Labor Arbiter and the NLRC that there was no basis to find that Virginia
abandoned her work. Indeed, factual findings of the NLRC affirming those of the
Labor Arbiter, both bodies being deemed to have acquired expertise in matters
within their jurisdictions, when sufficiently supported by evidence on record, are
accorded respect if not finality, and are considered binding on this Court. 13 As long
as their decisions are devoid of any unfairness or arbitrariness in the process of
their deduction from the evidence proffered by the parties, all that is left is for the
Court to stamp its affirmation and declare its finality. No reversible error may thus
be laid at the door of the Court of Appeals when it refused to rule that the NLRC
committed a grave abuse of discretion amounting to want or excess of jurisdiction
in holding that private respondent was illegally dismissed.
Anent petitioners' assertion that they cannot be solidarily liable in this case as there
was no malice or bad faith on their part has no leg to stand on. What the Court finds
apropos is our disquisition in A.C. Ransom Labor Union-CCLU v. NLRC, 14 which held
that since a corporation is an artificial person, it must have an officer who can be
presumed to be the employer, being the "person acting in the interest of the
employer." In other words the corporation, in the technical sense only, is the
employer. In a subsequent case, we ordered the corporate officers of the employer
corporation to pay jointly and solidarily the private respondents' monetary award.
15 More recently, a corporation and its president were directed by this Court to
jointly and severally reinstate the illegally dismissed employees to their former
positions and to pay the monetary awards. 16
In this case Cathy Ng, admittedly, is the manager of NYK. Conformably with our
ruling in A. C. Ransom, she falls within the meaning of an "employer" as
contemplated by the Labor Code, 17 who may be held jointly and severally liable for
the obligations of the corporation to its dismissed employees. Pursuant to prevailing
jurisprudence, Cathy Ng, in her capacity as manager and responsible officer of NYK,
cannot be exonerated from her joint and several liability in the payment of
monetary award to private respondent. DaIACS
WHEREFORE, the instant petition is DENIED. The assailed resolutions of the Court of
Appeals dated September 15, 2000 and December 5, 2000, are hereby AFFIRMED.
Costs against petitioners.
SO ORDERED.

Bellosillo, Mendoza, Austria-Martinez and Callejo, Sr., JJ., concur.

[G.R. No. 147082. January 28, 2008.]


HEIRS OF MAURA SO, namely, YAN LAM LIM, JIMMY SO LIM, and FERDINAND SO LIM,
petitioners, vs. LUCILA JOMOC OBLIOSCA, ELVIRA JOMOC GARDINAB, and HEIRS OF
ABUNDIA JOMOC BALALA, namely, ROSITA BALALA ACENAS, EVANGELINE BALALA
BAACLO, OLIVER JOMOC BALALA, and PERLA BALALA CONDESA, respondents.
DECISION
NACHURA, J p:
This is a petition for review on certiorari of the Decision 1 of the Court of Appeals
(CA) dated October 18, 2000, and Resolution dated January 11, 2001, denying the
motion for reconsideration of the said decision. The assailed decision declared that
a petition for annulment of judgment cannot be availed of when the petitioner had
already filed an appeal under Rule 45 of the Rules of Court. IcDCaT
The antecedents of the case are as follows:
Pantaleon Jomoc was the owner of a parcel of land with an area of 496 square
meters, covered by Transfer Certificate of Title (TCT) No. T-19648, and located at
Cogon District, Cagayan de Oro. Upon his death, the property was inherited by his
wife, brothers, sisters, nephews and nieces (collectively referred to as the Jomoc
heirs). The respondents, Lucila Jomoc Obliosca and Abundia Jomoc Balala, sisters of
the deceased, and Elvira Jomoc, a niece, were among those who inherited the
property.
In February 1979, the Jomoc heirs executed a Deed of Extrajudicial Settlement with
Absolute Sale of Registered Land 2 in favor of petitioner, Maura So, over the
property for P300,000.00. However, the three respondents and Maura So failed to
affix their signatures on this document. Moreover, the document was not notarized.
Nonetheless, petitioner made a partial payment of P49,000.00 thereon.
Thereafter, petitioner demanded the execution of a final deed of conveyance but
the Jomoc heirs ignored the demand. On February 24, 1983, petitioner filed a
Complaint 3 for specific performance against the Jomoc heirs to compel them to
execute and deliver the proper registerable deed of sale over the lot. The Jomoc

heirs, except for the respondents, were impleaded as defendants. The case was
docketed as Civil Case No. 8983.
On February 28, 1983, the Jomoc heirs executed again a Deed of Extrajudicial
Settlement with Absolute Sale of Registered Land 4 in favor of the spouses Lim
Liong Kang and Lim Pue King for P200,000.00. The spouses Lim intervened as
defendants in Civil Case No. 8983. CEDHTa
On February 12, 1988, the trial court decided the case in favor of the petitioner. On
appeal, the CA affirmed the decision with the modification that the award of
damages, attorney's fees and expenses of litigation was deleted. The defendant
heirs and the spouses Lim filed separate petitions for review with the Supreme
Court, docketed as G.R. Nos. 92871 and 92860, which petitions were later
consolidated.
On August 2, 1991, the Court rendered a Decision 5 in these consolidated cases
upholding petitioner's better right over the property. 6 The decision became final
and executory on November 25, 1991.
On February 10, 1992, petitioner filed a motion for execution of the said decision.
The respondents opposed the motion on the ground that they did not participate in
the execution of the Deed of Extrajudicial Settlement with Absolute Sale of
Registered Land and they were not parties to the case. Despite the opposition, the
trial court granted the motion for execution. The respondents filed a motion for
reconsideration but the trial court denied the same.
On July 22, 1992, the trial court issued an Order granting the motion for execution
and divesting all the Jomoc heirs of their titles over the property. 7 Accordingly, the
Register of Deeds cancelled the title of the Jomoc heirs and issued TCT No. T-68370
in the name of the petitioner on July 24, 1992. IHSTDE
All the Jomoc heirs filed a petition for certiorari with the CA, assailing the said order
of the RTC. They alleged that herein respondents were not parties to the case,
therefore, they should not be bound by the decision therein and be deprived of their
right over the property. On December 8, 1992, the CA dismissed the petition,
holding that respondents were bound by the said decision. The CA ratiocinated that
respondents were aware of the pendency of the case, yet they did not intervene,
and that the case is barred by res judicata. Respondents elevated the case to this
Court through a petition for review on certiorari, which was docketed as G.R. No.
110661. In a Resolution dated December 1, 1993, the Court denied the petition,
thus:
In the case of Vda. de Jomoc v. Court of Appeals (200 SCRA [1991]), this Court
concluded that the contract of sale between the heirs of Pantaleon Jomoc and the
private respondent Maura So, even if not complete in form, so long as the essential
requisites of consent of the contracting parties, object and cause of the obligation

concur, and they were clearly established to be present, is valid and effective
between the parties.
The lower court found that petitioners were aware of the pendency of the specific
performance case brought by Maura So and we agree with the Court of Appeals that
their failure to intervene in said suit for the protection of their rights binds them to
the decision rendered therein.
This Court has held that a writ of execution may be issued against a person not a
party to a case where the latter's remedy, which he did not avail of, was to
intervene in the case in question involving rights over the same parcel of land
(Lising vs. Plan, 133 SCRA 194 [1984]; Suson vs. Court of Appeals, 172 SCRA 70
[1989]) STDEcA
It appears that petitioner Elvira Jomoc Gadrinab signed a Special Power of Attorney
in favor of Fellermo Jomoc to represent her in all proceedings regarding Civil Case
No. 8983. It also appears that all the Jomoc heirs wanted to realize a higher price by
selling the same piece of land a second time to the Lim spouses. Petitioner Lucila,
Abundia and Elvira shared the same goal, and kept quiet while Maura So sought
relief before the trial court. The other heirs sought to capitalize on Lucila's,
Abundia's and Elvira's non-participation in the first sale to Maura So. The heirs' (all
of them) position is bereft of moral and equitable basis.
As for the issue of res judicata, we believe that the same applies as a bar to the
instant Petition. In G.R. No. 92871 and G.R. No. 92860, this Court had occasion to
rule that herein private respondent had the right to compel the heirs of Pantaleon
Jomoc to execute the proper public instrument so that a valid contract of sale of
registered land can be duly registered and can bind third persons. In effect, this
Court had already determined the right of private respondent to a proper
registerable deed of sale which petitioners seek to challenge again in this Petition. A
party cannot avoid the application of the principle of bar by prior judgment by
simply varying the form of the action or by adopting a different mode of presenting
its case or by adding or dropping a party (Widows and Orphans Association, Inc. vs.
Court of Appeals, 212 SCRA 360 [1992]).
ACCORDINGLY, the Court Resolved to DENY the Petition for Review for lack of merit.
The resolution became final and executory on June 20, 1994.

IaEScC

It appears that, on March 12, 1992, respondents also filed a complaint for legal
redemption against petitioner with the Regional Trial Court (RTC) of Misamis
Oriental. The case was docketed as Civil Case No. 92-135. Respondents posited
therein that, since they did not sell their shares in the property to petitioner, they
remained co-owners, who have the right to redeem the shares sold by the other
heirs. They prayed that they be allowed to exercise their right to redeem their co-

heirs' shares and that petitioner execute all papers, documents and deeds to
effectuate the right of legal redemption.
On April 27, 1994, the RTC resolved the case in favor of the respondents, thus:
WHEREFORE, judgment is hereby rendered on the pleadings and evidence of the
parties on record, affidavits and other documents submitted, there being but purely
legal issues involve[d], ordering the defendant herein, MAURA SO, to allow the
plaintiffs to exercise their substantive right of legal redemption of the shares of
plaintiffs' co-heirs, defendant Maura So, for the purpose of redemption by the
plaintiffs, Lucita Jomoc Obliosca, Abundia Jomoc Balala (deceased) substituted by
her children: Rosita Balala Acenas, Evangeline Balala Baaclo, Oliver J. Balala, and
Perla Balala Condesa; and Elvira Jomoc Gardinab, is ordered to receive and accept
the amount tendered by the plaintiffs in the amount of P49,000.00 deposited in the
Office of the Clerk of Court of the Regional Trial Court of Misamis Oriental at
Cagayan de Oro City, and to execute a deed of redemption in favor of the herein
plaintiffs reconveying to the latter the property, and to pay Plaintiffs for attorney's
fees in the reasonable sum of P20,000.00.
Other claims and for counterclaims for monetary damages of the parties are
dismissed, with costs against defendant. EAHcCT
SO ORDERED. 8
In a Resolution dated July 14, 1994, the RTC granted petitioner's motion for
reconsideration. 9 Respondents moved for reconsideration of the said resolution. On
September 7, 1994, the RTC issued an Order 10 granting respondents' motion for
reconsideration and reinstating the April 27, 1994 Resolution.
On November 14, 1994, acting jointly on petitioner's Motion for Reconsideration and
respondents' Compliance/Motion for the Issuance of a Writ of Execution, the RTC
rendered a Resolution, 11 denying petitioner's motion for reconsideration and
granting respondents' motion for execution.
On December 28, 1994, petitioner, later substituted by her heirs, filed with the CA a
petition for annulment of judgment, particularly the September 7, 1994 Order,
which reinstated the RTC's April 27, 1994 and November 14, 1994 Resolutions,
which denied the petitioner's motion for reconsideration. On October 18, 2000, the
CA denied the petition, holding that the remedy of a petition for annulment of
judgment is no longer available since petitioner Maura So had already filed a
petition for review with this Court assailing the same orders of the trial court. 12
Apparently, on December 19, 1994, prior to the filing of the petition for annulment
of judgment with the CA, petitioner Maura So filed a petition for review on certiorari
13 with this Court assailing the same RTC Order and Resolution. This case was
docketed as G.R. No. 118050. In a Minute Resolution dated March 1, 1995, the Court

denied the petition for failure to sufficiently show that the questioned judgment is
tainted with grave abuse of discretion and for being the wrong remedy. 14 On June
7, 1995, the Court likewise denied petitioner's first motion for reconsideration, 15
and on July 27, 1998, the second motion for reconsideration. The March 1, 1995
Minute Resolution became final and executory on September 1, 1998. 16 ECaITc
On January 11, 2001, the CA denied petitioners' motion for reconsideration of its
decision denying the petition for annulment of judgment. 17 Petitioners then filed
this petition for review, raising the following issues:
I.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED A REVERSIBLE
ERROR IN NOT HOLDING THAT THE TRIAL COURT ACTED WITHOUT JURISDICTION IN
CIVIL CASE NO. 92-135 BECAUSE THE HONORABLE SUPREME COURT HAD
PREVIOUSLY RULED THAT THE LOT IN QUESTION HAD BEEN SOLD TWICE BY ALL THE
HEIRS OF PANTALEON TO MAURA SO AND LATER TO THE LIM SPOUSES IN G.R. NOS.
92871 AND 98860 AND G.R. NO. 110661 AND SAID FINAL DECISIONS AND
RESOLUTION CANNOT BE REVISED AND REVERSED BY SAID TRIAL COURT.
II.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED A REVERSIBLE
ERROR IN HOLDING THAT THE ORIGINAL PETITION DOCKETED AS CA-G.R. SP NO.
50059 IS BARRED BY RES JUDICATA BECAUSE THE RESOLUTION IN G.R. NO. 118050
DID NOT AND CANNOT REPEAL THE FINAL AND EXECUT[ORY] DECISIONS IN G.R. NO.
92871 AND G.R. NO. 92860, AND THE FINAL AND EXECUT[ORY] RESOLUTION IN G.R.
NO. 110661, AS THE RESOLUTION IN G.R. NO. 118050 IS NOT ON THE MERITS, OR
BY THE SUPREME COURT EN BANC. 18
The Court resolves to grant the petition despite the prevailing procedural
restrictions, considering the peculiar circumstances of the case, in order to avoid
causing a grave injustice to petitioners. TCAScE
But before we discuss these circumstances which impel us to grant the petition, we
must acknowledge extant procedural principles.
First, annulment of judgment is a recourse equitable in character, allowed only in
exceptional cases as where there is no available or other adequate remedy. 19
Thus, it may not be invoked (1) where the party has availed himself of the remedy
of new trial, appeal, petition for relief, or other appropriate remedy and lost; or (2)
where he has failed to avail himself of those remedies through his own fault or
negligence. 20 We, therefore, agree with the CA that the remedy of a petition for
annulment of judgment is no longer available to petitioners since their predecessorin-interest, Maura So, had already availed herself of a petition for review on
certiorari under Rule 45 of the Rules of Court.

Further, none of the grounds for annulment of judgment, namely, extrinsic fraud
and lack of jurisdiction, is present in this case.
Petitioners argue that the RTC acted without jurisdiction when it rendered the
Resolution which recognized respondents' right to redeem the property because
this, in effect, amended the Decision of the Supreme Court in G.R. Nos. 92871 and
92860, and the Resolution in G.R. No. 110661, which sustained the sale of the
property to Maura So. CDAHaE
Petitioners clearly confused lack of jurisdiction with error in the exercise of
jurisdiction. Jurisdiction is not the same as the exercise of jurisdiction. As
distinguished from the exercise of jurisdiction, jurisdiction is the authority to decide
a case, and not the decision rendered therein. Where there is jurisdiction over the
person and the subject matter, the decision on all other questions arising in the
case is but an exercise of such jurisdiction. And the errors which the court may
commit in the exercise of jurisdiction are merely errors of judgment which are the
proper subject of an appeal. 21 The error raised by petitioners pertains to the trial
court's exercise of its jurisdiction, not its lack of authority to decide the case. In a
petition for annulment of judgment based on lack of jurisdiction, petitioner must
show not merely an abuse of jurisdictional discretion but an absolute lack of
authority to hear and decide the case. On this basis, there would be no valid ground
to grant the petition for annulment of judgment.
Second, well-settled is the principle that a decision that has acquired finality
becomes immutable and unalterable, and may no longer be modified in any respect
even if the modification is meant to correct erroneous conclusions of fact or law and
whether it will be made by the court that rendered it or by the highest court of the
land. 22 The reason for this is that litigation must end and terminate sometime and
somewhere, and it is essential to an effective and efficient administration of justice
that, once a judgment has become final, the winning party, through a mere
subterfuge, be not deprived of the fruits of the verdict. 23
The doctrine of finality of judgment is grounded on the fundamental principle of
public policy and sound practice that, at the risk of occasional error, the judgment of
courts and the award of quasi-judicial agencies must become final on some definite
date fixed by law. 24 The only exceptions to the general rule are the correction of
clerical errors, the so-called nunc pro tunc entries which cause no prejudice to any
party, void judgments, and whenever circumstances transpire after the finality of
the decision which render its execution unjust and inequitable. 25 Again, none of
these exceptions is present in this case. DCAEcS
Notwithstanding these principles, however, the higher interests of justice and equity
demand that we brush aside the procedural norms. After all, rules of procedure are
intended to promote rather than defeat substantial justice, and should not be
applied in a very rigid and technical sense. Rules of procedure are merely tools

designed to facilitate the attainment of justice; they are promulgated to aid the
court in the effective dispensation of justice. The Court has the inherent power and
discretion to amend, modify or reconsider a final judgment when it is necessary to
accomplish the ends of justice. 26
If the rigid application of the Rules would frustrate rather than promote justice, it is
always within the Court's power to suspend the Rules or except a particular case
from its operation. 27 The power to suspend or even disregard rules can be so
pervasive and compelling as to alter even that which this Court itself has already
declared to be final. 28
The present case is peculiar in the sense that it involves three final and executory
judgments. The first is this Court's Decision in G.R. Nos. 92871 and 92860 which
upheld the sale of the whole property by the Jomoc heirs, including the herein
respondents, to petitioner Maura So. The second is the Court's Resolution in G.R. No.
110661, which sustained the order of execution of the said decision against the
herein respondents despite the fact that they were not party-defendants in the first
case. And the third is the Court's Minute Resolution in G.R. No. 118050 which denied
Maura So's petition for review of the RTC Decision granting respondents' right to
redeem the property.
It is the third judgment that is apparently in conflict with the two previous
judgments. It rendered final and executory the April 27, 1994 Resolution of the RTC
which recognized the right of respondents, as co-owners, to redeem the disputed
land from Maura So. To recall, the RTC premised its decision on its finding that
respondents did not actually sell their shares in the property to Maura So because
they did not sign the Deed of Extrajudicial Settlement with Absolute Sale of
Registered Land in favor of So; hence, they remained co-owners. This ruling is
patently erroneous because this Court had already pronounced in the first two final
and executory judgments (in G.R. Nos. 92871 and 92860, and G.R. No. 110661) that
the whole property had already been sold to Maura So. The RTC was barred from
holding otherwise under the doctrine of conclusiveness of judgment. cSATDC
The doctrine of "conclusiveness of judgment" precludes the re-litigation of a
particular fact or issue already passed upon by a court of competent jurisdiction in a
former judgment, in another action between the same parties based on a different
claim or cause of action. 29
In Collantes v. Court of Appeals, 30 the Court offered three options to solve a case
of conflicting decisions: the first is for the parties to assert their claims anew, the
second is to determine which judgment came first, and the third is to determine
which of the judgments had been rendered by a court of last resort. In that case, the
Court applied the first option and resolved the conflicting issues anew.
Instead of resorting to the first offered solution as in Collantes, which would entail
disregarding all the three final and executory decisions, we find it more equitable to

apply the criteria mentioned in the second and third solutions, and thus, maintain
the finality of one of the conflicting judgments. The principal criterion under the
second option is the time when the decision was rendered and became final and
executory, such that earlier decisions should be sustained over the current ones
since final and executory decisions vest rights in the winning party. The major
criterion under the third solution is a determination of which court or tribunal
rendered the decision. Decisions of this Court should be accorded more respect than
those made by the lower courts. ISTHED
The application of these criteria points to the preservation of the Decision of this
Court in G.R. Nos. 92871 and 92860 dated August 2, 1991, and its Resolution in G.R.
No. 110661 dated December 1, 1993. Both judgments were rendered long before
the Minute Resolution in G.R. No. 118050 was issued on March 1, 1995. In fact, the
August 2, 1991 Decision was executed already respondents were divested of
their title over the property and a new title, TCT No. T-68370, was issued in the
name of Maura So on July 24, 1992. Further, while all three judgments actually
reached this Court, only the two previous judgments extensively discussed the
respective cases on the merits. The third judgment (in G.R. No. 118050) was a
Minute Resolution, dismissing the petition for review on certiorari of the RTC
Resolution in the legal redemption case for failure to sufficiently show that the
questioned resolution was tainted with grave abuse of discretion and for being the
wrong remedy. In a manner of speaking, therefore, the third final and executory
judgment was substantially a decision of the trial court.
Obviously, the complaint for legal redemption was deliberately filed by the
respondents with the RTC to circumvent this Court's previous decisions sustaining
the sale of the whole property to Maura So. The Court cannot condone this ploy,
even if it failed to uncover the same when the case was erroneously elevated to it
directly from the trial court (G.R. No. 118050).
The matter is again before this Court, and this time, it behooves the Court to set
things right in order to prevent a grave injustice from being committed against
Maura So who had, for 15 years since the first decision was executed, already
considered herself to be the owner of the property. The Court is not precluded from
rectifying errors of judgment if blind and stubborn adherence to the doctrine of
immutability of final judgments would involve the sacrifice of justice for technicality.
CaDATc
WHEREFORE, premises considered, the petition is GRANTED. The Decision of the
Court of Appeals dated October 18, 2000, and Resolution dated January 11, 2001,
are REVERSED. The April 27, 1994 Resolution and September 7, 1994 Order of the
RTC are SET ASIDE. The complaint for legal redemption docketed as Civil Case No.
92-135 is DISMISSED.
SO ORDERED.

Ynares-Santiago, Austria-Martinez, Corona * and Reyes, JJ., concur.

[G.R. Nos. 65957-58. July 5, 1994.]


ELEAZAR V. ADLAWAN and ELENA S. ADLAWAN, petitioners, vs. Hon. Judge RAMON
AM. TORRES, as Presiding Judge of Branch 6, Regional Trial Court Cebu City, ABOITIZ
& COMPANY, INC. and THE PROVINCIAL SHERIFFS OF CEBU, DAVAO, RIZAL and
METRO MANILA, Respectively, respondents.
SYLLABUS
1.
REMEDIAL LAW; PROVISIONAL REMEDIES; ATTACHMENT; INTENT TO DEFRAUD
CREDITORS; MUST BE CLEARLY ALLEGED IN THE AFFIDAVIT IN SUPPORT OF THE
PRAYER THEREOF. The affidavit submitted by respondent Aboitiz in support of its
prayer for the writ of attachment does not meet the requirements of Rule 57 of the
Revised Rules of Court regarding the allegations on impending fraudulent removal,
concealment and disposition of defendant's property. As held in Carpio v. Macadaeg,
9 SCRA 552 (1963), to justify a preliminary attachment, the removal or disposal
must have been made with intent to defraud defendant's creditors. Proof of defraud
is mandated by paragraphs (d) and (e) of Section 1, Rule 57 of the Revised Rules of
Court on the grounds upon which attachment may issue. Thus, the factual basis on
defendant's intent to defraud must be clearly alleged in the affidavit in support of
the prayer for the writ of attachment if not so specifically alleged in the verified
complaint.
2.
ID.; ID.; ID.; ID.; ID.; FACTUAL BASES MUST CLEARLY BE AVERRED. It is
evident from said affidavit that the prayer for attachment rests on the mortgage by
petitioners of 11 parcels of land in Cebu, which encumbrance respondent Aboitiz
considered as fraudulent concealment of property to its prejudice. We find,
however, that there is no factual allegation which may constitute as a valid basis for
the contention that the mortgage was in fraud of respondent Aboitiz. As this Court
said in Jardine-Manila finance, Inc. v. Court of Appeals, 171 SCRA 636 (1989), "[T]he
general rule is that the affidavit is the foundation of the writ, and if none be filed or
one be filed which wholly fails to set out some facts required by law to be stated
therein, there is no jurisdiction and the proceedings are null and void." Bare
allegation that an encumbrance of a property is in fraud of the creditor does not
suffice. Factual bases for such conclusion must be clearly averred. The execution of
a mortgage in favor of another creditor is not conceived by the Rules as one of the
means of fraudulently disposing of one's property. By mortgaging a piece of

property, a debtor merely subjects it to a lien but ownership thereof is not parted
with. Furthermore, the inability to pay one's creditors is not necessarily synonymous
with fraudulent intent not to honor an obligation. Consequently, when petitioners
filed a motion for the reconsiderations of the order directing the issuance of the writ
of attachment, respondent Judge should have considered it as a motion for the
discharge of the attachment and should have conducted a hearing or required
submission of counter-affidavits from the petitioners, if only to gather facts in
support of the allegation of fraud.
3.
ID.; ID.; ID.; ID.; ISSUANCE THEREOF MUST BE STRICTLY CONSTRUED AGAINST
APPLICANT; REASON THEREFOR. This procedure should be followed because, as
the Court has time and again said, attachment is a harsh, extraordinary and
summary remedy and the rules governing its issuance must be construed strictly
against the applicant. Verily, a writ of attachment can only be granted on concrete
and specific grounds and not on general averments quoting perfunctorily the words
of the Rules. The judge before whom the application is made exercises full
discretion in considering the supporting evidence proffered by the applicant. One
overriding consideration is that a writ of attachment is substantially a writ of
execution except that it emanates at the beginning, instead of at the termination of
the suit.
DECISION
QUIASON, J p:
This is a petition for certiorari and mandamus with preliminary injunction order to
nullify: (1) the Order dated September 14, 1983 of respondent Judge Ramon Am.
Torres of the Regional Trial Court, Branch 6, Cebu City, in Civil Case No. CEB-1185
and the Order dated September 26, 1983 of Judge Emilio A. Jacinto of Branch 23 of
the same court in Civil Case No. CEB-1186, which granted the motion for the
issuance of writs of preliminary attachments for the seizure of the property of
petitioners by respondent Provincial Sheriffs; and (2) the Order dated December 12,
1983 or respondent Judge Ramon Am. Torres in the consolidated cases, Civil Case
No. CEB-1185 and civil Case No. CEB-1186. Cdpr
I
In a complaint dated April 24, 1982 filed with the Court of First Instance of Cebu,
now Regional Trial Court, (Civil Case No. R-21761), respondent Aboitiz and
Company, Inc. (Aboitiz) sought to collect from petitioners a sum of money
representing payments for: (1) the unpaid amortizations of a loan; (2) technical and
managerial services rendered; and (3) the unpaid installments of the equipment
provided by respondent Aboitiz to petitioners (Rollo, p. 37).
Acting on the ex parte application for attachment, the Executive Judge of the Court
of First Instance of Cebu, issued on May 14, 1982, an order directing the issuance of

the writ of preliminary attachment against the property of petitioners upon the filing
by respondent Aboitiz of an attachment bond. cdll
Subsequently, the case was raffled to Branch 11 of the Court of First Instance of
Cebu, which issued a writ of attachment addressed to the Provincial Sheriffs of Cebu
and the City Sheriff of Davao City. It was the Sheriff of Davao City who enforced the
writ of attachment, resulting in the seizure of heavy construction equipment, motor
vehicle spare parts, and other personal property with the aggregate value of
P15,000,000.00. The said court also granted the motion of respondent Aboitiz to
take possession and custody of the attached property of petitioners and ordered the
Provincial Sheriff of Davao to deliver the property to respondent Aboitiz.
Petitioners moved for a bill of particulars and to set aside the ex parte writ of
attachment. Finding merit in the motion to set aside the writ, Branch 11 ordered on
July 6, 1982 the lifting of the writ and, consequently, the discharge of the property
levied upon.
Respondent Aboitiz filed an urgent ex parte motion, praying for the stay of the July
6, 1982 Order for a period of 15 days for it to be able to appeal the order. The
motion was favorably acted upon.
However, on July 13, 1982, respondent Aboitiz filed a notice of dismissal of its
complaint in accordance with Section 1, Rule 17 of the Revised Rules of Court.
Consequently, Branch 11 issued an order confirming the notice of dismissal,
emphasizing that all orders of the court issued prior to the filing of said notice of
dismissal had been rendered functus oficio, and considering all pending incidents in
the case as moot and academic.
Petitioner Eleazar Adlawan filed a motion praying that the July 6, 1982 Order be
implemented and enforced. On December 20, however, Branch 11 denied the
motion on account of the filing by respondent Aboitiz before Branch 16 of the Court
of First Instance of Cebu in Lapu-lapu City of an action for delivery of personal
property (Civil Case No. 619-L), and the filing by petitioner Eleazar Adlawan before
Branch 10 of the same court of an action for damages in connection with the seizure
of his property under the writ of attachment. Cdpr
In the replevin suit, Branch 16 ordered the seizure and delivery of the property
described in the complaint. Said property were later delivered by the provincial
sheriff to respondent Aboitiz that while his office was situated in Cebu City, Adlawan
was a resident of Minglanilla, and therefore, the Lapu-lapu City court should not
entertain the action for replevin. Petitioner Eleazar Adlawan filed an omnibus motion
praying for the reconsideration and dissolution of the writ of seizure, the retrieval of
the property seized, and the dismissal of the complaint. He also averred that the
property seized were in custodia legis by virtue of the writ of attachment issued by
Branch 11. His omnibus motion was denied. Subsequently, he filed a motion for
reconsideration which was not granted.

The denial of his omnibus motion led petitioner Eleazar Adlawan to file a petition for
certiorari and mandamus in the Supreme Court (G. R. No. 63225). The Third Division
of this Court ruled on April 3, 1990 that since attachment is an ancillary remedy, the
withdrawal of the complain left it with no leg to stand on. Thus, the Court disposed
of the case as follows:
"WHEREFORE, in view of the foregoing, this Court rules that the attached properties
left in the custody of private respondent Aboitiz and Company, Inc. be returned to
petitioner Eleazar V. Adlawan without prejudice to the outcome of the cases filed by
both parties" (Rollo, p. 324).
Respondent Aboitiz filed a motion for reconsideration of the decision, contending
that the replevin case was distinct and separate from the case where the writ of
attachment was issued. It argued that the writ of replevin, therefore, remained in
force as the third Division of the Supreme Court had not found it illegal. The motion
was, however, denied with finality in the Resolution of July 11, 1990. LLjur
Undaunted, respondent Aboitiz filed a second motion for reconsideration with a
prayer that the dispositive portion of the decision be clarified. It asserted that
because the writ of preliminary attachment was different from the writ of replevin,
we should rule that the property subject of the latter writ should remain in custodia
legis of the court issuing the said writ.
In the Resolution dated September 10, 1990, the Third Division stated that "the
properties to be returned to petitioner are only those held by private respondent
(Aboitiz) by virtue of the writ attachment which has been declared non-existent."
Accordingly, the dispositive portion of the April 3, 1990 decision of the Third Division
of this Court was modified as follows:
"WHEREFORE, in view of the foregoing, this Court rules that the properties in the
custody of the private respondent Aboitiz & Company by virtue of the writ of
attachment issued in Civil Case No. R-2176 be returned to the petitioner, but
properties in the custody of the private respondent by virtue of the writ of replevin
issued in Civil Case No. 619-L be continued in custodia legis of said court pending
litigation therein."
The decision in G. R. No. 63225 having become final and executory, entry of
judgment was made on November 15, 1990. This should have terminated the
controversy between petitioners and respondent Aboitiz insofar as the Supreme
Court was concerned, but that was not to be. On September 9, 1983 respondent
Aboitiz filed against petitioners two complaints for collection of sums of money with
prayers for the issuance of writs of attachment in the Regional Trial Court, Branch
23, Cebu City, docketed as Civil Cases Nos. CEB-1185 and CEB-1186. The complaint
in Civil Case No. CEB-1185 alleged that petitioner Eleazar Adlawan (defendant
therein) was awarded a contract for the construction of the Tago Diversion Works for
the Tago River Irrigation Project by the National Irrigation Administration and that

respondent Aboitiz (plaintiff therein) loaned him money and equipment, which
indebtedness as of June 30, 1983 totalled P13,430,259.14. Paragraph 16 of the
complaint states:
"16. That, in view of the enormous liabilities which the defendants have with the
plaintiff, defendants executed a real estate mortgage covering eleven (11) parcels
of land in favor of Philippine Commercial and Industrial Bank (PCIB) to secure a
P1,000,000.00 loan with said bank and was able to remove, conceal and dispose of
their properties, obviously to defraud the plaintiff, . . ." (Rollo, pp. 65-66).
The complaint in Civil Case No. CEB-1186 alleged that petitioner Eleazar Adlawan
(defendant therein) was awarded a contract for the construction of the Lasang River
Irrigation Project by the National Irrigation Administration and that respondent
Aboitiz (plaintiff therein) loaned him money and equipment, which indebtedness as
of June 30, 1983 totalled P5,370,672.08. Paragraph 15 of the complaint is similarly
worded as paragraph 16 of the complaint in Civil Case No. CEB-1185.
Civil Case No. CEB-1185 was raffled to the Regional Trial Court, Branch 6, presided
by respondent Judge Ramon Am. Torres. On September 14, 1983, respondent Judge
ordered the issuance of a writ of attachment upon respondent Aboitiz' filing of a
bond of P5,000,000.00. Similarly, in Civil Case No. CEB-1186, which was raffled to
Branch 23, presiding Judge Emilio A. Jacinto ordered the issuance of a writ of
attachment upon the filing of a bond of P2,500,000.00. Accordingly, in Civil Case No.
CEB-1185, the Acting Provincial Sheriff of Cebu issued separate writs dated
September 26, 1983 addressed to the Sheriffs of Cebu, Davao and Metro Manila. No
writ of preliminary attachment was, however, issued in Civil Case No. CEB-1186.
Petitioners then filed in Civil Case Nos. CEB-1185 and CEB-1186 urgent motions to
hold in abeyance the enforcement of the writs of attachments. They alleged in the
main that since their property had been previously attached and said attachment
was being questioned before the Supreme Court in G.R. No. 63225, the filing of the
two cases, as well s the issuance of the writs of attachment, constituted undue
interference with the processes of this court in the then pending petition involving
the same property. cdll
Upon motion of respondent Aboitiz, Branch 23 issued on October 13, 1983, an order
directing the transfer to Branch 6 of Civil Case No. CEB-1186 for consolidation with
Civil Case No. CEB-1185.
Meanwhile, in its comment on petitioners' motion to withhold the enforcement of
the writs of attachment, respondent Aboitiz alleged that the voluntary dismissal of
Civil Case No. R-21761 under Section 1, Rule 17 of the Revised Rules of Court was
without prejudice to the institution of another action based on the same subject
matter. It averred that the issuance of the writ of attachment was justified because
petitioners were intending to defraud respondent Aboitiz by mortgaging 11 parcels
of land to the Philippine Commercial and Industrial Bank (PCIB) in consideration of

the loan P1,100,000.00, thereby making PCIB a preferred creditor to the prejudice of
respondent Aboitiz, which had an exposure amounting to P13,430,259.14.
Petitioners then filed a rejoinder to said comment, contending that since the
property subject of the writ of attachment have earlier been attached or replevied,
the same property were under custodia legis and therefore could not be the subject
of other writs of attachment.
On December 12, 1983, respondent Judge issued an order finding no merit in
petitioners' motion for reconsideration and directing the sheriffs of Cebu, Davao and
Metro Manila "to proceed with the enforcement and implementation of the writs of
preliminary attachment." Respondent Judge ruled that the writs of attachment were
issued on the basis of the supporting affidavits alleging that petitioners had
removed or disposed of their property with intent to defraud respondent Aboitiz
(Rollo, pp. 109-113).
On December 15, petitioners filed an ex parte motion praying: (1) that the
December 12, 1983 Order be set for hearing; (2) that they be given 15 days within
which to either file a motion for reconsideration or elevate the matter to this Court
or the then Intermediate Appellate Court; and (3) that within the same 15-day
period the implementation or enforcement of the writs of attachment be held in
abeyance.
On the same day, respondent Judge issued an order holding in abeyance the
enforcement of the writs of preliminary attachment in order to afford petitioners an
opportunity to seek their other remedies (Rollo, p. 116).On December 27,
petitioners filed the instant petition for certiorari and mandamus. They alleged that
respondent Judge gravely abused his discretion in ordering the issuance of the writs
of preliminary attachment inasmuch as the real estate mortgage executed by them
in favor of PCIB did not constitute fraudulent removal, concealment or disposition of
property. They argued that granting the mortgage constituted removal or
disposition of property, it was not per se a ground for attachment lacking proof of
intent to defraud the creditors of the defendant. LibLex
Petitioners contended that in Civil Case No. 21761, Branch 11 had ruled that the
loan for which the mortgage was executed was contracted in good faith, as it was
necessary for them to continue their business operations even after respondent
Aboitiz had stopped giving them financial aid.
Petitioners also contended that respondent Judge exceeded his direction when he
issued the Order of December 12, 1983, without first hearing the parties on the
motion for attachment and the motion to dissolve the attachment. Moreover, they
argued that respondent Judge gravely abused his discretion in proceeding with the
case, notwithstanding that his attention had been called with regard to the
pendency of G.R. No. 63225 in this Court.

As prayed for by petitioners, we issued a temporary retraining order on January 6,


1984 "enjoining the respondent from enforcing or implementing the writs of
preliminary attachment against the property of petitioners, all dated September 26,
1983 and issued in Civil Case Nos. CEB 1185 and 1186" (Rollo, p. 118).
II
The resolution of this case centers on the issue of the legality of the writ of
attachment issued by the respondent Judge in the consolidated cases for collection
of sums of money. cdrep
The affidavit submitted by respondent Aboitiz in support of its prayer for the writ of
attachment does not meet the requirements of Rule 57 of the Revised Rules of
Court regarding the allegations on impending fraudulent removal, concealment and
disposition of defendant's property. As held in Carpio v. Macadaeg, 9 SCRA 552
(1963), to justify a preliminary attachment, the removal or disposal must have been
made with intent to defraud defendant's creditors. Proof of defraud is mandated by
paragraphs (d) and (e) of Section 1, Rule 57 of the Revised Rules of Court on the
grounds upon which attachment may issue. Thus, the factual basis on defendant's
intent to defraud must be clearly alleged in the affidavit in support of the prayer for
the writ of attachment if not so specifically alleged in the verified complaint. The
affidavit submitted by respondent Aboitiz states:
"REPUBLIC OF THE PHILIPPINES).
CITY OF CEBU ...............................) S.S.
I, ROMAN S. RONQUILLO, of legal age, married and a resident of Cebu City, after
being sworn in accordance with law, hereby depose and say:
That I am the Vice-President of the plaintiff corporation in the above-entitled case;
That a sufficient cause of action exists against the defendants named therein
because the said defendants are indebted to the plaintiffs in the amount of
P13,430,259.14 exclusive of interests thereon and damages claimed;
That the defendants have removed or disposed of their properties with intent to
defraud the plaintiff, their creditor, because on May 27, 1982 they executed a real
estate mortgage in favor of Philippine Commercial and Industrial Bank (PCIB)
covering eleven (11) of their fifteen (15) parcels of land in Cebu to secure a
P1,100,000.00 loan with the same bank;
That this action is one of those specifically mentioned in Section 1, Rule 57 of the
Rules of Court, whereby a writ preliminary attachment may lawfully issue because
the action therein is one against parties who have removed or disposed of their
properties with intent to defraud their creditor, plaintiff herein;

That there is no sufficient security for the claims sought to be enforced by the
present action;
That the total amount due to the plaintiff in the above-titled case is P13,430,259.14,
excluding interests and claim for damages and is as much the sum for which an
order of attachment is herein sought to be granted; above all legal counter-claim on
the part of the defendants.
IN VIEW WHEREOF, I hereunto set my hand this 24th day of August 1983 at Cebu
City, Philippines.
(Sgd.)
RAMON S. RONQUILLO
Affiant
(Rollo, pp. 171-172)
It is evident from said affidavit that the prayer for attachment rests on the mortgage
by petitioners of 11 parcels of land in Cebu, which encumbrance respondent Aboitiz
considered as fraudulent concealment of property to its prejudice. We find,
however, that there is no factual allegation which may constitute as a valid basis for
the contention that the mortgage was in fraud of respondent Aboitiz. As this Court
said in Jardine-Manila finance, Inc. v. Court of Appeals, 171 SCRA 636 (1989), "[T]he
general rule is that the affidavit is the foundation of the writ, and if none be filed or
one be filed which wholly fails to set out some facts required by law to be stated
therein, there is no jurisdiction and the proceedings are null and void."
Bare allegation that an encumbrance of a property is in fraud of the creditor does
not suffice. Factual bases for such conclusion must be clearly averred.
The execution of a mortgage in favor of another creditor is not conceived by the
Rules as one of the means of fraudulently disposing of one's property. By
mortgaging a piece of property, a debtor merely subjects it to a lien but ownership
thereof is not parted with.
Furthermore, the inability to pay one's creditors is not necessarily synonymous with
fraudulent intent not to honor an obligation (Insular Bank of Asia & America, Inc. v.
Court of Appeals, 190 SCRA 629 [1990]).
Consequently, when petitioners filed a motion for the reconsiderations of the order
directing the issuance of the writ of attachment, respondent Judge should have
considered it as a motion for the discharge of the attachment and should have
conducted a hearing or required submission of counter-affidavits from the
petitioners, if only to gather facts in support of the allegation of fraud (Jopillo, Jr. v.

Court of Appeals, 167 SCRA 247 [1988]). This is what Section 13 of rule 57
mandates. LLpr
This procedure should be followed because, as the Court has time and again said,
attachment is a harsh, extraordinary and summary remedy and the rules governing
its issuance must be construed strictly against the applicant. Verily, a writ of
attachment can only be granted on concrete and specific grounds and not on
general averments quoting perfunctorily the words of the Rules (D.P. Lub Oil
Marketing Center, Inc. v. Nicolas, 191 SCRA 423 [1990]).
The judge before whom the application is made exercises full discretion in
considering the supporting evidence proffered by the applicant. One overriding
consideration is that a writ of attachment is substantially a writ of execution except
that it emanates at the beginning, instead of at the termination of the suit (Santos
v. Aquino, Jr., 205 SCRA 127 [1992]; Tay Chuan Suy v. Court of Appeals, 212 SCRA
713 [1992]). LibLex
We need not discuss the issue of whether or not Civil Cases Nos. CB-1185 and CEB1186 constituted undue interference with the proceedings in G.R. No. 63225 in view
of the entry of judgment in the latter case.
WHEREFORE, the petition is GRANTED and the Temporary Restraining Order issued
on January 6, 1984 is made PERMANENT. Respondent Judge or whoever is the
presiding judge of the regional Trial court, Branch 6, Cebu City, is DIRECTED to
PROCEED with the resolution of Civil Cases Nos. CEB-1185 and CEB-1186 with
deliberate dispatch.
SO ORDERED.
Cruz, Davide, Jr., Bellosillo and Kapunan, JJ., concur.

C o p y r i g h t 1 9 9 4 - 1 9 9 9 C D T e c h n o l o g i e s A s i a, I n c.

A.M. No. P-93-935 July 5, 1994


Ong v. Meregildo
EN BANC
[A.M. No. P-93-935. July 5, 1994.]
ILDEFONSO ONG, complainant, vs. MAXIMO A. MEREGILDO, Deputy Sheriff of
Municipal Trial Court, Branch 31, Quezon City, respondent.
SYLLABUS

CONSTITUTIONAL LAW; SUPREME COURT; ADMINISTRATIVE SUPERVISION OVER


COURT PERSONNEL; DEPUTY SHERIFF; REPEATED DEMANDS FOR SUMS OF MONEY
TO DEFRAY EXPENSES OF EXECUTION WITHOUT COURT APPROVAL CONSTITUTES
GRAVE MISCONDUCT; DISMISSAL FROM SERVICE, SANCTION; CASE AT BAR.
Respondent Sheriff failed grievously to comply with the requirements of Section 9 of
Rule 141, Revised Rules of Court, as amended. Respondent knew, or should have
known, that he had to present his cost estimates for implementation of the Writ of
Demolition and Possession to the court issuing that Writ for its approval. He did not
do so. Respondent Sheriff repeated charged and collected from complainant sums of
money totalling in the amount of P47,000.00 without approval of the Court; he did
not deposit the sums received from complainant with the Clerk of Court who, under
Section 9, was then authorized to disburse the same to respondent Sheriff to effect
implementation of the Writ. We note also that respondent Sheriff made no mention
in the Final Sheriff's Return which he submitted to Judge Vera, of the amounts of
monies he had received from complainant. It does not appear that he submitted any
liquidation of such amounts to the trial court, before the present administrative
complaint was instituted. Respondent Sheriff attempted to defend the
"reasonableness" of the amounts he had charged and received from the
complainant, and tried to explain his repeated failure to execute the Writ. The
Investigating Judge was not persuaded by the explanations offered by respondent
Sheriff. Investigating Judge Alonzo-Legasto stated that the amounts charged and
collected from the complainant were exorbitant and highly disproportionate to the
actual service rendered by the laborers purportedly retained by respondent Sheriff.
She believed that there was no justification for employing as many as fifty (50)
laborers and fifty (50) policemen for enforcing the Writ. The Investigating Judge
dismissed respondent Sheriff's accounting of sums received as "too simplistic," . . .
and unworthy of credence and highly improbable. The Court agrees with the
Investigating Judge that respondent Sheriff was dishonest in rendering his
accounting of expenses actually incurred (if any). Respondent Sheriff's explanations
are strained to an extreme; in any case, "reasonableness" of the amounts charged
and collected and received by respondent is not a defense. For respondent clearly
ignored the procedures laid down in Section 9 of Rule 141 of the Rules of Court. The
Investigating Judge recommended suspension for respondent Sheriff. The Court,
however, is convinced that the inculpatory acts committed by respondent Sheriff
are very serious and call for a more severe penalty. Respondent Sheriff Maximo A.
Meregildo is an officer of the court. As such, he forms an integral part of the
administration of justice, since he is called upon to serve the orders and writs and
execute all processes of the court. As such, he is required to live up to strict
standards of honesty and integrity in public service. His conduct must at all times
be characterized by honesty and openness and must constantly be above suspicion.
Respondent Sheriff's unilaterally and repeatedly demanding sums of money from a
party-litigant purportedly to defray expenses of execution, without obtaining the
approval of the trial court for such purported expense and without rendering to that
court an accounting thereof, in effect constituted dishonesty and extortion. That

conduct, therefore, fell too far short of the required standards of public service.
Such conduct is threatening to the very existence of the system of administration of
Justice. WHEREFORE, respondent Maximo A. Meregildo, Deputy Sheriff of the
Municipal Trial Court, Branch 31 of Quezon City, is hereby FOUND GUILTY of serious
misconduct and conduct prejudicial to the best interest of the service, and is hereby
DISMISSED from office, with forfeiture of all retirement benefits and accrued leave
credits and with prejudice to re-employment in any branch or instrumentality of
government, including government owned or controlled corporations.
RESOLUTION
PER CURIAM p:
Complainant Ildefonso Ong originally charged respondent Deputy Sheriff Maximo A.
Meregildo with violation of Section 3 (e) of R.A. No. 3019, the Anti-Graft and Corrupt
Practices Act, before the Office of the Ombudsman. This charge was dismissed by
the Office of the Ombudsman for lack of sufficient evidence. At the same time, the
Investigating Officer of the Office of the Ombudsman declared that the complaint
was sufficient in form and substance for purposes of initiation of an administrative
inquiry. Thus, in April 1993, Overall Deputy Ombudsman Francisco Villa referred to
the Office of the Court Administrator the Affidavit- Complaint of Ildefonso Ong for
appropriate action. prLL
On 29 June 1993, the Court referred the Indorsement of the Overall Deputy
Ombudsman, the Affidavit-Complaint of complainant Ong and related papers to the
Executive Judge of the Metropolitan Trial Court of Quezon City, Judge Rose Marie
Alonzo-Legasto for investigation, report and recommendation.
The Investigating Judge held hearings on 10, 17 and 21 September 1993, 15
October 1993 and 14 January 1994. Both parties appeared at these hearings.
On 9 March 1994, Judge Alonzo-Legasto submitted her Report and
Recommendation. We find, from this Report and Recommendation, that the
following facts are substantially undisputed:
Respondent Deputy Sheriff Maximo Meregildo was appointed by Judge Abraham
Vera of the Regional Trial Court, Branch 90, Quezon City, as Special Sheriff to
implement the Fourth Alias Writ of Demolition and Possession issued in LRC Case
No. 87-8187. As such Special Sheriff, respondent Meregildo advised complainant
Ong, the successor-in-interest of the judgment creditor in LRC Case No. 87-8187,
that expenses would have to be incurred in the implementation of the Writ, e.g.,
expenses for transportation of laborers and policemen to the demolition site, as well
as expenses for food of the laborers and policemen and their compensation.
Respondent Sheriff advised complainant Ong to prepare P11,000.00 as the "initial
sheriff's fees and expenses." 1

On 21 August 1992, respondent Deputy Sheriff received from complainant Ong


P11,000.00 in cash. Meregildo, however, failed or was unable successfully to
implement the Writ of Demolition. Respondent and complainant agreed that a
second attempt could and should be made to implement the Fourth Alias Writ of
Possession and Demolition, since such Fourth Writ had not then expired. For this
second attempt at implementation, respondent Sheriff asked complainant Ong to
prepare an amount of P10,000.00; this amount complainant Ong delivered promptly
to respondent on 27 August 1992.
The second attempt to enforce the Fourth Alias Writ of Demolition and Possession
also produced no effects. By this time, the effectivity of the Fourth Alias Writ had
expired and the judgment creditor secured a Fifth Alias Writ of Demolition and
Possession. LexLib
Respondent Sheriff again asked complainant to prepare another P10,000.00 for the
enforcement of the Fifth Alias Writ. On 17 September 1992, complainant handed
over P5,000.00 to respondent Sheriff. Two (2) days later, on 17 September 1992,
respondent Sheriff received another P20,000.00 in cash from complainant, the
complainant having been told by respondent Sheriff that that additional sum was
essential for effective implementation. Respondent Sheriff repaired to the
demolition site with his group of laborers and policemen. The demolition team
allegedly penetrated the barricades set up by the squatter families sought to be
ejected. However, peaceful possession of the area was not turned over to the
complainant. According to respondent Sheriff, the Office of the Mayor of Quezon
City, or the CAPCOM, had directed the policemen to back off from the area.
Respondent alleged that the policemen left the area and, fearing for his safety and
that of his laborers, respondent and his group of laborers followed suit. Complainant
Ong offered in evidence five (5) receipts signed by respondent for the sums of
money referred to above, including a receipt for P1,000.00 dated 4 November 1992,
to wit:
Date Received

Amount Received

21 August

1992 P11,000.00

27 August

1992 P10,000.00

15 September

1992

17 September

1992 P20,000.00

4 November 1992

P5,000.00

P1,000.00

TOTAL

P47,000.00

Disappointed with the repeated failure of respondent Sheriff to put him in peaceful
possession of the premises involved despite the cumulative amount of fees and
expenses paid to the Sheriff, and doubting either the sincerity or the ability or both
of respondent to deliver possession of the premises to complainant, complainant
Ong demanded the return of the total amount of P47,000.00 from respondent
Sheriff. Respondent Sheriff alleged that most of the various sums had already been
spent and offered to return an "unspent portion" of P8,800.00. Thereupon,
complainant Ong filed his Affidavit-Complaint with the Office of the Ombudsman
which, as noted, referred the same to this Court for appropriate administration
action.
Respondent Sheriff submitted to the Investigating Judge, by way of comment on the
complaint, his "Explanation" or accounting of the monies he had received. This
"Explanation" read, in relevant part, as follows:
"xxx

xxx

xxx

The amount of P47,000.00 collected by me from Mr. Ong was properly receipted to
show that there was good faith in my intention that the said amount would be solely
spent for the costs of the implementation such as food, costs of labor,
transportation, voluntary police allowances and other incidental expenses. The said
amount of P47,000.00 was actually spent for the said purposes not only for the
implementation of the Fifth Alias Writ but also for the prior writ which has the Fourth
Alias Writ dated 16 June 1992. A scrutiny of the Receipts reveal that the Receipt
under date of August 21, 1992 in the amount of P11,000.00 and the Receipt under
date of August 27, 1992 in the amount of P10,000.00 were spent during which the
Fourth alias Writ was still in effect and has not yet expired. With respect to the
Receipt under date of September 15, 1992, receipt under date of September 17,
1992 and the receipt under date of November 4, 1992 were spent for the purposes
during which the Fifth Alias Writ was still in effect and has not yet expired. Said
receipts are hereto attached and respectively marked as Annexes 'D,' 'E,' 'F,' 'G'
AND 'H.'.
A mathematical calculation would show that the amount of P11,000.00 under
Receipt dated August 21, 1992 (Annex D) which was actually spent on August 24,
1992 represented the following to:
Labor for 35 laborers at
P150.00 per person

P5,250.00

Food expenses for 35


laborers and 20 policemen
at P50.00/person

P3,250.00

Jeepney Rent at P800.00


per jeep of three jeeps

P2,400.00

TOTAL

P10,900.00

With regards to the amount of P10,000.00 under Receipt dated August 27, 1992
(Annex E) was actually spent on August 26, 1992 for the following:
Labor for 35 laborers at
P150.00 per person

P5,250.00

Food expenses for 35


laborers and 20 policemen
at P50.00/person

P3,250.00

Jeepney rent for three


jeepneys at P700.00
per jeepney P2,100.00

TOTAL

P10,600.00

It can be noted that there was an excess of the amount of P600.00 and said amount
was shouldered by herein complainant.
The amount of P5,000.00 and P20,000.00 under Receipts of September 15 and 17,
1992 (Annexes F and G) were actually spent for the same purposes on September
17, 1992 and which represented the following:
Labor for 50 laborers
at P150.00/person P5,250.00
Food expenses for 35 laborers
and 20 policemen at P50.00/person

P3,250.00

Jeepney rent for three


jeepneys at P700.00 per jeepney

P2,100.00

TOTAL

P16,200.00

On the amount of P25,000.00, on the amount of P16,200.00 and the unspent


portion thereof was in the amount of P8,800.00 and said amount was retain by me
to be spent again for future implementations.
With regards to the last amount mentioned in the amount of P1,000.00 under
Receipt dated November 4, 1992 was actually spent for transportation and food
allowances for laborers on November 5, 1992 but said implementation had to be
postponed because of lack of security police assistance plus on the account of bad
weather. The excess amount of P8,800.00 was actually spent during the
implementation of the Sixth Alias Writ on April 22 and 23, 1993.
xxx

xxx

xxx" 2

The complainant, on the witness stand, controverted the explanation rendered by


respondent Sheriff. He stated that respondent had charged him the amount of
P200.00 per laborer employed and not merely P150.00. Complainant, who had
physically accompanied respondent Sheriff to the demolition site during the
attempts to enforce the Writ, stated that respondent Sheriff had only fifteen (15)
men to a team and not thirty-five (35) or more persons as alleged by respondent.
Moreover, complainant saw only on (1) owner-type vehicle, for the personal use of
another sheriff who was assisting respondent; complainant saw no evidence of the
three (3) or four (4) public utility jeeps respondent had allegedly hired. Further,
complainant claimed that he had paid for the cost of food for the policemen, over
and above the amounts he had delivered to respondent Sheriff. Complainant's
testimony in this respect follows:
"Q:

What other items did you find that are not correct?

A:
For the expenses of the policemen, sir, I usually pay for the food of the
policemen if there is any.
Q:

In other words, the Sheriff did not spend this amount?

A:
I did not pay for the policemen (sic) food, sir, I usually gave him for the food
of the policemen, sir.
Q:

If you paid the food.

A:
Aside from the money I gave to Meregildo, sir, the payment I gave to this
policemen was from my own pocket and is not included in P47,000.00.
Court:
Are you insinuating Mr. Ong that aside from the money you gave to this
respondent, you spend (sic) personally?

Witness:
Yes, your Honor, for the policemen.
Court:
For what date?
Witness:
This August 27, your Honor.
Court:
August 21?
Atty. Linzag:
Well, I think that was the implementation of the writ, your Honor.
Witness:
Yes, your Honor, for the implementation of the writ I usually pay for the food
of the policemen, your Honor.
Court:
For all the writs?
Witness:
Yes, your Honor, not for the laborers, your Honor, for the policemen.
Court:
So, you mean you gave directly to the policemen aside from the money you
give (sic) to the Sheriff?
Witness:
Yes, your Honor.
Court:
How much did you give to these policemen?
Witness:
Actual expenses, your Honor.
Court:

How much?
Atty. Linzag:
For food?
Witness:
P3,000.00, your Honor, sometime (sic) we are eating(sic) at the Tropical Hut,
your Honor." 3 (Emphasis supplied)
Upon examination of the evidence presented by the parties, the Investigating Judge
concluded that the behavior of respondent Sheriff was, under the circumstances,
highly irregular and prejudicial to the best interest of the service.
We agree with the Investigating Judge's view that Section 9 of Rule 141, as
amended, of the Rules of Court is applicable. This Section reads in part as follows:
"Sec. 9.
xxx

Sheriffs, and other persons serving processes.


xxx

xxx

(g)
For executing a writ of process to place a party in possession of real estate,
one hundred (P100.00) pesos;
xxx

xxx

xxx

In addition to the fees hereinabove, fixed, the party requesting the process of any
court, preliminary, incidental, or final, shall pay the sheriff's expenses in serving or
executing the process or safeguarding the property levied upon, attached or seized,
including kilometrage for each kilometer of travel, guard's fees, warehousing and
similar charges, in an amount estimated by the sheriff, subject to the approval of
the court. Upon approval of said estimated expenses, the interested party shall
deposit such amount with the clerk of court and ex-officio sheriff, who shall disburse
the same to the deputy sheriff assigned to effect the process, subject to liquidation
within the same period for rendering a return on the process. Any unspent amount
shall be refunded to the party making the deposit. A full report shall be submitted
by the deputy sheriff assigned with his return, and the sheriff's expenses shall be
taxed as costs against the judgment debtor. (7a)" 4 (Emphasis supplied).
Respondent Sheriff failed grievously to comply with the above requirements of
Section 9. Respondent knew, or should have known, that he had to present his cost
estimates for implementation of the Writ of Demolition and Possession to the court
issuing that Writ for its approval. He did not do so. Respondent Sheriff repeatedly
charged and collected from complainant sums of money without approval of the
Court; he did not deposit the sums received from complainant with the Clerk of
Court who, under Section 9, was then authorized to disburse the same to
respondent Sheriff to effect implementation of the Writ. We note also that

respondent Sheriff made no mention in the Final Sheriff's Return which he submitted
to Judge Vera, of the amounts of monies he had received from complainant. It does
not appear that he submitted any liquidation of such amounts to the trial court,
before the present administrative complaint was instituted. 5
Respondent Sheriff attempted to depend the "reasonableness" of the amounts he
had charged and received from the complainant, and tried to explain his repeated
failure to execute the Writ. Respondent claimed that the Writ of Demolition was
directed against sixty (60) families, more or less, of squatters illegally occupying the
parcel of land here involved, located in Bagong Bantay, Quezon City. These
squatters families had refused to leave voluntarily and so had to be ejected by
force. When respondent allegedly tried to implement the Fourth Writ, the police
contingent he had allegedly arranged for was supposedly not dispatched by their
commanding officer in view of a heavy rain on that day. On his alleged second
attempt to enforce the Writ, bad weather again prevented the success of his efforts.
He assured complainant that they would try once more as soon as the weather
cleared up. On the next attempt, he alleged that, although prepared to demolish the
structures found in the premises, he acceded to the request of counsel of the
squatters for "peaceful settlement of the conflict." 6
The Investigating Judge was not persuaded by the explanations offered by
respondent Sheriff. Investigating Judge Alonzo-Legasto stated that the amounts
charged and collected from the complainant were exorbitant and highly
disproportionate to the actual service rendered by the laborers purportedly retained
by respondent Sheriff. She believed that there was no justification for employing as
many as fifty (50) laborers and fifty (50) policemen for enforcing the Writ. The
Investigating Judge dismissed respondent Sheriff's accounting of sums received as
"too simplistic," . . . and unworthy of credence and highly improbable." 7 The Court
agrees with the Investigating Judge that respondent Sheriff was dishonest in
rendering his accounting of expenses actually incurred (if any). Respondent Sheriff's
explanations are strained to an extreme; in any case, "reasonableness" of the
amounts charged and collected and received by respondent is not a defense. For
respondent clearly ignored the procedures laid down in Section 9 of Rule 141 of the
Rules of Court.
The Investigating Judge recommended suspension for respondent Sheriff. The Court,
however, is convinced that the inculpatory acts committed by respondent Sheriff
are very serious and call for a more severe penalty. Respondent Sheriff Maximo A.
Meregildo is an officer of the court. As such, he forms an integral part of the
administration of justice, since he is called upon to serve the orders and writs and
execute all processes of the Court. 8 As such, he is required to live up to strict
standards of honesty and integrity in public service. 9 His conduct must at all
times be characterized by honesty and openness and must constantly be above
suspicion. 10 Respondent Sheriff's unilaterally and repeatedly demanding sums of
money from a party-litigant purportedly to defray expenses of execution, without

obtaining the approval of the trial court for such purported expense and without
rendering to that court an accounting thereof, in effect constituted dishonesty and
extortion. That conduct, therefore, fell too far short of the required standards of
public service. Such conduct is threatening to the very existence of the system of
administration of justice.
WHEREFORE, respondent Maximo A. Meregildo, Deputy Sheriff of the Municipal Trial
Court, Branch 31 of Quezon City, is hereby FOUND GUILTY of serious misconduct
and conduct prejudicial to the best interest of the service, and is hereby DISMISSED
from office, with forfeiture of all retirement benefits and accrued leave credits and
with prejudice to re-employment in any branch or instrumentality of government,
including government owned or controlled corporations.
SO ORDERED.

FILINVEST CREDIT CORPORATION, petitioner, vs. THE HONORABLE JUDGE BENJAMIN


RELOVA (In his capacity as Presiding Judge of the Court of First Instance of Manila,
Branch XI) and ERNESTO SALAZAR, respondents.
Labaquis, Loyola & Angara Law Offices for petitioner.
Cecilio D. Ignacio for respondents.
SYNOPSIS
In payment of a motor vehicle he purchased, Ernesto Salazar, herein private
respondent, executed a promissory note and a deed of chattel mortgage over the
subject property in favor of seller Rallye Motor Co., Inc. which subsequently
assigned all its rights, title and interest to the said note and mortgage to Filinvest
Credit Corporation, herein petitioner. Later, petitioner Filinvest filed with the Court of
First Instance a complaint against Rallye and Salazar for collection with damages
and preliminary writ of attachment, alleging that defendants have committed fraud
in securing the obligation and are now avoiding payment of the same. For his
defense, respondent Salazar claimed that he was himself defrauded, because while
he signed the promissory note and chattel mortgage over the motor vehicle which
he bought from Rallye, the latter did not deliver to him the said personal property
and that Rallye has disappeared and can no longer be found. The then presiding
judge granted petitioner's ex-parte motion for a writ of attachment which was
implemented solely against respondent Salazar's property. Over a year later,
however, the now respondent judge,on motion of respondent Salazar, ordered the
dissolution and setting aside of the writ of preliminary attachment and the return of
the attached properties on a finding that Salazar did not commit fraud in
contracting his obligation.
On certiorari, the Supreme Court reversed and set aside the order of the lower court
holding that the failure of respondent Salazar to disclose the material fact of nondelivery of the motor vehicle, there being a duty on his part to reveal the same,
constitutes fraud which justifies issuance of the writ of attachment, hence
respondent judge committed grave abuse of discretion in dissolving and setting
aside the subject writ.
Petition granted and decision reversed and set aside.
SYLLABUS
1.
REMEDIAL LAW; CIVIL PROCEDURE; PROVISIONAL REMEDIES; ATTACHMENT;
WRIT MAY BE ISSUED EX-PARTE. Nothing in the Rules of Court makes notice and
hearing indispensable and mandatory requisites for the issuance of a writ of
attachment. The statement in the case of Blue Green Waters, vs. Hon. Sundiam and
Tan (79 SCRA 66) cited by private respondent, to the effect that the order of
attachment issued without notice to therein petitioner Blue Green Waters, Inc. and

without giving it a chance to prove that it was not fraudulently disposing of its
properties is irregular, give the wrong implication. As clarified in the separate
opinion of Mr. Justice Claudio Teehankee in the same cited case, a writ of
attachment may be issued ex-parte.
2.
ID.; ID.; ID.; ID.; GROUND FOR DISCHARGE; IMPROPER AND IRREGULAR
ISSUANCE; FILING OF CASH DEPOSIT OR COUNTER-BOND NOT REQUIRED. A writ
of attachment may be discharged without the necessity of filing the cash deposit or
counter-bond required by Section 12, Rule 57. Section 13 of the same Rule grants
an aggrieved party relief from baseless and unjustifiable attachments procured,
among others, upon false allegations, without having to file any cash deposit or
counter-bond.
3.
ID.; ID.; ID.; ID.; CASE AT BAR. In the instant case, the order of attachment
was granted upon the allegation of petitioner, as plaintiff in the court below, that
private respondent RALLYE, the defendants, had committed "fraud in contracting
the debt or incurring the obligation upon which the action is brought," covered by
Section 1(d), Rule 57. Subsequent to the issuance of the attachment order on
August 17, 1977, private respondent filed in the lower court an "Urgent Motion for
the Recall and Quashal of the Writ of Preliminary Attachment on (his property)"
dated December 11, 1971 precisely upon the assertion that there was "absolutely
no fraud on (his) part'' in contracting the obligation sued upon by petitioner. Private
respondent was in effect claiming that petitioner's allegation of fraud was false, that
hence there was ground for- attachment, and that therefore the attachment order
was "improperly or irregularly issued." This Court has held that "(i)f the grounds
upon which the attachment was issued were not true . . . , the defendant has his
remedy by immediately presenting a motion for the dissolution of the same." (Hijos
de I. de la Rama vs. Sajo, 45 Phil. 703, 706). We find that private respondent's
Urgent Motion was filed under Section 13, Rule 57.
4.
ID.; ID.; ID.; ID.; ID.; ID.; HEARING REQUIRED TO DETERMINE DEFECT IN
ISSUANCE OF WRIT. The last sentence of Section 13, Rule 57 indicates that a
hearing must be conducted by the judge for the purpose of determining whether or
not there really was a defect in the issuance of the attachment.
5.
ID.; ID.; ID.; ID.; ID.; ID.; ID.; BURDEN OF PROOF LIES IN THE PARTY WITH
AFFIRMATIVE ALLEGATIONS. The question is:At this hearing, on whom does the
burden of proof lie? Under the circumstances of the present case, We sustain the
ruling of the court a quo in its questioned Order dated February 2, 1979 that it
should be the plaintiff (attaching creditor), who should prove his allegation of fraud.
This pronouncement finds support in the first sentence of Section 1, Rule 13, which
states that: "Each party must prove his own affirmative allegations.'' The last part of
the same provision also provides that: "The burden of proof lies on the party who
would be defeated if no evidence were given on either side." It must be borne in
mind that in this jurisdiction, fraud is never presumed. FRAUS EST IDIOSA ET NON

PRAESUMENDA. Indeed, private transactions are presumed to have been fair and
regular. (Rule 131, Section 5 [o]. Likewise, written contracts such as the documents
executed by the parties in the instant case, are presumed to have been entered into
for a sufficient consideration. (Rule 131, Section 5(r)).
6.
CIVIL LAW; ARTICLE 1339 OF THE NEW CIVIL CODE; FRAUD; FAILURE OF A
PARTY TO DISCLOSE MATERIAL FACTS WHERE HE IS DUTY-BOUND TO REVEAL THEM.
Respondent Salazar had previously applied for financing assistance from
petitioner FILINVEST as shown in Exhibits "E" and "E-1" and his application was
approved, thus he negotiated for the acquisition of the motor vehicle in question
from Rallye Motors. Since he claimed that the motor vehicle was not delivered to
him, then he was duty-bound to reveal that to FILINVEST, it being ,material in
inducing the latter to accept the assignment of the promissory note and the chattel
mortgage. More than that, good faith as well as commercial usages or customs
require the disclosure of facts and circumstances which go into the very object and
consideration of the contractual obligation. We rule that the failure of respondent
Salazar to disclose the material fact of non-delivery of the motor vehicle, there
being a duty on his part to reveal them, constitutes fraud. (Article 1339, New Civil
Code).
DECISION
GUERRERO, J p:
This is a special civil action for certiorari, with prayer for restraining order or
preliminary injunction, filed by petitioner Filinvest Credit Corporation seeking to
annul the Orders issued by respondent Judge dated February 2, 1979 and April 4,
1979 in Civil Case No. 109900.
As shown by the records, the antecedents of the instant Petition are as follows:
On August 2, 1977, Filinvest Credit Corporation (hereinafter referred to as
FILINVEST) filed a complaint in the lower court against defendants Rallye Motor CO.,
Inc. (hereinafter referred to as RALLYE) and Ernesto Salazar for the collection of a
sum of money with damages and preliminary writ of attachment. From the
allegations of the complaint, 1 it appears that in payment of a motor vehicle
described as: "One (1) Unit MAZDA DIESEL SCHOOL BUS, Model: E4100, Serial No.:
EXC43P-02356, Motor No.: Y-13676," Salazar executed a promissory note dated May
5, 1977 in favor of RALLYE for the amount of P99,828.00. To secure the note, Salazar
also executed in favor of RALLYE a deed of chattel mortgage over the above
described motor vehicle. On May 7, 1977, RALLYE, for valuable consideration,
assigned all its rights, title and interest to the aforementioned note and mortgage to
FILINVEST. Thereafter, FILINVEST came to know that RALLYE had not delivered the
motor vehicle subject of the chattel mortgage to Salazar, "as the said vehicle (had)
been the subject of a sales agreement between the co-defendants." Salazar
defaulted in complying with the terms and conditions of the aforesaid promissory

note and chattel mortgage. RALLYE, as assignor who guaranteed the validity of the
obligation, also failed and refused to pay FILINVEST despite demand. According to
FILINVEST, the defendants intentionally, fraudulently and with malice concealed
from it the fact that there was no vehicle delivered under the documents negotiated
and assigned to it, otherwise, it would not have accepted the negotiation and
assignment of the rights and interest covered by the promissory note and chattel
mortgage. Praying for a writ of preliminary attachment, FILINVEST submitted with
its complaint the affidavit of one Gil Mananghaya, pertinent portions of which read
thus: Cdpr
"That he is the Collection Manager, Automotive Division of Filinvest Credit
Corporation;
"That in the performance of his duties, he came to know of the account of Ernesto
Salazar, which is covered by a Promissory Note and secured by a Chattel Mortgage,
which documents together with all the rights and interest thereto were assigned by
Rallye Motor Co., Inc.;
"That for failure to pay a stipulated installment, and the fact that the principal
debtor, Ernesto Salazar, and the assignor, Rallye Motor Co., Inc. concealed the fact
that there was really no motor vehicle mortgaged under the terms of the Promissory
Note and the Chattel Mortgage, the entire amount of the obligation stated in the
Promissory Note becomes due and demandable, which Ernesto Salazar and Rallye
Motor Co., Inc. failed and refused to pay, so much so that a sufficient cause of
action really exists for Filinvest Credit Corporation to institute the corresponding
complaint against said person and entity;
"That the case is one of those mentioned in Section 1, Rule 57 of the Rules of Court,
particularly an action against parties who have been guilty of a fraud in contracting
the debt or incurring the obligation upon which the action is brought;
"That there is no other sufficient security for the claim sought to be enforced by the
action, and that the amount due to the applicant Filinvest Credit Corporation is as
much as the sum for which the order is granted above all legal counterclaims;
That this affidavit is executed for the purpose of securing a writ of attachment from
the court." 2
The specific provision adverted to in the above Affidavit is Section 1(d) of Rule 57
which includes "an action against a party who has been guilty of fraud in
contracting the debt or incurring the obligation upon which the action is brought, or
in concealing or disposing of the property for the taking, detention or conversion of
which the action is brought" as one of the cases in which a "plaintiff or any proper
party may, at the commencement of the action or at any time thereafter, have the
property of the adverse party attached as security for the satisfaction of any
judgment that may be recovered."

Judge Jorge R. Coquia (now Justice of the Court of Appeals), then presiding Judge of
the lower court, granted the prayer for a writ of attachment in an Order dated
August 17, 1977 stating that:
"Finding the complaint sufficient in form and substance, and in view of the sworn
statement of Gil Mananghaya, Collection Manager of the plaintiff that defendants
have committed fraud in securing the obligation and are now avoiding payment of
the same, let a writ of attachment issue upon the plaintiff's filing of a bond in the
sum of P97,000.00.
"In the meantime, let summons issue on the defendants." 3
More than a year later, in an Urgent Motion dated December 11, 1978, 4 defendant
Salazar prayed that the writ of preliminary attachment issued ex parte and
implemented solely against his property be recalled and/or quashed. He argued that
when he signed the promissory note and chattel mortgage on May 5, 1977 in favor
of RALLYE, FILINVEST was not yet his creditor or obligee, therefore, he could not be
said to have committed fraud when he contracted the obligation on May 5, 1977.
Salazar added that as the motor vehicle which was the object of the chattel
mortgage and the consideration for the promissory note had admittedly not been
delivered to him by RALLYE, his repudiation of the loan and mortgage is more
justifiable.
FILINVEST filed an Opposition, but on February 2, 1979, the court a quo, this time
presided over by herein respondent Judge, ordered the dissolution and setting aside
of the writ of preliminary attachment issued on August 17, 1977 and the return to
defendant Salazar of all his properties attached by the Sheriff by virtue of the said
writ. In this Order, respondent Judge explained that:
"When the incident was called for hearing, the Court announced that, as a matter of
procedure, when a motion to quash a writ of preliminary attachment is filed, it is
incumbent upon the plaintiff to prove the truth of the allegations which were the
basis for the issuance of said writ. In this hearing, counsel for the plaintiff
manifested that he was not going to present evidence in support of the allegation of
fraud. He maintained that it should be the defendant who should prove the truth of
his allegation in the motion to dissolve the said writ. The Court disagrees." 5
FILINVEST filed a Motion for Reconsideration of the above Order, and was
subsequently allowed to adduce evidence to prove that Salazar committed fraud as
alleged in the affidavit of Gil Mananghaya earlier quoted. This notwithstanding,
respondent Judge denied the Motion in an Order dated April 4, 1979 reasoning thus:
cdrep
"The plaintiff's evidence show that the defendant Rallye Motor assigned to the
former defendant Salazar's promissory note and chattel mortgage by virtue of which
plaintiff discounted the note. Defendant Salazar refused to pay the plaintiff for the

reason that Rallye Motor has not delivered to Salazar the motor vehicle which he
bought from Rallye. It is the position of plaintiff that defendant Salazar was in
conspiracy with Rallye Motor in defrauding plaintiff.
"Ernesto Salazar, on his part complained that he was himself defrauded, because
while he signed a promissory note and chattel mortgage over the motor vehicle
which he bought from Rallye Motor, Rullye Motor did not deliver to him the personal
property he bought; that the address and existence of Rallye Motor can no longer be
found.
"While it is true that the plaintiff may have been defrauded in this transaction, it
having paid Rallye Motor the amount of the promissory note, there is no evidence
that Ernesto Salazar had connived or in any way conspired with Rallye Motor in the
assignment of the promissory note to the plaintiff, because of which the plaintiff
paid Rallye Motor the amount of the promissory note. Defendant Ernesto Salazar
was himself a victim of fraud. Rallye Motor was the only party which committed it."
6
From the above order denying reconsideration and ordering the sheriff to return to
Salazar the personal property attached by virtue of the writ of preliminary
attachment issued on August 17, 1977, FILINVEST filed the instant Petition on April
19, 1979. On July 16, 1979, petitioner FILINVEST also filed an Urgent Petition for
Restraining Order 7 alleging, among others, that pending this certiorari proceeding
in this court, private respondent Salazar filed a Motion for Contempt of Court in the
court below directed against FILINVEST and four other persons allegedly for their
failure to obey the Order of respondent Judge dated April 4, 1979, which Order is the
subject of this Petition. On July 23, 1979, this Court issued a temporary restraining
order "enjoining respondent Judge or any person or persons acting in his behalf from
hearing private respondent's motion for contempt in Civil Case No. 109900, entitled,
'Filinvest Credit Corporation, Plaintiff, versus. The Rallye Motor Co., Inc., et al.,
Defendants' of the Court of First Instance of Manila, Branch XI." 8
Petitioner FILINVEST in its MEMORANDUM contends that respondent Judge erred:
(1)
In dissolving the writ of preliminary attachment already enforced by the
Sheriff of Manila without Salazar's posting a counter-replevin bond as required by
Rule 57, Section 12; and
(2)
In finding that there was no fraud on the part of Salazar, despite evidence in
abundance to show the fraud perpetrated by Salazar at the very inception of the
contract.
It is urged in petitioner's first assignment of error that the writ of preliminary
attachment having been validly and properly issued by the lower court on August
17, 1977, the same may only be dissolved, quashed or recalled by the posting of a

counter-replevin bond under Section 12, Rule 57 of the Revised Rules of Court which
provides that:
"Section 12. Discharge of Attachment upon giving counterbond. At any time after an order of attachment has been granted, the party
whose property has been attached, or the person appearing on his behalf, may,
upon reasonable notice to the applicant, apply to the judge who granted the order,
or to the judge of the court in which the action is pending, for an order discharging
the attachment wholly or in part on the security given. The judge shall, after
hearing, order the discharge of the attachment if a cash deposit is made, or a
counter-bond executed to the attaching creditor is filed, on behalf of the adverse
party, with the clerk or judge of the court where the application is made, in an
amount equal to the value of the property attached as determined by the judge, to
secure the payment of any judgment that the attaching creditor may recover in the
action. . . . . "
Citing the above provision, petitioner contends that the court below should not have
issued the Orders dated February 2, 1979 and April 4, 1979 for failure of private
respondent Salazar to make a cash deposit or to file a counter-bond.
On the other hand, private respondent counters that the subject writ of preliminary
attachment was improperly or irregularly issued in the first place, in that it was
issued ex parte without notice to him and without hearing.
We do not agree with the contention of private respondent. Nothing in the Rules of
Court makes notice and hearing indispensable and mandatory requisites for the
issuance of a writ of attachment. The statement in the case of Blue Green Waters,
Inc. vs. Hon. Sundiam and Tan 9 cited by private respondent, to the effect that the
order of attachment issued without notice to therein petitioner Blue Green Waters,
Inc. and without giving it a chance to prove that it was not fraudulently disposing of
its properties is irregular, gives the wrong implication. As clarified in the separate
opinion of Mr. Justice Claudio Teehankee in the same cited case, 10 a writ of
attachment may be issued ex parte. Sections 3 and 4, Rule 57, merely require that
an applicant for an order of attachment file an affidavit and a bond: the affidavit to
be executed by the applicant himself or some other person who personally knows
the facts and to show that (1) there is a sufficient cause of action, (2) the case is
one of those mentioned in Section 1 of Rule 57, (3) there is no other sufficient
security for the claim sought to be enforced, and (4) the amount claimed in the
action is as much as the sum for which the order is granted above all legal
counterclaims; and the bond to be "executed to the adverse party in an amount
fixed by the judge, not exceeding the applicant's claim, conditioned that the latter
will pay all the costs which may be adjudged to the adverse party and all damages
which he may sustain by reason of the attachment, if the court shall finally adjudge
that the applicant was not entitled thereto."

We agree, however, with private respondents contention that a writ of attachment


may be discharged without the necessity of filing the cash deposit or counter-bond
required by Section 12, Rule 57, cited by petitioner. The following provision of the
same Rule allows it:
"Sec. 13.

Discharge of attachment for improper or irregular

issuance. The party whose property has been attached may also, at any time
either before or after the release of the attached property, or before any attachment
shall have been actually levied, upon reasonable notice to the attaching creditor,
apply to the judge who granted the order, or to the judge of the court in which the
action is pending, for an order to discharge the attachment on the ground that the
same was improperly or irregularly issued. If the motion be made on affidavits on
the part of the party whose property has been attached; but not otherwise, the
attaching creditor may oppose the same by counter-affidavits or other evidence in
addition to that on which the attachment was made. After hearing, the judge shall
order the discharge of the attachment if it appears that it was improperly or
irregularly issued and the defect is not cured forthwith." (Italics supplied)
The foregoing provision grants an aggrieved party relief from baseless and
unjustifiable attachments procured, among others, upon false allegations, without
having to file any cash deposit or counter-bond. In the instant case, the order of
attachment was granted upon the allegation of petitioner, as plaintiff in the court
below, that private respondent RALLYE, the defendants, had committed "fraud in
contracting the debt or incurring the obligation upon which the action is brought,"
covered by Section 1(d), Rule 57, earlier quoted. Subsequent to the issuance of the
attachment order on August 17, 1977, private respondent filed in the lower court an
"Urgent Motion for the Recall and Quashal of the Writ of Preliminary Attachment on
(his property)" dated December 11, 1978 11 precisely upon the assertion that there
was "absolutely no fraud on (his) part" in contracting the obligation sued upon by
petitioner. Private respondent was in effect claiming that petitioner's allegation of
fraud was false, that hence there was no ground for attachment, and that therefore
the attachment order was "improperly or irregularly issued." This Court was held
that "(i)f the grounds upon which the attachment was issued were not true . . . , the
defendant has his remedy by immediately presenting a motion for the dissolution of
the same." 12 We find that private respondent's abovementioned Urgent Motion
was filed under Section 13, Rule 57.
The last sentenced of the said provision, however, indicates that a hearing must be
conducted by the judge for the purpose of determining whether or not there really
was a defect in the issuance of the attachment. The question is: At this hearing, on
whom does the burden of proof lie? Under the circumstances of the present case,
We sustain the ruling of the court a quo in its questioned Order dated February 2,
1979 that it should be the plaintiff (attaching creditor), who should prove his
allegation of fraud. This pronouncement finds support in the first sentence of

Section 1, Rule 131, which states that: "Each party must prove his own affirmative
allegations." The last part of the same provision also provides that: "The burden of
proof lies on the party who would be defeated if no evidence were given on either
side." It must be borne in mind that in this jurisdiction, fraud is never presumed.
FRAUS EST IDIOSA ET NON PRAESUMENDA. 13 Indeed, private transactions are
presumed to have been fair and regular. 14 Likewise, written contracts such as the
documents executed by the parties in the instant case, are presumed to have been
entered into for a sufficient consideration. 15
In a similar case of Villongco, et al. vs. Hon. Panlilio, et al.,16 a writ of preliminary
attachment was issued ex parte in a case for damages on the strength of the
affidavit of therein petitioners to the effect that therein respondents had concealed,
removed or disposed of their properties, credits or accounts collectible to defraud
their creditors. Subsequently, the lower court dissolved the writ of attachment. This
was questioned in a certiorari proceeding wherein this Court held, inter alia, that:
LLpr
"The affidavit supporting the petition for the issuance of the preliminary attachment
may have been sufficient to justify the issuance of the preliminary writ, but it cannot
be considered as proof of the allegations contained in the affidavit. The reason is
obvious. The allegations are mere conclusions of law, not statement of facts. No
acts of the defendants are ever mentioned in the affidavit to show or prove the
supposed concealment to defraud creditors. Said allegations are affirmative
allegations, which plaintiffs had the obligation to prove . . . " 17
It appears from the records that both herein private parties did in fact adduce
evidence to support their respective claims. 18 Attached to the instant Petition as
its Annex "H" 19 is a Memorandum filed by herein petitioner FILINVEST in the court
below on March 20, 1979. After private respondent filed his Comment to the
Petition, 20 petitioner filed a Reply 21 attaching another copy of the aforesaid
Memorandum as Annex "A". 22 In this case on February 28, 1979 and March 1,
1979, the plaintiff (FILINVEST) presented in evidence documentary exhibits "marked
Exhibit A, A-1, B, B-1, B-2, B-3, B-4, C, C-1, D, E, F, G and G-1. The Memorandum
goes on to state that FILINVEST presented as its witness defendant Salazar himself
who testified that he signed Exhibits A, B, C, D, E and G; that he is a holder of a
master's degree in Business Administration and is himself a very careful and
prudent person; that he does not sign post-dated documents; that he does not sign
contracts which do not reflect the truth or which are irregular on their face; that he
intended to purchase a school bus from Rallye Motors Co., Inc. from whom he had
already acquired one unit; that he had been dealing with Abel Sahagun, manager of
RALLYE, whom he had known for a long time; that he intended to purchase the
school bus on installment basis so he applied for financing with the FILINVEST; that
he knew his application was approved; that with his experience as a business
executive, he knew that under a financing arrangement, upon approval of his
application, when he signed Exhibits A, B, C, D, E and G, the financing company

(FILINVEST) would release the proceeds of the loan to RALLYE and that he would be
obligated to pay the installments to FILINVEST; that he signed Exhibits A, B and C
simultaneously; that it was his wife who was always transacting business with
RALLYE and Abel Sahagun. 23
Without disputing the above summary of evidence, private respondent Salazar
states in his Comment that "the same evidence proferred by (petitioner's) counsel
was adopted by (private respondent) Ernesto Salazar during the proceedings." 24
According to the court a quo in its assailed order of April 4, 1979, Ernesto Salazar
"was himself defrauded because while he signed the promissory note and the
chattel mortgage over the vehicle which he bought from Rallye Motors, RALLYE did
not deliver to him the personal property he bought." And since no fraud was
committed by Salazar, the court accordingly ordered the sheriff to return to Salazar
the properties attached by virtue of the writ of preliminary attachment issued on
August 17, 1977.
We do not agree. Considering the claim of respondent Salazar that Rallye Motors did
not deliver the motor vehicle to him, it follows that the Invoice, Exhibit "C", for the
motor vehicle and the Receipt, Exhibit "G", for its delivery and both signed by
Salazar, Exhibits "C-1" and "G-1", were fictitious. It also follows that the Promissory
Note, Exhibit "A", to pay the price of the undelivered vehicle was without
consideration and therefore fake; the Chattel Mortgage, Exhibit "B", over the nonexistent vehicle was likewise a fraud; the registration of the vehicle in the name of
Salazar was a falsity and the assignment of the promissory note by RALLYE with the
conforme of respondent Salazar in favor of petitioner over the undelivered motor
vehicle was fraudulent and a falsification. LLpr
Respondent Salazar, knowing that no motor vehicle was delivered to him by RALLYE,
executed and committed all the above acts as shown in the exhibits enumerated
above. He agreed and consented to the assignment by RALLYE of the fictitious
promissory note and the fraudulent chattel mortgage, by affixing his signature
thereto, in favor of petitioner FILINVEST, who, in the ordinary course of business,
relied on the regularity and validity of the transaction. Respondent had previously
applied for financing assistance from petitioner FILINVEST as shown in Exhibits "E"
and "E-1" and his application was approved, thus he negotiated for the acquisition
of the motor vehicle in question from Rallye Motors. Since he claimed that the
motor vehicle was not delivered to him, then he was duty-bound to reveal that to
FILINVEST, it being material in inducing the latter to accept the assignment of the
promissory note and the chattel mortgage. More than that, good faith as well as
commercial usages or customs require the disclosure of facts and circumstances
which go into the very object and consideration of the contractual obligation. We
rule that the failure of respondent Salazar to disclose the material fact of nondelivery of the motor vehicle, there being a duty on his part to reveal them,
constitutes fraud. (Article 1339, New Civil Code).

We hold that the court a quo committed grave abuse of discretion in dissolving and
setting aside the writ of preliminary attachment issued on August 17, 1977.
WHEREFORE, IN VIEW OF THE FOREGOING, the appealed Orders of the lower court
dated February 2, 1979 and April 4, 1979 are hereby REVERSED and SET ASIDE. The
temporary restraining order issued by Us on July 23, 1979 is hereby made
permanent. No costs.
SO ORDERED.

DAVAO LIGHT & POWER CO., INC., petitioner, vs. THE COURT OF APPEALS,
QUEENSLAND HOTEL or MOTEL or QUEENSLAND TOURIST INN, and TEODORICO
ADARNA, respondents.
Breva & Breva Law Offices for petitioner.
Goc-Ong & Associates for private respondents.
SYLLABUS
1.
REMEDIAL LAW; ACTIONS; JURISDICTION; HOW ACQUIRED. An action or
proceeding is commenced by the filing of the complaint or other initiatory pleading.
By that act, the jurisdiction of the court over the subject matter or nature of the
action or proceeding is invoked or called into activity; and it is thus that the court
acquires jurisdiction over said subject matter or nature of the action. And it is by
that self-same act of the plaintiff (or petitioner) of filing the complaint (or other
appropriate pleading) by which he signifies his submission to the court's power
and authority that jurisdiction is acquired by the court over his person. On the
other hand, jurisdiction over the person of the defendant is obtained, as above
stated, by the service of summons or other coercive process upon him or by his
voluntary submission to the authority of the court.
2.
ID.; PROVISIONAL REMEDIES; PRELIMINARY ATTACHMENT; DEFINED. A
preliminary attachment may be defined, paraphrasing the Rules of Court, as the
provisional remedy in virtue of which a plaintiff or other proper party may, at the
commencement of the action or at any time thereafter, have the property of the
adverse party taken into the custody of the court as security for the satisfaction of
any judgment that may be recovered. It is a remedy which is purely statutory in
respect of which the law requires a strict construction of the provisions granting it.
Withal no principle, statutory or jurisprudential, prohibits its issuance by any court
before acquisition of jurisdiction over the person of the defendant.
3.
ID.; ID.; ID.; PHRASE "AT THE COMMENCEMENT OF THE ACTION,"
CONSTRUED. Rule 57 in fact speaks of the grant of the remedy "at the
commencement of the action or at any time thereafter." The phrase, "at the
commencement of the action," obviously refers to the date of the filing of the
complaint which, as above pointed out, is the date that marks "the
commencement of the action;" and the reference plainly is to a time before
summons is served on the defendant, or even before summons issues.
4.
ID.; ID.; ID.; WRIT MAY BE ISSUED EX-PARTE. What the rule is saying quite
clearly is that after an action is properly commenced by the filing of the
complaint and the payment of all requisite docket and other fees the plaintiff may
apply for and obtain a writ of preliminary attachment upon fulfillment of the
pertinent requisites laid down by law, and that he may do so at any time, either
before or after service of summons on the defendant. And this indeed, has been the

immemorial practice sanctioned by the courts: for the plaintiff or other proper party
to incorporate the application for attachment in the complaint or other appropriate
pleading (counterclaim, cross-claim, third-party claim) and for the Trial Court to
issue the writ ex-parte at the commencement of the action if it finds the application
otherwise sufficient in form and substance.
5.
ID.; ID.; ID.; HEARING ON APPLICATION THEREON, GENERALLY NOT
NECESSARY. In Toledo v. Burgos this Court ruled that a hearing on a motion or
application for preliminary attachment is not generally necessary unless otherwise
directed by the Trial Court in its discretion. And in Filinvest Credit Corporation v.
Relova, the Court declared that "(n)othing in the Rules of Court makes notice and
hearing indispensable and mandatory requisites for the issuance of a writ of
attachment."
6.
ID.; ID.; ID.; ID.; BASIS OF GRANT. The only pre-requisite is that the Court
be satisfied, upon consideration of "the affidavit of the applicant or of some other
person who personally knows the facts, that a sufficient cause of action exists, that
the case is one of those mentioned in Section 1 . . . (Rule 57), that there is no other
sufficient security for the claim sought to be enforced by the action, and that the
amount due to the applicant, or the value of the property the possession of which
he is entitled to recover, is as much as the sum for which the order (of attachment)
is granted above all legal counterclaims." If the court be so satisfied, the "order of
attachment shall be granted," and the writ shall issue upon the applicant's posting
of a bond executed to the adverse party in an amount to be fixed by the judge, not
exceeding the plaintiff's claim, conditioned that the latter will pay all the costs
which may be adjudged to the adverse party and all damages which he may sustain
by reason of the attachment, if the court shall finally adjudge that the applicant was
not entitled thereto."
7.
ID.; ID.; ID.; ID.; REASON. In Mindanao Savings & Loan Association, Inc. v.
Court of Appeals, decided on April 18, 1989, decided on April 18, 1989, this Court
had occasion to emphasize the postulate that no hearing is required on an
application for preliminary attachment, with notice to the defendant, for the reason
that this "would defeat the objective of the remedy . . . (since the) time which such
a hearing would take, could be enough to enable the defendant to abscond or
dispose of his property before a writ of attachment issues." As observed by a former
member of this Court, such a procedure would warn absconding debtors-defendants
of the commencement of the suit against them and the probable seizure of their
properties, and thus give them the advantage of time to hide their assets, leaving
the creditor-plaintiff holding the proverbial empty bag; it would place the creditorapplicant in danger of losing any security for a favorable judgment and thus give
him only an illusory victory.

8.
ID.; ID.; ID.; HOW DISCHARGED. There are two (2) ways of discharging an
attachment: first, by the posting of a counterbond; and second, by a showing of its
improper or irregular issuance.
9.
ID.; ID.; ID.; ID.; BY COUNTERBOND. The submission of a counterbond is an
efficacious mode of lifting an attachment already enforced against property, or even
of preventing its enforcement altogether. When property has already been seized
under attachment, the attachment may be discharged upon counterbond in
accordance with Section 12 of Rule 57. But even before actual levy on property,
seizure under attachment may be prevented also upon counterbond. The defendant
need not wait until his property is seized before seeking the discharge of the
attachment by a counterbond. This is made possible by Section 5 of Rule 57.
10.
ID.; ID.; ID.; ID.; BY MOTION TO DISCHARGE ON GROUND THAT THE SAME
WAS IRREGULARLY OR IMPROPERLY ISSUED. Aside from the filing of a
counterbond, a preliminary attachment may also be lifted or discharged on the
ground that it has been irregularly or improperly issued, in accordance with Section
13 of Rule 57. Like the first, this second mode of lifting an attachment may be
resorted to even before any property has beer levied on. Indeed, it may be availed
of after property has been released from a levy on attachment, as is made clear by
said Section 13.
11.
ID.; ID.; ID.; ID.; FIRST MODE SPEEDIER THAN THE SECOND. The filing of a
counterbond is a speedier way of discharging the attachment writ maliciously
sought out by the attaching creditor instead of the other way, which, in most
instances . . . would require presentation of evidence in a fullblown trial on the
merits, and cannot easily be settled in a pending incident of the case.
12.
ID.; ID.; ID.; MAY NOT BE DISSOLVED BY A SHOWING OF ITS IRREGULAR OR
IMPROPER ISSUANCE. (a) When an attachment may not be dissolved by a
showing of its irregular or improper issuance:
". . . (W)hen the preliminary attachment is issued upon a ground which is at the
same time the applicant's cause of action e.g., 'an action for money or property
embezzled or fraudulently misapplied or converted to his own use by a public
officer, or an officer of a corporation, or an attorney, factor, broker, agent, or clerk,
in the course of his employment as such, or by any other person in a fiduciary
capacity, or for a willful violation of duty.' (Sec. 1 [b], Rule 57), or 'an action against
a party who has been guilty of fraud in contracting the debt or incurring the
obligation upon which the action is brought' (Sec. 1 [d], Rule 57), the defendant is
not allowed to file a motion to dissolve the attachment under Section 13 of Rule 57
by offering to show the falsity of the factual averments in the plaintiff's application
and affidavits on which the writ was based and consequently that the writ based
thereon had been improperly or irregularly issued (SEE Benitez v. I.A.C., 154 SCRA
41) the reason being that the hearing on such a motion for dissolution of the writ

would be tantamount to a trial of the merits of the action. In other words, the merits
of the action would be ventilated at a mere hearing of a motion, instead of at the
regular trial. Therefore, when the writ of attachment is of this nature, the only way it
can be dissolved is by a counterbond (G.B. Inc. v. Sanchez, 98 Phil. 886)."
13.
ID.; ID.; ID.; DISSOLUTION OF PRELIMINARY ATTACHMENT DOES NOT
DISCHARGE SURETIES ON BOND; REASON. ". . . The dissolution of the preliminary
attachment upon security given, or a showing of its irregular or improper issuance,
does not of course operate to discharge the sureties on plaintiff's own attachment
bond. The reason is simple. That bond is 'executed to the adverse party, . . .
conditioned that the . . . (applicant) will pay all the costs which may be adjudged to
the adverse party and all damages which he may sustain by reason of the
attachment, if the court shall finally adjudge that the applicant was not entitled
thereto' (SEC. 4, Rule 57). Hence, until that determination is made, as to the
applicant's entitlement to the attachment, his bond must stand and cannot be
withdrawn."
DECISION
NARVASA, J p:
Subject of the appellate proceedings at bar is the decision of the Court of Appeals in
CA-G.R. Sp. No. 1967 entitled "Queensland Hotel, Inc., etc. and Adarna v. Davao
Light & Power Co., Inc., promulgated on May 4, 1990. 1 That decision nullified and
set aside the writ of preliminary attachment issued by the Regional Trial Court of
Davao City 2 in Civil Case No. 19513-89 on application of the plaintiff (Davao Light
& Power Co.), before the service of summons on the defendants (herein respondents
Queensland Co., Inc. and Adarna).
Following is the chronology of the undisputed material facts culled from the
Appellate Tribunal's judgment of May 4, 1990.
1.
On May 2, 1989 Davao Light & Power Co., Inc. (hereafter, simply Davao Light)
filed a verified complaint for recovery of a sum of money and damages against
Queensland Hotel, etc. and Teodorico Adarna (docketed as Civil Case No. 19613-89).
The complaint contained an ex parte application for a writ of preliminary
attachment.
2.
On May 3, 1989 Judge Nartatez, to whose branch the case was assigned by
raffle, issued an Order granting the ex parte application and fixing the attachment
bond at P4,600,513.37.
3.
On May 11, 1989 the attachment bond having been submitted by Davao
Light, the writ of attachment issued.
4.
On May 12, 1989, the summons and a copy of the complaint, as well as the
writ of attachment and a copy of the attachment bond, were served on defendants

Queensland and Adarna; and pursuant to the writ, the sheriff seized properties
belonging to the latter. LibLex
5.
On September 6, 1989, defendants Queensland and Adarna filed a motion to
discharge the attachment for lack of jurisdiction to issue the same because at the
time the order of attachment was promulgated (May 3, 1989) and the attachment
writ issued (May 11, 1989), the Trial Court had not yet acquired jurisdiction over the
cause and over the persons of the defendants.
6.
On September 14, 1989, Davao Light filed an opposition to the motion to
discharge attachment.
7.
On September 19, 1989, the Trial Court issued an Order denying the motion
to discharge.
This Order of September 19, 1989 was successfully challenged by Queensland and
Adarna in a special civil action of certiorari instituted by them in the Court of
Appeals. The Order was, as aforestated, annulled by the Court of Appeals in its
Decision of May 4, 1990. The Appellate Court's decision closed with the following
disposition:
". . . the Orders dated May 3, 1989 granting the issuance of a writ of preliminary
attachment, dated September 19, 1989 denying the motion to discharge
attachment; dated November 7, 1989 denying petitioner's motion for
reconsideration; as well as all other orders emanating therefrom, specially the Writ
of Attachment dated May 11, 1989 and Notice of Levy on Preliminary Attachment
dated May 11, 1989, are hereby declared null and void and the attachment hereby
ordered DISCHARGED."
The Appellate Tribunal declared that
". . .While it is true that a prayer for the issuance of a writ of preliminary attachment
may be included in the complaint, as is usually done, it is likewise true that the
Court does not acquire jurisdiction over the person of the defendant until he in duly
summoned or voluntarily appears, and adding the phrase that it be issued 'ex parte'
does not confer said jurisdiction before actual summons had been made, nor
retroact jurisdiction upon summons being made. . . ."
It went on to say, citing Sievert v. Court of Appeals, 3 that "in a proceedings in
attachment," the "critical time which must be identified is . . . when the trial court
acquires authority under law to act coercively against the defendant or his
property . . .;" and that " critical time is the time of the vesting of jurisdiction in the
court over the person of the defendant in the main case."
Reversal of this Decision of the Court of Appeals of May 4, 1990 is what Davao Light
seeks in the present appellate proceedings. cdrep

The question is whether or not a writ of preliminary attachment may issue ex parte
against a defendant before acquisition of jurisdiction of the latter's person by
service of summons or his voluntary submission to the Court's authority.
The Court rules that the question must be answered in the affirmative and that
consequently, the petition for review will have to be granted.
It is incorrect to theorize that after an action or proceeding has been commenced
and jurisdiction over the person of the plaintiff has been vested in the court, but
before the acquisition of jurisdiction over the person of the defendant (either by
service of summons or his voluntary submission to the court's authority), nothing
can be validly done by the plaintiff or the court. It is wrong to assume that the
validity of acts done during this period should be dependent on, or held in
suspension until, the actual obtention of jurisdiction over the defendant's person.
The obtention by the court of jurisdiction over the person of the defendant is one
thing; quite another is the acquisition of jurisdiction over the person of the plaintiff
or over the subject-matter or nature of the action, or the res or object thereof.
An action or proceeding is commenced by the filing of the complaint or other
initiatory pleading. 4 By that act, the jurisdiction of the court over the subject
matter or nature of the action or proceeding is invoked or called into activity; 5 and
it is thus that the court acquires jurisdiction over said subject matter or nature of
the action. 6 And it is by that self-same act of the plaintiff (or petitioner) of filing the
complaint (or other appropriate pleading) by which he signifies his submission to
the court's power and authority that jurisdiction is acquired by the court over his
person. 7 On the other hand, jurisdiction over the person of the defendant is
obtained, as above stated, by the service of summons or other coercive process
upon him or by his voluntary submission to the authority of the court. 8
The events that follow the filing of the complaint as a matter of routine are well
known. After the complaint is filed, summons issues to the defendant, the summons
is then transmitted to the sheriff, and finally, service of the summons is effected on
the defendant in any of the ways authorized by the Rules of Court. There is thus
ordinarily some appreciable interval of time between the day of the filing of the
complaint and the day of service of summons of the defendant. During this period,
different acts may be done by the plaintiff or by the Court, which are of
unquestionable validity and propriety. Among these, for example, are the
appointment of a guardian ad litem, 9 the grant of authority to the plaintiff to
prosecute the suit as a pauper litigant, 10 the amendment of the complaint by the
plaintiff as a matter of right without leave of court, 11 authorization by the Court of
service of summons by publication, 12 the dismissal of the action by the plaintiff on
mere notice. 13
This, too, is true with regard to the provisional remedies of preliminary attachment,
preliminary injunction, receivership or replevin. 14 They may be validly and properly

applied for and granted even before the defendant is summoned or is heard from.
LibLex
A preliminary attachment may be defined, paraphrasing the Rules of Court, as the
provisional remedy in virtue of which a plaintiff or other proper party may, at the
commencement of the action or at any time thereafter, have the property of the
adverse party taken into the custody of the court as security for the satisfaction of
any judgment that may be recovered. 15 It is a remedy which is purely statutory in
respect of which the law requires a strict construction of the provisions granting it.
16 Withal no principle, statutory or jurisprudential, prohibits its issuance by any
court before acquisition of jurisdiction over the person of the defendant.
Rule 57 in fact speaks of the grant of the remedy "at the commencement of the
action or at any time thereafter." 17 The phrase, "at the commencement of the
action," obviously refers to the date of the filing of the complaint which, as above
pointed out, is the date that marks "the commencement of the action;" 18 and the
reference plainly is to a time before summons is served on the defendant, or even
before summons issues. What the rule is saying quite clearly is that after an action
is properly commenced by the filing of the complaint and the payment of all
requisite docket and other fees the plaintiff may apply for and obtain a writ of
preliminary attachment upon fulfillment of the pertinent requisites laid down by law,
and that he may do so at any time, either before or after service of summons on the
defendant. And this indeed, has been the immemorial practice sanctioned by the
courts: for the plaintiff or other proper party to incorporate the application for
attachment in the complaint or other appropriate pleading (counterclaim, crossclaim, third-party claim) and for the Trial Court to issue the writ ex-parte at the
commencement of the action if it finds the application otherwise sufficient in form
and substance.
In Toledo v. Burgos, 19 this Court ruled that a hearing on a motion or application for
preliminary attachment is not generally necessary unless otherwise directed by the
Trial Court in its discretion. 20 And in Filinvest Credit Corporation v. Relova, 21 the
Court declared that "(n)othing in the Rules of Court makes notice and hearing
indispensable and mandatory requisites for the issuance of a writ of attachment."
The only pre-requisite is that the Court be satisfied, upon consideration of "the
affidavit of the applicant or of some other person who personally knows the facts,
that a sufficient cause of action exists, that the case is one of those mentioned in
Section 1 . . . (Rule 57), that there is no other sufficient security for the claim sought
to be enforced by the action, and that the amount due to the applicant, or the value
of the property the possession of which he is entitled to recover, is as much as the
sum for which the order (of attachment) is granted above all legal counterclaims."
22 If the court be so satisfied, the "order of attachment shall be granted," 23 and
the writ shall issue upon the applicant's posting of a bond executed to the adverse
party in an amount to be fixed by the judge, not exceeding the plaintiff's claim,
conditioned that the latter will pay all the costs which may be adjudged to the

adverse party and all damages which he may sustain by reason of the attachment,
if the court shall finally adjudge that the applicant was not entitled thereto." 24
In Mindanao Savings & Loan Association, Inc. v. Court of Appeals, decided on April
18, 1989, 25 this Court had occasion to emphasize the postulate that no hearing is
required on an application for preliminary attachment, with notice to the defendant,
for the reason that this "would defeat the objective of the remedy . . . (since the)
time which such a hearing would take, could be enough to enable the defendant to
abscond or dispose of his property before a writ of attachment issues." As observed
by a former member of this Court, 26 such a procedure would warn absconding
debtors-defendants of the commencement of the suit against them and the
probable seizure of their properties, and thus give them the advantage of time to
hide their assets, leaving the creditor-plaintiff holding the proverbial empty bag; it
would place the creditor-applicant in danger of losing any security for a favorable
judgment and thus give him only an illusory victory. Cdpr
Withal, ample modes of recourse against a preliminary attachment are secured by
law to the defendant. The relative ease with which a preliminary attachment may be
obtained is matched and paralleled by the relative facility with which the
attachment may legitimately be prevented or frustrated. These modes of recourse
against preliminary attachments granted by Rule 57 were discussed at some length
by the separate opinion in Mindanao Savings & Loans Asso. Inc. v. C.A., supra.
That separate opinion stressed that there are two (2) ways of discharging an
attachment: first, by the posting of a counterbond; and second, by a showing of its
improper or irregular issuance.
1.0. The submission of a counterbond is an efficacious mode of lifting an
attachment already enforced against property, or even of preventing its
enforcement altogether.
1.1. When property has already been seized under attachment, the attachment
may be discharged upon counterbond in accordance with Section 12 of Rule 57.
'SECTION 12.
Discharge of attachment upon giving counterbond. At any
time after an order of attachment has been granted, the party whose property has
been attached or the person appearing in his behalf, may, upon reasonable notice
to the applicant, apply to the judge who granted the order, or to the judge of the
court in which the action is pending, for an order discharging the attachment wholly
or in part on the security given . . . in an amount equal to the value of the property
attached as determined by the judge to secure the payment of any judgment that
the attaching creditor may recover in the action . . .'
1.2. But even before actual levy on property, seizure under attachment may be
prevented also upon counterbond. The defendant need not wait until his property is

seized before seeking the discharge of the attachment by a counterbond. This is


made possible by Section 5 of Rule 57.
'SECTION 5. Manner of attaching property. The officer executing the order shall
without delay attach, to await judgment and execution in the action, all the
properties of the party against whom the order is issued in the province, not exempt
from execution, or so much thereof as may be sufficient to satisfy the applicant's
demand, unless the former makes a deposit with the clerk or judge of the court from
which the order issued, or gives a counter-bond executed to the applicant, in an
amount sufficient to satisfy such demand besides costs, or in an amount equal to
the value of the property which is about to be attached, to secure payment to the
applicant of any judgment which he may recover in the action. . . .' (Emphasis
supplied).
2.0. Aside from the filing of a counterbond, a preliminary attachment may also be
lifted or discharged on the ground that it has been irregularly or improperly issued,
in accordance with Section 13 of Rule 57. Like the first, this second mode of lifting
ar attachment may be resorted to even before any property has beer levied on.
Indeed, it may be availed of after property has been released from a levy on
attachment, as is made clear by said Section 13, viz.: cdphil
'SECTION 13.
Discharge of attachment for improper or irregular issuance.
The party whose property has been attached may also, at any time either BEFORE
or AFTER the release of the attached property, or before any attachment shall have
been actually levied, upon reasonable notice to the attaching creditor, apply to the
judge who granted the order, or to the judge of the court in which the action is
pending, for an order to discharge the attachment on the ground that the same was
improperly or irregularly issued. If the motion be made on affidavits on the part of
the party whose property has been attached, but not otherwise, the attaching
creditor may oppose the same by counter-affidavits or other evidence in addition to
that on which the attachment was made. . . .' (Emphasis supplied).
This is so because "(a)s pointed out in Calderon v. I.A.C., 155 SCRA 531 (1987), 'The
attachment debtor cannot be deemed to have waived any defect in the issuance of
the attachment writ by simply availing himself of one way of discharging the
attachment writ, instead of the other. Moreover, the filing of a counterbond is a
speedier way of discharging the attachment writ maliciously sought out by the
attaching creditor instead of the other way, which, in most instances . . . would
require presentation of evidence in a fullblown trial on the merits, and cannot easily
be settled in a pending incident of the case.'" 27
It may not be amiss to here reiterate other related principles dealt with in Mindanao
Savings & Loans Asso. Inc. v. C.A., supra., 28 to wit:
(a)
When an attachment may not be dissolved by a showing of its irregular or
improper issuance:

". . . (W)hen the preliminary attachment is issued upon a ground which is at the
same time the applicant's cause of action e.g., 'an action for money or property
embezzled or fraudulently misapplied or converted to his own use by a public
officer, or an officer of a corporation, or an attorney, factor, broker, agent, or clerk,
in the course of his employment as such, or by any other person in a fiduciary
capacity, or for a willful violation of duty.' (Sec. 1 [b], Rule 57), or 'an action against
a party who has been guilty of fraud in contracting the debt or incurring the
obligation upon which the action is brought' (Sec. 1 [d], Rule 57), the defendant is
not allowed to file a motion to dissolve the attachment under Section 13 of Rule 57
by offering to show the falsity of the factual averments in the plaintiffs application
and affidavits on which the writ was based and consequently that the writ based
thereon had been improperly or irregularly issued (SEE Benitez v. I.A.C., 154 SCRA
41) the reason being that the hearing on such a motion for dissolution of the writ
would be tantamount to a trial of the merits of the action. In other words, the merits
of the action would be ventilated at a mere hearing of a motion, instead of at the
regular trial. Therefore, when the writ of attachment is of this nature, the only way it
can be dissolved is by a counterbond (G.B. Inc. v. Sanchez, 98 Phil. 886)."
(b)
Effect of the dissolution of a preliminary attachment on the plaintiff's
attachment bond:
". . . The dissolution of the preliminary attachment upon security given, or a
showing of its irregular or improper issuance, does not of course operate to
discharge the sureties on plaintiff's own attachment bond. The reason is simple.
That bond is 'executed to the adverse party, . . . conditioned that the . . . (applicant)
will pay all the costs which may be adjudged to the adverse party and all damages
which he may sustain by reason of the attachment, if the court shall finally adjudge
that the applicant was not entitled thereto' (SEC. 4, Rule 57). Hence, until that
determination is made, as to the applicant's entitlement to the attachment, his
bond must stand and cannot be withdrawn." LexLib
With respect to the other provisional remedies, i.e., preliminary injunction (Rule 58),
receivership (Rule 59), replevin or delivery of personal property (Rule 60), the rule is
the same: they may also issue ex parte. 29
It goes without saying that whatever be the acts done by the Court prior to the
acquisition of jurisdiction over the person of the defendant, as above indicated
issuance of summons, order of attachment and writ of attachment (and/or
appointment of guardian ad litem, or grant of authority to the plaintiff to prosecute
the suit as a pauper litigant, or amendment of the complaint by the plaintiff as a
matter of right without leave of court 30 and however valid and proper they
might otherwise be, these do not and cannot bind and affect the defendant until
and unless jurisdiction over his person is eventually obtained by the court, either by
service on him of summons or other coercive process or his voluntary submission to
the court's authority. Hence, when the sheriff or other proper officer commences

implementation of the writ of attachment, it is essential that he serve on the


defendant not only a copy of the applicant's affidavit and attachment bond, and of
the order of attachment, as explicitly required by Section 5 of Rule 57, but also the
summons addressed to said defendant as well as a copy of the complaint and order
for appointment of guardian ad litem, if any, as also explicitly directed by Section 3,
Rule 14 of the Rules of Court. Service of all such documents is indispensable not
only for the acquisition of jurisdiction over the person of the defendant, but also
upon considerations of fairness, to apprise the defendant of the complaint against
him, of the issuance of a writ of preliminary attachment and the grounds therefor
and thus accord him the opportunity to prevent attachment of his property by the
posting of a counterbond in an amount equal to the plaintiff's claim in the complaint
pursuant to Section 5 (or Section 12), Rule 57, or dissolving it by causing dismissal
of the complaint itself on any of the grounds set forth in Rule 16, or demonstrating
the insufficiency of the applicant's affidavit or bond in accordance with Section 13,
Rule 57.
It was on account of the failure to comply with this fundamental requirement of
service of summons and the other documents above indicated that writs of
attachment issued by the Trial Court ex parte were struck down by this Court's Third
Division in two (2) cases, namely: Sievert v. Court of Appeals, 31 and BAC
Manufacturing and Sales Corporation v. Court of Appeals, et al. 32 In contrast to the
case at bar where the summons and a copy of the complaint, as well as the order
and writ of attachment and the attachment bond were served on the defendant
in Sievert, levy on attachment was attempted notwithstanding that only the petition
for issuance of the writ of preliminary attachment was served on the defendant,
without any prior or accompanying summons and copy of the complaint; and in BAC
Manufacturing and Sales Corporation, neither the summons nor the order granting
the preliminary attachment or the writ of attachment itself was served on the
defendant "before or at the time the levy was made."
For the guidance of all concerned, the Court reiterates and reaffirms the proposition
that writs of attachment may properly issue ex parte provided that the Court is
satisfied that the relevant requisites therefor have been fulfilled by the applicant,
although it may, in its discretion, require prior hearing on the application with notice
to the defendant; but that levy on property pursuant to the writ thus issued may not
be validly effected unless preceded, or contemporaneously accompanied by service
on the defendant of summons, a copy of the complaint (and of the appointment of
guardian ad litem, if any), the application for attachment (if not incorporated in but
submitted separately from the complaint), the order of attachment, and the
plaintiff's attachment bond.
WHEREFORE, the petition is GRANTED; the challenged decision of the Court of
Appeals is hereby REVERSED, and the order and writ of attachment issued by Hon.
Milagros C. Nartatez, Presiding Judge of Branch 8, Regional Trial Court of Davao City
in Civil Case No. 19513-89 against Queensland Hotel or Motel or Queensland Tourist

Inn and Teodorico Adarna are hereby REINSTATED. Costs against private
respondents.
SO ORDERED.

[G.R. No. 107303. February 23, 1995.]


EMMANUEL C. OATE and ECON HOLDINGS CORPORATION, petitioners, vs. HON.
ZEUS C. ABROGAR, as Presiding Judge of Branch 150 of the Regional Trial Court of
Makati, and SUN LIFE ASSURANCE COMPANY OF CANADA, respondents.
[G.R. No. 107491. February 23, 1995.]
BRUNNER DEVELOPMENT CORPORATION, petitioner, vs. HON. ZEUS C. ABROGAR, as
Presiding Judge of Branch 150 of the Regional Trial Court of Makati, and SUN LIFE
ASSURANCE COMPANY OF CANADA, respondents.
SYLLABUS
1.
REMEDIAL LAW; PROVISIONAL REMEDIES; ATTACHMENT; WRIT ISSUED PRIOR
TO THE ACQUISITION OF JURISDICTION OVER THE PERSON OF THE DEFENDANT,
CONSIDERED VOID; CASE AT BAR. It should be stated that the Court does not in
the least doubt the validity of the writ of attachment issued in these cases. The fact
that a criminal complaint for estafa which Sun Life had filed against petitioner Oate
and Noel L. Dio, president of Brunner, was dismissed by the Office of the Provincial
Prosecutor is immaterial to the resolution of the motions for reconsideration. In the
first place, the dismissal, although later affirmed by the Department of Justice, is
pending reconsideration. In the second place, since the issue in the case below is
precisely whether petitioners were guilty of fraud in contracting their obligation,
resolution of the question must await the trial of the main case. However, we find
petitioners' contention respecting the validity of the attachment of their properties
to be well taken. We hold that the attachment of petitioners' properties prior to the
acquisition of jurisdiction by the respondent court is void and that the subsequent
service of summons on petitioners did not cure the invalidity of such attachment.
The records show that before the summons and the complaint were served on
petitioners Oate and Econ Holdings Corporation (Econ) on January 9, 1992, Deputy
Sheriff Arturo C. Flores had already served on January 3, 1992 notices of
garnishment on the PNB Head Office and on all its Metro Manila branches and on
A.B. Capital. In addition he made other levies before the service of summons on
petitioners. Private respondent invokes the ruling in Davao Light & Power Co. v.
Court of Appeals, (204 SCRA 343 [1991]) in support of its contention that the
subsequent acquisition of jurisdiction by the court cured the defect in the
proceedings for attachment. It cites the following portion of the decision in Davao
Light and Power, written by Justice, now Chief Justice, Narvasa: It goes without
saying that whatever be the acts done by the Court prior to the acquisition of
jurisdiction over the person of the defendant, as above indicated issuance of
summons, order of attachment and writ of attachment (and/or appointment of
guardian ad litem, or grant of authority to the plaintiff to prosecute the suit as a
pauper litigant, or amendment of the complaint by the plaintiff as a matter of right
without leave of court and however valid and proper they might otherwise be,

these do not and cannot bind and affect the defendant until and unless jurisdiction
over his person is eventually obtained by the court, either by service on him of
summons or other coercive process or his voluntary submission to the court's
authority. Hence, when the sheriff or other proper officer commences
implementation of the writ of attachment, it is essential that he serve on the
defendant not only a copy of the applicant's affidavit and attachment bond, and of
the order of attachment, as explicitly required by Section 5 of Rule 57, but also the
summons addressed to said defendant as well as a copy of the complaint and order
for appointment of guardian ad litem, if any, as also explicitly directed by Section 3,
Rule 14 of the Rules of Court. It is clear from the above excerpt, however, that while
the petition for a writ of preliminary attachment may be granted and the writ itself
issued before the defendant is summoned, the writ of attachment cannot be
implemented until jurisdiction over the person of the defendant is obtained. As this
Court explained, "levy on property pursuant to the writ thus issued may not be
validly effected unless preceded, or contemporaneously accompanied, by service on
the defendant of summons, a copy of the complaint (and of the appointment of
guardian ad litem, if any), the application for attachment (if not incorporated in but
submitted separately from the complaint), the order of attachment, and the
plaintiff's attachment bond."
2.
ID.; ID.; ID.; ID.; NOT CURED BY SUBSEQUENT SERVICE OF SUMMONS.
Further clarification was made in Cuartero v. Court of Appeals, (212 SCRA 260, 266
[1992]) in which it was held: It must be emphasized that the grant of the provisional
remedy of attachment practically involves three stages; first, the court issues the
order granting the application; second, the writ of attachment issues pursuant to
the order granting the writ; and third, the writ is implemented. For the initial two
stages, it is not necessary that jurisdiction over the person of the defendant should
first be obtained. However, once the implementation commences, it is required that
the court must have acquired jurisdiction over the defendant for without such
jurisdiction, the court has no power and authority to act in any manner against the
defendant. Any order issuing from the Court will not bind the defendant. Private
respondent argues that the case of Cuartero itself provides for an exception as
shown in the statement that "the court [in issuing the writ of preliminary
attachment] cannot bind and affect the defendant until jurisdiction is eventually
obtained" and that since petitioners were subsequently served with summons, no
question can be raised against the validity of the attachment of petitioners'
properties before such service. The statement in question has been taken out of
context. The full statement reads: It is clear from our pronouncements that a writ of
preliminary attachment may issue even before summons is served upon the
defendant. However, we have likewise ruled that the writ cannot bind and affect the
defendant until jurisdiction over his person is eventually obtained. Therefore, it is
required that when the proper officer commences implementation of the writ of
attachment, service of summons should be simultaneously made. Indeed, as this
Court through its First Division has ruled in H.B. Zachry Co., Inc. v. Court of Appeals

(232 SCRA 329 [1994]) on facts similar to those in these cases, the attachment of
properties before the service of summons on the defendant is invalid, even though
the court later acquires jurisdiction over the defendant. At the very least, then, the
writ of attachment must be served simultaneously with the service of summons
before the writ may be enforced. As the properties of the petitioners were attached
by the sheriff before he had served the summons on them, the levies made must be
considered void.
3.
ID.; ID.; ID.; ID.; CANNOT BE CURED ON THE GROUND THAT THE DEFENDANT
MIGHT DISPOSE THE PROPERTY. Nor can the attachment of petitioners' properties
before the service of summons on them was made be justified on the ground that
unless the writ was then enforced, petitioners would be alerted and might dispose
of their properties before summons could be served on them. The Rules of Court do
not require that issuance of the writ be kept a secret until it can be enforced.
Otherwise in no case may the service of summons on the defendant precede the
levy on attachment. To the contrary, Rule 57, sec. 13 allows the defendant to move
to discharge the attachment even before any attachment is actually levied upon,
thus negating any inference that before its enforcement, the issuance of the writ
must be kept secret. As this Court pointed out in Davao Light and Power, the lifting
of an attachment "may be resorted to even before any property has been levied
on." It is indeed true that proceedings for the issuance of a writ of attachment are
generally ex parte. In Mindanao Savings and Loans Ass'n v. Court of Appeals (172
SCRA 480, 484 [1989]) it was held that no hearing is required for the issuance of a
writ of attachment because this "would defeat the objective of the remedy
[because] the time which such hearing would take could be enough to enable the
defendant to abscond or dispose of his property before a writ of attachment issues."
It is not, however, notice to defendant that is sought to be avoided but the "time
which such hearing would take" because of the possibility that defendant may delay
the hearing to be able to dispose of his properties. On the contrary there may in fact
be a need for a hearing before the writ is issued as where the issue of fraudulent
disposal of property is raised. It is not true that there should be no hearing lest a
defendant learns of the application for attachment and he removes his properties
before the writ can be enforced. On the other hand, to authorize the attachment of
property even before jurisdiction over the person of the defendant is acquired
through the service of summons or his voluntary appearance could lead to abuse. It
is entirely possible that the defendant may not know of the filing of a case against
him and consequently may not be able to take steps to protect his interests. Nor
may sheriff's failure to abide by the law be excused on the pretext that after all the
court later acquired jurisdiction over petitioners. More important than the need for
insuring success in the enforcement of the writ is the need for affirming a principle
by insisting on that "most fundamental of all requisites the jurisdiction of the
court issuing attachment over the person of the defendant." It may be that the
same result would follow from requiring that a new writ be served all over again.

The symbolic significance of such an act, however, is that it would affirm our
commitment to the rule of law.
4.
ID.; ID.; ID.; ID.; EXAMINATION OF THE PROPERTY BY VIRTUE THEREOF;
CONSIDERED VOID. We likewise find petitioners' second contention to be
meritorious. The records show that, on January 21, 1992, respondent judge ordered
the examination of the books of accounts and ledgers of Brunner at the Urban Bank,
Legaspi Village branch, and on January 30, 1992 the records of account of petitioner
Oate at the BPI, even as he ordered the PNB to produce the records regarding
certain checks deposited in it. First, Sun Life defends these court orders on the
ground that the money paid by it to Brunner was subsequently withdrawn from the
Urban Bank after it had been deposited by Brunner and then transferred to
petitioner Oate's account in the BPI and to the unnamed account in the PNB. The
issue before the trial court, however, concerns the nature of the transaction
between petitioner Brunner and Sun Life. In its complaint, Sun Life alleges that
Oate, in his personal capacity and as president of Econ, offered to sell to Sun Life
P46,990,000.00 worth of treasury bills owned by Econ and Brunner at the
discounted price of P39,526,500.82; that on November 27, 1991, Sun Life paid the
price by means of a check payable to Brunner; that Brunner, through its president
Noel L. Dio, issued to it a receipt with undertaking to deliver the treasury bills to
Sun Life; and that on December 4, 1991, Brunner and Dio delivered instead a
promissory note, dated November 27, 1991, in which it was made to appear that
the transaction was a money placement instead of sale of treasury bills. Thus the
issue is whether the money paid to Brunner was the consideration for the sale of
treasury bills, as Sun Life claims, or whether it was money intended for placement,
as petitioners allege. Petitioners do not deny receipt of P39,526,500.82 from Sun
Life. Hence, whether the transaction is considered a sale or money placement does
not make the money the "subject matter of litigation" within the meaning of s. 2 of
Republic Act No. 1405 which prohibits the disclosure or inquiry into bank deposits
except "in cases where the money deposited or invested is the subject matter of
litigation." Nor will it matter whether the money was "swindled" as Sun Life
contends. Since, as already stated, the attachment of petitioners' properties was
invalid, the examination ordered in connection with such attachment must likewise
be considered invalid. Under Rule 57, sec. 10, such examination is only proper
where the property of the person examined has been validly attached.
DECISION
MENDOZA, J p:
These are motions separately filed by petitioners, seeking reconsideration of the
decision of the Second Division holding that although the levy on attachment of
petitioner's properties had been made before the trial court acquired jurisdiction
over them, the subsequent service of summons on them cured the invalidity of the
attachment. LLjur

The motions were referred to the Court en banc in view of the fact that in another
decision rendered by the Third Division on the same question, it was held that the
subsequent acquisition of jurisdiction over the person of a defendant does not
render valid the previous attachment of his property. 1 The Court en banc accepted
the referral and now issues this resolution.
Petitioners maintain that, in accordance with prior decisions of this Court, the
attachment of their properties was void because the trial court had not at that time
acquired jurisdiction over them and that the subsequent service of summons on
them did not cure the invalidity of the levy. They further contend that the
examination of the books and ledgers of the Bank of the Philippine Islands (BPI), the
Philippine National Bank (PNB) and the Urban Bank was a "fishing expedition" which
the trial court should not have authorized because petitioner Emmanuel C. Oate,
whose accounts were examined, was not a signatory to any of the documents
evidencing the transaction between Sun Life Assurance of Canada (Sun Life) and
Brunner Development Corporation (Brunner).cdasia
On the other hand private respondent Sun Life stresses the fact that trial court
eventually acquired jurisdiction over petitioners and contends that this cured the
invalidity of the attachment of petitioner's properties. With respect to the second
contention of petitioners, private respondent argues that the examination of
petitioner Oate's bank account was justified because it was he who signed checks
transferring huge amounts from Brunner's account in the Urban Bank to the PNB
and the BPI.
I.
At the outset, it should be stated that the Court does not in the least doubt the
validity of the writ of attachment issued in these cases. The fact that a criminal
complaint for estafa which Sun Life had filed against petitioner Oate and Noel L.
Dio, president of Brunner, was dismissed by the Office of the Provincial Prosecutor
is immaterial to the resolution of the motions for reconsideration. In the first place,
the dismissal, although later affirmed by the Department of Justice, is pending
reconsideration. In the second place, since the issue in the case below is precisely
whether petitioners were guilty of fraud in contracting their obligation, resolution of
the question must await the trial of the main case. cdasia
However, we find petitioner's contention respecting the validity of the attachment of
their properties to be well taken. We hold that the attachment of petitioner's
properties prior to the acquisition of jurisdiction by the respondent court is void and
that the subsequent service of summons on petitioners did not cure the invalidity of
such attachment. The records show that before the summons and the complaint
were served on petitioners Oate and Econ Holdings Corporation (Econ) on January
9, 1992, Deputy Sheriff Arturo C. Flores had already served on January 3, 1992
notices of garnishment on the PNB Head Office 2 and on all its Metro Manila

branches and on A.B. Capital. 3 In addition he made other levies before the service
of summons on petitioners, to wit:
On January 6, 1992, he served notices of garnishment on the Urban Bank Head
Office and all its Metro Manila branches, 4 and on the BPI. 5
On the same day, he levied on attachment Oate's condominium unit at the
Amorsolo Apartments Condominium Project, covered by Condominium Certificate of
Title No. S-1758. 6
On January 7, 1992, he served notice of garnishment on the Union Bank of the
Philippines. 7
On January 8, 1992, attached Oate's lot, consisting of 1,256 square meters, at
the Ayala-Alabang Subdivision, Alabang, Muntinlupa, covered by TCT No. 112673. 8
First. The Deputy Sheriff claims that he had tried to serve the summons with a copy
of the complaint on petitioners on January 3, 1992 but that there was no one in the
offices of petitioners on whom he could make a service. This is denied by petitioners
who claim that their office was always open and that Adeliza M. Jaranilla, Econ's
Chief Accountant who eventually received summons on behalf of Oate and Econ,
was present that day. Whatever the truth is, the fact is that no other attempt was
made by the sheriff to serve the summons except on January 9, 1992, in the case of
Oate and Econ, and on January 16, 1992, in the case of Dio. Meantime, he made
several levies, which indicates a predisposition to serve the writ of attachment in
anticipation of the eventual acquisition by the court of jurisdiction over petitioners.
cdasia
Second. Private respondent invokes the ruling in Davao Light & Power Co. v. Court of
Appeals 9 in support of its contention that the subsequent acquisition of jurisdiction
by the court cured the defect in the proceedings for attachment. It cites the
following portion of the decision in Davao Light and Power, written by Justice, now
Chief Justice Narvasa:
It goes without saying that whatever be the acts done by the Court prior to the
acquisition of jurisdiction over the person of the defendant, as above indicated
issuance of summons, order of attachment and writ of attachment (and/or
appointment of guardian ad litem, or grant of authority to the plaintiff to prosecute
the suit as a pauper litigant, or amendment of the complaint by the plaintiff as a
matter of right without leave of court and however valid and proper they might
otherwise be, these do not and cannot bind and affect the defendant until and
unless jurisdiction over his person is eventually obtained by the court, either by
service on him of summons or other coercive process or his voluntary submission to
the court's authority. Hence, when the sheriff or other proper officer commences
implementation of the writ of attachment, it is essential that he serve on the
defendant not only a copy of the applicant's affidavit and attachment bond, and of

the order of attachment, as explicitly required by Section 5 of Rule 57, but also the
summons addressed to said defendant as well as a copy of the complaint and order
for appointment of Guardian ad litem, if any, as also explicitly directed by Section 3,
Rule 14 of the Rules of Court. 10
It is clear from the above excerpt, however, that while the petition for a writ of
preliminary attachment may be granted and the writ itself issued before the
defendant is summoned, the writ of attachment cannot be implemented until
jurisdiction over the person of the defendant is obtained. As this Court explained,
"levy on property pursuant to the writ thus issued may not be validly effected
unless preceded, or contemporaneously accompanied, by service on the defendant
of summons, a copy of the complaint (and of the appointment of guardian ad litem,
if any), the application for attachment (if not incorporated in but submitted
separately from the complaint), the order of attachment, and the plaintiff's
attachment bond." 11
Further clarification on this point was made in Cuartero v. Court of Appeals, 12 in
which it was held:
It must be emphasized that the grant of the provisional remedy of attachment
practically involves three stages; first, the court issues the order granting the
application; second, the writ of attachment issues pursuant to the order granting
the writ; and third, the writ is implemented. For the initial two stages, it is not
necessary that jurisdiction over the person of the defendant should first be
obtained. However, once the implementation commences, it is required that the
court must have acquired jurisdiction over the defendant for without such
jurisdiction, the court has no power and authority to act in any manner against the
defendant. Any order issuing from the Court will not bind the defendant. cdasia
Private respondent argues that the case of Cuartero itself provides for an exception
as shown in the statement that "the court [in issuing the writ of preliminary
attachment] cannot bind and affect the defendant until jurisdiction is eventually
obtained" and that since petitioners were subsequently served with summons, no
question can be raised against the validity of the attachment of petitioner's
properties before such service.
The statement in question has been taken out of context. The full statement reads:
It is clear from our pronouncements that a writ of preliminary attachment may issue
even before summons is served upon the defendant. However, we have likewise
ruled that the writ cannot bind and affect the defendant until jurisdiction over his
person is eventually obtained. Therefore it is required that when the proper officer
commences implementation of the writ of attachment, service of summons should
be simultaneously made. 13

Indeed, as this Court through its First Division has ruled on facts similar to those in
these cases, the attachment of properties before the service of summons on the
defendant is invalid, even though the court later acquires jurisdiction over the
defendant. 14 At the very least, then, the writ of attachment must be served
simultaneously with the service of summons before the writ may be enforced. As
the properties of the petitioners were attached by the sheriff before he had served
the summons on them, the levies made must be considered void. cdasia
Third. Nor can the attachment of petitioners' properties before the service of
summons on them was made be justified on the ground that unless the writ was
then enforced, petitioners would be alerted and might dispose of their properties
before summons could be served on them.
The Rules of Court do not require that issuance of the writ be kept a secret until it
can be enforced. Otherwise in no case may the service of summons on the
defendant precede the levy on attachment. To the contrary, Rule 57, s. 13 allows
the defendant to move to discharge the attachment even before any attachment is
actually levied upon, thus negating any inference that before its enforcement, the
issuance of the writ must be kept secret. Rule 57, s. 13 provides:
SEC. 13.
Discharge of attachment for improper or irregular issuance. The
party whose property has been attached may also, at any time either before or after
the release of the attached property, or before any attachment shall have been
actually levied, upon reasonable notice to the attaching creditor, apply to the judge
who granted the order, or to the judge of the court in which the action is pending,
for an order to discharge the attachment on the ground that the same was
improperly or irregularly issued . . . . (Emphasis added).
As this Court pointed out in Davao Light and Power, 15 the lifting of an attachment
"may be resorted to even before any property has been levied on."
It is indeed true that proceedings for the issuance of a writ of attachment are
generally ex parte. In Mindanao Savings and Loans Ass'n v. Court of Appeals 16 it
was held that no hearing is required for the issuance of a writ of attachment
because this "would defeat the objective of the remedy [because] the time which
such hearing would take could be enough to enable the defendant to abscond or
dispose of his property before a writ of attachment issues." It is not, however, notice
to defendant that is sought to be avoided but the "time which such hearing would
take" because of the possibility that defendant may delay the hearing to be able to
dispose of his properties. On the contrary there may in fact be a need for a hearing
before the writ is issued as where the issue of fraudulent disposal of property is
raised. 17 It is not true that there should be no hearing lest a defendant learns of
the application for attachment and he removes his properties before the writ can be
enforced. cdasia

On the other hand, to authorize the attachment of property even before jurisdiction
over the person of the defendant is acquired through the service of summons or his
voluntary appearance could lead to abuse. It is entirely possible that the defendant
may not know of the filing of a case against him and consequently may not be able
to take steps to protect his interests.
Nor may sheriff's failure to abide by the law be excused on the pretext that after all
the court later acquired jurisdiction over petitioners. More important than the need
for insuring success in the enforcement of the writ is the need for affirming a
principle by insisting on that "most fundamental of all requisites the jurisdiction
of the court issuing attachment over the person of the defendant." 18 It may be that
the same result would follow from requiring that a new writ be served all over again.
The symbolic significance of such an act, however, is that it would affirm our
commitment to the rule of law. 19
II.
We likewise find petitioner's second contention to be meritorious. The records show
that, on January 21, 1992, respondent judge ordered the examination of the books
of accounts and ledgers of Brunner at the Urban Bank, Legazpi Village branch, and
on January 30, 1992 the records of account of petitioner Oate at the BPI, even as
he ordered the PNB to produce the records regarding certain checks deposited in it.
cdasia
First. Sun Life depends these court orders on the ground that the money paid by it
to Brunner was subsequently withdrawn from the Urban Bank after it had been
deposited by Brunner and then transferred to petitioner Oate's account in the BPI
and to the unnamed account in the PNB.
The issue before the trial court, however, concerns the nature of the transaction
between petitioner Brunner and Sun Life. In its complaint, Sun Life alleges that
Oate, in his personal capacity and as president of Econ, offered to sell to Sun Life
P46,990,000.00 worth of treasury bills owned by Econ and Brunner at the
discounted price of P39,526,500.82; that on November 27, 1991, Sun Life paid the
price by means of a check payable to Brunner; that Brunner, through its president
Noel L. Dio, issued to it a receipt with undertaking to deliver the treasury bills to
Sun Life; and that on December 4, 1991, Brunner and Dio delivered instead a
promissory note, dated November 27, 1991, in which it was made to appear that
the transaction was a money placement instead of sale of treasury bills.
Thus the issue is whether the money paid to Brunner was the consideration for the
sale of treasury bills, as Sun Life claims, or whether it was money intended for
placement, as petitioners allege. Petitioners do not deny receipt of P39,526,500.82
from Sun Life. Hence, whether the transaction is considered a sale or money
placement does not make the money the "subject matter of litigation" within the
meaning of s. 2 of Republic Act No. 1405 which prohibits the disclosure or inquiry

into bank deposits except "in cases where the money deposited or invested is the
subject matter of litigation." Nor will it matter whether the money was "swindled" as
Sun Life contends.
Second. The examination of bank books and records cannot be justified under Rule
57, s. 10. This provision states:cdasia
SEC. 10.
Examination of party whose property is attached and persons indebted
to him or controlling his property; delivery of property to officer. Any person
owing debts to the party whose property is attached or having in his possession or
under his control any credit or other personal property belonging to such party, may
be required to attend before the court in which the action is pending, or before a
commissioner appointed by the court, and be examined on oath respecting the
same. The party whose property is attached may also be required to attend for the
purpose of giving information respecting his property, and may be examined on
oath. The court may, after such examination, order personal property capable of
manual delivery belonging to him, in the possession of the person so required to
attend before the court, to be delivered to the clerk of the court, sheriff, or other
proper officer on such terms as may be just, having reference to any lien thereon or
claims against the same, to await the judgment in the action.
Since, as already stated, the attachment of petitioner's properties was invalid, the
examination ordered in connection with such attachment must likewise be
considered invalid. Under Rule 57, s. 10, as quoted above such examination is only
proper where the property of the person examined has been validly attached.
WHEREFORE, the decision dated February 21, 1994 is RECONSIDERED and SET
ASIDE and another one is rendered GRANTING the petitions for certiorari and
SETTING ASIDE the orders dated February 26, 1992 and September 9, 1992, insofar
as they authorize the attachment of petitioner's properties and the examination of
bank books and records pertaining to their accounts, and ORDERING respondent
Judge Zeus C. Abrogar
(1)
forthwith to issue an alias writ of attachment upon the same bond furnished
by respondent Sun Life Assurance Company of Canada;
(2)
direct the sheriff to lift the levy under the original writ of attachment and
simultaneously levy on the same properties pursuant to the alias writ so issued; and
cdasia
(3)
take such steps as may be necessary to insure that there will be no
intervening period between the lifting of the original attachment and the
subsequent levy under the alias writ.
Petitioners may file the necessary counterbond to prevent subsequent levy or to
dissolve the attachment after such levy.

SO ORDERED.

[G.R. No. 158997. October 6, 2008.]


FORT BONIFACIO DEVELOPMENT CORPORATION, petitioner, vs. YLLAS LENDING
CORPORATION and JOSE S. LAURAYA, in his official capacity as President,
respondents.
DECISION
CARPIO, J p:
The Case
This is a petition for review on certiorari 1 of the Orders issued on 7 March 2003 2
and 3 July 2003 3 by Branch 59 of the Regional Trial Court of Makati City (trial court)
in Civil Case No. 01-1452. The trial court's orders dismissed Fort Bonifacio
Development Corporation's (FBDC) third party claim and denied FBDC's Motion to
Intervene and Admit Complaint in Intervention. ADcHES
The Facts
On 24 April 1998, FBDC executed a lease contract in favor of Tirreno, Inc. (Tirreno)
over a unit at the Entertainment Center Phase 1 of the Bonifacio Global City in
Taguig, Metro Manila. The parties had the lease contract notarized on the day of its
execution. Tirreno used the leased premises for Savoia Ristorante and La Strega Bar.
HCTAEc
Two provisions in the lease contract are pertinent to the present case: Section 20,
which is about the consequences in case of default of the lessee, and Section 22,
which is about the lien on the properties of the lease. The pertinent portion of
Section 20 reads:
Section 20. Default of the Lessee
20.1 The LESSEE shall be deemed to be in default within the meaning of this
Contract in case: cTECIA
(i)
The LESSEE fails to fully pay on time any rental, utility and service charge or
other financial obligation of the LESSEE under this Contract;

xxx

xxx

xxx

20.2 Without prejudice to any of the rights of the LESSOR under this Contract, in
case of default of the LESSEE, the lessor shall have the right to: CSaITD
(i)
Terminate this Contract immediately upon written notice to the LESSEE,
without need of any judicial action or declaration;
xxx

xxx

xxx

Section 22, on the other hand, reads:


Section 22. Lien on the Properties of the Lessee.
Upon the termination of this Contract or the expiration of the Lease Period without
the rentals, charges and/or damages, if any, being fully paid or settled, the LESSOR
shall have the right to retain possession of the properties of the LESSEE used or
situated in the Leased Premises and the LESSEE hereby authorizes the LESSOR to
offset the prevailing value thereof as appraised by the LESSOR against any unpaid
rentals, charges and/or damages. If the LESSOR does not want to use said
properties, it may instead sell the same to third parties and apply the proceeds
thereof against any unpaid rentals, charges and/or damages. SHTaID
Tirreno began to default in its lease payments in 1999. By July 2000, Tirreno was
already in arrears by P5,027,337.91. FBDC and Tirreno entered into a settlement
agreement on 8 August 2000. Despite the execution of the settlement agreement,
FBDC found need to send Tirreno a written notice of termination dated 19
September 2000 due to Tirreno's alleged failure to settle its outstanding obligations.
On 29 September 2000, FBDC entered and occupied the leased premises. FBDC also
appropriated the equipment and properties left by Tirreno pursuant to Section 22 of
their Contract of Lease as partial payment for Tirreno's outstanding obligations.
Tirreno filed an action for forcible entry against FBDC before the Municipal Trial
Court of Taguig. Tirreno also filed a complaint for specific performance with a prayer
for the issuance of a temporary restraining order and/or a writ of preliminary
injunction against FBDC before the Regional Trial Court (RTC) of Pasig City. The RTC
of Pasig City dismissed Tirreno's complaint for forum-shopping. aIcDCA
On 4 March 2002, Yllas Lending Corporation and Jose S. Lauraya, in his official
capacity as President, (respondents) caused the sheriff of Branch 59 of the trial
court to serve an alias writ of seizure against FBDC. On the same day, FBDC served
on the sheriff an affidavit of title and third party claim. FBDC found out that on 27
September 2001, respondents filed a complaint for Foreclosure of Chattel Mortgage
with Replevin, docketed as Civil Case No. 01-1452, against Tirreno, Eloisa Poblete
Todaro (Eloisa), and Antonio D. Todaro (Antonio), in their personal and individual
capacities, and in Eloisa's official capacity as President. In their complaint,
respondents alleged that they lent a total of P1.5 million to Tirreno, Eloisa, and

Antonio. On 9 November 2000, Tirreno, Eloisa and Antonio executed a Deed of


Chattel Mortgage in favor of respondents as security for the loan. The following
properties are covered by the Chattel Mortgage:
a.
Furniture, Fixtures and Equipment of Savoia Ristorante and La Strega Bar, a
restaurant owned and managed by [Tirreno], inclusive of the leasehold right of
[Tirreno] over its rented building where [the] same is presently located. EcDSTI
b.
Goodwill over the aforesaid restaurant, including its business name, business
sign, logo, and any and all interest therein.
c.
Eighteen (18) items of paintings made by Florentine Master, Gino Tili, which
are fixtures in the above-named restaurant.
The details and descriptions of the above items are specified in Annex "A" which is
hereto attached and forms as an integral part of this Chattel Mortgage instrument. 4
cHAaEC
In the Deed of Chattel Mortgage, Tirreno, Eloisa, and Antonio made the following
warranties to respondents:
1.

WARRANTIES: The MORTGAGOR hereby declares and warrants that:

a.
The MORTGAGOR is the absolute owner of the above named properties
subject of this mortgage, free from all liens and encumbrances. IcTCHD
b.
There exist no transaction or documents affecting the same previously
presented for, and/or pending transaction. 5
Despite FBDC's service upon him of an affidavit of title and third party claim, the
sheriff proceeded with the seizure of certain items from FBDC's premises. The
sheriff's partial return indicated the seizure of the following items from FBDC:
DIESaC
A.

FIXTURES

(2) Smaller Murano Chandeliers


(1) Main Murano Chandelier
B.

EQUIPMENT

(13) Uni-Air Split Type 2HP Air Cond.


(2) Uni-Air Split Type 1HP Air Cond.
(3) Uni-Air Window Type 2HP Air Cond.
(56) Chairs

(1) Table
(2) boxes Kitchen equipments [sic] 6
The sheriff delivered the seized properties to respondents. FBDC questioned the
propriety of the seizure and delivery of the properties to respondents without an
indemnity bond before the trial court. FBDC argued that when respondents and
Tirreno entered into the chattel mortgage agreement on 9 November 2000, Tirreno
no longer owned the mortgaged properties as FBDC already enforced its lien on 29
September 2000. TSHcIa
In ruling on FBDC's motion for leave to intervene and to admit complaint in
intervention, the trial court stated the facts as follows:
Before this Court are two pending incidents, to wit: 1) [FBDC's] Third-Party Claim
over the properties of [Tirreno] which were seized and delivered by the sheriff of
this Court to [respondents]; and 2) FBDC's Motion to Intervene and to Admit
Complaint in Intervention.
Third party claimant, FBDC, anchors its claim over the subject properties on
Sections 20.2(i) and 22 of the Contract of Lease executed by [FBDC] with Tirreno.
Pursuant to said Contract of Lease, FBDC took possession of the leased premises
and proceeded to sell to third parties the properties found therein and appropriated
the proceeds thereof to pay the unpaid lease rentals of [Tirreno]. AICTcE
FBDC, likewise filed a Motion to Admit its Complaint-in-Intervention.
In Opposition to the third-party claim and the motion to intervene, [respondents]
posit that the basis of [FBDC's] third party claim being anchored on the aforesaid
Contract [of] Lease is baseless. [Respondents] contend that the stipulation of the
contract of lease partakes of a pledge which is void under Article 2088 of the Civil
Code for being pactum commissorium. AEScHa
xxx

xxx

xxx

By reason of the failure of [Tirreno] to pay its lease rental and fees due in the
amount of P5,027,337.91, after having notified [Tirreno] of the termination of the
lease, . . . FBDC took possession of [Tirreno.'s] properties found in the premises and
sold those which were not of use to it. Meanwhile, [respondents], as mortgagee of
said properties, filed an action for foreclosure of the chattel mortgage with replevin
and caused the seizure of the same properties which [FBDC] took and appropriated
in payment of [Tirreno's] unpaid lease rentals. 7 ITcCaS
The Ruling of the Trial Court
In its order dated 7 March 2003, the trial court stated that the present case raises
the questions of who has a better right over the properties of Tirreno and whether

FBDC has a right to intervene in respondents' complaint for foreclosure of chattel


mortgage. caEIDA
In deciding against FBDC, the trial court declared that Section 22 of the lease
contract between FBDC and Tirreno is void under Article 2088 of the Civil Code. 8
The trial court stated that Section 22 of the lease contract pledges the properties
found in the leased premises as security for the payment of the unpaid rentals.
Moreover, Section 22 provides for the automatic appropriation of the properties
owned by Tirreno in the event of its default in the payment of monthly rentals to
FBDC. Since Section 22 is void, it cannot vest title of ownership over the seized
properties. Therefore, FBDC cannot assert that its right is superior to respondents,
who are the mortgagees of the disputed properties. ACTEHI
The trial court quoted from Bayer Phils. v. Agana 9 to justify its ruling that FBDC
should have filed a separate complaint against respondents instead of filing a
motion to intervene. The trial court quoted from Bayer as follows:
In other words, construing Section 17 of Rule 39 of the Revised Rules of Court (now
Section 16 of the 1997 Rules on Civil Procedure), the rights of third-party claimants
over certain properties levied upon by the sheriff to satisfy the judgment may not
be taken up in the case where such claims are presented but in a separate and
independent action instituted by the claimants. 10 cSEaDA
The dispositive portion of the trial court's decision reads:
WHEREFORE, premises considered, [FBDC's] Third Party Claim is hereby DISMISSED.
Likewise, the Motion to Intervene and Admit Complaint in Intervention is DENIED. 11
FBDC filed a motion for reconsideration on 9 May 2003. The trial court denied
FBDC's motion for reconsideration in an order dated 3 July 2003. FBDC filed the
present petition before this Court to review pure questions of law. CIcEHS
The Issues
FBDC alleges that the trial court erred in the following:
1.
Dismissing FBDC's third party claim upon the trial court's erroneous
interpretation that FBDC has no right of ownership over the subject properties
because Section 22 of the contract of lease is void for being a pledge and a pactum
commissorium; IaTSED
2.
Denying FBDC intervention on the ground that its proper remedy as third
party claimant over the subject properties is to file a separate action; and
3.
Depriving FBDC of its properties without due process of law when the trial
court erroneously dismissed FBDC's third party claim, denied FBDC's intervention,

and did not require the posting of an indemnity bond for FBDC's protection. 12
TCASIH
The Ruling of the Court
The petition has merit.
Taking of Lessee's Properties without Judicial Intervention
We reproduce Section 22 of the Lease Contract below for easy reference:

TSHIDa

Section 22. Lien on the Properties of the Lessee.


Upon the termination of this Contract or the expiration of the Lease Period without
the rentals, charges and/or damages, if any, being fully paid or settled, the LESSOR
shall have the right to retain possession of the properties of the LESSEE used or
situated in the Leased Premises and the LESSEE hereby authorizes the LESSOR to
offset the prevailing value thereof as appraised by the LESSOR against any unpaid
rentals, charges and/or damages. If the LESSOR does not want to use said
properties, it may instead sell the same to third parties and apply the proceeds
thereof against any unpaid rentals, charges and/or damages. SECAHa
Respondents, as well as the trial court, contend that Section 22 constitutes a
pactum commissorium, a void stipulation in a pledge contract. FBDC, on the other
hand, states that Section 22 is merely a dacion en pago.
Articles 2085 and 2093 of the Civil Code enumerate the requisites essential to a
contract of pledge: (1) the pledge is constituted to secure the fulfillment of a
principal obligation; (2) the pledgor is the absolute owner of the thing pledged; (3)
the persons constituting the pledge have the free disposal of their property or have
legal authorization for the purpose; and (4) the thing pledged is placed in the
possession of the creditor, or of a third person by common agreement. Article 2088
of the Civil Code prohibits the creditor from appropriating or disposing the things
pledged, and any contrary stipulation is void. IcSEAH
On the other hand, Article 1245 of the Civil Code defines dacion en pago, or dation
in payment, as the alienation of property to the creditor in satisfaction of a debt in
money. Dacion en pago is governed by the law on sales. Philippine National Bank v.
Pineda 13 held that dation in payment requires delivery and transmission of
ownership of a thing owned by the debtor to the creditor as an accepted equivalent
of the performance of the obligation. There is no dation in payment when there is no
transfer of ownership in the creditor's favor, as when the possession of the thing is
merely given to the creditor by way of security. IEAacS
Section 22, as worded, gives FBDC a means to collect payment from Tirreno in case
of termination of the lease contract or the expiration of the lease period and there
are unpaid rentals, charges, or damages. The existence of a contract of pledge,

however, does not arise just because FBDC has means of collecting past due rent
from Tirreno other than direct payment. The trial court concluded that Section 22
constitutes a pledge because of the presence of the first three requisites of a
pledge: Tirreno's properties in the leased premises secure Tirreno's lease payments;
Tirreno is the absolute owner of the said properties; and the persons representing
Tirreno have legal authority to constitute the pledge. However, the fourth requisite,
that the thing pledged is placed in the possession of the creditor, is absent. There is
non-compliance with the fourth requisite even if Tirreno's personal properties are
found in FBDC's real property. Tirreno's personal properties are in FBDC's real
property because of the Contract of Lease, which gives Tirreno possession of the
personal properties. Since Section 22 is not a contract of pledge, there is no pactum
commissorium. TEDAHI
FBDC admits that it took Tirreno's properties from the leased premises without
judicial intervention after terminating the Contract of Lease in accordance with
Section 20.2. FBDC further justifies its action by stating that Section 22 is a
forfeiture clause in the Contract of Lease and that Section 22 gives FBDC a remedy
against Tirreno's failure to comply with its obligations. FBDC claims that Section 22
authorizes FBDC to take whatever properties that Tirreno left to pay off Tirreno's
obligations. HIaTCc
We agree with FBDC.
A lease contract may be terminated without judicial intervention. Consing v.
Jamandre upheld the validity of a contractually-stipulated termination clause:
This stipulation is in the nature of a resolutory condition, for upon the exercise by
the [lessor] of his right to take possession of the leased property, the contract is
deemed terminated. This kind of contractual stipulation is not illegal, there being
nothing in the law proscribing such kind of agreement. aDcEIH
xxx

xxx

xxx

Judicial permission to cancel the agreement was not, therefore necessary because
of the express stipulation in the contract of [lease] that the [lessor], in case of
failure of the [lessee] to comply with the terms and conditions thereof, can takeover the possession of the leased premises, thereby cancelling the contract of sublease. Resort to judicial action is necessary only in the absence of a special
provision granting the power of cancellation. 14 CAcDTI
A lease contract may contain a forfeiture clause. Country Bankers Insurance Corp. v.
Court of Appeals upheld the validity of a forfeiture clause as follows:
A provision which calls for the forfeiture of the remaining deposit still in the
possession of the lessor, without prejudice to any other obligation still owing, in the
event of the termination or cancellation of the agreement by reason of the lessee's

violation of any of the terms and conditions of the agreement is a penal clause that
may be validly entered into. A penal clause is an accessory obligation which the
parties attach to a principal obligation for the purpose of insuring the performance
thereof by imposing on the debtor a special prestation (generally consisting in the
payment of a sum of money) in case the obligation is not fulfilled or is irregularly or
inadequately fulfilled. 15 ADcHES
In Country Bankers, we allowed the forfeiture of the lessee's advance deposit of
lease payment. Such a deposit may also be construed as a guarantee of payment,
and thus answerable for any unpaid rent or charges still outstanding at any
termination of the lease.
In the same manner, we allow FBDC's forfeiture of Tirreno's properties in the leased
premises. By agreement between FBDC and Tirreno, the properties are answerable
for any unpaid rent or charges at any termination of the lease. Such agreement is
not contrary to law, morals, good customs, or public policy. Forfeiture of the
properties is the only security that FBDC may apply in case of Tirreno's default in its
obligations. HDCAaS
Intervention versus Separate Action
Respondents posit that the right to intervene, although permissible, is not an
absolute right. Respondents agree with the trial court's ruling that FBDC's proper
remedy is not intervention but the filing of a separate action. Moreover,
respondents allege that FBDC was accorded by the trial court of the opportunity to
defend its claim of ownership in court through pleadings and hearings set for the
purpose. FBDC, on the other hand, insists that a third party claimant may vindicate
his rights over properties taken in an action for replevin by intervening in the
replevin action itself. acHETI
We agree with FBDC.
Both the trial court and respondents relied on our ruling in Bayer Phils. v. Agana 16
to justify their opposition to FBDC's intervention and to insist on FBDC's filing of a
separate action. In Bayer, we declared that the rights of third party claimants over
certain properties levied upon by the sheriff to satisfy the judgment may not be
taken up in the case where such claims are presented, but in a separate and
independent action instituted by the claimants. However, both respondents and the
trial court overlooked the circumstances behind the ruling in Bayer, which makes
the Bayer ruling inapplicable to the present case. The third party in Bayer filed his
claim during execution; in the present case, FBDC filed for intervention during the
trial. IESTcD
The timing of the filing of the third party claim is important because the timing
determines the remedies that a third party is allowed to file. A third party claimant
under Section 16 of Rule 39 (Execution, Satisfaction and Effect of Judgments) 17 of

the 1997 Rules of Civil Procedure may vindicate his claim to the property in a
separate action, because intervention is no longer allowed as judgment has already
been rendered. A third party claimant under Section 14 of Rule 57 (Preliminary
Attachment) 18 of the 1997 Rules of Civil Procedure, on the other hand, may
vindicate his claim to the property by intervention because he has a legal interest in
the matter in litigation. 19 DAcSIC
We allow FBDC's intervention in the present case because FBDC satisfied the
requirements of Section 1, Rule 19 (Intervention) of the 1997 Rules of Civil
Procedure, which reads as follows:
Section 1.
Who may intervene. A person who has a legal interest in the matter
in litigation, or in the success of either of the parties, or an interest against both, or
is so situated as to be adversely affected by a distribution or other disposition of
property in the custody of the court or of an officer thereof may, with leave of court,
be allowed to intervene in the action. The court shall consider whether or not the
intervention will unduly delay or prejudice the adjudication of the rights of the
original parties, and whether or not the intervenor's rights may be fully protected in
a separate proceeding. SaTAED
Although intervention is not mandatory, nothing in the Rules proscribes
intervention. The trial court's objection against FBDC's intervention has been set
aside by our ruling that Section 22 of the lease contract is not pactum
commissorium.
Indeed, contrary to respondents' contentions, we ruled in BA Finance Corporation v.
Court of Appeals that where the mortgagee's right to the possession of the specific
property is evident, the action need only be maintained against the possessor of the
property. However, where the mortgagee's right to possession is put to great doubt,
as when a contending party might contest the legal bases for mortgagee's cause of
action or an adverse and independent claim of ownership or right of possession is
raised by the contending party, it could become essential to have other persons
involved and accordingly impleaded for a complete determination and resolution of
the controversy. Thus: IHEAcC
A chattel mortgagee, unlike a pledgee, need not be in, nor entitled to, the
possession of the property, unless and until the mortgagor defaults and the
mortgagee thereupon seeks to foreclose thereon. Since the mortgagee's right of
possession is conditioned upon the actual default which itself may be controverted,
the inclusion of other parties, like the debtor or the mortgagor himself, may be
required in order to allow a full and conclusive determination of the case. When the
mortgagee seeks a replevin in order to effect the eventual foreclosure of the
mortgage, it is not only the existence of, but also the mortgagor's default on, the
chattel mortgage that, among other things, can properly uphold the right to replevy
the property. The burden to establish a valid justification for that action lies with the

plaintiff [-mortgagee]. An adverse possessor, who is not the mortgagor, cannot just
be deprived of his possession, let alone be bound by the terms of the chattel
mortgage contract, simply because the mortgagee brings up an action for replevin.
20 (Emphasis added) SITCcE
FBDC exercised its lien to Tirreno's properties even before respondents and Tirreno
executed their Deed of Chattel Mortgage. FBDC is adversely affected by the
disposition of the properties seized by the sheriff. Moreover, FBDC's intervention in
the present case will result in a complete adjudication of the issues brought about
by Tirreno's creation of multiple liens on the same properties and subsequent
default in its obligations. EcHTDI
Sheriff's Indemnity Bond
FBDC laments the failure of the trial court to require respondents to file an
indemnity bond for FBDC's protection. The trial court, on the other hand, did not
mention the indemnity bond in its Orders dated 7 March 2003 and 3 July 2003.
Pursuant to Section 14 of Rule 57, the sheriff is not obligated to turn over to
respondents the properties subject of this case in view of respondents' failure to file
a bond. The bond in Section 14 of Rule 57 (proceedings where property is claimed
by third person) is different from the bond in Section 3 of the same rule (affidavit
and bond). Under Section 14 of Rule 57, the purpose of the bond is to indemnify the
sheriff against any claim by the intervenor to the property seized or for damages
arising from such seizure, which the sheriff was making and for which the sheriff
was directly responsible to the third party. Section 3, Rule 57, on the other hand,
refers to the attachment bond to assure the return of defendant's personal property
or the payment of damages to the defendant if the plaintiff's action to recover
possession of the same property fails, in order to protect the plaintiff's right of
possession of said property, or prevent the defendant from destroying the same
during the pendency of the suit. aCcSDT
Because of the absence of the indemnity bond in the present case, FBDC may also
hold the sheriff for damages for the taking or keeping of the properties seized from
FBDC.
WHEREFORE, we GRANT the petition. We SET ASIDE the Orders dated 7 March 2003
and 3 July 2003 of Branch 59 of the Regional Trial Court of Makati City in Civil Case
No. 01-1452 dismissing Fort Bonifacio Development Corporation's Third Party Claim
and denying Fort Bonifacio Development Corporation's Motion to Intervene and
Admit Complaint in Intervention. We REINSTATE Fort Bonifacio Development
Corporation's Third Party Claim and GRANT its Motion to Intervene and Admit
Complaint in Intervention. Fort Bonifacio Development Corporation may hold the
Sheriff liable for the seizure and delivery of the properties subject of this case
because of the lack of an indemnity bond. CTDHSE

SO ORDERED.
Azcuna, Reyes * and Leonardo-de Castro, JJ., concur.
Puno, C.J., took no part.
Footnotes
1.

Under Rule 45 of the 1997 Rules of Civil Procedure.

TDCAIS

2.

Rollo, pp. 49-52. Penned by Judge Winlove M. Dumayas.

3.

Id. at 53.

4.

Id. at 100-101.

5.

Id. at 101.

6.

Id. at 121.

7.

Id. at 49-50.

8.
Article 2088 provides that "[t]he creditor cannot appropriate the things given
by way of pledge or mortgage, or dispose of them. Any stipulation to the contrary is
null and void". EaHcDS
9.

159 Phil. 955 (1975).

10.

Rollo, p. 52.

11.

Id.

12.

Id. at 19.

13.

274 Phil. 274 (1991).

14.

159-A Phil. 291, 298 (1975).

15.

G.R. No. 85161, 9 September 1991, 201 SCRA 458, 464-465.

16.

Supra note 9.

ETCcSa

17.
Proceedings where property claimed by third person. If the property levied
on is claimed by any person other than the judgment obligor or his agent, and such
person makes an affidavit of his title thereto or right to the possession thereof,
stating the grounds of such right or title, and serves the same upon the officer
making the levy and a copy thereof upon the judgment obligee, the officer shall not
be bound to keep the property, unless such judgment obligee, on demand of the
officer, files a bond approved by the court to indemnify the third-party claimant in a
sum not less than the value of the property levied on. In case of disagreement as to

such value, the same shall be determined by the court issuing the writ of execution.
No claim for damages for the taking or keeping of the property may be enforced
against the bond unless the action therefor is filed within one hundred twenty (120)
days from the date of the filing of the bond. EHSADc
The officer shall not be liable for damages for the taking or keeping of the
property, to any third-party claimant if such bond is filed. Nothing herein contained
shall prevent such claimant or any third person from vindicating his claim to the
property in a separate action, or prevent the judgment obligee from claiming
damages in the same or separate action against a third-party claimant who filed a
frivolous or plainly spurious claim.
When the writ of execution is issued in favor of the Republic of the
Philippines, or any officer duly representing it, the filing of such bond shall not be
required, and in case the sheriff or levying officer is sued for damages as a result of
the levy, he shall be represented by the Solicitor General and if held liable therefor,
the actual damages adjudged by the court shall be paid by the National Treasurer
out of such funds as may be appropriated for the purpose.
18.
Proceedings where property claimed by third person. If the property
attached is claimed by any person other than the party against whom attachment
had been issued or his agent, and such person makes an affidavit of his title
thereto, or right to the possession thereof, stating the grounds of such right or title,
and serves such affidavit upon the sheriff while the latter has possession of the
attached property, and a copy thereof upon the attaching party, the sheriff shall not
be bound to keep the property under attachment, unless the attaching party or his
agent, on demand of the sheriff, shall file a bond approved by the court to
indemnify the third-party claimant in a sum not less than the value of the property
levied upon. In case of disagreement as to such value, the same shall be decided by
the court issuing the writ of attachment. No claim for damages for the taking or
keeping of the property may be enforced against the bond unless the action
therefor is filed within one hundred twenty (120) days from the date of the filing of
the bond. DTcASE
The sheriff shall not be liable for damages, for the taking or keeping of such
property, to any such third-party claimant if such bond shall be filed. Nothing herein
contained shall prevent such claimant or any third person from vindicating his claim
to the property, or prevent the applicant from claiming damages against a thirdparty claimant who filed a frivolous or plainly spurious claim, in the same or a
separate action.
When the writ of attachment is issued in favor of the Republic of the
Philippines, or any officer duly representing it, the filing of such bond shall not be
required, and in case the sheriff is sued for damages as a result of the attachment,
he shall be represented by the Solicitor General, and if held liable therefor, the

actual damages adjudged by the court shall be paid by the National Treasurer out of
the funds appropriated for the purpose. IEDaAc
19.
Yllas Lending Corporation filed a complaint for Foreclosure of Chattel
Mortgage with Replevin. However, Yllas Lending Corporation did not allege that it is
the owner of the properties being claimed, which is a requirement in the issuance of
a writ of replevin. Yllas Lending Corporation merely stated that it is Tirreno's chattel
mortgagee.
20.

G.R. No. 102998, 5 July 1996, 258 SCRA 102, 113-114.

*
As replacement of Justice Renato C. Corona who is on official leave per
Special Order No. 520. ATSIED

Copyright 2005

C D T e c h n o l o g i e s A s i a, I n c.

G.R. No. 156962 October 6, 2008


Victorias Milling Co., Inc. v. Padilla
FIRST DIVISION
[G.R. No. 156962. October 6, 2008.]
VICTORIAS MILLING CO., INC., petitioner, vs. LUIS J. PADILLA, EMMANUEL S.
DUTERTE, CARLOS TUPAS, JR., and ROLANDO C. RODRIGUEZ, respondents.
DECISION
CARPIO, J p:
The Case
This petition for review assails the 13 June 2002 Decision 1 and the 22 January 2003
Resolution 2 of the Court of Appeals in CA-G.R. SP No. 65895. The Court of Appeals
dismissed the petition for certiorari filed by petitioner on the grounds of (1) lack of
standing to prosecute the criminal cases for falsification of private documents
against respondents; (2) failure to attach the assailed order in the petition for
certiorari filed in the Regional Trial Court; and (3) late filing of the petition for
certiorari in the Regional Trial Court. CSIDEc
The Facts
The present controversy stemmed from a single complaint for falsification of private
documents filed by the Chief of Police 3 of the then Municipality of Victorias against

respondents Luis J. Padilla (Padilla), Emmanuel S. Duterte (Duterte), Carlos Tupas, Jr.
(Tupas), and Rolando C. Rodriguez (Rodriguez). Docketed as Criminal Case No. 8069V, the complaint reads:
COMPLAINT
The undersigned, Station Commander, Victorias Police Station, PNP Victorias, Negros
Occidental, hereby accuses Luis J. Padilla, Emmanuel S. Duterte, Carlos Tupas, Jr.
and Rolando C. Rodriguez of the crime of Violation of Article 172 Paragraph 2 of the
Revised Penal Code on Falsification of Private Documents committed as follows:
SaAcHE
That confederating, working and acting in conspiracy with one another and with
intent to cause damage to Victorias Milling Company (VMC), Luis J. Padilla,
Emmanuel S. Duterte, Carlos Tupas, Jr. and Rolando C. Rodriguez on various dates
and in various quantities during the period from 21 January 1992 to 02 December
1996 committed the crime of falsification of private documents in Victorias, Negros
Occidental by executing, issuing and signing RSDOs (Refined Sugar Invoice/Delivery
Orders) amounting to THREE MILLION ONE HUNDRED FORTY TWO THOUSAND
SEVEN HUNDRED SIXTEEN (3,142,716) LKG, which are sugarless, and executing,
issuing and signing false certifications supporting the RSDOs without securing the
authority of the board of directors of VMC, as shown in Annex "A" hereof.
Acts contrary to Law. 4 (Emphasis supplied)
On 6 November 1998, upon Motions to Quash the Complaint filed by several of the
respondents on the ground, among others, of duplicity of offenses, Municipal Trial
Court in Cities Judge Ricardo S. Real, Sr. (MTCC Judge) dismissed the complaint and
ordered the amendment of the complaint or the filing of another information. 5
THCSEA
Accordingly, on 13 November 1998, upon the conversion of the Municipality of
Victorias into a city, 6 City Prosecutor Adelaida R. Rendon filed sixty-four (64)
Informations for falsification 7 against respondents, 8 alleging conspiracy among
respondents in signing and using "sugarless" Refined Sugar Delivery Orders
(RSDOs) as collateral to obtain loans from five banks 9 in the total amounts of
US$15,274,956.40 and P692,322,644.86.
The MTCC Judge approved the issuance of Warrants of Arrest against respondents
only in the cases where they were the signatories of the sugarless RSDOs. Thus,
warrants of arrest were issued against Padilla in 47 cases only, against Duterte in 10
cases only, against Tupas in 6 cases only, and against Rodriguez in 1 case only.
On 14 January 1999, the prosecution filed a Motion to Defer Arraignment, 10
praying for the issuance of 64 warrants of arrest against each respondent

corresponding to the 64 informations for falsification in view of the charge of


conspiracy. cHAaCE
In an Order of 7 April 1999, 11 the MTCC Judge denied the Motion to Defer
Arraignment, ruling that conspiracy had to be proved by the prosecution and setting
the cases for arraignment on 3 July 2000.
On 14 April 1999, the prosecution moved for reconsideration, 12 which the MTCC
Judge denied in his Order of 24 November 1999. 13 This order reads:
It must be stressed that although the affidavit of the prosecution is based on
personal knowledge, the same were not yet introduced, authenticated, marked as
exhibits and offered as evidence, consequently, it remained as a worthless piece of
evidence to establish even the circumstantial evidence of conspiracy. During the
preliminary investigation using the sworn statement of the prosecution as part
thereof is only to determine that a probable cause exists that the crime as charged
was committed and that all the accused were probably guilty thereof and there is a
necessity to issue a warrant of arrest.
The theory of the City Prosecutor of Victorias to issue Sixty Four (64) Warrants of
Arrest to each accused as a result of the alleged conspiracy is baseless. Each
accused is only liable for each RSDO's that they have signed since the dictum that
the act of one is the act of all no longer stand [sic]. The High Court speaking thru
Justice Davide, Jr. states: CAHaST
"Conspiracy, just like the crime itself, must be established by proof beyond
reasonable doubt and the Rule has always been that co-conspirators are liable only
for the acts done pursuant to the conspiracy, for other acts done outside the
contemplation of the co-conspirators or which are not necessary and logical
consequence of the intended crime, only the actual perpetrators are liable. In such
a case, the dictum that the act of one is the act of all does not hold true anymore.
People versus Rodolfo Federico y Mediona (G.R. No. 99840, August 14, 1995)." 14
(Underscoring in the original)
On 29 June 2000, the prosecution filed an Urgent Ex-Parte Motion 15 praying for an
ex-parte hearing for the presentation of evidence on its allegation of conspiracy.
On 3 July 2000, during the scheduled arraignment, the MTCC Judge impliedly denied
the ex-parte motion, stating in open court that it is a "mere scrap of paper" 16 and
proceeded with the arraignment. Respondents, except Tupas, were arraigned only
on specific informations where their signatures appeared in the RSDOs or
certifications. Accordingly, Padilla pleaded not guilty to 46 cases, 17 Duterte
pleaded not guilty to 10 cases, and Rodriguez pleaded not guilty to 1 case only.
Tupas, through his counsel, requested a deferment of his arraignment. DICSaH

On the same date, the MTCC Judge set the pre-trial of the case on 4 September
2000 and trial proper on 25 and 26 September, 23 and 24 October, and 27 and 28
November 2000. He also reset the arraignment of Tupas to 4 September 2000.
On 30 August 2000, petitioner filed with the Regional Trial Court (RTC) of Negros
Occidental a petition for certiorari and mandamus, docketed as Civil Case Nos.
2133-40, against the MTCC Judge. 18 Petitioner prayed for the nullification of the
arraignment of the three respondents and for the issuance of a writ of preliminary
injunction to enjoin the MTCC Judge from further hearing the cases.
On 31 August 2000, the RTC issued an Order setting the date of the hearing for the
preliminary injunction on 7 September 2000 and granting a temporary restraining
order. 19 EHTISC
On 29 September 2000, petitioner filed an Amended Petition attaching the 24
November 1999 Order of the MTCC Judge, which had been inadvertently omitted
from the original Petition.
On 23 November 2000, the RTC issued an Order 20 denying the petition for
certiorari and mandamus on three grounds: 1) petitioner has no standing to file the
petition for certiorari; 2) the petition was incomplete in the narration of facts; and 3)
the petition was filed beyond the prescribed period.
On 26 December 2000, petitioner filed a Motion for Reconsideration, which was
denied in the 25 May 2001 Order of the RTC. 21
On 1 August 2001, petitioner filed a petition for certiorari with the Court of Appeals
challenging the 23 November 2000 and 25 May 2001 Orders of the RTC.
On 5 December 2001, the Court of Appeals issued a Resolution directing the
issuance of a temporary restraining order. 22 EIDATc
On 12 December 2001, the Office of the Solicitor General (OSG) filed a
Manifestation and Motion (in Lieu of Comment) 23 asking that the People of the
Philippines be removed as a party respondent and be excused from filing a
comment to the petition considering that it was in conformity with the petition.
On 13 June 2002, the Court of Appeals rendered a Decision dismissing the petition.
On 1 July 2002, petitioner filed a Motion for Reconsideration, which was denied by
the Court of Appeals on 22 January 2003.
Hence, this petition.
The Ruling of the Court of Appeals
In dismissing the petition for certiorari, the Court of Appeals ruled that petitioner
has no personality to file the petition. The Court of Appeals stated that all criminal

actions either commenced by complaint or by information should be prosecuted


under the direction and control of the public prosecutor. In this case, petitioner did
not even acquire the conformity of the public prosecutor before filing the petition.
Petitioner was not also able to show that it suffered damages by reason of the
alleged criminal act committed by respondents. TEAICc
The Court of Appeals also found procedural lapses in petitioner's filing of the
petition for certiorari before the RTC. Petitioner failed to attach the assailed orders
to its petition and filed the petition beyond the reglementary period. The Court of
Appeals opined that the 60-day period should start from the date of receipt of the
24 November 1999 Order, not from 3 July 2000 when the RTC impliedly denied the
motion to conduct an ex-parte hearing. Hence, the RTC did not commit grave abuse
of discretion in dismissing the petition for certiorari.
The Issues
Petitioner raises the following issues:
1.

Whether the petition for certiorari was filed within the reglementary period;

2.
Whether the petition for certiorari lacked the required vital documents;
TCIEcH
3.

Whether petitioner has a legal personality to file a petition for certiorari; and

4.
Whether the issuance of a writ of mandamus directing the MTCC Judge to
conduct an ex-parte hearing on the allegation of conspiracy is proper.
The Ruling of the Court
The petition is meritorious.
On the procedural issues
Petitioner contends that it seasonably filed on 30 August 2000 the petition for
certiorari with the RTC considering that it "directly challenged the 3 July 2000 Orders
issued by the MTCC", not the Orders dated 7 April 1999 and 24 November 1999. The
prayer of the petition for certiorari filed in the RTC reads: acCETD
WHEREFORE, it is respectfully prayed of this Honorable Court that, after hearing,
judgment be rendered in favor of the petitioner and against the respondents,
directing the issuance of the writs of certiorari and mandamus, setting aside the
arraignment of the three (3) accused for being null and void, and directing
respondent judge through the writ of mandamus to conduct first an ex-parte
hearing to determine whether warrants of arrest (shall) issue against all the accused
in all the criminal informations for falsification, with costs against the respondents.

It is also prayed of this Honorable Court that after hearing, a writ of preliminary
injunction be likewise issued to enjoin respondent Judge from further hearing the
cases below and arraigning the accused Carlos Tupas, Jr. until further orders from
this Honorable Court; that pending consideration of the issuance of the writ of
preliminary injunction, a temporary restraining order be issued forthwith to the
same effect. 24 (Emphasis supplied)
Under Section 4 of Rule 65, 25 the aggrieved party must file a petition for certiorari
within 60 days from notice of the assailed judgment, resolution or order. IHEDAT
As can be gleaned from the prayer of the petition for certiorari, petitioner was not
only assailing the implied denial of its ex-parte motion during the scheduled
arraignment on 3 July 2000. Petitioner was also challenging the legality of
respondents' arraignment on specific informations only instead of on all the 64
informations. Since the arraignment of the three respondents was held on 3 July
2000, the 60-day period for filing a petition for certiorari questioning the legality of
the arraignment may be reckoned from that date. Therefore, the petition for
certiorari filed on 30 August 2000 was filed within the reglementary period.
Considering that petitioner is also objecting to the arraignment of the respondents,
then the attachment to the petition for certiorari of the 3 July 2000 orders of the
MTCC Judge and the transcript of the stenographic notes taken on that date
substantially complied with the requirement under the Rules.
On petitioner's personality to file a petition for certiorari
Contrary to the view of the Court of Appeals, petitioner has the personality to file a
petition for certiorari assailing the orders of the MTCC Judge. In Paredes v.
Gopengco, 26 which ruling was reiterated in People v. Calo, Jr., 27 the Court held
that: cdphil
The non-joinder of the People in the action was . . . but a formality, . . . and should
not serve as a ground for dismissal of the action, by virtue of the provisions of Rule
3, section 11, providing that "parties may be dropped or added by order of the
Court on motion of any party or on its own initiative at any stage of the action and
on such terms as are just." Furthermore, as offended party . . ., it cannot be gainsaid
that respondents have sufficient interest and personality as "person(s) aggrieved" . .
. to file the special civil action, under sections 1 and 2 of Rule 65.
Moreover, it is basic in criminal law that the civil case is impliedly included in the
criminal case. 28 Therefore, private complainant, petitioner in this case, has
sufficient interest and personality in filing the petition for certiorari.
At any rate, the OSG fully adopted petitioner's views, curing the perceived lack of
standing on the part of petitioner to assail the 3 July 2000 orders of the MTCC Judge
via a petition for certiorari. In its Manifestation and Motion (In Lieu of Comment)
filed with the Court of Appeals, the OSG explicitly stated that: TDcAaH

. . . it is in conformity with the instant petition [for certiorari], being on all fours with
the Rules of Court and pertinent jurisprudence. Hence, it should be removed as
party respondent, and excused from filing comment on the petition. 29
In its Manifestation and Motion filed before this Court, the OSG reiterated its
position that the petition for certiorari is correct. 30
Further, it is not yet necessary to prove that petitioner suffered damages on account
of the falsification of the private documents in order for petitioner to have standing
to file a petition for certiorari. Intent to cause damage is a sufficient allegation of
damage for a charge of falsification of private documents. 31
On the MTCC Judge's failure to determine the existence of probable cause against
respondents as conspirators in the crimes charged
The 64 separate informations filed with the Municipal Trial Court in Cities by City
Prosecutor Adelaida R. Rendon uniformly charge Padilla, Duterte, Tupas, and
Rodriguez of conspiring in the falsification of 64 private documents consisting of
various RSDOs or certifications on different occasions with the intent to cause
damage to petitioner. In effect, each respondent is charged, as a co-conspirator,
with 64 counts of falsification of private documents. CTAIDE
At the time of the filing of the informations, the applicable provision was Section 9,
Rule 112 of the 1985 Rules on Criminal Procedure, which covers cases not falling
under the original jurisdiction of the Regional Trial Courts nor covered by the Rule on
Summary Procedure. 32 No preliminary investigation is required in such cases. 33
In the course of the proceedings, Section 9 of Rule 112 was amended to read as
follows:
SEC. 8.
Cases not requiring a preliminary investigation nor covered by the Rule
on Summary Procedure.
xxx

xxx

xxx

(b)
If the complaint or information is filed with the Municipal Trial Court or
Municipal Circuit Trial Court for an offense covered by this section, the procedure in
section 3(a) of this Rule shall be observed. If within ten (10) days after the filing of
the complaint or information, the judge finds no probable cause after personally
evaluating the evidence, or after personally examining in writing and under oath the
complainant and his witnesses in the form of searching questions and answers, he
shall dismiss the same. He may, however, require the submission of additional
evidence, within ten (10) days from notice, to determine further the existence of
probable cause. If the judge still finds no probable cause despite the additional
evidence, he shall, within ten (10) days from its submission or expiration of said
period, dismiss the case. When he finds probable cause, he shall issue a warrant of
arrest, or a commitment order if the accused had already been arrested, and hold

him for trial. However, if the judge is satisfied that there is no necessity for placing
the accused under custody, he may issue summons instead of a warrant of arrest.
(Emphasis supplied) DaCEIc
Whether under the old or new provision, the Rules applicable to this case are
substantially the same. The Rules essentially provide that if the MTCC judge finds no
probable cause against respondents, he shall dismiss the complaint or information.
Otherwise, he shall issue either warrants of arrest or summonses, depending on the
necessity to place the accused under custody.
In the present case, Padilla, Duterte, Tupas, and Rodriguez are charged in each
information as conspirators of falsifying 64 private documents. In other words,
whether respondents signed the falsified documents or not, they are alleged to
have conspired in making untruthful statements in such documents. EAISDH
After the filing of the 64 informations for falsification of private documents by the
City Prosecutor, the MTCC Judge proceeded to the issuance of warrants of arrest
only against the signatories of the allegedly falsified documents and arraigned the
same respondents against whom warrants of arrest were issued. The MTCC Judge
opined that "each respondent is liable only for the RSDO that he signed", citing the
case of People v. Federico, where this Court held that "conspiracy, just like the
crime itself, must be established by proof beyond reasonable doubt." The MTCC
Judge also stated that the prosecution's evidence is worthless for not being marked
as exhibits and for not being authenticated.
The MTCC Judge is mistaken. He ruled out the existence of conspiracy based on a
wrong ground. At that stage of the proceedings, the MTCC Judge need not find proof
beyond reasonable doubt of the existence of conspiracy. He must only satisfy
himself whether there is probable cause or sufficient ground to hold each
respondent for trial as a co-conspirator. It is obviously absurd for the MTCC Judge to
require that conspiracy must be proved before conspiracy can be alleged in the
informations. ACcEHI
For the sake of the prosecution, which desires the punishment of the criminals liable
for the falsifications, and for the benefit of the respondents, who will possibly face
prosecution or conviction for the crimes charged, the MTCC Judge should properly
and clearly resolve whether there is probable cause against each respondent as a
co-conspirator for 64 counts of falsification of private documents. The summary
nature of the procedure under the Rules does not dispense with such determination.
As stated above, Section 9 of Rule 112 was amended. Since remedial laws may be
given retroactive effect, 34 the Court orders the MTCC Judge to determine the
existence of probable cause against respondents as conspirators for the crimes
charged pursuant to the amended provision, specifically Section 8 (b) of Rule 112 of
the Revised Rules of Criminal Procedure. Accordingly, if the MTCC judge finds no
probable cause against respondents as conspirators, he shall dismiss the

informations against the non-conspirators. He may, however, require the submission


of additional evidence, within ten (10) days from notice, to determine further the
existence of probable cause. If the MTCC Judge still finds no probable cause despite
the additional evidence, he shall, within ten (10) days from its submission or
expiration of said period, dismiss the informations against the non-conspirators. If
there exists probable cause against each respondent as a co-conspirator for 64
counts of falsification of private documents, then the MTCC Judge shall issue either
warrants of arrest, in addition to the arrest warrants already issued, or summonses
against respondents, depending on the necessity of placing the accused under
custody. Thereafter, the MTCC Judge should arraign each respondent for 64 counts
of falsification of private documents. HETDAa
Concerning the arraignment of the respondents, the same is not void. If ever, the
eventual positive finding of the existence of probable cause against all respondents
as conspirators will only mean additional indictments for respondents. This finding
will not affect the arraignment of the respondents.
WHEREFORE, the Court GRANTS the petition. The Court orders Judge Ricardo S.
Real, Sr. or the Presiding Judge of the Municipal Trial Court in Cities of Victorias City
to determine whether there is probable cause against respondents as conspirators
in the crime of falsification of 64 private documents defined and penalized under
Article 172 (1) in relation to Article 171 (4) of the Revised Penal Code in accordance
with the procedure in Section 8 (b) of Rule 112 of the Revised Rules of Criminal
Procedure. CDISAc
SO ORDERED.

[G.R. No. 73976. May 29, 1987.]


THE CONSOLIDATED BANK AND TRUST CORPORATION (SOLIDBANK), petitioner, vs.
HON. INTERMEDIATE APPELLATE COURT, GOLDEN STAR INDUSTRIAL CORPORATION,
NICOS INDUSTRIAL CORPORATION and THE PROVINCIAL SHERIFF OF BULACAN,
respondents.
C.M. Delos Reyes and Associates for petitioner.
Magtanggol C. Gunigundo and Fajardo Law office for respondents.

SYLLABUS
1.
REMEDIAL LAW; PROVISIONAL REMEDIES; WRIT OF ATTACHMENT; CREATES A
LIEN OVER THE PROPERTY LEVIED. The rule is well settled that when a writ of
attachment has been levied on real property or any interest therein belonging to the
judgment debtor, the levy thus effected creates a lien which nothing can destroy
but its dissolution (Chua Pua Hermanos v. Register of Deeds of Batangas, 50 Phil.
670; Government, et. al. v. Mercado, 67 Phil. 409).
2.
ID.; ID.; WRIT OF POSSESSION ISSUED OVER PROPERTY IN CUSTODIA LEGIS,
NULL AND VOID; REASON. The writ of possession issued by the Malolos court in
favor of respondent GOLDEN STAR is null and void ab initio because it interfered
with the jurisdiction of a co-ordinate and co-equal court (See De Leon v. Salvador,
36 SCRA 567): "While property or money is in custodia legis, the officer holding it is
the mere hand of the court, his possession is the possession of the court, and to
interfere with it is to invade the jurisdiction of the court itself (Gende v. Fleming, 371
N.E. 2d. 191; Bishop v. Atlantic Smokeless Coal Co., 88F. Supp. 27, 7 CJS 320)."
3.
ID.; ID.; WRIT OF ATTACHMENT; ENTITLES ATTACHING CREDITOR THE RIGHT
TO REDEEM THE FORECLOSED PROPERTIES. Petitioner has acquired by operation
of law the right of redemption over the foreclosed properties pursuant to Sec. 6 of
Act No. 3135, to wit: "In all such cases in which an extrajudicial sale is made . . . any
person having a lien on the property subsequent to the mortgage . . . may redeem
the same at any time within the term of one year from and after the date of sale. It
has been held that "an attaching creditor may succeed to the incidental rights to
which the debtor was entitled by reason of his ownership of the property, as for
example, a right to redeem from a prior mortgage" (Lyon v. Stanford, 5 Conn. 541, 7
CJS 505).
4.
CIVIL LAW; SPECIAL CONTRACTS; MORTGAGE; PERIOD TO EXERCISE RIGHT OF
REDEMPTION; SUSPENDED DURING PENDENCY OF AN ACTION. Well settled is the
rule that the pendency of an action tolls the term of the right of redemption.
Specifically, this Court in Ong Chua v. Carr, (53 Phil. 975, 983), categorically ruled
that: . . . ". . . Neither was it error on the part of the court to hold that the pendency
of the action tolled the term for the right of redemption; that is an old and well
established rule."
5.
ID.; ID.; ID.; ID.; CONTINUES AFTER PERFECTION OF THE APPEAL AND UNTIL
THE DECISION THEREOF. It has been held that "under a statute limiting the time
for redemption . . ., the right of redemption continues after perfection of an
appeal . . . until the decision of the appeal (Philadelphia Mortgage Co. v. Gustus, 75
N.W. 1107).
DECISION
GUTIERREZ, JR., J p:

The basic issue for resolution in this petition for review of the December 13, 1985
decision of the Intermediate Appellate Court, now the Court of Appeals, as well as
the resolution of March 13, 1986 denying the motion for reconsideration, is whether
or not an attaching creditor acquires the right of redemption of a debtor over the
attached properties of the latter which are subsequently extrajudicially foreclosed
by third parties.
Briefly, the facts are as follows: Originally, petitioner Consolidated Bank and Trust
Corporation (SOLIDBANK) loaned private respondent NICOS Industrial Corporation
(NICOS) sums of money in the total amount of FOUR MILLION SEVENTY SIX
THOUSAND FIVE HUNDRED EIGHTEEN AND 64/100 PESOS (P4,076,518.64).
Subsequently, NICOS failed to pay back the loan prompting SOLIDBANK to file a
collection case before the Court of First Instance of Manila, Branch XXIX. The case
was docketed as Civil Case No. 82-11611.
On August 30, 1982, the court in the aforecited case issued an order of attachment
". . . upon the rights, interests and participation of which defendants NICOS
Industrial Corporation . . . may have in Transfer Certificate of Title No. T-210581 (T32.505 M) and Transfer Certificate of Title No. T-210580 (T-32.504 M) (Annexes "B,"
"B-1." "B-2" and "B-3" of petition).
On September 1, 1982, pursuant to the writ of attachment issued by the Court and
upon petitioner's posting of sufficient bond, the Sheriff of Manila levied and
attached the two real properties described by the foregoing order of attachment,
including the buildings and other improvements thereon. Afterwards, the Sheriff
sent separate Notices of Levy Upon Realty to the Registrar of Deeds of Malolos,
Bulacan, dated September 1, 1982 requesting him "to make the proper annotation
in the books of your office" by virtue of the order of attachment dated August 30,
1982 issued by the Manila Court in Civil Case No. 82-11611.
Accordingly, on September 7, 1982, the Registrar of Deeds of Malolos, Bulacan,
pursuant to the request of the Manila Sheriff, inscribed and annotated the Notices of
Levy Upon Real Property at the back of Transfer Certificates of Title Nos. 210581 (T32.505 M) and T-210580 (T-32.504 M).
Pursuant to the foregoing inscription and annotations, guards were deputized by the
Manila Sheriff to secure the premises of the two attached realties. LexLib
A year later, however, on July 11, 1983, the attached properties which had been
mortgaged by NICOS to the United Coconut Planters Bank (UCPB) on March 11,
1982, were extra-judicially foreclosed by the latter. As the highest bidder therein, a
certificate of sale was issued to it by the Sheriff of Bulacan over the subject realties
including the buildings and improvements thereon.

Surprisingly, two transactions occurred soon thereafter, both on August 29, 1983.
First, UCPB sold all of its rights, interests, and participation over the properties in
question to a certain Manuel Go; Second, Manuel Go sold all the rights he acquired
from UCPB over the same lots on that very same day to private respondent Golden
Star Industrial Corporation (GOLDEN STAR).
Barely a month later, on October 5, 1983, respondent NICOS, though fully aware
that it still had the right to redeem the auctioned properties within the one year
period of redemption from July 11, 1983, suddenly executed a document entitled
"Waiver of Right of Redemption" in favor of respondent GOLDEN STAR.
On September 15, 1983, GOLDEN STAR filed a petition for the issuance of a writ of
possession over the subject realties before the Regional Trial Court, Branch VI of
Malolos, Bulacan.
On November 4, 1983, the Malolos Court granted GOLDEN STAR's petition for a writ
of possession and issued the writ. In accordance with these orders, armed men of
GOLDEN STAR forcibly took over the possession of the properties in dispute from the
guards deputized by the Sheriff of Manila to secure the premises.
Thus on November 21, 1983, petitioner SOLIDBANK, on the strength of its prior
attachment over the lands in question filed with the Malolos court an omnibus
motion to annul the writ of possession issued to GOLDEN STAR and to punish for
contempt of court the persons who implemented the writ of possession with the use
of force and intimidation.
The respondents NICOS and GOLDEN STAR, filed oppositions to the foregoing
omnibus motion, the former on the basis of the waiver of its right of redemption to
GOLDEN STAR, and the latter on its alleged ignorance that the lands in question
were under custodia legis, having been attached by the Sheriff of Manila.
On June 9, 1984, the Malolos Court issued an order denying the omnibus motion,
the decretal portion of which is as follows:
"WHEREFORE, the Omnibus Motion of movant Consolidated Bank and Trust
Corporation to annul the writ of possession issued by this Court in favor of Golden
Star Industrial Corporation and to cite for contempt those who fraudulently secured
and unlawfully implemented the writ of possession is hereby DENIED for lack of
merit." (p. 8 of the Brief for the Complainant-Oppositor-Appellant in AC-G.R. CV No.
04398 [p. 118, Rollo])
The petitioner SOLIDBANK forthwith interposed an appeal before the Intermediate
Appellate Court arguing inter alia that the properties were under custodia legis,
hence the extrajudicial foreclosure and the writ of possession were null and void,
and that the right of NICOS to redeem the auctioned properties had been acquired
by SOLIDBANK.

On December 13, 1985, the Intermediate Appellate Court rendered its assailed
decision "finding no merit in this appeal and affirming in toto the appealed order of
June 9, 1984, ruling that "the properties in issue . . . were not in custodia legis at the
time of the extrajudicial foreclosure."
The petitioner moved for reconsideration, arguing that its writ of attachment over
the properties in question was duly registered in the Register of Deeds of Malolos,
Bulacan, and that the right to redeem said properties should be retained or given
back to SOLIDBANK as attaching creditor. LLphil
On March 13, 1986, the Intermediate Appellate Court promulgated its resolution
denying the motion for reconsideration for lack of merit.
Hence this petition for review, on the grounds that respondent appellate court
decided the case contrary to law and applicable decisions of the Supreme Court,
and has departed from the accepted and usual course of judicial proceedings as to
call for an exercise of the power of supervision of this Court.
The fundamental question herein, which is determinative of the other issues, is
whether or not the subject properties were under custodia legis by virtue of the
prior annotation of a writ of attachment in petitioner's favor at the time the
properties were extrajudicially foreclosed.
We rule in the affirmative on the following grounds:
First of all, the records show (specifically Annexes "B," "B-1" to "B-3" of the petition)
that on September 1, 1982, the Sheriff of Branch XXIX of the Court of First Instance
of Manila, sent separate Notices of Levy Upon Realty to the Registrar of Deeds of
Malolos Bulacan, requesting him "to make the proper annotation in the books of
your office," "by virtue of an order of attachment issued in Civil Case No. 82-11611
dated August 30, 1982, . . . upon the rights, interests, and participation of which
defendant NICOS Industrial Corporation in this case may have in . . ." Transfer
Certificate of Title No. T-210581 (T-32.505 M) and Transfer Certificate of Title No. T210580 (T-32.505 M).
Secondly, and more significant, the records clearly show (page 4, Annex "D" of
petition) that the Registrar of Deeds of Malolos, Bulacan, on September 7, 1982,
inscribed and annotated the foregoing Notices of Levy at the back of Transfer
Certificate of Title Nos. 210580 and 210581, to wit:
TRANSFER CERTIFICATE OF TITLE
No. T-210580 (T-32.504 M)
"Entry No. 79524 (M): Kind: NOTICE OF LEVY UPON REALTY, Executed in favor of the
CONSOLIDATED BANK AND TRUST CORPORATION (SOLIDBANK); Plaintiff;
Conditions: Notice is hereby given that by virtue of an Order of Attachment issued

by the C.F.I. of Manila, Branch XXIX, in Civil Case No. 82-11611, all the rights,
interest and participation of NICOS INDUSTRIAL CORPORATION Defendant over
the herein described lot is hereby levied upon attached.; Date of Instrument:
September 1, 1982; Date of Inscription: September 7, 1982 at 2:35.
Meycauayan, Bulacan.
(SGD.) VIOLETA R. LINCALLO GARCIA
Branch Register of Deeds
TRANSFER CERTIFICATE OF TITLE
No. T-210581 (T-32.505 M)
"Entry No. 79524 (M); Kind: NOTICE OF LEVY UPON REALTY, Executed in favor of THE
CONSOLIDATED BANK AND TRUST CORPORATION (SOLIDBANK) Plaintiff;
Conditions: Notice is hereby given that by virtue of an Order of Attachment issued
by the C.F.I. of Manila, Branch XXIX, in Civil Case No. 82-11611, all the rights,
interest and participation of NICOS INDUSTRIAL CORPORATION Defendants over
the herein described lot is hereby levied upon attached.; Date of Instrument;
September 1, 1982; Date of Inscription: September 7, 1982 at 2:35.
Meycauayan, Bulacan.
(SGD.) VIOLETA R. LINCALLO GARCIA
Branch Register of Deeds"
(pp. 91-92, Rollo)
Based on the foregoing evidence on record, the conclusion is clear that the disputed
real properties were under custodia legis by virtue of a valid attachment at the time
the same were extrajudicially foreclosed by a third party mortgagee.
The rule is well settled that when a writ of attachment has been levied on real
property or any interest therein belonging to the judgment debtor, the levy thus
effected creates a lien which nothing can destroy but its dissolution (Chua Pua
Hermanos v. Register of Deeds of Batangas, 50 Phil. 670; Government, et. al. v.
Mercado, 67 Phil. 409). LexLib
The foregoing conclusion has two necessary consequences.
Firstly, it follows that the writ of possession issued by the Malolos court in favor of
respondent GOLDEN STAR is null and void ab initio because it interfered with the
jurisdiction of a co-ordinate and co-equal court (See De Leon v. Salvador, 36 SCRA
567):

"While property or money is in custodia legis, the officer holding it is the mere hand
of the court, his possession is the possession of the court, and to interfere with it is
to invade the jurisdiction of the court itself (Gende v. Fleming, 371 N.E. 2d. 191;
Bishop v. Atlantic Smokeless Coal Co., 88F. Supp. 27, 7 CJS 320)."
Of equal importance is the fact that the transactions on which respondent GOLDEN
STAR's right to a writ of possession are based are highly irregular and questionable,
to say the least, considering the following circumstances:
On July 11, 1983, the Sheriff of Bulacan executed a certificate of sale over the two
lots in question in favor of UCPB.
On August 29, 1983, or about a month and a half later, UCPB sold its rights,
interests and participation over the lands to Manuel Go.
On that very same day, August 29, 1983, Manuel Go sold the same properties to
respondent GOLDEN STAR.
On October 5, 1983, respondent NICOS, which had a one year right of redemption
over the lands in question executed a "Waiver of Right of Redemption in favor of
respondent GOLDEN STAR." The attempts to bring the disputed properties out of the
petitioner's reach, inspite of the attachment, are plain and apparent.
Based on the foregoing facts, we find that respondents NICOS and GOLDEN STAR
conspired to defeat petitioner's lien on the attached properties and to deny the
latter its right of redemption.
It appears that in issuing the writ of possession, the Malolos court relied on copies of
documents (which did not show the memorandum of encumbrance) submitted to it
by GOLDEN STAR. It was thus led into the error of ruling that the petitioner's
attachment was not properly annotated.
Secondly, it likewise follows that the petitioner has acquired by operation of law the
right of redemption over the foreclosed properties pursuant to Sec. 6 of Act No.
3135, to wit:
"In all such cases in which an extrajudicial sale is made . . . any person having a lien
on the property subsequent to the mortgage . . . may redeem the same at any time
within the term of one year from and after the date of sale.
It has been held that "an attaching creditor may succeed to the incidental rights to
which the debtor was entitled by reason of his ownership of the property, as for
example, a right to redeem from a prior mortgage" (Lyon v. Stanford, 5 Conn. 541, 7
SJS 505).

The fact that respondent NICOS executed a waiver of right of redemption in favor of
respondent GOLDEN STAR on October 5, 1983 is of no moment as by that time it
had no more right which it may waive in favor of another.
Finally, GOLDEN STAR argues that even if the attachment in issue was duly
registered and the petitioner has a right of redemption, the certificate of sale of the
lands in question was registered on September 6, 1983. It claims that the period to
redeem therefore lapsed on September 6, 1984 without the petitioner bank ever
exercising any right of redemption. cdrep
This argument is untenable. Well settled is the rule that the pendency of an action
tolls the term of the right of redemption. Specifically, this Court in Ong Chua v. Carr,
(53 Phil. 975, 983), categorically ruled that:
xxx

xxx

xxx

". . . Neither was it error on the part of the court to hold that the pendency of the
action tolled the term for the right of redemption; that is an old and well established
rule."
This was reiterated in Fernandez v. Suplido (96 Phil. 541, 543), as follows:
xxx

xxx

xxx

". . . As pointed out in Ong Chua v. Carr, 53 Phil. 975, the pendency of an action
brought in good faith and relating to the validity of a sale with pacto de retro tolls
the term for the right of redemption. . . ."
Not only that. It has been held that "under a statute limiting the time for redemption
. . ., the right of redemption continues after perfection of an appeal . . . until the
decision of the appeal (Philadelphia Mortgage Co. v. Gustus, 75 N.W. 1107).
In the case at bar, the petitioner commenced the instant action by way of an
omnibus motion before the Bulacan Court on November 21, 1983 or barely two
months after the certificate of sale was registered on September 6, 1983, well
within the one year period of redemption.
WHEREFORE, IN VIEW OF THE FOREGOING, the petition is granted and judgment is
hereby rendered:
1)
declaring as valid and binding the levy and attachment by the Manila Sheriff
on the two realties in question including the buildings and improvements thereon;
2)
declaring that petitioner has acquired the right of redemption over the
aforesaid properties which it may exercise within one year from notice of entry of
judgment in this case; and

3)
declaring as null and void (a) the order of the Bulacan Court dated November
4, 1983 granting the writ of possession to respondent GOLDEN STAR, (b) its order of
June 9, 1984 denying the petitioner's omnibus motion, and (c) the Waiver of Right of
Redemption executed by respondent NICOS in favor of respondent GOLDEN STAR.
SO ORDERED.
Fernan, Paras, Padilla, Bidin and Cortes, JJ., concur.

C o p y r i g h t 1 9 9 4 - 1 9 9 9 C D T e c h n o l o g i e s A s i a, I n c.

G.R. No. 73804 May 29, 1987


People v. Bravante
SECOND DIVISION
[G.R. No. 73804. May 29, 1987.]
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. FELIPE BRAVANTE and AUGUSTO
ALTAREJOS, accused-appellants.
SYLLABUS
REMEDIAL LAW; EVIDENCE; WEIGHT AND SUFFICIENCY; TREACHERY; DEEMED
PRESENT IN VIEW OF THE WAYLAYING AND SUDDEN ATTACK OF ACCUSED. The
evidence shows that Miguel Nuevo was bringing food items for a noche buena when
he was suddenly attacked by two assailants, one armed with a spear and the other
with a bolo. The victim alone suffered the fatal wounds. The attack was so sudden
that the victim had no opportunity to defend himself or to inflict retaliatory blows on
the assailants. He just fell down after the spearing and was then hacked by Altarejos
with the bolo. The waylaying and the sudden attack show that the elements of
treachery or alevosia are present. (See People v. Estillore, 141 SCRA 456).
DECISION
GUTIERREZ, JR., J p:
This is an appeal from an August 16, 1985 judgment of the Regional Trial Court of
Masbate which found Felipe Bravante and Augusto Altarejos guilty of murder and
sentenced them as follows:
"WHEREFORE, premises considered, judgment is hereby entered finding all the
herein accused GUILTY beyond reasonable doubt of the crime of murder and hereby
sentences them with the penalty of RECLUSION PERPETUA with all the accessory

penalties provided for by law; and, to indemnify, jointly and severally, the heirs of
the victim, Miguel B. Nuevo, in the sum of P30,000.00, without subsidiary
imprisonment in case of insolvency, and to pay their proportionate share of the
costs."(pp. 8-9, Decision of the trial court.)
In an information dated May 18, 1984, the two accused-appellants were charged as
follows:
"That on or about December 24, 1983, in the evening thereof, at sitio Burabod,
Barangay Resurreccion, Municipality of San Fernando, Province of Masbate,
Philippines, within the jurisdiction of this court, the said accused conspiring and
helping each other, with intent to kill, evident premeditation, treachery and
superiority of strength, did then and there wilfully, unlawfully and feloniously attack,
assault, spear, hack and stab with bolos one Miguel Nuevo, hitting the latter on the
different parts of the body, thereby inflicting wounds which directly caused his
instantaneous death. "(p. 2, Rollo)
The facts upon which the trial court based its decision finding the appellants guilty
beyond reasonable doubt are summarized as follows. prcd
"It is not disputed that on or about 6:00 o'clock in the afternoon of December 24,
1983, Miguel Bravante Nuevo, the victim in this case, died of 'massive hemorrhage
secondary to multiple wounds'(Exh. B-2.) as a result of injuries he suffered in an
incident involving him and the herein accused which took place at sitio Burabod,
barangay Resurreccion (also known as Looc), San Fernando, Masbate, more
particularly the following, to wit:
'1.
Hacking wound to the head, "C" shaped about 6 inches on left temporal area
penetrating the brain;
'2.
Hacking wound to the throat, about 6 inches long, 3 inches deep, along
anterior side of the neck;
'3.
Stab wound, right side, thorax, about 3 inches long, 1 inch to the right of
sternum at 3rd intercostal spine;
'4.

Incised wound, 3 inches long across left palm.

"The post-mortem examination of the victim was conducted at about 1:00 p.m. of
December 25, 1983 by Municipal Health Officer Roger A. Badillo of Batusa, Masbate
(Exhs. B & B-1) who likewise issued the victim's Certificate of Death (Exhs. C & C-1).
Per testimony of Dr. Artemio Capellan (who was called to the witness stand in lieu of
Dr. Badillo who was unavailable), the fatal wounds were injuries Nos. 1, 2 and 3,
inclusive, which could have been respectively caused by a 'C-shaped' spade, a
sharp-bladed instrument like a bolo, and a sharp-pointed weapon like a dagger (tsnDiano, January 24, 1985, p. 2).

"The State asserts that late in the afternoon of December 24, 1983, while victim
Miguel B. Nuevo, the latter's 8-year old son Jose Nuevo and their companion Nilo
(alias Sato) Bauso (also known as Danilo Bauso) were on their way home to
Burabod, Resurreccion, from the Poblacion of San Fernando, Masbate, (where they
bought some food items in preparation for the 'noche buena'), the herein accused
Felipe Bravante and his co-accused and son-in-law Augusto Altarejos suddenly
approached them while they were in a trail near accused Bravante's house, and
without any warning, accused Felipe Bravante armed with a spear attacked the
victim Miguel B. Nuevo (who ran then unarmed) hitting the latter twice first, on
the upper portion of his left arm below the shoulder, followed by the thrust of the
spear on the middle portion of the victim's breast. After the victim fell down to the
ground face upward, accused Augusto Altarejos, armed with a bolo, hacked the
victim twice hitting him on the forehead and on the neck. Thereafter, the two
accused chased Nilo (alias Danilo or Sato) Banso while the victim's son, Jose Nuevo,
went home to inform his mother, Teresita Aninipot (victim's wife) about his father's
death in the hands of the herein two accused. Mother and son returned to the crime
scene where they found the victim lying dead on the ground, face upward. One
named Leonardo Maro reported the incident to the municipal authorities.
"Jose Nuevo and the victim's wife were interrogated that same evening by
Patrolman Darlie Alvarez and the latter's companions, Patrolman Llacer and Arnulfo
Arizala, all of whom failed to reduce into writing the child's narration of the incident.
Nonetheless, the said policemen prepared a sketch of the crime scene (Exhs. A & A1) indicating therein the location of the victim's corpse in relation to the house of
accused Felipe Bravante which turned out to be only thirteen (13) meters away
(Exh. A-2). The policemen learned, during their interrogation, that the victim's
assailants were the herein accused Felipe Bravante and Augusto Altarejos who were
both no longer at the crime scene so they failed to investigate them. They also
failed to investigate that evening the victim's companion, Nilo Bauso, who was
likewise a suspect in this case.
"On the following day, December 25, 1983, Patrolman Arnulfo Arizala, on orders of
the Station Commander, conducted an investigation of the two accused but only
accused Felipe Bravante executed an extrajudicial confession while his co-accused,
Augusto Altarejos, refused to give any formal statements, even as it was uncertain
whether the third suspect, Nilo (Sato) Bauso, ever gave any written affidavit.
"The victim's widow, Teresita Aninipot, claims furthermore that sometime in January,
1984, accused Felipe Bravante, armed with a bolo, gave her P60.00 (which she
received for fear of her life) in her residence at Burabod, Resurreccion telling her to
leave the place with her children for if she does she would still be paid the
additional sum of P300.00 so as to abandon this case. In fact, accused Bravante
revealed to her that Nilo (alias Sato) Bauso had already left the place and would no
longer be available as a witness in this case, in consideration of P500.00 given to
him by the accused." (pp. 2-4, Decision of the trial court.)

The evidence presented by the appellants consisted of their own testimonies and
that of two witnesses Pelagio Tuca and Patrolman Redempto Caperino. It
consisted primarily of allegations of self-defense on the part of Felipe Bravante and
alibi on the part of Augusto Altarejos. llcd
The accused-appellants summarized their evidence as follows:
"Evidence for the defense shows that at 2:00 o'clock in the afternoon of December
24, 1983, Felipe Bravante and his hired cook, Melanio Tuca, were preparing food at
the former's house. Miguel Nuevo and Nilo Bauso arrived uninvited at Bravante's
house and were entertained with drinks. The duo left at about five p.m., but
returned after an hour and challenged Felipe Bravante to a fight, threatening to kill
the accused and his family. Knowing the victim to be a criminal and a trouble maker,
with a sturdier and bigger body build than the accused, the latter armed himself
with a bolo and a double bladed spear. As Nuevo tried to go up the house of
Bravante, the latter blocked his way with the spear, hitting the former on the head
and breast. Nuevo died a few meters away from Bravante's dwelling. The accused
surrendered to Pat. Arizala.
"When the quarrel actually took place, accused Augusto Altarejos already left
Bravante's house. Altarejos, out of fear, ran with his pregnant wife and mother-inlaw towards his own house some two (2) kilometers away. He denied any
participation in the offense charged and was implicated in the case for being a sonin-law of Felipe Bravante." (p. 3, appellants' brief)
xxx

xxx

xxx

The accused-appellants raised the following assignments of errors in their appeal:


I
THE COURT A QUO ERRED IN FINDING THAT CONSPIRACY BETWEEN AUGUSTO
ALTAREJOS AND HIS CO-ACCUSED WAS ESTABLISHED BY EVIDENCE.
II
THE COURT A QUO ERRED IN FINDING THAT THE QUALIFYING CIRCUMSTANCE OF
TREACHERY WAS ATTENDANT IN THE COMMISSION OF THE CRIME.
III
THE COURT A QUO ERRED IN FINDING THE ACCUSED GUILTY BEYOND REASONABLE
DOUBT OF THE CRIME OF MURDER. (pp. 4 and 5 of appellants' brief)
The first assigned error alleges that Augusto Altarejos had no participation in the
killing of Miguel Nuevo. The evidence indicates otherwise. Altarejos was not a mere
passive co-conspirator. Much less was he an innocent person two kilometers away
when the crime was committed. After Bravante struck the victim with a spear

wounding him in the breast and in the upper left arm, Altarejos finished him off by
hacking him on the forehead with a bolo. The wound was so deep that it penetrated
to the brain. The two appellants then chased Nilo Bauso, the victim's companion
while the victim's eight year old son, Jose Nuevo, ran home to report the killing and
to seek help. The evidence points to two assailants. There was eye-witness
testimony. The number and nature of the wounds corroborate the testimony of the
eyewitness that the two accused one armed with a spear and the other with a
bolo perpetrated the killing.
We agree with the findings of the trial court on this point:
"As established by the evidence, the sequence of the overt acts individually
performed by the accused clearly revealed their unity of purpose at the time of the
commission of the offense and that they were united in its execution. (See People v.
Cadag, 2 SCRA 288; People v. Clarit, 3 SCRA 331; and People v. Pagaduan, 29 SCRA
54). In fact, the victim suffered numerous wounds a circumstance which
negatived the defense' submission that it was the accused Felipe Bravante who
alone inflicted the fatal injuries. Notwithstanding Dr. Capellan's opinion as to the
possibility that the victim's various wounds could have been caused by only one
assailant armed with 2 or 3 weapons (tsn.; Diano, January 24, 1985, p. 4), the Court,
nonetheless, finds ample justification in the conclusion of 'plurality of assailants' in
the light of the nature and degree of the victim's fatal injuries which, per the
doctor's opinion, were caused probably by at least two (2) weapons one, a 'Cshaped' instrument, and the other, by a bladed and sharp-pointed bolo or dagger
(tsn., p. 2). As aptly observed by the Supreme Court in one case:
'Numerous wounds in the body of the victim indicate plurality of assailants' (People
v. Manzano, 58 SCRA 250).
Having thus cooperated indispensably in causing the death of the victim, the herein
two accused are liable as co-conspirators (People v. Cutura, 4 SCRA 663) and each
of them responsible for the acts of the other in furtherance of their conspiracy
(People v. Pareja, 30 SCRA 693)." (p. 6, Decision of trial court).
The other assigned error questions the finding of treachery.
The appellants claim that the bolo belonged to Miguel Nuevo and that appellant
Bravante was able to arm himself with another bolo and a double bladed spear to
defend himself against an attack by Nuevo. Cdpr
The findings of the trial court that Bravante and Altarejos waylaid Miguel Nuevo,
Nilo Bauso, and eight year old Jose Nuevo when the three were passing along a trail
near the Bravante's house is more logical and believable than the allegation of selfdefense. The evidence shows that Miguel Nuevo was bringing food items for a
noche buena when he was suddenly attacked by two assailants, one armed with a
spear and the other with a bolo. The victim alone suffered the fatal wounds. The

attack was so sudden that the victim had no opportunity to defend himself or to
inflict retaliatory blows on the assailants. He just fell down after the spearing and
was then hacked by Altarejos with the bolo. The killing was characterized by
treachery.
The Revised Penal Code states:
"ART 14.
Aggravating circumstances The following are aggravating
circumstances:
xxx

xxx

xxx

"(16) That the act be committed with treachery (alevosia).


"There is treachery when the offender commits any of the crimes against the
person, employing means, methods, or forms in the execution thereof which tend
directly and specially to insure its execution, without risk to himself arising from the
defense which the offended party might make."
xxx

xxx

xxx

The waylaying and the sudden attack show that the elements of treachery or
alevosia are present. (See People v. Estillore, 141 SCRA 456).
To support his self-defense theory, Felipe Bravante alleged voluntary surrender. This
claim is belied by the trial court which stated:
"The Court also finds defense' evidence as to the fact of surrender of accused Felipe
Bravante to be unsatisfactory and unconvincing for, as disclosed by the record, the
accused did not surrender but was, in fact, arrested on March 12, 1984 (more than 2
months after the incident) by Patrolman Blandino Deinla and was placed in
detention in the municipal jail of San Fernando, Masbate, up to March 16, 1984
when he posted bail for his provisional liberty (record, pp. 13 to 21). Besides, his
assertion of having surrendered to Patrolman Alvarez has not been corroborated by
any competent and reliable evidence, muchless by Pat. Alvarez whose testimony in
Court did not bear any suggestion to that effect.
"In this case, the crime committed is murder qualified by treachery. The two
accused, all armed with deadly weapons, suddenly attacked the victim without any
warning, accused Felipe Bravante, using his double-bladed spear, struck the victim,
hitting him on the upper portion of the left arm, and on the middle portion of the
victim's breast. When the victim fell down, accused Augusto Altarejos hacked him
with a bolo on the forehead and the neck, causing his instantaneous death, without
any opportunity on the part of the victim to defend himself." (p. 8, Decision of the
trial court).

The third assignment of error has no merit. The evidence clearly shows the
appellants' guilt beyond reasonable doubt.
WHEREFORE, the judgment rendered by the court a quo is hereby AFFIRMED in toto
with costs against the accused-appellants.
SO ORDERED.
Fernan, Paras, Padilla, Bidin and Cortes, JJ., concur.

[G.R. No. 174569. September 17, 2008.]


CHINA BANKING CORPORATION, SPOUSES JOEY & MARY JEANNIE CASTRO and
SPOUSES RICHARD & EDITHA NOGOY, petitioners, vs. BENJAMIN CO, ENGR. DALE
OLEA and THREE KINGS CONSTRUCTION & REALTY CORPORATION, respondents.
DECISION
CARPIO-MORALES, J p:
Petitioner China Banking Corporation sold a lot located at St. Benedict Subdivision,
Sindalan, San Fernando, Pampanga, which was covered by Transfer Certificate of
Title (TCT) No. 450216-R to petitioner-spouses Joey and Mary Jeannie Castro (the
Castro spouses). It sold two other lots also located in the same place covered by
TCT Nos. 450212-R and 450213-R to petitioner-spouses Richard and Editha Nogoy
(the Nogoy spouses). CSEHcT
The lots of the Castro spouses and the Nogoy spouses are commonly bound on their
southeastern side by Lot No. 3783-E, which is covered by TCT No. 269758-R in the
name of respondent Benjamin Co (Co) and his siblings.
Co and his siblings entered into a joint venture with respondent Three Kings
Construction and Realty Corporation for the development of the Northwoods
Estates, a subdivision project covering Lot No. 3783-E and adjacent lots. For this
purpose, they contracted the services of respondent, Engineer Dale Olea.
In 2003, respondents started constructing a perimeter wall on Lot No. 3783-E.
On November 28, 2003, petitioners, through counsel, wrote respondents asking
them to stop constructing the wall, and remove all installed construction materials
and restore the former condition of Lot No. [3]783-E which they (petitioners)
claimed to be a road lot. 1 They also claimed that the construction obstructed and
closed the only means of ingress and egress of the Nogoy spouses and their family,
and at the same time, caved in and impeded the ventilation and clearance due the
Castro spouses' residential house. 2 aESTAI
Petitioners' demand remained unheeded, prompting them to file before the Regional
Trial Court (RTC) of San Fernando, Pampanga a complaint, 3 docketed as Civil Case
No. 12834, for injunction, restoration of road lot/right of way and damages with
prayer for temporary restraining order and/or writ of preliminary injunction.
Before respondents filed their Answer, 4 petitioners filed an Amended Complaint, 5
alleging that the construction of the perimeter wall was almost finished and thus
modifying their prayer for a writ of preliminary injunction to a writ of preliminary
mandatory injunction, viz.: STECDc
WHEREFORE, it is respectfully prayed of this Honorable Court that:

A.
Before trial on the merits, a temporary restraining order be issued
immediately restraining the defendants from doing further construction of the
perimeter wall on the premises, and thereafter, a writ of preliminary mandatory
injunction be issued enjoining the defendants from perpetrating and continuing with
the said act and directing them jointly and severally, to restore the road lot, Lot
3783-E to its previous condition.
xxx
supplied)

xxx

xxx 6 (Underscoring in the original; emphasis

After hearing petitioners' application for a writ of preliminary mandatory injunction,


Branch 44 of the San Fernando, Pampanga RTC denied the same, without prejudice
to its resolution after the trial of the case on the merits, in light of the following
considerations: HSCAIT
After a judicious evaluation of the evidence, the Commissioner's Report on the
Conduct of the Ocular Inspection held on February 14, 2004, as well as the
pleadings, the Court is of the opinion and so holds that a writ of preliminary
injunction should not be issued at this time. Plaintiffs have not clearly shown that
their rights have been violated and that they are entitled to the relief prayed for and
that irreparable damage would be suffered by them if an injunction is not issued.
Whether lot 3783-E is a road lot or not is a factual issue which should be resolved
after the presentation of evidence. This Court is not inclined to rely only on the
subdivision plans presented by plaintiffs since, as correctly argued by defendants,
the subdivision plans do not refer to lot 3783-E hence are not conclusive as to the
status or classification of lot 3783-E. This court notes further that Subdivision Plan
Psd-03-000577 of Lot 3783 from which the other subdivision plans originates [sic]
does not indicate lot 3783-E as a road lot.
Even the physical evidence reveals that lot 3783-E is not a road lot. The Court
noticed during the ocular inspection on February 14, 2004, that there is a PLDT box
almost in front of lot 3783-E. There is no visible pathway either in the form of a
beaten path or paved path on lot 3783-E. Visible to everyone including this court
are wild plants, grasses, and bushes of various kinds. Lot 3783-E could not have
been a road lot because Sps. Nogoy, one of the plaintiffs, even built a structure on
lot 3783-E which they used as a coffin factory. HTSaEC
Plaintiffs failed to prove that they will be prejudiced by the construction of the wall.
The ocular inspection showed that they will not lose access to their residences. As a
matter of fact, lot 3783-E is not being used as an access road to their residences
and there is an existing secondary road within St. Benedict Subdivision that serves
as the main access road to the highway. With respect to the blocking of ventilation
and light of the residence of the Sps. Castro, suffice it to state that they are not
deprived of light and ventilation. The perimeter wall of the defendants is situated on
the left side of the garage and its front entrance is still open and freely accessible.

This is indeed an issue of fact which should be ventilated in a full blown trial,
determinable through further presentation of evidence by the parties. . . .
xxx

xxx

xxx

WHEREFORE, premises considered, plaintiffs' application for the issuance of a writ of


preliminary mandatory injunction is denied without prejudice to its resolution after
the trial of the case on the merits. 7 (Underscoring supplied) cSATEH
Their Motion for Reconsideration 8 having been denied, petitioners filed a petition
for certiorari 9 before the Court of Appeals which dismissed the same 10 and denied
their subsequent Motion for Reconsideration. 11
Hence, the petitioners filed the present petition, 12 faulting the Court of Appeals in
I.
. . . DECID[ING] AND RESOLV[ING] A QUESTION OF SUBSTANCE NOT IN ACCORD
WITH THE BASIC GOVERNING LAW (PRESIDENTIAL DECREE NO. 1529) AND
APPLICABLE DECISIONS OF THIS HONORABLE COURT.
II.
. . . PROMOTING THE LOWER COURT'S RATIOCINATION THAT PETITIONERS ARE
SEEKING THE ESTABLISHMENT OF AN EASEMENT OF RIGHT OF WAY, WHEN THEY
ARE CLAIMING THE ENFORCEMENT OF THE STATUTORY PROHIBITION AGAINST
CLOSURE OR DISPOSITION OF AN ESTABLISHED ROAD LOT. ISHCcT
III.
. . . SANCTION[ING] THE LOWER COURT'S PATENT GRAVE ABUSE OF DISCRETION IN
PERFUNCTORILY DENYING PETITIONERS' APPLICATION FOR WRIT OF PRELIMINARY
INJUNCTION. 13
It is settled that the grant of a preliminary mandatory injunction rests on the sound
discretion of the court, and the exercise of sound judicial discretion by the lower
court should not be interfered with except in cases of manifest abuse. 14
It is likewise settled that a court should avoid issuing a writ of preliminary
mandatory injunction which would effectively dispose of the main case without trial.
15
In the case at bar, petitioners base their prayer for preliminary mandatory injunction
on Section 44 of Act No. 496 (as amended by Republic Act No. 440), Section 50 of
Presidential Decree 1529, and their claim that Lot No. 3783-E is a road lot. DTaSIc
To be entitled to a writ of preliminary injunction, however, the petitioners must
establish the following requisites: (a) the invasion of the right sought to be

protected is material and substantial; (b) the right of the complainant is clear and
unmistakable; and (c) there is an urgent and permanent necessity for the writ to
prevent serious damage. 16
Since a preliminary mandatory injunction commands the performance of an act, it
does not preserve the status quo and is thus more cautiously regarded than a mere
prohibitive injunction. 17 Accordingly, the issuance of a writ of preliminary
mandatory injunction is justified only in a clear case, free from doubt or dispute. 18
When the complainant's right is thus doubtful or disputed, he does not have a clear
legal right and, therefore, the issuance of injunctive relief is improper.
Section 44 of Act 496, 19 which petitioners invoke, provides:
xxx

xxx

HCEcaT

xxx

Any owner subdividing a tract of registered land into lots shall file with the Chief of
the General Land Registration Office a subdivision plan of such land on which all
boundaries, streets and passageways, if any, shall be distinctly and accurately
delineated. If no streets or passageways are indicated or no alteration of the
perimeter of the land is made, and it appears that the land as subdivided does not
need of them and that the plan has been approved by the Chief of the General Land
Registration Office, or by the Director of Lands as provided in section fifty-eight of
this Act, the Register of Deeds may issue new certificates of title for any lot in
accordance with said subdivision plan. If there are streets and/or passageways, no
new certificates shall be issued until said plan has been approved by the Court of
First Instance of the province or city in which the land is situated. A petition for that
purpose shall be filed by the registered owner, and the court after notice and
hearing, and after considering the report of the Chief of the General Land
Registration Office, may grant the petition, subject to the condition, which shall be
noted on the proper certificate, that no portion of any street or passageway so
delineated on the plan shall be closed or otherwise disposed of by the registered
owner without approval of the court first had, or may render such judgment as
justice and equity may require. 20 (Underscoring supplied by the petitioners)
Section 50 of Presidential Decree No. 1529, 21 which petitioners likewise invoke,
provides: DEHaTC
SEC. 50.
Subdivision and consolidation plans. Any owner subdividing a tract
of registered land into lots which do not constitute a subdivision project as defined
and provided for under P.D. No. 957, shall file with the Commissioner of Land
Registration or with the Bureau of Lands a subdivision plan of such land on which all
boundaries, streets, passageways and waterways, if any, shall be distinctly and
accurately delineated.
If a subdivision plan, be it simple or complex, duly approved by the Commissioner of
Land Registration or the Bureau of Lands together with the approved technical

descriptions and the corresponding owner's duplicate certificate of title is presented


for registration, the Register of Deeds shall, without requiring further court approval
of said plan, register the same in accordance with the provisions of the Land
Registration Act, as amended: Provided, however, that the Register of Deeds shall
annotate on the new certificate of title covering the street, passageway or open
space, a memorandum to the effect that except by way of donation in favor of the
national government, province, city or municipality, no portion of any street,
passageway, waterway or open space so delineated on the plan shall be closed or
otherwise disposed of by the registered owner without the approval of the Court of
First Instance of the province or city in which the land is situated. . . . 22
(Underscoring supplied by petitioner) CDHcaS
The best evidence thus that Lot No. 3783-E is a road lot would be a memorandum to
that effect annotated on the certificate of title covering it. Petitioners presented TCT
No. 185702-R covering Lot No. 3783-E in the name of Sunny Acres Realty
Management Corporation which states that the registration is subject to "the
restrictions imposed by Section 44 of Act 496, as amended by Rep. Act No. 440." 23
The annotation does not explicitly state, however, that Lot No. 3783-E is a road lot.
In any event, TCT No. 185702-R had been cancelled and in its stead was issued TCT
No. 247778-R 24 which, in turn, was cancelled by TCT No. 269758-R 25 in the name
of respondent Co and his siblings.
TCT No. 247778-R and respondent Co's TCT No. 269758-R do not now contain the
aforementioned memorandum annotated on TCT No. 185702-R re the registration
being "subject to restrictions imposed by Section 44 of Act 496, as amended by
Republic Act No. 440." Given the immediately foregoing circumstances, there is
doubt on whether Lot No. 3783-E is covered by a road lot. STDEcA
While petitioners correctly argue that certain requirements must be observed before
encumbrances, in this case the condition of the lot's registration as being subject to
the law, may be discharged and before road lots may be appropriated 26 gratuity
assuming that the lot in question was indeed one, TCT Nos. 247778-R and 269758-R
enjoy the presumption of regularity 27 and the legal requirements for the removal
of the memorandum annotated on TCT No. 185702-R are presumed to have been
followed. 28
At all events, given the following factual observations of the trial court after
conducting an ocular inspection of Lot 3783-E, viz.:
. . . The ocular inspection showed that [petitioners] will not lose access to their
residences. As a matter of fact, lot 3783-E is not being used as an access road to
their residences and there is an existing secondary road within St. Benedict
Subdivision that serves as the main access road to the highway. 29 With respect to
the blocking of ventilation and light of the residence of the Sps. Castro, suffice it to
state that they are not deprived of light and ventilation. The perimeter wall of the

defendants is situated on the left side of the garage and its front entrance is still
open and freely accessible, 30 EHCaDS
and the absence of a showing that petitioners have an urgent and paramount need
for a writ of preliminary mandatory injunction to prevent irreparable damage, they
are not entitled to such writ.
WHEREFORE, the petition is DENIED.
SO ORDERED.

[G.R. Nos. 139275-76 and 140949. November 25, 2004.]


LIGHT RAIL TRANSIT AUTHORITY, petitioner, vs. COURT OF APPEALS and T.N. LAL &
CO., LTD., respondents.
The Government Corporate Counsel for petitioner.
Vitales Dela Cruz Diwa & Napenas for private respondent.
SYNOPSIS
T.N. LAL & Co. Ltd. donated a stereo system to the Light Rail Transit Authority (LRTA)
to provide music for relaxation and amusement in the 18 stations and all the rail
vehicles of the LRTA along its Line 1. Later, LAL and LRTA entered into an agreement
to expire on March 31, 1997 whereby LAL was authorized to air commercial
advertisements through the aforesaid stereo system. On March 31, 1997, LAL filed
an action for reformation of contract and damages with application for preliminary
mandatory and prohibitory injunction and temporary restraining order against LRTA
with the Regional Trial Court of Pasay City. The trial court issued a temporary
restraining order enjoining the parties to maintain the status quo until April 20,
1997. On April 16, 1997, the trial court granted the issuance of a writ of preliminary
injunction on the condition that LAL will post a bond. On April 22, 1997, LRTA
unplugged the electrical connection of the sound system for failure of LAL to post a
bond. On April 25, 1997, LAL filed an injunction bond and the writ of preliminary
injunction was issued by the trial court which was immediately served on LRTA.
Later, upon motion of LAL, the trial court found the officers of LRTA guilty of indirect
contempt because they refused to comply with the order of the court to restore the
sound system to its original status/condition. In the petitions for certiorari
separately filed by the General Manager of Metro Transit Organization and the LRTA,
the Court of Appeals annulled the Order that found the officers of the LRTA guilty of
indirect contempt but it upheld the writ of preliminary injunction issued by the trial
court. Hence, this petition. DcITHE
The Court ruled that the contract explicitly states that it was due to expire on March
31, 1997, the same day respondent filed its action for reformation of contract. When
the trial court issued its Order dated April 16, 1997 ordering petitioner to refrain
from terminating the contract and to retain respondent's services until further
orders from the court, the contract had already expired. Respondent, therefore, has
no clear and unmistakable right to be protected by the issuance of the writ. This is
but a consequence of their stipulation of a determinate period for its expiration. The
injunction, in effect, virtually extended the original period agreed upon. It was the
trial court's belief that to allow the contract to expire would render respondent's
action for reformation of contract moot and academic. Needless to say, a contract
can be renewed, revived or extended only by mutual consent of the parties. No
court can compel a party to agree through the instrumentality of a writ of

preliminary injunction. Also, the possibility of irreparable damage without proof of


actual existing right is not a ground for an injunction.
SYLLABUS
1.
REMEDIAL LAW; CIVIL PROCEDURE; JUDGMENT; IT IS THE DISPOSITIVE PART
THAT ACTUALLY SETTLES AND DECLARES THE RIGHTS AND OBLIGATIONS OF THE
PARTIES. It must be stressed that it is the dispositive part of the judgment that
actually settles and declares the rights and obligations of the parties, finally,
definitively, and authoritatively, notwithstanding the existence of inconsistent
statements in the body that may tend to confuse. ICcaST
2.
ID.; ID.; PROVISIONAL REMEDIES; PRELIMINARY INJUNCTION; PURPOSE AND
REQUISITES. The purpose of a preliminary injunction is to prevent threatened or
continuous irremediable injury to some of the parties before their claims can be
thoroughly studied and adjudicated. To be entitled to an injunctive writ, the
petitioner has the burden to establish the following requisites: (1) a right in esse or
a clear and unmistakable right to be protected; (2) a violation of that right; (3) that
there is an urgent and permanent act and urgent necessity for the writ to prevent
serious damage.
3.
ID.; ID.; ID.; ID.; PLAINTIFF'S ENTITLEMENT THERETO CAN BE DETERMINED BY
THE TERMS OF THE CONTRACT BETWEEN THE PARTIES; CASE AT BAR. In the
present case, respondent's entitlement to the injunctive writ is found on its prima
facie legal right to remain in the premises and continue broadcasting commercial
advertisements within the LRT stations. The only way to determine this is to look
into the terms of the contract between petitioner and respondent, as it provides for
their respective rights and obligations. It is fundamental that if the terms of a
contract are clear and leave no doubt upon the intention of the contracting parties,
the literal meaning of its stipulations shall control. No amount of extrinsic aids are
required and no further extraneous sources are necessary in order to ascertain the
parties' intent.
4.
ID.; ID.; ID.; ID.; NO COURT CAN COMPEL A PARTY TO AGREE TO A CONTRACT
THROUGH THE INSTRUMENTALITY OF A WRIT THEREOF. The contract explicitly
states that it was due to expire on March 31, 1997, the same day respondent filed
its action for reformation of contract. When the trial court issued its Order dated
April 16, 1997, ordering petitioner to refrain from terminating the contract and to
retain respondent's services until further orders from the court, the contract had
already expired. Respondent, therefore, has no clear and unmistakable right to be
protected by the issuance of the writ. This is but a consequence of their stipulation
of a determinate period for its expiration. The injunction, in effect, virtually
extended the original period agreed upon. It was the trial court's belief that to allow
the contract to expire would render respondent's action for reformation of contract
moot and academic. Needless to say, a contract can be renewed, revived or

extended only by mutual consent of the parties. No court can compel a party to
agree to a contract through the instrumentality of a writ of preliminary injunction.
Also, the possibility of irreparable damage without proof of actual existing right is
not a ground for an injunction. cCaATD
DECISION
AUSTRIA-MARTINEZ, J p:
Both filed by petitioner Light Rail Transit Authority (LRTA), G.R. Nos. 139275-76
assail the Decision dated February 26, 1999, rendered by the Court of Appeals (CA)
in the consolidated petitions docketed as CA-G.R. SP Nos. 44220 and 44227; 1 G.R.
No. 140949, on the other hand, questions the Decision dated November 12, 1999,
issued by the CA in CA-G.R. SP No. 52382. 2 These cases originated from the orders
issued by the Regional Trial Court of Pasay City (Branch 111) in Civil Case No. 970423. HcDSaT
The antecedent facts of these consolidated petitions were summed up by the CA in
CA-G.R. SP Nos. 44220 and 44227, as follows:
On October 1, 1986, T.N. LAL & CO., LTD. (private respondent herein and hereafter
to be referred to as LAL for short) donated a stereo system to the LRTA, to provide
music for relaxation and amusement in the 18 stations and all the rail vehicles of
LRTA along its Line 1. On March 19, 1990, LAL and the LRTA entered into an
agreement whereby LAL was authorized to air commercial advertisements through
the aforesaid stereo system for a period of five (5) years and three (3) months from
March 19, 1990, in consideration of a fee equivalent to thirty percent (30%) of the
gross sales of advertisements (less any agency commission) annually, with
minimum annual guaranteed fees. Subsequently, the period of the contract was
amended to five (5) years from April 1, 1992, or until March 31, 1997.
On March 31, 1997, LAL filed an action for reformation of contract and damages
(with application for preliminary mandatory & prohibitory injunction and Temporary
Restraining Order) against LRTA with the Regional Trial Court at Pasay City, and the
same was docketed as Civil Case No. 97-0423 and raffled to Branch 111, presided
over by the respondent judge.
The complaint alleged that vibrations and noises coming from the light rail vehicles
caused disruptions in the sound system, resulting in a sharp decline of
advertisements aired over the said system. LAL requested for a moratorium of the
agreement until the said problem can be solved, but LRTA refused to grant such
request. Hence, the complaint prays that the contract be reformed by including
therein a provision allowing a moratorium in case of disruption affecting the system
attributable to mechanical/technical problems in the LRT line or light rail vehicles,
including a pro rata extension of the agreement. The complaint also prays for a
temporary restraining order and preliminary injunction ordering the defendant to

maintain the status quo and prohibiting it or any of its agents from disrupting,
cutting, severing or disconnecting the electric power supplied to the plaintiff's
sound system.
Upon receipt of the complaint, the respondent Judge issued a Temporary Restraining
Order enjoining the parties to maintain the status quo, and restraining the LRTA
from disrupting, cutting, severing or disconnecting the electric power supplied to
LAL's sound system installed in all the LRT stations and vehicles. The TRO was to
expire on April 20, 1997.
On April 16, 1997, after notice and hearing, the respondent judge issued an Order,
the dispositive portion of which is as follows:
WHEREFORE, with all the foregoing considerations, and subject to the condition of
plaintiff posting a bond in the amount of Five Hundred Thousand Pesos
(P500,000.00), Philippine Currency, conditioned to answer for any damage which
the defendant may suffer by reason of the injunction herein granted, let therefore, a
Writ of Preliminary Injunction be issued in favor of the plaintiff against the defendant
who is enjoined from:
(a)
Terminating or declaring as terminated the Agreement dated March 19, 1990
as amended on August 6, 1993 and to observe the status quo before March 31,
1997; and,
(b)
As a consequence thereof, to desist from removing, disrupting, interfering,
disconnecting or tampering the power supply leading to plaintiff's sound system, in
all places, sites and locations within the defendant's area of responsibility for the
duration of this proceedings, UNLESS THIS ORDER IS EARLIER RECALLED by this
Court. EaSCAH
SO ORDERED. (p. 57, Rollo)
On April 22, 1997, LRTA filed a Manifestation alleging that the failure of LAL to post
a bond has rendered the Order dated April 16, 1997 ineffective. On the same day,
LRTA unplugged the electrical connection of the sound system.
However, on April 25, 1997, LAL filed an injunction bond in the amount of
P500,000.00, and the writ of preliminary injunction was issued by the respondent
judge. The same was served on LRTA on the same day.
On April 25, 1997, LAL filed a "Motion to Cite the Defendant in Contempt", alleging
that on April 22, 1997, in defiance of the court's Order of March 31, 1997 (sic), the
defendant disconnected and cut off the power supply to its sound system thereby
disrupting and disturbing the regular programs and advertisements aired therein.
The motion was set for hearing on April 29, 1997.

On April 28, 1997, LRTA filed a motion for postponement which was granted and the
hearing was reset to May 15, 1997. However, the respondent judge issued an order
dated April 29, 1997, the dispositive portion of which is as follows:
WHEREFORE, pending resolution of plaintiff's 'Motion To Cite Defendant In
Contempt' which is calendared anew on May 15, 1997 at 8:30 A.M., defendant Light
Rail Transit Authority as well as its counsel are hereby ORDERED to comply with the
Order of this Court dated April 16, 1997 to cause the complete restoration of the
sound system to its original status/condition immediately upon receipt hereof. Let
this Order be served for prompt implementation by the Sheriff of this Court who is
directed to submit his report/return on the action taken in this regard.
SO ORDERED. (p. 32, Rollo)
On April 30, 1997, the LRTA filed a motion for reconsideration of the said order.
On May 5, 1997, LAL filed another motion to cite Evangeline M. Razon, Geronima P.
Anastacio and Atty. Moises S. Tolentino, [Jr.] for civil contempt, for refusing to
comply with the order of the court dated April 29, 1997. The motion was requested
to be submitted for [to] the court for proper decision "immediately upon receipt
hereof".
On May 7, 1997, LRTA filed an opposition to the two motions to cite in contempt.
On May 13, 1997, the respondent judge issued the herein assailed order the
dispositive portion of which is as follows:
WHEREFORE, this Court finds the defendants guilty of indirect contempt for defying
the Orders of April 16 and 29, 1997 and the Writ of Preliminary Injunction issued in
this case. Since the act committed can still be corrected or capable of being undone
by the officers of the defendant corporation and/or its agents/operators themselves,
let therefore a Warrant of Arrest be issued against the following persons, namely:
1)

Evangeline M. Razon, Officer-in-charge, LRTA;

2)

Geronima P. Anastacio, Head of LRTA, Legal Department; and,

3)
Moises S. Tolentino, [Jr.], General Manager, Metro Transit Organization,
Operators of the LRT system.
for their apprehension and incarceration/imprisonment until such time when they
have performed or cause to be performed the act complained of in this case, by
reconnecting, replugging or reactivating plaintiff's sound system at all LRT facilities
and restoring them in the same state and condition as it was on April 16, 1997.
SO ORDERED. (p. 25, Rollo)

Accordingly, warrants of arrest were issued against the persons named in the order.
Motions to quash warrants of arrest were filed by LRTA, Evangeline M. Razon, [and]
Geronima P. Anastacio. At the same time, the LRTA filed a motion for the respondent
judge to inhibit himself from further hearing the case. . . . 3
Atty. Moises S. Tolentino, Jr., General Manager of Metro Transit Organization
(operators of the LRT system), then filed a special civil action for certiorari and
prohibition (CA-G.R. SP No. 44227) on May 21, 1997, assailing the trial court's order
dated May 13, 1997, finding him, Evangeline M. Razon, and Geronima P. Anastacio,
guilty of indirect contempt and ordering the issuance of warrants of arrest against
them. Atty. Tolentino contended that the trial court issued the orders in disregard of
substantive and procedural due process. 4
Petitioner LRTA, meanwhile, filed a special civil action for certiorari (CA-G.R. SP No.
44220) on May 28, 1997, seeking the annulment of the following orders issued by
the trial court: (1) Order dated April 29, 1997, ordering petitioner to comply with the
trial court's Order dated April 16, 1997; and (2) Order dated May 13, 1997, denying
petitioner's motion for reconsideration and finding Atty. Tolentino, Razon, and
Anastacio, guilty of indirect contempt and ordering the issuance of warrants of
arrest against them.
CA-G.R. SP Nos. 44220 and 44227 were thereafter consolidated as both involved
related issues. 5
On February 26, 1999, the CA rendered its decision in the above-mentioned cases,
the decretal portion of which reads:
WHEREFORE, the petitions filed in these cases are hereby GIVEN DUE COURSE, and
judgment is hereby rendered ANNULLING AND SETTING ASIDE the Order dated May
13, 1997 and the warrants of arrest in connection therewith, issued by the
respondent judge in Civil Case No. 97-0423.
SO ORDERED. 6
While the CA annulled the Order dated May 13, 1997 and the warrants of arrest
issued by the trial court in Civil Case No. 97-0423, it nevertheless ruled that the writ
of preliminary injunction issued by the trial court per Order dated April 16, 1997, as
well as the Order dated April 29, 1997, is valid and binding. 7
Respondent then filed with the trial court a Motion to Enforce the Order dated April
16, 1997. Petitioner, on the other hand, filed a Manifestation asking that the
resolution of respondent's motion be suspended on the ground that there appears
to be an inconsistency with the body and the dispositive portion of the CA's
decision. 8
Notwithstanding petitioner's manifestation, the trial court issued an order dated
April 7, 1999, granting respondent's motion and ordering petitioner to immediately

restore the power supply to respondent's sound system within 24 hours. 9 Petitioner
filed a motion for reconsideration but the trial court denied it in another (second)
order dated April 7, 1999.
On April 22, 1999, the trial court issued an order amending the second order dated
April 7, 1999, to be dated April 20, 1999.10
Thus, petitioner filed on April 22, 1999, another special civil action for certiorari (CAG.R. SP No. 52382) with the CA, contesting the trial court's orders dated April 7,
1999 and April 20, 1999 (previously dated April 7, 1999).
Petitioner alleged that the assailed orders were issued with grave abuse of
discretion, as these are not in accordance with the CA's decision dated February 26,
1999. 11
In the meantime, petitioner, on April 14, 1999, filed in CA-G.R. SP Nos. 44220 and
44227 a Motion for Clarification of Decision, 12 but it was denied by the CA per
Resolution dated May 21, 1999. 13 Petitioner sought reconsideration but it was also
denied per Resolution dated July 9, 1999, 14 prompting petitioner to institute on July
29, 1999, a petition for certiorari with this Court, docketed as G.R. Nos. 139275-76.
The CA then promulgated its decision in CA-G.R. SP No. 52382 on November 12,
1999, dismissing the petition and affirming the assailed orders dated April 7, 1999
and April 20, 1999. Petitioner elevated the dismissal to this Court via petition for
review filed on December 20, 1999, docketed as G.R. No. 140949. SIaHDA
On February 21, 2000, the Court ordered the consolidation of G.R. Nos. 139275-76
and G.R. No. 140949. 15
In G.R. Nos. 139275-76, petitioner raises the following issues:
I
IF THE BODY OF THE DECISION IN THE SAID CONSOLIDATED CASES IS IN CONFLICT
WHICH HAS BECOME FINAL CONFLICTS WITH THE DISPOSITIVE PORTION THEREOF,
WHICH OF THEM SHALL PREVAIL?
II
CAN THE LIFETIME OF AN EXPIRED CONTRACT BE EXTENDED BY A PRELIMINARY
INJUNCTION? 16
In G.R. No. 140949, the following:
1.
CAN A BODY OF THE DECISION [WHICH DOES NOT HAVE ANY SUPPORT IN OR
CONTRARY TO THE DISPOSITIVE PORTION THEREOF] BE ENFORCED OR EXECUTED?

2.
WHETHER OR NOT THE ORDER OF THE TRIAL COURT A QUO DATED APRIL 7,
1999 AND THE OTHER ONE ALSO DATED APRIL 7, 1999 [WHICH WAS LATER
AMENDED BY THE TRIAL COURT A QUO TO BE DATED APRIL 20, 1999 IN AN ORDER
DATED APRIL 22, 1999] ENFORCING THE BODY OF THE DECISION OF THE
HONORABLE COURT OF APPEALS DATED FEBRUARY 26, 1999 IN CA-G.R. SP NO.
44220 AND CA-G.R. SP NO. 44227 ARE NULL AND VOID. 17
Petitioner's argument rests mainly on its adamant belief that the discussion of the
CA in the body of its Decision dated February 26, 1999, rendered in CA-G.R. SP Nos.
44220 and 44227, is inconsistent with its fallo, which nullified and set aside the trial
court's order dated May 13, 1997. According to petitioner, since the May 13, 1997
order is premised on the April 16, 1997 (granting the issuance of the writ of
preliminary injunction) and April 29, 1997 (enforcing compliance with the injunctive
writ) orders, therefore, these orders are likewise invalid, and respondent cannot
seek its enforcement.
The Court, however, has carefully read the assailed decision and cannot find
anything inconsistent with the body and fallo. Even a student of law can understand
its import. It has been said that, to understand the dispositive portion of a decision,
one has only to ascertain the issues of the action. 18
CA-G.R. SP Nos. 44220 and 44227 involved three issues. First is whether or not an
injunction order, as embodied in the April 16, 1997 order, is effective prior to the
posting of an injunction bond and the issuance of the injunctive writ; 19 second,
whether or not the Order of April 29, 1997 is valid and binding; 20 and the third is
whether or not the petitioners were validly held guilty of contempt of court per
Order dated May 13, 1997. 21
On the first issue, the CA categorically ruled that the April 16, 1997 order is binding
even without the filing of the injunction bond. 22 On the second issue, the CA
likewise ruled that the April 29, 1997 Order is valid and binding. 23 It was on the
third issue that the CA found grave abuse of discretion committed by the trial court,
and the Order dated May 13, 1997 was consequently rendered null and void. The CA
is clear on this score. It held, viz.:
The Motion to Cite Defendant in Contempt, dated April 23, 1997 (Annex "G",
Petition, SP No. 44227) does not name them as respondents. It prays only that the
defendant (LRTA) "and its officers and employees who are responsible for the act
complained of" be held in contempt. It is only in the Motion to Cite Defendants for
Civil Contempt Under Rule 71, Section 7 of the Revised Rules of Court dated May 5,
1997 (sic) that Evangeline M. Razon, Geronima P. Atanacio, and Moises S. Tolentino,
[Jr.] are mentioned as "responsible on the continuing defiance of the Orders of the
Honorable Court." But the said motion was fatally defective in that it did not contain
a proper notice of hearing, as required by Sec. 4, Rule 15 of the Revised Rules of

Court. It only contains the request to the Branch Clerk of Court that the said motion
be submitted to the court "immediately upon receipt hereof."
Worst of all, the respondent judge issued his disputed order . . ., two (2) days before
the date that he himself fixed for the hearing of the motion to cite the defendant in
contempt. Clearly, the said persons were denied their day in court.
Moreover, we have reviewed the transcript of the ex parte hearing conducted by the
respondent judge on April 29, 1997 (on the motion to cite defendant in contempt
dated April 23, 1997), and we find that the evidence presented against the
abovenamed persons (who are now facing warrants of arrest) were basically
hearsay testimony. . . . The respondent judge acted with grave abuse of discretion in
issuing his disputed order, and its corresponding warrants of arrest, without a
hearing, and on the basis of flimsy evidence. 24 (Emphasis Ours)
It is plain to see that only the May 13, 1997 order was nullified by the CA. The April
16 and 29, 1997 orders remain valid and binding. Petitioner's argument that these
two orders should likewise have been nullified because the May 13, 1997 order is
based thereon, is misplaced. The nullity of the May 13, 1997 order was not based on
these 2 orders, but on grounds of lack of due process and evidence. These grounds
inevitably led to the dispositive portion of the CA's decision. It must be stressed that
it is the dispositive part of the judgment that actually settles and declares the rights
and obligations of the parties, finally, definitively, and authoritatively,
notwithstanding the existence of inconsistent statements in the body that may tend
to confuse. 25
If there was any error committed by the CA, it was in failing to state in the
dispositive portion of the decision that the petition was only partially granted. But
this does not affect the decision, as its import can be grasped notwithstanding the
lapse. Consequently, the Decision dated February 26, 1999 in CA-G.R. SP Nos.
44220 and 44227 nullifying the Order dated May 13, 1997 is a valid decision.
aHcACI
Nevertheless, the Court agrees with petitioner that the trial court committed grave
abuse of discretion in issuing the injunctive writ.
Section 3 of Rule 58 of the Rules of Court provides for the grounds justifying the
issuance of a preliminary injunction, to wit:
SEC. 3.
Grounds for issuance of preliminary injunction. A preliminary
injunction may be granted when it is established:
(a)
That the applicant is entitled to the relief demanded, and the whole or part of
such relief consists in restraining the commission or continuance of the act or acts
complained of, or in requiring the performance of an act or acts, either for a limited
period or perpetually;

(b)
That the commission, continuance or non-performance of the act or acts
complained of during the litigation would probably work injustice to the applicant; or
(c)
That a party, court, agency or a person is doing, threatening or is attempting
to do, or is procuring or suffering to be done, some act or acts probably in violation
of the rights of the applicant respecting the subject of the action or proceeding, and
tending to render the judgment ineffectual.
The purpose of a preliminary injunction is to prevent threatened or continuous
irremediable injury to some of the parties before their claims can be thoroughly
studied and adjudicated. To be entitled to an injunctive writ, the petitioner has the
burden to establish the following requisites: 26
(1)

a right in esse or a clear and unmistakable right to be protected;

(2)

a violation of that right;

(3)
that there is an urgent and permanent act and urgent necessity for the writ to
prevent serious damage.
In the present case, respondent's entitlement to the injunctive writ is found on its
prima facie legal right to remain in the premises and continue broadcasting
commercial advertisements within the LRT stations. The only way to determine this
is to look into the terms of the contract between petitioner and respondent, as it
provides for their respective rights and obligations. It is fundamental that if the
terms of a contract are clear and leave no doubt upon the intention of the
contracting parties, the literal meaning of its stipulations shall control. No amount of
extrinsic aids are required and no further extraneous sources are necessary in order
to ascertain the parties' intent. 27
The "Agreement" contains the following stipulations, inter alia:
Whereas, for purposes of adjusting the five-year period corresponding to the annual
minimum guaranteed amount disrupted by the start-up ninety-day period and the
six-month moratorium period effective September 1, 1990, to end March 1, 1991,
the parties have agreed to formally amend the "Agreement" to reflect the changes
thereon;
xxx
1.

xxx

xxx

Article I (a) of the "Agreement" is hereby amended to read as follows:

(a.)
This Agreement shall be effective for five (5) years to commence on April 1,
1992 until March 31, 1997, unless sooner terminated as provided hereunder." 28
The contract explicitly states that it was due to expire on March 31, 1997, the same
day respondent filed its action for reformation of contract. When the trial court
issued its Order dated April 16, 1997, ordering petitioner to refrain from terminating

the contract and to retain respondent's services until further orders from the court,
the contract had already expired. Respondent, therefore, has no clear and
unmistakable right to be protected by the issuance of the writ. This is but a
consequence of their stipulation of a determinate period for its expiration. 29 The
injunction, in effect, virtually extended the original period agreed upon. THcaDA
It was the trial court's belief that to allow the contract to expire would render
respondent's action for reformation of contract moot and academic. 30 Needless to
say, a contract can be renewed, revived or extended only by mutual consent of the
parties. No court can compel a party to agree to a contract through the
instrumentality of a writ of preliminary injunction. 31 Also, the possibility of
irreparable damage without proof of actual existing right is not a ground for an
injunction. 32
WHEREFORE, the petitions in G.R. Nos. 139275-76 and 140949, are hereby
GRANTED. The Decision dated February 26, 1999, in CA-G.R. SP Nos. 44220 and
44227, and the Decision dated November 12, 1999, in CA-G.R. SP No. 52382,
rendered by the Court of Appeals are hereby SET ASIDE. Consequently, the Orders
dated April 16 and 29, 1997, issued by the Regional Trial Court of Pasay City (Branch
111) in Civil Case No. 97-0423, and all other orders appurtenant thereto, are
NULLIFIED.
The trial court is ORDERED to proceed with Civil Case No. 97-0423 with immediate
dispatch. HIDCTA
SO ORDERED.
Puno, Callejo, Sr., Tinga and Chico-Nazario, JJ ., concur.

[G.R. No. 157494. December 10, 2004.]


BACOLOD CITY WATER DISTRICT, petitioner, vs. THE HON. EMMA C. LABAYEN,
Presiding Judge, RTC of Bacolod City, Br. 46 and the City of Bacolod, respondents.
Office of the Government Corporate Counsel for petitioner.
Vicente A. Sabornay for respondents.
SYNOPSIS
Respondent City filed a case for Injunction with Prayer for Temporary Restraining
Order (TRO) and/or Preliminary Mandatory Injunction against petitioner who
announced the implementation of its water rates adjustment. The trial court issued
a restraining order but the same was put in issue: Whether the Order was a TRO or
a preliminary injunction. CAIHTE
The Court ruled that the attendant facts and circumstances of the case clearly
showed that the trial court issued a TRO. That the Order failed to state the period
for the restraint does not convert it from a TRO to a preliminary injunction. And the
20-day limited period of effectivity of the TRO is absolute. The 20-day period should
be deemed incorporated in the Order where there is an omission to do so.
SYLLABUS
REMEDIAL LAW; CIVIL PROCEDURE; ACTION FOR INJUNCTION; DISTINGUISHED FROM
PRELIMINARY INJUNCTION; ELUCIDATED. Injunction is a judicial writ, process or
proceeding whereby a party is ordered to do or refrain from doing a certain act. It
may be the main action or merely a provisional remedy for and as an incident in the
main action. The main action for injunction is distinct from the provisional or
ancillary remedy of preliminary injunction which cannot exist except only as part or
an incident of an independent action or proceeding. As a matter of course, in an
action for injunction, the auxiliary remedy of preliminary injunction, whether
prohibitory or mandatory, may issue. Under the law, the main action for injunction
seeks a judgment embodying a final injunction which is distinct from, and should
not be confused with, the provisional remedy of preliminary injunction, the sole
object of which is to preserve the status quo until the merits can be heard. A
preliminary injunction is granted at any stage of an action or proceeding prior to the
judgment or final order. It persists until it is dissolved or until the termination of the
action without the court issuing a final injunction. A restraining order, on the other
hand, is issued to preserve the status quo until the hearing of the application for
preliminary injunction which cannot be issued ex parte. Under Rule 58 of the Rules
of Court, a judge may issue a temporary restraining order with a limited life of
twenty (20) days from date of issue. If before the expiration of the twenty (20)-day
period the application for preliminary injunction is denied, the temporary restraining
order would be deemed automatically vacated. If no action is taken by the judge on

the application for preliminary injunction within the said twenty (20) days, the
temporary restraining order would automatically expire on the 20th day by the
sheer force of law, no judicial declaration to that effect being necessary. The rule
against the non-extendibility of the twenty (20)-day limited period of effectivity of a
temporary restraining order is absolute if issued by a regional trial court. The failure
of respondent court to fix a period for the ordered restraint did not lend the
temporary restraining order a breath of semi-permanence which can only be
characteristic of a preliminary injunction. The twenty (20)-day period provided by
the Rules of Court should be deemed incorporated in the Order where there is an
omission to do so. EScAHT
DECISION
PUNO, J p:
First, the chronology of facts. Petitioner Bacolod City Water District (BACIWA) is a
water district established pursuant to Presidential Decree No. 198 as a governmentowned and controlled corporation with original charter. It is in the business of
providing safe and potable water to Bacolod City. ETDHSa
Public respondent City of Bacolod is a municipal corporation created by
Commonwealth Act No. 326, otherwise known as the Charter of Bacolod.
On March 26, 1999, respondent City filed a case for Injunction With a Prayer for
Temporary Restraining Order And/Or Preliminary Mandatory Injunction against
petitioner in the sala of public respondent judge. The petition stated that on January
15, 1999, BACIWA published in the Visayan Daily Star, 1 a local paper of general
circulation, a Schedule of Automatic Water Rates Adjustments for the years 1999,
2000 and 2001. The rates were supposed to take effect seven (7) days after its
posting in the local papers or on January 22, 1999. The increase was aborted after
petitioner unilaterally suspended the January 22, 1999 scheduled implementation.
On March 15, 1999, however, petitioner announced that the rate hike will be
implemented on April 1, 1999. 2
Respondent City opposed. It alleged that the proposed water rates would violate
due process as they were to be imposed without the public hearing required under
Letter of Instructions No. 700 3 and Presidential Decree No. 1479. 4 Hence, it
prayed that before the hearing of the main case, a temporary restraining order or a
preliminary injunction be issued. 5
On March 30, 1999, the court a quo issued an Order 6 summoning the parties with
their counsels to attend the preliminary hearing for the issuance of a temporary
restraining order or preliminary mandatory injunction. On April 8, 1999, it required
the parties to simultaneously submit their respective memoranda on whether it had
jurisdiction over the case and whether a public hearing was conducted re the
proposed increase in water rates. 7

Petitioner filed its Position Paper dated April 15, 1999. It attached documents
evidencing the conduct of extensive and lengthy public hearings in fifty-eight (58) of
the sixty-one (61) barangays of Bacolod City. It opined that original jurisdiction over
cases on rate review is vested in the Local Water Utilities Administration (LWUA);
appellate jurisdiction is vested in the National Water Resources [Board] (NWRB)
whose decisions shall be appealable to the Office of the President. 8
On May 5, 1999, petitioner also filed a Motion to Dismiss. In an Order 9 dated May 7,
1999, the court directed respondent City to file its Opposition to petitioner's Motion
to Dismiss within fifteen (15) days.
On June 17, 1999, respondent City filed a Motion to Set [for] Hearing 10 its
application for a temporary restraining order or preliminary mandatory injunction. It
alleged that the parties had already submitted their respective memoranda and it
has already submitted its Opposition to petitioner's Motion to Dismiss. It also
alleged that petitioner had already effected the water rates increase and collection,
hence, causing irreparable injury to the public. HITAEC
Petitioner opposed the Motion. On July 20, 1999, respondent City filed its Reply to
Opposition and reiterated that the application for the issuance of a temporary
restraining order or preliminary mandatory injunction be heard since petitioner
continued to violate the right of the public to due process and it might take time
before the case would be finally resolved. 11 On the same date, petitioner filed a
Manifestation and Motion 12 stating that the hearing may no longer be necessary as
the respective positions of both parties have already been presented and amplified
in their pleadings and memoranda.
On July 22, 1999, respondent trial court issued an Order 13 stating that there was
no more need to hear the case on the merits 14 as both parties have already
submitted their position papers and documents to prove their respective
allegations.
On July 23, 1999, petitioner filed its Reply 15 to respondent City's Opposition to the
Motion to Dismiss reiterating that petitioner failed to exhaust administrative
remedies provided by law hence the petition be dismissed for utter lack of merit.
After a hiatus of nearly seven (7) months, or on February 18, 2000, respondent City
filed an Urgent Motion for the Issuance of Temporary Restraining Order And[/]Or Writ
of Preliminary Injunction 16 praying that the case be set for hearing on February 24,
2000. On the same date requested, respondent court heard respondent's
application for temporary restraining order and issued an Order 17 commanding
petitioner to stop, desist and refrain from implementing the proposed water rates
for the year 2000 which were then supposed to take effect on March 1, 2000.
On March 7, 2000, petitioner filed an Urgent Motion for Reconsideration and
Dissolution of the Temporary Restraining Order. 18 Respondent court a quo issued

on March 10, 2000 an Order 19 directing respondent City to file an Opposition to the
Urgent Motion. In its Opposition, respondent City 20 contended that the temporary
restraining order issued was not infirmed with procedural and substantive defects. It
also averred that respondent court has jurisdiction over the case since the sole
question of the lack of public hearing does not require the special knowledge or
expertise of an administrative agency and may be resolved by respondent court,
hence the doctrine of primary jurisdiction does not apply.
Respondent court continued with the proceedings by receiving the evidence of
petitioner in support of its Motion for Reconsideration and Dissolution of Temporary
Restraining Order. It further issued Orders dated March 17, 2000 21 and March 20,
2000. 22
On April 6, 2000, respondent court issued an Order 23 finding petitioner's Urgent
Motion for Reconsideration and Dissolution of Temporary Restraining Order moot
and academic considering petitioner's compliance of said temporary restraining
order. TaCSAD

Four (4) days after, in an Order 24 dated April 10, 2000, it denied petitioner's Motion
to Dismiss for lack of merit.
On April 19, 2000, respondent City filed a Manifestation praying that respondent
trial court issue a writ of preliminary injunction against petitioner, stating thus:
A Temporary Restraining Order was issued against the respondents which, however,
expired before the parties were able to finish the presentation of their respective
witnesses and evidences;
The instant case was submitted for resolution and decision of this Honorable Court
during the last week of March but while awaiting the decision of this Honorable
Court, several complaints had reached the petitioner that the respondents had
already reflected in the water billings for the month of April the new water rates for
the year 2000;
xxx

xxx

xxx 25

Petitioner, for its part, filed a Motion for Reconsideration 26 of .respondent trial
court's Order denying its Motion to Dismiss. Respondent City filed an Opposition to
[the] Motion for Reconsideration 27 on June 1, 2000.
Respondent court did not act upon petitioner's Motion for Reconsideration until
respondent City filed an [Ex Parte] Motion for Speedy Resolution 28 of the case on
October 6, 2000 praying that the case be resolved before the year 2000 ends in
order to prevent the implementation of the water rates increase for the year 2001
which was to be imposed allegedly without the benefit of a public hearing.

On December 21, 2000, respondent court issued the assailed Decision 29 granting
the final injunction which allegedly confirmed the previous preliminary injunction.
Petitioner filed its Motion for Reconsideration 30 of the assailed Decision on January
11, 2001 asserting, among others, that the case was not yet ripe for decision when
the court granted the final injunction, the petitioner having had no opportunity to
file its answer, avail of the mandatory pre-trial conference and have the case tried
on the merits.
Respondent court denied the Motion for Reconsideration for lack of merit in an
Order 31 dated January 24, 2001. Petitioner then filed a special civil action for
certiorari under Rule 65 in the Court of Appeals. It alleged that public respondent
judge acted without or in excess of jurisdiction and/or with grave and patent abuse
of discretion amounting to lack or excess of jurisdiction when she issued the final
injunction in disregard of petitioner's basic right to due process. 32
The Court of Appeals dismissed the petition for review on certiorari, ratiocinating
thus:
In the case at bar, the [O]rder of public respondent dated 24 February 2000, though
termed by BACIWA as a temporary restraining order, is in fact a preliminary
injunction. The period of the restraint was not limited. By its wordings, it can be
safely inferred that the increased water rates must not be effected until final
disposition of the main case. This note of semi-permanence simply cannot issue
from a mere temporary restraining order. It must be further noted that the
temporary restraining order has been elevated to the same level as the preliminary
injunction in the procedure, grounds and requirements of its obtention by S[ection]
4, Rule 58. Thus, to set [a] distinction, the present practice is to categorically refer
to it as a temporary restraining order. In which case, the omission by the public
respondent in referring to the 24 February 2000 order as a temporary restraining
order could not have been a mere oversight but deliberate. 33
Resorting to this Court, petitioner raises the following issues:
I
THE COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED AND REFUSED TO RULE
THAT RESPONDENT COURT HAD ACTED WITHOUT OR IN EXCESS OF JURISDICTION
AND/OR WITH GRAVE ABUSE OF DISCRETION FOR ARBITRARILY AND CAPRICIOUSLY
RENDERING A DECISION PURPORTING TO ISSUE A FINAL INJUNCTION AND
CONFIRMING ITS ALLEGED PRELIMINARY INJUNCTION, DESPITE THE FACT THAT:
A.

NO PRELIMINARY INJUNCTION HAD BEEN ISSUED;

B.
THE RESPONDENT LOWER COURT DID NOT RESOLVE HEREIN PETITIONER'S
MOTION FOR RECONSIDERATION OF THE ORDER DENYING PETITIONER'S MOTION TO
DISMISS; DHCSTa

C.

THE HEREIN PETITIONER HAD NOT YET FILED ITS ANSWER TO THE PETITION;

D.
THERE WAS STILL NO JOINDER OF THE ISSUES SINCE NO ANSWER HAD YET
BEEN FILED;
E.

THE MANDATORY PRE-TRIAL CONFERENCE WAS NOT YET CONDUCTED;

F.

THERE WAS NO TRIAL ON THE MERITS FOR THE MAIN CASE.

II
THE COURT OF APPEALS GRAVELY ERRED WHEN IT INSISTED THAT THE 24
FEBRUARY 2000 ORDER (ANNEX R) ISSUED BY THE TRIAL COURT WAS A
PRELIMINARY INJUNCTION WHEN THE RECORDS CLEARLY AND INDUBITABLY SHOW
THAT IT WAS A TEMPORARY RESTRAINING ORDER (TRO).
III
BY DISMISSING THE PETITION FOR CERTIORARI, THE COURT OF APPEALS GRAVELY
ERRED WHEN IT EFFECTIVELY PREVENTED PETITIONER FROM FULLY VENTILATING ITS
CASE IN THE MAIN ACTION DUE TO THE IRREGULAR AND CONFUSED PROCEEDINGS
CONDUCTED BY THE RESPONDENT COURT. 34
We rule in favor of petitioner.
The initial issue is the proper characterization of the Order dated February 24, 2000.
The sequence of events and the proceedings that transpired in the trial court make
a clear conclusion that the Order issued was a temporary restraining order and not
a preliminary injunction.
First. We quote the pertinent parts of the questioned Order:
xxx

xxx

xxx

When this motion was called for hearing wherein both parties have argued
exhaustedly their respective sides, this court denied the ten (10) days extension for
further amplification of the arguments of the respondent to oppose the said motion
for issuance of a temporary restraining order.
It appearing therefore, that the acts of the defendant will actually affect the plaintiff
before the decision of this court can be rendered and in order to afford the court to
pass on the issues without the same becoming moot and academic and considering
the urgency of the matter that immediate action should be taken, and pursuant to
Administrative Circular No. 6, Paragraph 4 and sub-paragraph 15 and The Interim
Rules and Guidelines [set forth] by the Rules of Court, this court hereby orders the
respondent[,] its agents, representatives or any person acting in his behalf to stop,
desist and refrain from implementing in their billings the new water rate increase

which will start on March 1, 2000. The Deputy Provincial Sheriff of this court is
hereby ordered to furnish copy of this order to the respondent Bacolod City Water
District as well as to its agents or representatives acting [o]n his behalf. HSEcTC
xxx

xxx

xxx 35 (emphases supplied)

It can be gleaned from the afore-quoted Order that what the trial court issued was a
temporary restraining order and not a preliminary injunction. The trial court has
always referred to it as a temporary restraining order in the succeeding Orders it
issued on March 10, 2000 36 and April 6, 2000. 37
The parties, in their succeeding pleadings, 38 also referred to the assailed Order as
a temporary restraining order. The petitioner filed an Urgent Motion for
Reconsideration and Dissolution of Temporary Restraining Order (TRO) 39 on March
1, 2000. This was opposed by respondent City itself in its Opposition to Motion for
Reconsideration and Dissolution of Temporary Restraining Order (TRO) 40 dated
March 14, 2000. Further, respondent City, in its Manifestation dated April 19, 2000
stated, viz:
xxx

xxx

xxx

A Temporary Restraining Order was issued against the respondents which, however,
expired before the parties were able to finish the presentation of their respective
witnesses and evidences;
xxx

xxx

xxx

WHEREFORE, it is most respectfully prayed that while waiting for the decision and
order of the Honorable Court, a preliminary injunction as prayed for in the petition
be issued against the respondents.
xxx

xxx

xxx 41 (emphases supplied)

It can be gleaned from the foregoing that both parties and respondent trial court
have consistently referred to the directive as a temporary restraining order. It was
only in the respondent court's assailed Decision that the Order was referred to as a
preliminary injunction, viz:
xxx

xxx

xxx

This Court therefore grants the final injunction prayed for restraining the respondent
from the commission of the act complained of for the year 2001 and hereby
confirming the preliminary injunction previously ordered.
xxx

xxx

xxx 42 (emphasis supplied)

Again, it was only when petitioner expressed its vehement objection on the ruling
that the final injunction confirmed the preliminary injunction previously issued,

when the respondent City and the respondent trial court started to insist that the
questioned Order was a preliminary injunction. Given the previous undeviating
references to it as a temporary restraining order, respondents cannot now consider
it as a preliminary injunction to justify the validity of the assailed Decision. The
attendant facts and circumstances clearly show that the respondent trial court
issued a temporary restraining order. THCASc
Second. Injunction is a judicial writ, process or proceeding whereby a party is
ordered to do or refrain from doing a certain act. It may be the main action or
merely a provisional remedy for and as an incident in the main action. 43
The main action for injunction is distinct from the provisional or ancillary remedy of
preliminary injunction which cannot exist except only as part or an incident of an
independent action or proceeding. As a matter of course, in an action for injunction,
the auxiliary remedy of preliminary injunction, whether prohibitory or mandatory,
may issue. Under the law, the main action for injunction seeks a judgment
embodying a final injunction which is distinct from, and should not be confused
with, the provisional remedy of preliminary injunction, the sole object of which is to
preserve the status quo until the merits can be heard. 44 A preliminary injunction is
granted at any stage of an action or proceeding prior to the judgment or final order.
It persists until it is dissolved or until the termination of the action without the court
issuing a final injunction. 45
A restraining order, on the other hand, is issued to preserve the status quo until the
hearing of the application for preliminary injunction which cannot be issued ex
parte. Under Rule 58 46 of the Rules of Court, a judge may issue a temporary
restraining order with a limited life of twenty (20) days from date of issue. If before
the expiration of the twenty (20)-day period the application for preliminary
injunction is denied, the temporary restraining order would be deemed
automatically vacated. If no action is taken by the judge on the application for
preliminary injunction within the said twenty (20) days, the temporary restraining
order would automatically expire on the 20th day by the sheer force of law, no
judicial declaration to that effect being necessary. 47
Hence, in the case at bar, since no preliminary injunction was issued, the temporary
restraining order granted automatically expired after twenty (20) days under the
Rules. The fact that respondent court merely ordered "the respondent[,] its agents,
representatives or any person acting in his behalf to stop, desist and refrain from
implementing in their billings the new water rate increase which will start on March
1, 2000" 48 without stating the period for the restraint does not convert the
temporary restraining order to a preliminary injunction.
The rule against the non-extendibility of the twenty (20)-day limited period of
effectivity of a temporary restraining order is absolute if issued by a regional trial
court. The failure of respondent court to fix a period for the ordered restraint did not

lend the temporary restraining order a breath of semi-permanence which can only
be characteristic of a preliminary injunction. The twenty (20)-day period provided by
the Rules of Court should be deemed incorporated in the Order where there is an
omission to do so. It is because of this rule on non-extendibility that respondent City
was prompted to move that hearings be set for its application of a preliminary
injunction. Respondent City cannot take advantage of this omission by respondent
trial court. ASDCaI
Third. Even if we assume that the issued Order was a preliminary injunction,
petitioner is correct in contending that the assailed Decision is premature.
The records reveal that respondent court did not resolve petitioner's Motion for
Reconsideration of the Order denying its Motion to Dismiss before it issued the
assailed Decision. Consequently, there was no answer filed by petitioner, no joinder
of issues, no mandatory pre-trial conference, and no trial on the merits, yet, a
Decision was handed down by the respondent trial court.
The short circuiting of the procedural process denied the petitioner due process of
law. It was not able to allege its defenses in an answer and prove them in a hearing.
The convoluted procedure allowed by the respondent trial court and the pleadings
filed by the parties which are not models of clarity certainly created confusion. But
this confusion should not be seized as a reason to deny a party the constitutional
right to due process. Over and above every desideratum in litigation is fairness. All
doubts should be resolved in favor of fairness.
IN VIEW WHEREOF, the petition is GRANTED. The Decision and Resolution of the
Court of Appeals dated November 27, 2002 and February 28, 2003, respectively, are
REVERSED and SET ASIDE. The case is REMANDED to the court a quo for further
proceedings. DTAaCE
SO ORDERED.
Austria-Martinez, Callejo, Sr., Tinga and Chico-Nazario, JJ ., concur

[G.R. No. 79128. June 16, 1988.]


ORTIGAS & COMPANY Limited Partnership, petitioner, vs. COURT OF APPEALS and
SPS. DALTON B. KING and CECILIA F. KING, respondents.
DECISION
YAP, C.J p:
Challenged in this petition is the writ of preliminary mandatory injunction issued by
the respondent Court of Appeals directing the petitioner herein to reconnect and
restore the electrical service to Gondola Unit No. 8 of private respondent at the
Greenhills Shopping Center upon the filing by the latter of an injunction bond in the
amount of P15,000. The respondent court annulled and set aside the order of the
Regional Trial Court of Pasig, Metro Manila, Branch 152, dated March 19, 1987
entitled "Dalton B. King, et al. vs. Ortigas and Company, Limited Partnership" dated
March 19, 1987, which denied plaintiffs application for preliminary mandatory
injunction.
We deal in this case only with the matter of the issuance of the writ of preliminary
mandatory injunction to compel petitioners to reconnect the electrical service to
private respondents. We are not called upon to review the merits of the case, for
this has still to be tried and decided by the court a quo.
The antecedent facts are as follows:
In a letter agreement dated October 28, 1983, Ortigas and Company, Limited
Partnership (Ortigas for brevity) through its Greenhills Shopping Center (GSC)
Manager, Manuel Lozano, Jr., leased to Wellington Syquiatco a unit in Gondola alley
(Unit No. 8) at Greenhills Shopping Center, San Juan, Metro Manila for a period of
ten (10) years at a monthly rental of P1,500.00 starting December 1, 1983 and
increasing gradually every year thereafter. The subject unit was used for the
operation of a snack counter, known as "Pied Piper."
On May 10, 1984, Wellington Syquiatco, with the approval of Ortigas, subleased the
subject unit to herein respondent spouses (King spouses for brevity) who occupied
the premises effective May 15, 1984. Later, Wellington Syquiatco, for valuable
consideration (P97,000.00) sold to King spouses his leasehold rights and obligations
over the subject Gondola/unit. This transfer of rights was approved by Ortigas on
September 18, 1984.
In August, 1985, Ortigas dismissed its GSC Manager and undertook an audit of his
performance. Ortigas discovered that the letter-lease agreements signed by the
GSC Manager, allegedly without appropriate authority, uniformly included a clause
providing that "6. Electric and water bills shall be for our (i.e. Ortigas) account."
Ortigas also discovered later that the GSC Manager owned one Gondola unit (Unit
No. 1).

Ortigas' new manager, Jose Lim III, met with the Gondola lessees in March 1986 and
proposed to correct the inequities in the lease agreements. Individual electric
meters were to be installed in the respective units. A new contract for the Gondola
units was submitted to the lessees, which provided among others that "electric and
other utility costs" were for the lessees' account. The Kings did not sign the new
lease agreement.
The electricity bill for May and June, 1986, amounted to P3,480.02 (including cost of
meter installation) and P2,456.53, respectively, which Ortigas tried to collect from
the King spouses. In a letter dated July 28, 1986, the latter protested the bill, citing
paragraph No. 6 of the letter contract of October 28, 1983 which provided that
electric and water bills were for the account of Ortigas. prcd
The subsequent electricity bills for the months of July, August, September and
October amounted to P2,069.06, P2,097.74, P2,018.10 and P2,051.58, respectively,
which including the unpaid bills for May and June, totalled P14,174.03. When the
Kings refused to pay the bill, Ortigas disconnected the electricity supply to them. As
a consequence, the Kings filed on January 16, 1987, a complaint against Ortigas
with the Regional Trial Court of Pasig, Metro Manila, Branch 152, docketed as Civil
Case No. 54202, for specific performance and damages, with prayer for the
issuance of a writ of preliminary mandatory injunction to compel restoration and
reconnection of the electric power supply to plaintiff's Gondola unit. Ortigas filed an
opposition, dated February 9, 1987, to plaintiffs' application for a writ of preliminary
mandatory injunction, alleging among others that there was a typographical error in
Paragraph No. 6 of the letter agreement, consisting of the omission of the letter "y"
from the word "our;" that taking advantage of such typographical error, the
plaintiffs consumed electricity amounting to a monthly average of P2,362.17, while
paying a monthly rental initially at P1,500.00, thereby making Ortigas subsidize
their occupancy of the leased premises to the tune of more than P800 per month.
Ortigas further alleged that to grant the writ of preliminary mandatory injunction
would allow plaintiffs to enrich themselves unjustly at the expense of defendant.
After hearing the oral arguments of the parties and considering their pleadings, the
trial court on March 19, 1987 denied plaintiffs' application for a writ of preliminary
mandatory injunction.
The plaintiffs filed a petition with the respondent Court of Appeals for the annulment
of the order of the court a quo dated March 19, 1987, denying their application for a
writ of preliminary mandatory injunction. As stated above, the respondent appellate
court issued its questioned decision dated June 30, 1987, annulling the order of the
court a quo and issuing itself the writ of preliminary mandatory injunction prayed for
by the Kings upon the filing of a bond of P15,000.00.

The basic issue which we have to determine is whether the court a quo committed a
grave abuse of discretion in denying plaintiffs' application for a preliminary
mandatory injunction. Cdpr
We find no such grave abuse of discretion committed by the trial court which would
justify the setting aside of its order by the respondent appellate court and the
issuance by the latter of the writ of preliminary mandatory injunction.
The writ of preliminary injunction, in general, cannot be sought as a matter of right,
but its grant or refusal rests in the sound discretion of the court under the
circumstances and the facts of the particular case. The writ is the "strong arm of
equity" and therefore should not be used to sanction inequity.
The defendant in the case, the petitioner herein, was able to show that the
electricity consumed per month by the King spouses was way above the amount of
the monthly rentals which they were paying to the petitioner, thereby in effect
making the latter subsidize the business of the former in the leased premises. Such
an obviously inequitable situation by which private respondents enriched
themselves at the expense of petitioner cannot be ignored, as private respondents
wanted the trial court to do, by insisting on a strict adherence to the letter of the
contract, which petitioner questioned, alleging inter alia obvious mistake and
collusion, and non-approval of the contract by the principal of the signatory for the
lessor - defenses which must eventually be considered by the court a quo in
deciding the merits of the case. It is thus not a simple case of a contracting party
having made a bad bargain and who must be made to abide by it. The trial court,
considering the equities of the case, refused to issue the preliminary mandatory
injunction. We hold that in refusing to do so the trial court did not commit a grave
abuse of discretion. prcd
In general, courts should avoid issuing a writ of preliminary injunction which in
effect disposes of the main case without trial. This is precisely the effect of the writ
of preliminary mandatory injunction issued by the respondent appellate court.
Having granted through a writ of preliminary mandatory injunction the main prayer
of the complaint, there is practically nothing left for the trial court to try except the
plaintiffs' claim for damages.
WHEREFORE, the appealed decision of the respondent Court of Appeals dated June
30, 1987 is reversed and set aside.
SO ORDERED.
Melencio-Herrera, Paras and Sarmiento, JJ., concur.
Padilla., J., took no part.

[G.R. No. 82985. April 22, 1991.]


MERVILLE PARK HOMEOWNERS ASSOCIATION, INC., petitioner, vs. HON. FRANCISCO
X. VELEZ and EDGARDO M. SALANDANAN, respondents.
Bengzon, Zarraga, Narciso, Cudala, Pecson & Bengson for petitioner.
E.M. Salandanan, Linato and Associates for respondents. Nicanor T. Santos,
Bernadette G. Santos and Associates for Intervenor.
SYLLABUS
1.
REMEDIAL LAW; PROVISIONAL REMEDIES; PRELIMINARY MANDATORY
INJUNCTION; ISSUANCE THEREOF PENDENTE LITE, PROPER ONLY IN EXTREME
URGENCY. A preliminary mandatory injunction is not a proper remedy to take
property, possession of which is being disputed, out of the possession and control of
one party and to deliver the same to the other party. It may issue pendente lite only
in case of extreme urgency, where the right to the possession, during the pendency
of the main case, of the property involved is very clear; where considerations of
relative inconvenience bear strongly in favor of the complainant seeking the
possession pendente lite; where there was wilful and unlawful invasion of plaintiff's
rights, over his protest and remonstrance, the injury being a continuing one; where
the effect of the preliminary mandatory injunction is to re-establish and maintain a
pre-existing and continuing relationship between the parties, recently and arbitrarily
interrupted by the defendant, rather than to establish a new relationship during the
pendency of the principal case. Obviously, it is for the party requesting the writ to
demonstrate clearly the presence of one or more of the above grounds.
2.
ID.; ID.; ID.; NOT PROPER IN CASE AT BAR. Under the terms and conditions
of the amended contract of lease, private respondent Salandanan is entitled to
possess and manage the waterworks system for a period of ten (10) years
beginning 20 March 1981, unless, of course, the contract is judicially rescinded.
Petitioner's action for the rescission of the amended lease contract was pending
before the trial court at the time petitioner had recourse to the Supreme Court, and
that action, so far as the records before us show, remains pending to this date.
Petitioner has failed to show the existence of some extraordinary situation imposing

upon it irreparable injury and clearly calling for the issuance and maintenance of the
writ of preliminary mandatory injunction. Petitioner alleged that sometime in 1984,
the power supply of the water pumps had been cut off by Meralco for failure of
private respondent Salandanan to pay his electric bills, resulting in a severe water
shortage within the Subdivision. There was, however, no showing that this condition
remained subsisting three (3) years later, at the time respondent Judge's orders
here assailed were rendered (August 1987 and March 1988) and at the time the
Petition for Certiorari was filed (May 1988) before the Supreme Court. There was, in
other words, no showing that the severe water shortage had not been remedied at
or before the said material times and that a clear and present danger of the same
or similar default on Salandanan's part, threatening the same severe consequences
for the subdivision residents, persisted. On the contrary, it appears from the record
that the Metropolitan Waterworks and Sewerage System ("MWSS") had commenced
servicing the Subdivision before issuance of the respondent Judge's orders here
sought to be annulled, which circumstance surely reduced the probabilities of
recurrence of such breakdown of water supply. Succinctly put, petitioner has not
shown that the continued possession of the leased waterworks system by
respondent Salandanan created a continuing, clear and imminent danger that the
Subdivision would suffer from lack of adequate supply of potable water.
3.
ID.; SUPREME COURT; MAY REQUIRE THE POSTING OF ADDITIONAL CASH
DEPOSIT OR A SURETY BOND TO ENSURE THAT CONTRACTUAL OBLIGATIONS
BETWEEN PARTIES ARE COMPLIED WITH. It appears to the Court that the relations
between the petitioner MPHAI and private respondent Salandanan have been
strained and frayed by the controversies and litigation between them. In order to
protect the Subdivision residents from the hardships that would ensue from any
recurrence of the problems encountered in 1984 after delivery of the possession of
the waterworks system to private respondent Salandanan, private respondent
should be required to post either a cash deposit or a surety bond from a company of
indubitable solvency, in the amount of P100,000.00, conditioned upon the
continued and adequate supply of potable water to Subdivision residents by private
respondent and faithful compliance with his other obligations under existing
agreements with petitioner. This deposit or bond shall be in addition to any
performance bond required from private respondent under existing contractual
arrangements. Moreover, it goes without saying that the trial court has full authority
to issue such further order or orders as may become necessary to protect
adequately the Subdivision residents from disruption of water service within the
Subdivision, attributable to the failure of either petitioner MPHAI or private
respondent Salandanan to comply with any of their respective contractual
obligations during the pendency of the action for rescission of contract.
RESOLUTION
FELICIANO, J p:

Petitioner Merville Park Homeowners Association, Inc. ("MPHAI"), a non-stock, nonprofit corporation, became the owner of the pipelines and waterworks system
("waterworks system") of Merville Park Subdivision in Paraaque, Metro Manila, by
virtue of a deed of donation dated 24 February 1977 executed in its favor by
Merville Development Corporation.
On 19 December 1978, MPHAI, through its then President Ernesto N. Gonzales,
entered into a contract of lease with private respondent Edgardo Salandanan
covering its waterworks system to insure efficient water service within the Merville
Park Subdivision ("Subdivision"). That lease contract required respondent
Salandanan to construct additional wells, to put into full operational condition Wells
Nos. 4 and 5 as well as to rehabilitate Wells Nos. 1, 2 and 3. The contract also
allowed respondent Salandanan to increase annually the water rates but only to the
extent of ten percent (10%) of the preceding year's rates. The water rates set out in
the contract could be charged only upon completion of Well No. 5. The lease
contract was later on amended to provide for, inter alia, a period of ten (10) years
commencing from its signing on 20 July 1981. In that amended contract, the parties
agreed to increase the water rates which increase was in turn approved by the
National Water Resources Council. It was also there provided that each homeowner
shall pay a deposit in the amount of P300.00 which was to be used to pay for
respondent Salandanan's overdue electric bill with Meralco, and thereafter, to be
credited against the homeowner's future water bills.
Subsequently, respondent Salandanan again asked for an increase in water rates.
MPHAI was at first adamant to the point of filing a case in court against respondent
Salandanan. But sometime in 1982, MPHAI and respondent Salandanan arrived at a
compromise. In that compromise agreement, MPHAI consented to an increase in the
water rates as urged by respondent Salandanan but conditioned upon his
completion of Well No. 2 (New Madrid Well). The compromise agreement was later
amended and provided for a new water rate schedule effective 1 July 1984, but
similarly conditioned upon Salandanan's completion of Well No. 2
On 16 July 1985, MPHAI commenced an action, Civil Case No. 11124, before Branch
136 of the Regional Trial Court (RTC) of Makati, presided over by Judge Ricardo
Francisco, against respondent Salandanan. In this suit, MPHAI sought to rescind the
amended lease contract and the amended compromise agreement, and prayed for
issuance of a writ of preliminary mandatory injunction. MPHAI alleged in its
complaint that sometime in 1984 for failure of respondent Salandanan to pay his
electric bills amounting to P1,035,000.00, Meralco had cut off the electric power
supply of his rented water pumps resulting in a severe water shortage within the
Subdivision and thereby endangering the lives and health of the residents thereof;
that aside from respondent Salandanan's failure to pay his electric bills, he had
violated his contract with petitioner by neglecting to drill and complete new wells
and undertake immediate repairs of broken water pumps; that there was an

immediate need to issue a writ of preliminary mandatory injunction in its favor to


enable it to take possession and control of the water works system.
Judge Francisco, in an order dated 23 July 1985, granted MPHAI's prayer for a writ of
preliminary mandatory injunction and directed respondent Salandanan to turn over
to MPHAI the operation and control of the waterworks system. This prompted
respondent Salandanan to file an urgent motion for reconsideration stating, among
other things, that the regular courts had no jurisdiction over the subject matter of
the case, the same being under the jurisdiction of the National Water Resources
Council; and that the case was filed prematurely considering that MPHAI had not as
yet exhausted the available administrative remedies. llcd
After private respondent had filed an answer with counterclaim and third-party
complaint, the case was re-raffled to Branch 180 presided over by Judge Benigno M.
Puno, who in an order dated 12 August 1985, lifted the writ of preliminary
mandatory injunction. The case, however, was once more re-raffled and this time it
went to Branch 149 with Judge Manuel Yuzon presiding. Judge Yuzon, upon MPHAI's
motion for reconsideration and upon its filing of a surety bond in the amount of
P26,000.00, issued an order dated 11 August 1986 reinstating the writ of
preliminary mandatory injunction. Respondent Salandanan, however, in turn moved
for reconsideration on the ground that such a writ was not a proper remedy to
deliver property in the possession of one party to another. But, before Salandanan's
motion could be resolved, the case was, for the third time, re-raffled and transferred
this time to the sala of respondent Judge Francisco X. Velez. Judge Velez, on 6
August 1987, issued an order lifting and setting aside the writ, and on 30 March
1988, an order directing the Deputy Sheriff to return and restore to respondent
Salandanan the possession of the waterworks system.
And so the present Petition for Certiorari was filed.
The Court issued a Temporary Restraining Order on 6 May 1988 enjoining
respondent Judge Velez from enforcing his two (2) orders, ordering petitioner MPHAI
to file a bond in the amount of P50,000.00, and requiring private respondent
Salandanan to file a Comment on the Petition. After additional pleadings and
counter-pleadings, the Court granted due course to the Petition and required the
parties to file simultaneous Memoranda. The parties complied; private respondent
Salandanan also submitted a Supplemental Memorandum.
Deliberating on the instant Petition for Certiorari and after careful examination of
the record of this case, the Court considers that petitioner has failed to show any
grave abuse of discretion, or any act without or in excess of jurisdiction, on the part
of respondent Judge in issuing the orders dated 6 August 1987 and 30 March 1988,
lifting and setting aside the writ of preliminary mandatory injunction earlier issued
in Civil Case No. 11124, and ordering private respondent restored to the possession
of the waterworks system involved.

A preliminary mandatory injunction is not a proper remedy to take property,


possession of which is being disputed, out of the possession and control of one
party and to deliver the same to the other party. It may issue pendente lite only in
cases of extreme urgency, where the right to the possession, during the pendency
of the main case, of the property involved is very clear; where considerations of
relative inconvenience bear strongly in favor of the complainant seeking the
possession pendente lite; where there was willful and unlawful invasion of plaintiff's
rights, over his protest and remonstrance, the injury being a continuing one; where
the effect of the preliminary mandatory injunction is to re-establish and maintain a
pre-existing and continuing relationship between the parties, recently and arbitrarily
interrupted by the defendant, rather than to establish a new relationship during the
pendency of the principal case. 1 Obviously, it is for the party requesting the writ
to demonstrate clearly the presence of one or more of the above grounds. prLL
Under the terms and conditions of the amended contract of lease, private
respondent Salandanan is entitled to possess and manage the waterworks system
for a period of ten (10) years beginning 20 March 1981, unless, of course, the
contract is judicially rescinded. Petitioner's action for the rescission of the amended
lease contract was pending before the trial court at the time petitioner had recourse
to the Supreme Court, and that action, so far as the records before us show,
remains pending to this date. Petitioner has failed to show the existence of some
extraordinary situation imposing upon it irreparable injury and clearly calling for the
issuance and maintenance of the writ of preliminary mandatory injunction.
Petitioner alleged that sometime in 1984, the power supply of the water pumps had
been cut off by Meralco for failure of private respondent Salandanan to pay his
electric bills, resulting in a severe water shortage within the Subdivision. There was,
however, no showing that this condition remained subsisting three (3) years later,
at the time respondent Judge's orders here assailed were rendered (August 1987
and March 1988) and at the time the Petition for Certiorari was filed (May 1988)
before the Supreme Court. There was, in other words, no showing that the severe
water shortage had not been remedied at or before the said material times and that
a clear and present danger of the same or similar default on Salandanan's part,
threatening the same severe consequences for the subdivision residents, persisted.
On the contrary, it appears from the record that the Metropolitan Waterworks and
Sewerage System ("MWSS") had commenced servicing the Subdivision before
issuance of the respondent Judge's orders here sought to be annulled, which
circumstance surely reduced the probabilities of recurrence of such breakdown of
water supply. Succinctly put, petitioner has not shown that the continued possession
of the leased waterworks system by respondent Salandanan created a continuing,
clear and imminent danger that the Subdivision would suffer from lack of adequate
supply of potable water.
Accordingly, the Court believes that respondent Judge was not merely acting
arbitrarily and capriciously in holding that private respondent Salandanan was

entitled to be maintained in the possession of the leased waterworks system


pending resolution of the on-going action for rescission of the amended contract of
lease and amended compromise agreement. At the same time, it appears to the
Court that the relations between the petitioner MPHAI and private respondent
Salandanan have been strained and frayed by the controversies and litigation
between them. In order to protect the Subdivision residents from the hardships that
would ensue from any recurrence of the problems encountered in 1984 after
delivery of the possession of the waterworks system to private respondent
Salandanan, private respondent should be required to post either a cash deposit or
a surety bond from a surety company of indubitable solvency, in the amount of
P100,000.00, conditioned upon the continued and adequate supply of potable water
to Subdivision residents by private respondent and faithful compliance with his
other obligations under existing agreements with petitioner. This deposit or bond
shall be in addition to any performance bond required from private respondent
under existing contractual arrangements. Moreover, it goes without saying that the
trial court has full authority to issue such further order or orders may become
necessary to protect adequately the Subdivision residents from disruption of water
service within the Subdivision, attributable to the failure of either petitioner MPHAI
or private respondent Salandanan to comply with any of their respective contractual
obligations during the pendency of the action for rescission of contract. prcd
WHEREFORE, the Petition for Certiorari is hereby DISMISSED for lack of merit.
Private respondent Salandanan is hereby REQUIRED to put up either a cash deposit
or a surety bond issued by a surety company of indubitable solvency acceptable to
this Court in the amount of P100,000.00, within a non-extendible period of ten (10)
days from notice hereof, to indemnify the members of petitioner MPHAI for any
damages or inconvenience they may suffer by reason of failure of private
respondent Salandanan to provide a continuous and adequate supply of potable
water and otherwise to comply faithfully with all of his obligations under the
amended contract of lease and amended compromise agreement. No
pronouncement as to costs. This Resolution is immediately executory.

[G.R. No. L-25407. August 29, 1969.]


PILAR M. NORMANDY, in her own behalf and of others similarly situated, as well as
of the World War II Veterans Enterprises, Inc., & LORENZO B. CAMINS, plaintiffsappellees, vs. CALIXTO DUQUE, CLARO P. LIZARDO, FLORENCIO SELGA, ALBERTO
RAMOS, MANUEL BUENAFE & FILIPINAS MERCHANDISING CORPORATION,
defendants-appellees, JOSE COCHINGYAN, SR., and SUSANA COCHINGYAN,
intervenors-appellees vs. RAMON E. SAURA, former first receiver-appellant.
Lino M. Patajo for defendants-appellees.
Encarnacion, Jr. & Clapano, Jr. for intervenors-appellees.
Saura, Magno & Associates for former first receiver-appellant.
SYLLABUS
1.
REMEDIAL LAW; PROVISIONAL REMEDIES; RECEIVERSHIP; NATURE;
RECEIVERSHIP COURT HAS AUTHORITY TO DETERMINE REASONABLENESS OF
EXPENDITURE. A receiver is a representative of the Court appointed for the
purpose of preserving and conserving the property in litigation and prevent its
possible destruction or dissipation, if it were left in the possession of any of the
parties. The receiver is not the representative of any of the parties but of all of them
to the end that their interests may be equally protected with the least possible
inconvenience and expense. It is inherent in the office of a receiver not only that he
should act at all times with the diligence and prudence of a good father of a family
but should also not incur any obligation or expenditure without leave of court to
supervise the receiver and see to it that he adheres to the above standard of his
trust and limits the expense of the receivership to the minimum. It is generally the
receivership court that is in a better position to determine whether a particular
expenditure is reasonable and justified or not and its ruling therein may not be
disturbed by this Court.
2.
ID.; ID.; ID.; ID.; ID.; CLERICAL SERVICES EMPLOYED BY RECEIVER MUST BE
WITH LEAVE OF COURT FOR REIMBURSEMENT TO BE PROPER. The receivership
court's reasons for withholding approval of the reimbursement in question are
precisely because "whatever amount he (the receiver now seeks in addition thereto
(P10,000.00) would be improper. Moreover, he is now estopped from claiming any
further amount as compensation for alleged clerical services employed by him as
such receiver without prior approval or authority of this Court." We find these
reasons to be cogent enough in the premises, especially because appellant's
alleged employment of a clerk was made without prior leave of court. In these
circumstances, it cannot be said that the court a quo abused its discretion, much
less gravely.
DECISION

BARREDO, J p:
Appeal from the order of the Court of First Instance of Manila Branch I), dated March
5, 1965, denying the motion of Ramon E. Saura, former First Receiver of the World
War II Veterans Enterprises, Inc. (hereinafter referred to merely as WARVETS), asking
for reimbursement of the sum of P5,236.00, representing the amount which he
allegedly paid in advance as compensation to a clerk whose services he availed of
while he was still a receiver.
On September 6, 1960, appellant was appointed receiver of the WARVETS by the
lower court in Civil Case No. 34998 1 "generally to do and perform such acts
respecting the property, assets and transactions" of the organization "as the court
may authorize." Upon filing a bond in the sum of fifty thousand (P50,000.00) pesos,
he entered upon the discharge of his functions.
During his term, appellant went to Japan by authority of the lower court's order
dated October 12, 1960 for the purpose of checking on the reported under valuation
of goods shipped to the WARVETS and of preparing the shipment of the goods which
had not yet been committed. For expenses incurred by him during this trip, which
amounted to P9,431.48, he was ordered reimbursed by the lower court on June 5,
1963. 2 The order authorizing reimbursement stated thus:
". . . The order permits the claim for reimbursement as part of the receiver's
compensation as such receiver. It does not prohibit the reimbursement of the
expenses before the payment of the receiver's compensation, and it is only fair and
just that at least the expenses which the receiver advanced, if found reasonable and
necessary, be reimbursed as soon as the funds of the WARVETS permit."
Except for this reimbursed amount, appellant received no other fee or
compensation from the WARVETS. In fact, for a continuous period of three (3) years,
he performed his duties as receiver without receiving any compensation as such.
Hence, on October 9, 1963, he filed a motion in the lower court to fix not only his
compensation but also that of his co-receiver, Macario Ofilada. 3 In his motion, he
prayed further for such amounts as attorney's fees and stenographer's fees as the
court may allow. After an opposition thereto had been duly interposed, the lower
court issued an "Omnibus Order" on January 22, 1964, the second paragraph of
which denied the motion of appellant. A reconsideration of the order of denial was
immediately sought by appellant.
Without awaiting action on his motion for reconsideration, appellant filed another
motion, on May 28, 1964, resigning from his post as receiver and praying that the
lower court accept it and at the same time fix the amount of his fees and
compensation as receiver.

On June 5, 1964, appellant was discharged as receiver and his compensation was
fixed at P10,000.00. The order of the lower court approving his discharge reads as
follows:
"Ramon E. Saura, first receiver, filed in his own behalf on May 28, 1964, his motion
to withdraw as first receiver and for fixing of his compensation. There being no
objection to this withdrawal, the same is hereby granted. Respecting his
compensation, neither is there objection thereto. In fact, per joint motion filed on
May 28, by defendants, except Filipinas Merchandising, which has been granted,
they asked the withdrawal of their joint motion dated March 31, 1961, for the
removal of Saura as receiver; and per manifestation of said defendants except
Filipinas Merchandising dated May 28, they recommend P10,000.00 as Saura's fee,
which Jose and Susana Cochingyan are willing to advance for the account of
WARVETS.
"WHEREFORE, Ramon E. Saura's withdrawal as receiver in this case is hereby
approved, and his fee as such is hereby fixed at P10,000.00, which Jose and Susana
Cochingyan shall advance for the account of WARVETS."
Subsequently, one Atty. Anacleto Magno, on his own behalf, presented before the
lower court a motion dated August 18, 1964, for the payment of attorney's fees to
him in the amount of P10,000.00 for his alleged services as legal counsel for the
appellant when he was still a receiver. Appellant, himself, filed another motion for
the payment and cancellation of his receiver' bond and for the reimbursement to
him of the sum of P2,030.00 which he paid out of his personal funds as premium for
said bond from September 9, 1960 to September 9, 1964. On September 24, 1964,
the lower court disposed of both motions in one order by allowing compensation to
Atty. Magno in the reduced amount of P1,000.00 and granting reimbursement to
appellant in the whole sum prayed for by him as premium on his bond. In granting
fee to the counsel of appellant, the lower court said:
"The motion, to the mind of the Court, is not well taken, because Ramon E. Saura is
himself a lawyer and he did not have to retain legal counsel. If he did, the matter
should be for his own account, particularly because it was a unilateral act on
Saura's part to get Magno as his lawyer in the receivership.
"Nevertheless, the Court is not unaware that Atty. Magno did in fact work for Saura,
for the former appeared in Court and signed pleadings for Saura as receiver.
"Wherefore, in fairness to Atty. Magno, it is hereby ordered that he be paid
P1,000.00 from the funds under receivership. If he is not satisfied with this amount,
he can go after Saura."
Barely two months after the issuance of the last-mentioned order, or on November
18, 1964, appellant filed another motion for reimbursement, this time for the
amount he allegedly paid as compensation of a clerk whom he employed when he

was still a receiver for the period September 9, 1960 to May 28, 1964, inclusive, at
the rate of P120.00 a month, or the total sum of P5,236.00. Appellant alleged that in
view of the voluminous paper and legal work which he had to attend to as receiver,
it was necessary for him to engage the service of a typist-stenographer, one
Melchor C. Ordono, who doubled as messenger, filing clerk, utility clerk and records
clerk.
On March 5, 1965, although no party registered any objection to appellant's last
motion for reimbursement, the lower court denied it in the appealed order,
reasoning thus:
"The record shows that the Court had previously ordered the payment of P10,000.00
as compensation for Ramon E. Saura for his services as first receiver in this case.
Therefore, whatever amount he now seeks in addition thereto would be improper.
Moreover, he is now estopped from claiming any further amount as compensation
for alleged clerical services employed by him as such receiver without prior
approval or authority of this Court."
The lone contention of appellant in this appeal is that the lower court committed an
error in holding that he is not entitled to reimbursement of the salaries paid by him
to his clerk as receiver of the WARVETS. None of the other parties filed any brief.
A receiver is a representative of the court appointed for the purpose of preserving
and conserving the property in litigation and prevent its possible destruction or
dissipation, if it were left in the possession of any of the parties. The receiver is not
the representative of any of the parties but of all of them to the end that their
interests may be equally protected with the least possible inconvenience and
expense. It is inherent in the office of a receiver not only that he should act at all
times with the diligence and prudence of a good father of a family but should also
not incur any obligation or expenditure without leave of the court and it is the
responsibility of the court to supervise the receiver and see to it that he adheres to
the above standard of his trust and limits the expenses of the receivership to the
minimum. For these reasons, it is generally the receivership court that is in a better
position to determine whether a particular expenditure is reasonable and justified or
not and its ruling thereon may not be disturbed by this Court.
It is true that in the case at bar, the motion m question of the receiver was not
opposed by any of the parties. It is to be observed, however, that the records show
that the court a quo had previously allowed or approved reimbursements to the
receiver of expenditures made by him in connection with the performance of his
duties, more particularly, for a trip made to Japan and for the fees of a lawyer who
had allegedly assisted him, notwithstanding, he is a lawyer himself. Besides, the
court a quo fixed the total compensation to the appellant receiver at P10,000.00 for
his services as such and said amount, from all appearances, is agreeable to
everyone, including appellant.

The receivership court's reasons for withholding approval of the reimbursement in


question are precisely because "whatever amount he (the receiver) now seeks in
addition thereto (P10,000) would be improper. Moreover, he is now estopped from
claiming any further amount as compensation for alleged clerical services employed
by him as such receiver without prior approval or authority of this Court." We find
these reasons to be cogent enough in the premises, specially because appellant's
alleged employment of a clerk was made without prior leave of court. In these
circumstances, it cannot be said that the court a quo abused its discretion, much
less gravely.
WHEREFORE, the order appealed from is affirmed, with costs against appellant.

[G.R. No. 125008. June 19, 1997.]


COMMODITIES STORAGE & ICE PLANT CORPORATION, SPOUSES VICTOR &
JOHANNAH TRINIDAD, petitioners, vs. COURT OF APPEALS, JUSTICE PEDRO A.
RAMIREZ, CHAIRMAN and FAR EAST BANK & TRUST COMPANY, respondents.
Nonette C. Mina for petitioners.
Siguion Reyna, Montecillo & Ongsiako for private respondents.
SYLLABUS
1.
REMEDIAL LAW; PROVISIONAL REMEDIES; RECEIVER OF PROPERTY;
DISCUSSED. A receiver of real or personal property may be appointed by the
court when it appears from the pleadings or such other proof as the judge may
require, that the party applying for such appointment has (1) an actual interest in it;
and (2) that (a) such property is in danger of being lost, removed or materially
injured; or (b) whenever it appears to be the most convenient and feasible means of
preserving or administering the property in litigation. A receiver is a person
appointed by the court in behalf of all the parties to the action for the purpose of
preserving and conserving the property in litigation and prevent its possible
destruction or dissipation, if it were left in the possession of any of the parties. The
appointment of a receiver is not a matter of absolute right. It depends upon the

sound discretion of the court and is based on facts and circumstances of each
particular case.
2.
ID.; ID.; ID.; NECESSITY THEREOF, REQUIRED; NOT PRESENT IN CASE AT BAR
A petition for receivership under Section 1 (b) of Rule 59 requires that the
property or fund which is the subject of the action must be in danger of loss,
removal or material injury which necessitates protection or preservation. The
guiding principle is the prevention of imminent danger to the property. If an action
by its nature, does not require such protection or preservation, said remedy cannot
be applied for and granted. Petitioners have not sufficiently shown that the Sta.
Maria Ice Plant is in danger of disappearing or being wasted and reduced to a "scrap
heap." Neither have they proven that the property has been materially injured
which necessitates its protection and preservation.
3.
ID.; ID.; ID.; APPOINTMENT THEREOF. Neither party to a litigation should be
appointed as receiver without the consent of the other because a receiver should be
a person indifferent to the parties and should be impartial and disinterested. The
receiver is not the representative of any of the parties but of all of them to the end
that their interests may be equally protected with the least possible inconvenience
and expense. The power to appoint a receiver must be exercised with extreme
caution. There must be a clear showing of necessity therefor in order to save the
plaintiff from grave and irremediable loss or damage. It is only when the
circumstances so demand, either because there is imminent danger that the
property sought to be placed in the hands of a receiver be lost or because they run
the risk of being impaired, endeavouring to avoid that the injury thereby caused be
greater than the one sought to be avoided. aEIcHA
4.
ID.; CIVIL PROCEDURE; ACTIONS; MOTION TO DISMISS; ON THE GROUND OF
IMPROPER VENUE; MAY BE CONSIDERED ALTHOUGH NOT SPECIFICALLY RAISED IN
APPELLATE COURT, IN A PETITION FOR RECEIVERSHIP. The motion to dismiss is
anchored on improper venue, lack of cause of action and forum-shopping. The
question of venue relates to the principal action and is prejudicial to the ancillary
issue of receivership. Although the grounds for dismissal were not specifically raised
before the appellate court, the said court may consider the same since the petition
for receivership depends upon a determination thereof. Under Section 2 of Rule 4 of
the Revised Rules of Court, where the action affects title to the property, it should
be instituted in the Regional Trial Court where the property is situated. The Sta.
Maria Ice Plant & Cold storage is located in Sta. Maria, Bulacan. The venue in Civil
Case No. 94-72076 was therefore laid improperly, having been instituted in Manila.
5.
ID.; ID.; REAL ACTIONS; MORTGAGE; FORECLOSURE; ACTION FOR
REDEMPTION; INVOLVES TITLE TO FORECLOSED PROPERTY. An action to redeem
by the mortgage debtor affects his title to the foreclosed property. If the action is
seasonably made, it seeks to erase from the title of the judgment or mortgage
debtor the lien created by registration of the mortgage and sale. If not made

seasonably, it may seek to recover ownership to the land since the purchaser's
inchoate title to the property becomes consolidated after expiration of the
redemption period. Either way, redemption involves the title to the foreclosed
property. It is a real action.
6.
ID.; ID.; PARTIES TO CIVIL ACTIONS; TRANSFER OF INTEREST PENDING
LITIGATION; ONLY UPON COURT ORDER. There is no merit in petitioners' claim
that the respondent bank is no longer the real party in interest after selling the ice
plant to a third person during the pendency of the case. Section 20 of Rule 3 of the
Revised Rules of Court provides that in a transfer of interest pending litigation, the
action may be continued by or against the original party, unless the court, upon
motion, directs the transferee to be substituted in the action or joined with the
original party. The court has not ordered the substitution of respondent bank.
DHIETc
DECISION
PUNO, J p:
In this petition for certiorari, petitioner seeks to annul and set aside the decision and
resolution of the Court of Appeals 1 in CA-G.R. SP No. 36032 dismissing the
complaint in Civil Case No. 94-72076 before the Regional Trial Court, Branch 9,
Manila.
The facts show that in 1990, petitioner spouses Victor and Johannah Trinidad
obtained a loan of P31,000,000.00 from respondent Far East Bank & Trust Company
to finance the purchase of the Sta. Maria Ice Plant & Cold Storage in Sta. Maria,
Bulacan. The loan was secured by a mortgage over the ice plant and the land on
which the ice plant stands. Petitioner spouses failed to pay their loan. The bank
extrajudicially foreclosed the mortgage and the ice plant was sold by public bidding
on March 22, 1993. Respondent bank was the highest bidder. It registered the
certificate of sale on September 22, 1993 and later took possession of the property.
On November 22, 1993, petitioner spouses filed Civil Case No. 956-M-93 against
respondent bank before the Regional Trial Court, Malolos, Bulacan for reformation of
the loan agreement, annulment of the foreclosure sale and damages. 2 The trial
court dismissed the complaint for petitioners' failure to pay the docket fees. The
dismissal was without prejudice to refiling of the complaint. 3
On October 28, 1994, petitioners filed Civil Case No. 94-72076 against respondent
bank before the Regional Trial Court, Branch 9, Manila for damages, accounting and
fixing of redemption period. 4 As a provisional remedy, petitioners filed on
November 16, 1994 an "Urgent Petition for Receivership." They alleged that
respondent bank took possession of the ice plant forcibly and without notice to
them; that their occupation resulted in the destruction of petitioners' financial and
accounting records making it impossible for them to pay their employees and

creditors; the bank has failed to take care of the ice plant with due diligence such
that the plant has started emitting ammonia and other toxic refrigerant chemicals
into the atmosphere and was posing a hazard to the health of the people in the
community; the spouses' attention had been called by several people in the
barangay who threatened to inform the Department of Environment and Natural
Resources should they fail to take action. Petitioners thus prayed for the
appointment of a receiver to save the ice plant, conduct its affairs and safeguard its
records during the pendency of the case. 5
Instead of an answer, respondent bank filed on November 25, 1994 a "Motion to
Dismiss and Opposition to Plaintiff's Petition for Receivership." It alleged that the
complaint states no cause of action and that venue had been improperly laid. It also
alleged that petitioners failed to pay the proper docket fees and violated the rule on
forum-shopping. 6
In an order dated December 13, 1994, the trial court granted the petition for
receivership and appointed petitioners' nominee, Ricardo Pesquera, as receiver. The
order disposed as follows:
"WHEREFORE, premises considered the Urgent Petition for Receivership is GRANTED
and Mr. Ricardo Pesquera to whose appointment no opposition was raised by the
defendant and who is an ice plant contractor, maintainer and installer is appointed
receiver. Accordingly, upon the filing and approval of the bond of TWO MILLION
(P2,000,000.00) pesos which shall answer for all damages defendant may sustain
by reason of the receivership, said Ricardo Pesquera is authorized to assume the
powers of a receiver as well as the obligation as provided for in Rule 59 of the Rules
of Court after taking his oath as such receiver.
SO ORDERED." 7
Respondent bank assailed this order before the Court of Appeals on a petition for
certiorari. On January 11, 1996, the Court of Appeals annulled the order for
receivership and dismissed petitioners' complaint for improper venue and lack of
cause of action. The dispositive portion of the decision reads:
"WHEREFORE, the petition for certiorari is GRANTED. Accordingly, the assailed order
dated December 13, 1994 (Annex A, petition) is ANNULLED and SET ASIDE and
respondent's complaint in Civil Case No. 94-72076 in the respondent court (Annexes
F, petition; 4, comment), is DISMISSED. Costs against respondents except the court.
SO ORDERED."
Reconsideration was denied on May 23, 1996. 8 Hence, this petition.
Section 1 of Rule 59 of the Revised Rules of Court provides that:

"Sec. 1.
When and by whom receiver appointed. One or more receivers of
the property, real or personal, which is the subject of the action, may be appointed
by the judge of the Court of First Instance in which the action is pending, or by a
Justice of the Court of Appeals or of the Supreme Court, in the following cases:
(a)
When the corporation has been dissolved, or is insolvent, or is in imminent
danger of insolvency, or has forfeited its corporate rights;
(b)
When it appears from the complaint or answer, and such other proof as the
judge may require, that the party applying for the appointment of receiver has an
interest in the property or fund which is the subject of the action, and that such
property or fund is in danger of being lost, removed or materially injured unless a
receiver be appointed to guard and preserve it;
(c)
When it appears in an action by the mortgagee for the foreclosure of a
mortgage that the property is in danger of being wasted or materially injured, and
that its value is probably insufficient to discharge the mortgage debt, or that the
parties have so stipulated in the contract of mortgage;
(d)
After judgment, to preserve the property during the pendency of the appeal,
or to dispose of it according to the judgment, or to aid execution when the
execution has been returned unsatisfied or the judgment debtor refuses to apply his
property in satisfaction of the judgment, or otherwise carry the judgment into effect;
(e)
Whenever in other cases it appears that the appointment of a receiver is the
most convenient and feasible means of preserving, administering, or disposing of
the property in litigation."
A receiver of real or personal property, which is the subject of the action, may be
appointed by the court when it appears from the pleadings or such other proof as
the judge may require, that the party applying for such appointment has (1) an
actual interest in it; and (2) that (a) such property is in danger of being lost,
removed or materially injured; or (b) whenever it appears to be the most convenient
and feasible means of preserving or administering the property in litigation. 9
A receiver is a person appointed by the court in behalf of all the parties to the action
for the purpose of preserving and conserving the property in litigation and prevent
its possible destruction or dissipation, if it were left in the possession of any of the
parties. 10 The appointment of a receiver is not a matter of absolute right. It
depends upon the sound discretion of the court 11 and is based on facts and
circumstances of each particular case. 12
Petitioners claim that the appointment of a receiver is justified under Section 1 (b)
of Rule 59. They argue that the ice plant which is the subject of the action was in
danger of being lost, removed and materially injured because of the following
"imminent perils":

"6.1 Danger to the lives, health and peace of mind of the inhabitants living near
the Sta. Maria Ice Plant;
6.2
Drastic action or sanctions that could be brought against the plaintiff by
affected third persons, including workers who have claims against the plaintiff but
could not be paid due to the numbing manner by which the defendant took the Sta.
Maria Ice Plant;
6.3
The rapid reduction of the Ice Plant into a scrap heap because of evident
incompetence, neglect and vandalism." 13
A petition for receivership under Section 1 (b) of Rule 59 requires that the property
or fund which is the subject of the action must be in danger of loss, removal or
material injury which necessitates protection or preservation. The guiding principle
is the prevention of imminent danger to the property. If an action by its nature, does
not require such protection or preservation, said remedy cannot be applied for and
granted. 14
In the instant case, we do not find the necessity for the appointment of a receiver.
Petitioners have not sufficiently shown that the Sta. Maria Ice Plant is in danger of
disappearing or being wasted and reduced to a "scrap heap." Neither have they
proven that the property has been materially injured which necessitates its
protection and preservation. 15 In fact, at the hearing on respondent bank's motion
to dismiss, respondent bank, through counsel, manifested in open court that the
leak in the ice plant had already been remedied and that no other leakages had
been reported since. 16 This statement has not been disputed by petitioners.
At the time the trial court issued the order for receivership of the property, the
problem had been remedied and there was no imminent danger of another leakage.
Whatever danger there was to the community and the environment had already
been contained.
The "drastic sanctions" that may be brought against petitioners due to their inability
to pay their employees and creditors as a result of "the numbing manner by which
[respondent bank] took the ice plant" does not concern the ice plant itself. These
claims are the personal liabilities of petitioners themselves. They do not constitute
"material injury" to the ice plant.
Moreover, the receiver appointed by the court appears to be a representative of
petitioners. Respondent bank alleges that it was not aware that petitioners
nominated one Mr. Pesquera as receiver. 17 The general rule is that neither party to
a litigation should be appointed as receiver without the consent of the other
because a receiver should be a person indifferent to the parties and should be
impartial and disinterested. 18 The receiver is not the representative of any of the
parties but of all of them to the end that their interests may be equally protected
with the least possible inconvenience and expense. 19

The power to appoint a receiver must be exercised with extreme caution. There
must be a clear showing of necessity therefor in order to save the plaintiff from
grave and irremediable loss or damage. 20 It is only when the circumstances so
demand, either because there is imminent danger that the property sought to be
placed in the hands of a receiver be lost or because they run the risk of being
impaired, endeavouring to avoid that the injury thereby caused be greater than the
one sought to be avoided. 21
The Court of Appeals correctly found that the trial court gravely abused its
discretion in issuing the order for receivership. The respondent court, however, went
further and took cognizance of respondent bank's motion to dismiss. And finding
merit in the motion, it dismissed the complaint. Petitioners now claim that the
respondent court should have refrained from ruling on the motion to dismiss
because the motion itself was not before it. 22
Again, we reject petitioners' contention. The motion to dismiss is anchored on
improper venue, lack of cause of action and forum-shopping. We agree with the
respondent court that the question of venue relates to the principal action and is
prejudicial to the ancillary issue of receivership. Although the grounds for dismissal
were not specifically raised before the appellate court, the said court may consider
the same since the petition for receivership depends upon a determination thereof.
23
In their complaint, petitioners prayed for the following:
"WHEREFORE, in view of the foregoing, it is respectfully prayed that after trial on
the merits judgment be rendered:
1.
Ordering the Defendant to pay COMMODITIES actual and compensatory
damages in the amount of PESOS: TWO MILLION FIVE HUNDRED THOUSAND and
00/100 (P2,500,000.00);
2.
Ordering the Defendant to pay Plaintiffs moral damages in the amount of
PESOS: TWO MILLION and 00/100 (P2,000,000.00) to compensate the Plaintiffs for
the anxiety and besmirched reputation caused by the unjust actuations of the
Defendant;
3.
Ordering the Defendant to pay Plaintiffs nominal and exemplary damages in
the amount of PESOS: FIVE HUNDRED THOUSAND and 00/100 (P500,000.00) to
deter the repetition of such unjust and malicious actuations of the Defendant;
4.
In order to restore the legal right of the Plaintiff COMMODITIES to redeem its
foreclosed property, a right which COMMODITIES has been unjustly deprived of by
the malicious and bad faith machinations of the Defendant, compelling the
Defendant to produce the correct, lawful, official and honest statements of account
and application of payment. Concomitantly, ordering the Defendant to accept the

redemption of the foreclosed properties pursuant to Rule 39 of the Revised Rules of


Court in conjunction with Act 3135, within the prescribed period for redemption,
said period to commence from the date of receipt by the Plaintiff COMMODITIES of
the correct, lawful, official and honest statements of account and application of
payments;
5.
Ordering the Defendant to pay attorney's fees in the amount of PESOS:
THREE HUNDRED THOUSAND (P300,000.00); and costs of litigation.
Other reliefs and remedies just and equitable under the circumstances are likewise
prayed for." 24
Petitioners pray for two remedies: damages and redemption. The prayer for
damages is based on respondent bank's forcible occupation of the ice plant and its
malicious failure to furnish them their statements of account and application of
payments which prevented them from making a timely redemption. 25 Petitioners
also pray that respondent bank be compelled to furnish them said documents, and
upon receipt thereof, allow redemption of the property. They ultimately seek
redemption of the mortgaged property. This is explicit in paragraph 4 of their prayer.
An action to redeem by the mortgage debtor affects his title to the foreclosed
property. If the action is seasonably made, it seeks to erase from the title of the
judgment or mortgage debtor the lien created by registration of the mortgage and
sale. 26 If not made seasonably, it may seek to recover ownership to the land since
the purchaser's inchoate title to the property becomes consolidated after expiration
of the redemption period. 27 Either way, redemption involves the title to the
foreclosed property. It is a real action.
Section 2 of Rule 4 of the Revised Rules of Court provides:
"Sec. 2.
Venue in Courts of First Instance. (a) Real actions. Actions
affecting title to, or for recovery of possession, or for partition or condemnation of,
or foreclosure of mortgage on, real property, shall be commenced and tried in the
province where the property or any part thereof lies." 28
Where the action affects title to the property, it should be instituted in the Regional
Trial Court where the property is situated. The Sta. Maria Ice Plant & Cold Storage is
located in Sta. Maria, Bulacan. The venue in Civil Case No. 94-72076 was therefore
laid improperly. cdtai
Finally, there is no merit in petitioners' claim that the respondent bank is no longer
the real party in interest after selling the ice plant to a third person during the
pendency of the case. Section 20 of Rule 3 of the Revised Rules of Court provides
that in a transfer of interest pending litigation, the action may be continued by or
against the original party, unless the court, upon motion, directs the transferee to

be substituted in the action or joined with the original party. The court has not
ordered the substitution of respondent bank.
IN VIEW WHEREOF, the decision dated January 11, 1996 and resolution dated May
23, 1996 of the Court of Appeals in CA-G.R. SP No. 36032 are affirmed. Costs
against petitioners.
SO ORDERED.

[G.R. No. 61508. March 17, 1999.]


CITIBANK, N.A. (Formerly First National City Bank), petitioner, vs. THE HONORABLE
COURT OF APPEALS AND DOUGLAS F. ANAMA, respondents.
Agcaoili & Associates for petitioner.
Quasha Asperilla Ancheta Pena & Associates for private respondent.
SYNOPSIS
In consideration of a loan obtained from Citibank, N.A., Anama executed a
promissory note to pay the same and constituted a Chattel Mortgage in favor of the
Bank, on his various machineries and equipment. Later, for failure of Anama to pay
the promissory note despite demand, the Bank filed a complaint for the collection of
the unpaid balance, for the delivery and possession of the chattels preparatory to
the foreclosure thereof. An Order of Replevin over the properties covered by the
Chattel Mortgage was issued but the same was not immediately implemented in
view of an amicable settlement then being worked out. But when the same failed,
the lower court proceeded to try the case on the merits. The Bank filed a Motion for
the Issuance of an Alias Writ of Seizure, and the same was granted despite
opposition by Anama. Thereafter, the Bank took possession of the mortgaged
chattels and they were advertised for public auction. Anama then went to the Court
of Appeals, which ruled, among others, that there was no Affidavit of Merit
accompanying the Complaint for Replevin and the bond posted by Citibank was
insufficient. Hcnce, this petition for certiorari.
There is substantial compliance with the rule requiring an affidavit of merit to
support the complaint for replevin if the complaint itself contains a statement of
every fact required to be stated in the affidavit of merit and the complaint is verified
like an affidavit. Here, the Bank's complaint did not allege all the facts that should
be set forth in an affidavit of merit. At any rate, the defense of lack of affidavit of
merit was interposed only in the Reply to the Comment of the Bank on the Petition
for Certiorari which Anama filed with the Court of Appeals. Procedurally therefore,
such defense was no longer available for failure to plead the same in the Answer as
required by the omnibus motion rule.
The Bank also questioned the finding of the Court of Appeals that the bond posted
was insufficient. What was posted was merely an amount which was double the
probable value as declared by the Bank and, therefore, inadequate should there be
a finding that the actual value is actually greater. Since the valuation has been
disputed, actual value of the properties should have been determined first by the
lower court.
SYLLABUS

1.
REMEDIAL LAW; CIVIL ACTION; JUDGMENT ON THE MERITS; NOT MADE IN
CASE AT BAR. A judgment is on the merits when it determines the rights and
liabilities of the parties on the basis of the disclosed facts, irrespective of formal,
technical or dilatory objections, and it is not necessary that there should have been
a trial. The assailed decision of the Court of Appeals did not make any adjudication
on the rights and liabilities between Citibank and Douglas Anama. There was no
finding yet of the fact of default. The decision only ruled on the propriety of the
issuance of the writ of seizure by the trial court. In resolving the issue posed by the
petition, the Court of Appeals limited its disposition to a determination of whether or
not the assailed order of seizure was issued in accordance with law, that is, whether
the provisions of the Rules of Court on delivery of personal property or replevin as a
provisional remedy were followed. The Court of Appeals did not pass upon the issue
of who, as between Douglas Anama and Citibank, is entitled to the possession of
subject machineries, as asserted by the latter. When it ordered the restoration of
the said machineries to Douglas Anama (now the private respondent), it merely
brought the parties to a status quo, by restoring the defendant to the possession of
his properties, since there was a finding that the issuance of the writ was not in
accordance with the specific rules of the Rules of Court.
2.
ID.; PROVISIONAL REMEDIES; REPLEVIN; AFFIDAVIT OF MERIT; SUBSTANTIAL
COMPLIANCE THEREOF. There is substantial compliance with the rule requiring
that an affidavit of merit to support the complaint for replevin if the complaint itself
contains a statement of every fact required to be stated in the affidavit of merit and
the complaint is verified like an affidavit. And similarly, in the case of an attachment
which likewise requires an affidavit of merit, the Court held that the absence of an
affidavit of merit is not fatal where the petition itself, which is under oath, recites
the circumstances or facts constitutive of the grounds for the petition.
3.
ID.; ID.; ID.; ID.; FACTS THAT MUST BE SET FORTH. The facts that must be
set forth in the affidavit of merit are (1) that plaintiff owns the property particularly
describing the same, or that he is entitled to its possession; (2) wrongful detention
by defendant of said property; (3) that the property is not taken by virtue of a tax
assessment or fine pursuant to law or seized under execution or attachment or, if it
is so seized, that it is exempt from such seizure; and (4) the actual value of the
property.
4.
ID.; ID.; ID.; ID.; ACTUAL VALUE OF THE PROPERTY SUBJECT OF REPLEVIN.
Pertinent rules require that the affidavit of merit should state the actual value of the
property subject of a replevin suit and not just its probable value. Actual value (or
actual market value) means "the price which an article would command in the
ordinary course of business, that is to say, when offered for sale by one willing to
sell, but not under compulsion to sell, and purchased by another who is willing to
buy, but under no obligation to purchase it." It bears stressing that the actual value
of the properties subject of a replevin is, required to be stated in the affidavit
because such actual value will be the basis of the replevin bond required to be

posted by the plaintiff. Therefore, when the petitioner failed to declare the actual
value of the machineries and equipment subject of the replevin suit, there was noncompliance with Section 2, Rule 60 of the Revised Rules of Court.
5.
ID.; CIVIL ACTION; PLEADINGS; DEFENSES AND OBJECTIONS NOT PLEADED
DEEMED WAIVED. It should be noted, however, that the private respondent
interposed the defense of lack of affidavit of merit only in his Reply to the Comment
of Citibank on the Petition for Certiorari which respondent filed with the Court of
Appeals. Thus, although respondent's defense of lack of affidavit of merit is
meritorious, procedurally, such a defense is no longer available for failure to plead
the same in the Answer as required by the omnibus motion rule.
6.
ID.; PROVISIONAL REMEDIES; REPLEVIN; BOND; SHOULD BE DOUBLE THE
ACTUAL VALUE OF THE PROPERTIES INVOLVED. As there was a disagreement on
the valuation of the properties in the first place, proper determination of the value
of the bond to be posted by the plaintiff cannot be sufficiently arrived at. The Rules
of Court requires the plaintiff to "give a bond, executed to the defendant in double
the value of the property as stated in the affidavit . . . ." Hence, the bond should be
double the actual value of the properties involved. In this case, what was posted
was merely an amount which was double the probable value as declared by the
plaintiff and, therefore, inadequate should there be a finding that the actual value is
actually greater. Since the valuation made by the petitioner has been disputed by
the respondent, the lower court should have determined first the actual value of the
properties. It was thus an error for the said court to approve the bond, which was
based merely on the probable value of the properties.
7.
ID.; ID.; ID.; ID.; PURPOSE THEREOF. It should be noted that a replevin bond
is intended to indemnify the defendant against any loss that he may suffer by
reason of its being compelled to surrender the possession of the disputed property
pending trial of the action. The same may also be answerable for damages if any
when judgment is rendered in favor of the defendant or the party against whom a
writ of replevin was issued and such judgment includes the return of the property to
him. Thus, the requirement that the bond be double the actual value of the
properties litigated upon. Such is the case because the bond will answer for the
actual loss to the plaintiff, which corresponds to the value of the properties sought
to be recovered and for damages, if any.
8.
ID.; ID.; ID.; POSTING OF COUNTERBOND OR REDELIVERY BOND; WHEN
PROPER; CASE AT BAR. The Court held in a prior case that the remedies provided
under Section 5, Rule 60, are alternative remedies. ". . . If a defendant in a replevin
action wishes to have the property taken by the sheriff restored to him, he should,
within five days from such taking, (1) post a counter-bond in double the value of
said property, and (2) serve plaintiff with a copy thereof, both requirements as
well as compliance therewith within the fve-day period mentioned being
mandatory." This course of action is available to the defendant for as long as he

does not object to the sufficiency of the plaintiff's bond. Conformably, a defendant
in a replevin suit may demand the return of possession of the property replevined
by filing a redelivery bond executed to the plaintiff in double the value of the
property as stated in the plaintiff's affidavit within the period specified in Sections 5
and 6. Alternatively, "the defendant may object to the sufficiency of the plaintiff's
bond, or of the surety or sureties thereon"; but if he does so, "he cannot require the
return of the property" by posting a counter-bond pursuant to Sections 5 and 6. In
the case under consideration, the private respondent did not opt to cause redelivery
of the properties to him by filing a counter-bond precisely because he objected to
the sufficiency of the bond posted by plaintiff. Therefore, he need not file a counterbond or redelivery bond. When such objection was not given due course in the court
below when, instead of requiring the plaintiff to post a new bond, the court
approved the bond claimed by respondent to be insufficient, and ordered the
seizure of the properties recourse to a petition for certiorari before the Court of
Appeals assailing such order is proper under the circumstances.
9.
ID.; RECEIVERSHIP; OATH AND BOND OF RECEIVER; CASE AT BAR. The
Court of Appeals found that the requirements of Section 5, Rule 59 on receivership
were not complied with by the petitioner, particularly the filing or posting of a bond
and the taking of an oath. It should be noted that under the old Rules of Court which
was in effect at the time this case was still at trial stage, a bond for the appointment
of a receiver was not generally required of the applicant, except when the
application was made ex parte. Therefore, petitioner was not absolutely required to
file a bond. Besides, as stipulated in the chattel mortgage contract between the
parties, petitioner, as the mortgagee, is entitled to the appointment of a receiver
without a bond. However, the Court of Appeals was right in finding a defect in such
assumption of receivership in that the requirement of taking an oath has not been
complied with. Consequently, the trial court erred in allowing the petitioner to
assume receivership over the machine shop of private respondent without requiring
the appointed receiver to take an oath.
10.
ID.; SPECIAL CIVIL ACTIONS; CERTIORARI; GRAVE ABUSE OF DISCRETION,
COMMITTED BY THE TRIAL COURT. For erroneously issuing the alias writ of seizure
without inquiring into the sufficiency of the replevin bond and for allowing petitioner
to assume receivership without the requisite oath, the Court of Appeals aptly held
that the trial court acted with grave abuse of discretion in dealing with the situation.
Under the Revised Rules of Court, the property seized under a writ of replevin is not
to be delivered immediately to the plaintiff. This is because a possessor has every
right to be respected in its possession and may not be deprived of it without due
process.
DECISION
PURISIMA, J p:

At bar is a special civil action for certiorari with prayer for a temporary restraining
order faulting the Court of Appeals 1 with grave abuse of discretion for nullifying the
lower court's order of seizure of mortgaged properties subject of a case for sum of
money and replevin. llcd
The facts leading to the institution of the case are as follows:
In consideration for a loan obtained from Citibank, N.A. (formerly First National City
Bank), the defendant (private respondent herein) Douglas Anama executed a
promissory note, dated November 10, 1972, 2 to pay the plaintiff bank the sum of
P418,000.00 in sixty (60) equal successive monthly installments of P8,722.25,
starting on the 10th day of December 1972 and on the 10th of every month
thereafter. The said Promissory Note stipulated further that:
"(a)

the loan is subject to interest at the rate of twelve percent (12%) per annum;

(b)
the promissory note and the entire amount therein stated shall become
immediately due and payable without notice or demand upon
(aa) default in the payment of any installment of principal or interest at the time
when the same is due;
(bb) the occurrence of any change in the condition and affairs of the defendant,
which in the opinion of the plaintiff shall increase its credit risk;
(c)
the defendant agrees to pay all costs, expenses, handling and insurance
charges incurred in the granting of the loan;
(d)
in case the services of a lawyer is made necessary for collection, defendant
shall be liable for attorney's fees of at least ten percent (10%) of the total amount
due." 3
To secure payment of the loan, private respondent Anama also constituted a Chattel
Mortgage of even date in favor of petitioner, on various machineries and equipment
located at No. 1302 Epifanio delos Santos Avenue, Quezon City, under the following
terms and conditions:
"(a) The machineries and equipment, subject of the mortgage, stand as security
for defendant's account.
(b)
All replacements, substitutions, additions, increases and accretions to the
properties mortgaged shall also be subject to the mortgage.
(c)
The defendant appoints the plaintiff as his attorney-in-fact with authority to
enter the premises of the defendant and take actual possession of the mortgaged
chattels without any court order, to sell said property to any party.

(d)
All expenses in carrying into effect the stipulations therein shall be for the
account of the defendant and shall form part of the amount of the obligation
secured by the mortgage.
(e)
In case the plaintiff institutes proceedings for the foreclosure of the
mortgage, the plaintiff shall be entitled to the appointment of a receiver without a
bond.
(f)
In case of default, the defendant shall be liable for attorney's fees and cost of
collection in the sum equal to twenty-five percent (25%) of the total amount of the
indebtedness outstanding and unpaid." 4
On November 25, 1974, for failure and refusal of the private respondent to pay the
monthly installments due under the said promissory note since January 1974,
despite repeated demands, petitioner filed a verified complaint against private
respondent Anama for the collection of his unpaid balance of P405,820.52 on the
said promissory note, for the delivery and possession of the chattels covered by the
Chattel Mortgage preparatory to the foreclosure thereof as provided under Section
14 of the Chattel Mortgage Law, docketed as Civil Case No. 95991 before the then
Court of First Instance of Manila.
On February 20, 1975, the defendant Anama submitted his Answer with
Counterclaim, denying the material averments of the complaint, and averring, inter
alia (1) that the remedy of replevin was improper and the writ of seizure should be
vacated; (2) that he signed the promissory note for P418,000.00 without receiving
from plaintiff Citibank any amount, and was even required to pay the first
installment on the supposed loan in December 1974; (3) that the understanding
between him and the Citibank was for the latter to release to him the entire loan
applied for prior to and during the execution of his promissory note, but Citibank did
not do so and, instead, delayed the release of any amount on the loan even after
the execution of the promissory note thereby disrupting his timetable of plans and
causing him damages; (4) that the amount released by Citibank to him up to the
present was not the amount stated in the promissory note, and his alleged default
in paying the installments on the loan was due to the delay in releasing the full
amount of the loan as agreed upon; (5) that the machineries and equipment
described in the chattel mortgage executed by him are really worth more than
P1,000,000.00 but he merely acceded to the valuation thereof by Citibank in said
document because of the latter's representation that the same was necessary to
speed up the granting of the loan applied for by him; (6) that the properties covered
by said chattel mortgage are real properties installed in a more or less permanent
nature at his (defendant's) premises in Quezon City, as admitted by Citibank in said
mortgage document; (7) that the mortgage contract itself stipulated that the
manner and procedure for effecting the sale or redemption of the mortgaged
properties, if made extrajudicially, shall be governed by Act No. 1508 and other
pertinent laws which all pertain to real properties; and (8) that because of the filing

of this complaint without valid grounds therefor, he suffered damages and incurred
attorney's fees; the defendant, now private respondent, averred.
On December 2, 1974, the trial court, upon proof of default of the private
respondent in the payment of the said loan, issued an Order of Replevin over the
machineries and equipment covered by the Chattel Mortgage.
However, despite the issuance of the said order of seizure of subject chattels, actual
delivery of possession thereof to petitioner did not take place because negotiations
for an amicable settlement between the parties were encouraged by the trial court.
On March 24, 1975, a pre-trial conference was held and the lower court issued an
order for joint management by the petitioner and the private respondent of the
latter's business for ten (10) days, after which the former would be appointed
receiver for the said business.
On April 1, 1975, the petitioner took over private respondent's business as receiver.
When further proposals to settle the case amicably failed, the lower court
proceeded to try the case on the merits.
On January 29, 1977, petitioner presented a Motion for the Issuance of an Alias Writ
of Seizure, ordering the sheriff to seize the properties involved and dispose of them
in accordance with the Revised Rules of Court. The lower court then gave private
respondent five (5) days to oppose the said motion and on February 22, 1977, he
sent in his opposition thereto on the grounds: (1) that Citibank's P400,000 replevin
bond to answer for damages was grossly inadequate because the market value of
the properties involved is P1,710,000 and their replacement cost is P2,342,300.00
per the appraisal report of the Appraisal and Research Corp.; (2) that he was never
in default to justify the seizure; (3) that the Civil Case No. 18071 of the Court of First
Instance, entitled Hernandes vs. Anama, et al., which, according to Citibank,
supposedly increased its credit risk in the alleged obligation, had already been
dismissed as against him and the case terminated with the dismissal of the
complaint against the remaining defendant, First National City Bank, by the Court in
its orders of January 12, 1977 and February 7, 1977; (4) that his (defendant's)
supposed obligations with Citibank were fully secured and his mortgaged properties
are more than sufficient to secure payment thereof; and (5) that the writ of seizure
if issued would stop his business operations and contracts and expose him to
lawsuits from customers, and also dislocate his employees and their families
entirely dependent thereon for their livelihood.
On February 28, 1977, acting on the said Motion and private respondent's
opposition, the trial court issued an Order granting the Motion for Alias Writ of
Seizure, ruling thus:

"WHEREFORE, the motion for alias writ of seizure is hereby granted. At any rate, this
Order gives another opportunity for defendant and the intervenor who claims to be
a part owner to file a counterbond under Sec. 60 of Rules of Court." 5
Private respondent moved for reconsideration of the aforesaid order but the same
was denied by the Resolution of March 18, 1977, to wit:
"In view of the foregoing, the motion for reconsideration is hereby denied.
At any rate, as already stated, the defendant has still a remedy available which is to
file a bond executed to the plaintiff in double the value of the properties as stated in
the plaintiff's affidavit. The Court at this instance therefore has no authority to stop
or suspend the writ of seizure already ordered." 6
Accordingly, by virtue of the Alias Writ of Seizure, petitioner took possession of the
mortgaged chattels of private respondent. As a consequence, the sheriff seized
subject properties, dismantled and removed them from the premises where they
were installed, delivered them to petitioner's possession on March 17, 18 and 19,
1977 and advertised them for sale at public auction scheduled on March 22, 1977.
On March 21, 1977, private respondent filed with the Court of Appeals a Petition for
Certiorari and Prohibition 7 with Injunction to set aside and annul the questioned
resolutions of the trial court on the ground that they were issued "in excess of
jurisdiction and with grave abuse of discretion" because of the "lack of evidence and
clear cut right to possession of First National City Bank (herein petitioner)" to the
machineries subject of the Chattel Mortgage. cdasia
On July 30, 1982, finding that the trial court acted with grave abuse of discretion
amounting to excess or lack of jurisdiction in issuing the assailed resolutions, the
Court of Appeals granted the petition, holding that the provisions of the Rules of
Court on Replevin and Receivership have not been complied with, in that (1) there
was no Affidavit of Merit accompanying the Complaint for Replevin; (2) the bond
posted by Citibank was insufficient; and (3) there was non-compliance with the
requirement of a receiver's bond and oath of office. The decretal portion of the
assailed decision of the Court of Appeals, reads:
"WHEREFORE, the petition is granted. The questioned resolutions issued by the
respondent judge in Civil Case No. 95991, dated February 28, 1977 and March 18,
1977, together with the writs and processes emanating or deriving therefrom, are
hereby declared null and void ab initio.
The respondent ex-officio sheriff of Quezon City and the respondent First National
City Bank are hereby ordered to return all the machineries and equipment with their
accessories seized, dismantled and hauled, to their original and respective places
and positions in the shop flooring of the petitioner's premises where these articles
were, before they were dismantled, seized and hauled at their own expense. The

said respondents are further ordered to cause the repair of the concrete foundations
destroyed by them including the repair of the electrical wiring and facilities affected
during the seizure, dismantling and hauling.
The writ of preliminary injunction heretofore in effect is hereby made permanent.
Costs against the private respondents.
SO ORDERED." 8
Therefrom, Citibank came to this Court via its present petition for certiorari,
ascribing grave abuse of discretion to the Court of Appeals and assigning as errors,
that:
I
THE RESPONDENT COURT ERRED IN PRACTICALLY AND IN EFFECT RENDERING
JUDGMENT ON THE MERITS AGAINST THE HEREIN PETITIONER BY ORDERING THE
RETURN OF THE MACHINERIES AND EQUIPMENT AND ITS ACCESSORIES TO THEIR
ORIGINAL AND RESPECTIVE PLACES AND POSITIONS.
II
THE RESPONDENT COURT ERRED IN FINDING THAT THE COMPLAINT OF THE
PETITIONER DID NOT COMPLY WITH THE PROVISIONS OF SEC. 2, RULE 60 OF THE
RULES OF COURT. LLpr
III
THAT THE RESPONDENT COURT ERRED IN FINDING THAT THE BOND POSTED BY THE
PETITIONER IS QUESTIONABLE AND/OR INSUFFICIENT.
IV
THE RESPONDENT COURT ERRED IN FINDING THAT THE PETITIONER DID NOT
COMPLY WITH THE PROVISIONS OF SEC. 5, RULE 59 BY FAILING TO POST A
RECEIVER'S BOND.
V
THE RESPONDENT ERRED IN FINDING THAT THE HON. JORGE R. COQUIA ACTED
WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO EXCESS OR LACK OF
JURISDICTION IN DEALING WITH THE SITUATION.
I
Anent the first assigned error, petitioner contends that the Court of Appeals, by
nullifying the writ of seizure issued below, in effect, rendered judgment on the
merits and adjudged private respondent Anama as the person lawfully entitled to
the possession of the properties subject of the replevin suit. It is theorized that the

same cannot be done, as the case before the court below was yet at trial stage and
the lower court still had to determine whether or not private respondent was in fact
in default in the payment of his obligation to petitioner Citibank, which default
would warrant the seizure of subject machineries and equipment.
The contention is untenable. A judgment is on the merits when it determines the
rights and liabilities of the parties on the basis of the disclosed facts, irrespective of
formal, technical or dilatory objections, and it is not necessary that there should
have been a trial. 9 The assailed decision of the Court of Appeals did not make any
adjudication on the rights and liabilities between Citibank and Douglas Anama.
There was no finding yet of the fact of default. The decision only ruled on the
propriety of the issuance of the writ of seizure by the trial court. As worded by the
respondent court itself, "the main issues to be resolved are whether there was lack
or excess of jurisdiction, or grave abuse of discretion, in the issuance of the orders
in question, and there is no appeal nor any plain, speedy, and adequate remedy in
the ordinary course of law." 10
In resolving the issue posed by the petition, the Court of Appeals limited its
disposition to a determination of whether or not the assailed order of seizure was
issued in accordance with law, that is, whether the provisions of the Rules of Court
on delivery of personal property or replevin as a provisional remedy were followed.
The Court of Appeals relied on Rule 60 of the Rules of Court, which prescribes the
procedure for the recovery of possession of personal property, which Rule, provides:
SECTION 2. Affidavit and Bond. Upon applying or such order the plaintiff must
show by his own affidavit or that of some other person who personally knows the
facts:
(a)
That the plaintiff is the owner of the property claimed particularly describing
it, or is entitled to the possession thereof;
(b)
That the property is wrongfully detained by the defendant, alleging the cause
of detention thereof according to his best of knowledge, information and belief;
(c)
That it has not been taken for a tax assessment or fine pursuant to law, or
seized under an execution, or an attachment against the property of the plaintiff, or
is so seized, that is exempt from such seizure; and
(d)

The actual value of the property.

The plaintiff must also give a bond, executed to the defendant in double of the
value of the property as stated in the affidavit aforementioned, for the return of the
property to the defendant of such sum as he may recover from the plaintiff in the
action.
The Court of Appeals did not pass upon the issue of who, as between Douglas
Anama and Citibank, is entitled to the possession of subject machineries, as

asserted by the latter. When it ordered the restoration of the said machineries to
Douglas Anama (now the private respondent), it merely brought the parties to a
status quo, by restoring the defendant to the possession of his properties, since
there was a finding that the issuance of the writ was not in accordance with the
specific rules of the Rules of Court.
II
In its second assignment of errors, petitioner theorizes that the Court of Appeals
erred in finding that it did not comply with Section 2, Rule 60 of the Rules of Court
requiring the replevin plaintiff to attach an affidavit of merit to the complaint.
Petitioner maintains that although there was no affidavit of merit accompanying its
complaint, there was nonetheless substantial compliance with the said rule as all
that is required to be alleged in the affidavit of merit was set forth in its verified
complaint. Petitioner argues further that assuming arguendo that there was noncompliance with the affidavit of merit requirement, such defense can no longer be
availed of by private respondent Anama as it was not alleged in his Answer and was
only belatedly interposed in his Reply to the Petitioner's Comment on the Petition for
Certiorari before the Court of Appeals.
Petitioner is correct insofar as it contends that substantial compliance with the
affidavit requirement may be permissible. There is substantial compliance with the
rule requiring that an affidavit of merit to support the complaint for replevin if the
complaint itself contains a statement of every fact required to be stated in the
affidavit of merit and the complaint is verified like an affidavit. On the matter of
replevin, Justice Vicente Francisco's Comment on the Rules of Court, states:
"Although the better practice is to keep the affidavit and pleading separate, if
plaintiff's pleading contains a statement of every fact which the statute requires to
be shown in the affidavit, and the pleading is verified by affidavit covering every
statement therein, this will be sufficient without a separate affidavit; but in no event
can the pleading supply the absence of the affidavit unless all that the affidavit is
required to contain is embodied in the pleading, and the pleading is verified in the
form required in the case of a separate affidavit." (77 CJS 65 cited in Francisco,
Rules of Court of the Philippines, Vol. IV-A, p. 383)
And similarly, in the case of an attachment which likewise requires an affidavit of
merit, the Court held that the absence of an affidavit of merit is not fatal where the
petition itself, which is under oath, recites the circumstances or facts constitutive of
the grounds for the petition. 11
The facts that must be set forth in the affidavit of merit are (1) that plaintiff owns
the property particularly describing the same, or that he is entitled to its
possession; (2) wrongful detention by defendant of said property; (3) that the
property is not taken by virtue of a tax assessment or fine pursuant to law or seized

under execution or attachment or, if it is so seized, that it is exempt from such


seizure; and the (4) the actual value of the property. 12
But, as correctly taken note of by the Court of Appeals, petitioner's complaint does
not allege all the facts that should be set forth in an affidavit of merit. Although the
complaint alleges that petitioner is entitled to the possession of subject properties
by virtue of the chattel mortgage executed by the private respondent, upon the
latter's default on its obligation, and the defendant's alleged "wrongful detention" of
the same, the said complaint does not state that subject properties were not taken
by virtue of a tax assessment or fine imposed pursuant to law or seized under
execution or attachment or, if they were so seized, that they are exempt from such
seizure.
Then too, petitioner stated the value of subject properties at a "probable value of
P200,000.00, more or less". Pertinent rules require that the affidavit of merit should
state the actual value of the property subject of a replevin suit and not just its
probable value. Actual value (or actual market value) means "the price which an
article would command in the ordinary course of business, that is to say, when
offered for sale by one willing to sell, but not under compulsion to sell, and
purchased by another who is willing to buy, but under no obligation to purchase it".
13 Petitioner alleged that the machineries and equipment involved are valued at
P200,000.00 while respondent denies the same, claiming that per the appraisal
report, the market value of the said properties is P1,710,000.00 and their
replacement cost is P2,342,300.00. Petitioner's assertion is belied by the fact that
upon taking possession of the aforesaid properties, it insured the same for
P610,593.74 and P450,000.00, separately. It bears stressing that the actual value of
the properties subject of a replevin is required to be stated in the affidavit because
such actual value will be the basis of the replevin bond required to be posted by the
plaintiff. Therefore, when the petitioner failed to declare the actual value of the
machineries and equipment subject of the replevin suit, there was non-compliance
with Section 2, Rule 60 of the Revised Rules of Court.
It should be noted, however, that the private respondent interposed the defense of
lack of affidavit of merit only in his Reply to the Comment of Citibank on the Petition
for Certiorari which respondent filed with the Court of Appeals. Section 2, Rule 9 of
the Revised Rules of Court, provides:
SECTION 2. Defenses and objections not pleaded deemed waived. Defenses and
objections not pleaded either in a motion to dismiss or in the answer are deemed
waived; except the failure to state a cause of action which may be alleged in a later
pleading, . . . .
This Rule has been revised and amended, as follows:
SECTION 1. Defenses and objections not pleaded. Defenses and objections not
pleaded in a motion to dismiss or in the answer are deemed waived. However, when

it appears from the pleadings or the evidence on record that the court has no
jurisdiction over the subject matter, that there is another action pending between
the same parties for the same cause, or that the action is barred by a prior
judgment or by statute of limitations, the court shall dismiss the claim.
Thus, although respondent's defense of lack of affidavit of merit is meritorious,
procedurally, such a defense is no longer available for failure to plead the same in
the Answer as required by the omnibus motion rule.
III
Petitioner also faults the Court of Appeals for finding that the bond posted by the
petitioner is questionable and/or insufficient. It is averred that, in compliance with
Section 2, Rule 60 requiring the replevin plaintiff to post a bond in double the value
of the properties involved, it filed a bond in the amount of P400,000.00 which is
twice the amount of P200,000.00 declared in its complaint.
The Court reiterates its findings on the second assignment of errors, particularly on
the issue of the actual value of subject properties as against their probable value.
Private respondent, at the onset, has put into issue the value of the said properties.
In the Special Defenses contained in his Answer, private respondent averred:
"That while defendant admits that he executed a Chattel Mortgage in favor of
plaintiff, he vigorously denies that the machineries covered therein are only worth
P200,000.00. The fact is that plaintiff knew fully well that said chattels are worth no
less than P1,000,000.00, said defendant having acceded to said valuation upon
plaintiff's representation that it would be necessary to speed up the granting of the
loan."
As there was a disagreement on the valuation of the properties in the first place,
proper determination of the value of the bond to be posted by the plaintiff cannot
be sufficiently arrived at. Though the rules specifically require that the needed bond
be double the value of the properties, since plaintiff merely denominated a probable
value of P200,000.00 and failed to aver the properties' actual value, which is
claimed to be much greater than that declared by plaintiff, the amount of
P400,000.00 would indeed be insufficient as found by the Court of Appeals. The
Rules of Court requires the plaintiff to "give a bond, executed to the defendant in
double the value of the property as stated in the affidavit . . . ." Hence, the bond
should be double the actual value of the properties involved. In this case, what was
posted was merely an amount which was double the probable value as declared by
the plaintiff and, therefore, inadequate should there be a finding that the actual
value is actually far greater than P200,000.00. Since the valuation made by the
petitioner has been disputed by the respondent, the lower court should have
determined first the actual value of the properties. It was thus an error for the said
court to approve the bond, which was based merely on the probable value of the
properties.

It should be noted that a replevin bond is intended to indemnify the defendant


against any loss that he may suffer by reason of its being compelled to surrender
the possession of the disputed property pending trial of the action. 14 The same
may also be answerable for damages if any when judgment is rendered in favor of
the defendant or the party against whom a writ of replevin was issued and such
judgment includes the return of the property to him. 15 Thus, the requirement that
the bond be double the actual value of the properties litigated upon. Such is the
case because the bond will answer for the actual loss to the plaintiff, which
corresponds to the value of the properties sought to be recovered and for damages,
if any.
Petitioner also maintains that, assuming for the sake of argument that its replevin
bond was grossly inadequate or insufficient, the recourse of the respondent should
be to post a counterbond or a redelivery bond as provided under Section 5 of Rule
60.
Sections 5 and 6, Rule 60 of the Rules of Court, read:
"SECTION 5.Return of property. If the defendant objects to the sufficiency of the
plaintiff's bond, or of the surety or sureties thereon, he cannot require the return of
the property as in this section provided; but if he does not so object, he may, at any
time before the delivery of the property to the plaintiff, if such delivery be adjudged,
and for the payment of such sum to him as may be recovered against the
defendant, and by serving a copy of such bond on the plaintiff or his attorney.
SECTION 6. Disposition of property by officer. If within five (5) days after the
taking of the property by the officer, the defendant does not object to the
sufficiency of the bond, or of the surety or sureties thereon, or require the return of
the property as provided in the last preceding section; or if the defendant so
objects, and the plaintiff's first or new bond is approved; or if the defendant so
requires, and his bond is objected to and found insufficient and he does not
forthwith file an approved bond, the property shall be delivered to the plaintiff, the
officer must return it to the defendant."
The Court held in a prior case 16 that the remedies provided under Section 5, Rule
60, are alternative remedies. ". . . If a defendant in a replevin action wishes to have
the property taken by the sheriff restored to him, he should, within five days from
such taking, (1) post a counter-bond in double the value of said property, and (2)
serve plaintiff with a copy thereof, both requirements as well as compliance
therewith within the five-day period mentioned being mandatory." 17 This course
of action is available to the defendant for as long as he does not object to the
sufficiency of the plaintiff's bond.
Conformably, a defendant in a replevin suit may demand the return of possession of
the property replevined by filing a redelivery bond executed to the plaintiff in double

the value of the property as stated in the plaintiff's affidavit within the period
specified in Sections 5 and 6. cdasia
Alternatively, "the defendant may object to the sufficiency of the plaintiff's bond, or
of the surety or sureties thereon;" but if he does so, "he cannot require the return of
the property" by posting a counter-bond pursuant to Sections 5 and 6. 18
In the case under consideration, the private respondent did not opt to cause
redelivery of the properties to him by filing a counter-bond precisely because he
objected to the sufficiency of the bond posted by plaintiff. Therefore, he need not
file a counter-bond or redelivery bond. When such objection was not given due
course in the court below when, instead of requiring the plaintiff to post a new
bond, the court approved the bond in the amount of P400,000.00, claimed by
respondent to be insufficient, and ordered the seizure of the properties recourse
to a petition for certiorari before the Court of Appeals assailing such order is proper
under the circumstances.
IV
As its fourth assignment of errors, petitioner contends that the Court of Appeals
made an error of judgment in finding that the petitioner did not comply with the
provisions of Section 5, Rule 59 by failing to post a receiver's bond. Petitioner
contends that although it is in agreement with the Court of Appeals that a receiver's
bond is separate and distinct from a replevin bond, under the circumstances it was
not required to file a receiver's bond because it did not assume receivership over
the properties. It is further argued that assuming that it did assume receivership,
the Chattel Mortgage expressly provides, that:
"In case the MORTGAGEE institutes proceedings, judicially or otherwise, for the
foreclosure of this Chattel Mortgage, or to enforce any of its rights hereunder, the
MORTGAGEE shall be entitled as a matter of right to the appointment of a receiver,
without bond, of the mortgaged properties and of such other properties, real or
personal, claims and rights of the MORTGAGOR as shall be necessary or proper to
enable the said receiver to properly control and dispose of the mortgaged
properties." 19
The order of the trial court dated March 24, 1975 provided, among others, that the
properties shall be under joint management for a period of ten days, after which
period "the bank, by virtue of the stipulations under the chattel mortgage, becomes
the Receiver to perform all the obligations as such Receiver" and "in the event that
the bank decides not to take over the receivership, the joint management
continues." 20
From the evidence on record, it is palpably clear that petitioner Citibank did, in fact,
assume receivership. A letter 21 dated April 1, 1975 sent by petitioner to the
private respondent, reads:

April 1, 1975
Anama Engineering Service Group
114 R. Lagmay Street
San Juan, Rizal
Attention: Mr. Douglas Anama
Gentlemen:
Pursuant to the Court order, we have decided to take over your machine shop as
Receiver.
We are hereby appointing Mr. Artemio T. Gonzales as our representative.
Very truly yours,
FIRST NATIONAL CITY BANK
By:
P.R. REAL, JR.
Assistant Manager
Petitioner cannot therefore deny that nine days after the trial court issued the order
of receivership, it informed the private respondent that it would, as it did, assume
receivership.
The Court of Appeals found that the requirements of Section 5, Rule 59 on
receivership were not complied with by the petitioner, particularly the filing or
posting of a bond and the taking of an oath.
It should be noted that under the old Rules of Court which was in effect at the time
this case was still at trial stage, a bond for the appointment of a receiver was not
generally required of the applicant, except when the application was made ex parte.
22 Therefore, petitioner was not absolutely required to file a bond. Besides, as
stipulated in the chattel mortgage contract between the parties, petitioner, as the
mortgagee, is entitled to the appointment of a receiver without a bond.
However, the Court of Appeals was right in finding a defect in such assumption of
receivership in that the requirement of taking an oath has not been complied with.
Section 5, Rule 59, states:
"SECTION 5. Oath and bond of receiver. Before entering upon his duties, the
receiver must be sworn to perform them faithfully, and must file a bond, executed
to such person and in such sum as the court or judge may direct, to the effect that

he will faithfully discharge the duties of receiver in the action and obey the orders of
the court therein."
Consequently, the trial court erred in allowing the petitioner to assume receivership
over the machine shop of private respondent without requiring the appointed
receiver to take an oath.
V
In light of the foregoing, the answer to the fifth assignment of errors is in the
negative. For erroneously issuing the alias writ of seizure without inquiring into the
sufficiency of the replevin bond and for allowing petitioner to assume receivership
without the requisite oath, the Court of Appeals aptly held that the trial court acted
with grave abuse of discretion in dealing with the situation.
Under the Revised Rules of Court, the property seized under a writ of replevin is not
to be delivered immediately to the plaintiff. 23 This is because a possessor has
every right to be respected in its possession and may not be deprived of it without
due process. 24
As enunciated by this Court in the case of Filinvest Credit Corporation vs. Court of
Appeals, 25
"The reason why the law does not allow the creditor to possess himself of the
mortgaged property with violence and against the will of the debtor is to be found in
the fact that the creditor's right of possession is conditioned upon the fact of
default, and the existence of this fact may naturally be the subject of controversy.
The debtor, for instance, may claim in good faith, and rightly or wrongly, that the
debt is paid, or that for some other reason the alleged default is nonexistent. His
possession in this situation is as fully entitled to protection as that of any other
person, and in the language of Article 446 of the Civil Code, he must be respected
therein. To allow the creditor to seize the property against the will of the debtor
would make the former to a certain extent both judge and executioner in his own
cause a thing which is inadmissible in the absence of unequivocal agreement in
the contract itself or express provision to the effect in the statute."
WHEREFORE, for lack of merit, the petition is hereby DISMISSED. No pronouncement
as to costs.
SO ORDERED.

[G.R. No. 131283. October 7, 1999.]


OSCAR C. FERNANDEZ and NENITA P. FERNANDEZ, petitioners, vs. THE
INTERNATIONAL CORPORATE BANK, now UNION BANK OF THE PHILIPPINES and
PREMIERE INSURANCE & SURETY CORP., respondents.
Oscar C. Fernandez for petitioners.
Arnulfo V. Pelagio for The Premiere Insurance & Surety Corp.
Tomas R. Leonidas for the Union Bank of the Philippines.
SYNOPSIS
This is a petition for review on certiorari under Rule 45 of the Rules of Court filed by
spouses Oscar and Nenita Fernandez challenging the decision and resolution of the
Court of Appeals in CA-G.R. SP No. 44409. In dismissing petitioners' suit for
certiorari and prohibition, the Court of Appeals ruled that the Metropolitan Trial
Court (MTC) of Pasay City had jurisdiction in the instant case. Furthermore, it
declared that the writ of replevin issued by the MTC of Pasay could validly be served
and executed anywhere in Metro Manila. EIAaDC
The Supreme Court found the petition devoid of merit. Under the Resolution of the
Supreme Court en banc dated January 11, 1983 providing for the interim rules and
guidelines relative to the implementation of BP 129, a writ of replevin may be
served anywhere in the Philippines. Thus the writ in question issued by Judge Paas
may be validly enforced anywhere in the Philippines. Moreover, the amount
tendered by the petitioners for the purpose of advance payment plus the redelivery
bond was insufficient to cover even just the required redelivery bond, hence, the
MTC's refusal to grant petitioners' motion for redelivery was correct, and the Court
of Appeals did not err in upholding it. Accordingly, the petition was denied and the
assailed decision was affirmed.
SYLLABUS
1.
REMEDIAL LAW; CIVIL PROCEDURE; PROVISIONAL REMEDIES; REPLEVIN; WRIT
OF REPLEVIN CAN BE SERVED ANYWHERE IN THE PHILIPPINES. Under the
Resolution of the Supreme Court en banc, dated January 11, 1983, providing for the
interim rules and guidelines relative to the implementation of BP 129, a writ of
replevin like the one issued in the present case may be served anywhere in the
Philippines. Specifically, the said Resolution states: "3. Writs and processes. (a)
Writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and
injunction issued by a regional trial court may be enforced in any part of the region.
(b) All other processes, whether issued by a regional trial court or a metropolitan
trial court, municipal trial court or municipal circuit trial court may be served
anywhere in the Philippines, and, in the last three cases, without a certification by
the judge of the regional trial court." Thus, the Writ of Replevin issued by Judge

Paas, which obviously does not fall under item "a" of the abovecited Rule, may be
validly enforced anywhere in the Philippines. Petitioners confused the jurisdiction of
a court to hear and decide a case on the one hand with, on the other, its power to
issue writs and processes pursuant to and in the exercise of said jurisdiction.
Applying the said Rule, Malaloan v. Court of Appeals reiterated the foregoing
distinction between the jurisdiction of the trial court and the administrative area in
which it could enforce its orders and processes pursuant to the jurisdiction conferred
on it: "We feel that the foregoing provision is too clear to be further belabored or
enmeshed in unwarranted polemics. The rule enumerates the writs and processes
which even if issued by a regional trial court, are enforceable only within its judicial
region. In contrast, it unqualifiedly provides that all other writs and processes,
regardless of which court issued the same, shall be enforceable anywhere in the
Philippines. No legal provision, statutory or reglementary, expressly or impliedly
provides a jurisdictional or territorial limit [to] its area, of enforceability. On the
contrary, the above-quoted provision of the interim Rules expressly authorizes its
enforcement anywhere in the country, since it is not among the processes specified
in paragraph (a) and there is no distinction or exception made regarding the
processes contemplated in paragraph (b)."
2.
ID.; ID.; ID.; ID.; REDELIVERY BOND; SHOULD BE IN AN AMOUNT DOUBLE
THAT OF THE CHATTEL. In their Petition for Review, petitioners plainly admit that
they issued a check for only P69,168 for the purpose of covering the advance
payments plus the redelivery bond. Clearly, that amount was insufficient to cover
even just the required redelivery bond alone, which should be in an amount double
that of the chattel. Hence, the MTC's refusal to grant petitioners' Motion for
redelivery was correct, and the Court of Appeals did not err in upholding it.
3.
ID.; ID.; MOTION TO DISMISS; VENUE; OBJECTION TO IMPROPER VENUE MUST
BE MADE BEFORE A RESPONSIVE PLEADING IS FILED. Under the Rules of Court
before the 1997 amendments, an objection to an improper venue must be made
before a responsive pleading is filed. Otherwise, it will be deemed waived. In Diaz v.
Adiong, the Court explained such requirement in this wise: ". . .. Indeed, the laying
of venue is procedural rather than substantive, relating as it does to jurisdiction of
the court over the person rather than the subject matter. Venue relates to trial and
not to jurisdiction. Finally, Sec. 1 of Rule 16 provides that objections to improper
venue must be made in a motion to dismiss before any responsive pleading is filed.
Responsive pleadings are those which seek affirmative relief and set up defenses.
Consequently, having already submitted his person to the jurisdiction of the trial
court, petitioner may no longer object to the venue which, although mandatory in
the instant case, is nevertheless waivable. As such, improper venue must be
seasonably raised, otherwise, it may be deemed waived." In the present case,
petitioners' objection to the venue of the case was raised for the first time in the
Answer itself. Not having been raised on time, their objection is therefore deemed
waived. In any event, petitioners had agreed to a stipulation in the Promissory Note

that a suit arising from their transaction may be filed in the proper court anywhere
in Metro Manila, at the sole option of respondent bank. Necessarily, Pasay City is
deemed included in the said stipulation. TIcAaH
DECISION
PANGANIBAN, J p:
A writ of replevin issued by the Metropolitan Trial Court of Pasay City may be served
and enforced anywhere in the Philippines. Moreover, the jurisdiction of a court is
determined by the amount of the claim alleged in the complaint, not by the value of
the chattel seized in ancillary proceedings. prLL
The Case
Spouses Oscar C. Fernandez and Nenita P. Fernandez challenge, via the instant
Petition for Review on Certiorari 1 under Rule 45 of the Rules of Court, the
September 4, 1997 Decision 2 and the November 14, 1997 Resolution, 3 both
issued by the Court of Appeals 4 in CA-GR SP No. 44409.
The assailed Decision dismissed petitioners' suit for certiorari and prohibition
praying for the redelivery of the vehicle seized from them and for the declaration of
nullity of the Writ of Replevin, which had been issued by Judge Estelita M. Paas 5 of
the Metropolitan Trial Court of Pasay City, 6 and all other Orders subsequent thereto.
The challenged Resolution, on the other hand, denied reconsideration.
The Facts
In its assailed Decision, the Court of Appeals summarized the facts as follows:
". . . [O]n or about October 26, 1993, [petitioners] purchased a Nissan Sentra Sedan
through a financing scheme of the private respondent, the International Corporate
Bank, now Union Bank of the Philippines, and the chattel mortgage was executed in
favor of the financing institution on November 10, 1993. As borne out by the
Disclosure Statement in the credit transaction, the cash purchase price was
P492,000.00, minus the downpayment of P147,500.00, leaving the amount of P344,
[5]00.00 to be financed. The total amount to be paid for 48 monthly installments
would amount to P553,944.00.
"Petitioner added that due to the respondent bank's 'greedy desire' to unjustly
enrich itself at the expense of the petitioners, the former filed an unfounded
complaint for a sum of money with replevin (Case No. 983-96) before the
Metropolitan Trial Court, Branch 44, Pasay City.
"Considering that the principal amount involved was P553,944.00, petitioners filed
an Answer mentioning in the special and affirmative defenses a Motion to Dismiss,
for lack of jurisdiction, but this was denied on February 10, 1997 and was received

on February 20, 1997. A Motion for Reconsideration was then submitted on April 2,
1997.
"Aside from that, petitioners contested the venue considering that the principal
office of the respondent bank [was] in Makati, while their residence [was] in Quezon
City.
"The Motion for Reconsideration was denied on May 9, 1997 and received by them
on May 29, 1997.
"When the respondent bank filed its complaint with prayer for the issuance of a Writ
of Replevin on November 28, 1997, the monthly installments were almost fully paid;
[they] would have been fully paid on November 26, 1997. Furthermore, the car's
mileage at the time of illegal seizure was only 28,464 kilometers. They could not
have been considered in default at the time the complaint was filed, considering
that: (a) they attempted many times to pay the bank their installments for the
months of August, September, October, 1996, and up to the time of the filing of the
case, they ha[d] not received any statement of delinquency as mandated by R.A.
No. 3165, otherwise known as the Truth in Lending Act.
"If at all, petitioners added, the baseless filing of the case was deliberately done to
enrich the bank at the expense of the petitioners which [was] tantamount to simple
robbery. They even tried consigning the P69,168.00 through a Manager's Check
dated January 7, 1997 for the months of August to February, 1997, or beyond the
four months installment in advance but were similarly refused by the court for no
valid reason.
"Their petition for the outright dismissal of the complaint, as well as the lifting of the
Writ of Replevin was denied even if the amount of P553,344.00 representing the
value of the chattel was beyond the jurisdiction of the court. LLphil
"To be precise, the February 10, 1997 Order (Rollo, p. 17) states:
'For consideration before this court is the Urgent Motion to Re-deliver the Chattel
and the Motion to Dismiss by way of Special and Affirmative Defenses the following:
'that this Honorable Court has no jurisdiction to try the case and to issue the Writ of
Replevin, for the reason that the plaintiff's office is in Makati and defendant's
residence is in Quezon City and that the amount involved is P553,344.00 which is
beyond the jurisdiction of this Honorable Court.
xxx

xxx

xxx

'This Court has carefully reviewed the records of this case as well as the Sheriff's
Return which [show] that the subject value covered by the Writ of Replevin was
seized on January 7, 1997 by the branch sheriff of this court and thereafter turned
over to the plaintiff in this case.

'Under the Rules of Court, the defendant has a period of 5 days from January 7,
1997 to post a re-delivery bond, in order to secure the return of the subject vehicle
and to post a counter bond double the amount of the chattel.
'In this respect, defendants failed to exercise his right.
'As to the question of jurisdiction the complaint [shows] that the amount plaintiff
seeks to recover is P190,635.00, which is well within the jurisdiction of this
Honorable Court. Likewise the attached Promissory Note in the Complaint also
contains stipulation as to the venue agreed upon by the parties in case an action is
filed in court, in which case this court has jurisdiction.
'WHEREFORE, finding the Motion to Re-deliver chattel filed by the defendant to be
untenable, the same is hereby denied for lack of merit.
'The Motion to Dismiss on ground of lack of jurisdiction is likewise denied for being
unmeritorious.
'SO ORDERED.'" 7
Ruling of the Court of Appeals
The Court of Appeals ruled that the Metropolitan Trial Court (MTC) of Pasay City had
jurisdiction over civil cases in which the amount of the demand did not exceed
P200,000 exclusive of interest, damages and attorney's fees. The basic claim in the
present case was P190,635.90; hence, the MTC had jurisdiction.
The appellate court further held that the objection to the impropriety of the venue
should have been raised in a motion to dismiss before the filing of a responsive
pleading. The said issue, however, was raised for the first time only in petitioners'
Answer.
Lastly, the Court of Appeals agreed with the MTC that the Writ of Replevin could be
validly executed anywhere in Metro Manila because Section 27, Chapter III of B.P.
129, authorized the establishment of the Metropolitan Trial Court of Metro Manila
with eighty-two (82) branches. Therefore, any branch in this case, Branch 44
which was stationed in Pasay could issue writs and processes that could validly
be served and executed anywhere within Metro Manila.
Aggrieved, petitioners now seek the reversal of the foregoing rulings through this
recourse. 8
Issues
In their Memorandum, petitioners present the following issues:
"1.
The jurisdiction of the Metropolitan Trial Court of Pasay City is strictly limited
within the confines of the boundary limits of Pasay City, B.P. 129, Sec. 28.

2.
The Metropolitan Trial Court's jurisdiction is limited to not more than two
hundred thousand pesos.
3.
Assuming that the Metropolitan Trial Court of Pasay City has jurisdiction to try
and decide the case and to issue the ancillary writ of replevin, the Court of Appeals
grievously erred in sanctioning the order of [the] Metropolitan Trial Court of Pasay
City in denying Petitioners['] Motion for Redelivery of the vehicle which was filed
within five days after such seizure, which in essence [was] an outright departure
from the express provision of the law and the settled jurisprudence on the matter.
4.
The bank's Memorandum dated July 5, 1999 should be stricken off and
ordered expunged from the records for being fatally defective in form and
substance. No Annexes to said Memorandum were attached to petitioners' copy,
thereby making said memorandum fatally defective because the annexes [were]
integral part[s] of the memorandum itself. Up to this late date, respondent Premiere
Insurance and Surety Corporation has not submitted its memorandum and may now
therefore be deemed to have admitted the entire text of the Petition to be true,
valid and binding against it."
To resolve this case, this Court shall dispose of the following questions: (1) May the
Writ of Replevin issued by the MTC of Pasay City be enforced outside the city? (2)
Did the MTC have jurisdiction over the Complaint? (3) Were petitioners entitled to
the redelivery of the subject vehicle?
This Court's Ruling
The Petition has no merit. cdll
First Issue: Territorial Enforcement of the Writ of Replevin
Petitioners argue that the Writ of Replevin issued by the Metropolitan Trial Court of
Pasay could be enforced only within the confines of Pasay City. In support, they cite
Section 28 of Batas Pambansa (BP) 129, which states:
"SECTION 28.
Other Metropolitan Trial Courts. The Supreme Court shall
constitute Metropolitan Trial Courts in such other metropolitan areas as may be
established by law whose territorial jurisdiction shall be co-extensive with the cities
and municipalities comprising the metropolitan area.
Every Metropolitan Trial Judge shall be appointed to a metropolitan area which shall
be his permanent station and his appointment shall state the branch of the court
and the seat thereof to which he shall be originally assigned. A Metropolitan Trial
Judge may be assigned by the Supreme Court to any branch within said
metropolitan area as the interest of justice may require, and such assignment shall
not be deemed an assignment to another station within the meaning of this
section." 9

We are not convinced. Under the Resolution of the Supreme Court en banc, dated
January 11, 1983, providing for the interim rules and guidelines relative to the
implementation of BP 129, a writ of replevin like the one issued in the present case
may be served anywhere in the Philippines. Specifically, the said Resolution states:
"3.

Writs and processes.

(a)
Writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and
injunction issued by a regional trial court may be enforced in any part of the region.
(b)
All other processes, whether issued by a regional trial court or a metropolitan
trial court, municipal trial court or municipal circuit trial court may be served
anywhere in the Philippines, and, in the last three cases, without a certification by
the judge of the regional trial court." 10
Thus, the Writ of Replevin issued by Judge Paas, which obviously does not fall under
item "a" of the above-cited Rule, may be validly enforced anywhere in the
Philippines. Petitioners confused the jurisdiction of a court to hear and decide a case
on the one hand with, on the other, its power to issue writs and processes pursuant
to and in the exercise of said jurisdiction. Applying the said Rule, Malaloan v. Court
of Appeals 11 reiterated the foregoing distinction between the jurisdiction of the
trial court and the administrative area in which it could enforce its orders and
processes pursuant to the jurisdiction conferred on it:
"We feel that the foregoing provision is too clear to be further belabored or
enmeshed in unwarranted polemics. The rule enumerates the writs and processes
which, even if issued by a regional trial court, are enforceable only within its judicial
region. In contrast, it unqualifiedly provides that all other writs and processes,
regardless of which court issued the same, shall be enforceable anywhere in the
Philippines. No legal provision, statutory or reglementary, expressly or impliedly
provides a jurisdictional or territorial limit [to] its area of enforceability. On the
contrary, the above-quoted provision of the interim Rules expressly authorizes its
enforcement anywhere in the country, since it is not among the processes specified
in paragraph (a) and there is no distinction or exception made regarding the
processes contemplated in paragraph (b)."
Objection to Venue Too Late
Petitioners object to the filing of the Complaint in Pasay City, pointing out that their
residence is in Quezon City, while private respondent's principal place of business is
in Makati. Again, we are not persuaded. Under the Rules of Court before the 1997
amendments, 12 an objection to an improper venue must be made before a
responsive pleading is filed. Otherwise, it will be deemed waived. In Diaz v. Adiong,
13 the Court explained such requirement in this wise:

". . . . Indeed, the laying of venue is procedural rather than substantive, relating as
it does to jurisdiction of the court over the person rather than the subject matter.
Venue relates to trial and not to jurisdiction.
Finally, Sec. 1 of Rule 16 provides that objections to improper venue must be made
in a motion to dismiss before any responsive pleading is filed. Responsive pleadings
are those which seek affirmative relief and set up defenses. Consequently, having
already submitted his person to the jurisdiction of the trial court, petitioner may no
longer object to the venue which, although mandatory in the instant case, is
nevertheless waivable. As such, improper venue must be seasonably raised,
otherwise, it may be deemed waived." 14
In the present case, petitioners' objection to the venue of the case was raised for
the first time in the Answer itself. Not having been raised on time, their objection is
therefore deemed waived. LLpr
In any event, petitioners had agreed to a stipulation in the Promissory Note that a
suit arising from their transaction may be filed in the proper court anywhere in
Metro Manila, at the sole option of respondent bank. 15 Necessarily, Pasay City is
deemed included in the said stipulation.
Second Issue: MTC's Jurisdiction Over the Complaint
Petitioners argue that the value of the property seized is in excess of P200,000 and
thus outside the jurisdiction of the Metropolitan Trial Court. This argument has no
legal and factual basis. The fundamental claim in the main action against
petitioners, as shown in respondent bank's Complaint, is the collection of the sum of
P190,635.90, an amount that is clearly within the jurisdiction of the MTC. Although
the value of the vehicle seized pursuant to the Writ of Replevin may have exceeded
P200,000, that fact does not deprive the trial court of its jurisdiction over the case.
After all, the vehicle was merely the subject of a chattel mortgage that had been
used to secure petitioners' loan. In any case, private respondents are entitled only
to the amount owed them. Under Section 14 of the Chattel Mortgage Law, the
proceeds of the sale of the mortgaged property shall be used primarily to pay the
costs of the sale, the obligation that has been secured and other subsequent
obligations; and the balance will be turned over to the mortgagors, herein
petitioners.
Third Issue: Redelivery of Subject Vehicle
Petitioners assail the MTC's refusal to release the seized vehicle despite a Manager's
Check in the amount of P69,168 they issued for the redelivery of the vehicle within
five days from its seizure.
This argument is devoid of merit. As observed by the trial court, petitioners failed to
comply with the requisites for the redelivery of the vehicle seized:

"Under the Rules of Court, the defendant has a period of 5 days from January 7,
1997 to post a re-delivery bond, in order to secure the return of the subject vehicle
and to post a counter bond double the amount of the chattel. In this respect[,]
defendants failed to exercise his right." 16
Indeed, a careful perusal of the records shows that petitioners failed to comply with
the requirements prescribed by Rule 60 of the Rules of Court in effect at the time:
17
"SECTION 5. Return of Property. If the defendant objects to the sufficiency of the
plaintiff's bond, or of the surety or sureties thereon, he cannot require the return of
the property as in this section provided; but if he does not so object, he may, at any
time before the delivery of the property to the plaintiff, require the return thereof,
by filing with the clerk or judge of the court a bond executed to the plaintiff, in
double the value of the property as stated in the plaintiff's affidavit, for the delivery
of the property to the plaintiff, if such delivery be adjudged, and for the payment of
such sum to him as may be recovered against the defendant, and by serving a copy
of such bond on the plaintiff or his attorney.
SECTION 6. Disposition of property by officer. If within five (5) days after the
taking of the property by the officer, the defendant does not object to the
sufficiency of the bond, or of the surety or sureties thereon; or require the return of
the property as provided in the last preceding section; or if the defendant so
objects, and the plaintiff's first or new bond is approved; or if the defendant so
requires, and his bond is objected to and found insufficient and he does not
forthwith file an approved bond, the property shall be delivered to the plaintiff. If for
any reason the property is not delivered to the plaintiff, the officer must return it to
the defendant."
In their Petition for Review, petitioners plainly admit that they issued a check for
only P69,168 for the purpose of covering the advance payments plus the redelivery
bond. Clearly, that amount was insufficient to cover even just the required
redelivery bond alone, which should be in an amount double that of the chattel.
Hence, the MTC's refusal to grant petitioners' Motion for redelivery was correct, and
the Court of Appeals did not err in upholding it.
WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED.
Costs against petitioners.
SO ORDERED.

[G.R. No. 185595. January 9, 2013.]


MA. CARMINIA C. CALDERON, represented by her Attorney-in-Fact, Marycris V.
Baldevia, petitioner, vs. JOSE ANTONIO F. ROXAS and COURT OF APPEALS,
respondents.
DECISION
VILLARAMA, JR., J p:
Before us is a petition for review on certiorari under Rule 45 assailing the Decision 1
dated September 9, 2008 and Resolution 2 dated December 15, 2008 of the Court
of Appeals (CA) in CA-G.R. CV No. 85384. The CA affirmed the Orders dated March 7,
2005 and May 4, 2005 of the Regional Trial Court (RTC) of Paraaque City, Branch
260 in Civil Case No. 97-0608. ICASEH
Petitioner Ma. Carminia C. Calderon and private respondent Jose Antonio F. Roxas,
were married on December 4, 1985 and their union produced four children. On
January 16, 1998, petitioner filed an Amended Complaint 3 for the declaration of
nullity of their marriage on the ground of psychological incapacity under Art. 36 of
the Family Code of the Philippines.
On May 19, 1998, the trial court issued an Order 4 granting petitioner's application
for support pendente lite. Said order states in part:
. . . Accordingly, the defendant is hereby ordered to contribute to the support of the
above-named minors, (aside from 50% of their school tuition fees which the
defendant has agreed to defray, plus expenses for books and other school supplies),
the sum of P42,292.50 per month, effective May 1, 1998, as his share in the
monthly support of the children, until further orders from this Court. The first
monthly contribution, i.e., for the month of May 1998, shall be given by the
defendant to the plaintiff within five (5) days from receipt of a copy of this Order.
The succeeding monthly contributions of P42,292.50 shall be directly given by the
defendant to the plaintiff without need of any demand, within the first five (5) days
of each month beginning June 1998. All expenses for books and other school
supplies shall be shouldered by the plaintiff and the defendant, share and share
alike. Finally, it is understood that any claim for support-in-arrears prior to May 1,
1998, may be taken up later in the course of the proceedings proper. CHcTIA
xxx
SO ORDERED. 5

xxx

xxx

The aforesaid order and subsequent orders for support pendente lite were the
subject of G.R. No. 139337 entitled "Ma. Carminia C. Roxas v. Court of Appeals and
Jose Antonio F. Roxas" decided by this Court on August 15, 2001. 6 The Decision in
said case declared that "the proceedings and orders issued by the trial court in the
application for support pendente lite (and the main complaint for annulment of
marriage) in the re-filed case, that is, in Civil Case No. 97-0608 were not rendered
null and void by the omission of a statement in the certificate of non-forum
shopping regarding the prior filing and dismissal without prejudice of Civil Case No.
97-0523 which involves the same parties." The assailed orders for support pendente
lite were thus reinstated and the trial court resumed hearing the main case.
On motion of petitioner's counsel, the trial court issued an Order dated October 11,
2002 directing private respondent to give support in the amount of P42,292.50 per
month starting April 1, 1999 pursuant to the May 19, 1998 Order. 7 EAcCHI
On February 11, 2003, private respondent filed a Motion to Reduce Support citing,
among other grounds, that the P42,292.50 monthly support for the children as fixed
by the court was even higher than his then P20,800.00 monthly salary as city
councilor. 8

After hearing, the trial court issued an Order 9 dated March 7, 2005 granting the
motion to reduce support and denying petitioner's motion for spousal support,
increase of the children's monthly support pendente lite and support-in-arrears. The
trial court considered the following circumstances well-supported by documentary
and testimonial evidence: (1) the spouses' eldest child, Jose Antonio, Jr. is a
Sangguniang Kabataan Chairman and is already earning a monthly salary; (2) all the
children stay with private respondent on weekends in their house in Pasay City; (3)
private respondent has no source of income except his salary and benefits as City
Councilor; (4) the voluminous documents consisting of official receipts in payment
of various billings including school tuition fees, private tutorials and purchases of
children's school supplies, personal checks issued by private respondent, as well as
his own testimony in court, all of which substantiated his claim that he is fulfilling
his obligation of supporting his minor children during the pendency of the action; (5)
there is no proof presented by petitioner that she is not gainfully employed, the
spouses being both medical doctors; (6) the unrebutted allegation of private
respondent that petitioner is already in the United States; and (7) the alleged
arrearages of private respondent was not substantiated by petitioner with any
evidence while private respondent had duly complied with his obligation as ordered
by the court through his overpayments in other aspects such as the children's
school tuition fees, real estate taxes and other necessities. aHcACT
Petitioner's motion for partial reconsideration of the March 7, 2005 Order was
denied on May 4, 2005. 10

On May 16, 2005, the trial court rendered its Decision 11 in Civil Case No. 97-0608
decreeing thus:
WHEREFORE, judgment is hereby rendered declaring (sic):
1.
Declaring null and void the marriage between plaintiff [Ma.] Carmina C. Roxas
and defendant Jose Antonio Roxas solemnized on December 4, 1985 at San Agustin
Convent, in Manila. The Local Civil Registrar of Manila is hereby ordered to cancel
the marriage contract of the parties as appearing in the Registry of Marriage as the
same is void;
2.
Awarding the custody of the parties' minor children Maria Antoinette Roxas,
Julian Roxas and Richard Roxas to their mother herein petitioner, with the
respondent hereby given his visitorial and or custodial rights at [sic] the express
conformity of petitioner. DHCcST
3.
Ordering the respondent Jose Antonio Roxas to provide support to the
children in the amount of P30,000.00 a month, which support shall be given directly
to petitioner whenever the children are in her custody, otherwise, if the children are
in the provisional custody of respondent, said amount of support shall be recorded
properly as the amounts are being spent. For that purpose the respondent shall
then render a periodic report to petitioner and to the Court to show compliance and
for monitoring. In addition, the respondent is ordered to support the proper
schooling of the children providing for the payment of the tuition fees and other
school fees and charges including transportation expenses and allowances needed
by the children for their studies.
4.
Dissolving the community property or conjugal partnership property of the
parties as the case may be, in accordance with law.
Let copies of this decision be furnished the Office of the Solicitor General, the Office
of the City Prosecutor, Paraaque City, and the City Civil Registrar of Paraaque City
and Manila.
SO ORDERED. 12 CHATcE
On June 14, 2005, petitioner through counsel filed a Notice of Appeal from the
Orders dated March 7, 2005 and May 4, 2005.
In her appeal brief, petitioner emphasized that she is not appealing the Decision
dated May 16, 2005 which had become final as no appeal therefrom had been
brought by the parties or the City Prosecutor or the Solicitor General. Petitioner
pointed out that her appeal is "from the RTC Order dated March 7, 2005, issued prior
to the rendition of the decision in the main case", as well as the May 4, 2005 Order
denying her motion for partial reconsideration. 13

By Decision dated September 9, 2008, the CA dismissed the appeal on the ground
that granting the appeal would disturb the RTC Decision of May 16, 2005 which had
long become final and executory. The CA further noted that petitioner failed to avail
of the proper remedy to question an interlocutory order.
Petitioner's motion for reconsideration was likewise denied by the CA.
Hence, this petition raising the following issues:

ACTaDH

A.
DID THE CA COMMIT A GRAVE ABUSE OF DISCRETION and/or REVERSIBLE
ERROR WHEN IT RULED THAT THE RTC ORDERS DATED MARCH 7, 2005 AND MAY 4,
2005 ARE MERELY INTERLOCUTORY?
B.
DID THE CA COMMIT A GRAVE ABUSE OF DISCRETION and/or REVERSIBLE
ERROR WHEN IT DISMISSED OUTRIGHT THE APPEAL FROM SAID RTC ORDERS, WHEN
IT SHOULD HAVE DECIDED THE APPEAL ON THE MERITS? 14
The core issue presented is whether the March 7, 2005 and May 4, 2005 Orders on
the matter of support pendente lite are interlocutory or final.
This Court has laid down the distinction between interlocutory and final orders, as
follows:
. . . A "final" judgment or order is one that finally disposes of a case, leaving nothing
more to be done by the Court in respect thereto, e.g., an adjudication on the merits
which, on the basis of the evidence presented at the trial, declares categorically
what the rights and obligations of the parties are and which party is in the right; or
a judgment or order that dismisses an action on the ground, for instance, of res
judicata or prescription. Once rendered, the task of the Court is ended, as far as
deciding the controversy or determining the rights and liabilities of the litigants is
concerned. Nothing more remains to be done by the Court except to await the
parties' next move (which among others, may consist of the filing of a motion for
new trial or reconsideration, or the taking of an appeal) and ultimately, of course, to
cause the execution of the judgment once it becomes "final" or, to use the
established and more distinctive term, "final and executory." aITECD
xxx

xxx

xxx

Conversely, an order that does not finally dispose of the case, and does not end the
Court's task of adjudicating the parties' contentions and determining their rights
and liabilities as regards each other, but obviously indicates that other things
remain to be done by the Court, is "interlocutory" e.g., an order denying a motion to
dismiss under Rule 16 of the Rules, or granting a motion for extension of time to file
a pleading, or authorizing amendment thereof, or granting or denying applications
for postponement, or production or inspection of documents or things, etc. Unlike a
"final" judgment or order, which is appealable, as above pointed out, an
"interlocutory" order may not be questioned on appeal except only as part of an

appeal that may eventually be taken from the final judgment rendered in the case.
15 [Emphasis supplied]
The assailed orders relative to the incident of support pendente lite and support in
arrears, as the term suggests, were issued pending the rendition of the decision on
the main action for declaration of nullity of marriage, and are therefore
interlocutory. They did not finally dispose of the case nor did they consist of a final
adjudication of the merits of petitioner's claims as to the ground of psychological
incapacity and other incidents as child custody, support and conjugal assets.
EATcHD
The Rules of Court provide for the provisional remedy of support pendente lite which
may be availed of at the commencement of the proper action or proceeding, or at
any time prior to the judgment or final order. 16 On March 4, 2003, this Court
promulgated the Rule on Provisional Orders 17 which shall govern the issuance of
provisional orders during the pendency of cases for the declaration of nullity of
marriage, annulment of voidable marriage and legal separation. These include
orders for spousal support, child support, child custody, visitation rights, hold
departure, protection and administration of common property.
Petitioner contends that the CA failed to recognize that the interlocutory aspect of
the assailed orders pertains only to private respondent's motion to reduce support
which was granted, and to her own motion to increase support, which was denied.
Petitioner points out that the ruling on support in arrears which have remained
unpaid, as well as her prayer for reimbursement/payment under the May 19, 1998
Order and related orders were in the nature of final orders assailable by ordinary
appeal considering that the orders referred to under Sections 1 and 4 of Rule 61 of
the Rules of Court can apply only prospectively. Thus, from the moment the accrued
amounts became due and demandable, the orders under which the amounts were
made payable by private respondent have ceased to be provisional and have
become final.
We disagree.
The word interlocutory refers to something intervening between the
commencement and the end of the suit which decides some point or matter but is
not a final decision of the whole controversy. 18 An interlocutory order merely
resolves incidental matters and leaves something more to be done to resolve the
merits of the case. In contrast, 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. 19 Clearly, whether an order or resolution is final or interlocutory is
not dependent on compliance or non-compliance by a party to its directive, as what
petitioner suggests. It is also important to emphasize the temporary or provisional
nature of the assailed orders. DECSIT

Provisional remedies are writs and processes available during the pendency of the
action which may be resorted to by a litigant to preserve and protect certain rights
and interests therein pending rendition, and for purposes of the ultimate effects, of
a final judgment in the case. They are provisional because they constitute
temporary measures availed of during the pendency of the action, and they are
ancillary because they are mere incidents in and are dependent upon the result of
the main action. 20 The subject orders on the matter of support pendente lite are
but an incident to the main action for declaration of nullity of marriage.
Moreover, private respondent's obligation to give monthly support in the amount
fixed by the RTC in the assailed orders may be enforced by the court itself, as what
transpired in the early stage of the proceedings when the court cited the private
respondent in contempt of court and ordered him arrested for his refusal/failure to
comply with the order granting support pendente lite. 21 A few years later, private
respondent filed a motion to reduce support while petitioner filed her own motion to
increase the same, and in addition sought spousal support and support in arrears.
This fact underscores the provisional character of the order granting support
pendente lite. Petitioner's theory that the assailed orders have ceased to be
provisional due to the arrearages incurred by private respondent is therefore
untenable. TCDHIc
Under Section 1, Rule 41 of the 1997 Revised Rules of Civil Procedure, as amended,
appeal from interlocutory orders is not allowed. Said provision reads:
SECTION 1. Subject of appeal. An appeal may be taken from a judgment or final
order that completely disposes of the case, or of a particular matter therein when
declared by these Rules to be appealable.
No appeal may be taken from:
(a)

An order denying a motion for new trial or reconsideration;

(b)
An order denying a petition for relief or any similar motion seeking relief from
judgment;
(c)

An interlocutory order;

(d)

An order disallowing or dismissing an appeal;

SDEHCc

(e)
An order denying a motion to set aside a judgment by consent, confession or
compromise on the ground of fraud, mistake or duress, or any other ground vitiating
consent;
(f)

An order of execution;

(g)
A judgment or final order for or against one or more of several parties or in
separate claims, counterclaims, cross-claims and third-party complaints, while the
main case is pending, unless the court allows an appeal therefrom; and
(h)

An order dismissing an action without prejudice;

In all the above instances where the judgment or final order is not appealable, the
aggrieved party may file an appropriate special civil action under Rule 65.
(Emphasis supplied.) CDEaAI
The remedy against an interlocutory order not subject of an appeal is an
appropriate special civil action under Rule 65 provided that the interlocutory order is
rendered without or in excess of jurisdiction or with grave abuse of discretion.
Having chosen the wrong remedy in questioning the subject interlocutory orders of
the RTC, petitioner's appeal was correctly dismissed by the CA.
WHEREFORE, the petition for review on certiorari is DENIED, for lack of merit. The
Decision dated September 9, 2008 and Resolution dated December 15, 2008 of the
Court of Appeals in CA-G.R. CV No. 85384 are AFFIRMED.
With costs against the petitioner.

TcSAaH

SO ORDERED

[G.R. No. L-23851. March 26, 1976.]


WACK WACK GOLF & COUNTRY CLUB, INC., plaintiff appellant, vs. LEE E. WON alias
RAMON LEE and BIENVENIDO A. TAN, defendants-appellees.
Leonardo Abola for plaintiff-appellant.
B. A. Tan, Jr. for defendant-appellee B. A. Tan.
Alfonso V. Agcaoili and Ramon A. Barcelona for defendant-appellee Lee E. Won.
SYNOPSIS
Lee E. Won and Bienvenido Tan both claimed ownership over Wack Wack Golf and
Country Club's membership fee certificate 201, the former, by virtue of the decision

rendered in Civil Case 26044 of the Court of First Instance of Manila and of
membership fee certificate 201-serial No. 1478 issued pursuant to a court order in
said case, and the latter by virtue of membership fee certificate 201-serial No. 1199
issued to him in July 1950 pursuant to an assignment made in his favor by the
original owner and holder thereof. The corporation filed an action of interpleader in
the court a quo to have defendants litigate among themselves their conflicting
claims of ownership. In separate motions, the defendants moved to dismiss the
complaint upon the grounds of res judicata, failure of the complainant to state a
cause of action, and bar by prescription. Finding the first two grounds well taken,
the trial court dismissed the complain. Hence, this appeal, the determinative issue
of which is the timeless of the remedy of interpleader availed of by the Corporation.
The Supreme Court held that because the Corporation had allowed itself to be sued
to final judgment and be made independently liable in civil case 26044 and the
appellee Lee had already established in said case his rights to membership fee
certificate 201, its action of interpleader is barred by laches.
Order affirmed.
SYLLABUS
1.
SPECIAL CIVIL ACTION; INTERPLEADER; A REMEDY TO DETERMINE
CONFLICTING CLAIMS ON PROPERTY. The actions of interpleader under Section
120 of the Code of Civil Procedure is a remedy whereby a person who has personal
property in his posession, or an obligation to render wholly or partially, without
claiming any right to either, comes to court and asks that the persons who claim the
said personal property or who consider themselves entitled to demand compliance
with the obligation, be required to litigate among themselves in order to determine
finally who is entitled to one or other thing. The remedy is afforded to protect a
person not against double liability but against double vexation in respect of one
liability.
2.
ID.; ID.; PROCEDURE UNDER THE CODE OF CIVIL PROCEDURE AND NEW
RULES OF COURT DISTINGUISHED. The procedure under Section 1 of Rule 63 of
the Revised Rules of Court is the same as that under Section 120 of the Code of Civil
Procedure, except that under the former the remedy of interpleader is available
regardless of the nature of the subject-matter of the controversy, whereas under the
latter an interpleader suit is proper only if the subject-matter of the controversy is
personal property or relates to the performance of an obligation.
3.
ID.; ID.; ACTION TO BE FILED WITHIN A REASONABLE TIME AFTER A DISPUTE
ARISES. A stakeholder, meaning a person entrusted with the custody of property
or money that is subject of litigation or of contention between rival claimants in
which the holder claims no right or property interest, should use reasonable
diligence to hale the contending claimants to court. He need not await actual
institution of independent suits against him before filing a bill of interpleader. He

should file an action of interpleader within a reasonable time after a dispute has
arisen without waiting to be sued by either of the contending claimants. Otherwise,
he may be barred by laches or undue delay. But where he acts with reasonable
diligence in view of the environmental circumstances, the remedy is not barred.
4.
ID.; ID.; ACTION BARRED IF NOT TIMELY MADE. When a stakeholder's action
is filed after judgment has been rendered against him in favor of one of the
contending claimants, especially where he had notice of the conflicting claims prior
to the rendition of the judgment and neglected the opportunity to implead the
adverse claimants in the suit where judgment was entered, the interpleader suit is
too late and will be barred by laches or undue delay.
5.
ID.; ID.; ID.; ID.; INSTANT CASE. The Corporation was aware of the
conflicting claims of the parties with respect to the membership fee certificate 201
long before it filed its interpleader suit. It had been recognizing Tan as the lawful
owner thereof. It was sued by Lee who also claimed the same membership fee
certificate. Yet it did not interplead Tan. It preferred to proceed with the litigation
(civil case 26004) and to defend itself therein. Final judgment was rendered against
it and said judgment has already been executed. It is now therefore too late for it to
invoke the remedy of interpleader.
6.
ID.; ID.; ID.; PARTY WHO HAS SUCCESSFULLY ESTABLISHED A RIGHT CANNOT
BE LATTER IMPLEADED. A successful litigant cannot later be impleaded by his
defeated adversary in an interpleader suit and compelled to prove his claim anew
against other adverse claimants, as that would in effect be a collateral attack upon
the judgment.
DECISION
CASTRO, J p:
This is an appeal from the order of the Court of First Instance of Rizal, in civil case
7656, dismissing the plaintiff-appellant's complaint of interpleader upon the
grounds of failure to state a cause of action and res judicata.
In its amended and supplemental complaint of October 23, 1963, the Wack Wack
Golf & Country Club, Inc., a non-stock, civic and athletic corporation duly organized
under the laws of the Philippines, with principal office in Mandaluyong, Rizal
(hereinafter referred to as the Corporation), alleged, for its first cause of action, that
the defendant Lee E. Won claims ownership of its membership fee certificate 201,
by virtue of the decision rendered in civil case 26044 of the CFI of Manila, entitled
"Lee E. Won alias Ramon Lee vs. Wack Wack Golf & Country Club, Inc." and also by
virtue of membership fee certificate 201-serial no. 1478 issued on October 17, 1963
by Ponciano B. Jacinto, deputy clerk of court of the said CFI of Manila, for and in
behalf of the president and the secretary of the Corporation and of the People's
Bank & Trust Company as transfer agent of the said Corporation, pursuant to the

order of September 23, 1963 in the said case; that the defendant Bienvenido A. Tan,
on the other hand, claims to be lawful owner of its aforesaid membership fee
certificate 201 by virtue of membership fee certificate 201-serial no. 1199 issued to
him on July 24, 1950 pursuant to an assignment made in his favor by "Swan,
Culbertson and Fritz," the original owner and holder of membership fee certificate
201; that under its articles of incorporation and by-laws the Corporation is
authorized to issue a maximum of 400 membership fee certificates to persons duly
elected or admitted to proprietary membership, all of which have been issued as
early as December 30, 1939; that it claims no interest whatsoever in the said
membership fee certificate 201; that it has no means of determining who of the two
defendants is the lawful owner thereof; that it is without power to issue two
separate certificates for the same membership fee certificate 201, or to issue
another membership fee certificate to the defendant Lee, without violating its
articles of incorporation and by-laws; and that the membership fee certificate 201serial no. 1199 held by the defendant Tan and the membership fee certificate 201serial no. 1478 issued to the defendant Lee proceed from the same membership fee
certificate 201, originally issued in the name of "Swan, Culbertson and Fritz"
For its second cause of action, it alleged that the membership fee certificate 201serial no. 1478 issued by the deputy clerk of court of the CFI of Manila in behalf of
the Corporation is null and void because issued in violation of its by-laws, which
require the surrender and cancellation of the outstanding membership fee
certificate 201 before issuance may be made to the transferee of a new certificate
duly signed by its president and secretary, aside from the fact that the decision of
the CFI of Manila in civil case 26044 is not binding upon the defendant Tan, holder of
membership fee certificate 201-serial no. 1199; that Tan is made a party because of
his refusal to join it in this action or bring a separate action to protect his rights
despite the fact that he has a legal and beneficial interest in the subject-matter of
this litigation; and that he is made a party so that complete relief may be accorded
herein.
The Corporation prayed that (a) an order be issued requiring Lee and Tan to
interplead and litigate their conflicting claims; and (b) judgment be rendered, after
hearing, declaring who of the two is the lawful owner of membership fee certificate
201, and ordering the surrender and cancellation of membership fee certificate 201serial no. 1478 issued in the name of Lee.
In separate motions the defendants moved to dismiss the complaint upon the
grounds of res judicata, failure of the complaint to state a cause of action, and bar
by prescription. 1 These motions were duly opposed by the Corporation. Finding the
grounds of bar by prior judgment and failure to state a cause of action well taken,
the trial court dismissed the complaint, with costs against the Corporation.
In this appeal, the Corporation contends that the court a quo erred (1) in finding
that the allegations in its amended and supplemental complaint do not constitute a

valid ground for an action of interpleader, and in holding that "the principal motive
for the present action is to reopen the Manila Case and collaterally attack the
decision of the said Court"; (2) in finding that the decision in civil case 26044 of the
CFI of Manila constitutes res judicata and bars its present action; and (3) in
dismissing its action instead of compelling the appellees to interplead and litigate
between themselves their respective claims.
The Corporation's position may be stated elsewise as follows: The trial court erred in
dismissing the complaint, instead of compelling the appellees to interplead because
there actually are conflicting claims between the latter with respect to the
ownership of membership fee certificate 201, and, as there is no identity of parties,
of subject-matter, and of cause of action, between civil case 26044 of the CFI of
Manila and the present action, the complaint should not have been dismissed upon
the ground of res judicata.
On the other hand, the appellees argue that the trial court properly dismissed the
complaint, because, having the effect of reopening civil case 26044, the present
action is barred by res judicata.
Although res judicata or bar by a prior judgment was the principal ground availed of
by the appellees in moving for the dismissal of the complaint and upon which the
trial court actually dismissed the complaint, the determinative issue, as can be
gleaned from the pleadings of the parties, relates to the propriety and timeliness of
the remedy of the interpleader.
The action of interpleader, under section 120 of the Code of Civil Procedure, 2 is a
remedy whereby a person who has personal property in his possession, or an
obligation to render wholly or partially, without claiming any right to either, comes
to court and asks that the persons who claim the said personal property or who
consider themselves entitled to demand compliance with the obligation, be required
to litigate among themselves in order to determine finally who is entitled to one or
the other thing. The remedy is afforded to protect a person not against double
liability but against double vexation in respect of one liability. 3 The procedure
under the Rules of Court 4 is the same as that under the Code of Civil Procedure, 5
except that under the former the remedy of interpleader is available regardless of
the nature of the subject-matter of the controversy, whereas under the latter an
interpleader suit is proper only if the subject-matter of the controversy is personal
property or relates to the performance of an obligation.
There is no question that the subject-matter of the present controversy, i.e., the
membership fee certificate 201, is proper for an interpleader suit. What is here
disputed is the propriety and timeliness of the remedy in the light of the facts and
circumstances obtaining.
A stakeholder 6 should use reasonable diligence to hale the contending claimants to
court. 7 He need not await actual institution of independent suits against him before

filing a bill of interpleader. 8 He should file an action of interpleader within a


reasonable time after a dispute has arisen without waiting to be sued by either of
the contending claimants. 9 Otherwise, he may be barred by laches 10 or undue
delay. 11 But where he acts with reasonable diligence in view of the environmental
circumstances, the remedy is not barred. 12
Has the Corporation in this case acted with diligence, in view of all the
circumstances, such that it may properly invoke the remedy of interpleader? We do
not think so. It was aware of the conflicting claims of the appellees with respect to
the membership fee certificate 201 long before it filed the present interpleader suit.
It had been recognizing Tan as the lawful owner thereof. It was sued by Lee who also
claimed the same membership fee certificate. Yet it did not interplead Tan. It
preferred to proceed with the litigation (civil case 26044) and to defend itself
therein. As a matter of fact, final judgment was rendered against it and said
judgment has already been executed. It is now therefore too late for it to invoke the
remedy of interpleader.
It has been held that a stakeholder's action of interpleader is too late when filed
after judgment has been rendered against him in favor of one of the contending
claimants, 13 especially where he had notice of the conflicting claims prior to the
rendition of the judgment and neglected the opportunity to implead the adverse
claimants in the suit where judgment was entered. This must be so, because once
judgment is obtained against him by one claimant he becomes liable to the latter.
14 In one case, 15 it was declared:
"The record here discloses that long before the rendition of the judgment in favor of
relators against the Hanover Fire Insurance Company the latter had notice of the
adverse claim of South to the proceeds of the policy. No reason is shown why the
Insurance Company did not implead South in the former suit and have the
conflicting claims there determined. The Insurance Company elected not to do so
and that suit proceeded to a final judgment in favor of relators. The Company
thereby became independently liable to relators. It was then too late for such
company to invoke the remedy of interpleader."
The Corporation has not shown any justifiable reason why it did not file an
application for interpleader in civil case 26044 to compel the appellees herein to
litigate between themselves their conflicting claims of ownership. It was only after
adverse final judgment was rendered against it that the remedy of interpleader was
invoked by it. By then it was too late, because to be entitled to this remedy the
applicant must be able to show that he has not been made independently liable to
any of the claimants. And since the Corporation is already liable to Lee under a final
judgment, the present interpleader suit is clearly improper and unavailing.
"It is the general rule that before a person will be deemed to be in a position to ask
for an order of interpleader, he must be prepared to show, among other

prerequisites, that he has not become independently liable to any of the claimants.
25 Tex. Jur. p. 52, Sec. 3; 30 Am. Jur. p. 218, Section 8.
"It is also the general rule that a bill of interpleader comes too late when it is filed
after judgment has been rendered in favor of one of the claimants of the fund, this
being especially true when the holder of the funds had notice of the conflicting
claims prior to the rendition of the judgment and had an opportunity to implead the
adverse claimants in the suit in which the judgment was rendered. United Producers
Pipe Line Co. v. Britton, Tex. Civ. App. 264 S.W. 176; Nash v. McCullum, Tex. Civ. 74
S.W. 2d 1046; 30 Am. Jur. p. 223, Sec. 11; 25 Tex. Jur. p. 56, Sec. 5; 108 A.L.R., note
5, p. 275." 16
Indeed, if a stakeholder defends a suit filed by one of the adverse claimants and
allows said suit to proceed to final judgment against him, he cannot later on have
that part of the litigation repeated in an interpleader suit. In the case at hand, the
Corporation allowed civil case 26044 to proceed to final judgment. And it offered no
satisfactory explanation for its failure to implead Tan in the same litigation. In this
factual situation, it is clear that this interpleader suit cannot prosper because it was
filed much too late.
"If a stakeholder defends a suit by one claimant and allows it to proceed so far as a
judgment against him without filing a bill of interpleader, it then becomes too late
for him to do so. Union Bank v. Kerr, 2 Md. Ch. 460; Home Life Ins. Co. v. Gaulk, 86
Md. 385, 390, 38 A. 901; Gonia v. O'Brien, 223 Mass. 177, 111 N.E. 787. It is one of
the main offices of a bill of interpleader to restrain a separate proceeding at law by
claimant so as to avoid the resulting partial judgment; and if the stakeholder
acquiesces in one claimant's trying out his claim and establishing it at law, he
cannot then have that part of the litigation repeated in an interpleader suit. 4
Pomeroy's Eq. Juris. # 162; Mitfor's Eq. Pleading (Tyler's Ed.) 147 and 236;
Langdell's Summary of Eq. Pleading, # 162; De Zouche v. Carrison, 140 Pa. 430, 21
A. 450." 17
"It is the general rule that a bill of interpleader comes too late when application
therefor is delayed until after judgment has been rendered in favor of one of the
claimants of the fund, and that this is especially true where the holder of the fund
had notice of the conflicting claims prior to the rendition of such judgment and an
opportunity to implead the adverse claimants in the suit in which such judgment
was rendered. (See notes and cases cited 36 Am. Dec. 703, Am. St. Rep. 598; also 5
Pomeroy's Eq. Juris. Sec. 41.).
"The evidence in the opinion of the majority shows beyond dispute that the
appellant permitted the Parker county suit to proceed to judgment in favor of Britton
with full notice of the adverse claims of the defendants in the present suit other
than the assignees of that judgment (the bank and Mrs. Pabb) and no excuse is
shown why he did not implead them in that suit." 18

To now permit the Corporation to bring Lee to court after the latter's successful
establishment of his rights in civil case 26044 to the membership fee certificate
201, is to increase instead of to diminish the number of suits, which is one of the
purposes of an action of interpleader, with the possibility that the latter would lose
the benefits of the favorable judgment. This cannot be done because having elected
to take its chances of success in said civil case 26044, with full knowledge of all the
facts, the Corporation must submit to the consequences of defeat.
"The act providing for the proceeding has nothing to say touching the right of one,
after contesting a claim of one of the claimants to final judgment unsuccessfully, to
involve the successful litigant in litigation anew by bringing an interpleader action.
The question seems to be one of first impression here, but, in other jurisdictions,
from which the substance of the act was apparently taken, the rule prevails that the
action cannot be resorted to after an unsuccessful trial against one of the claimants.
"'It is well settled, both by reasons and authority, that one who asks the
interposition of a court of equity to compel others, claiming property in his hands, to
interplead, must do so before putting them to the test of trials at law. Yarborough v.
Thompson, 3 Smedes & M. 291 (41 Am. Dec. 626); Gornish v. Tanner, 1 You. & Jer.
333; Haseltine v. Brickery, 16 Grat. (Va.) 116. The remedy by interpleader is
afforded to protect the party from the annoyance and hazard of two or more actions
touching the same property or demand; but one who, with knowledge of all the
facts, neglects to avail himself of the relief, or elects to take the chances for success
in the actions at law, ought to submit to the consequences of defeat. To permit an
unsuccessful defendant to compel the successful plaintiffs to interplead, is to
increase instead of to diminish the number of suits; to put upon the shoulders of
others the burden which he asks may be taken from his own . . .'
"It is urged, however, that the American Surety Company of New York was not in
position to file an interpleader until it had tested the claim of relatrix to final
judgment, and that, failing to meet with success, it promptly filed the interpleader.
The reason why, it urges, it was not in such position until then is that had it
succeeded before this court in sustaining its construction of the bond and the law
governing the bond, it would not have been called upon to file an interpleader, since
there would have been sufficient funds in its hands to have satisfied all lawful
claimants. It may be observed, however, that the surety company was acquainted
with all of the facts, and hence that it simply took its chances of meeting with
success by its own construction of the bond and the law. Having failed to sustain it,
it cannot now force relatrix into litigation anew with others, involving most likely a
repetition of what has been decided, or force her to accept a pro rata part of a fund,
which is far from benefits of the judgment." 19
Besides, a successful litigant cannot later be impleaded by his defeated adversary
in an interpleader suit and compelled to prove his claim anew against other adverse
claimants, as that would in effect be a collateral attack upon the judgment.

"The jurisprudence of this state and the common law states is well-settled that a
claimant who has been put to test of a trial by a surety, and has established his
claim, may not be impleaded later by the surety in an interpleader suit, and
compelled to prove his claim again with other adverse claimants. American Surety
Company of New York v. Brim, 175 La. 959, 144 So. 727; American Surety Company
of New York v. Brim (In Re Lyong Lumber Company), 176 La. 867, 147 So. 18; Dugas
v. N.Y. Casualty Co., 181 La. 322, 159 So. 572, 15 Ruling Case Law, 228; 33 Corpus
Juris, 477; 4 Pomeroy's Equity Jurisprudence (4th Ed.) 3172; 2 Lawrence on Equity
Jurisprudence, 1023; Royal Neighbors of America v. Lowary (D.C.) 46 F2d 565;
Brackett v. Graves, 30 App. Div. 162, 51 N.Y.S. 895; De Zouche v. Garrison, 140 Pa.
430, 21 A. 450, 451; Manufacturer's Finance Co. v. W.I. Jones Co. 141 Ga., 519, 81
S.E. 1033; Hancock Mutual Life Ins. Co. v. Lawder, 22 R.I. 416, 84 A. 383.
"There can be no doubt that relator's claim has been finally and definitely
established, because that matter was passed upon by three courts in definitive
judgments. The only remaining item is the value of the use of the land during the
time that relator occupied it. The case was remanded solely and only for the
purpose of determining the amount of that credit. In all other respects the judgment
is final." 20
"It is generally held by the cases it is the office of interpleader to protect a party,
not against double liability, but against double vexation on account of one liability.
Gonia v. O'Brien, 223 Mass. 177, 111 N.E. 787. And so it is said that it is too late for
the remedy of interpleader if the party seeking this relief has contested the claim of
one of the parties and suffered judgment to be taken.
"In United P.P.I. Co. v. Britton (Tex. Civ. App.) 264 S.W. 576, 578, it was said: 'It is the
general rule that a bill of interpleader comes too late when application therefor is
delayed until after judgment has been rendered in favor of one of the claimants of
the fund, and this is especially true where the holder of the fund had notice of the
conflicting claims prior to the rendition of such judgment and an opportunity to
implead the adverse claimants in the suit in which such judgment was rendered.
See notes and cases cited 35 Am. Dec. 703; 91 An. St. Rep. 598; also 5 Pomeroy's
Equity Jurisprudence # 41.'
"The principle thus stated has been recognized in many cases in other jurisdictions,
among which may be cited American Surety Co. v. O'Brien, 223 Mass. 177, 111 N.E.
787; Phillips v. Taylor, 148 Md. 157, 129 A. 18; Moore v. Hill, 59 Ga. 760, 761;
Yarborough v. Thompson, 3 Smedes & M. (11 Miss.) 291, 41 Am. Dec. 626. See, also
33 C.J. p. 447, # 30; Nash v. McCullum, (Tex. Civ. App.) 74 S.W. 2d 1042, 1047.
"It would seem that this rule should logically follow since, after the recovery of
judgment, the interpleading of the judgment creditor is in effect a collateral attack
upon the judgment." 21

In fine, the instant interpleader suit cannot prosper because the Corporation had
already been made independently liable in civil case 26044 and, therefore, its
present application for interpleader would in effect be a collateral attack upon the
final judgment in the said civil case; the appellee Lee had already established his
rights to membership fee certificate 201 in the aforesaid civil case and, therefore,
this interpleader suit would compel him to establish his rights anew, and thereby
increase instead of diminish litigations, which is one of the purposes of an
interpleader suit, with the possibility that the benefits of the final judgment in the
said civil case might eventually be taken away from him; and because the
Corporation allowed itself to be sued to final judgment in the said case, its action of
interpleader was filed inexcusably late, for which reason it is barred by laches or
unreasonable delay.
ACCORDINGLY, the order of May 28, 1964, dismissing the complaint, is affirmed, at
appellant's costs.

[G.R. No. 169466. May 9, 2007.]


DEPARTMENT OF BUDGET AND MANAGEMENT, represented by SECRETARY ROMULO
L. NERI, PHILIPPINE NATIONAL POLICE, represented by POLICE DIRECTOR GENERAL
ARTURO L. LOMIBAO, NATIONAL POLICE COMMISSION, represented by CHAIRMAN
ANGELO T. REYES, AND CIVIL SERVICE COMMISSION, represented by CHAIRPERSON
KARINA C. DAVID, petitioners, vs. MANILA'S FINEST RETIREES ASSOCIATION, INC.,
represented by P/COL. FELICISIMO G. LAZARO (RET.), AND ALL THE OTHER INP
RETIREES, respondents.
DECISION
GARCIA, J p:
Assailed and sought to be set aside in this petition for review on certiorari under
Rule 45 of the Rules of Court are the following issuances of the Court of Appeals
(CA) in CA-G.R. CV No. 78203, to wit:
1.
Decision 1 dated July 7, 2005 which affirmed in toto the decision of the
Regional Trial Court of Manila, Branch 32, in Civil Case No. 02-103702, a suit for
declaratory relief, declaring the herein respondents entitled to the same retirement
benefits accorded upon retirees of the Philippine National Police (PNP) under
Republic Act (R.A.) No. 6975, as amended by R.A. No. 8551, and ordering the herein
petitioners to implement the proper adjustments on respondents' retirement
benefits; and HIaAED
2.
Resolution 2 dated August 24, 2005 which denied the petitioners' motion for
reconsideration.
The antecedent facts:
In 1975, Presidential Decree (P.D.) No. 765 was issued constituting the Integrated
National Police (INP) to be composed of the Philippine Constabulary (PC) as the
nucleus and the integrated police forces as components thereof. Complementing
P.D. No. 765 was P.D. No. 1184 3 dated August 26, 1977 (INP Law, hereinafter)
issued to professionalize the INP and promote career development therein.
On December 13, 1990, Republic Act (R.A.) No. 6975, entitled "AN ACT
ESTABLISHING THE PHILIPPINE NATIONAL POLICE UNDER A REORGANIZED
DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT, AND FOR OTHER
PURPOSES," hereinafter referred to as PNP Law, was enacted. Under Section 23 of
said law, the Philippine National Police (PNP) would initially consist of the members
of the INP, created under P.D. No. 765, as well as the officers and enlisted personnel
of the PC. In part, Section 23 reads:
SEC. 23.
Composition. Subject to the limitation provided for in this Act, the
Philippine National Police, hereinafter referred to as the PNP, is hereby established,

initially consisting of the members of the police forces who were integrated into the
Integrated National Police (INP) pursuant to Presidential Decree No. 765, and the
officers and enlisted personnel of the Philippine Constabulary (PC). DaAISH
A little less than eight (8) years later, or on February 25, 1998, R.A. No. 6975 was
amended by R.A. No. 8551, otherwise known as the "PHILIPPINE NATIONAL POLICE
REFORM AND REORGANIZATION ACT OF 1998." Among other things, the
amendatory law reengineered the retirement scheme in the police organization.
Relevantly, PNP personnel, under the new law, stood to collect more retirement
benefits than what INP members of equivalent rank, who had retired under the INP
Law, received. HaAISC
The INP retirees illustrated the resulting disparity in the retirement benefits between
them and the PNP retirees as follows: 4
Retirement Rank

Monthly Pension

INP

PNP

PNP

INP

Corporal

SPO3 P3,225.00

Captain

P. Sr. Insp.

Brig. Gen.

P. Chief Supt.

Difference

P11,310.00 P8,095.00

P5,248.00

P15,976.00 P10,628.00

P10,054.24 P18,088.00 P8,033.76

Hence, on June 3, 2002, in the Regional Trial Court (RTC) of Manila, all INP retirees,
spearheaded by the Manila's Finest Retirees Association, Inc., or the MFRAI
(hereinafter collectively referred to as the INP Retirees), filed a petition for
declaratory relief, 5 thereunder impleading, as respondents, the Department of
Budget and Management (DBM), the PNP, the National Police Commission
(NAPOLCOM), the Civil Service Commission (CSC) and the Government Service
Insurance System (GSIS). Docketed in the RTC as Civil Case No. 02-103702, which
was raffled to Branch 22 thereof, the petition alleged in gist that INP retirees were
equally situated as the PNP retirees but whose retirement benefits prior to the
enactment of R.A. No. 6975, as amended by R.A. No. 8551, were unconscionably
and arbitrarily excepted from the higher rates and adjusted benefits accorded to the
PNP retirees. Accordingly, in their petition, the petitioning INP retirees pray that a
HDAECI
DECLARATORY JUDGMENT be rendered in their favor, DECLARING with certainty that
they, as INP-retirees, are truly absorbed and equally considered as PNP-retirees and
thus, entitled to enjoy the SAME or IDENTICAL retirement benefits being bestowed
to PNP-retirees by virtue of said PNP Law or Republic Act No. 6975, as amended by
Republic Act 8551, with the corollary mandate for the respondents-government
agencies to effect the immediate adjustment on their previously received disparate
retirement benefits, retroactive to its effectivity, and with due payment thereof.

The GSIS moved to dismiss the petition on grounds of lack of jurisdiction and cause
of action. On the other hand, the CSC, DBM, NAPOLCOM and PNP, in their respective
answers, asserted that the petitioners could not claim the more generous
retirement benefits under R.A. No. 6975 because at no time did they become PNP
members, having retired prior to the enactment of said law. DBM, NAPOLCOM and
PNP afterwards filed their respective pre-trial briefs. CIAHaT
The ensuing legal skirmish is not relevant to the disposition of the instant case. The
bottom line is that, on March 21, 2003, the RTC came out with its decision 6 holding
that R.A. No. 6975, as amended, did not abolish the INP but merely provided for the
absorption of its police functions by the PNP, and accordingly rendered judgment for
the INP retirees, to wit:
WHEREFORE, this Court hereby renders JUDGMENT DECLARING the INP Retirees
entitled to the same or identical retirement benefits and such other benefits being
granted, accorded and bestowed upon the PNP Retirees under the PNP Law (RA No.
6975, as amended).
The respondents Government Departments and Agencies shall IMMEDIATELY EFFECT
and IMPLEMENT the proper adjustments on the INP Retirees' retirement and such
other benefits, RETROACTIVE to its date of effectivity, and RELEASE and PAY to the
INP Retirees the due payments of the amounts. cSaADC
SO ORDERED.
On April 2, 2003, the trial court issued what it denominated as Supplement to the
Decision whereunder it granted the GSIS' motion to dismiss and thus considered the
basic petition as withdrawn with respect to the latter.
From the adverse decision of the trial court, the remaining respondents, namely,
DBM, PNP, NAPOLCOM and CSC, interposed an appeal to the CA whereat their
appellate recourse was docketed as CA-G.R. CV No. 78203.
As stated at the threshold hereof, the CA, in its decision of July 7, 2005, 7 affirmed
that of the trial court upholding the entitlement of the INP retirees to the same or
identical retirement benefits accorded upon PNP retirees under R.A. No. 6975, as
amended. aDCIHE
Their motion for reconsideration having been denied by the CA in its equally
assailed resolution of August 24, 2005, 8 herein petitioners are now with this Court
via the instant recourse on their singular submission that
THE COURT OF APPEALS COMMITTED A SERIOUS ERROR IN LAW IN AFFIRMING THE
DECISION OF THE TRIAL COURT NOTWITHSTANDING THAT IT IS CONTRARY TO LAW
AND ESTABLISHED JURISPRUDENCE.
We DENY.

In the main, it is petitioners' posture that R.A. No. 6975 clearly abolished the INP
and created in its stead a new police force, the PNP. Prescinding therefrom,
petitioners contend that since the PNP is an organization entirely different from the
INP, it follows that INP retirees never became PNP members. Ergo, they cannot avail
themselves of the retirement benefits accorded to PNP members under R.A. No.
6975 and its amendatory law, R.A. No. 8551. HDIATS
A flashback at history is proper.
As may be recalled, R.A. No. 6975 was enacted into law on December 13, 1990, or
just about four (4) years after the 1986 Edsa Revolution toppled down the
dictatorship regime. Egged on by the current sentiment of the times generated by
the long period of martial rule during which the police force, the PC-INP, had a
military character, being then a major service of the Armed Forces of the
Philippines, and invariably moved by a fresh constitutional mandate for the
establishment of one police force which should be national in scope and, most
importantly, purely civilian in character, 9 Congress enacted R.A. No. 6975
establishing the PNP and placing it under the Department of Interior and Local
Government. To underscore the civilian character of the PNP, R.A. No. 6975 made it
emphatically clear in its declaration of policy the following:
Section 2.
Declaration of policy It is hereby declared to be the policy of the
State to promote peace and order, ensure public safety and further strengthen local
government capability aimed towards the effective delivery of the basic services to
the citizenry through the establishment of a highly efficient and competent police
force that is national in scope and civilian in character. . . . . HCaDIS
The police force shall be organized, trained and equipped primarily for the
performance of police functions. Its national scope and civilian character shall be
paramount. No element of the police force shall be military nor shall any position
thereof be occupied by active members of the [AFP]. (Emphasis and word in bracket
supplied.)
Pursuant to Section 23, supra, of R.A. No. 6975, the PNP initially consisted of the
members of the police forces who were integrated into the INP by virtue of P.D. No.
765, while Section 86 10 of the same law provides for the assumption by the PNP of
the police functions of the INP and its absorption by the former, including its
appropriations, funds, records, equipment, etc., as well as its personnel. 11 And to
govern the statute's implementation, Section 85 of the Act spelled out the following
absorption phases: DACcIH
Phase I Exercise of option by the uniformed members of the [PC], the PC
elements assigned with the Narcotics Command, CIS, and the personnel of the
technical services of the AFP assigned with the PC to include the regular CIS
investigating agents and the operatives and agents of the NAPOLCOM Inspection.
Investigation and Intelligence Branch, and the personnel of the absorbed National

Action Committee on Anti-Hijacking (NACAH) of the Department of National Defense


to be completed within six (6) months from the date of the effectivity of this Act. At
the end of this phase, all personnel from the INP, PC, AFP Technical Services,
NACAH, and NAPOLCOM Inspection, Investigation and Intelligence Branch shall have
been covered by official orders assigning them to the PNP, Fire and Jail Forces by
their respective units.
Phase II Approval of the table of organization and equipment of all bureaus and
offices created under this Act, preparation and filling up of their staffing pattern,
transfer of assets to the [DILG] and organization of the Commission, to be
completed within twelve (12) months from the effectivity date hereof. At the end of
this phase, all personnel to be absorbed by the [DILG] shall have been issued
appointment papers, and the organized Commission and the PNP shall be fully
operational. DASEac
The PC officers and enlisted personnel who have not opted to join the PNP shall be
reassigned to the Army, Navy or Air Force, or shall be allowed to retire under
existing AFP rules and regulations. Any PC-INP officer or enlisted personnel may,
within the twelve-month period from the effectivity of this Act, retire and be paid
retirement benefits corresponding to a position two (2) ranks higher than his
present grade, subject to the conditions that at the time he applies for retirement,
he has rendered at least twenty (20) years of service and still has, at most, twentyfour (24) months of service remaining before the compulsory retirement age as
provided by existing law for his office.
Phase III Adjustment of ranks and establishment of one (1) lineal roster of officers
and another for non-officers, and the rationalization of compensation and retirement
systems; taking into consideration the existing compensation schemes and
retirement and separation benefit systems of the different components of the PNP,
to ensure that no member of the PNP shall suffer any diminution in basic longevity
and incentive pays, allowances and retirement benefits due them before the
creations of the PNP, to be completed within eighteen (18) months from the
effectivity of this Act. . . . .
Upon the effectivity of this Act, the [DILG] Secretary shall exercise administrative
supervision as well as operational control over the transferred, merged and/or
absorbed AFP and INP units. The incumbent Director General of the PC-INP shall
continue to act as Director General of the PNP until . . . replaced . . . . (Emphasis and
words in brackets supplied.) TAHCEc
From the foregoing, it appears clear to us that the INP was never, as posited by the
petitioners, abolished or terminated out of existence by R.A. No. 6975. For sure,
nowhere in R.A. No. 6975 does the words "abolish" or "terminate" appear in
reference to the INP. Instead, what the law provides is for the "absorption,"
"transfer," and/or "merger" of the INP, as well as the other offices comprising the

PC-INP, with the PNP. To "abolish" is to do away with, to annul, abrogate or destroy
completely; 12 to "absorb" is to assimilate, incorporate or to take in. 13 "Merge"
means to cause to combine or unite to become legally absorbed or extinguished by
merger 14 while "transfer" denotes movement from one position to another. Clearly,
"abolition" cannot be equated with "absorption." HaEcAC
True it is that Section 90 15 of R.A. No. 6975 speaks of the INP "[ceasing] to exist"
upon the effectivity of the law. It ought to be stressed, however, that such cessation
is but the logical consequence of the INP being absorbed by the PNP.
Far from being abolished then, the INP, at the most, was merely transformed to
become the PNP, minus of course its military character and complexion.
Even the petitioners' effort at disclosing the legislative intent behind the enactment
of R.A. No. 6975 cannot support their theory of abolition. Rather, the Senate and
House deliberations on the bill that eventually became R.A. No. 6975 reveal what
has correctly been held by the CA in its assailed decision: that the PNP was precisely
created to erase the stigma spawned by the militarization of the police force under
the PC-INP structure. The rationale behind the passage of R.A. No. 6975 was
adequately articulated by no less than the sponsor 16 of the corresponding House
bill in his sponsorship speech, thus:
By removing the police force from under the control and supervision of military
officers, the bill seeks to restore and underscore the civilian character of police work
an otherwise universal concept that was muddled up by the martial law years.
Indeed, were the legislative intent was for the INP's abolition such that nothing
would be left of it, the word "abolish" or what passes for it could have easily found
its way into the very text of the law itself, what with the abundant use of the word
during the legislative deliberations. But as can be gleaned from said deliberations,
the lawmakers' concern centered on the fact that if the entire PC-INP corps join the
PNP, then the PC-INP will necessarily be abolished, for who then would be its
members? Of more consequence, the lawmakers were one in saying that there
should never be two national police agencies at the same time. cIHSTC
With the conclusion herein reached that the INP was not in fact abolished but was
merely transformed to become the PNP, members of the INP which include the
herein respondents are, therefore, not excluded from availing themselves of the
retirement benefits accorded to PNP retirees under Sections 74 17 and 75 18 of R.A.
No. 6975, as amended by R.A. No. 8551. It may be that respondents were no longer
in the government service at the time of the enactment of R.A. No. 6975. This fact,
however, without more, would not pose as an impediment to the respondents'
entitlement to the new retirement scheme set forth under the aforecited sections.
As correctly ratiocinated by the CA to which we are in full accord:

For sure, R.A. No. 6975 was not a retroactive statute since it did not impose a new
obligation to pay the INP retirees the difference between what they received when
they retired and what would now be due to them after R.A. No. 6975 was enacted.
Even so, that did not render the RTC's interpretation of R.A. No. 6975 any less valid.
The [respondents'] retirement prior to the passage of R.A. No. 6975 did not exclude
them from the benefits provided by R.A. No. 6975, as amended by R.A. No. 8551,
since their membership in the INP was an antecedent fact that nonetheless allowed
them to avail themselves of the benefits of the subsequent laws. R.A. No. 6975
considered them as PNP members, always referring to their membership and
service in the INP in providing for their retirement benefits. 19 HScCEa
Petitioners maintain, however, that NAPOLCOM Resolution No. 8, 20 particularly
Section 11 21 thereof, bars the payment of any differential in retirement pay to
officers and non-officers who are already retired prior to the effectivity of R.A. No.
6975. SAHIaD
The contention does not commend itself for concurrence.
Under the amendatory law (R.A. No. 8551), the application of rationalized retirement
benefits to PNP members who have meanwhile retired before its (R.A. No. 8551)
enactment was not prohibited. In fact, its Section 38 22 explicitly states that the
rationalized retirement benefits schedule and program "shall have retroactive effect
in favor of PNP members and officers retired or separated from the time specified in
the law." To us, the aforesaid provision should be made applicable to INP members
who had retired prior to the effectivity of R.A. No. 6975. For, as afore-held, the INP
was, in effect, merely absorbed by the PNP and not abolished.
Indeed, to bar payment of retirement pay differential to INP members who were
already retired before R.A. No. 6975 became effective would even run counter to the
purpose of NAPOLCOM Resolution No. 8 itself, as expressed in its preambulatory
clause, which is to rationalize the retirement system of the PNP taking into
consideration existing retirement and benefit systems (including R.A. No. 6975 and
P.D. No. 1184) of the different components thereof "to ensure that no member of the
PNP shall suffer any diminution in the retirement benefits due them before the
creation of the PNP." 23
Most importantly, the perceived restriction could not plausibly preclude the
respondents from asserting their entitlement to retirement benefits adjusted to the
level when R.A. No. 6975 took effect. Such adjustment hews with the constitutional
warrant that "the State shall, from time to time, review to upgrade the pensions and
other benefits due to retirees of both the government and private sectors," 24 and
the implementing mandate under the Senior Citizen's Law 25 that "to the extent
practicable and feasible, retirement benefits . . . shall be upgraded to be at par with
the current scale enjoyed by those in actual service." EcAISC

Certainly going for the respondents in their bid to enjoy the same retirement
benefits granted to PNP retirees, either under R.A. No. 6975 or R.A. No. 8551, is
Section 34 of the latter law which amended Section 75 of R.A. No. 6975 by adding
thereto the following proviso:
Section 75. Retirement benefits. . . . : Provided, finally, That retirement pay of the
officers/non-officers of the PNP shall be subject to adjustments based on the
prevailing scale of base pay of police personnel in the active service. aCSEcA
Then, too, is the all familiar rule that:
Retirement laws should be liberally construed in favor of the retiree because their
intention is to provide for his sustenance and hopefully, even comfort, when he no
longer has the stamina to continue earning his livelihood. The liberal approach aims
to achieve the humanitarian purposes of the law in order that efficiency, security
and well-being of government employees may be enhanced. 26
The petitioners parlay the notion of prospective application of statutes, noting in
this regard that R.A. No. 6975, as amended, cannot be applied retroactively, there
being no provision to that effect.
We are not persuaded.
As correctly found by the appellate court, R.A. No. 6975 itself contextually provides
for its retroactive application to cover those who had retired prior to its effectivity. In
this regard, we invite attention to the three (3) phases of implementation under
Section 85 for the absorption and continuation in the service of, among others, the
INP members under the newly-established PNP. IHEDAT
In a further bid to scuttle respondents' entitlement to the desired retirement
benefits, the petitioners fault the trial court for ordering the immediate adjustments
of the respondents' retirement benefits when the basic petition filed before it was
one for declaratory relief. To the petitioners, such petition does not essentially entail
an executory process, the only relief proper under that setting being a declaration of
the parties' rights and duties.
Petitioners' above posture is valid to a point. However, the execution of judgments
in a petition for declaratory relief is not necessarily indefensible. In Philippine
Deposit Insurance Corporation[PDIC] v. Court of Appeals, 27 wherein the Court
affirmed the order for the petitioners therein to pay the balance of the deposit
insurance to the therein respondents, we categorically ruled:
Now, there is nothing in the nature of a special civil action for declaratory relief that
proscribes the filing of a counterclaim based on the same transaction, deed or
contract subject of the complaint. A special civil action is after all not essentially
different from an ordinary civil action, which is generally governed by Rules 1 to 56
of the Rules of Court, except that the former deals with a special subject matter

which makes necessary some special regulation. But the identity between their
fundamental nature is such that the same rules governing ordinary civil suits may
and do apply to special civil actions if not inconsistent with or if they may serve to
supplement the provisions of the peculiar rules governing special civil actions. 28
IHEaAc
Similarly, in Matalin Coconut Co., Inc. v. Municipal Council of Malabang, Lanao del
Sur: 29 the Court upheld the lower court's order for a party to refund the amounts
paid by the adverse party under the municipal ordinance therein questioned,
stating:
. . . Under Sec. 6 of Rule 64, the action for declaratory relief may be converted into
an ordinary action and the parties allowed to file such pleadings as may be
necessary or proper, if before the final termination of the case "a breach or violation
of an . . . ordinance, should take place." In the present case, no breach or violation
of the ordinance occurred. The petitioner decided to pay "under protest" the fees
imposed by the ordinance. Such payment did not affect the case; the declaratory
relief action was still proper because the applicability of the ordinance to future
transactions still remained to be resolved, although the matter could also be
threshed out in an ordinary suit for the recovery of taxes paid . . . In its petition for
declaratory relief, petitioner-appellee alleged that by reason of the enforcement of
the municipal ordinance by respondents it was forced to pay under protest the fees
imposed pursuant to the said ordinance, and accordingly, one of the reliefs prayed
for by the petitioner was that the respondents be ordered to refund all the amounts
it paid to respondent Municipal Treasurer during the pendency of the case. The
inclusion of said allegation and prayer in the petition was not objected to by the
respondents in their answer. During the trial, evidence of the payments made by the
petitioner was introduced. Respondents were thus fully aware of the petitioner's
claim for refund and of what would happen if the ordinance were to be declared
invalid by the court. cTIESa
The Court sees no reason for treating this case differently from PDIC and Matalin.
This disposition becomes all the more appropriate considering that the respondents,
as petitioners in the RTC, pleaded for the immediate adjustment of their retirement
benefits which, significantly, the herein petitioners, as respondents in the same
court, did not object to. Being aware of said prayer, the petitioners then already
knew the logical consequence if, as it turned out, a declaratory judgment is
rendered in the respondents' favor.
At bottom then, the trial court's judgment forestalled multiplicity of suits which,
needless to stress, would only entail a long and arduous process. Considering their
obvious advanced years, the respondents can hardly afford another protracted
proceedings. It is thus for this Court to already write finis to this case.

WHEREFORE, the instant petition is DENIED and the assailed decision and resolution
of the CA, respectively dated July 7, 2005 and August 24, 2005, are AFFIRMED.
EcIDaA
No costs.
SO ORDERED.

[G.R. No. 160208. June 30, 2008.]


RAFAEL R. MARTELINO, BARCHELECHU S. MORALES, ROSELYN S. CACHAPERO,
REYNALDO R. EVANGELISTA, CESAR B. YAPE, LEONORA R. PARAS, SEGUNDINA I.
IBARRA, RAQUEL G. HALNIN, ZAMORA I. DIAZ, and ARTHUR L. VEGA, * petitioners,
vs. NATIONAL HOME MORTGAGE FINANCE CORPORATION and HOME DEVELOPMENT
MUTUAL FUND, respondents.
DECISION
QUISUMBING, J p:
On appeal is the Decision 1 dated April 22, 2003 of the Court of Appeals in C.A.-G.R.
CV No. 70231, which had affirmed the March 12, 2001 Order 2 of the Regional Trial
Court (RTC), Branch 120, Caloocan City, dismissing Civil Case No. C-551 for
declaratory relief and prohibition. Also assailed is the appellate court's Resolution 3
dated September 25, 2003, denying petitioners' motion for reconsideration.
DaHSIT
The case stemmed from the petition for declaratory relief and prohibition with
urgent prayer for the issuance of a temporary restraining order and/or preliminary
injunction 4 filed before the RTC of Caloocan City, by petitioners against the
National Home Mortgage Finance Corporation (NHMFC) and the Home Development
Mutual Fund (HDMF), herein respondents, and Sheriff Alberto A. Castillo. 5
Petitioners alleged that they obtained housing loans from respondents who directly
released the proceeds thereof to the subdivision developer, Shelter Philippines, Inc.
(Shelter).
However, Shelter failed to complete the subdivision according to its representations
and the subdivision plan. They were thus compelled to spend their own resources to
improve the subdivision roads and alleys, and to install individual water facilities.
Respondents, on the other hand, failed to ensure Shelter's completion of the
subdivision. Instead, respondents ignored their right to suspend amortization
payments for Shelter's failure to complete the subdivision, charged interests and
penalties on their outstanding loans, threatened to foreclose their mortgages and
initiated foreclosure proceedings against petitioner Rafael Martelino. Hence, they
prayed that respondents be restrained from foreclosing their mortgages. CSHcDT
Moreover, petitioners specifically sought a declaration from the RTC (1) that their
right as house and lot buyers to suspend payment to Shelter for its failure to fully
develop the subdivision also applied to respondents who released their loans
directly to Shelter; and (2) that during the suspension of payment, respondents
should not assess them accrued interests and penalties. Petitioners further prayed
that they be allowed to pay their housing loans without interest and penalties.

In its June 17, 1998 Order, 6 the RTC set the preliminary injunction hearing, but said
order, including the summons and petition, were served only on the NHMFC and
Sheriff Castillo. 7 Despite notice, the NHMFC failed to attend the preliminary
injunction hearing. On July 9, 1998, the RTC ordered that a writ of preliminary
injunction be issued restraining the respondents from foreclosing the mortgages on
petitioners' houses. 8 The writ 9 was issued on July 14, 1998. aDcETC
On July 22, 1998, the NHMFC filed its Answer with Special and Affirmative Defenses.
10 Thereafter, the RTC ordered the parties to submit their pre-trial briefs and
scheduled the pre-trial conference. 11
On August 10, 1998, the NHMFC filed a Manifestation and Motion to Dismiss the
Petition on the ground that the RTC had no jurisdiction over its person or over the
subject matter of the case. 12
The next day, the HDMF moved to set aside the July 9, 1998 preliminary injunction
order on the ground that it was not notified of the hearing. The HDMF also stated
that the petition should have been filed with the Housing and Land Use Regulatory
Board (HLURB) as the case involved the developer's failure to complete the
subdivision. The HDMF alleged that the RTC had no jurisdiction over the case or
even to implead the HDMF which only financed petitioners' housing loans. 13
HICEca
Petitioners opposed the NHMFC's motion to dismiss and the HDMF's motion to set
aside the July 9, 1998 Order. 14 They said that the NHMFC stated no basis why the
RTC lacked jurisdiction. Since they sought a judicial declaration of their right to
suspend amortization payments to respondents, not to the subdivision developer,
the HLURB had no jurisdiction over the case. Petitioners also averred that the HDMF
cannot claim ignorance of the preliminary injunction hearing because the NHMFC
was duly notified. They claimed that the HDMF's motion constituted voluntary
submission to the RTC's jurisdiction which cured the lack of service of summons.
STIEHc
On February 10, 2000, petitioners moved to cite Atty. Florentino C. Delos Santos,
Manager of HDMF's Legal Department, in contempt for foreclosing the mortgage of
Rosella T. Rosete 15 and threatening to pursue similar actions against petitioners, in
defiance of the preliminary injunction order. 16
On March 12, 2001, the RTC, Branch 120, Caloocan City, issued an Order, decreeing
as follows:
WHEREFORE, premises considered:
1)
The motion to set aside [the] order of this Court dated July 9, 1998 is hereby
granted;
2)

The motion to cite defendant HDMF in contempt is denied; and

3)
The motion to dismiss is hereby granted and the herein petition is
DISMISSED. HICSaD
SO ORDERED. 17
The RTC held that the July 9, 1998 Order was not applicable to the HDMF since it
was not notified of the preliminary injunction hearing. Thus, no basis existed to
declare Atty. Delos Santos in contempt of court.
In dismissing the case, the RTC ruled that the issue of non-completion of the
subdivision should have been brought before the HLURB. It also ruled that no
judicial declaration can be made because the petition was vague. The RTC assumed
that the subject of the petition was Republic Act No. 8501 18 or the Housing Loan
Condonation Act of 1998 which was cited by petitioners. But the RTC pointed out
that petitioners failed to state which section of the law affected their rights and
needed judicial declaration. The RTC also noted that, as stated by petitioners,
respondents still foreclosed their mortgages, a breach of said law which rendered
the petition for declaratory relief improper. The proper remedy was an ordinary civil
action, the RTC concluded. HcDSaT
The Court of Appeals affirmed the RTC Order. First, the appellate court ruled that the
writ of preliminary injunction was not valid against the HDMF since under Section 5,
19 Rule 58 of the Rules of Court, no preliminary injunction shall be granted without
hearing and prior notice to the party or person sought to be enjoined. The HDMF
was not notified of the hearing and only appeared before the RTC to object to its
jurisdiction for non-service of summons. Second, the appellate court held that
petitioners were not denied due process because the motions to dismiss and to set
aside the July 9, 1998 Order both raised the issue of jurisdiction and were duly
heard. Petitioners even filed a memorandum. Third, the appellate court did not
entertain the issue of whether the petition for declaratory relief can be converted to
an ordinary action for it was not raised before the RTC. The Court of Appeals also
denied the motion for reconsideration.
In this appeal, petitioners contend that the Court of Appeals erred:
I.
. . . IN AFFIRMING THE ORDER OF DISMISSAL OF THE TRIAL COURT BASED ON A
GROUND NOT ALLEGED IN THE MOTION TO DISMISS; ICASEH
II.
. . . IN APPLYING THE RULING IN U. BAEZ ELECTRIC LIGHT CO., vs. ABRA ELECTRIC
COOPERATIVE[,] INC., (119 SCRA 90) TO SUPPORT THE ORDER OF DISMISSAL BY THE
TRIAL COURT;
III.

. . . IN NOT HOLDING THAT PETITIONERS WERE DENIED THEIR RIGHT TO DUE


PROCESS OF LAW WHEN THE TRIAL COURT FAVORABLY RESOLVED THE MOTION TO
DISMISS BASED ON A GROUND NOT RAISED IN THE MOTION TO DISMISS;
IV.
. . . IN NOT HOLDING THAT THE PETITION SHOULD BE CONVERTED INTO AN
ORDINARY ACTION ASSUMING THAT DECLARATORY RELIEF IS NOT THE PROPER
REMEDY;
V.
. . . IN NOT HOLDING THAT THE TRIAL COURT HAD COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR . . . EXCESS OF JURISDICTION IN GRANTING
THE MOTION TO DISMISS; HICATc
VI.
. . . IN SUSTAINING THE RTC ORDER SETTING ASIDE THE INJUNCTIVE ORDER BY NOT
HOLDING THAT THE HOME DEVELOPMENT MUTUAL FUND IS DEEMED TO HAVE
VOLUNTARILY SUBMITTED TO THE JURISDICTION OF THE LOWER COURT[.]20
In brief, the basic issues pertain (1) to the validity of the preliminary injunction order
against the HDMF and (2) the propriety of dismissing the petition for declaratory
relief and prohibition. aScIAC
Petitioners point out that, contrary to the finding of the Court of Appeals, the HDMF
did not question the lack of service of summons upon it nor did it raise the issue of
jurisdiction of the RTC over its person. What the HDMF protested, they say, were the
lack of notice of the preliminary injunction hearing and the RTC's lack of jurisdiction
over the subject matter. But by filing the motion to set aside the July 9, 1998 Order,
the HDMF voluntarily submitted to the RTC's jurisdiction. 21
In its comment, the HDMF maintains that it was not notified of the preliminary
injunction hearing and this fact is admitted by petitioners. Thus, the preliminary
injunction order is null and void. 22
We affirm the RTC and Court of Appeals ruling that the preliminary injunction order
is not valid against the HDMF. Section 5, Rule 58 of the Rules of Court expressly
states that "[n]o preliminary injunction shall be granted without hearing and prior
notice to the party or person sought to be enjoined". Here, petitioners even admit
that the HDMF was not notified of the preliminary injunction hearing. In fact,
petitioners do not contest the lower courts' ruling that the July 9, 1998 Order cannot
apply to the HDMF. They merely contend and insist that the HDMF voluntarily
submitted to the RTC's jurisdiction. Unfortunately, such contention is immaterial.
The issue involves the validity of the preliminary injunction order absent a notice of

hearing for its issuance to the HDMF, and not the HDMF's voluntary submission to
the RTC's jurisdiction. aIHSEc
Petitioners also argue that the Court of Appeals erred when it sustained the RTC's
dismissal of the petition on a ground not relied upon by respondents. They contend
that the RTC went beyond the issue of jurisdiction raised by respondents by
determining the sufficiency of the petition and ruling that it was vague and
improper. The basic issue petitioners raised is whether their right under Section 23
23 of Presidential Decree No. 957 24 to suspend amortization payments to the
subdivision developer is equally available against respondents.
In response, the NHMFC "reiterates and adheres" to the lower courts' ruling that the
petition for declaratory relief is a case of forum shopping considering consolidated
HLRB Cases Nos. REM-111585-4240 and REM-022690-4355 (HLRB cases) which
were decided allegedly in petitioners' favor. The NHMFC also maintains that the RTC
had no jurisdiction since petitioners' complaint of the developer's failure to
complete the subdivision is a case cognizable by the HLURB. EDHTAI
After a careful study of the case, we are in agreement to uphold the dismissal of the
petition for declaratory relief and prohibition.
I.
Worthy of recall, the RTC held that respondents' 25 act of initiating
foreclosure proceedings was in breach of Rep. Act No. 8501 and rendered the action
of declaratory relief improper. The RTC suggested that the proper remedy is an
ordinary civil action. Incidentally, this point is also related to petitioners' contention
that the Court of Appeals should have ordered the conversion of their petition filed
before the RTC to an ordinary civil action, under the provisions of Section 6, 26 Rule
63 of the Rules of Court. aSTAcH
We agree with the RTC but hasten to point out that the RTC had not ruled on
whether the petition was also improper as a petition for prohibition. Indeed, under
Section 1, 27 Rule 63, a person must file a petition for declaratory relief before
breach or violation of a deed, will, contract, other written instrument, statute,
executive order, regulation, ordinance or any other governmental regulation. In this
case, the petitioners had stated in their petition that respondents assessed them
interest and penalties on their outstanding loans, initiated foreclosure proceedings
against petitioner Rafael Martelino as evidenced by the notice of extra-judicial sale
28 and threatened to foreclose the mortgages of the other petitioners, all in
disregard of their right to suspend payment to Shelter for its failure to complete the
subdivision. Said statements clearly mean one thing: petitioners had already
suspended paying their amortization payments. Unfortunately, their actual
suspension of payments defeated the purpose of the action to secure an
authoritative declaration of their supposed right to suspend payment, for their
guidance. Thus, the RTC could no longer assume jurisdiction over the action for
declaratory relief because its subject initially unspecified, now identified as P.D. No.

957 and relied upon correctly or otherwise by petitioners, and assumed by the
RTC to be Rep. Act No. 8501, was breached before filing the action. As we said in
Tambunting, Jr. v. Sumabat: 29 EaHDcS
. . . The purpose of the action [for declaratory relief] is to secure an authoritative
statement of the rights and obligations of the parties under a statute, deed,
contract, etc. for their guidance in its enforcement or compliance and not to settle
issues arising from its alleged breach. It may be entertained only before the breach
or violation of the statute, deed, contract, etc. to which it refers. Where the law or
contract has already been contravened prior to the filing of an action for declaratory
relief, the court can no longer assume jurisdiction over the action. . . . Under such
circumstances, inasmuch as a cause of action has already accrued in favor of one or
the other party, there is nothing more for the court to explain or clarify short of a
judgment or final order. 30
Under the circumstances, may the Court nonetheless allow the conversion of the
petition for declaratory relief and prohibition into an ordinary action? We are
constrained to say: no. Although Section 6, Rule 63 might allow such course of
action, the respondents did not argue the point, and we note petitioners' failure to
specify the ordinary action they desired. We also cannot reasonably assume that
they now seek annulment of the mortgages. Further, the records support the Court
of Appeals' finding that this issue was not raised before the RTC. 31 The Court of
Appeals therefore properly refused to entertain the issue as it cannot be raised for
the first time on appeal. 32 EIASDT
Relatedly, the Court had considered De La Llana, etc., et al. v. Alba, etc., et al., 33
where this Court considered a petition erroneously entitled Petition for Declaratory
Relief and/or for Prohibition as an action for prohibition. That case involved the
constitutionality of Batas Pambansa Blg. 129 or the Judiciary Reorganization Act of
1980. Citing De La Llana, Justice Florenz D. Regalado opined in his book 34 that if
the petition has far-reaching implications and it raises questions that should be
resolved, it may be treated as one for prohibition.
Assuming the Court can also treat the Petition for Declaratory Relief and Prohibition
as an action for prohibition, we must still hold that prohibition is improper.
Prohibition is a remedy against proceedings that are without or in excess of
jurisdiction, or with grave abuse of discretion, there being no appeal or other plain,
speedy adequate remedy in the ordinary course of law. 35 But here, the petition did
not even impute lack of jurisdiction or grave abuse of discretion committed by
respondents and Sheriff Castillo regarding the foreclosure proceedings. Foreclosure
of mortgage is also the mortgagee's right in case of non-payment of a debt secured
by mortgage. The mortgagee can sell the encumbered property to satisfy the
outstanding debt. 36 Hence, the HDMF cannot be faulted for exercising its right to
foreclose the mortgages, 37 under the provisions of Act No. 3135 38 as amended by
Act No. 4118. 39 We are not saying, however, that the HDMF must exercise its right

at all cost, considering that Rep. Act No. 8501 allows condonation of loan penalties
when appropriate. DCcAIS
We note that Rep. Act No. 8501 not only allows condonation of loan penalties, 40 it
also grants to the HDMF Board of Trustees the power to condone penalties imposed
on loans of HDMF members-borrowers who for, justifiable reasons, failed to pay on
time any obligation due to the HDMF. 41 Notably, the law applies to borrowers who
failed or refused to pay their monthly amortizations due to structurally defective or
substandard housing units and/or subdivisions lacking in basic amenities such as
water, light, drainage, good roads and others as required by law. 42 And the rules
promulgated by the HDMF provide that such refusal shall be considered as a
justifiable reason for failure to pay the required amortization. 43 Furthermore, the
Board of Trustees of the HDMF may also consider other causes similarly justifiable.
44
Petitioners wanted to avail of the benefits of Rep. Act No. 8501 and said that "the
most that [respondents] should have done under the circumstances was to advise
[them] about the effectivity of said law and encourage them to apply thereunder."
45 But instead of applying for condonation of penalties and restructuring of their
loans, they filed an erroneous petition before the RTC. They need not wait for
encouragement because the HDMF, the assignee of petitioners' loans, had already
issued and published its rules according to the NHMFC. 46 Petitioners need only to
apply with the HDMF and squarely raise before the HDMF not only their refusal to
pay amortizations because of the defective subdivision a justifiable reason
according to the rules but also their implied imputation of negligence against
respondents who allegedly released the proceeds of their loans directly to Shelter,
despite its failure to complete the subdivision. cDCSTA
The HDMF could then determine if the latter ground is also a justifiable cause for
non-payment of amortization. Surely, respondents would not espouse a policy to go
after petitioners if they were found justified. Respondents could even enhance
administrative controls for releasing future loans to protect borrower-mortgagors
against subdivision developers who renege on their obligations.
II.
We cannot agree, however, with the RTC's ruling that the vagueness of the
petition furnished additional justification for its dismissal. If the petition for
declaratory relief and prohibition was vague, dismissal is not proper because the
respondents may ask for more particulars. 47 Notably, the NHMFC never assailed
the supposed vagueness of the petition in its motion to dismiss nor did it ask for
more particulars before filing its answer. When the RTC also set the pre-trial
conference and ordered the parties to submit their pre-trial briefs, it even noted that
the issues had already been joined. 48 Petitioners fairly stated also the necessary
ultimate facts, except that their action for declaratory relief was improper. aDSHIC

Moreover, the RTC made an assumption that Rep. Act No. 8501 was the subject
matter of the case. But while the petition mentioned the law, the declaration that
petitioners sought was not anchored on any of its provisions. The petition only
stated that despite the effectivity of said law, respondents still acted in bad faith
and with undue haste in threatening petitioners with foreclosures, instead of
encouraging them to avail of its benefits.
III.
On the matter of forum shopping, we find the claim unsubstantiated. The
NHMFC has not explained why there is forum shopping. 49 It failed to show the
elements of forum shopping, i.e., (1) identity of parties in the HLRB cases and this
case; (2) identity of rights asserted or relief prayed for; and (3) identity of the two
preceding particulars so that the judgment in the HLRB cases will be res judicata in
this case. 50 In any event, the decision in the HLRB cases, as affirmed with
modification by the HLURB Board of Commissioners, 51 ordered Shelter to complete
the subdivision roads, sidewalks, water, electrical and drainage systems. Thus,
there is no forum shopping since the petition for declaratory relief and prohibition
filed by petitioners against respondents is entirely different from the HLRB cases.
Involved were different parties, rights asserted and reliefs sought. Obviously, the
NHMFC invokes a ruling of the RTC and Court of Appeals that petitioners committed
forum shopping, when no such ruling exists. AEIHaS
IV.
Respondents' contention that the case should or could have been filed with
the HLURB lacks merit. The jurisdiction of the HLURB is defined under Section 1 of
P.D. No. 1344, 52 to wit:
SEC. 1.
In the exercise of its functions to regulate the real estate trade and
business and in addition to its powers provided for in Presidential Decree No. 957,
the National Housing Authority [now HLURB] shall have exclusive jurisdiction to hear
and decide cases of the following nature:
A.

Unsound real estate business practices;

B.
Claims involving refund and any other claims filed by subdivision lot or
condominium unit buyer against the project owner, developer, dealer, broker or
salesman; and
C.
Cases involving specific performance of contractual and statutory obligations
filed by buyers of subdivision lot or condominium unit against the owner, developer,
dealer, broker or salesman. ISAcHD
As we previously held, the jurisdiction of the HLURB to hear and decide cases is
determined by the nature of the cause of action, the subject matter or property
involved and the parties. 53 In this case, the petition for declaratory relief and
prohibition did not involve an unsound real estate business practice, or a refund
filed by subdivision buyers against the developer, or a specific performance case
filed by buyers against the developer. Rather, the petition specifically sought a

judicial declaration that petitioners' right to suspend payment to the developer for
failure to complete the subdivision also applies to respondents who provided them
housing loans and released the proceeds thereof to the developer although the
subdivision was not completed. Note also that the buyers (petitioners) are not suing
the developer but their creditor-mortgagees 54 (respondents).
WHEREFORE, the petition is DENIED for lack of merit. The assailed Decision and
Resolution of the appellate court are AFFIRMED. HTCAED
No pronouncement as to costs.
SO ORDERED.

[G.R. No. 165001. January 31, 2007.]


NEW FRONTIER SUGAR CORPORATION, petitioner, vs. REGIONAL TRIAL COURT,
BRANCH 39, ILOILO CITY and EQUITABLE PCI BANK, respondents.
DECISION
AUSTRIA-MARTINEZ, J p:
In the present petition for review under Rule 45 of the Rules of Court, petitioner
assails the decision of the Court of Appeals (CA) 1 in CA-G.R. SP No. 78673,
dismissing its special civil action for certiorari and affirming the dismissal orders
dated January 13, 2003 and April 14, 2003 issued by the Regional Trial Court (RTC)
of Iloilo City, Branch 39, acting as a special commercial court, in Civil Case No. 0227278.
As borne by the records, New Frontier Sugar Corporation (petitioner) is a domestic
corporation engaged in the business of raw sugar milling. Foreseeing that it cannot
meet its obligations with its creditors as they fell due, petitioner filed a Petition for
the Declaration of State of Suspension of Payments with Approval of Proposed
Rehabilitation Plan under the Interim Rules of Procedure on Corporate Rehabilitation
(2000) some time in August 2002. 2 Finding the petition to be sufficient in form and
substance, the RTC issued a Stay Order dated August 20, 2002, appointing Manuel
B. Clemente as rehabilitation receiver, ordering the latter to put up a bond, and
setting the initial hearing on the petition. 3
One of petitioner's creditors, the Equitable PCI Bank (respondent bank), filed a
Comment/Opposition with Motion to Exclude Property, alleging that petitioner is not
qualified for corporate rehabilitation, as it can no longer operate because it has no
assets left. Respondent bank also alleged that the financial statements, schedule of
debts and liabilities, inventory of assets, affidavit of general financial condition, and
rehabilitation plan submitted by petitioner are misleading and inaccurate since its
properties have already been foreclosed and transferred to respondent bank before
the petition for rehabilitation was filed, and petitioner, in fact, still owes respondent
bank deficiency liability. 4
On January 13, 2003, the RTC issued an Omnibus Order terminating the proceedings
and dismissing the case. 5 Petitioner filed an Omnibus Motion but this was denied
by the RTC in its Order dated April 14, 2003. 6
Petitioner then filed with the CA a special civil action for certiorari, which was denied
by the CA per assailed Decision dated July 19, 2004, the dispositive portion of which
reads:
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us
DISMISSING the petition filed in this case and AFFIRMING the orders assailed by the
petitioner. HTCSDE

SO ORDERED. 7
In dismissing the petition, the CA sustained the findings of the RTC that since
petitioner no longer has sufficient assets and properties to continue with its
operations and answer its corresponding liabilities, it is no longer eligible for
rehabilitation. The CA also ruled that even if the RTC erred in dismissing the petition,
the same could not be corrected anymore because what petitioner filed before the
CA was a special civil action for certiorari under Rule 65 of the Rules of Court
instead of an ordinary appeal. 8
Hence, herein petition based on the following reasons:
(a)
THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS DISCRETION IN
UPHOLDING THE FINDINGS OF THE SPECIAL COMMERCIAL COURT (RTC BR. 39,
ILOILO CITY), PREMATURELY EXCLUDING THE FORECLOSED PROPERTY OF
PETITIONER AND DECLARING THAT PETITIONER HAS NO SUBSTANTIAL PROPERTY
LEFT TO MAKE CORPORATE REHABILITATION FEASIBLE AS THERE IS AN ONGOING
LITIGATION FOR THE ANNULMENT OF SUCH FORECLOSURE IN ANOTHER
PROCEEDING.
(b)
THE COURT OF APPEALS ERRED IN DISMISSING THE PETITION FOR CERTIORARI FILED
BEFORE IT AS "IMPROPER," APPEAL BEING AN AVAILABLE REMEDY. 9
The Court denies the petition.
Rehabilitation contemplates a continuance of corporate life and activities in an
effort to restore and reinstate the corporation to its former position of successful
operation and solvency. 10 Presently, the applicable law on rehabilitation petitions
filed by corporations, partnerships or associations, 11 including rehabilitation cases
transferred from the Securities and Exchange Commission to the RTCs pursuant to
Republic Act No. 8799 or the Securities Regulation Code, 12 is the Interim Rules of
Procedure on Corporate Rehabilitation (2000). SAEHaC
Under the Interim Rules, the RTC, within five (5) days from the filing of the petition
for rehabilitation and after finding that the petition is sufficient in form and
substance, shall issue a Stay Order appointing a Rehabilitation Receiver, suspending
enforcement of all claims, prohibiting transfers or encumbrances of the debtor's
properties, prohibiting payment of outstanding liabilities, and prohibiting the
withholding of supply of goods and services from the debtor. 13 Any transfer of
property or any other conveyance, sale, payment, or agreement made in violation
of the Stay Order or in violation of the Rules may be declared void by the court upon
motion or motu proprio. 14

Further, the Stay Order is effective both against secure and unsecured creditors.
This is in harmony with the principle of "equality is equity" first enunciated in
Alemar's Sibal & Sons, Inc. v. Elbinias, 15 thus:
During rehabilitation receivership, the assets are held in trust for the equal benefit
of all creditors to preclude one from obtaining an advantage or preference over
another by the expediency of an attachment, execution or otherwise. For what
would prevent an alert creditor, upon learning of the receivership, from rushing
posthaste to the courts to secure judgments for the satisfaction of its claims to the
prejudice of the less alert creditors.
As between creditors, the key phrase is "equality is equity." When a corporation
threatened by bankruptcy is taken over by a receiver, all the creditors should stand
on an equal footing. Not anyone of them should be given any preference by paying
one or some of them ahead of the others. This is precisely the reason for the
suspension of all pending claims against the corporation under receivership. Instead
of creditors vexing the courts with suits against the distressed firm, they are
directed to file their claims with the receiver who is a duly appointed officer of the
SEC. (Emphasis supplied) ISHaCD
Nevertheless, the suspension of the enforcement of all claims against the
corporation is subject to the rule that it shall commence only from the time the
Rehabilitation Receiver is appointed. Thus, in Rizal Commercial Banking Corporation
v. Intermediate Appellate Court, 16 the Court upheld the right of RCBC to
extrajudicially foreclose the mortgage on some of BF Homes' properties, and
reinstated the trial court's judgment ordering the sheriff to execute and deliver to
RCBC the certificate of auction sale involving the properties. The Court vacated its
previous Decision rendered on September 14, 1992 in the same case, finding that
RCBC can rightfully move for the extrajudicial foreclosure of the mortgage since it
was done on October 16, 1984, while the management committee was appointed
only on March 18, 1985. The Court also took note of the SEC's denial of the
petitioner's consolidated motion to cite the sheriff and RCBC for contempt and to
annul the auction proceedings and sale.
In this case, respondent bank instituted the foreclosure proceedings against
petitioner's properties on March 13, 2002 and a Certificate of Sale at Public Auction
was issued on May 6, 2002, with respondent bank as the highest bidder. The
mortgage on petitioner's chattels was likewise foreclosed and the Certificate of Sale
was issued on May 14, 2002. It also appears that titles over the properties have
already been transferred to respondent bank. 17
On the other hand, the petition for corporate rehabilitation was filed only on August
14, 2002 and the Rehabilitation Receiver appointed on August 20, 2002.
Respondent bank, therefore, acted within its prerogatives when it foreclosed and

bought the property, and had title transferred to it since it was made prior to the
appointment of a rehabilitation receiver. AacSTE
The fact that there is a pending case for the annulment of the foreclosure
proceedings and auction sales 18 is of no moment. Until a court of competent
jurisdiction, which in this case is the RTC of Dumangas, Iloilo, Branch 68, annuls the
foreclosure sale of the properties involved, petitioner is bereft of a valid title over
the properties. 19 In fact, it is the trial court's ministerial duty to grant a possessory
writ over the properties. 20
Consequently, the CA was correct in upholding the RTC's dismissal of the petition for
rehabilitation in view of the fact that the titles to petitioner's properties have
already passed on to respondent bank and petitioner has no more assets to speak
of, specially since petitioner does not dispute the fact that the properties which
were foreclosed by respondent bank comprise the bulk, if not the entirety, of its
assets.
It should be stressed that the Interim Rules was enacted to provide for a summary
and non-adversarial rehabilitation proceedings. 21 This is in consonance with the
commercial nature of a rehabilitation case, which is aimed to be resolved
expeditiously for the benefit of all the parties concerned and the economy in
general.
As provided in the Interim Rules, the basic procedure is as follows:
(1)

The petition is filed with the appropriate Regional Trial Court; 22

(2)
If the petition is found to be sufficient in form and substance, the trial court
shall issue a Stay Order, which shall provide, among others, for the appointment of
a Rehabilitation Receiver; the fixing of the initial hearing on the petition; a directive
to the petitioner to publish the Order in a newspaper of general circulation in the
Philippines once a week for two (2) consecutive weeks; and a directive to all
creditors and all interested parties (including the Securities and Exchange
Commission) to file and serve on the debtor a verified comment on or opposition to
the petition, with supporting affidavits and documents. 23
3)

Publication of the Stay Order;

4)
Initial hearing on any matter relating to the petition or on any comment
and/or opposition filed in connection therewith. If the trial court is satisfied that
there is merit in the petition, it shall give due course to the petition; 24
5)
Referral for evaluation of the rehabilitation plan to the rehabilitation receiver
who shall submit his recommendations to the court; 25
6)

Modifications or revisions of the rehabilitation plan as necessary; 26

7)

Submission of final rehabilitation plan to the trial court for approval; 27

8)

Approval/disapproval of rehabilitation plan by the trial court; 28

In the present case, the petition for rehabilitation did not run its full course but was
dismissed by the RTC after due consideration of the pleadings filed before it. On this
score, the RTC cannot be faulted for its summary dismissal, as it is tantamount to a
finding that there is no merit to the petition. This is in accord with the trial court's
authority to give due course to the petition or not under Rule 4, Section 9 of the
Interim Rules. Letting the petition go through the process only to be dismissed later
on because there are no assets to be conserved will not only defeat the reason for
the rules but will also be a waste of the trial court's time and resources. DIEACH
The CA also correctly ruled that petitioner availed of the wrong remedy when it filed
a special civil action for certiorari with the CA under Rule 65 of the Rules of Court.
Certiorari is a remedy for the correction of errors of jurisdiction, not errors of
judgment. It is an original and independent action that was not part of the trial that
had resulted in the rendition of the judgment or order complained of. More
importantly, since the issue is jurisdiction, an original action for certiorari may be
directed against an interlocutory order of the lower court prior to an appeal from the
judgment; or where there is no appeal or any plain, speedy or adequate remedy. A
petition for certiorari should be filed not later than sixty days from the notice of
judgment, order, or resolution, and a motion for reconsideration is generally
required prior to the filing of a petition for certiorari, in order to afford the tribunal
an opportunity to correct the alleged errors. 29
The Omnibus Order dated January 13, 2003 issued by the RTC is a final order since it
terminated the proceedings and dismissed the case before the trial court; it leaves
nothing more to be done. As such, petitioner's recourse is to file an appeal from the
Omnibus Order.
In this regard, A.M. No. 00-8-10-SC promulgated by the Court on September 4, 2001
provides that a petition for rehabilitation is considered a special proceeding given
that it seeks to establish the status of a party or a particular fact. Accordingly, the
period of appeal provided in paragraph 19 (b) of the Interim Rules Relative to the
Implementation of Batas Pambansa Blg. 129 for special proceedings shall apply.
Under said paragraph 19 (b), the period of appeal shall be thirty (30) days, a record
of appeal being required.
However, it should be noted that the Court issued A.M. No. 04-9-07-SC on
September 14, 2004, clarifying the proper mode of appeal in cases involving
corporate rehabilitation and intra-corporate controversies. It is provided therein that
all decisions and final orders in cases falling under the Interim Rules of Corporate
Rehabilitation and the Interim Rules of Procedure Governing Intra-Corporate
Controversies under Republic Act No. 8799 shall be appealed to the CA through a

petition for review under Rule 43 of the Rules of Court to be filed within fifteen (15)
days from notice of the decision or final order of the RTC. CIaDTE
In any event, as previously stated, since what petitioner filed was a petition for
certiorari under Rule 65 of the Rules, the CA rightly dismissed the petition and
affirmed the assailed Orders.
WHEREFORE, the petition is DENIED for lack of merit.
Costs against petitioner.
SO ORDERED.

[G.R. No. 171545. December 19, 2007.]


EQUITABLE PCI BANK, * AIMEE YU and BEJAN LIONEL APAS, petitioners, vs. NG
SHEUNG NGOR ** doing business under the name and style "KEN MARKETING," KEN
APPLIANCE DIVISION, INC. and BENJAMIN E. GO, respondents.
DECISION
CORONA, J p:
This petition for review on certiorari 1 seeks to set aside the decision 2 of the Court
of Appeals (CA) in CA-G.R. SP No. 83112 and its resolution 3 denying
reconsideration.
On October 7, 2001, respondents Ng Sheung Ngor, 4 Ken Appliance Division, Inc.
and Benjamin E. Go filed an action for annulment and/or reformation of documents
and contracts 5 against petitioner Equitable PCI Bank (Equitable) and its employees,
Aimee Yu and Bejan Lionel Apas, in the Regional Trial Court (RTC), Branch 16 of Cebu
City. 6 They claimed that Equitable induced them to avail of its peso and dollar
credit facilities by offering low interest rates 7 so they accepted Equitable's proposal
and signed the bank's pre-printed promissory notes on various dates beginning
1996. They, however, were unaware that the documents contained identical
escalation clauses granting Equitable authority to increase interest rates without
their consent. 8 CTaSEI
Equitable, in its answer, asserted that respondents knowingly accepted all the terms
and conditions contained in the promissory notes. 9 In fact, they continuously
availed of and benefited from Equitable's credit facilities for five years. 10
After trial, the RTC upheld the validity of the promissory notes. It found that, in 2001
alone, Equitable restructured respondents' loans amounting to US$228,200 and
P1,000,000. 11 The trial court, however, invalidated the escalation clause contained
therein because it violated the principle of mutuality of contracts. 12 Nevertheless,
it took judicial notice of the steep depreciation of the peso during the intervening
period 13 and declared the existence of extraordinary deflation. 14 Consequently,
the RTC ordered the use of the 1996 dollar exchange rate in computing
respondents' dollar-denominated loans. 15 Lastly, because the business reputation
of respondents was (allegedly) severely damaged when Equitable froze their
accounts, 16 the trial court awarded moral and exemplary damages to them. 17
The dispositive portion of the February 5, 2004 RTC decision 18 provided:
WHEREFORE, premises considered, judgment is hereby rendered:

TcCDIS

A)
Ordering [Equitable] to reinstate and return the amount of [respondents']
deposit placed on hold status;

B)
Ordering [Equitable] to pay [respondents] the sum of P12 [m]illion [p]esos as
moral damages;
C)
Ordering [Equitable] to pay [respondents] the sum of P10 [m]illion [p]esos as
exemplary damages;
D)
Ordering defendants Aimee Yu and Bejan [Lionel] Apas to pay [respondents],
jointly and severally, the sum of [t]wo [m]illion [p]esos as moral and exemplary
damages;
E)
Ordering [Equitable, Aimee Yu and Bejan Lionel Apas], jointly and severally, to
pay [respondents'] attorney's fees in the sum of P300,000; litigation expenses in the
sum of P50,000 and the cost of suit;
F)
Directing plaintiffs Ng Sheung Ngor and Ken Marketing to pay [Equitable] the
unpaid principal obligation for the peso loan as well as the unpaid obligation for the
dollar denominated loan;
G)
Directing plaintiff Ng Sheung Ngor and Ken Marketing to pay [Equitable]
interest as follows: aEIADT
1)

12% per annum for the peso loans;

2)
8% per annum for the dollar loans. The basis for the payment of the dollar
obligation is the conversion rate of P26.50 per dollar availed of at the time of
incurring of the obligation in accordance with Article 1250 of the Civil Code of the
Philippines;
H)
Dismissing [Equitable's] counterclaim except the payment of the aforestated
unpaid principal loan obligations and interest.
SO ORDERED. 19
Equitable and respondents filed their respective notices of appeal. 20
In the March 1, 2004 order of the RTC, both notices were denied due course because
Equitable and respondents "failed to submit proof that they paid their respective
appeal fees." 21
WHEREFORE, premises considered, the appeal interposed by defendants from the
Decision in the above-entitled case is DENIED due course. As of February 27, 2004,
the Decision dated February 5, 2004, is considered final and executory in so far as
[Equitable, Aimee Yu and Bejan Lionel Apas] are concerned. 22 (emphasis supplied)
DIETcC
Equitable moved for the reconsideration of the March 1, 2004 order of the RTC 23 on
the ground that it did in fact pay the appeal fees. Respondents, on the other hand,
prayed for the issuance of a writ of execution. 24

On March 24, 2004, the RTC issued an omnibus order denying Equitable's motion for
reconsideration for lack of merit 25 and ordered the issuance of a writ of execution
in favor of respondents. 26 According to the RTC, because respondents did not move
for the reconsideration of the previous order (denying due course to the parties'
notices of appeal), 27 the February 5, 2004 decision became final and executory as
to both parties and a writ of execution against Equitable was in order. 28
A writ of execution was thereafter issued 29 and three real properties of Equitable
were levied upon. 30
On March 26, 2004, Equitable filed a petition for relief in the RTC from the March 1,
2004 order. 31 It, however, withdrew that petition on March 30, 2004 32 and instead
filed a petition for certiorari with an application for an injunction in the CA to enjoin
the implementation and execution of the March 24, 2004 omnibus order. 33
On June 16, 2004, the CA granted Equitable's application for injunction. A writ of
preliminary injunction was correspondingly issued. 34 HTAIcD
Notwithstanding the writ of injunction, the properties of Equitable previously levied
upon were sold in a public auction on July 1, 2004. Respondents were the highest
bidders and certificates of sale were issued to them. 35
On August 10, 2004, Equitable moved to annul the July 1, 2004 auction sale and to
cite the sheriffs who conducted the sale in contempt for proceeding with the auction
despite the injunction order of the CA. 36
On October 28, 2005, the CA dismissed the petition for certiorari. 37 It found
Equitable guilty of forum shopping because the bank filed its petition for certiorari in
the CA several hours before withdrawing its petition for relief in the RTC. 38
Moreover, Equitable failed to disclose, both in the statement of material dates and
certificate of non-forum shopping (attached to its petition for certiorari in the CA),
that it had a pending petition for relief in the RTC. 39
Equitable moved for reconsideration 40 but it was denied. 41 Thus, this petition.
IaEACT
Equitable asserts that it was not guilty of forum shopping because the petition for
relief was withdrawn on the same day the petition for certiorari was filed. 42 It
likewise avers that its petition for certiorari was meritorious because the RTC
committed grave abuse of discretion in issuing the March 24, 2004 omnibus order
which was based on an erroneous assumption. The March 1, 2004 order denying its
notice of appeal for non payment of appeal fees was erroneous because it had in
fact paid the required fees. 43 Thus, the RTC, by issuing its March 24, 2004 omnibus
order, effectively prevented Equitable from appealing the patently wrong February
5, 2004 decision. 44
This petition is meritorious.

EQUITABLE WAS NOT GUILTY


OF FORUM SHOPPING
Forum shopping exists when two or more actions involving the same transactions,
essential facts and circumstances are filed and those actions raise identical issues,
subject matter and causes of action. 45 The test is whether, in two or more pending
cases, there is identity of parties, rights or causes of actions and reliefs. 46
Equitable's petition for relief in the RTC and its petition for certiorari in the CA did
not have identical causes of action. The petition for relief from the denial of its
notice of appeal was based on the RTC's judgment or final order preventing it from
taking an appeal by "fraud, accident, mistake or excusable negligence." 47 On the
other hand, its petition for certiorari in the CA, a special civil action, sought to
correct the grave abuse of discretion amounting to lack of jurisdiction committed by
the RTC. 48 IEaCDH
In a petition for relief, the judgment or final order is rendered by a court with
competent jurisdiction. In a petition for certiorari, the order is rendered by a court
without or in excess of its jurisdiction.
Moreover, Equitable substantially complied with the rule on non-forum shopping
when it moved to withdraw its petition for relief in the RTC on the same day (in fact
just four hours and forty minutes after) it filed the petition for certiorari in the CA.
Even if Equitable failed to disclose that it had a pending petition for relief in the RTC,
it rectified what was doubtlessly a careless oversight by withdrawing the petition for
relief just a few hours after it filed its petition for certiorari in the CA a clear
indication that it had no intention of maintaining the two actions at the same time.
THE TRIAL COURT
COMMITTED GRAVE ABUSE
OF DISCRETION IN ISSUING
ITS MARCH 1, 2004 AND
MARCH 24, 2004 ORDERS
Section 1, Rule 65 of the Rules of Court provides:
Section 1.
Petition for Certiorari. When any tribunal, board or officer exercising
judicial or quasi-judicial function has acted without or in excess of its or his
jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction, and there is no appeal, nor any plain, speedy or adequate remedy in
the ordinary course of law, a person aggrieved thereby may file a verified petition in
the proper court, alleging the facts with certainty and praying that judgment be

rendered annulling or modifying the proceedings of such tribunal, board or officer,


and granting such incidental reliefs as law and justice may require. IEaHSD
The petition shall be accompanied by a certified true copy of the judgment, order or
resolution subject thereof, copies of all pleadings and documents relevant and
pertinent thereto, and a sworn certificate of non-forum shopping as provided in the
third paragraph of Section 3, Rule 46.
There are two substantial requirements in a petition for certiorari. These are:
1.
that the tribunal, board or officer exercising judicial or quasi-judicial functions
acted without or in excess of his or its jurisdiction or with grave abuse of discretion
amounting to lack or excess of jurisdiction; and
2.
that there is no appeal or any plain, speedy and adequate remedy in the
ordinary course of law.
For a petition for certiorari premised on grave abuse of discretion to prosper,
petitioner must show that the public respondent patently and grossly abused his
discretion and that abuse amounted to an evasion of positive duty or a virtual
refusal to perform a duty enjoined by law or to act at all in contemplation of law, as
where the power was exercised in an arbitrary and despotic manner by reason of
passion or hostility. 49 cCTIaS
The March 1, 2004 order denied due course to the notices of appeal of both
Equitable and respondents. However, it declared that the February 5, 2004 decision
was final and executory only with respect to Equitable. 50 As expected, the March
24, 2004 omnibus order denied Equitable's motion for reconsideration and granted
respondents' motion for the issuance of a writ of execution. 51
The March 1, 2004 and March 24, 2004 orders of the RTC were obviously intended
to prevent Equitable, et al. from appealing the February 5, 2004 decision. Not only
that. The execution of the decision was undertaken with indecent haste, effectively
obviating or defeating Equitable's right to avail of possible legal remedies. No
matter how we look at it, the RTC committed grave abuse of discretion in rendering
those orders.
With regard to whether Equitable had a plain, speedy and adequate remedy in the
ordinary course of law, we hold that there was none. The RTC denied due course to
its notice of appeal in the March 1, 2004 order. It affirmed that denial in the March
24, 2004 omnibus order. Hence, there was no way Equitable could have possibly
appealed the February 5, 2004 decision. 52
Although Equitable filed a petition for relief from the March 24, 2004 order, that
petition was not a plain, speedy and adequate remedy in the ordinary course of law.
53 A petition for relief under Rule 38 is an equitable remedy allowed only in

exceptional circumstances or where there is no other available or adequate remedy.


54 cHDaEI
Thus, we grant Equitable's petition for certiorari and consequently give due course
to its appeal.
EQUITABLE RAISED PURE
QUESTIONS OF LAW IN ITS
PETITION FOR REVIEW
The jurisdiction of this Court in Rule 45 petitions is limited to questions of law. 55
There is a question of law "when the doubt or controversy concerns the correct
application of law or jurisprudence to a certain set of facts; or when the issue does
not call for the probative value of the evidence presented, the truth or falsehood of
facts being admitted." 56
Equitable does not assail the factual findings of the trial court. Its arguments
essentially focus on the nullity of the RTC's February 5, 2004 decision. Equitable
points out that that decision was patently erroneous, specially the exorbitant award
of damages, as it was inconsistent with existing law and jurisprudence. 57 DcITaC
THE PROMISSORY NOTES
WERE VALID
The RTC upheld the validity of the promissory notes despite respondents' assertion
that those documents were contracts of adhesion.
A contract of adhesion is a contract whereby almost all of its provisions are drafted
by one party. 58 The participation of the other party is limited to affixing his
signature or his "adhesion" to the contract. 59 For this reason, contracts of adhesion
are strictly construed against the party who drafted it. 60
It is erroneous, however, to conclude that contracts of adhesion are invalid per se.
They are, on the contrary, as binding as ordinary contracts. A party is in reality free
to accept or reject it. A contract of adhesion becomes void only when the dominant
party takes advantage of the weakness of the other party, completely depriving the
latter of the opportunity to bargain on equal footing. 61
That was not the case here. As the trial court noted, if the terms and conditions
offered by Equitable had been truly prejudicial to respondents, they would have
walked out and negotiated with another bank at the first available instance. But
they did not. Instead, they continuously availed of Equitable's credit facilities for five
long years. AcIaST

While the RTC categorically found that respondents had outstanding dollar- and
peso-denominated loans with Equitable, it, however, failed to ascertain the total
amount due (principal, interest and penalties, if any) as of July 9, 2001. The trial
court did not explain how it arrived at the amounts of US$228,200 and P1,000,000.
62 In Metro Manila Transit Corporation v. D.M. Consunji, 63 we reiterated that this
Court is not a trier of facts and it shall pass upon them only for compelling reasons
which unfortunately are not present in this case. 64 Hence, we ordered the partial
remand of the case for the sole purpose of determining the amount of actual
damages. 65
ESCALATION CLAUSE
VIOLATED THE PRINCIPLE OF
MUTUALITY OF CONTRACTS
Escalation clauses are not void per se. However, one "which grants the creditor an
unbridled right to adjust the interest independently and upwardly, completely
depriving the debtor of the right to assent to an important modification in the
agreement" is void. Clauses of that nature violate the principle of mutuality of
contracts. 66 Article 1308 67 of the Civil Code holds that a contract must bind both
contracting parties; its validity or compliance cannot be left to the will of one of
them. 68
For this reason, we have consistently held that a valid escalation clause provides:
CSIDTc
1.
that the rate of interest will only be increased if the applicable maximum rate
of interest is increased by law or by the Monetary Board; and
2.
that the stipulated rate of interest will be reduced if the applicable maximum
rate of interest is reduced by law or by the Monetary Board (de-escalation clause).
69
The RTC found that Equitable's promissory notes uniformly stated:
If subject promissory note is extended, the interest for subsequent extensions shall
be at such rate as shall be determined by the bank. 70
Equitable dictated the interest rates if the term (or period for repayment) of the loan
was extended. Respondents had no choice but to accept them. This was a violation
of Article 1308 of the Civil Code. Furthermore, the assailed escalation clause did not
contain the necessary provisions for validity, that is, it neither provided that the rate
of interest would be increased only if allowed by law or the Monetary Board, nor
allowed de-escalation. For these reasons, the escalation clause was void.

With regard to the proper rate of interest, in New Sampaguita Builders v. Philippine
National Bank 71 we held that, because the escalation clause was annulled, the
principal amount of the loan was subject to the original or stipulated rate of interest.
Upon maturity, the amount due was subject to legal interest at the rate of 12% per
annum. 72 IDaEHS
Consequently, respondents should pay Equitable the interest rates of 12.66% p.a.
for their dollar-denominated loans and 20% p.a. for their peso-denominated loans
from January 10, 2001 to July 9, 2001. Thereafter, Equitable was entitled to legal
interest of 12% p.a. on all amounts due.
THERE WAS NO
EXTRAORDINARY DEFLATION
Extraordinary inflation exists when there is an unusual decrease in the purchasing
power of currency (that is, beyond the common fluctuation in the value of currency)
and such decrease could not be reasonably foreseen or was manifestly beyond the
contemplation of the parties at the time of the obligation. Extraordinary deflation,
on the other hand, involves an inverse situation. 73
Article 1250 of the Civil Code provides:
Article 1250. In case an extraordinary inflation or deflation of the currency stipulated
should intervene, the value of the currency at the time of the establishment of the
obligation shall be the basis of payment, unless there is an agreement to the
contrary.
For extraordinary inflation (or deflation) to affect an obligation, the following
requisites must be proven: HAcaCS
1.
that there was an official declaration of extraordinary inflation or deflation
from the Bangko Sentral ng Pilipinas (BSP); 74
2.

that the obligation was contractual in nature; 75 and

3.
that the parties expressly agreed to consider the effects of the extraordinary
inflation or deflation. 76
Despite the devaluation of the peso, the BSP never declared a situation of
extraordinary inflation. Moreover, although the obligation in this instance arose out
of a contract, the parties did not agree to recognize the effects of extraordinary
inflation (or deflation). 77 The RTC never mentioned that there was a such
stipulation either in the promissory note or loan agreement. Therefore, respondents
should pay their dollar-denominated loans at the exchange rate fixed by the BSP on
the date of maturity. 78

THE AWARD OF MORAL AND


EXEMPLARY DAMAGES LACKED
BASIS
Moral damages are in the category of an award designed to compensate the
claimant for actual injury suffered, not to impose a penalty to the wrongdoer. 79 To
be entitled to moral damages, a claimant must prove: aTADCE
1.
That he or she suffered besmirched reputation, or physical, mental or
psychological suffering sustained by the claimant;
2.

That the defendant committed a wrongful act or omission;

3.
That the wrongful act or omission was the proximate cause of the damages
the claimant sustained;
4.
The case is predicated on any of the instances expressed or envisioned by
Article 2219 80 and 2220 81 . 82
In culpa contractual or breach of contract, moral damages are recoverable only if
the defendant acted fraudulently or in bad faith or in wanton disregard of his
contractual obligations. 83 The breach must be wanton, reckless, malicious or in
bad faith, and oppressive or abusive. 84
The RTC found that respondents did not pay Equitable the interest due on February
9, 2001 (or any month thereafter prior to the maturity of the loan) 85 or the amount
due (principal plus interest) due on July 9, 2001. 86 Consequently, Equitable applied
respondents' deposits to their loans upon maturity.
The relationship between a bank and its depositor is that of creditor and debtor. 87
For this reason, a bank has the right to set-off the deposits in its hands for the
payment of a depositor's indebtedness. 88 cSaADC
Respondents indeed defaulted on their obligation. For this reason, Equitable had the
option to exercise its legal right to set-off or compensation. However, the RTC
mistakenly (or, as it now appears, deliberately) concluded that Equitable acted
"fraudulently or in bad faith or in wanton disregard" of its contractual obligations
despite the absence of proof. The undeniable fact was that, whatever damage
respondents sustained was purely the consequence of their failure to pay their
loans. There was therefore absolutely no basis for the award of moral damages to
them.
Neither was there reason to award exemplary damages. Since respondents were not
entitled to moral damages, neither should they be awarded exemplary damages. 89
And if respondents were not entitled to moral and exemplary damages, neither
could they be awarded attorney's fees and litigation expenses. 90

ACCORDINGLY, the petition is hereby GRANTED.


The October 28, 2005 decision and February 3, 2006 resolution of the Court of
Appeals in CA-G.R. SP No. 83112 are hereby REVERSED and SET ASIDE.
The March 24, 2004 omnibus order of the Regional Trial Court, Branch 16, Cebu City
in Civil Case No. CEB-26983 is hereby ANNULLED for being rendered with grave
abuse of discretion amounting to lack or excess of jurisdiction. All proceedings
undertaken pursuant thereto are likewise declared null and void. SDHTEC
The March 1, 2004 order of the Regional Trial Court, Branch 16 of Cebu City in Civil
Case No. CEB-26983 is hereby SET ASIDE. The appeal of petitioners Equitable PCI
Bank, Aimee Yu and Bejan Lionel Apas is therefore given due course.
The February 5, 2004 decision of the Regional Trial Court, Branch 16 of Cebu City in
Civil Case No. CEB-26983 is accordingly SET ASIDE. New judgment is hereby
entered:
1.
ordering respondents Ng Sheung Ngor, doing business under the name and
style of "Ken Marketing," Ken Appliance Division, Inc. and Benjamin E. Go to pay
petitioner Equitable PCI Bank the principal amount of their dollar- and pesodenominated loans;
2.
ordering respondents Ng Sheung Ngor, doing business under the name and
style of "Ken Marketing," Ken Appliance Division, Inc. and Benjamin E. Go to pay
petitioner Equitable PCI Bank interest at:
a)
12.66% p.a. with respect to their dollar-denominated loans from January 10,
2001 to July 9, 2001; aSTHDc
b)
20% p.a. with respect to their peso-denominated loans from January 10, 2001
to July 9, 2001; 91
c)
pursuant to our ruling in Eastern Shipping Lines v. Court of Appeals, 92 the
total amount due on July 9, 2001 shall earn legal interest at 12% p.a. from the time
petitioner Equitable PCI Bank demanded payment, whether judicially or extrajudicially; and
d)
after this Decision becomes final and executory, the applicable rate shall be
12% p.a. until full satisfaction;
3.

all other claims and counterclaims are dismissed.

As a starting point, the Regional Trial Court, Branch 16 of Cebu City shall compute
the exact amounts due on the respective dollar-denominated and pesodenominated loans, as of July 9, 2001, of respondents Ng Sheung Ngor, doing
business under the name and style of "Ken Marketing," Ken Appliance Division and
Benjamin E. Go. ACcEHI

SO ORDERED.

[G.R. No. 192908. August 22, 2012.]


REPUBLIC OF THE PHILIPPINES, represented by the DEPARTMENT OF PUBLIC WORKS
AND HIGHWAYS (DPWH), petitioner, vs. ST. VINCENT DE PAUL COLLEGES, INC.,
respondent.
DECISION
REYES, J p:
Before the Court is a petition for review on certiorari 1 under Rule 45 of the Rules of
Court, where petitioner Republic of the Philippines (Republic), represented by the
Department of Public Works and Highways through the Office of the Solicitor
General, questions the resolutions of the Court of Appeals (CA) in CA-G.R. SP No.
108499, to wit: acTDCI
1.
Resolution dated October 30, 2009 2 dismissing petitioner's petition for
certiorari under Rule 65 for being filed out of time; and
2.
Resolution dated July 15, 2010 3 denying petitioner's motion for
reconsideration.
Antecedent Facts
The instant case arose from two cases filed by the Republic seeking expropriation of
certain properties in the name of St. Vincent de Paul Colleges, Inc. (St. Vincent). In
Civil Case No. 0062-04, the Republic sought to expropriate 1,992 square meters out
of a total area of 6,068 square meters of land for the construction of the ManilaCavite Toll Expressway Project (MCTEP). Said property belongs to St. Vincent
covered by TCT No. T-821169 and located in Binakayan, Kawit, Cavite. In Civil Case
No. 0100-04, on the other hand, the Republic sought to expropriate 2,450 square
meters out of a total area of 9,039 square meters, also belonging to St. Vincent and
covered by TCT No. T-821170. Said property adjoins the property subject of Civil
Case No. 0062-04.

Subsequently, the Republic filed in both cases an amended complaint alleging that
the subject land originated from a free patent title and should be adjudicated to it
without payment of just compensation pursuant to Section 112 of Commonwealth
Act No. 141.
On August 9, 2005, the Republic filed in Civil Case No. 0062-04 a motion for the
issuance of an order of expropriation. 4 It was granted by the trial court per Order 5
dated August 16, 2005, ruling that the Republic has a lawful right to take the 1,992
square meters portion of the subject property, with "no pronouncement as to just
compensation" since the subject property originated from a free patent. 6 A motion
for the issuance of an order of expropriation was likewise filed by the Republic in
Civil Case No. 0100-04 but before this could be resolved, the Republic moved to
consolidate the two cases, which was granted by the trial court. 7
On November 16, 2006, the trial court denied St. Vincent's motion for
reconsideration of its Order dated August 16, 2005 granting expropriation. 8 As
alleged in the petition, no appeal was taken by St. Vincent from said orders. 9
After almost 2 years, or on July 28, 2008, St. Vincent filed a Manifestation with
Motion for Clarification of the Order dated August 16, 2005, 10 contending that
although it does not oppose the ruling regarding the determination of public
purpose and the Republic's right to expropriate the subject land, it, however, claims
that it is entitled to just compensation. EHCaDS
Meanwhile, the Republic attempted to implement the Order dated August 16, 2005
by entering the subject portion of St. Vincent's property. Aggrieved, the latter
demanded upon the Republic and its agents to immediately vacate, and remove
any and all equipment or structures they introduced on its property in a demandletter 11 dated October 3, 2008.
Due to St. Vincent's refusal to honor the order of expropriation, the Republic filed an
urgent motion for the issuance of a writ of possession, which was denied by the
lower court in its Order 12 dated November 25, 2006 [2008]. The lower court,
however, modified its Order dated August 16, 2005 and required the Republic to
immediately pay St. Vincent in an amount equivalent to one hundred percent
(100%) of the value of the property sought to be expropriated. The Republic moved
for reconsideration but it was denied by the lower court per Order 13 dated January
29, 2009 for lack of factual and legal basis.
Seeking to avail the extra ordinary remedy of certiorari under Rule 65 of the Rules
of Court, the Republic filed with the CA a motion for additional time of fifteen (15)
days within which to file its petition. The CA granted the motion in its Resolution 14
dated April 30, 2009 and the Republic was given a non-extensible period of fifteen
(15) days or until May 4, 2009 within which to file its petition for certiorari.

On April 30, 2009, the Republic filed its petition for certiorari assailing the lower
court's orders dated November 25, 2008 and January 29, 2009 for having been
issued with grave abuse of discretion amounting to lack or in excess of jurisdiction.
On June 19, 2009, the CA, motu proprio, issued a Resolution 15 ordering the
Republic to show cause why its petition for certiorari should not be dismissed for
being filed out of time, pursuant to A.M. No. 07-7-12-SC.
The Republic filed its Compliance with Explanation 16 dated July 1, 2009 pleading
for the relaxation of the rules by reason of the transcendental importance of the
issues involved in the case and in consideration of substantial justice. St. Vincent
filed its Comment/Opposition 17 dated July 15, 2009 alleging among others that the
said explanation is merely pro forma due to the Republic's failure to justify its
explanation. DIAcTE
On October 30, 2009, the CA rendered the assailed resolution dismissing the
Republic's petition for certiorari on the ground that the petition was filed out of time
inasmuch as extensions of time are now disallowed by A.M. No. 07-7-12-SC 18 and
as applied in Laguna Metts Corporation v. Court of Appeals. 19
On November 26, 2009, the Republic filed its motion for reconsideration alleging
that it merely relied in good faith on the appellate court's resolution granting the
former an additional period of fifteen (15) days within which to file the subject
petition.
On July 15, 2010, the CA rendered the assailed resolution denying the Republic's
motion for reconsideration, stating that it cannot disobey the ruling in Laguna Metts
Corporation. 20
Hence, this petition.
The Republic relies on the CA resolution granting its motion for extension of time
and upon the strength of the substantial merits of its petition. The Republic also
invokes Domdom v. Third and Fifth Divisions of the Sandiganbayan, 21 where the
Court ruled that absent a prohibition, motions for extensions are allowed, subject to
the Court's sound discretion.
St. Vincent, however, contends that the present petition fails to neither allege any
circumstance nor state any justification for the deliberate disregard of a very
elementary rule of procedure like Section 4 of Rule 65 of the Rules of Court. And in
the absence of any such circumstance or justification, the general rule on pro forma
motions/pleadings must apply.
The Issue
The Republic discussed the substantial merits of its case; however, the CA did no
more than include such matters in its narration of facts, and neither did St. Vincent

dwell on said issues. Hence, the only issue to be resolved in this petition is whether
the CA committed a reversible error when it dismissed the Republic's petition for
certiorari for being filed out of time, pursuant to A.M. No. 07-7-12-SC.
The Court's Ruling
We GRANT the petition.

CDHaET

The Court notes that the CA Resolution dated April 30, 2009, which initially granted
the Republic's motion for extension, was premised on the mistaken notion that the
petition filed by the latter was one for petition for review as a mode of appeal. The
CA resolution stated, among others: "[P]rovided that this Motion for Extension of
Time to File Petition for Review is seasonably filed, as prayed for, . . . ." 22 Thus, the
CA granted extension inasmuch as motions for this purpose are allowed by the
rules. 23 On this score alone, the CA should have admitted the petition filed by the
Republic since the latter merely relied on its Resolution dated April 30, 2009
granting the extension prayed for.
Nevertheless, the CA subsequently dismissed the petition filed by the Republic on
the ground that the same was filed out of time, following A.M. No. 07-7-12-SC. In its
Resolution dated July 15, 2010, which dismissed the Republic's motion for
reconsideration, the CA also relied on the ruling in Laguna Metts Corporation that
the sixty (60)-day period within which to file a petition for certiorari is nonextendible. The petitioner, however, insists that Domdom allows extensions of time
to file a petition.
In order to resolve the instant controversy, the Court deems it necessary to discuss
the relationship between its respective rulings in Laguna Metts Corporation and
Domdom with respect to the application of the amendment introduced by A.M. No.
07-7-12-SC to Section 4, Rule 65 of the Rules of Court.
Before said amendment, Section 4 of Rule 65 originally provides:
Sec. 4.
When and where petition filed. The petition shall be filed not later
than sixty (60) days from notice of the judgment, order or resolution. In case a
motion for reconsideration or new trial is timely filed, whether such motion is
required or not, the sixty (60) day period shall be counted from notice of the denial
of said motion.
The petition shall be filed in the Supreme Court or, if it relates to the acts or
omissions of a lower court or of a corporation, board, officer or person, in the
Regional Trial Court exercising jurisdiction over the territorial area as defined by the
Supreme Court. It may also be filed in the Court of Appeals whether or not the same
is in aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of its
appellate jurisdiction. If it involves the acts or omissions of a quasi-judicial agency,

unless otherwise provided by law or these rules, the petition shall be filed in and
cognizable only by the Court of Appeals. DCTSEA
No extension of time to file the petition shall be granted except for compelling
reason and in no case exceeding fifteen (15) days.
As amended by A.M. No. 07-7-12-SC, Section 4 of Rule 65 now reads:
Sec. 4.
When and where petition filed. The petition shall be filed not later
than sixty (60) days from notice of the judgment or resolution. In case a motion for
reconsideration or new trial is timely filed, whether such motion is required or not,
the sixty (60) day period shall be counted from notice of the denial of said motion.
If the petition relates to an act or an omission of a municipal trial court or of a
corporation, a board, an officer or a person, it shall be filed with the Regional Trial
Court exercising jurisdiction over the territorial area as defined by the Supreme
Court. It may also be filed with the Court of Appeals or with the Sandiganbayan,
whether or not the same is in aid of the court's appellate jurisdiction. If the petition
involves an act or an omission of a quasi-judicial agency, unless otherwise provided
by law or these rules, the petition shall be filed with and be cognizable only by the
Court of Appeals.
In election cases involving an act or an omission of a municipal or a regional trial
court, the petition shall be filed exclusively with the Commission on Elections, in aid
of its appellate jurisdiction.
In interpreting said amendment, the Court, in Laguna Metts Corporation, held that:
As a rule, an amendment by the deletion of certain words or phrases indicates an
intention to change its meaning. It is presumed that the deletion would not have
been made if there had been no intention to effect a change in the meaning of the
law or rule. The amended law or rule should accordingly be given a construction
different from that previous to its amendment.
If the Court intended to retain the authority of the proper courts to grant extensions
under Section 4 of Rule 65, the paragraph providing for such authority would have
been preserved. The removal of the said paragraph under the amendment by A.M.
No. 07-7-12-SC of Section 4, Rule 65 simply meant that there can no longer be any
extension of the 60-day period within which to file a petition for certiorari. aESICD
The rationale for the amendments under A.M. No. 07-7-12-SC is essentially to
prevent the use (or abuse) of the petition for certiorari under Rule 65 to delay a
case or even defeat the ends of justice. Deleting the paragraph allowing extensions
to file petition on compelling grounds did away with the filing of such motions. As
the Rule now stands, petitions for certiorari must be filed strictly within 60 days
from notice of judgment or from the order denying a motion for reconsideration. 24
(Citation omitted and emphasis ours)

Nevertheless, Domdom later stated:


On the People's argument that a motion for extension of time to file a petition for
certiorari is no longer allowed, the same rests on shaky grounds. Supposedly, the
deletion of the following provision in Section 4 of Rule 65 by A.M. No. 07-7-12-SC
evinces an intention to absolutely prohibit motions for extension:
"No extension of time to file the petition shall be granted except for the most
compelling reason and in no case exceeding fifteen (15) days."
The full text of Section 4 of Rule 65, as amended by A.M. No. 07-7-12-SC, reads:
xxx

xxx

xxx

That no mention is made in the above-quoted amended Section 4 of Rule 65 of a


motion for extension, unlike in the previous for formulation, does not make the filing
of such pleading absolutely prohibited. If such were the intention, the deleted
portion could just have simply been reworded to state that "no extension of time to
file the petition shall be granted." Absent such prohibition, motions for extensions
are allowed, subject to the Court's sound discretion. The present petition may thus
be allowed, having been filed within the extension sought and, at all events, given
its merits. 25 (Citation omitted and emphasis and underscoring ours)
What seems to be a "conflict" is actually more apparent than real. A reading of the
foregoing rulings leads to the simple conclusion that Laguna Metts Corporation
involves a strict application of the general rule that petitions for certiorari must be
filed strictly within sixty (60) days from notice of judgment or from the order
denying a motion for reconsideration. Domdom, on the other hand, relaxed the rule
and allowed an extension of the sixty (60)-day period subject to the Court's sound
discretion. 26 DCESaI
Labao v. Flores 27 subsequently laid down some of the exceptions to the strict
application of the rule, viz.:
Under Section 4 of Rule 65 of the 1997 Rules of Civil Procedure, certiorari should be
instituted within a period of 60 days from notice of the judgment, order, or
resolution sought to be assailed. The 60-day period is inextendible to avoid any
unreasonable delay that would violate the constitutional rights of parties to a
speedy disposition of their case.
xxx

xxx

xxx

However, there are recognized exceptions to their strict observance, such as: (1)
most persuasive and weighty reasons; (2) to relieve a litigant from an injustice not
commensurate with his failure to comply with the prescribed procedure; (3) good
faith of the defaulting party by immediately paying within a reasonable time from
the time of the default; (4) the existence of special or compelling circumstances; (5)

the merits of the case; (6) a cause not entirely attributable to the fault or
negligence of the party favored by the suspension of the rules; (7) a lack of any
showing that the review sought is merely frivolous and dilatory; (8) the other party
will not be unjustly prejudiced thereby; (9) fraud, accident, mistake or excusable
negligence without appellant's fault; (10) peculiar legal and equitable circumstances
attendant to each case; (11) in the name of substantial justice and fair play; (12)
importance of the issues involved; and (13) exercise of sound discretion by the
judge guided by all the attendant circumstances. Thus, there should be an effort on
the part of the party invoking liberality to advance a reasonable or meritorious
explanation for his/her failure to comply with the rules. 28 (Citations omitted and
emphasis ours)
Note that Labao explicitly recognized the general rule that the sixty (60)-day period
within which to file a petition for certiorari under Rule 65 is non-extendible, only that
there are certain exceptional circumstances, which may call for its non-observance.
Even more recently, in Mid-Islands Power Generation Corporation v. Court of
Appeals, 29 the Court, taking into consideration Laguna Metts Corporation and
Domdom, "relaxed the procedural technicalities introduced under A.M. No. 07-7-12SC in order to serve substantial justice and safeguard strong public interest" and
affirmed the extension granted by the CA to the respondent Power One Corporation
due to the exceptional nature of the case and the strong public interest involved.
STIcEA
In Laguna Metts Corporation v. Court of Appeals, we explained that the reason
behind the amendments under A.M. No. 07-7-12-SC was to prevent the use or abuse
of the remedy of petition for certiorari in order to delay a case or even defeat the
ends of justice. We thus deleted the clause that allowed an extension of the period
to file a Rule 65 petition for compelling reasons. Instead, we deemed the 60-day
period to file as reasonable and sufficient time for a party to mull over the case and
to prepare a petition that asserts grave abuse of discretion by a lower court. The
period was specifically set and limited in order to avoid any unreasonable delay in
the dispensation of justice, a delay that could violate the constitutional right of the
parties to a speedy disposition of their case. . . . .
Nevertheless, in the more recent case of Domdom v. Sandiganbayan, we ruled that
the deletion of the clause in Section 4, Rule 65 by A.M. No. 07-7-12-SC did not, ipso
facto, make the filing of a motion for extension to file a Rule 65 petition absolutely
prohibited. We held in Domdom that if absolute proscription were intended, the
deleted portion could have just simply been reworded to specifically prohibit an
extension of time to file such petition. Thus, because of the lack of an express
prohibition, we held that motions for extension may be allowed, subject to this
Court's sound discretion, and only under exceptional and meritorious cases.

Indeed, we have relaxed the procedural technicalities introduced under A.M. No. 077-12-SC in order to serve substantial justice and safeguard strong public
interest. . . .:
xxx

xxx

xxx

The present Petition involves one of those exceptional cases in which relaxing the
procedural rules would serve substantial justice and safeguard strong public
interest. . . . Consequently, in order to protect strong public interest, this Court
deems it appropriate and justifiable to relax the amendment of Section 4, Rule 65
under A.M. No. 07-7-12-SC, concerning the reglementary period for the filing of a
Rule 65 petition. Considering that the imminent power crisis is an exceptional and
meritorious circumstance, the parties herein should be allowed to litigate the issues
on the merits. Furthermore, we find no significant prejudice to the substantive rights
of the litigants as respondent was able to file the Petition before the CA within the
15-day extension it asked for. We therefore find no grave abuse of discretion
attributable to the CA when it granted respondent Power One's Motion for Extension
to file its Petition for Certiorari. 30 (Citations omitted and emphasis ours) aIcTCS
To reiterate, under Section 4, Rule 65 of the Rules of Court and as applied in Laguna
Metts Corporation, the general rule is that a petition for certiorari must be filed
within sixty (60) days from notice of the judgment, order, or resolution sought to be
assailed. Under exceptional circumstances, however, and subject to the sound
discretion of the Court, said period may be extended pursuant to Domdom, Labao
and Mid-Islands Power cases.
Accordingly, the CA should have admitted the Republic's petition: first, due to its
own lapse when it granted the extension sought by the Republic per Resolution
dated April 30, 2009; second, because of the public interest involved, i.e.,
expropriation of private property for public use (MCTEP); and finally, no undue
prejudice or delay will be caused to either party in admitting the petition.
WHEREFORE, premises considered, the petition is GRANTED. The Resolutions dated
October 30, 2009 and July 15, 2010 of the Court of Appeals in CA-G.R. SP No.
108499 are NULLIFIED. The Court of Appeals is hereby ORDERED to REINSTATE and
ADMIT the petition for certiorari filed by the Republic of the Philippines in CA-G.R. SP
No. 108499 and to proceed with the case with dispatch.
SO ORDERED.

[G.R. No. 154282. April 7, 2006.]


VANGIE BARRAZONA, petitioner, vs. REGIONAL TRIAL COURT, BRANCH 61, BAGUIO
CITY and SAN-AN REALTY AND DEVELOPMENT CORPORATION, herein represented by
RODRIGO CHUA TIU, respondents.
DECISION
SANDOVAL-GUTIERREZ, J p:
For our resolution is the instant Petition for Certiorari under Rule 65 of the 1997
Rules of Civil Procedure, as amended, assailing the Order dated June 19, 2002 of the
Regional Trial Court (RTC), Branch 61, Baguio City, denying petitioner's Motion to
Dismiss Civil Case No. 5238-R, entitled "SAN-AN REALTY and DEVELOPMENT
CORPORATION, herein represented by RODRIGO CHUA TIU, plaintiff, v. VANGIE
BARRAZONA, defendant." EITcaH
San-an Realty and Development Corporation, respondent, owns a building located
at Naguilian corner Asin Road, Baguio City. Vangie Barrazona, petitioner, has been
leasing portions of the building identified as Units 203 A and B at the second floor.
The period of the lease is for two (2) years, commencing July 15, 2001 and ending
June 30, 2003. The monthly rental is P400.00 per square meter for Unit 203 A and
P500.00 per square meter for Unit 203 B.
Starting August 2001, petitioner defaulted in the payment of the monthly rentals
and failed to pay despite demands by respondent. Thus, on May 14, 2002,
respondent filed with the RTC, Branch 61, Baguio City, a Complaint for Collection of
Sum of Money with Damages, docketed as Civil Case No. 5238-R.
On June 3, 2002, petitioner filed with the RTC a Motion to Dismiss on the ground,
among others, that the RTC has no jurisdiction over the complaint considering that
the allegations therein clearly indicate that the action is one for ejectment (illegal
detainer) which is under the exclusive jurisdiction of the Municipal Trial Court (MTC).
Petitioner pointed out the following allegations in paragraphs 4 and 5 of the
complaint showing that it is not for sum of money but for ejectment:
4.
That the defendant has failed to pay the rentals for the said leased premises
for the month of August 2001 up to the present;
5.
That the plaintiff has demanded the defendant to pay her overdue account,
now amounting to P971,838.15, the last demand to vacate and payment of arrears
having been made in writing on March 27, 2002 . . . .
In an Order dated June 19, 2002, the RTC denied the Motion to Dismiss for lack of
merit.

Forthwith, petitioner filed the instant Petition for Certiorari alleging that: (1) the RTC
committed grave abuse of discretion amounting to lack or excess of jurisdiction in
denying her Motion to Dismiss; and (2) the Resolution denying her Motion to Dismiss
is unconstitutional as it does not state its legal basis.
On the other hand, respondent, in praying for the dismissal of the petition, contends
that (1) the complaint is for the collection of unpaid rentals as there is absolutely no
allegation that its intent is to eject petitioner from the premises; (2) petitioner
should have first filed a motion for reconsideration before resorting to the
extraordinary suit of certiorari; and (3) the assailed order denying petitioner's
motion to dismiss is interlocutory and, therefore, cannot be the subject of a petition
for certiorari.
We hold that in denying petitioner's motion to dismiss the complaint, the RTC acted
with grave abuse of discretion.
Petitioner's motion to dismiss the complaint for lack of jurisdiction is pursuant to
Section 1, Rule 16 of the 1997 Rules of Civil Procedure, as amended, which
provides:
Sec. 1.
Grounds. Within the time for but before filing the answer to the
complaint or pleading asserting a claim, a motion to dismiss may be made on any of
the following grounds:
xxx

xxx

xxx

b.)
That the court has no jurisdiction over the subject matter of the claim.
AEIHCS
As mentioned earlier, petitioner stated in her motion that respondent's allegations
in its complaint show that it is one for ejectment cognizable, not by the RTC but, by
the MTC of Baguio City.
In Herrera, et al. v. Bollos, et al., 1 we emphasized the basic rule that jurisdiction of
the court over the subject matter of the action is determined by the allegations of
the complaint at the time of its filing, irrespective of whether or not the plaintiff is
entitled to recover upon all or some of the claims asserted therein. What determines
the jurisdiction of the court is the nature of the action pleaded as appearing from
the allegations in the complaint. The averments therein and the character of the
relief sought are the ones to be consulted.
It bears reiterating paragraph 5 of the complaint, thus:
5.
That the plaintiff has demanded the defendant to pay her overdue account,
now amounting to P971,838.15, the last demand to vacate and payment of arrears
having been made in writing on March 27, 2002 . . . .

This allegation clearly shows that respondent made several demands upon
petitioner to pay her overdue rentals and to vacate the premises; and that the last
demand to pay and vacate in writing was on March 27, 2002. Respondent thus
complied with Section 2, Rule 70 of the 1997 Rules of Civil Procedure, as amended,
which provides:
Sec. 2.
Lessor to proceed against lessee only after demand. Unless
otherwise stipulated, such action by the lessor shall be commenced only after
demand to pay or comply with the conditions of the lease and to vacate is made
upon the lessee, or by serving written notice of such demand upon the person found
on the premises, or by posting such notice on the premises if no person be found
thereon, and the lessee fails to comply therewith after fifteen (15) days in the case
of land or five (5) days in the case of buildings. (2a)
Indeed, while the complaint is captioned "Collection of Sum of Money with
Damages," the allegations therein show that respondent's action is for ejectment.
All ejectment cases are within the jurisdiction of the MTC. 2
Next, petitioner maintains that the Order of the RTC denying her Motion to Dismiss
violates the Constitution as it does not state the facts and the law on which it is
based. The challenged Order is reproduced as follows:
ORDER
This Court finds that the grounds stated in the Motion to Dismiss to be without
merit, hence, the same is denied.
SO ORDERED.
We have admonished the trial courts not to issue a minute order or resolution like
the one specified above. A trial court should state in its order the reasons for the
dismissal of the complaint so that when the order is appealed, the appellate court
can readily determine from a casual perusal thereof whether there is a prima facie
justification for the dismissal. 3
Under Section 3, Rule 16 of the 1997 Rules of Civil Procedure, as amended, we
require that resolutions disposing of a motion to dismiss shall state clearly and
distinctly the reasons therefor, thus:
Sec. 3.
Resolution of motion. After the hearing, the court may dismiss the
action or claim, deny the motion, or order the amendment of the pleading.
The court shall not defer the resolution of the motion for the reason that the ground
relied upon is not indubitable.
In every case, the resolution shall state clearly and distinctly the reasons therefor.

This requirement proscribes the common practice of perfunctorily dismissing a


motion to dismiss for "lack of merit." Such cavalier dispositions can often pose
difficulty and misunderstanding on the part of the aggrieved party in taking
recourse therefrom and likewise on the higher court called upon to resolve the
same, usually on certiorari. 4
While an order denying a motion to dismiss is interlocutory and non-appealable,
however, if the denial is without or in excess of jurisdiction, certiorari and
prohibition are proper remedies from such order of denial. 5 In Time, Inc. v. Reyes, 6
this Court, speaking through Justice J.B. L. Reyes, held: The motion to dismiss was
predicated on the respondent court's lack of jurisdiction to entertain the action; and
the rulings of this Court are that writs of certiorari or prohibition, or both, may issue
in case of a denial or deferment of an action or on the basis of a motion to dismiss
for lack of jurisdiction. 7 Verily, the writ of certiorari is granted to keep an inferior
court within the bounds of its jurisdiction or to prevent it from committing such a
grave abuse of discretion amounting to lack or excess of jurisdiction. 8
Lastly, we cannot go along with respondent's contention that petitioner should have
first filed a motion for reconsideration before resorting to the remedy of certiorari.
While the rule is that before certiorari may be availed of, petitioner must first file a
motion for reconsideration with the lower court of the act or order complained of, 9
however, such rule is not without exception. We have, in several instances,
dispensed with the filing of a motion for reconsideration of a lower court's ruling,
such as: where the proceedings in which the error occurred is a patent nullity; 10
where the question is purely of law; when public interest is involved; where judicial
intervention is urgent or its application may cause great and irreparable damage;
11 and where the court a quo has no jurisdiction, 12 as in this case. SHECcD
WHEREFORE, the petition is GRANTED. The Order dated June 19, 2002 issued by the
RTC, Branch 61, Baguio City, in Civil Case No. 5238-R, is ANNULLED and SET ASIDE.
SO ORDERED.

[G.R. No. 149640. October 19, 2007.]


SAN MIGUEL CORPORATION, ANDRES SORIANO III, FRANCISCO C. EIZMENDI, JR., and
FAUSTINO F. GALANG, petitioners, vs. NUMERIANO LAYOC, JR., CARLOS APONESTO,
PAULINO BALDUGO, QUEZON BARIT, BONIFACIO BOTOR, HERMINIO CALINA, DANILO
CAMINGAL, JUAN DE MESA, REYNOLD DESEMBRANA, BERNARDITO DEUS, EDUARDO
FILLARTA, MAXIMIANO FRANCISCO, MARIO MARILIM, DEMETRIO MATEO, FILOMENO
MENDOZA, CONRADO NIEVA, FRANCISCO PALINES, FELIPE POLINTAN, MALCOLM
SATORRE, and ALEJANDRO TORRES, respondents.
DECISION
CARPIO, J p:
The Case
This is a petition for review 1 of the decision 2 promulgated on 29 August 2001 by
the Court of Appeals (appellate court) in CA-G.R. SP No. 55838. The appellate
court's decision set aside the decision 3 in NLRC NCR Case No. 00-12-08656-94
dated 23 March 1998, the decision 4 dated 27 November 1998, and the resolution 5
dated 31 August 1999 in NLRC CA No. 015710-98. The appellate court ordered San
Miguel Corporation (SMC), Andres Soriano III, Francisco C. Eizmendi, Jr., and Faustino
F. Galang (collectively, petitioners) to pay respondent Numeriano Layoc, Jr. (Layoc)
P125,000, representing overtime pay for services that he could have rendered from
January 1993 up to his retirement on 30 June 1997, and respondents Carlos
Aponesto, Paulino Baldugo, Quezon Barit, Bonifacio Botor, Herminio Calina, Danilo
Camingal, Juan de Mesa, Reynold Desembrana, Bernardito Deus, Eduardo Fillarta,
Maximiano Francisco, Mario Marilim, Demetrio Mateo, Filomeno Mendoza, Conrado
Nieva, Francisco Palines, Felipe Polintan, Malcolm Satorre, and Alejandro Torres
(collectively, respondents) P10,000 each as nominal damages. AHDaET
The Facts
The appellate court stated the facts as follows:
[Respondents] were among the "Supervisory Security Guards" of the Beer Division
of the San Miguel Corporation (p. 10, Rollo), a domestic corporation duly organized
and existing under and by virtue of the laws of the Republic of the Philippines with
offices at No. 40 San Miguel Avenue, Mandaluyong City. They started working as
guards with the petitioner San Miguel Corporation assigned to the Beer Division on
different dates until such time that they were promoted as supervising security
guards. The dates of their employment commenced as follows (Ibid., pp. 87-89):
As guards
a.

As supervising guards

Aponesto, Carlos

June 1970

February 1983

b.

Baldugo, Paulino

November 1978

May 1984

c.

Barit, Quezon

January 1969

May 1984

d.

Botor, Bonifacio

April 1980

e.

De Mesa, Juan

November 1977

May 1984

f.

Calina, Herminio

February 1976

May 1984

g.

Desembrana, Reynold

h.

Camingal, Danilo

December 1975

i.

Deus, Bernardito

July 1976

j.

Fillarta, Eduardo

January 1979

k.

Francisco, Maximiano

l.

Layoc, Numeriano June 1974

m.

Marilim, Mario

December 1977

June 1984

n.

Mateo, Demetrio

November 1976

March 1984

o.

Mendoza, Filomena March 1980 May 1983

p.

Palines, Francisco

May 1979

q.

Nieva, Conrado

January 1977

r.

Polintan, Felipe

June 1972

s.

Satorre, Malcolm

September 1970

May 1984

t.

Torres, Alejandro

January 1974

May 1984

January 1987

November 1976

April 1983

December 1985

May 1983
May 1989

October 1977

May 1984

January 1982

May 1985
June 1987

May 1983

As supervising security guards, the private respondents were performing the


following functions (Ibid., pp. 202-204):
1.

Supervises the facility security force under his shift;

2.
Inspects all company-owned firearms and ammunition and promptly submits
report as regards to discrepancy and/or state of doubtful/suspected serviceability;
3.
Receives and transfers from outgoing to incoming supervising security guard
all company property, all official papers, documents and/or cases investigated
including pieces of evidence properly labeled and secured;

4.
Physically checks and accounts for all company property within his area of
responsibility immediately upon assumption of duty;
5.
Updates compilation of local security rules, policies and regulations and
ensures that all his guards are posted thereon;
6.
Conducts regular and irregular inspection to determine his guards'
compliance with all guard force instructions, corporate security standards and
procedures; CEcaTH
7.
Passes on all official communications, requests, applications of leaves, etc.
and makes his comments and/or recommendations to his superior;
8.
Systematically and continuously screens the good performers from the
marginal or poor among his guards; concentrates on teaching and guiding the
latter; determines further what training and/or skills that should be learned and
submits appropriate report to superior;
9.
Corrects, on the spot, all deficiencies noted and institutes corrective
measures within his authority; recommends commendations for those guards who
deserves [sic] recognition for good work;
10.
Conducts an investigation of all cases coming to his attention and promptly
submits appropriate report to his superiors;
11.
Evaluates individual guard performance and renders efficiency reports in
accordance with standing instructions;
12.
Ensures that all his guards are courteous, respectful and accommodating at
all times;
13.
Ensures that even those who have been found violating the facility's policies,
rules and procedures are professionally treated with courtesy and understanding to
preclude embarrassment and humiliation; aEcTDI
14.
Ensures the maintenance of [a] logbook of all incidents, communications,
personnel and materials' movements;
15.

Responds to all calls for assistance;

16.
Conducts continuing physical checks of the facility's critical and vulnerable
areas;
17.

Obtains critical security information and passes it on to his superiors;

18.

Assesses the need for extra guard service requirements;

19.
Continuously monitors the personal needs and problems of his men to his
superiors;

20.

Acts as Detachment Commander in the latter's absence;

21.
Responds to emergencies and activates the Corporate Security Alerting
System as appropriate; and
22.
Performs such other duties as may be required by his Detachment
Commander/Plant Security Officer.
From the commencement of their employment, the private respondents were
required to punch their time cards for purposes of determining the time they would
come in and out of the company's work place. Corollary [sic], the private
respondents were availing the benefits for overtime, holiday and night premium
duty through time card punching (Rollo, p. 89). However, in the early 1990's, the
San Miguel Corporation embarked on a Decentralization Program aimed at enabling
the separate divisions of the San Miguel Corporation to pursue a more efficient and
effective management of their respective operations (Ibid., p. 99). HSIDTE
As a result of the Decentralization Program, the Beer Division of the San Miguel
Corporation implemented on January 1, 1993 a "no time card policy" whereby the
Supervisory I and II composing of the supervising security guards of the Beer
Division were no longer required to punch their time cards (Ibid., p. 100).
Consequently, on January 16, 1993, without prior consultation with the private
respondents, the time cards were ordered confiscated and the latter were no longer
allowed to render overtime work (Ibid., p. 117).
However, in lieu of the overtime pay and the premium pay, the personnel of the
Beer Division of the petitioner San Miguel Corporation affected by the "No Time
Card Policy" were given a 10% across-the-board increase on their basic pay while
the supervisors who were assigned in the night shift (6:00 p.m. to 6:00 a.m.) were
given night shift allowance ranging from P2,000.00 to P2,500.00 a month (Rollo, p.
12). 6
On 1 December 1994, respondents filed a complaint for unfair labor practice,
violation of Article 100 of the Labor Code of the Philippines, and violation of the
equal protection clause and due process of law in relation to paragraphs 6 and 8 of
Article 32 of the New Civil Code of the Philippines. Respondents prayed for actual
damages for two years (1993-1994), moral damages, exemplary damages, and
overtime, holiday, and night premium pay.
In their position paper dated 28 February 1995, respondents stated that the Beer
Division of SMC maliciously and fraudulently refused payment of their overtime,
holiday, and night premium pay from 1 to 15 January 1993 because of the "no time
card policy." Moreover, petitioners had no written authority to stop respondents
from punching their time cards because the alleged memorandum authorizing such
stoppage did not include supervisory security guards. Thus, the respondents

suffered a diminution of benefits, making petitioners liable for non-payment of


overtime, holiday, and night premium pay. cCSEaA
In their position paper dated 23 February 1995, petitioners maintained that
respondents were supervisory security guards who were exempt from the provisions
of the Labor Code on hours of work, weekly rest periods, and rest days. The "no
time card policy" did not just prevent respondents from punching their time cards,
but it also granted respondents an across-the-board increase of 10% of basic salary
and either a P2,000 or P2,500 night shift allowance on top of their yearly merit
increase. Petitioners further asserted that the "no time card policy" was a valid
exercise of management prerogative and that all supervisors in the Beer Division
were covered by the "no time card policy," which classification was distinct and
separate from the other divisions within SMC.
Respondents filed their reply dated 15 March 1995 to petitioners' position paper.
Petitioners, on the other hand, filed their rejoinder dated 27 March 1995 to
respondents' reply. Respondents filed a request for admission dated 2 May 1995 to
which petitioners filed their reply dated 15 May 1995.
The Ruling of the Labor Arbiter
In his decision dated 23 March 1998, Labor Arbiter Potenciano S. Canizares, Jr.
(Arbiter Canizares) stated that the principal issue is whether petitioners can, in their
"no time card policy," remove the benefits that respondents have obtained through
overtime services. Arbiter Canizares then stated that the facts and the evidence are
in respondents' favor. Arbiter Canizares ruled that rendering services beyond the
regular eight-hour work day has become company practice. Moreover, petitioners
failed to show good faith in the exercise of their management prerogative in altering
company practice because petitioners changed the terms and conditions of
employment from "hours of work rendered" to "result" only with respect to
respondents and not with other supervisors in other departments. The dispositive
portion of Arbiter Canizares' decision reads: SECATH
WHEREFORE, the [petitioners] are hereby ordered to restore to the [respondents]
their right to earn for overtime services rendered as enjoyed by the other
employees.
The [petitioners] are further ordered to indemnify the [respondents] for lost
earnings after their terms and conditions of employment have been unilaterally
altered by the [petitioners], namely in the amount of P500,000.00 each as
computed by the [respondents], and the [petitioners] failed to refute.