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Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 125078

May 30, 2011

BERNABE L. NAVIDA, JOSE P. ABANGAN, JR., CEFERINO P. ABARQUEZ, ORLANDITO A. ABISON, FELIPE
ADAYA, ALBERTO R. AFRICA, BENJAMIN M. ALBAO, FELIPE ALCANTARA, NUMERIANO S. ALCARIA,
FERNANDO C. ALEJADO, LEOPOLDO N. ALFONSO, FLORO I. ALMODIEL, ANTONIO B. ALVARADO, ELEANOR
AMOLATA, RODOLFO P. ANCORDA, TRIFINO F. ANDRADA, BERT B. ANOCHE, RAMON E. ANTECRISTO, ISAGANI
D. ANTINO, DOMINGO ANTOPINA, MANSUETO M. APARICIO, HERMINIGILDO AQUINO, MARCELO S. AQUINO,
JR., FELIPE P. ARANIA, ULYSES M. ARAS, ARSENIO ARCE, RUPERTO G. ARINZOL, MIGUEL G. ARINZOL,
EDGARADO P. ARONG, RODRIGO D.R. ASTRALABIO, RONNIE BACAYO, SOFRONIO BALINGIT, NELSON M.
BALLENA, EMNIANO BALMONTE, MAXIMO M. BANGI, SALVADOR M. BANGI, HERMOGENES T. BARBECHO,
ARSENIO B. BARBERO, DIOSDADO BARREDO, VIRGILIO BASAS, ALEJANDRO G. BATULAN, DOMINGO A.
BAUTISTA, VICTOR BAYANI, BENIGNO BESARES, RUFINO BETITO, GERARDO A. BONIAO, CARLO B.
BUBUNGAN, FERNANDO B. BUENAVISTA, ALEJANDRINO H. BUENO, TOMAS P. BUENO, LEONARDO M.
BURDEOS, VICENTE P. BURGOS, MARCELINO J. CABALUNA, DIOSDADO CABILING, EMETRIO C. CACHUELA,
BRAULIO B. CADIVIDA, JR., SAMSON C. CAEL, DANIEL B. CAJURAO, REY A. CALISO, NORBERTO F.
CALUMPAG, CELESTINO CALUMPAG, LORETO CAMACHO, VICTORIANO CANETE, DOMINADOR P. CANTILLO,
FRUCTUSO P. CARBAJOSA, VICTORINO S. CARLOS, VICTOR CARLOS, GEORGE M. CASSION, JAIME S.
CASTAÑARES, FLAVIANO C. CASTAÑARES, ELPIDIO CATUBAY, NATHANIEL B. CAUSANG, BEOFIL B. CAUSING,
ADRIANO R. CEJAS, CIRILO G. CERERA, SR., CRISTITUTO M. CEREZO, DANTE V. CONCHA, ALBERT
CORNELIO, CESAR CORTES, NOEL Y. CORTEZ, SERNUE CREDO, CORNELIO A. CRESENCIO, ALEX CRUZ,
ROGER CRUZ, RANSAM CRUZ, CANUTO M. DADULA, ROMEO L. DALDE, ZACARIAS DAMBAAN, ELISEO
DAPROZA, VIRGILIO P. DAWAL, TESIFREDO I. DE TOMAS, GAMALLER P. DEANG, CARMELINO P. DEANG,
DIOSDADO P. DEANG, DOMINGO A. DEANG, FELIPE R. DEANG, JR., JULIETO S. DELA CRUZ, ELIEZER R. DELA
TORRE, JEFFREY R. DELA TORRE, RAUL DEMONTEVERDE, FELIPE P. DENOLAN, RUBENCIO P. DENOY,
RODRIGO M. DERMIL, ROLANDO B. DIAZ, LORENZO DIEGO, JOVENCIO DIEGO, SATURNINO DIEGO, GREGORIO
DIONG, AMADO R. DIZON, FE DIZON, VIRGILO M. DOMANTAY, LEO S. DONATO, DOMINADOR L. DOSADO,
NESTOR DUMALAG, FREDDIE DURAN, SR., MARIO C. ECHIVERE, AQUILLO M. EMBRADORA, MIGUEL EMNACE,
RIO T. EMPAS, EFRAIM ENGLIS, ANICETO ENOPIA, DIOCENE ENTECOSA, RUBENTITO D. ENTECOSA, AVELINO
C. ENTERO, FORTUNATA ENTRADA, ROGELIO P. EROY, RODOLFO M. ESCAMILLA, SERGIO C. ESCANTILLA,
LAZARO A. ESPAÑOLA, EULOGIO M. ETURMA, PRIMO P. FERNANDEZ, EDILBERTO D. FERNANDO, GREGORIO
S. FERNANDO, VICENTE P. FERRER, MARCELO T. FLOR, ANTONIO M. FLORES, REDENTOR T. FLOREZA,
NORBERTO J. FUENTES, RICARDO C. GABUTAN, PEDRO D.V. GALEOS, ARNULFO F. GALEOS, EDGARDO V.
GARCESA, BERNARDO P. GENTOBA, EDUARDO P. GENTOBA, VICTORIO B. GIDO, ROLANDO V. GIMENA,
EARLWIN L. GINGOYO, ERNESTO GOLEZ, JUANITO G. GONZAGA, ONOFRE GONZALES, AMADO J. GUMERE,
LEONARDO M. GUSTO, ALEJANDRO G. HALILI, NOEL H. HERCEDA, EMILIO V. HERMONDO, CLAUDIO
HIPOLITO, TORIBIO S ILLUSORIO, TEODURO G. IMPANG, JR., GIL A. JALBUNA, HERMIE L. JALICO, ARMANDO
B. JAMERLAN, NARCISO JAPAY, LIBURO C. JAVINAS, ALEJANDO S. JIMENEZ, FEDERICO T. JUCAR,
NAPOLEON T. JUMALON, OSCAR JUNSAY, ANASTACIO D. LABANA, CARLOS C. LABAY, AVELINO L.
LAFORTEZA, LOE LAGUMBAY, NORBETO D. LAMPERNIS, ROLANDO J. LAS PEÑAS, ISMAEL LASDOCE,
RENOLO L. LEBRILLA, CAMILO G. LEDRES, ANASTACIO LLANOS, ARMANDO A. LLIDO, CARLITO LOPEZ,
ARISTON LOS BAÑEZ, CONCISO L. LOVITOS, ARQUILLANO M. LOZADA, RODOLFO C. LUMAKIN, PRIMITIVO
LUNTAO, JR., EMILIO S. MABASA, JR., JUANITO A. MACALISANG, TEOTIMO L. MADULIN, JOSEPH D.
MAGALLON, PEDRO P. MAGLASANG, MARIO G. MALAGAMBA, JAIME B. MAMARADLO, PANFILO A. MANADA,
SR., RICARDO S. MANDANI, CONCHITA MANDANI, ALBERTO T. MANGGA, ALEJANDRO A. MANSANES, RUFINO
T. MANSANES, EUTIQUIO P. MANSANES, ALCIO P. MARATAS, AGAPITO D. MARQUEZ, RICARDO R. MASIGLAT,
DENDERIA MATABANG, ARNELO N. MATILLANO, HERNANI C. MEJORADA, ROSITA MENDOZA, GREGORIO R.
MESA, RENATO N. MILLADO, ANTONIO L. MOCORRO, ALBERTO M. MOLINA, JR., DOMINGO P. MONDIA,
JUANITO P. MONDIA, RICARDO MONTAÑO, RAUL T. MONTEJO, ROGELIO MUNAR, RODOLFO E. MUÑEZ,
CRESENCIO NARCISO, PANFILO C. NARCISO, BRICS P. NECOR, MOISES P. NICOLAS, NEMESIO G. NICOLAS,
ALFREDO NOFIEL, FELIX T. NOVENA, MARCELO P. OBTIAL, SR., TEODORO B. OCRETO, BIBIANO C. ODI,
ALFREDO M. OPERIO, TEOTISTO B. OPON, IZRO M. ORACION, ALAN E. ORANAS, ELPEDIO T. OSIAS, ERNESTO
M. PABIONA, NARCISO J. PADILLA, NELSON G. PADIOS, SR., FRNACISCO G. PAGUNTALAN, RENE B.
PALENCIA, MICHAEL P. PALOMAR, VIRGILIO E. PANILAGAO, NOLITO C. PANULIN, ROMEO PARAGUAS,
NESTOR B. PASTERA, VICENTE Q. PEDAZO, EDGAR M. PEÑARANDA, ILUMINIDO B. PERACULLO, ANTONIO C.
PEREZ, DOMINGO PEREZ, OSCAR C. PLEÑOS, ANTONIETO POLANCOS, SERAFIN G. PRIETO, ZENAIDA
PROVIDO, FERNANDO Y. PROVIDO, ERNESTO QUERO, ELEAZAR QUIJARDO, WILLIAM U. QUINTOY, LAURO
QUISTADIO, ROGELIO RABADON, MARCELINO M. RELIZAN, RAUL A. REYES, OCTAVIO F. REYES, EDDIE M.
RINCOR, EMMANUEL RIVAS, RODULFO RIVAS, BIENVENIDO C. ROMANCA, JACINTO ROMOC, ROMEO S.
ROMUALDO, ALBERTO ROSARIO, ROMEO L. SABIDO, SIMON SAGNIP, TIMOTEO SALIG, ROMAN G.
SALIGONAN, VICTORINO SALOMON, GENEROSO J. SALONGKONG, RODOLFO E. SALVANI, JIMMY A. SAMELIN,
EDUARDO A. SAMELIN, ANDRES A. SAMELIN, GEORGE SAMELIN, ROMEO A. SARAOSOS, RUDIGELIO S.
SARMIENTO, CIRILO SAYAANG, JARLO SAYSON, LEONCIO SERDONCILLO, RODOLFO C. SERRANO, NESTOR
G. SEVILLA, SIMEON F. SIMBA, CATALINO S. SIMTIM, SERAFIN T. SINSUANGCO, EDUARDO A. SOLA,
VICTORINO M. SOLOMON, JAIME B. SUFICIENCIA, LYNDON SUMAJIT, ALFREDO P. SUMAJIT, ALFREDO L.
SUMAJIT, PEDRO A. SUMARAGO, ERNESTO SUMILE, NESTOR S. SUMOG-OY, MANUEL T. SUPAS, WILFREDO A.
TABAQUE, CONSTANCIO L. TACULAD, EUFROCINO A. TAGOTO, JR., SERAPIO TAHITIT, PANTALEON T.
TAMASE, ERNESTO TARRE, MAGNO E. TATOY, AVELINO TAYAPAD, SAMUEL S. TERRADO, APOLINARIO B.

TICO, ORLANDO TINACO, ALBERT G. TINAY, ANTONIO TOLEDO, ANTONIO M. TORREGOSA, ISABELO TORRES,
JIMMY C. TORRIBIO, EDUARDO Y. TUCLAOD, JACINTO UDAL, RICARDO M. URBANO, ERNESTO G. VAFLOR,
FILOMENO E. VALENZUELA, SALORIANO VELASCO, RODOLFO VIDAL, WALTER VILLAFAÑE, DANTE VILLALVA,
PERIGRINO P. VILLARAN, JESUS L. VILLARBA, ELEAZAR D. VILLARBA, JENNY T. VILLAVA, HENRY C.
VILLEGAS, DELFIN C. WALOG, RODOLFO YAMBAO, EDGAR A. YARE, MANSUETO M. YBERA, EDUARDO G.
YUMANG, HENRY R. YUNGOT, ROMEO P. YUSON, ARSENIA ZABALA, FELIX N. ZABALA and GRACIANO
ZAMORA, Petitioners,
vs.
HON. TEODORO A. DIZON, JR., Presiding Judge, Regional Trial Court, Branch 37, General Santos City, SHELL
OIL CO., DOW CHEMICAL CO., OCCIDENTAL CHEMICAL CORP., STANDARD FRUIT CO., STANDARD FRUIT &
STEAMSHIP CO., DOLE FOOD CO., INC., DOLE FRESH FRUIT CO., DEL MONTE FRESH PRODUCE N.A., DEL
MONTE TROPICAL FRUIT CO., CHIQUITA BRANDS INTERNATIONAL, INC. and CHIQUITA BRANDS,
INC., Respondents.
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G.R. No. 125598
THE DOW CHEMICAL COMPANY and OCCIDENTAL CHEMICAL CORPORATION, Petitioners,
vs.
BERNABE L. NAVIDA, JOSE P. ABANGAN, JR., CEFERINO P. ABARQUEZ, ORLANDITO A. ABISON, FELIPE
ADAYA, ALBERTO R. AFRICA, BENJAMIN M. ALBAO, FELIPE ALCANTARA, NUMERIANO S. ALCARIA,
FERNANDO C. ALEJADO, LEOPOLDO N. ALFONSO, FLORO I. ALMODIEL, ANTONIO B. ALVARADO, ELEANOR
AMOLATA, RODOLFO P. ANCORDA, TRIFINO F. ANDRADA, BERT B. ANOCHE, RAMON E. ANTECRISTO, ISAGANI
D. ANTINO, DOMINGO ANTOPINA, MANSUETO M. APARICIO, HERMINIGILDO AQUINO, MARCELO S. AQUINO,
JR., FELIPE P. ARANIA, ULYSES M. ARAS, ARSENIO ARCE, RUPERTO G. ARINZOL, MIGUEL G. ARINZOL,
EDGARADO P. ARONG, RODRIGO D.R. ASTRALABIO, RONNIE BACAYO, SOFRONIO BALINGIT, NELSON M.
BALLENA, EMNIANO BALMONTE, MAXIMO M. BANGI, SALVADOR M. BANGI, HERMOGENES T. BARBECHO,
ARSENIO B. BARBERO, DIOSDADO BARREDO, VIRGILIO BASAS, ALEJANDRO G. BATULAN, DOMINGO A.
BAUTISTA, VICTOR BAYANI, BENIGNO BESARES, RUFINO BETITO, GERARDO A. BONIAO, CARLO B.
BUBUNGAN, FERNANDO B. BUENAVISTA, ALEJANDRINO H. BUENO, TOMAS P. BUENO, LEONARDO M.
BURDEOS, VICENTE P. BURGOS, MARCELINO J. CABALUNA, DIOSDADO CABILING, EMETRIO C. CACHUELA,
BRAULIO B. CADIVIDA, JR., SAMSON C. CAEL, DANIEL B. CAJURAO, REY A. CALISO, NORBERTO F.
CALUMPAG, CELESTINO CALUMPAG, LORETO CAMACHO, VICTORIANO CANETE, DOMINADOR P. CANTILLO,
FRUCTUSO P. CARBAJOSA, VICTORINO S. CARLOS, VICTOR CARLOS, GEORGE M. CASSION, JAIME S.
CASTAÑARES, FLAVIANO C. CASTAÑARES, ELPIDIO CATUBAY, NATHANIEL B. CAUSANG, BEOFIL B. CAUSING,
ADRIANO R. CEJAS, CIRILO G. CERERA, SR., CRISTITUTO M. CEREZO, DANTE V. CONCHA, ALBERT
CORNELIO, CESAR CORTES, NOEL Y. CORTEZ, SERNUE CREDO, CORNELIO A. CRESENCIO, ALEX CRUZ,
ROGER CRUZ, RANSAM CRUZ, CANUTO M. DADULA, ROMEO L. DALDE, ZACARIAS DAMBAAN, ELISEO
DAPROZA, VIRGILIO P. DAWAL, TESIFREDO I. DE TOMAS, GAMALLER P. DEANG, CARMELINO P. DEANG,
DIOSDADO P. DEANG, DOMINGO A. DEANG, FELIPE R. DEANG, JR., JULIETO S. DELA CRUZ, ELIEZER R. DELA
TORRE, JEFFREY R. DELA TORRE, RAUL DEMONTEVERDE, FELIPE P. DENOLAN, RUBENCIO P. DENOY,
RODRIGO M. DERMIL, ROLANDO B. DIAZ, LORENZO DIEGO, JOVENCIO DIEGO, SATURNINO DIEGO, GREGORIO
DIONG, AMADO R. DIZON, FE DIZON, VIRGILO M. DOMANTAY, LEO S. DONATO, DOMINADOR L. DOSADO,
NESTOR DUMALAG, FREDDIE DURAN, SR., MARIO C. ECHIVERE, AQUILLO M. EMBRADORA, MIGUEL EMNACE,
RIO T. EMPAS, EFRAIM ENGLIS, ANICETO ENOPIA, DIOCENE ENTECOSA, RUBENTITO D. ENTECOSA, AVELINO
C. ENTERO, FORTUNATA ENTRADA, ROGELIO P. EROY, RODOLFO M. ESCAMILLA, SERGIO C. ESCANTILLA,
LAZARO A. ESPAÑOLA, EULOGIO M. ETURMA, PRIMO P. FERNANDEZ, EDILBERTO D. FERNANDO, GREGORIO
S. FERNANDO, VICENTE P. FERRER, MARCELO T. FLOR, ANTONIO M. FLORES, REDENTOR T. FLOREZA,
NORBERTO J. FUENTES, RICARDO C. GABUTAN, PEDRO D.V. GALEOS, ARNULFO F. GALEOS, EDGARDO V.
GARCESA, BERNARDO P. GENTOBA, EDUARDO P. GENTOBA, VICTORIO B. GIDO, ROLANDO V. GIMENA,
EARLWIN L. GINGOYO, ERNESTO GOLEZ, JUANITO G. GONZAGA, ONOFRE GONZALES, AMADO J. GUMERE,
LEONARDO M. GUSTO, ALEJANDRO G. HALILI, NOEL H. HERCEDA, EMILIO V. HERMONDO, CLAUDIO
HIPOLITO, TORIBIO S ILLUSORIO, TEODURO G. IMPANG, JR., GIL A. JALBUNA, HERMIE L. JALICO, ARMANDO
B. JAMERLAN, NARCISO JAPAY, LIBURO C. JAVINAS, ALEJANDO S. JIMENEZ, FEDERICO T. JUCAR,
NAPOLEON T. JUMALON, OSCAR JUNSAY, ANASTACIO D. LABANA, CARLOS C. LABAY, AVELINO L.
LAFORTEZA, LOE LAGUMBAY, NORBETO D. LAMPERNIS, ROLANDO J. LAS PEÑAS, ISMAEL LASDOCE,
RENOLO L. LEBRILLA, CAMILO G. LEDRES, ANASTACIO LLANOS, ARMANDO A. LLIDO, CARLITO LOPEZ,
ARISTON LOS BAÑEZ, CONCISO L. LOVITOS, ARQUILLANO M. LOZADA, RODOLFO C. LUMAKIN, PRIMITIVO
LUNTAO, JR., EMILIO S. MABASA, JR., JUANITO A. MACALISANG, TEOTIMO L. MADULIN, JOSEPH D.
MAGALLON, PEDRO P. MAGLASANG, MARIO G. MALAGAMBA, JAIME B. MAMARADLO, PANFILO A. MANADA,
SR., RICARDO S. MANDANI, CONCHITA MANDANI, ALBERTO T. MANGGA, ALEJANDRO A. MANSANES, RUFINO
T. MANSANES, EUTIQUIO P. MANSANES, ALCIO P. MARATAS, AGAPITO D. MARQUEZ, RICARDO R. MASIGLAT,
DENDERIA MATABANG, ARNELO N. MATILLANO, HERNANI C. MEJORADA, ROSITA MENDOZA, GREGORIO R.
MESA, RENATO N. MILLADO, ANTONIO L. MOCORRO, ALBERTO M. MOLINA, JR., DOMINGO P. MONDIA,
JUANITO P. MONDIA, RICARDO MONTAÑO, RAUL T. MONTEJO, ROGELIO MUNAR, RODOLFO E. MUÑEZ,
CRESENCIO NARCISO, PANFILO C. NARCISO, BRICS P. NECOR, MOISES P. NICOLAS, NEMESIO G. NICOLAS,
ALFREDO NOFIEL, FELIX T. NOVENA, MARCELO P. OBTIAL, SR., TEODORO B. OCRETO, BIBIANO C. ODI,
ALFREDO M. OPERIO, TEOTISTO B. OPON, IZRO M. ORACION, ALAN E. ORANAS, ELPEDIO T. OSIAS, ERNESTO
M. PABIONA, NARCISO J. PADILLA, NELSON G. PADIOS, SR., FRANCISCO G. PAGUNTALAN, RENE B.
PALENCIA, MICHAEL P. PALOMAR, VIRGILIO E. PANILAGAO, NOLITO C. PANULIN, ROMEO PARAGUAS,
NESTOR B. PASTERA, VICENTE Q. PEDAZO, EDGAR M. PEÑARANDA, ILUMINIDO B. PERACULLO, ANTONIO C.
PEREZ, DOMINGO PEREZ, OSCAR C. PLEÑOS, ANTONIETO POLANCOS, SERAFIN G. PRIETO, ZENAIDA
PROVIDO, FERNANDO Y. PROVIDO, ERNESTO QUERO, ELEAZAR QUIJARDO, WILLIAM U. QUINTOY, LAURO

QUISTADIO, ROGELIO RABADON, MARCELINO M. RELIZAN, RAUL A. REYES, OCTAVIO F. REYES, EDDIE M.
RINCOR, EMMANUEL RIVAS, RODULFO RIVAS, BIENVENIDO C. ROMANCA, JACINTO ROMOC, ROMEO S.
ROMUALDO, ALBERTO ROSARIO, ROMEO L. SABIDO, SIMON SAGNIP, TIMOTEO SALIG, ROMAN B.
SALIGONAN, VICTORINO SALOMON, GENEROSO M. SALONGKONG, RODOLFO E. SALVANI, JIMMY A.
SAMELIN, EDUARDO A. SAMELIN, ANDRES A. SAMELIN, GEORGE SAMELIN, ROMEO A. SARAOSOS,
RUDIGELIO S. SARMIENTO, CIRILO SAYAANG, JARLO SAYSON, LEONCIO SERDONCILLO, RODOLFO C.
SERRANO, NESTOR G. SEVILLA, SIMEON F. SIMBA, CATALINO S. SIMTIM, SERAFIN T. SINSUANGCO, EDUARDO
A. SOLA, VICTORINO M. SOLOMON, JAIME B. SUFICIENCIA, LYNDON SUMAJIT, ALFREDO P. SUMAJIT,
ALFREDO L. SUMAJIT, PEDRO A. SUMARAGO, ERNESTO SUMILE, NESTOR S. SUMOG-OY, MANUEL T. SUPAS,
WILFREDO A. TABAQUE, CONSTANCIO L. TACULAD, EUFROCINO A. TAGOTO, JR., SERAPIO TAHITIT,
PANTALEON T. TAMASE, ERNESTO TARRE, MAGNO E. TATOY, AVELINO TAYAPAD, SAMUEL S. TERRADO,
APOLINARIO B. TICO, ORLANDO TINACO, ALBERT G. TINAY, ANTONIO TOLEDO, ANTONIO M. TORREGOSA,
ISABELO TORRES, JIMMY C. TORRIBIO, EDUARDO Y. TUCLAOD, JACINTO UDAL, RICARDO M. URBANO,
ERNESTO G. VAFLOR, FILOMENO E. VALENZUELA, SALORIANO VELASCO, RODOLFO VIDAL, WALTER
VILLAFAÑE, DANTE VILLALVA, PERIGRINO P. VILLARAN, JESUS L. VILLARBA, ELEAZAR D. VILLARBA, JENNY
T. VILLAVA, HENRY C. VILLEGAS, DELFIN C. WALOG, RODOLFO YAMBAO, EDGAR A. YARE, MANSUETO M.
YBERA, EDUARDO G. YUMANG, HENRY R. YUNGOT, ROMEO P. YUSON, ARSENIA ZABALA, FELIX N. ZABALA,
and GRACIANO ZAMORA, Respondents.
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G.R. No. 126654
CORNELIO ABELLA, JR., IRENEO AGABATU, PRUDENCIO ALDEPOLIA, ARTEMIO ALEMAN, FIDEL ALLERA,
DOMINGO ALONZO, CORNELIO AMORA, FELIPE G. AMORA, LEOPOLDO AMORADO, MARCELINO ANDIMAT,
JORGE ANDOY, MARGARITO R. ANGELIA, GREGOTIO APRIANO, ALFREDO A. ARARAO, BONIFACIO L.
ARTIGAS, JERSON ASUAL, SERAFIN AZUCENA, FELIX M. BADOY, JULIAN J. BAHALLA, REYNALDO BAHAYA,
ANTONIO L. BALDAGO, CESAR N. BALTAZAR, DOMINADO A. BARING, ANTIPAS A. BATINGAL, MARCIANO
NATINGAL, MARINO BIBANCO, LEANDRO BILIRAN, MARGARITO BLANCO, CATALINO BONGO, MELCHOR
BRIGOLE, ELISEO BRINA, ROBERTO BRINA, LUIS BUGHAO, EDUARDO L. BURGUINZO, CELSO M. BUSIA,
RPDITO CABAGTE, RICARADO C. CABALLES, CARLITO A. CAINDOC, CANDIDO CALO, JR., PEDRITO CAMPAS,
FERNANDO R. CAPAROSO, DANILO CARILLO, BONIFACIO M. CATCHA, FRANKLIN CLARAS, JOSE F.
COLLAMAT, BERNARDO M. COMPENDIO, CORNELIO COSTILLAS, ENERIO R. DAGAME, FELIMON DEBUMA, JR.,
RICADO C. DEIPARIME, GREGORIO S. DE LA PENA, JOSE G. DELUAO, JR., ELPEDIO A. DIAZ, QUINTINO
DISIPULO, JR., CESAR G. DONAYRE, JOSE DULABAY, JAIRO DUQUIZA, ANTONIO ENGBINO, ALFREDO
ESPINOSA, ALONZO FAILOG, JAIME FEROLINO, RODOLFO L. GABITO, PEDRO G. GEMENTIZA, RICARDO A.
GEROLAGA, RODULFO G. GEROY, ROGELIO GONZAGA, ROLANDO GONZALES, MODESTO M. GODELOSAO,
HECTOR GUMBAN, CAMILO HINAG, LECERIO IGBALIC, SILVERIO E. IGCALINOS, ALFREDO INTOD, OLEGARIO
IYUMA, DOMINGO B. JAGMOC, JR., EDUARDO JARGUE, ROLANDO A. LABASON, ROLANDO LACNO, VIRGILIO
A. LADURA, CONSTANCIO M. LAGURA, FRANCISCO LAMBAN, ENRIQUE LAQUERO, LUCIO B. LASACA, SISINO
LAURDEN, VIVENCIO LAWANGON, ANECITO LAYAN, FERNANDO P. LAYAO, MARDENIO LAYAO, NEMENCIO C.
LINAO, PEDRO LOCION, ENERIO LOOD, DIOSDADO MADATE, RAMON MAGDOSA, NILO MAGLINTE, MARINO G.
MALINAO, CARLITO MANACAP, AURELIO A. MARO, CRISOSTOMO R. MIJARES, CESAR MONAPCO, SILVANO
MONCANO, EMILIO MONTAJES, CESAR B. MONTERO, CLEMENTE NAKANO, RODRIGO H. NALAS, EMELIANO C.
NAPITAN, JUANITO B. NARON, JR., LUCIO NASAKA, TEOFILO NUNEZ, JORGE M. OLORVIDA, CANULO P. OLOY,
DOROTEO S. OMBRETE, TEOFILIO OMOSURA, MIGUEL ORALO, SUSANTO C. OTANA, JR., CHARLIE P. PADICA,
ALFREDO P. PALASPAS, CATALINO C. PANA, ERNESTO M. PASCUAL, BIENVENIDO PAYAG, RESURRECCION
PENOS, PEDRO PILAGO, ROMEO PRESBITERO, OMEO L. PRIEGO, ELADIO QUIBOL, JESUS D. QUIBOL, MAGNO
QUIZON, DIONISIO RAMOS, MAMERTO RANISES, NESTOR B. REBUYA, RODRIGO REQUILMEN, ISIDRO
RETANAL, CARLITO ROBLE, GLICERIO V. ROSETE, TINOY G. SABINO, MELCHOR SALIGUMBA, SILVERIO
SILANGAN, ROBERTO SIVA, PACITA SUYMAN, CANILO TAJON, AVELINO TATAPOD, ROMEO TAYCO, RENATO
TAYCO, CONRADO TECSON, AGAPITO TECSON, ROMAN. E. TEJERO, ALFREDO TILANDOCA, CARLOS B. TIMA,
HERMONEGES TIRADOR, JOSELITO TIRO, PASTOR T. TUNGKO, LEANDRO B. TURCAL, VICENTE URQUIZA,
VICENTE VILLA, ANTONIO P. VILLARAIZ, LEOPOLDO VILLAVITO and SAMUEL M. VILLEGAS, Petitioners,
vs.
THE HON. ROMEO D. MARASIGAN, Presiding Judge of Regional Trial Court, Branch 16, Davao City, SHELL OIL
CO., DOW CHEMICAL CO., OCCIDENTAL CHEMICAL CORP., STANDARD FRUIT CO., STANDARD FRUIT &
STEAMSHIP CO., DOLE FOOD CO., INC., DOLE FRESH FRUIT CO., DEL MONTE FRESH PRODUCE N.A., DEL
MONTE TROPICAL FRUIT CO., CHIQUITA BRANDS INTERNATIONAL, INC. and CHIQUITA BRANDS,
INC., Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 127856
DEL MONTE FRESH PRODUCE N.A. and DEL MONTE TROPICAL FRUIT CO., Petitioners,
vs.
THE REGIONAL TRIAL COURT OF DAVAO CITY, BRANCHES 16 AND 13, CORNELIO ABELLA, JR., IRENEO
AGABATU, PRUDENCIO ALDEPOLIA, ARTEMIO ALEMAN, FIDEL ALLERA, DOMINGO ALONZO, CORNELIO
AMORA, FELIPE G. AMORA, LEOPOLDO AMORADO, MARCELINO ANDIMAT, JORGE ANDOY, MARGARITO R.
ANGELIA, GREGOTIO APRIANO, ALFREDO A. ARARAO, BONIFACIO L. ARTIGAS, JERSON ASUAL, SERAFIN
AZUCENA, FELIX M. BADOY, JULIAN J. BAHALLA, REYNALDO BAHAYA, ANTONIO L. BALDAGO, CESAR N.
BALTAZAR, DOMINADO A. BARING, ANTIPAS A. BATINGAL, MARCIANO NATINGAL, MARINO BIBANCO,

MARGARITO BLANCO. ROBERTO SIVA. SILVANO MONCANO. TIMA.. CAMILO HINAG. x . BURGUINZO. LABASON. BONIFACIO M. MIJARES. JESUS D. CHARLIE P. RICADO C. JR. BUSIA. RICARADO C. NARON. LINAO. MAGNO QUIZON. VIRGILIO A. CATALINO C. EDUARDO JARGUE. GODELOSAO. OLOY. COLLAMAT. NEMENCIO C. Petitioners. CAINDOC. ROMEO PRESBITERO. ENERIO R.LEANDRO BILIRAN. ALONZO FAILOG. PEDRO G. VICENTE VILLA. CORNELIO ABELLA. FRANCISCO LAMBAN. LAGURA. ENRIQUE LAQUERO. REYNALDO BAHAYA.. PEDRO G. ROMAN. CARLITO ROBLE. ANGELIA. ELISEO BRINA. BIENVENIDO PAYAG. and CHIQUITA BRANDS INTERNATIONAL. DOMINGO B. JR. MALINAO.. HECTOR GUMBAN. PEDRO PILAGO.. LUIS BUGHAO. ANTIPAS A. CELSO M. E. COLLAMAT.. ROLANDO LACNO. HERMONEGES TIRADOR.. DIOSDADO MADATE.. RESURRECCION PENOS. REBUYA. which arose out of two civil cases that were filed in different courts but whose factual background and issues are closely intertwined. JR. JOSE F. in her capacity as Presiding Judge of the Regional Trial Court. CARLOS B. GLICERIO V. RENATO TAYCO.. AVELINO TATAPOD. ROBERTO BRINA. LEANDRO B. BALDAGO. JOSE G. TURCAL. RAMON MAGDOSA. DOMINADO A. VILLARAIZ. CATCHA. SILVERIO SILANGAN. DOMINGO ALONZO. ALONZO FAILOG. EDUARDO JARGUE. JORGE ANDOY. CANDIDO CALO.. VILLARAIZ. TEOFILO NUNEZ. PRUDENCIO ALDEPOLIA. PACITA SUYMAN. PACITA SUYMAN. SERAFIN AZUCENA. VIVENCIO LAWANGON. LAGURA. FELIMON DEBUMA. MAGNO QUIZON. TEJERO. GABITO. FRANKLIN CLARAS. CRISOSTOMO R. DANILO CARILLO. ALFREDO INTOD. EMILIO MONTAJES. RODRIGO REQUILMEN. LAYAO. NESTOR B. FELIMON DEBUMA. JR. CESAR B. SISINO LAURDEN. SILVERIO E. DELUAO. CLEMENTE NAKANO. RICARADO C. MELCHOR SALIGUMBA. SILVERIO SILANGAN. NALAS. FERNANDO R. MIGUEL ORALO. MIGUEL ORALO. CANULO P. ROBERTO SIVA. EDUARDO L. BIENVENIDO PAYAG. IGCALINOS. LECERIO IGBALIC. ENERIO LOOD. ARARAO. CAMILO HINAG. GODELOSAO. BERNARDO M. PEDRITO CAMPAS.. ALFREDO P. DELUAO. RENATO TAYCO. CARLITO A. EMILIO MONTAJES. BUSIA. LEOPOLDO AMORADO.. JR. ROSETE. DAGAME. JOSELITO TIRO. DE LA PENA. CATALINO C. PEDRO PILAGO. JAIRO DUQUIZA.. ELADIO QUIBOL. DEIPARIME. JR. OMEO L. HECTOR GUMBAN. ROLANDO LACNO. ISIDRO RETANAL. RESURRECCION PENOS.. QUIBOL. LEANDRO B.. MELCHOR SALIGUMBA. TEOFILO NUNEZ.. FELIX M. LADURA. BALTAZAR. FERNANDO P. ARTEMIO ALEMAN. ISIDRO RETANAL. CANILO TAJON. TINOY G. No. JORGE M. SILVANO MONCANO. COMPENDIO. INC. Davao City. ENRIQUE LAQUERO. DIONISIO RAMOS. Branch 13. CORNELIO AMORA. DANILO CARILLO. OLOY. PRIEGO. PANA. ROMAN. JULIAN J. ROMEO TAYCO. VICENTE URQUIZA. ARTIGAS. RODRIGO REQUILMEN. REBUYA. GLICERIO V. JOSELITO TIRO. DIAZ. OMEO L. BARING. PASCUAL. GEROLAGA. MARCELINO ANDIMAT. JOSE F. SABINO. CONSTANCIO M. VIVENCIO LAWANGON. CARLITO A.. ALFREDO ESPINOSA. JAIRO DUQUIZA. CABALLES. AURELIO A. LEOPOLDO VILLAVITO and SAMUEL M. SUSANTO C. FIDEL ALLERA. SUSANTO C. CAINDOC. CONRADO TECSON. DIAZ. CESAR G. RODOLFO L. QUINTINO DISIPULO. ELPEDIO A. DONAYRE. MONTERO. ELISEO BRINA. MODESTO M. DOROTEO S. LUCIO B. CABALLES. CAPAROSO. MARINO BIBANCO. NEMENCIO C. LUIS BUGHAO. CARLITO MANACAP. MARDENIO LAYAO. PALASPAS.. ROLANDO A. JR. VILLEGAS. ALFREDO TILANDOCA. ROLANDO GONZALES. CESAR MONAPCO. CATALINO BONGO. CORNELIO COSTILLAS. ANTONIO ENGBINO. MARGARITO R. BAHALLA. BONIFACIO M. MALINAO.. OTANA.. VILLEGAS. ENERIO LOOD. CONRADO TECSON. QUIBOL. LASACA. RAMON MAGDOSA.. JERSON ASUAL. PASCUAL. CLEMENTE NAKANO.. ALFREDO A. QUINTINO DISIPULO. CATCHA. ALFREDO P. MAMERTO RANISES. TINOY G. ERNESTO M. FERNANDO P.. CESAR G.. OMBRETE. JOSE DULABAY. NILO MAGLINTE. vs.. ROMEO PRESBITERO. LINAO. OLEGARIO IYUMA. PEDRO LOCION. ENERIO R. AMORA. CORNELIO COSTILLAS. RODRIGO H. DIOSDADO MADATE. CANILO TAJON. MARDENIO LAYAO. ANECITO LAYAN.. LUCIO NASAKA. COMPENDIO. NALAS. PALASPAS. BONIFACIO L. HERMONEGES TIRADOR. JAIME FEROLINO. OLORVIDA. VICENTE VILLA. IGCALINOS. OMBRETE. JUANITO B. GEROLAGA.. CAPAROSO. JAGMOC. DOROTEO S. GEMENTIZA. ERNESTO M. RICARDO A. NARON. JR.. MODESTO M. LADURA. CHARLIE P.. MAMERTO RANISES. TUNGKO. DIONISIO RAMOS. BATINGAL. BURGUINZO. JR. GREGOTIO APRIANO. PADICA. INC. FELIPE G. MELCHOR BRIGOLE. NAPITAN. MONTERO. DECISION LEONARDO-DE CASTRO. GABITO.R.: Before the Court are consolidated Petitions for Review on Certiorari under Rule 45 of the Rules of Court. ROGELIO GONZAGA. AGAPITO TECSON. LEOPOLDO VILLAVITO and SAMUEL M.. LABASON. LUCIO B. DOMINGO B. OLORVIDA. BADOY. LUCIO NASAKA. Respondents. SABINO. PEDRO LOCION. TUNGKO. JR. LECERIO IGBALIC.. CANDIDO CALO. SILVERIO E. GEMENTIZA. ROLANDO A. TEOFILIO OMOSURA. CANULO P. RODULFO G. ALFREDO INTOD. ROLANDO GONZALES. NAPITAN. GREGORIO S. ANTONIO P. ELPEDIO A. CONSTANCIO M. NESTOR B. CARLITO ROBLE. LEANDRO BILIRAN. CESAR N. JR. ANECITO LAYAN. PEDRITO CAMPAS. ROMEO TAYCO. . MELCHOR BRIGOLE. TEOFILIO OMOSURA. RPDITO CABAGTE. ANITA ALFELOR-ALAGABAN.. MARGARITO BLANCO. TIMA. JAIME FEROLINO. JESUS D. GEROY. LAYAO. J. JAGMOC. ELADIO QUIBOL. JR. OLEGARIO IYUMA. VIRGILIO A. ANTONIO ENGBINO. EMELIANO C. AURELIO A. LASACA. ANTONIO P. CARLOS B. JOSE DULABAY.. TEJERO. GEROY. E. MARCIANO NATINGAL. JR. CESAR MONAPCO. ROBERTO BRINA. CESAR B.. MARO. SISINO LAURDEN. BERNARDO M. MARINO G. JOSE G.. GREGORIO S. IRENEO AGABATU... FERNANDO R.. MARINO G. PRIEGO. ALFREDO TILANDOCA. 128398 CHIQUITA BRANDS. HON. Respondents. CRISOSTOMO R. RPDITO CABAGTE. PADICA. DONAYRE. FRANKLIN CLARAS. PASTOR T. MIJARES. RODULFO G. ROGELIO GONZAGA. RICARDO A. ANTONIO L. RODRIGO H. NILO MAGLINTE. DE LA PENA. AVELINO TATAPOD. EMELIANO C. RODOLFO L. TURCAL. CATALINO BONGO. JUANITO B. AGAPITO TECSON. DAGAME. FRANCISCO LAMBAN. JORGE M. RICADO C. VICENTE URQUIZA.. CELSO M. MARO. JR. CARLITO MANACAP.-x G. JR. DEIPARIME. ALFREDO ESPINOSA. OTANA. PANA. EDUARDO L. ROSETE. PASTOR T.

. while working on farms in 23 foreign countries. 1995. Del Monte Fresh Produce N. Nos. a total of 336 plaintiffs from General Santos City (the petitioners in G. 1250781 and 1255982 both assail the Order3 dated May 20.R. Named as defendants therein were: Shell Oil Co. The said Order decreed the dismissal of the case in view of the perceived lack of jurisdiction of the RTC over the subject matter of the complaint. Valdez and Isae Carcamo will be dismissed 90 days after the entry of this Memorandum and Order provided that defendants and third. 5617 before the RTC of General Santos City and G.. Inc. Inc. The thousands of plaintiffs sought damages for injuries they allegedly sustained from their exposure to dibromochloropropane (DBCP). 125598 also challenges the Orders dated June 4.251-96. H-94-1359. 5617.R. 1996 4 and July 9.. On the other hand. 6 127856. et al. Inc. hereinafter referred to as NAVIDA. Nos. Ltd. No. et al. Any plaintiff desiring to bring such an action will do so within 30 days after the entry of this Memorandum and Order. Nos. Branch 37. In a Memorandum and Order dated July 11." which was docketed as Civil Action No.R. and "Juan Ramon Valdez. Ameribrom. the petitions in G. Inc. a chemical used to kill nematodes (worms). 126654. in Civil Case No.. Dow Chemical Co. The cases were eventually transferred to. The petition in G. Standard Fruit and Steamship Co.. They claimed.R. the court will resume jurisdiction over the action as if the case had never been dismissed for [forum non conveniens]. xxxx Notwithstanding the dismissals that may result from this Memorandum and Order. Chiquita Brands. among others.5 which held that the RTC of General Santos City no longer had jurisdiction to proceed with Civil Case No. in the event that the highest court of any foreign country finally affirms the dismissal for lack of jurisdiction of an action commenced by a plaintiff in these actions in his home country or the country in which he was injured. Bromine Compounds. which also dismissed the case on the ground of lack of jurisdiction. 125598.. (CHIQUITA). 1996 of the Regional Trial Court (RTC) of General Santos City. et al. in Civil Case No. Dole Fresh Fruit Co. (2) either waived or accepted service of process and waived any other jurisdictional defense within 40 days after the entry of this Memorandum and Order in any action commenced by a plaintiff in these actions in his home country or the country in which his injury occurred. the court ordered that: Delgado.13 Civil Case No. 5617. 126654.The petitions in G. et al. 125078 and 125598 In accordance with the above Memorandum and Order. v. Occidental Chemical Corp. (hereinafter collectively referred to as DOLE). including the Philippines. prayed for the payment of damages in view of the illnesses and injuries to the reproductive systems which they allegedly suffered because of their exposure to DBCP. that plaintiff may return to this court and.10 April 28. Shell Oil Co. 1996. et al. 1995. Dole Food Co..) Navida. and Amvac Chemical Corp. Standard Fruit Co.. (DOW). Houston Division. H-95-1356. G. (OCCIDENTAL). 24... 125078. v." which was docketed as Civil Action No. 1996 of the RTC of Davao City. a number of personal injury suits were filed in different Texas state courts by citizens of twelve foreign countries. 1999. Ltd. Branch 16.A. No. 1997. The case was docketed as Civil Case No. and Del Monte Tropical Fruit Co. (SHELL). the Federal District Court conditionally granted the defendants’ motion to dismiss. that they were exposed to this . (The aforementioned defendants are hereinafter collectively referred to as defendant companies. Dead Sea Bromine Co.. The cases therein that involved plaintiffs from the Philippines were "Jorge Colindres Carcamo. Shell Oil Co. and (5) submitted within 40 days after the entry of this Memorandum and Order an agreement binding them to satisfy any final judgment rendered in favor of plaintiffs by a foreign court.R. (hereinafter collectively referred to as DEL MONTE).. Nos. 5617. 199711 and March 10. 127856. upon proper motion. and 128398 were consolidated in the Resolutions dated February 10. Jorge Carcamo.12 The factual antecedents of the petitions are as follows: Proceedings before the Texas Courts Beginning 1993. the Federal District Court for the Southern District of Texas. 125078. (4) stipulated within 40 days after the entry of this Memorandum and Order that any discovery conducted during the pendency of these actions may be used in any foreign proceeding to the same extent as if it had been conducted in proceedings initiated there.and fourth-party defendants have: (1) participated in expedited discovery in the United States xxx. The defendants in the consolidated cases prayed for the dismissal of all the actions under the doctrine of forum non conveniens.) filed a Joint Complaint 14 in the RTC of General Santos City on August 10.R. et al. and consolidated in. and Chiquita Brands International.. (3) waived within 40 days after the entry of this Memorandum and Order any limitations-based defense that has matured since the commencement of these actions in the courts of Texas.7 and 1283988 seek the reversal of the Order9dated October 1. Pertinently.

COERCED AND ANOMALOUS The Court views that the plaintiffs did not freely choose to file the instant action. et al. hence. viz: FILING OF CASES IN THE PHILIPPINES . 3(h). the RTC of General Santos City declared that the tort alleged by Navida.. it appears that such voluntary appearance of the defendants in this case is conditional. without resolving the motions filed by the parties. to wit: THE COMPLAINT FOR DAMAGES FILED WITH THE REGIONAL TRIAL COURT SHOULD BE DISMISSED FOR LACK OF JURISDICTION xxxx The substance of the cause of action as stated in the complaint against the defendant foreign companies cites activity on their part which took place abroad and had occurred outside and beyond the territorial domain of the Philippines. if and only if the Civil Code of the Philippines. NAVIDA. merely to comply with the U. Amended . or a suppletory special law prescribes a product liability tort.. consisted of activity or course of conduct engaged in by foreign defendants outside Philippine territory. Thus in the "Defendants’ Amended Agreement Regarding Conditions of Dismissal for Forum Non Conveniens" (Annex to the Complaint) filed with the U. et al. These acts of defendants cited in the complaint included the manufacture of pesticides. 3(i). the trial court ascribed little significance to the voluntary appearance of the defendant companies therein. is premised on being themanufacturer of the pesticides. Accordingly.S. The decision of the U. et al. District Court’s Order dated July 11. the remaining defendant companies filed their various Motions for Bill of Particulars. their distribution through sale or other disposition.21 Fourth. 1996.. 20 Third. or ought to have known.. they were allowed to be exposed to the said products. court that defendants will voluntarily submit to the jurisdiction of this court. and in order to keep open to the plaintiffs the opportunity to return to the U. on March 13.16 excluding Dead Sea Bromine Co.. Bromine Compounds. When the averments in the present complaint are examined in terms of the particular categories of tort recognized in the Philippine Civil Code. it becomes stark clear that such averments describe and identify the category of specific tort known as product liability tort.S. most of the defendant companies respectively filed their Motions for Bill of Particulars. Inc.S. Ltd. 1995. 19 Second. District Court. BECAUSE IT IS NOT A TORT CATEGORY WITHIN THE PURVIEW OF THE PHILIPPINE LAW The specific tort asserted against defendant foreign companies in the present complaint is product liability tort. District Court dismissing the case is not yet final and executory since both the plaintiffs and defendants appealed therefrom (par. Ltd. claimed that their illnesses and injuries were due to the fault or negligence of each of the defendant companies in that they produced. resulting in their becoming part of the stream of commerce. which the defendant companies knew.. as party defendants. Instead of answering the complaint.S. in their complaint is a tort category that is not recognized in Philippine laws. sold and/or otherwise put into the stream of commerce DBCP-containing products. DOW filed an Answer with Counterclaim. While it is true that this court acquires jurisdiction over persons of the defendants through their voluntary appearance. Again.chemical during the early 1970’s up to the early 1980’s when they used the same in the banana plantations where they worked at. their packaging in containers.18 On May 20. First. and the liability of the defendant foreign companies. 1996. and/or when they resided within the agricultural area where such chemical was used. According to NAVIDA. and Amvac Chemical Corp. that the Regional Trial Court has jurisdiction over the present case. filed an Amended Joint Complaint. thus: THE DEFENDANTS’ SUBMISSION TO JURISDICTION IS CONDITIONAL AS IT IS ILLUSORY Defendants have appointed their agents authorized to accept service of summons/processes in the Philippines pursuant to the agreement in the U. were coerced into submitting their case to the Philippine courts. This is necessarily so. et al. because it is the productmanufactured by defendant foreign companies.. the RTC of General Santos City issued an Order dismissing the complaint.S. therefore. including the present Regional Trial Court. It is clear. outside and beyond the jurisdiction of Philippine Courts. Navida. which is asserted to be the proximate cause of the damages sustained by the plaintiff workers.15 During the pendency of the motions. the subject matter stated in the complaint and which is uniquely particular to the present case. 17 On May 15. the trial court determined that it did not have jurisdiction to hear the case. inclusive of and comprehending the specific tort described in the complaint of the plaintiff workers. the RTC of General Santos City adjudged that Navida. but rather were coerced to do so. 1996.. defendants declared that "(t)he authority of each designated representative to accept service of process will become effective upon final dismissal of these actions by the Court". Said the trial court: THE TORT ASSERTED IN THE PRESENT COMPLAINT AGAINST DEFENDANT FOREIGN COMPANIES IS NOT WITHIN THE SUBJECT MATTER JURISDICTION OF THE REGIONAL TRIAL COURT. et al. District Court. were highly injurious to the former’s health and well-being. Ameribrom.

No. There exists litis pendencia since there are two cases involving the same parties and interests. 1996. To allow the parties to litigate in this court when they are actively pursuing the same cases in another forum. The trial court expounded: THE JURISDICTION FROWNS UPON AND PROHIBITS FORUM SHOPPING This court frowns upon the fact that the parties herein are both vigorously pursuing their appeal of the decision of the U. WHEREFORE.S. thus produces no legal effect and is ineffective at the moment. District court dismissing the case filed thereat. DOW and OCCIDENTAL also filed a Joint Motion for Reconsideration 28 of the RTC Order dated May 20. while DOW filed a motion for reconsideration27 of the RTC Order dated June 4. DEL MONTE and SHELL each filed a motion for reconsideration 26 of the RTC Order dated May 20. This court takes note that the U. which merely noted the incidents still pending in Civil Case No. 1996. the RTC of General Santos City likewise issued an Order. the case filed in the U. might accord this court a charming appearance. The RTC of General Santos City then issued an Order 31 dated August 14. District Court has. which stated that the latter had already filed a petition for review on certiorari before this Court. To insist on further proceedings with this case. x x x. court involves the same parties. 1996. 24 On June 4.S. is still pending. which is really a matter of venue. violates the rule on ‘forum shopping’ so abhorred in this jurisdiction. NAVIDA. filed a Petition for Review on Certiorari in order to assail the RTC Order dated May 20. 125078. CHIQUITA. xxxx THIS CASE IS BARRED BY THE RULE OF "LITIS PENDENCIA" Furthermore. would be violative of the constitutional provision on the Bill of Rights guaranteeing speedy disposition of cases (Ref. 5617 and reiterated that it no longer had any jurisdiction over the case. By taking cognizance of the case.. the RTC of General Santos City ruled that the act of NAVIDA. x x x.S. It is settled that initial acquisition of jurisdiction divests another of its own jurisdiction. The case was dismissed on the ground of forum non conveniens. of filing the case in the Philippine courts violated the rules on forum shopping and litis pendencia. et al.S. xxxx THE FILING OF THE CASE IN U. et al. 1996. 1996. 1996. Subsequently. Article III.. in essence.22 Fifth.. in view of the foregoing considerations. the RTC of General Santos City declared that it had already lost its jurisdiction over the case as it took into consideration the Manifestation of the counsel of NAVIDA. same rights and interests.S. CHIQUITA and SHELL filed their motions for reconsideration30 of the above order. being subject to a suspensive condition. this court concludes that since the case between the parties in the U. District Court did not decline jurisdiction over the cause of action. DIVESTED THIS COURT OF ITS OWN JURISDICTION Moreover." 23 In fine. then this case is barred by the rule on "litis pendencia. Consequently. The court has no other choice. 16. The court is cognizant that the Federal Court may resume proceedings of that earlier case between the herein parties involving the same acts or omissions as in this case. Sec. the acquisition of jurisdiction by this court over the persons of the defendants is also conditional.Complaint).S. then to dismiss this case. as it is now presented. Applying the foregoing [precept] to the case-at-bar. this case is now considered DISMISSED.25 dismissing DOW’s Answer with Counterclaim. 1996. the filing of the case in the U. .R. et al. The court would like to emphasize that in accordance with the rule on litis pendencia x x x. the U. courts divested this court of its own jurisdiction. But the same insistence would actually thwart the very ends of justice which it seeks to achieve. In an Order29 dated July 9. Constitution). concurrent jurisdiction with this court over the subject matter of this case. This evaluation and action is made not on account of but rather with due consideration to the fact that the dismissal of this case does not necessarily deprive the parties – especially the plaintiffs – of their possible remedies. On July 11. as in this case. The appointment of agents by the defendants. x x x. courts.S. which was docketed as G. the subsequent case must be dismissed.S. since the authority of the agent of the defendants in the Philippines is conditioned on the final adjudication of the case pending with the U. For to continue with these proceedings. the trial court held that: It behooves this Court. 1996.

. sold. 1996. the Court. 1996. Chiquita Brands International. et al. upon proper motion. as plaintiffs.R. 24.251-96. Former Justice Secretary Demetrio Demetria in a May 1995 opinion said: The Philippines should be an inconvenient forum to file this kind of damage suit against foreign companies since the causes of action alleged in the petition do not exist under Philippine laws. plaintiffs seeking for payment of damages based on negligence. 1996. According to ABELLA.." 39ABELLA. 1996. which contained the chemical DBCP. No. DOW. as correctly pointed out by one of the defendants. which the defendant companies knew or ought to have known.. filed their opposition. In a Resolution33 dated October 7. 1996). 1996. One of the conditions imposed was for the plaintiffs to file actions in their home countries or the countries in which they were injured x x x.R. the U. conspiracy and international tort theories (par. 126654.) 11.R. Standard Fruit Company. 1996. 1996. Reply to Opposition dated July 22. all foreign corporations with Philippine Representatives. Del Monte Fresh Produce. The RTC of Davao City.R. 18). DBCP without warning the users of its hazardous effects on health. however.." to wit: 1.251-96 in its Order dated October 1. used. et al. Courts will reassume jurisdiction. and Del Monte Tropical Fruits Co. et al. 1996. 127856. 1996 and August 14. is convinced that plaintiffs "would have this Honorable Court dismiss the case to pave the way for their getting an affirmance by the Supreme Court" (#10 of Defendants’ Del Monte Fresh Produce. the Court dismissed the aforesaid petition for failure of CHIQUITA to show that the RTC committed grave abuse of discretion. the said plaintiffs may return to that court and. plaintiffs aver that: on 11 July 1995. 32 challenging the orders of the RTC of General Santos City dated May 20. 1996. plaintiffs are suing the defendants for tortuous acts committed by these foreign corporations on their respective countries. alleged that..34 which sought the reversal of the RTC Orders dated May 20. No. et al. 24. Nos. the Federal District Court issued a Memorandum and Order conditionally dismissing several of the consolidated actions including those filed by the Filipino complainants. No.. 126018. et al. There has been no decided case in Philippine Jurisprudence . DEL MONTE. 27). and without providing instructions on its proper use and application. DOLE Fresh Fruit Company.) amended their Joint-Complaint on May 21. 125078. and CHIQUITA was filed before Branch 16 of the RTC of Davao City by 155 plaintiffs from Davao City. and Del Monte Tropical Fruit Co. sterility and severe injuries to their reproductive capacities. plaintiffs state that: defendants have no properties in the Philippines.R. reads: Upon a thorough review of the Complaint and Amended Complaint For: Damages filed by the plaintiffs against the defendants Shell Oil Company. DOLE. produced. DOW Chemicals Company. 24.On August 30. OCCIDENTAL. DOW and DEL MONTE filed their respective Answers dated May 17. These plaintiffs (the petitioners in G. which. N.251-96 before the RTC of Davao City and G. ABELLA. No. 126654. 19). Chiquita Brands. 125598. No. 1996. Consider these: 1) In the original Joint Complaint. 125598 with G. CHIQUITA filed a Motion for Reconsideration. they have no agents as well (par. USA. distributed. et al.36 but the same was denied through a Resolution37 dated January 27. In the Amended Joint Complaint. such exposure resulted in "serious and permanent injuries to their health. This case was docketed as Civil Case No. The petition was docketed as G. July 9.. Inc.R. 1996 and June 24. Standard Fruit and Steamship.38 Similar to the complaint of NAVIDA. In a Resolution 35 dated November 13. said petition was provisionally dismissed on condition that these cases be filed in the Philippines or before 11 August 1995 (Philippine date. in its entirety. but not limited to. Occidental Chemical Corporation. the Memorandum and [O]rder further provided that should the highest court of any foreign country affirm the dismissal for lack of jurisdictions over these actions filed by the plaintiffs in their home countries [or] the countries where they were injured. DOLE Food Company. and/or made available in commerce. Should the Philippine Courts refuse or deny jurisdiction. strict liability. N. Civil Case No. had they exercised ordinary care and prudence. the Court will resume jurisdiction as if the case had never been dismissed for forum non conveniens. are now compelled by a decision of a Texas District Court to file cases under torts in this jurisdiction forcauses of actions which occurred abroad (par. upon defendants’ Motion to Dismiss on Forum non [conveniens].. DOW and OCCIDENTAL aver that the RTC of General Santos City erred in ruling that it has no jurisdiction over the subject matter of the case as well as the persons of the defendant companies. and 128398 Another joint complaint for damages against SHELL.A. Except for DOW. DOW and OCCIDENTAL filed their Petition for Review on Certiorari. after having elected to sue in the place of defendants’ residence. The Court however is constrained to dismiss the case at bar not solely on the basis of the above but because it shares the opinion of legal experts given in the interview made by the Inquirer in its Special report "Pesticide Cause Mass Sterility. In their petition. claimed that the defendant companies manufactured. the other defendant companies filed their respective motions for bill of particulars to which ABELLA. as workers in the banana plantation and/or as residents near the said plantation. hereinafter referred to as ABELLA.A. junked Civil Case No. Notwithstanding. June 4. S. a petition was filed by same plaintiffs against same defendants in the Courts of Texas. they were made to use and/or were exposed to nematocides. 1997. CHIQUITA filed a Petition for Review on Certiorari. Their petition was docketed as G. this Court resolved to consolidate G. 1996 and July 9. including.

filed before this Court a Consolidated Motion (to Drop PartyRespondents). 1997. DEL MONTE also filed its petition for review on certiorari before this Court assailing the abovementioned orders of the RTC of Davao City. No.. 1996 of the RTC of Davao City. and CHIQUITA each filed their respective motions for reconsideration of the Order dated October 1.45 The plaintiff claimants alleged that they had amicably settled their cases with DOW. et al. Indemnity. No. DOW. voluntarily inhibiting himself from trying the case.R. 1996. 1996. Thereafter..40 Docketed as G. et al. 128398. OCCIDENTAL. CHIQUITA also claims that the RTC of Davao City cannot dismiss the case simply on the basis of opinions of alleged legal experts appearing in a newspaper article. Initially. 126654. and SHELL. which contained an additional motion for the inhibition of the presiding judge. 1997.. later. further aver that the dismissal of the case. the petition for review. et al. and ABELLA. 126654. and March 10. 2. by the RTC of Davao City is bereft of basis. et al. According to DEL MONTE. filed a motion for reconsideration. Nos. . the RTC of Davao City has jurisdiction over the subject matter of the case since Articles 2176 and 2187 of the Civil Code are broad enough to cover the acts complained of and to support their claims for damages. questioning the Orders dated October 1. 1997. acted beyond its authority when it dismissed the case motu proprio or without any motion to dismiss from any of the parties to the case. CHIQUITA argues that the RTC of Davao City erred in dismissing the case motu proprio as it acquired jurisdiction over the subject matter of the case as well as over the persons of the defendant companies which voluntarily appeared before it.251-96. In an Order42 dated December 16. however. The Consolidated Motion to Drop DOW. 125078. On September 26. 24. 1997. 1997.R. 127856. 1997.. this Court consolidated G. et al. This case was docketed as G. Retired Supreme Court Justice Abraham Sarmiento opined that while a class suit is allowed in the Philippines the device has been employed strictly. and ABELLA. They also maintain that the absence of jurisprudence regarding the award of damages in favor of those adversely affected by the DBCP does not preclude them from presenting evidence to prove their allegations that their exposure to DBCP caused their sterility and/or infertility. According to ABELLA. filed on November 12. 3. Mass sterility will not qualify as a class suit injury within the contemplation of Philippine statute. According to them. SHELL. their cause of action is based on quasi-delict under Article 2176 of the Civil Code. the plaintiff claimants sought to withdraw their petitions as against DOW. April 28. CHIQUITA filed a Petition for Review dated March 5. based on the opinions of legal luminaries reported in a newspaper. DEL MONTE also filed its motion for reconsideration." which were attached to the said motion. an answer to the complaint. the RTC of Davao City affirmed the Order dated October 1. the RTC of Davao City. assails before this Court the above-quoted order of the RTC of Davao City. ABELLA.R. Its petition was docketed as G. 1996 by ABELLA. 127856. 125598. Retired High Court Justice Rodolfo Nocom stated that there is simply an absence of doctrine here that permits these causes to be heard. as defined under the law and that the said court already obtained jurisdiction over its person by its voluntary appearance and the filing of a motion for bill of particulars and. 24. ABELLA. This means there is no available evidence which will prove and disprove the relation between sterility and DBCP. dismissed the petition filed by CHIQUITA for submitting a defective certificate against forum shopping. 1999.251-96 on the ground of lack of jurisdiction. and denied the respective motions for reconsideration filed by defendant companies. OCCIDENTAL.awarding to those adversely affected by DBCP. and SHELL as Party-Respondents filed by NAVIDA. CHIQUITA. 1996. et al. Case ordered dismissed. In the Resolutions dated February 10. this Court in its Resolution43 dated July 28. and SHELL sometime in July 1997. On March 7. Pursuant to said agreement. 1997. 1996 of the RTC of Davao City. 1996 and December 16. therefore. Thus.. claim that the RTC of Davao City erred in dismissing Civil Case No. and 128398. et al. DEL MONTE claims that the RTC of Davao City has jurisdiction over Civil Case No. No product liability ever filed or tried here. and Hold Harmless Agreement. the case was re-raffled to Branch 13 of the RTC of Davao City. NAVIDA. No. et al.R. The presiding judge of Branch 16 then issued an Order41 dated December 2.. This settlement agreement was evidenced by facsimiles of the "Compromise Settlement. In its petition. OCCIDENTAL. which was granted by this Court in the Resolution44 dated October 8.

54 interposing no objection to the withdrawal of the petition. 1998. 125598. a) The court did not simply dismiss the case because it was filed in bad faith with petitioners intending to have the same dismissed and returned to the Texas court. the motion to withdraw petition for review filed by DOW and OCCIDENTAL. THE ISSUES In their Consolidated Memorandum. DEL MONTE filed its Comment on Motion to Withdraw Petition for Review Filed by Petitioners in G. d. 1998. The Memoranda of the Parties Considering the allegations. Assumption of jurisdiction by the U. No.51 and DOW and OCCIDENTAL jointly filed a Memorandum on December 23. et al. NAVIDA.. No. et al. presented the following issues for our consideration: IN REFUTATION I.R. 125598 On July 13. 5617 had already been amicably settled by the parties in 1997.S. The acts complained of occurred within Philippine territory. issues. 55 stating that they agree with the view of DOW and OCCIDENTAL that the petition in G. and arguments adduced by the parties. should be retained as defendants for purposes of prosecuting the cross-claims of DOLE.R. 1999. this Court granted. et al. Art. however. and ABELLA. THE COURT DISMISSED THE CASE DUE TO LACK OF JURISDICTION. et al. filed their Consolidated Memorandum on February 3.56 stating that it has no objections to the withdrawal of the petition filed by DOW and OCCIDENTAL in G. et al. DOLE filed its Manifestation dated September 6. as well as other settling defendant companies. Occidental and Shell does not unjustifiably prejudice remaining respondents Dole. No.. and SHELL.58 DISCUSSION On the issue of jurisdiction .. No. 199849 while DEL MONTE filed on October 13. 2004.R. The Compromise Agreement and the subsequent Consolidated Motion to Drop Party Respondents Dow. 48 DOLE filed its Memorandum on October 12. as well as the settlement entered into between the plaintiff claimants and DOW..50 NAVIDA. District Court over petitioner[s’] claims did not divest Philippine [c]ourts of jurisdiction over the same. in the event that the complaint below is reinstated. et al. On September 27. 2004. IN SUPPORT OF THE PETITION II. also filed their Comment dated September 14. DOW and OCCIDENTAL filed a Motion to Withdraw Petition for Review in G. b) The court dismissed the case because it was convinced that it did not have jurisdiction. and ABELLA. among others. No. OCCIDENTAL. b. 2176 of the Civil Code of the Philippines is broad enough to cover the acts complained of. opposed the motion. a. 53explaining that the said petition "is already moot and academic and no longer presents a justiciable controversy" since they have already entered into an amicable settlement with NAVIDA. and further stating that they maintain their position that DOW and OCCIDENTAL.52 The Motion to Withdraw Petition for Review in G. 2004.47 SHELL asked to be excused from the filing of a memorandum alleging that it had already executed a compromise agreement with the plaintiff claimants. this Court.R.DOLE. DEL MONTE and CHIQUITA. 125598. DOW and OCCIDENTAL added that they have fully complied with their obligations set forth in the 1997 Compromise Agreements. NAVIDA. 1999. THE TRIAL COURT HAS JURISDICTION OVER THE SUBJECT MATTER OF THE CASE. 1998.R. in a Resolution dated June 22. CHIQUITA filed its Memorandum on August 28. 125598 has become moot and academic because Civil Case No.. Del Monte and Chiquita. c. 125598.46 required all the parties to submit their respective memoranda. In a Resolution57 dated October 11. 2004. 2004.

which amount falls within the jurisdiction of the RTC. 5617 and 24. in such other cases in Metro Manila. Jurisdiction in civil cases.. and ABELLA. applying the customs of the place and. for lack of jurisdiction. prays for the remand of Civil Case Nos.. CHIQUITA argues that the courts a quo had jurisdiction over the subject matter of the cases filed before them. applies to cases where the damages are merely incidental to or a consequence of the main cause of action. the jurisdiction over the subject matter or nature of the action cannot be dislodged by anybody other than by the legislature through the enactment of a law. stated no cause of action against the defendant companies. the alleged legal opinions cited in the newspaper reports were taken judicial notice of. The Amended Joint-Complaints sought approximately P2. Said fact allegedly constitutes reasonable basis for our courts to assume jurisdiction over the case. None of the defendant companies ever objected to the exercise of jurisdiction by the courts a quo over their persons. Thus. The court may still resolve the case. Supreme Court Administrative Circular No. packaging. et al. the courts a quo should have dismissed the civil cases on the ground that the Amended Joint-Complaints of NAVIDA.251-96 be reversed and that the said cases be remanded to the courts a quo for further proceedings. however. on a particular court or body. CHIQUITA. The RTC of General Santos City and the RTC of Davao City have jurisdiction over Civil Case Nos. argue that the allegedly tortious acts and/or omissions of defendant companies occurred within Philippine territory.. DOLE adds that the RTC of Davao City gravely erred in relying upon newspaper reports in dismissing Civil Case No. the general principles of law. attorney’s fees. et al.00) or. DOLE posits that the Philippines is the situs of the tortious acts allegedly committed by defendant companies as NAVIDA.. which states that the law of the place where the alleged wrong was committed will govern the action. 129. Specifically.60 Corollary thereto. and costs or the value of the property in controversy exceeds One hundred thousand pesos (P100. in the absence thereof. as amended by Republic Act No. Blg. In addition. Furthermore. CHIQUITA and the other defendant companies also submitted themselves to the jurisdiction of the RTC by making voluntary appearances and seeking for affirmative reliefs during the course of the proceedings. opines that the dismissal of Civil Case Nos. DOLE states that if there were no actionable wrongs committed under Philippine law.P. as amended by R.Essentially. respectively. et al. thus. etc. 19. Federal District Court to re-assume jurisdiction over the cases.S.251-96 to the RTC of General Santos City and the RTC of Davao City.251-96. the use of and exposure to DBCP that was manufactured. exclusive of interest.. respectively.. At the time of the filing of the complaints. NAVIDA.59 Once vested by law. point to their alleged exposure to DBCP which occurred in the Philippines. the jurisdiction of the RTC in civil cases under Batas Pambansa Blg. Article 9 of the Civil Code dictates that a judge may not refuse to render a decision on the ground of insufficiency of the law. and ABELLA. However.000.251-96 was proper. DOLE.. given that plaintiff claimants merely prosecuted the cases with the sole intent of securing a dismissal of the actions for the purpose of convincing the U. irrespective of whether the plaintiffs are entitled to all or some of the claims asserted therein.. 5617 and 24. et al. litigation expenses. 24. et al. et al.7 million for each of the plaintiff claimants.A. respectively The rule is settled that jurisdiction over the subject matter of a case is conferred by law and is determined by the allegations in the complaint and the character of the relief sought. which falls under Article 2176 of the Civil Code. distribution. Remarkably. 5617 and 24. in cases where the claim for damages is the main cause of action. – Regional Trial Courts shall exercise exclusive original jurisdiction: xxxx (8) In all other cases in which the demand. specifically for approximately P2.251-96. damages of whatever kind. et al. All parties contend that the RTC of General Santos City and the RTC of Davao City have jurisdiction over the action for damages. Finally. 7691. No. as well as Article 2176 thereof. the amount of such claim shall be considered in determining the jurisdiction of the court. Likewise. NAVIDA. DOLE also argues that if indeed there is no positive law defining the alleged acts of defendant companies as actionable wrong.. exclusive of the abovementioned items exceeds Two hundred thousand pesos (P200. et al.. distributed or otherwise put into the stream of commerce by defendant companies happened in the Philippines. and ABELLA. are broad enough to cover their claim for damages.251-96 given that newspaper articles are hearsay and without any evidentiary value. . sale. et al. 5617 and 24. 09-94. and ABELLA. was: SEC. This is in consonance with the lex loci delicti commisi theory in determining the situs of a tort. NAVIDA. where the demand. In a similar vein. as the cause of the sterility and other reproductive system problems that they allegedly suffered. 5617 and 24. not the place of manufacture. assert that the provisions of Chapter 2 of the Preliminary Title of the Civil Code. and ABELLA. pray that the respective rulings of the RTC of General Santos City and the RTC of Davao City in Civil Case Nos. et al. DOLE similarly maintains that the acts attributed to defendant companies constitute a quasi-delict. the crux of the controversy in the petitions at bar is whether the RTC of General Santos City and the RTC of Davao City erred in dismissing Civil Case Nos. of the said chemical. states: 2.00). CHIQUITA avers that the pertinent matter is the place of the alleged exposure to DBCP. 7691.000..7 million in damages for each plaintiff claimant. without any notice to the parties. or one of the causes of action. none of the parties to this case claims that the courts a quo are bereft of jurisdiction to determine and resolve the above-stated cases. 129. The exclusion of the term "damages of whatever kind" in determining the jurisdictional amount under Section 19 (8) and Section 33 (1) of B.

including. it is most respectfully prayed that after hearing. NAVIDA. c. were highly harmful and injurious to the Plaintiffs’ health and well-being. and e) TO PAY THE COSTS of the suit. et al. used. IT ALSO CAUSED ILL-EFFECTS ON THE HEALTH OF PERSONS EXPOSED TO IT AFFECTING the human reproductive system as well..61 From the foregoing.500. AND/OR MADE AVAILABLE IN COMMERCE nematocides containing the chemical dibromochloropropane.00) each. and ABELLA. 6. THE DEFENDANTS WERE AT FAULT OR WERE NEGLIGENT IN THAT THEY MANUFACTURED. THE CHEMICAL WAS USED AGAINST the parasite known as the nematode. b. 129. the plaintiffs suffered serious and permanent injuries TO THEIR HEALTH.000. THEY allowed Plaintiffs to be exposed to. Failed to adequately warn Plaintiffs of the dangerous characteristics of DBCP. PUT THE SAME into the stream of commerce.00. Failed to place adequate warnings. 7. . distributed. or to cause their subsidiaries or affiliate to do so. MADE AVAILABLE OR PUT DBCP INTO THE STREAM OF COMMERCE were negligent OR AT FAULT in that they. governmental agencies and the public. et al. b) TO PAY EACH PLAINTIFF nominal damages in the amount of Four Hundred Thousand Pesos (P400. The RTCs unmistakably have jurisdiction over the cases filed in General Santos City and Davao City. Failed to provide plaintiffs with information as to what should be reasonably safe and sufficient clothing and proper protective equipment and appliances. to protect plaintiffs from the harmful effects of exposure to DBCP. DISTRIBUTED. but not limited to. PRODUCED. 5.7 million for each of the plaintiff claimants.. on containers of DBCP-containing materials to warn of the dangers to health of coming into contact with DBCP. and ABELLA. or to cause their subsidiaries or affiliates to so warn plaintiffs.. if any. et al. and/or USED DBCP and/or otherwise. DBCP not only destroyed nematodes. WITHOUT INFORMING THE USERS OF ITS HAZARDOUS EFFECTS ON HEALTH AND/OR WITHOUT INSTRUCTIONS ON ITS PROPER USE AND APPLICATION.Here. AS IT TURNED OUT. or to cause their subsidiaries or affiliates to do so. and/or (b) they resided within the agricultural area WHERE IT WAS USED. d) TO PAY EACH PLAINTIFF attorneys fees of Two Hundred Thousand Pesos (P200.000. The Defendants manufactured. c) TO PAY EACH PLAINTIFF exemplary damages in the amount of Six Hundred Thousand Pesos (P600. or to cause their subsidiaries or affiliates to do so. sought in their similarly-worded Amended Joint-Complaints filed before the courts a quo. and f. premises considered.. or in the exercise of ordinary care and prudence ought to have known. Moreover. which plagued banana plantations. Failed to reveal the results of tests conducted on DBCP to each plaintiff.00). The Defendants WHO MANUFACTURED.000. produced. judgment be rendered in favor of the plaintiffs ordering the defendants: a) TO PAY EACH PLAINTIFF moral damages in the amount of One Million Five Hundred Thousand Pesos (P1. it is clear that the claim for damages is the main cause of action and that the total amount sought in the complaints is approximately P2. the allegations in both Amended Joint-Complaints narrate that: THE CAUSES OF ACTION 4. Failed to test DBCP prior to releasing these products for sale.00). commonly known as DBCP. d. DBCP-containing materials which THEY knew.00). Failed to take reasonable precaution or to exercise reasonable care to publish. or to cause their subsidiaries or affiliates to do so. STERILITY and severe injuries to their reproductive capacities. e. or to cause their subsidiaries or affiliates to do so. As a result of such exposure. fall within the purview of the definition of the jurisdiction of the RTC under Batas Pambansa Blg. the following prayer: PRAYER WHEREFORE. AMONG OTHERS: a. sold. as both claims by NAVIDA. in a language understandable to the worker. INCLUDING THOSE in the Philippines. et al. adopt and enforce a safety plan and a safe method of handling and applying DBCP. SOLD. The plaintiffs were exposed to DBCP in the 1970s up to the early 1980s WHILE (a) they used this product in the banana plantations WHERE they were employed. sold.

64 this Court has always reminded that jurisdiction of the court over the subject matter of the action is determined by the allegations of the complaint. Inc... Failed to implement proper methods and techniques of application of said products. 66 . Failed to monitor the health of plaintiffs exposed to said products. "without informing the users of its hazardous effects on health and/or without instructions on its proper use and application. et al. b. et al. What determines the jurisdiction of the court is the nature of the action pleaded as appearing from the allegations in the complaint. which undeniably occurred in the Philippines. took place abroad and had occurred outside and beyond the territorial boundaries of the Philippines. with individual claims of approximately P2. therefore. irrespective of whether or not the plaintiffs are entitled to recover upon all or some of the claims asserted therein. f.. resulting in their becoming part of the stream of commerce. and ABELLA. the injuries and illnesses. et al. is called a quasi-delict and is governed by the provisions of this Chapter.. The illnesses and injuries of each plaintiff are also due to the FAULT or negligence of defendants Standard Fruit Company. Failed to warn Plaintiffs of the hazards of exposure to said products or to cause them to be so warned. nematocides which contain DBCP. Inc. or the situs of the act complained of. As specifically enumerated in the amended complaints. et al.7 million for each plaintiff claimant. Concealed from Plaintiffs information concerning the observed effects of said products on Plaintiffs. and ABELLA. where any of the plaintiffs or defendants resides.8. using. c. allegedly suffered resulted from their exposure to DBCP while they were employed in the banana plantations located in the Philippines or while they were residing within the agricultural areas also located in the Philippines. e.. and ABELLA. et al..A. The jurisdiction of the court cannot be made to depend upon the defenses set up in the answer or upon the motion to dismiss. such as claims for payment of damages. their distribution through sale or other disposition. and ABELLA. Whoever by act or omission causes damage to another. Inc.62 (Emphasis supplied and words in brackets ours. in that they failed to exercise reasonable care to prevent each plaintiff’s harmful exposure to DBCP-containing products which defendants knew or should have known were hazardous to each plaintiff in that they. which obviously falls within the purview of the civil action jurisdiction of the RTCs. such exposure to the said chemical caused ill effects. The factual allegations in the Amended JointComplaints all point to their cause of action. Chiquita Brands. and ABELLA. It is. for otherwise. et al. d. there being fault or negligence. Failed to place adequate labels on containers of said products to warn them of the damages of said products. et al.. if there is no pre-existing contractual relation between the parties. "the manufacture of the pesticides.. there being fault or negligence. the acts and/or omissions attributed to the defendant companies constitute a quasi-delict which is the basis for the claim for damages filed by NAVIDA. Certainly. et al. N.. or to cause such to be implemented. NAVIDA.. Court of Appeals. the allegations in the Amended Joint-Complaints of NAVIDA. which NAVIDA. hence. Thus. error on the part of the courts a quo when they dismissed the cases on the ground of lack of jurisdiction on the mistaken assumption that the cause of action narrated by NAVIDA. injuries and illnesses. and h. which under the Civil Code is defined as an act. i. and ABELLA. Failed to test said products for adverse health effects.e." 63 Verily. and/or otherwise putting into the stream of commerce. or omission which causes damage to another. et al. g. their packaging in containers. or to cause said products to be tested.. Dole Food Company.. these allegations in the complaints constitute the cause of action of plaintiff claimants – a quasi-delict. attribute to defendant companies certain acts and/or omissions which led to their exposure to nematocides containing the chemical DBCP. specifically to their reproductive system. Moreover. the Rules of Court allow the action to be commenced and tried in the appropriate court. Failed to use substitute nematocides for said products or to cause such substitutes to [be] used. Dole Fresh Fruit Company. et al. The RTC of General Santos City and the RTC of Davao City obviously have reasonable basis to assume jurisdiction over the cases. Clearly then. AMONG OTHERS: a. at the election of the plaintiff.) Quite evidently. The averments therein and the character of the relief sought are the ones to be consulted. et al. would be determinative of jurisdiction and venue for trial of cases.. the cases below are not criminal cases where territoriality.. Failed to adequately supervise and instruct Plaintiffs in the safe and proper application of DBCPcontaining products. in Citibank. v. In personal civil actions."65 and. point to the acts and/or omissions of the defendant companies in manufacturing. To be precise. Such fault or negligence. and Chiquita Brands International. the question of jurisdiction would almost entirely depend upon the defendants. selling. producing. outside the jurisdiction of the RTCs. where he may be found. or in the case of a non-resident defendant. et al. is obliged to pay for the damage done. Article 2176 of the Civil Code provides: Article 2176. According to NAVIDA.

and ABELLA. et al..69 Thus. against the defendant companies for damages occurred in the Philippines. and ABELLA. the RTC of General Santos City and the RTC of Davao City have validly acquired jurisdiction over the persons of the defendant companies. et al. This Court does not rule on allegations which are manifestly conjectural. indeed. all the defendant companies designated and authorized representatives to receive summons and to represent them in the proceedings before the courts a quo. 5617 and 24. as well as over the subject matter of the instant case. respectively. et al.. the decision on all questions arising therefrom is but an exercise of such jurisdiction. Any error that the court may commit in the exercise of its jurisdiction is merely an error of judgment. et al. the active participation of a party in the proceedings is tantamount to an invocation of the court’s jurisdiction and a willingness to abide by the resolution of the case. this Court. OCCIDENTAL and SHELL be dropped as respondents in G. et al. 5617 and 24. either in General Santos City or in Davao City. Nos. Thus. this jurisdiction. the convenient fora for trying these cases. Third. behooves this Court to order the remand of Civil Case Nos.. First. et al. as these may not exist at all. not the orders or the decision rendered therein... on realities. This Court deals with facts. plaintiff claimants are all residents of the Philippines. by praying for various affirmative reliefs. et al. NAVIDA. these additional factors. are further praying that DOW.. et al. 68 held that jurisdiction over the person of the defendant in civil cases is acquired either by his voluntary appearance in court and his submission to its authority or by service of summons.." Jurisdiction refers to the authority to decide a case. continues until the termination of the proceedings. What is more. et al.67 The RTC of General Santos City and the RTC of Davao City validly acquired jurisdiction over the persons of all the defendant companies It is well to stress again that none of the parties claims that the courts a quo lack jurisdiction over the cases filed before them. family members and other members of the community. as in the case of the courts a quo. et al.. would be easier to gather in the Philippines. not appearances. Rule 14. OCCIDENTAL and SHELL as respondents in view of their amicable settlement with NAVIDA. It may also be pertinently stressed that "jurisdiction" is different from the "exercise of jurisdiction.71 This is especially true with respect to allegations of bad faith. NAVIDA. the specific areas where they were allegedly exposed to the chemical DBCP are within the territorial jurisdiction of the courts a quo wherein NAVIDA.70 Plaintiffs’ purported bad faith in filing the subject civil cases in Philippine courts Anent the insinuation by DOLE that the plaintiff claimants filed their cases in bad faith merely to procure a dismissal of the same and to allow them to return to the forum of their choice. most of the evidence required to prove the claims of NAVIDA. et al. Sandiganbayan. the testimonial and documentary evidence from important witnesses.251-96 to the RTC of General Santos City and the RTC of Davao City. unconditionally and knowingly appeared and submitted themselves to the jurisdiction of the courts a quo. and by actively participating during the course of the proceedings below.R. are available only in the Philippines. in line with the basic rule that good faith is always presumed and bad faith must be proved. co-workers. argue that the non-settling defendants did not aver any cross-claim in their answers to the complaint and that they subsequently sought to amend their answers to plead their cross-claims only .In a very real sense.251-96. All parties voluntarily. In line herewith.. et al.. Section 20 of the 1997 Rules of Civil Procedure provides that "[t]he defendant’s voluntary appearance in the action shall be equivalent to service of summons." In this connection. and that the courts a quo have also acquired jurisdiction over the persons of all the defendant companies. and ABELLA. Second. All the defendant companies submitted themselves to the jurisdiction of the courts a quo by making several voluntary appearances. they are. initially filed their claims for damages. and ABELLA. justice and law will be short-lived.. and will bar said party from later on impugning the court or body’s jurisdiction. which does not affect its authority to decide the case. and ABELLA. et al.. 72 In sum. much less divest the court of the jurisdiction over the case. When this Court acts on appearances instead of realities. demonstrate that. and ABELLA. not fancies. All parties are one in asserting that the RTC of General Santos City and the RTC of Davao City have validly acquired jurisdiction over the persons of the defendant companies in the action below. it is not far-fetched to assume that voluminous records are involved in the presentation of evidence to support the claim of plaintiff claimants. Furthermore. apart from the RTC of General Santos City and the RTC of Davao City having jurisdiction over the subject matter in the instant civil cases. which has been acquired and has been vested on the courts a quo. this Court finds such argument much too speculative to deserve any merit. Considering the great number of plaintiff claimants involved in this case. 125078 and 126654. and ABELLA. et al.. The non-settling defendants allegedly manifested that they intended to file their cross-claims against their co-defendants who entered into compromise agreements. considering the fact that the RTC of General Santos City and the RTC of Davao City have jurisdiction over the subject matter of the amended complaints filed by NAVIDA. Accordingly. where a court has jurisdiction over the persons of the defendants and the subject matter. It must be remembered that this Court does not rule on allegations that are unsupported by evidence on record. in Meat Packing Corporation of the Philippines v. such as doctors. coupled with the fact that the alleged cause of action of NAVIDA. as well as in Civil Case Nos. On the issue of the dropping of DOW. it therefore.

et al. in view of the above settlement agreements with ABELLA. the responsibility of two or more persons who are liable for the same quasi-delict is solidary. as well as the Release in Full executed by the latter. A solidary obligation is one in which each of the debtors is liable for the entire obligation. 24. For this purpose. et al. Significantly. DEL MONTE filed a Manifestation and Motion73 before the Court.. the 336 plaintiff claimants in Civil Case No. thus. The Court notes that the Consolidated Motions (to Drop Party-Respondents) that was filed by NAVIDA.. 5617 and 24. DEL MONTE sought the dismissal of the Amended Joint-Complaint in the said civil case. 5617 and 24. to drop DOW. Thereafter.. et al. et al. and the Court subsequently orders the remand of the action to the trial court for continuance. but DEL MONTE qualified that it entered into a settlement agreement with only four of the plaintiff claimants in Civil Case No.. according to CHIQUITA. 5617. after the parties have submitted their respective memoranda. be denied. This solidary obligation on the part of all the defendants allegedly gives any codefendant the statutory right to proceed against the other co-defendants for the payment of their respective shares. et al. the latter being manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. There is. a primary need to establish who the specific parties to the alleged compromise agreements are. a compromise agreement determines the rights and obligations of only the parties to it. and Hold Harmless Agreement between DEL MONTE and the settling plaintiffs. OCCIDENTAL. would only unduly delay and complicate the proceedings..77 A compromise has upon the parties the effect and authority of res judicata78 and this holds true even if the agreement has not been judicially approved. NAVIDA.79 In addition. stating that similar settlement agreements were allegedly executed by the plaintiff claimants with DEL MONTE and CHIQUITA sometime in 1999.251-96. Having adjudged that Civil Case Nos. the trial courts can then determine who among the defendants may be dropped from the said cases. et al.. 5617 who are claiming against the Del Monte parties"75 and that the latter have executed amicable settlements which completely satisfied any claims against DEL MONTE.76 Judicial approval is not required for its perfection.. Furthermore. 2007. as well as in Civil Case Nos. Moreover. However.R. the RTC of General Santos City and the RTC of Davao City should first receive in evidence and examine all of the alleged compromise settlements involved in the cases at bar to determine the propriety of dropping any party as a defendant therefrom. Should the subject motion of NAVIDA. Indemnity. et al. Furthermore. to wit: Art. should likewise be referred to the said trial courts for appropriate disposition." Like any other contract. et al. on the basis of the records of the cases at bar and the additional evidence submitted by the parties. 1217. Indemnity. if any. Payment made by one of the solidary debtors extinguishes the obligation.80 In light of the foregoing legal precepts.R. CHIQUITA and DOLE similarly insist that the motion of NAVIDA. et al.251-96. In their Memoranda. the paying debtor’s right of reimbursement is provided for under Article 1217 of the Civil Code. Under Article 2028 of the Civil Code. as a binding contract. on April 2. and Hold Harmless Agreement and its truth could not be verified with certainty based on the records elevated to this Court. "[a] compromise is a contract whereby the parties. respectively. 5617.. and ABELLA. in subsequent developments. et al. and ABELLA. assert that the cross-claims are already barred. SHELL and OCCIDENTAL as respondents in G. only pertained to DOW. Attached to the said manifestation were copies of the Compromise Settlement. . the said allegation of DEL MONTE was simply stipulated in their Compromise Settlement. DEL MONTE and CHIQUITA supposedly reached their own amicable settlements with the plaintiff claimants. and ABELLA. perfected by mere consent. 81 In solidary obligations. and ABELLA.251-96. 5617 and 24. be granted. However. Nos. 5617 jointly filed a complaint without individually specifying their claims against DEL MONTE or any of the other defendant companies. It is true that. Purportedly included in the agreements were Civil Case Nos.after the settlement between the plaintiff claimants and DOW. CHIQUITA and DOLE are opposing the above motion of NAVIDA. the courts a quo may require the presentation of additional evidence from the parties. 127856 and accordingly prayed that it be allowed to withdraw the same. DEL MONTE stated that it no longer wished to pursue its petition in G.. If two or more solidary debtors offer to pay.. the creditor may choose which offer to accept. and SHELL were executed. and each of the creditors is entitled to demand the satisfaction of the whole obligation from any or all of the debtors. These four plaintiff claimants were allegedly the only ones who were asserting claims against DEL MONTE. avoid a litigation or put an end to one already commenced. et al. In accordance with the alleged compromise agreements with the four plaintiffs in Civil Case No.. et al. as well as their corresponding rights and obligations therein.. 125078 and 126654.251-96 should be remanded to the RTC of General Santos City and the RTC of Davao City. CHIQUITA and DOLE would allegedly be deprived of their right to prosecute their cross-claims against their other co-defendants. Incidentally. It is a consensual contract. a third party complaint or a separate trial. and ABELLA. in Civil Case No. 5617 and 24. not one plaintiff claimant filed a motion for the removal of either DEL MONTE or CHIQUITA as defendants in Civil Case Nos.. et al. the Court deems that the Consolidated Motions (to Drop Party-Respondents) filed by NAVIDA.251-96. No. by making reciprocal concessions. an extrajudicial compromise agreement is not excepted from rules and principles of a contract. and ABELLA. since the latter’s Amended Complaints cited several instances of tortious conduct that were allegedly committed jointly and severally by the defendant companies.74 DEL MONTE specified therein that there were "only four (4) plaintiffs in Civil Case No. OCCIDENTAL and SHELL in view of the latter companies’ alleged compromise agreements with the plaintiff claimants. therefore. under Article 2194 of the Civil Code.

and 128398. v. 24. Inc. reimburse his share to the debtor paying the obligation. 1996 of the Regional Trial Court of General Santos City. there is no right of reimbursement to speak of as yet. in Philippine International Surety Co. in proportion to the debt of each. 84 the Court had the occasion to state that "where there are. no interest for the intervening period may be demanded.. the Court hereby GRANTS the petitions for review on certiorari in G. 126654. Branch 37. 86 the Court upheld the ruling of the trial court that. A trial on the merits must necessarily be conducted first in order to establish whether or not defendant companies are liable for the claims for damages filed by the plaintiff claimants. We REVERSE and SET ASIDE the Order dated May 20.R. and the Order dated October 1. When one of the solidary debtors cannot. is not affected by the compromise agreements allegedly entered into by NAVIDA. No pronouncement as to costs. and the corresponding liability of the co-debtors to reimburse. along with the parties to the compromise. if proper.R. which would necessarily give rise to an obligation to pay on the part of the defendants. If the payment is made before the debt is due. of the obligation. As succinctly held in Lapanday Agricultural Development Corporation v.1avvphil The above right of reimbursement of a paying debtor. The Court likewise GRANTS the motion filed by Del Monte to withdraw its petition in G. other persons involved in the litigation who have not taken part in concluding the compromise agreement but are adversely affected or feel prejudiced thereby. is the operative fact which will entitle either of the solidary debtors to seek reimbursement for the share which corresponds to each of the [other] debtors. 1996 denying reconsideration in Civil Case No. and REMAND the records of this case to the respective Regional Trial Courts of origin for further and appropriate proceedings in line with the ruling herein that said courts have jurisdiction over the subject matter of the amended complaints in Civil Case Nos. will only arise. 5617.He who made the payment may claim from his co-debtors only the share which corresponds to each.. because of his insolvency. Court of Appeals. no cross-claims have been interposed by any defendant against another defendant. should not be precluded from invoking in the same proceedings an adequate relief therefor. with some of the defendant companies. et al. Nos. No. the right of the remaining defendant(s) to seek reimbursement in the above situation. 125078. SO ORDERED. At the point in time where the proceedings below were prematurely halted.251-96.. Branch 16. and ABELLA.R. Republic of the Philippines Supreme Court ."83 In the cases at bar.R. however. Nos. in a joint and solidary obligation. et al. the paying debtor may file a third-party complaint and/or a cross-claim to enforce his right to seek contribution from his co-debtors. If and when such a cross-claim is made by a non-settling defendant against a settling defendant. Gonzales. and its subsequent Order dated December 16. in any other manner. 127856 and 125598 are considered CLOSED AND TERMINATED. Court of Appeals. Hence. 82 "[p]ayment. which means not only the delivery of money but also the performance. Inc. In Armed Forces of the Philippines Mutual Benefit Association. both G. In view of the previous grant of the motion to withdraw the petition in G. WHEREFORE. in Civil Case No.251-96. 127856. v. with the interest for the payment already made. it is within the discretion of the trial court to determine the propriety of allowing such a cross-claim and if the settling defendant must remain a party to the case purely in relation to the cross claim. such share shall be borne by all his co-debtors. 5617 and 24. 1996 of the Regional Trial Court of Davao City. No." 85 Relevantly. 125598. if a solidary debtor who is made to answer for an obligation actually delivers payment to the creditor.

Hence. x--------------------------------------------------x DECISION PERALTA. Vda. 2011 EMELITA BERNARDO.Manila SECOND DIVISION CELIA S. 1999. and MENDOZA. No. and was later on acquired by Crisanto S. Twelfth Division. which was denied by the CA in a Resolution dated October 17. 2002. Crisanto Bernardo. J.993 square meters. in a Resolution[3] dated December 6. Promulgated: June 1.[5] The CA. in its Decision dated April 28. Chairperson. The COSLAP. disturbance. represented by Emelita Bernardo. 2005. petitioner Celia S. VDA. even assuming that the COSLAP has no jurisdiction over the land dispute of the parties herein. The CA ruled that the COSLAP has exclusive jurisdiction over the present case and. J. Crislyn and Crisanto Bernardo. 99-221. harassment and trespassing over a portion of a parcel of land situated at Barangay Dalig. as the surviving spouse of Alfredo. from a certain Domingo Villaran. The antecedents are as follows: Respondents heirs of Crisanto S. CD-006-0828 under the name of the respondents.Petitioner. petitioner elevated the case to this Court via Petition for Review on Certiorari under Rule 45 of the Rules of Court.: This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse and set aside the Decision [1] and Resolution[2] of the Court of Appeals (CA) in CA-G. Cardona. on the other hand. Consequently. The parcel of land was later on covered by Tax Declaration No. filed a complaint before the Commission on the Settlement of Land Problems (COSLAP) against Alfredo Herrera (Alfredo) for interference. Alfredo inherited the 700square-meter lot. with an area of 7. SP No. denied the motion and reiterated its Order dated December 6. PERALTA.. 73674. The COSLAP. 2005. The complaint was docketed as COSLAP Case No. EVELYN BERNARDO as Guardian of Erlyn. JJ. 170251 Present: CARPIO. Bernardo. de Herrera. a motion for reconsideration and/or reopening of the proceedings was filed by Alfredo. Rizal. NACHURA. 1999. dismissed the petition and affirmed the resolution of the COSLAP. filed a petition for certiorari with the CA.R.* Respondents. with the following issues: I . Petitioner. DE HERRERA. Petitioner filed a motion for reconsideration.versus - G. in an Order[4] dated August 21. Aggrieved. unlawful claim. ruled that respondents have a rightful claim over the subject property.R. Alfredo's father. Bernardo. petitioner is already estopped from raising the issue of jurisdiction because Alfredo failed to raise the issue of lack of jurisdiction before the COSLAP and he actively participated in the proceedings before the said body. alleged that the portion of the subject property consisting of about 700 square meters was bought by Diosdado Herrera. Respondents claimed that said parcel of land was originally owned by their predecessor-in-interest. . Upon the death of Diosdado Herrera. ABAD.

paragraph 2 (a) to (e) of E. Further. or (b) assume jurisdiction if the matter is one of those enumerated in paragraph 2 (a) to (e) of the law. respondents argued that petitioner is estopped from questioning the jurisdiction of the COSLAP by reason of laches due to Alfredo's active participation in the actual proceedings before the COSLAP.The Commission shall have the following powers and functions: xxxx 2. (c) Between occupants/squatters and public land claimants or applicants. 561. (d) Petitions for classification.O.) No. release and/or subdivision of lands of the public domain. in the following cases.O. II WHETHER OR NOT THE ISSUANCE OF A TORRENS TITLE IN THE NAME OF THE PETITIONER'S HUSBAND IN 2002 RENDERED THE INSTANT CONTROVERSY ON THE ISSUE OF OWNERSHIP OVER THE SUBJECT PROPERTY MOOT AND ACADEMIC. the nature of the questions raised. alleged that the COSLAP has jurisdiction over the present case. taking into account the large number of parties involved. Further. the presence or emergence of social unrest. That the Commission may. the COSLAP has two options in acting on a land dispute or problem lodged before it. Respondents said that Alfredo's filing of the Motion for Reconsideration and/or Reopening of the proceedings before the COSLAP is indicative of his conformity with the questioned resolution of the COSLAP. The petition is meritorious. like the COSLAP. (b) Between occupants/squatters and government reservation grantees. The law does not vest jurisdiction on the COSLAP over any land dispute or problem. landowners and members of the cultural minorities to avoid social unrest. [8] Under Section 3 of E. the large number of the parties involved. Powers and Functions. the COSLAP has to consider the nature or classification of the land involved. 561 specifically enumerates the instances when the COSLAP can exercise its adjudicatory functions: Section 3. or other similar critical situations requiring immediate action: (a) Between occupants/squatters and pasture lease agreement holders or timber concessionaires. The COSLAP was created by virtue of Executive Order (E. It is an administrative body established as a means of providing a mechanism for the expeditious settlement of land problems among small settlers. issued on September 21. for instance. . In resolving whether to assume jurisdiction over a case or to refer the same to the particular agency concerned. The dispute between the parties is not .O. The main issue for our resolution is whether the COSLAP has jurisdiction to decide the question of ownership between the parties. the COSLAP has no jurisdiction over the subject matter of respondents' complaint. 1979 by then President Ferdinand E. the parties to the case.[7] Administrative agencies. Respondents. the presence or emergence of social tension or unrest. Petitioner submits that it is the Regional Trial Court which has jurisdiction over controversies relative to ownership of the subject property. No. and (e) Other similar land problems of grave urgency and magnitude.[9] In the instant case. and the need for immediate and urgent action thereon to prevent injuries to persons and damage or destruction to property. if such case is critical and explosive in nature. 561. 561. No. The present case does not fall under any of the cases enumerated under Section 3. to wit: (a) refer the matter to the agency having appropriate jurisdiction for settlement/resolution. on the other hand.O. Refer and follow up for immediate action by the agency having appropriate jurisdiction any land problem or dispute referred to the Commission: Provided. No. are tribunals of limited jurisdiction that can only wield powers which are specifically granted to it by its enabling statute. assume jurisdiction and resolve land problems or disputes which are critical and explosive in nature considering. Section 3 of E. or other similar critical situations requiring immediate action. the present case cannot be classified as explosive in nature as the parties never resorted to violence in resolving the controversy. Marcos.WHETHER OR NOT COSLAP HAD JURISDICTION TO DECIDE THE QUESTION OF OWNERSHIP.[6] Petitioner averred that the COSLAP has no adjudicatory powers to settle and decide the question of ownership over the subject land.

The Court held that since the dispute involved a parcel of public land on a free patent issue. no considerable period had yet elapsed for laches to attach. It was only when the adverse decision was rendered by the Court of Appeals that it finally woke up to raise the question of jurisdiction. there is no showing that the parties have conflicting free patent applications over the subject parcel of land that would justify the exercise of the COSLAP's jurisdiction. Because of the Bureau of Land's inaction within a considerable period of time on the claims and protests of the parties and to conduct an investigation. could or should have been done earlier. Here. In Sibonghanoy. it is negligence or omission to assert a right within a reasonable length of time. Go. because it may be raised at any stage of the proceedings. It leaves the parties in the position they were before the proceedings. in the court a quo as well as in the Court of Appeals. [14] A judgment issued by a quasi-judicial body without jurisdiction is void. petitioner assailed the jurisdiction of the COSLAP when she appealed the case to the CA and at that time. the COSLAP had jurisdiction over that case. is inapplicable to the present case. Banagainvolved parties with conflicting free patent applications over a parcel of public land and pending with the Bureau of Lands. [23] .critical and explosive in nature. nor does it involve a large number of parties. that is. In the present case. Petitioner is not estopped from raising the jurisdictional issue. since such jurisdiction must arise by law and not by mere consent of the parties. Since the COSLAP has no jurisdiction over the action. warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it. even on appeal. laches should have been clearly present. all the proceedings therein. petitioner is not estopped from assailing the jurisdiction of the COSLAP. Sibonghanoy on the matter of jurisdiction by estoppel is the exception rather than the rule.[20] the Court held that laches should be clearly present for the Sibonghanoy[21] doctrine to apply. over the nature and subject matter of a petition or complaint is determined by the material allegations therein and the character of the relief prayed for. It can also hardly be characterized as involving a critical situation that requires immediate action. [10] Respondents' cause of action before the COSLAP pertains to their claim of ownership over the subject property. [11] the jurisdiction of which is vested with the Regional Trial Courts or the Municipal Trial Courts depending on the assessed value of the subject property. no laches will even attach because the judgment is null and void for want of jurisdiction. the defense of lack of jurisdiction was raised for the first time in a motion to dismiss filed by the Surety almost 15 years after the questioned ruling had been rendered. thus: Laches is defined as the "failure or neglect for an unreasonable and unexplained length of time. In such controversies. It is axiomatic that the jurisdiction of a tribunal. which is an action involving title to or possession of real property. irrespective of whether the petitioner or complainant is entitled to any or all such reliefs. It cannot be the source of any right or create any obligation. the Surety invoked the jurisdiction of the said courts to obtain affirmative relief and submitted its case for final adjudication on the merits.[19] In Regalado v. [13] applied by the CA and invoked by the respondents. lack of jurisdiction must have been raised so belatedly as to warrant the presumption that the party entitled to assert it had abandoned or declined to assert it.[17] Respondents allegation that petitioner is estopped from questioning the jurisdiction of the COSLAP by reason of laches does not hold water. Additionally. [16] Having no legal effect. to do that which.[12] The case of Banaga v. nor is there a presence or emergence of social tension or unrest. Estoppel by laches may be invoked to bar the issue of lack of jurisdiction only in cases in which the factual milieu is analogous to that in the cited case. are null and void. [22] The factual settings attendant in Sibonghanoy are not present in the case at bar that would justify the application of estoppel by laches against the petitioner. or any interest therein. The ruling in People v. At several stages of the proceedings. Therefore. including the decision rendered. the COSLAP assumed jurisdiction and resolved the conflicting claims of the parties. [18] The fact that a person attempts to invoke unauthorized jurisdiction of a court does not estop him from thereafter challenging its jurisdiction over the subject matter. Regalario that was based on the landmark doctrine enunciated in Tijam v. by exercising due diligence. Commission on the Settlement of Land Problems. the situation is the same as it would be as if there was no judgment at all.[15] All acts performed pursuant to it and all claims emanating from it have no legal effect. and is not lost by waiver or by estoppel. including a quasi-judicial officer or government agency.

WHEREFORE. SP No. respondents are now questioning the legality of OCT No. or canceled. It is a rule that the validity of a Torrens title cannot be assailed collaterally. are declared NULL and VOID for having been issued without jurisdiction. VS. 1529 provides that: Certificate not Subject to Collateral Attack. 1999 and August 21. 99-221. respectively. can only be raised in an action expressly instituted for that purpose [25] and the present appeal before us. The Decision and the Resolution of the Court of Appeals. PETITIONER.[24] Section 48 of Presidential Decree No. 2005 and October 17. respondents alleged that there was fraud. − A certificate of title shall not be subject to collateral attack. 192649 : June 22. in CA-G. misrepresentation and bad faith in the issuance thereof. Thus.R. 2005. 2011] HOME GUARANTY CORPORATION.Anent the issuance of OCT No.e. AND NATIONAL . dated April 28. SPECIAL FIRST DIVISION [G. The issue of the validity of the Title was brought only during the proceedings before this Court as said title was issued in the name of petitioner's husband only during the pendency of the appeal before the CA. the petition is GRANTED. an issue which this Court cannot pass upon in this present petition. SO ORDERED. except in a direct proceeding in accordance with law. 2002. M10991.. whether or not it was fraudulently issued. is simply not the direct proceeding contemplated by law. dated December 6. R-II BUILDERS INC. The issue on the validity of title.R. modified. M-10991 in favor of petitioners husband Alfredo Herrerra in 2002. 73674 are REVERSED and SET ASIDE. i. respectively. The Decision and Order of the Commission on the Settlement of Land Problems. No. in COSLAP Case No. It cannot be altered.

of course. Branch 142 [3] which involved SCCs trying and/or deciding cases which were found to be civil in nature. once acquired. In Atwel v. RESOLUTION PEREZ. Amended and Supplemental Complaint and Second Amended Complaint all primarily sought the nullification of the Deed of Assignment and Conveyance (DAC) transferring the Asset Pool in favor of petitioner Home Guaranty Corporation (HGC). In De Leon v. Lope E. Regional Trial Court of Makati. BRANCH 22. the Manila RTC did not lose jurisdiction over the same and its Executive Judge correctly directed its re-raffling to Branch 22 of the same Court. It appears that. Court of Appeals. that the re-raffle and/or amendment of pleadings do not affect a court's jurisdiction which. no less than R-II Builders . however. II. that since its original Complaint. it cannot be gainsaid that Branch 24 of the RTC Manila had no jurisdiction over the case. lack of jurisdiction and improper venue. In urging the reversal of the Court's decision. continues until the case is finally terminated. [2] and Reyes v.admitted that the case is a real action as it affects title to or possession of real property or an interest therein. true that jurisdiction. among other grounds. the designated Special Commercial Court (SCC) tasked to hear intra-corporate controversies. THE HONORABLE COURT ERRED IN RULING THAT THE CORRECT DOCKET FEES WERE NOT PAID. ruled that a case for rescission or annulment of contract is not susceptible of pecuniary estimation although it may eventually result in the recovery of . venue was improperly laid since none of the parties maintained its principal office in Manila. Concepcion Progressive Association. said court issued the 2 January 2008 order erroneously ordering the re-raffle of the case. R-II Builders' motion is bereft of merit. with prayer to be furnished all pleadings. even if it is. RESPONDENTS. Amended and Supplemental Complaint and Second Amended Complaint which not only sought the nullification of the DAC in favor of HGC but. seeking the reconsideration of Court's decision dated 9 March 2011 on the following grounds: [1] I THE HONORABLE COURT ERRED IN RULING THAT RTC MANILA. that the court erred in holding that the case was a real action and that it evaded the payment of the correct docket fees computed on the basis of the assessed value of the realties in the Asset Pool. Inc. Inc. and (b) the motion filed by R-II Builders. cannot be easily ousted. TO WHICH THE INSTANT CASE WAS INITIALLY RAFFLED HAD NO AUTHORITY TO HEAR THE CASE BEING A SPECIAL COMMERCIAL COURT.: Before the Court are: (a) the Entry of Appearance filed by Atty. notices and other court processes at its given address. that despite the determination subsequently made by Branch 24 of the Manila RTC that the case did not involve an intracorporate dispute. Even then. [7] Having only paid docket fees corresponding to an action where the subject matter is incapable of pecuniary estimation. that R-II Builders had no hand in the raffling of the case. more importantly. this Court significantly ordered the dismissal of the complaint for lack of jurisdiction instead of simply directing the re-raffle of the case to another branch. The record shows that. said complaint was raffled to Branch 24.in its opposition to HGC's motion to dismiss . therefore. BRANCH 24. Hon. once acquired. (R-II Builders). [4] While it is. R-II Builders argues that it filed its complaint with the Manila RTC which is undoubtedly vested with jurisdiction over actions where the subject matter is incapable of pecuniary estimation. HAD NO JURISDICTION OVER THE PRESENT CASE SINCE RTC-MANILA. Its current protestations to the contrary notwithstanding. HGC sought a preliminary hearing of its affirmative defenses which included. consequently. J. Feble of the Toquero Exconde Manalang Feble Law Offices as collaborating counsel for respondent R-II Builders. prayed for the transfer of possession of and/or control of the properties in the Asset Pool. with the raffle of R-II Builders' complaint before Branch 24 of the Manila RTC and said court's grant of the application for temporary restraining order incorporated therein. [8] this Court had. the subject matter of the case is clearly one which is incapable of pecuniary estimation.HOUSING AUTHORITY. the question of the Manila RTC's jurisdiction over the case is tied up with R-II Builder's payment of the correct docket fees which should be paid in full upon the filing of the pleading or other application which initiates an action or proceeding. [5] it is equally settled that a court acquires jurisdiction over a case only upon the payment of the prescribed filing and docket fees. it was established that R-II Builders' complaint did not involve an intra-corporate dispute and that. R-II Builders cannot expediently claim that jurisdiction over the case had already attached. [6] Already implicit from the filing of the complaint in the City of Manila where the realties comprising the Asset Pool are located. that through no fault of its own. While it is true. at said preliminary hearing. the fact that the case is a real action is evident from the allegations of R-II Builders' original Complaint. and. Rather than ordering the dismissal of the complaint.

Inc. [10] to wit: The Court x x x does not perceive a contradiction between Serrano and the Spouses De Leon. The Court calls attention to the following statement in Spouses De Leon: "A review of the jurisprudence of this Court indicates that in determining whether an action is one the subject matter of which is not capable of pecuniary estimation. Taking into consideration the allegations and the nature of the relief sought in the complaint in the subsequent case of Serrano v. this Court determined the existence of a real action and ordered the payment of the appropriate docket fees for a complaint for cancellation of sale which prayed for both permanent and preliminary injunction aimed at the restoration of possession of the land in litigation is a real action. In discounting the apparent conflict in said rulings. [13]R-II Builders' evident bad faith should clearly foreclose the relaxation of said rule. Ortigas Center Pasig." Necessarily. Philippine Stock Exchange Centre. the Court went on to rule as follows in Ruby Shelter Builders and Realty Development Corporation v. in pursuit of its mandate as statutory guarantor of government housing programs. it finally bears emphasizing that the Asset Pool is comprised of government properties utilized by HGC as part of its sinking fund. and DENY counsel's prayer to be furnished with all pleadings notices and other court processes at Unit 2704-A. What petitioner conveniently ignores is that in Spouses De Leon.. R-II Builders withdrew its Amended and Supplemental Complaint and. it is imperative that R-II Builders should be made to pay the docket and filing fees corresponding to the assessed value of the properties comprising the same. WHEREFORE. Exchange Road. Court of Appeals. the Court resolves to: (a) NOTE the Entry of Appearance of Atty. [9] however. the basic issues having been already passed upon and there being no substantial argument to warrant a modification of the same. In addition to the jurisdictional and pragmatic aspects underlying the payment of the correct docket fees which have already been discussed in the decision sought to be reconsidered. West Tower. There appeared to be no transfer of title or possession to the adverse party x x x. while deleting its causes of action for accounting and conveyance of title to and/or possession of the entire Asset Pool. Let an Entry of Judgment in this case be made in due course. Formaran. This much was directed in the 19 May 2008 Order issued by Branch 22 of the Manila RTC which determined that the case is a real action and admitted the Amended and Supplemental Complaint R-II Builders subsequently filed in the case. [11] In obvious evasion of said directive to pay the correct docket fees. it follows R-II Builders should have paid the correct and appropriate docket fees. Republic of the Philippines Supreme Court Manila . [12] this Court ruled that jurisdiction over any case is acquired only upon the payment of the prescribed docket fee which is both mandatory and jurisdictional. Inc. however. the action therein that private respondents instituted before the RTC was "solely for annulment or rescission" of the contract of sale over a real property. Lope E. filed its Second Amended Complaint which. Pablo C. No further pleadings or motions shall be entertained herein. Although it is true that the Manchester Ruledoes not apply despite insufficient filing fees when there is no intent to defraud the government. Delica. depending on the facts and circumstances of each. the determination must be done on a case-to-case basis. Feble of Tuquero Exconde Manalang Feble Law Offices as collaborating counsel for respondent R-II Builders. SO ORDERED. (b) DENY with FINALITY R-II Builders. Hon.'s Motion for Reconsideration of the Decision dated 9 March 2011 for lack of merit. in lieu thereof. With the adverse consequences that could result from the transfer of possession and control of the Asset Pool. nevertheless prayed for its appointment as Receiver of the properties comprising the same. this Court has adopted the criterion of first ascertaining the nature of the principal action or remedy sought. computed according to the assessed value thereof. In the landmark case of Manchester Development Corporation v. since only the lead counsel is entitled to service of court processes. (Underscoring Supplied) Having consistently sought the transfer of possession and control of the properties comprising the Asset Pool over and above the nullification of the Deed of Conveyance in favor of HGC.real property.

. RACHEL DE Promulgated: CASTOR. DE CASTOR. 2004 and the Resolution [2] dated September 17. JR. Petitioner also filed an Addendum to the Motion to Dismiss [5] raising the following additional grounds: (1) plaintiffs have no legal capacity to sue... Zacasio Poutan. petitioner's father. Rosario Dideles Vda.: Assailed in this petition for review on certiorari are the Decision[1] dated May 26. considering the above. Ferolyn Castor Facurib (Ferolyn).. J. On November 19. On August 26. or filed the case prematurely for failure to resort to prior barangay conciliation proceedings. (3) the action is barred by laches.... 1954.R.. it is now ripe for resolution. (2) the action is barred by extraordinary acquisitive prescription. and (4) plaintiff failed to state a cause of action.. 1960 which was made a part thereof as Annex D. and MENDOZA... JJ. 2004 of the Court of Appeals (CA) in CA-G..[7] Petitioner Ceferina filed a Motion for Reconsideration..... 1960 (Annex C) and an Affidavit of Relinquishment dated November 23. BRANCH 35.. The said land was sold to the defendant on October 3. 1999. Petitioner Ceferina filed a Motion to Dismiss[4] (Ex-Abundante Ad Cautelam) on the following grounds: (1) the claim or demand has been extinguished by virtue of the valid sale of Lot No.. x . and (2) the Affidavit of Relinquishment dated November 23. Ignacio Olarte and alias Dory. Chairperson.. 1615 to Eugenio. Respondents.R. ABAD. 165777 Present: CARPIO. and RHODORA R. Dolores Cagaitan. NEPTHALIE CASTOR ITUCAS.versus - G. No.. respondents Rosario Dideles Vda. Thus.. thereof belongs to the wife. ... the said land became conjugal as of the date of the marriage and. 1952.. and/or for recovery of Rosario's conjugal share with damages or redemption of the subject land against petitioner Ceferina de Ungria... 1999. 1615. de Castor (Rosario). Respondents filed their Opposition thereto.. represented by LOLITA UNGRIA SAN JUAN-JAVIER. and July 25. Considering the marriage of September 15.. LEA CASTOR DOLLOLOSA..... The documents they sought to annul are (1) the Deed of Transfer of Rights and Interest including Improvements thereon dated October 3. . possession and damages.. VELASCO... PO1 Jonas Montales. 2000... therefore.THIRD DIVISION CEFERINA DE UNGRIA [DECEASED]. de Castor. SP No. FEROLYN CASTOR FACURIB.. Petitioner.. J..-x DECISION PERALTA. and the application to the land was dated January 17. THE HONORABLE COURT OF APPEALS.. 1960 allegedly executed by Fernando in favor of Eugenio de Ungria... Rachel De Castor. 60764. substituted by her HEIRS. and alternative causes of action either to declare two documents as patent nullities. and (2) the court has no jurisdiction over the case for failure of plaintiffs to pay the filing fee in full. 2011 ROSALIE CASTOR BENEDICTO. the RTC issued an Order[6] denying the motion to dismiss. while the rest of the respondents are their legitimate children.. to wit: After the motion to dismiss and its addendum have been received. of Pls-209 D with damages.* J... de Castor were married on September 15. defendants Avelino Gumban. It is alleged that the late Fernando Castor and Rosario Dideles Vda. PERALTA. PELOMIDA as their Attorney-infact. 1960 executed by Eugenio in favor of petitioner... the motion to dismiss is DENIED. Lea Castor Dollolosa and Rosalie Castor Benedicto. 1992. ROSARIO DIDELES VDA. THE HONORABLE REGIONAL TRIAL COURT OF GENERAL SANTOS CITY.. Respondent Rosario is the surviving wife of the late Fernando Castor.[8] which the RTC denied in an Order[9] dated February 4. Nepthalie Castor Itucas. One of the grounds alleged in the complaint is for the recovery of conjugal share on Lot No. filed with the Regional Trial Court (RTC) of General Santos City a Complaint[3] for ownership... 1952 and the patent was issued by the President on November 19..

the RTC had acquired jurisdiction over the case despite the failure to state the amount of damages claimed in the body of the complaint or in the prayer thereof. if after hearing the Clerk of Court determine that the filing fees is still insufficient. The CA found that SC Circular No. 2000. petitioner filed a motion for reconsideration and clarification on whether plaintiffs should be allowed to continue prosecuting the case as indigent litigants. Respondents filed their Comment thereto. In a Decision dated May 26. they are not in a possession (sic) to determine how much is to be charged. 2000. 1999 and the subsequent orders issued by the RTC thereto for having been issued with grave abuse of discretion amounting to lack or excess of jurisdiction. Petitioner filed with the CA a petition for certiorari and prohibition with prayer for the issuance of a temporary restraining order and/or writ of preliminary injunction. On March 8. he must require the private respondent to pay the same x x x. the same shall be considered as lien on the judgment that may be entered. It noted that the RTC's Clarificatory Order dated March 30. . thus. So also are attorneys fees and moral damages. all to be proved during the hearing of this case. 7. Pending resolution of the motion. The CA found that the RTC did not commit grave abuse of discretion amounting to lack of jurisdiction when it denied petitioner's motion to dismiss.[13] From this Order. the omnibus motion is DENIED. Since there was no hearing yet. Davao del Norte. the Clerk of Court determines that the filing fee is still insufficient. after hearing. the plaintiff asserted in its motion that they are charging defendants actual and compensatory damages as has been proved during the hearing of this case. 2000.[15] In an Order dated May 31. the RTC again denied petitioner's motion for reconsideration. At any rate. the plaintiffs asserted in its motion that they are charging defendant actual and compensatory damages such as are proved during the hearing of this case.[17] The CA proceeded to state that a judicious examination of the complaint pointed to a determination of the respective rights and interests of the parties over the property based on the issues presented therein which could only be determined in a full-blown trial on the merits of the case. and (3) holding in abeyance the submission of the answer to the complaint. WHEREFORE. At any rate. the RTC issued a Clarificatory Order[14] reading as follows: As has been said. that the Circular could be applied only in cases where the amount claimed or the value of the personal property was determinative of the court's jurisdiction citing the case of Tacay v. Petitioner sought the nullification of the Order dated November 19. v. 2000. considering the total amount of the claim. the same shall be considered as lien on the judgment that may be entered was in accordance with the rule laid down in Sun Insurance Office. The defendant shall file their answer within fifteen (15) days from receipt of this order. they are not in a possession (sic) to determine how much is to be charged. WHEREFORE. which stated that if after hearing the Clerk of Court determines that the filing fee is still insufficient. 7 would not apply where the amount of damages or value of the property was immaterial. suffice it to say that the same is already provided for in this order. respondents filed a Motion to Allow[11] them to continue prosecuting this case as indigent litigants. premises considered. the CA dismissed the petition. 2000. 2000. Ltd. the same has already been decided in its order dated February 4. 2004. if any amount is found due. the RTC resolved the Omnibus Motion in an Order[12] that read in this wise: On the omnibus motion regarding filing fees. thereafter. On March 30. Since there was no hearing yet. (2) reconsidering the findings contained in the Order dated February 4.[16] The CA found that respondents had paid the corresponding docket fees upon the filing of the complaint. the defendants shall file their answer within fifteen (15) days from receipt of this Order.Petitioner filed an Omnibus Motion[10] asking the RTC to resolve the issues of (1) whether or not the complaint should be dismissed or expunged from the records pursuant to Supreme Court (SC) Circular No. Asuncion. As to the motion seeking from the Honorable Court allowance to allow plaintiff to continue prosecuting this case as indigent litigants. So also are attorney's fees and moral damages all to be proved during the hearing of this case. RTC of Tagum. As to the second issue. the Clerk of Court should determine and.

Jurisdiction in civil cases. An Act Expanding the Jurisdiction of the Metropolitan Trial Courts. and Municipal Circuit Trial Courts shall exercise: xxxx (3) Exclusive original jurisdiction in all civil actions which involve title to. Municipal Trial Courts and Municipal Circuit Trial Courts in Civil Cases. notorious and continuous possession under a claim of ownership for the period fixed by law is ineffective against a Torrens title. in civil actions in Metro Manila.00).000. damages of whatever kind. or any interest therein. Municipal Trial Courts. attorney's fees. THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE ACTION OF PRIVATE RESPONDENTS IS BARRED BY LACHES AND EXTRAORDINARY ACQUISITIVE PRESCRIPTION. where the assessed value of the property involved exceeds Twenty Thousand Pesos (P20. Preliminarily. and Municipal Circuit Trial Courts. That in cases of land not declared for taxation purposes. otherwise known as the "Judiciary Reorganization Act of 1980. Respondents' complaint was filed in 1999. amending BP Blg. that unless there are intervening rights of third persons which may be affected or prejudiced by a decision directing the return of the lot to petitioner.000.000. or possession of. 129. Municipal Trial Courts.000. Jurisdiction of Metropolitan Trial Courts. Section 33 of the same law (BP Blg. except actions for forcible entry into and unlawful detainer of lands or buildings. was already amended by Republic Act (RA) No. Metropolitan Trial Courts. 129) is hereby amended to read as follows: Sec. and Municipal Circuit Trial Courts. among others. provides that the RTC shall exercise exclusive original jurisdiction on the following actions: Section 1. [19] Section 1 of RA 7691. x x x Section 3 of RA No. (BP) 129. at the time Batas Pambansa Blg. this petition for review on certiorari where petitioner raises the following assignment of errors: THE COURT OF APPEALS ERRED IN NOT FINDING THAT RESPONDENT TRIAL COURT COMMITTED GRAVE ABUSE OF DISCRETION IN DENYING PETITIONER'S MOTION TO DISMISS DESPITE RESPONDENTS' NON-PAYMENT OF THE CORRECT DOCKET FEES. 33. Municipal Trial Courts. 2004. (2) In all civil actions which involve the title to. the value of such property shall be determined by the assessed value of the adjacent lots.00) or for civil actions in Metro Manila. real property. 129.Petitioner filed a Motion for Reconsideration. amending for the purpose BP Blg.00) exclusive of interest. that the defenses of acquisitive prescription and laches were likewise unavailing. 7691 expanded the exclusive original jurisdiction of the first level courts. we find it necessary to discuss the issue of jurisdiction over the subject matter of this case. litigation expenses and costs: Provided. It found that the subject property is covered by a Torrens title (OCT No. thus.00) or. the equitable defense of laches will not apply as against the registered owner. The CA ruled. 7691. where such assessed value does not exceed Fifty Thousand Pesos (P50. or any interest therein where the assessed value of the property or interest therein does not exceed Twenty Thousand Pesos (P20. although not raised as an issue in this petition. or possession of. real property. thus: Section 3. [18] We find the petition without merit. . it is axiomatic that adverse. Hence. 19. Regional Trial Courts shall exercise exclusive original jurisdiction: (1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation. original jurisdiction over which is conferred upon the Metropolitan Trial Courts. where such value exceeds Fifty Thousand Pesos (P50. Section 19 of Batas Pambansa Blg. V-19556). the Judiciary Reorganization Act of 1980. 129." is hereby amended to read as follows: Sec. which the CA denied in a Resolution dated September 17.

inexistent. the claim is considered capable of pecuniary estimation. the complaint must be accompanied by the payment of the requisite docket and filing fees. since it is a real action with an assessed value of less than P20. but the payment of the prescribed docket fee. Respondents also prayed in the alternative that if the Deed be finally upheld as valid. Clearly. and/or for redemption of the subject land. and whether jurisdiction is in the municipal courts or in the courts of first instance would depend on the amount of the claim. they prayed that the Deed of Transfer of Rights and Interest Including Improvements Thereon be declared as a forgery.780. that Fernando's signature in the Deed of Transfer was not his but a forgery.[21] we held that: In determining whether an action is one the subject matter of which is not capable of pecuniary estimation this Court has adopted the criterion of first ascertaining the nature of the principal action or remedy sought. however. or any interest in the real property under contention. hence. However.00. that vests a trial court with jurisdiction over the subject matter or nature of the action. and alternative causes of action either to declare two documents as patent nullities and/or for recovery of conjugal share on the subject land with damages or redemption of the subject land. respondents claimed that Rosario and Fernando are the registered owners of the subject land with an assessed value of P12. that respondent Rosario and Fernando thought that when the latter's mother died in 1980. [24] Section 7(b)(1) of Rule 141 of the Rules of Court provides: . void ab initio and/or a patent nullity. Respondents prayed that they be declared as absolute and lawful owners of the subject land and to order petitioner and the other defendants to vacate the premises and restore respondents to its possession and enjoyment therefore. respondents correctly filed their Complaint with the RTC. Notably.000. 1960. hence. The Complaint filed by respondents in the RTC was for ownership. Isabela Sawmill. this Court has considered such actions as cases where the subject of the litigation may not be estimated in terms of money. purely simulated and without any consideration.780. as amended. Respondents alleged that the assessed value of the subject land was P12. the subject land was in the enjoyment of the second family of his mother. where the money claim is purely incidental to. respondents in the same Complaint filed alternative causes of action assailing the validity of the Deed of Transfer of Rights and Interest executed by Fernando in favor of petitioner's father.[22] Thus. but later learned that the subject land was leased by petitioner Ceferina. Respondents also sought for the reconveyance to respondent Rosario of the undivided one-half portion of the subject land as conjugal owner thereof in case the Deed of Transfer of Rights and Interest will be upheld as valid. or a consequence of. we would first determine whether the RTC has jurisdiction over the subject matter of this case based on the above-quoted provisions. petitioner Ceferina's father. this is a case of joinder of causes of action which comprehends more than the issue of possession of. If it is primarily for the recovery of a sum of money. the principal relief sought.Respondents filed their Complaint with the RTC. to order petitioner to reconvey to respondent Rosario the undivided one-half portion of the subject land as conjugal owner thereof and to account and reimburse her of its usufruct. and/or to allow them to redeem the subject land. Thus. properly within the jurisdiction of the RTC. respondents learned of the existence of the Deed of Transfer of Rights and Interest including Improvements thereon dated October 3. thus. that the couple left the cultivation and enjoyment of the usufruct of the subject land to Fernando's mother and her second family to augment their means of livelihood. On their second cause of action.[20] In Singson v. that sometime in August 1999. In their Complaint. and are cognizable exclusively by courts of first instance (now Regional Trial Courts). where the basic issue is something other than the right to recover a sum of money. It is a settled rule in this jurisdiction that when an action is filed in court. possession and damages. It would appear that the first cause of action involves the issue of recovery of possession and interest of the parties over the subject land which is a real action. 1960 executed by Eugenio in favor of petitioner Ceferina. as well as an Affidavit of Relinquishment dated November 23. [23] It is not simply the filing of the complaint or appropriate initiatory pleading.00 based on Tax Declaration No. as well as the Affidavitof Relinquishment which was the direct result of the Deed of Transfer. 15272. where Fernando had allegedly transferred his rights and interests on the subject land in favor of Eugenio. and the Affidavit of Relinquishment was also void as it was a direct result of a simulated Deed of Transfer.00. but includes an action to annul contracts and reconveyance which are incapable of pecuniary estimation and. the case would fall under the jurisdiction of the MTC as provided under the above-quoted Section 33 (3) of BP 129.

.00 a year per hectare. falling within the jurisdiction of the RTC. jointly and severally. or P6. . to pay plaintiffs attorneys' fees and moral damages. or a complaint-in-intervention. 7. only just few months ago. all to be proved during the hearing of this case. Clerks of Regional Trial Courts. or for filing with leave of court a third-party. viz: (a) for defendant Ceferina de Ungria for a period of time claimed by her as such. 1998 requiring that all complaints must specify the amount of damages sought not only in the body of the pleadings but also in the prayer to be accepted and admitted for filing.. Thus. (b) for defendants Dolores Cagautan. once every four months. exclusive of interest.. thus.. every crop time.[28] Thus. the estimated value thereof shall be alleged by the claimant and shall be the basis in computing the fees.. or if there is none. that defendant Ignacio Olarte and Zacasio Puutan of occupying about one-half hectare each. and that the Court acquires jurisdiction over any case only upon the payment of the prescribed docket fee. the assessed value of the property. as assessed by the Clerk of Court. if the total-sum claimed.. etc. fourth-party. but should be based on Section 7(b)(1) of Rule 141. [26] Notably. Actions where the value of the subject matter cannot be estimated . xxxx (a) Ordering the defendants. to pay plaintiffs actual and compensatory damages such as are proved during the hearing of this case.00 per hectare. jointly and severally. complaint.000. upon respondents' proof of payment of the assessed fees..[25] Since we find that the case involved the annulment of contract which is not susceptible of pecuniary estimation. petitioners claim that the RTC did not acquire jurisdiction in this case is premised on her contention that respondents violated SC Circular No.[27] and in their prayer asked: x x x Ordering the defendants.(a) For filing an action or a permissive counter-claim or money claim against an estate not based on judgment.00 2. Petitioner argues that respondents alleged in paragraph 13 of their Complaint that: (T)he reasonable rental for the use of the [subject] land is P2. together with the other fees. the RTC should have dismissed the case. the latter having entered the areasometime in 1998 and defendant alias Dory. in proportion to the length and area of their respective occupancy. is: xxxx (b) For filing: 1. P400. to pay reasonable rentals to the plaintiffs in the proportion and amount assessed in paragraph 13 of the First Cause of Action.[29] where we held that a pleading which does not specify in the prayer the amount of damages being asked for shall not be accepted or admitted. a certain alias Dory. since respondents did not specify the amount of damages in their prayer. that defendants in proportion and length of time of their respective occupancy is and/or are jointly and severally liable to plaintiffs of the produce thereby in the following proportions. and PO1 Jonas Montales. A perusal of the entries in the Legal Fees Form attached to the records would reflect that the amount of P400. the docket fees should not be based on the assessed value of the subject land as claimed by petitioner in their memorandum. and for all clerical services in the same. We are not persuaded.SEC. jointly and severally. of an undetermined area. x x x In a real action. 7 was brought about by our ruling in Manchester Development Corporation v. . or the stated value of the property in litigation. Jurisdiction once acquired is never lost.00 was paid to the Clerk of Court. SC Circular No. or shall otherwise be expunged from the record.000. Court of Appeals. the RTC has properly acquired jurisdiction over the complaint. it continues until the case is terminated. 7 issued on March 24. (b) Ordering the defendants.

notorious and continuous since 1952 through her predecessor-ininterest. Melicor. the fact that private respondents prayed for payment of damages "in amounts justified by the evidence" does not call for the dismissal of the complaint for violation of SC Circular No. subsequently. open.[34] In this case.e. exclusive. v. we find no reversible error committed by the CA when it ruled that there was no grave abuse of discretion committed by the RTC in issuing its Order dated March 30. Subsequently. or if specified the same has been left for determination by the court.. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee but. in Heirs of Bertuldo Hinog v. 1988 which required that all complaints must specify the amount of damages sought not only in the body of the pleadings but also in the prayer in order to be accepted and admitted for filing. or for the allocation of the subject land to him vice the original settler Cadiente. 1952. was not the homestead application referred to in Sections 118 and 124 of the Public Land Act.[32] A reading of the allegations in the complaint would show that the amount of the rental due can only be determined after a final judgment. granting without admitting that the transfer of rights between Fernando and Eugenio was null and void for any reason whatsoever. dated January 17. Asuncion. 3. the sale was null and void because it violated the provisions of the Public Land Act. and by herself up to the present. where the RTC stated that since there was no hearing yet. to wit: 1. It would then be the responsibility of the Clerk of Court of the trial court or his duly-authorized deputy to enforce said lien and assess and collect the additional fees. the parcel of land subject of this case isa titled property. Thus. Sun Insurance effectively modified SC Circular No. titled in the name of the late Fernando Castor. in Sun Insurance Office. the additional filing fee therefor shall constitute a lien on the judgment. that vests a trial court with jurisdiction over the subject matter or nature of the action.However. but only according to respondents. the same shall be considered as lien on the judgment that may be entered. respondents are not in a position to determine how much is to be charged and that after hearing. x x x judgment awards which were left for determination by the court or as may be proven during trial would still be subject to additional filing fees which shall constitute a lien on the judgment. the court may allow payment of the fee within a reasonable time but in no case beyond the applicable prescriptive or reglementary period. It is not simply the filing of the complaint or appropriate initiatory pleading. the Clerk of Court determines that the filing fee is still insufficient. third-party claims and similar pleadings. 7. i. 2.[31] we said: Furthermore. but the payment of the prescribed docket fee. since there is a need to show supporting evidence when the petitioner and the other defendants started to possess the subject land. Such argument does not persuade. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period. The same rule applies to permissive counterclaims. petitioner's possession of the land had already ripened into ownership after the lapse of 30 years from August 1952 by virtue of the extraordinary acquisitive prescription. Petitioner argues that the application of Fernando. 7 by providing that filing fees for damages and awards that cannot be estimated constitute liens on the awards finally granted by the trial court. [33] Prescription is unavailing not only against the registered owner but also against his hereditary successors. Petitioner claims that respondent had impliedly admitted the fact of sale by Fernando to Eugenio in August 1952. It is a well-entrenched rule in this jurisdiction that no title to registered land in derogation of the rights of the registered owner shall be acquired by prescription or adverse possession. which shall not be considered filed until and unless the filing fee prescribed therefor is paid. Petitioner claims that the action is barred by extraordinary acquisitive prescription and laches. the judgment awards a claim not specified in the pleading. Petitioner contends that she took possession of the land in the concept of an owner. and that.[30] we laid down the following guidelines in the payment of docket fees. Eugenio. and that Fernando's application was only as settler. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee. that the late Fernando and private respondents had never taken possession of the land at any single moment. 2000. dated March 24. . It shall be the responsibility of the Clerk of Court or his duly-authorized deputy to enforce said lien and assess and collect the additional fee. married to Rosario Dideles. We are not persuaded. Ltd.

defendant Ceferina de Ungria sent overtures to plaintiffs through Ester Orejana. the allegations of respondents in their petition filed before the RTC which alleged among others: 7. who is the half sister-in-law of plaintiff Rosario Dideles Vda. the same is evidentiary in nature and cannot be established by mere allegations in the pleadings. telling her that it has something to do with the land above-described. WHEREFORE.1. SO ORDERED. de Castor heard that the land above-described had even been leased by defendant Ceferina de Ungria with the Stanfilco and Checkered farm. that in that negotiation.The trial in this case has not yet started as in fact no answer has yet been filed. it is necessary for petitioners to proceed to trial and present controverting evidence to prove the elements of laches. appeared in the residence of plaintiff Rosario Dideles Vda. and requested her to sign a folded document with her name only appearing thereon. of which she refused telling her that she better return it to the person who requested her to do so (referring to her mother-in-law). de Castor in Bo. Republic of the Philippines . 10. 9. more so that her husband was out at that time. however. That sometime in 1997. that the overtures developed into defendant Ceferina de Ungria meeting for the purpose plaintiff Ferolyn Castor Facurib where the negotiation continued with Lolita Javier as attorney-in-fact after defendant Ceferina de Ungria left to reside in Manila and which resulted later to the attorney-in-fact offering the plaintiffsP100. was refused by plaintiffs as so [insignificant] as compared to the actual value of the same land. We find that these issues are factual which must be resolved at the trial of this case on the merits wherein both parties will be given ample opportunity to prove their respective claims and defenses. which offer. x x x x[36] would not conclusively establish laches. That even after the death of the mother of the late Fernando Castor in Bo. de Castor that she desires to settle with them relating to the land above-described. South Cotabato.000. Bula. Without solid evidentiary basis. the petition for review is DENIED. [35] Notably. defendant Ceferina de Ungria. Anent petitioner's defense of laches. Thus. that it was only after sometime when plaintiff Rosario Dideles Vda. the latter just commented that [his] mother desires the land above-described to be sold to defendant Ceferina de Ungria which however he was opposed to do so even as they occasionally come into heated arguments everytime this insistence on the same subject propped up. City of General Santos. accompanied by Miss Angela Jagna-an. the latter and his surviving wife thought all the while that the land above-described was in the enjoyment of his late mother's family with his 2 nd husband.00 to quitclaim on their rights over the said land. sometime in 1980. Banga. That when the matter was brought home to Fernando Castor. laches cannot be a valid ground to dismiss respondents' complaint. That sometime between the years 1965 to 1970. defendant Ceferina de Ungria was challenged to show any pertinent document to support her claim on the land in question and where she meekly answered by saying at the time that she does not have any of such document. 8.

. 2005 which denied the Motion for Reconsideration of the said December 10. and the latter happens to be a domestic corporation. which disposed as follows: WHEREFORE. Taiwan for shipment to Manila.000.versus - BERSAMIN. Inc. J. solidarily liable to pay plaintiff Prudential Guarantee & Assurance. No. SO ORDERED. Oriental then filed its claim against the policy. Makati City. Promulgated: Respondent. INC. The cargoes were insured against all risks per Marine Insurance Policy No. the court cannot be said to have acquired jurisdiction over the person of both defendants. Makati City.J..: Where service of summons upon the defendant principal is coursed thru its co-defendant agent.00 as Attorneys fees.Supreme Court Manila FIRST DIVISION ATIKO TRANS. Ltd. (Cheng Lie) with Oriental Tin Can & Metal Sheet Manufacturing Co. and 3. Said Decision of the RTC affirmed the August 6. 2. Upon discharge of the cargoes. (Prudential). Inc. M/S Katjana arrived in the port of Manila. 2003 Decision[3] of the Regional Trial Court (RTC). and VILLARAMA. Branch 150. judgment is rendered declaring defendants Cheng Lie Navigation Co..97 representing the amount of losses it suffered due to the damaged cargo. 1998. such jurisdictional flaw cannot be cured by the agents subsequent voluntary appearance. 2004 Decision. Satisfied that Orientals claim was compensable. and G. crumpled and dented on the edges.[5] Likewise assailed is the CAs Resolution[6] dated March 16. Ltd. PRUDENTIAL GUARANTEE AND ASSURANCE. Branch 63. 167545 CHENG LIE NAVIGATION CO. Costs of suit. P10. On December 14. it was found that one of the tinplates was damaged. 82547 which affirmed the April 8. JR. and Atiko Trans.220.. 2011 x----------------------------------------------------------------x DECISION DEL CASTILLO. 2002 Decision[4] of the Metropolitan Trial Court (MeTC). P205.. SP No. LTD. Factual Antecedents On December 11. Inc. C. (Oriental) as the notify party. the following amounts: 1. This Petition for Review on Certiorari assails the December 10. presumably while still on board the vessel and during the course of the voyage. Present: Petitioners. 2004 Decision[2] of the Court of Appeals (CA) in CA-G.97 as actual damages with interest of 1% per month from 14 December 1999 until full payment. CORONA. 20RN18749/99 issued by respondent Prudential Guarantee and Assurance. And insofar as the principal is concerned. Prudential paid Oriental P205.R. 40 coils of electrolytic tinplates were loaded on board M/S Katjana in Kaohsiung. .220. the rules on service of summons upon a domestic private juridical entity [1] must be strictly complied with..R. JJ. DEL CASTILLO. KNMNI-15126[7] issued by petitioner Cheng Lie Navigation Co. Otherwise. INC. Inc.The sea van in which it was kept during the voyage was also damaged.. August 17. Chairperson. LEONARDO-DE CASTRO. 1998.. The shipment was covered by Bill of Lading No..

Plaintiff (Prudential) is a domestic insurance corporation duly organized and existing under the laws of the Philippines with office address at Coyiuto House.] Jr. Atiko asserted that Prudential failed to prove by preponderance of evidence that it is a domestic corporation with legal personality to file an action. Atiko then filed a Notice of Appeal[12] dated November 4. 2002. which is a domestic corporation duly established and created under the laws of the Philippines with office address at 7th Floor. On August 6. xxxx 9..[9] On March 20. plaintiff was and still is engaged in. Atiko and Cheng Lie challenged the RTC Decision before the CA via a Petition for Review[15] under Rule 42 of the Rules of Court but the appellate court affirmed the RTCs Decision.[13] Atiko argued that Prudential failed to prove the material allegations of the complaint. Makati City. At all times material to the cause of action of this complaint. Hence. St. 3. 1999. Inc. Ltd. shipping.Proceedings before the Metropolitan Trial Court On December 14.. that Prudential was subrogated to the rights of Oriental.[16] petitioners raised the following issues: 1. Proceedings before the Regional Trial Court and the Court of Appeals In its Memorandum of Appeal. Prudential filed a Motion to Declare Defendant in Default. (Both defendants are hereinafter referred to as the CARRIER). that Cheng Lie is a private foreign juridical entity operating its shipping business in the Philippines thru Atiko as its shipagent.97 under and by virtue of the aforesaid insurance policy. Ltd. United Nation[s] Ave. operated and/or chartered the ocean going vessel M/S Katjana as common carrier to and from any Philippine [port] in international trade [thru] its duly authorized shipagent defendant Atiko Trans Inc.220.[10] alleging among others that on March 1. Prudential alleged that: 1. where both defendants may be served with summons and other court processes. Victoria Bldg. 119 Carlos Palanca[. was and still is engaged in. paid the latters claim in the amount of P205. Cheng Lie filed its own Memorandum of Appeal [14] maintaining that the MeTC never acquired jurisdiction over its person. is [a] foreign shipping company doing business in the Philippines [thru] its duly authorized shipagent defendant Atiko Trans Inc. 2. the MeTC issued an Order [11] declaring Cheng Lie and Atiko in default and allowing Prudential to present its evidence ex-parte. owned. Prudential filed with the MeTC of Makati City a Complaint [8] for sum of money against Cheng Lie and Atiko Trans. Acting on the motion. 2.. WHETHER X X X THE RESPONDENT-PLAINTIFF IS REQUIRED TO PROVE THE MATERIAL ALLEGATIONS IN THE COMPLAINT EVEN IN DEFAULT JUDGMENT OR WHETHER OR NOT IN DEFAULT . 2002. 2003. and as such. Ermita. On April 8. thereby subrogating herein plaintiff to all the rights and causes of action appertaining to the consignee against the defendants. as cargo-insurer and upon finding that the consignees insurance claim was in order and compensable.. the MeTC rendered its judgment by default. 2000 a copy of the summons was served upon petitioners thru cashier Cristina Figueroa and that despite receipt thereof petitioners failed to file any responsive pleading. Issues In their Memorandum. LegaspiVillage. Defendant Cheng Lie Navigation Co. marine insurance business. the RTC rendered its Decision dismissing the appeal and affirming the Decision of the MeTC. Plaintiff. Although assisted by the same counsel. Manila. WHETHER X X X THE DECISION OF MAKATI [MeTC] WHICH WAS AFFIRMED BY MAKATI RTC AND THE COURT OF APPEALS IS NULL AND VOID FOR FAILURE TO ACQUIRE JURISDICTION OVER THE PERSONS OF THE PETITIONERS-DEFENDANTS CONSIDERING THAT THE SUMMONS WERE NOT PROPERLY SERVED ON THEM AS REQUIRED BY RULE 14 OF THE RULES OF COURT. among others. which owns and operates M/S Katjana. (Atiko). among others. that Atiko can be held solidarily liable with Cheng Lie. In addition to the above undisputed facts. and. Whereas Defendant Cheng Lie Navigation Co. 2000. transportation and freight/cargo forwarding business. this petition. that Cheng Lie is a common carrier.

only questions of law can be raised. as a matter of long and sound appellate practice. While there are recognized exceptions to this rule. 2. 2. Rule 14 of the Rules of Court. Respondent. even if they were declared in default.JUDGMENT. petitioners assert that respondent failed to prove that Cheng Lie is a common carrier which owned. We shall first tackle the factual matters involved in this case. deserve great weight and shall not be disturbed on appeal x x x. the respondent still has the burden of proving the material allegations in the complaint by preponderance of evidence. WHETHER X X X A MOTION TO DECLARE DEFENDANT IN DEFAULT ADDRESSED AND SENT TO ONLY ONE OF THE DEFENDANTS WOULD BIND THE OTHER DEFENDANT TO WHOM THE MOTION WAS NOT ADDRESSED AND NOT SENT.4. 2. service of summons may be made only upon the persons enumerated in Section 11. HENCE. assails the propriety of the remedy taken by the petitioners. viz: . We agree with respondent. for its part. These] factual determination[s]. which would support the material allegations of the complaint. Well-settled is the rule that in petitions for review on certiorari under Rule 45. when the defendant is a domestic corporation like Atiko. MUST BE PROVED BY COMPETENT EVIDENCE. then proceed with the jurisdictional issues raised. Rule 14 of the Rules of Court. general manager. They maintain that under Section 11. when the defendant is a domestic corporation.1. They also insist that respondents witnesses do not have personal knowledge of the facts on which they were examined. [20] However. [this] Court defers and accords finality to the factual findings of trial courts. WHETHER X X X RESPONDENT-PLAINTIFF IS OBLIGED TO PROVE ITS LEGAL PERSONALITY TO SUE EVEN IN DEFAULT JUDGMENT.Lastly.[18] none is present in this case.Petitioners also claim that respondent failed to present competent proof that Cheng Lie is a foreign shipping company doing business in the Philippines thru its duly authorized shipagent Atiko. Cristina Figueroa. [I]t is not the function of the Court to analyze and weigh all over again the evidence or premises supportive of the factual holding of the lower courts. [especially] when such findings were [affirmed by the RTC and the CA. Hence. WHETHER X X X RESPONDENT-PLAINTIFF IS OBLIGED TO PROVE THAT PETITIONERDEFENDANT ATIKO IS THE SHIPAGENT OF PETITIONER-DEFENDANT CHENG LIE EVEN IN DEFAULT JUDGMENT. True. corporate secretary. treasurer or in-house counsel. WHETHER X X X THE TESTIMONIES OF THE WITNESSES AND THE DOCUMENTARY EXHIBITS CAN BE CONSIDERED FOR PURPOSES OTHER THAN THE PURPOSE FOR WHICH THEY WERE OFFERED. Besides. summons may be served only upon its president.Petitioners emphasize that there is no proof. Petitioners further argue that respondent miserably failed to discharge this burden because it failed to present sufficient proof that it is a domestic corporation.3. It posits that petitioners advanced factual matters which are not the proper subject of a petition for review on certiorari. Petitioners also argue that the MeTC did not acquire jurisdiction over the person of Atiko as the summons was received by its cashier. as embodied in Section 20. ALL ALLEGATIONS IN THE COMPLAINT ARE DEEMED CONTROVERTED.2. Rule 14 of the Rules of Court. testimonial or otherwise. A cursory reading of the issues raised readily reveals that they involve factual matters which are not within the province of this Court to look into. operated and/or chartered M/S Katjana thru its duly authorized shipagent Atiko. respondent could not possibly maintain the present action because only natural or juridical persons or entities authorized by law can be parties to a civil action. We are not persuaded. Petitioners contend that the lower courts grievously erred in granting the complaint because. Petitioners raised factual matters which are not the proper subject of this appeal. [A]s a matter of x x x procedure.[17] Our Ruling The petition is partly meritorious. 2.[19] MeTC properly acquired jurisdiction over the person of Atiko. the lower courts consistently held that the allegations in respondents complaint are supported by sufficient evidence. jurisdiction over the person of the defendant can be acquired not only by proper service of summons but also by defendants voluntary appearance without expressly objecting to the courts jurisdiction.

Voluntary appearance. on the government official designated by law to that effect. Failing to do so.[24] it never questioned the jurisdiction of the MeTC over its person. Petitioners likewise challenge the validity of the service of summons upon Cheng Lie. Ltd. to admit answer. the records of this case is bereft of any showing that cashier Cristina Figueroa is a government official designated by law to receive summons on behalf of Cheng Lie or that she is an officer or agent of Cheng Lie within the Philippines. At this point. 11-3-6-SC. The inclusion in a motion to dismiss of other grounds aside from lack of jurisdiction over the person of the defendant shall not be deemed a voluntary appearance. service of summons may be made upon: 1. They claim that when the defendant is a foreign private juridical entity which has transacted business in the Philippines. hence.[27] it was held that the issue of jurisdiction over the person of the defendant must be seasonably raised. for reconsideration of a default judgment. when Atiko filed its Notice of Appeal. or. Thus. or on any of its officers or agents within the Philippines.[30] Section 12 of Rule 14 of the Rules of Court reads: SEC.M. this Court declared in Pioneer International. Court of Appeals. however. Hence.[29] we reminded the parties that they are not allowed to interject new issues in their memorandum. Jr. Guadiz. In La Naval Drug Corporation v. petitioners contention is a mere afterthought. in order for the court to acquire jurisdiction over the person of a defendant foreign private juridical entity under Section 12. In the case at bench. for additional time to file answer. The MeTC acquired jurisdiction over the person of Atiko not thru valid service of summons but by the latters voluntary appearance. there is no proof that Atiko is the local agent of Cheng Lie. In this case. When the defendant is a foreign private juridical entity which has transacted business in the Philippines.SEC. Rule 14 of the Rules of Court. It should be recalled that Atiko was not properly served with summons as the person who received it on behalf of Atiko. if there be no such agent. Moreover. rendered the alleged lack of jurisdiction moot. Indeed. On this score. cashier Cristina Figueroa.[25] this Court reiterated the oft-repeated rule that the filing of motions seeking affirmative relief. there being no proper service of summons upon Atiko to speak of. Service upon foreign private juridical entity. v. her receipt of summons bears no significance insofar as Cheng Lie is concerned. are considered voluntary submission to the jurisdiction of the court. 20. upon its resident agent. 2. MeTC did not acquire jurisdiction over the person of Cheng Lie. for the first time. or.[22] Motion for Reconsideration[23] of the April 8. 2003 Decision of the RTC. that Atiko was not properly served with summons. 2006 Resolution. Before it was amended by A. Also. there must be prior valid service of summons upon the agent of such defendant. is not one of the corporate officers enumerated in Section 11 of Rule 14 of the Rules of Court. [32] lest we ride roughshod on defendants right to due process. The government official designated by law to receive summons if the corporation does not have a resident agent. a party who invoked the jurisdiction of a court to secure an affirmative relief cannot be allowed to disavow such jurisdiction after unsuccessfully trying to obtain such relief. such as. In Palma v. no summons was served upon Cheng Lie in any manner prescribed above. The defendants voluntary appearance in the action shall be equivalent to service of summons. No. To rule otherwise would create an absurd situation where service of summons is valid upon the purported principal but not on the latters co-defendant cum putative agent despite the fact that service was coursed thru said agent.[31] that when the defendant is a foreign juridical entity. among others.[21] Memorandum of Appeal. and to lift order of default with motion for reconsideration. Its resident agent designated in accordance with law for that purpose. Any of the corporations officers or agents within the Philippines. It was only in their Memorandum[26] filed with this Court where they claimed. 12. Galvez. The filing of these pleadings seeking affirmative relief amounted to voluntary appearance and. service of summons may be made. In the case at bench. 3. Elucidating on the above provision of the Rules of Court. thru Atiko.[28] It may not be amiss to state too that in our February 13.[33] . we emphasize that the requirements of the rule on summons must be strictly followed. and Petition for Review. it follows that the MeTC never acquired jurisdiction over the person of Cheng Lie. we find for the petitioners. service may be made on its resident agent designated in accordance with law for that purpose.

SO ORDERED. Settled is the rule that a defendant cannot be declared in default unless such declaration is preceded by a valid service of summons. it has consistently questioned the validity of the service of summons and the jurisdiction of the MeTC over its person.[36] WHEREFORE. Cheng Lie never sought affirmative relief other than the dismissal of the complaint on the ground of lack of jurisdiction over its person. 2004 Decision of the Court of Appeals in CA-G. its decision insofar as Cheng Lie is concerned is void. SP No. the same cannot be considered as voluntary appearance. the MeTC likewise erred in declaring Cheng Lie in default. Applying the above disquisition.. From the very beginning. The assailed December 10. But these. are mere inaccuracies in the title of the pleadings. 82547 is AFFIRMED with the MODIFICATION that the judgment insofar as Cheng Lie Navigation Co. the instant petition is PARTIALLY GRANTED.[35] Cheng Lie was improperly declared in default. Republic of the Philippines .With regard to Cheng Lies filing of numerous pleadings.[34] In fine. Ltd. since the MeTC never acquired jurisdiction over the person of Cheng Lie. What is important are the allegations contained therein which consistently resisted the jurisdiction of the trial court. It does not escape our attention though that Cheng Lies pleadings do not indicate that the same were filed by way of special appearance. Unlike Atiko. to our mind. Thus.R. is concerned is declared VOID for failure to acquire jurisdiction over its person as there was improper service of summons. Cheng Lie cannot be considered to have submitted itself to the jurisdiction of the courts.

2005 and Resolution [2] dated August 3.versus - ABAD. AMADO GARCIA. 2005 in CA-G. JR. Respondents. . The facts of the case follow: Emilio Garcia (Emilio) and Eleuteria Pineda Garcia (Eleuteria) had nine (9) children. respondents Ester. Chairperson. Imelda. Eleuteria died in 1927. ADELA GARCIA. Rosa. BENJAMIN and NORMA Petitioner. 1996[6] and July 9. J.[9] respectively. while the assailed resolution denied petitioners motion for reconsideration. [10] . Jose. Violeta and Rosalinda.Supreme Court Manila THIRD DIVISION SPOUSES GARCIA. Rita Garcia-Shipley (Rita). Amado. thereafter. namely: Irma. JJ. Felixberto. PERALTA. 169157 Present: VELASCO. 2011 x ----------------------------------------------------------------------------------------x DECISION PERALTA.: For review is the Court of Appeals (CA) Decision [1] dated May 12. namely: Jerameal. questioning the Regional Trial Court (RTC) [4] Orders[5] dated April 24. 41556. The assailed decision dismissed the Amended Petition for Certiorari with Preliminary Injunction and/or Temporary Restraining Order (TRO) [3] filed by petitioners. Adela.R. in Civil Case No. Spouses Benjamin and Norma Garcia.. with whom he had eight (8) children.R. Maurita. 1996[7] denying their Urgent Motion to Quash Order of Execution [8] and Motion for Reconsideration. Q-36147. all surnamed Garcia. Rogelio.* and MENDOZA. Emilio. ROSA GARCIA and DAVID GARCIA. Emilio. married Monica Cruz (Monica). G. SP No. David and petitioner Benjamin. PEREZ. No. Promulgated: November 14.. ESTER GARCIA. J.

The case was docketed as Civil Case No. This resulted in the issuance of TCT No. Q-17933. 207210 for 445 sq m in the name of Rita and TCT No. thus. [12] Pursuant to said Deed. 207210 to petitioner Norma Dimalanta Garcia (Norma) resulting in the registration and issuance of TCT No. 1973. In addition to the annulment and cancellation of the TCT. 1982. [20] On August 22. Emilios daughters (Irma and Imelda) of his second marriage filed a complaint against Rita and Benjamin for the annulment of title.564-square-meter (sq m) lot (hereafter referred to as subject property) located in San Francisco Del Monte. 171640 was cancelled and TCT No. Rita sold her property covered by TCT No. while TCT No. and Monica and her children. 1962. Rosa and David filed a complaint for reconveyance. He left. Irma and Imelda prayed that the property covered thereby be partitioned in accordance with the law on intestate succession. [14] The parties. a 1. on the other. 1979. Consequently. 171639 in the name of Benjamin corresponding to his share of the subject property and TCT No. 1965.[21] Respondents Ester. Adela. [11] On June 28. survived by his wife Monica Cruz and his children of the first and second marriage. declaring themselves as the sole and only heirs of Emilio and Eleuteria. a Deed of Exchange was executed between Rita on the one hand. namely. 170385 was issued in the name of Rita and Benjamin. docketed as Civil Case No. TCT No. were supposed to receive a total area of 472. Rita divided her 1. Benjamin. Benjamin and Rita executed a Deed of Extrajudicial Settlement of Estate. instead of executing the judgment based on the compromise agreement. Amado. and adjudicating unto themselves the subject property. thereafter. The latter title was further cancelled and two (2) new TCTs were issued. 278765 in the name of Norma married to Benjamin. Emilio died intestate. of the parcel of land originally covered by TCT No. entered into a Compromise Agreement[15] which was approved by the court on August 29.[19] On April 17. a permanent service road was constructed on Ritas property.[13] On July 25. 1. 1974.On October 26.10 sq m. Q-36147.90 sq m. while the children of the second marriage. They alleged that Benjamin and Rita were able to adjudicate between themselves the subject property by claiming to be the only heirs of Emilio.000 sq m of which to Rita and the remaining 564 sq m to Benjamin. 171640 in the name of Rita for her share. 1971. Emilios children of the first marriage executed a General Power of Attorney (GPA) in favor of Rita. demanded for their shares . among others. Consequently. 18550 was cancelled and TCT No. the children of the first marriage were supposed to receive a total area of 1. and Monica and her children. including the surviving spouse Monica. Quezon City covered by Transfer Certificate of Title (TCT) No. 207211 for 555 sq m to Monica and her children. Pursuant to the said agreement as approved by the court. [16] The subject property was supposed to be partitioned among the siblings of the first and second marriage. They. which was later amended[22] on October 26. 207116 to Rita. TCT No. 207117 was issued to Monica and her children. when in fact they were not.091. against Rita.000sq-m property 555 sq m for herself and 445 sq m for Monica and her children. 1975. On July 29. 18550 registered in the name of Emilio married to Eleuteria. 18550. [18] However.[17] It was further agreed upon by the parties that the shares of Monica and her children were to be taken from Ritas 1. TCT No.000-sq-m portion of the subject property.

consequently. however. Defendants are ordered to pay attorney[s] fees amounting to P5. Defendants are ordered to convey to plaintiffs the portions corresponding to their shares in the property in question based upon the Compromise Agreement dated August 28. is incomplete. there is a need to complete the distribution to the omitted heirs. and 2. On March 15. The partition earlier made by Benjamin and Rita. the court held that the law requires a special power of attorney. the RTC rendered a Decision [23] in favor of respondents. except for the deletion of the award of attorneys fees. Norma alleged that she is the owner of a portion of the property being claimed by Amado and his siblings in a reconveyance case in which she was not made a party. The case was docketed as Civil Case No.in the subject property since.[24] The court noted that Benjamin and Ritas basis in adjudicating between themselves the subject property was the GPA allegedly executed by respondents in favor of Rita. not a GPA. in repudiating an inheritance. 1993. [27] The corresponding Writ of Execution[28] was issued thereafter. we denied the petition and.091 sq m. She added that she bought the property from Rita. Meanwhile on August 30. and later by Monica and her children based on the compromise agreement. 1989.00. However. as children of the first marriage (which includes Benjamin and Rita). Consequently. Q-93-17396. judgment is hereby rendered in favor of the plaintiff[s] and against the defendants as follows: 1. premises considered. the CA affirmed [26] the RTC decision. SO ORDERED. they are entitled to a total area of 1. 18550 which was already declared to have been fraudulently partitioned by Rita and Benjamin. 1974 Compromise Agreement. Costs against the defendants.000. was dismissed on motion of Amado on the ground of res judicata considering that the title to the property claimed by Norma emanated from TCT No.[31] .[25] On appeal. affirmed the CA decision. 1974. computed in accordance with the law on intestate succession. The decision attained finality. It follows that the deed of extrajudicial settlement executed by Benjamin and Rita is defective for having knowingly and willingly excluded compulsory heirs. the dispositive portion of which reads: WHEREFORE. pursuant to the August 28. Norma filed a Petition for Quieting of Title [29] against Amado with the RTC. When elevated before the Court. [30] The case.

the pertinent portion of which reads: NOW THEREFORE. Likewise. 18550 against which the execution may be had in favor of respondents. In said decision. Torio. The petition is without merit. In a special civil action for certiorari. The CA pointed out that the assailed order of execution did not amend the March 15. the appellate court applied the rule on estoppel by laches. the Branch Deputy Sheriff. Q-36147 for reconveyance and the August 28.On motion of respondents. 1974 Compromise Agreement.[34] In an Urgent Motion to Quash Order of Execution. considering that Norma was very much aware of the existence of the litigations involving the subject property. The RTC explained that the issue of Normas non-inclusion in the reconveyance case had been finally settled when her case had been dismissed for quieting of title precisely because of the reconveyance case that had become final and executory. Mr. an Alias Writ of Execution [32] in the reconveyance case was issued. the CA found no grave abuse of discretion on the part of the RTC in issuing the above orders. the judge amended the judgment sought to be executed. is ordered to return this writ into [this] court within sixty (60) days from date with your proceedings endorsed thereon. computed in accordance with the law on intestate succession and to show proof of compliance with this writ within sixty (60) days from receipt. the RTC denied the motion to quash. the court ordered Benjamin. the CA stressed that mere issuance of the certificate of title does not foreclose the possibility that the property may be under co-ownership with persons not named in the title. is undisputed. 1989 decision sought to be executed. [33] Petitioners. [40] It explained that the order of execution merely clarified the dispositive portion of the decision with reference to the other portions thereof. on petitioners claim of the indefeasibility of the Torrens title. [35] petitioners insisted that in including the properties of Benjamin and Norma in the order of execution. The existence of the courts decision in Civil Case No. opposed the writ on the ground that the compromise agreement referred to in the decision did not cover their properties. Monica and her children. to convey to respondents the portions corresponding to their shares in the subject property based . petitioners filed this petition assailing in general the denial of their urgent motion to quash writ of execution. however. [36] They likewise pointed out that Norma was never impleaded in the reconveyance case. In an Order[37] dated April 24.[43] Finally. 1974. [41] It found that the parcels of land in the name of petitioners form part of the decision as they originated from the mother title TCT No. [42] As to the non-inclusion of Norma as indispensable party in the reconveyance case. 1996. Cesar M. 1996. the defendants are hereby ordered to convey to plaintiffs the portions corresponding their shares in the property in question based upon the Compromise Agreement dated August 28. Petitioners motion for reconsideration[38] was likewise denied in an Order[39] dated July 9.[44] Aggrieved. Rita.

Respondents were not parties to the annulment case or to the compromise agreement but their rights to the subject property as heirs of Emilio were recognized.000 sq m.on the compromise agreement. however. TCT No. They based their claim on their entitlement to 1. certainly. the subject property had been divided between Benjamin and Rita.091 sq m as children of the first marriage. the subject property was divided as follows: 1. wherein they were issued their respective titles. We do not agree with petitioners. the compromise agreement. To facilitate the delivery of their[45] shares. has no leg to stand on.564 sq m property. 472 [46] sq m was supposed to be given to Monica and her children. Although several cancellations of titles had already taken place. and (2) the writ of execution could not cover the portion of the subject property in the name of Norma. From Ritas 1. In the compromise agreement.091 sq m as the total shares of the children of the first marriage and 472 sq m for Monica and her children. Although it was not specifically stated in the compromise agreement. thus.091 sq m was agreed upon as the total shares of the children of the first marriage which include Rita. Pursuant to the final and executory decision above. Benjamins claim that the portion of the property registered in his name is not covered by the compromise agreement. The action for reconveyance was instituted by the other heirs of Emilio who were not parties to the annulment case nor to the compromise agreement. obviously.091 sq m. First. Benjamin and respondents. 528 sq m remained for the children of the first marriage who are entitled to 1. the shares of the children of the first marriage should be taken from the remaining 528 sq m of Rita and the 564 sq m of Benjamin. and 472 sq m for Monica and her children. should not be considered part of the property ordered by the court to be reconveyed to respondents. 171640. It must be recalled that the compromise agreement came about because of the case for annulment of title instituted by Monica and her children against Benjamin and Rita.000 sq m share. Petitioners. the RTC issued a Writ of Execution and eventually the assailed Alias Writ of Execution. opposed the implementation of the writ of execution on two grounds: (1) the compromise agreement did not include the portion of the subject property in the name of Benjamin. To determine the propriety of petitioners claims. 171639 in the name of Benjamin covering 564 sq m and TCT No. At the time of the institution of the annulment case. the decision in the reconveyance case sought to be executed. it is clear from the decision . 171640 in the name of Rita covering 1. Second. After deducting said area. Of the 1. since she was not impleaded in the reconveyance case. The parties later entered into a compromise agreement recognizing the rights of Monica and her children to the subject property as heirs of Emilio being the surviving wife and children of the second marriage. it is necessary to look into the terms of the compromise agreement and the conclusions of the court in the decision sought to be executed. 1. and as such. it was stated in the compromise agreement that their shares shall be taken from Ritas portion covered by TCT No. is not bound by the decision sought to be executed.

As such. TCT No. and TCT No. at the time of the issuance of the questioned writ of execution. covering the subject property. At that time. Two new titles were later issued. 18550. the subject property was covered by TCT No. In sum. TCT No. The Court had thoroughly discussed in a number of cases the nature and definition of an indispensable party. in deciding the reconveyance case in favor of respondents. married to Eleuteria. 278765. 171639 covering 564 sq m in the name of Benjamin. which we now reiterate for a proper perspective. 18550. Respondents instituted the action for reconveyance involving the subject property originally covered by TCT No. in the names of Benjamin and Rita. 171639 was derived from TCT No. 207210 in the name of Rita. 18550. TCT No. she was an indispensable party as her title to the property was affected. to wit: x x x [I]ndispensable parties [are] parties-in-interests without whom there can be no final determination of an action. of course. Eventually. the shares of the omitted heirs will not be completed. As clearly stated above. 18550 in the name of Emilio. 170385. 171640 in the name of Rita. 207116 in the name of Rita. If we were to sustain Benjamins claim that the portion of the property registered in his name is excluded. the joinder of all necessary parties where possible. the court took into consideration how TCT No. The general rule with reference to the making of parties in a civil action requires. the wife of Benjamin. 207211 covering 555 sq m in the name of Monica and her children. Considering that Benjamins title which is TCT No. A Deed of Exchange was. 171640 was cancelled and new ones were issued. their presence being a sine qua non for the exercise of judicial power. Moreover. TCT No.sought to be executed that the subject property was that originally covered by TCT No. and the joinder of all indispensable parties under any and all conditions. x x x[47] . Pursuant to the compromise agreement entered into with their brothers and sisters of the second marriage. was cancelled and how TCT Nos. 171639 and 171640. executed resulting in the cancellation of the latter titles and new ones were issued. a new title was issued in their names. Norma had been the registered owner of a portion of the subject property. several cancellations of titles had taken place since the death of Emilio until the present case was instituted. Undoubtedly. came about. As such. TCT No. The court applied the laws on intestate succession and implied trust before it finally concluded that respondents were excluded from the partition and are thus entitled to their shares. TCT No. 278765 covering 445 sq m in the name of Norma. they must be joined either as plaintiffs or as defendants. the same was definitely included. TCT No. By virtue of the extrajudicial settlement of estate executed by Rita and Benjamin. The subject property was originally covered by TCT No. Neither can we sustain petitioners contention that the writ of execution cannot include the portion of the subject property registered in the name of Norma as she was never a party to the reconveyance case. thereafter. these rules apply not only to Rita but also to Benjamin. 171639 in the name of Benjamin and TCT No. 18550. 207117 in the name of Monica and her children and TCT No. 207211 in the name of Monica and her children and TCT No. Rita decided to sell the portion of the property registered in her name to Norma resulting in the cancellation of her title and the issuance of the new title in the name of Norma.

Garcia was very much aware of the existence of Civil Case No. things done between strangers ought not to injure those who are not parties to them. or equitable.An indispensable party is a party who has such an interest in the controversy or subject matter that a final adjudication cannot be made. warrants a presumption that the party entitled to assert it either has abandoned it or declined to assert it. it is addressed to the sound discretion of the court. The Amended Complaint dated 26 October 1982 specifically mentioned petitioner Benjamin Garcia as being married to herein petitioner Norma Dimalanta Garcia. Garcia for the conveyance to them (plaintiffs) of their legitimate shares. Garcia had knowledge of the existence of Civil Case No. It even alleged in paragraph 14 thereof that the property covered by TCT No. or the negligence or omission to assert a right within a reasonable time. for no man shall be affected by a proceeding in which he is a stranger. It has also been considered that an indispensable party is a person in whose absence there cannot be a determination between the parties already before the court which is effective. [51] There is no absolute rule as to what constitutes laches. that she knew very well that her property is involved in the litigation yet she did not take steps to have the same excluded therefrom. 66234 came from. Further. the private respondents alleged in their Comment dated 10 January 1997. in paragraph 15 of the said Amended Complaint. to do that which by exercising due diligence could or should have been done earlier. Estoppel by laches or stale demands ordains that the failure or neglect. Q36147 as the same involves the estate of her deceased parent-in-law Emilio Garcia from which her property covered by TCT No. its application is controlled by equitable considerations. Benjamin Garcia and Norma D. [49] Otherwise stated. in the name of Norma Garcia married to Benjamin Garcia. a person who was not impleaded in the complaint cannot be bound by the decision rendered therein. We quote with approval the exhaustive observations and explanations of the CA in this wise: [Records show] that petitioner Norma D. private respondents alleged that demands were made on Rita GarciaShipley. 66234. Being an equitable doctrine. Norma is estopped from invoking the rule on indispensable party. Likewise. and that she even participated actively during the trial of the case and testified to support the theory put up by the defendants. but also has an interest of such nature that a final decree cannot be made without affecting his interest or leaving the controversy in such a condition that its final determination may be wholly inconsistent with equity and good conscience. 207210 in the name of Rita Garcia-Shipley was transferred to petitioner Norma Dimalanta Garcia by virtue of a Deed of Sale dated 22 August 1979 executed between petitioner Norma Garcia and Rita Garcia-Shipley and resulted to the registration and issuance of TCT No. Q-36147 [for reconveyance] as well as the subject thereof. however. 278765.[48] Thus. an indispensable party is one who must be included in an action before it may properly go forward. a party who has not only an interest in the subject matter of the controversy. [50] In this case. Petitioner Norma Garcias filing of the Petition for Quieting of Title with [the] RTC of Quezon City docketed as Q-93-17396 raffled to . Further. for an unreasonable and unexplained length of time. [52] The CA has thoroughly explained the circumstances showing Normas knowledge of the existence of the pending litigation involving the subject property which includes the portion registered in her name. complete. without injuring or affecting that interest. that petitioner Norma D. as aptly held by the RTC and CA. in his absence. now TCT No.

2011 . Jr. BERSAMIN..R. 66234 (278765). She is now estopped from claiming that the RTC had not acquired jurisdiction over her and thus not bound by the decision sought to be executed.R. and VILLARAMA. Republic of the Philippines Supreme Court Manila FIRST DIVISION FEDMAN DEVELOPMENT CORPORATION. LEONARDO-DE CASTRO. 2005 in CA-G. August 31. Rita. SP No. therefore. WHEREFORE. Q-36147) as she categorically stated in paragraph 6 of said Petition that said case for reconveyance of property apparently includes the property registered in her name. JR. Taking into consideration the established circumstances surrounding the transfer in her name of the parcel of land covered by TCT No. 41556.J. Salazar. DEL CASTILLO. the petition is DENIED for lack of merit.. No. therefore. and Monica and her children. premises considered.) supports private respondentsassertion of petitioner Norma Garcias knowledge of the existence and subject matter of the reconveyance case (Civil Case No. Promulgated: FEDERICO AGCAOILI.Branch 103 (Judge Jaime N. her non-joinder as an indispensable party is a mere technicality that cannot prevail over considerations of substantial justice. C. x x x xxxx We. . x x x[53] Indeed. 2005 and Resolution dated August 3. Petitioner. evidence clearly shows that Norma had knowledge of the existence and the pendency of the reconveyance case filed by respondents against her husband Benjamin. did not abuse its discretion in denying petitioners urgent motion to quash the writ of execution. JJ. find that petitioner Norma Garcia is estopped by laches from invoking the rule on indispensable parties.versus - G. [54] The RTC. 165025 Present: CORONA. Chairperson. are AFFIRMED. The Court of Appeals Decision dated May 12. SO ORDERED.

a practicing attorney who was then also a member of the Provincial Board of Quezon Province. The obligations Agcaoili assumed totaled₱302. FDC executed a Master Deed with Declaration of Restrictions. 1986.00 upon signing of the deed of transfer.473. in favor of the respondent.[12] Agcaoili thus moved for the execution of the RTC decision dated August 26. [10] The parties later executed a compromise agreement that the RTC approved through its decision of August 26. 1986. Agcaoili was thus prompted to sue FDC and FSCC in the RTC. On March 31. Fedman Development Corporation (FDC) appeals the decision promulgated on August 20.858. the centralized air-conditioning unit of FSBs fourth floor broke down. and also paid FSCC an amount of ₱17.[13] On July 17. [4] On October 10. where the plaintiff has paid the amount of filing fees assessed by the clerk of court.[14] On March 6. Branch 150. Makati City. Interchem Laboratories Incorporated (Interchem) purchased FSBs Unit 411 under a contract to sell. [11] On April 22. being thereby adversely affected.[8] Not getting any immediate response. Legazpi Village. the RTC issued an order temporarily allowing Agcaoili to obtain his electric supply from the other units in the fourth floor of FSB until the main meter was restored. FDC cancelled the contract to sell involving Unit 411 and cut off the electric supply to the unit.002. Agcaoili lodged a complaint for damages against FDC and FSCC in the RTC. the trial court still acquires jurisdiction over the case. Agcaoili paid FDC the sum of ₱39. FDC again disconnected the electric supply of Unit 411. He then informed FDC and FSCC that he was suspending the payment of his condominium dues and monthly amortizations. 1987.[9] On August 30.24 effective October 1980. 1975. 1985.Respondent. inconvenience and embarrassment. and the amount paid turns out to be deficient. Yet. vice-president and board member of FSCC.[2] Antecedents FDC was the owner and developer of a condominium project known as Fedman Suites Building (FSB) located on Salcedo Street. electric bills. 1984. [5] As consideration for the transfer. (b) to update the account by paying to FDC the amount of ₱15.00.37 for accrued condominium dues. 1980. with FDCs consent. [7] On January 3. Makati City.857. subject to the payment by the plaintiff of the deficiency assessment. but the letters went unheeded. 1986 had unjustly deprived him of the use and enjoyment of the unit.286.60. Agcaoili. 1977. 1984. and surcharges as of March 1985. He alleged that the disconnection of the electric supply of Unit 411 on April 22.83 in 135 equal monthly installments of ₱1.04 as amortizations for the period from November 1983 to July 1985. that FDC and FSCC violated the compromise agreement. x-----------------------------------------------------------------------------------------x DECISION BERSAMIN.: The non-payment of the prescribed filing fees at the time of the filing of the complaint or other initiatory pleading fails to vest jurisdiction over the case in the trial court. transferred all its rights in Unit 411 to respondent Federico Agcaoili (Agcaoili).626. As stipulated in the compromise agreement. demanding the repair of the air-conditioning unit. and (c) to deliver to FDC the balance of ₱137. inclusive of 12% interest per annum on the diminishing balance. that he was entitled to actual damages amounting to ₱21. Agcaoili sent follow-up letters to FSCC reiterating the demand. Agcaoili agreed: (a) to pay Interchem ₱150. wrote to Eduardo X. On June 18. 1998 by the Regional Trial Court (RTC).760.17 through a 90 day-postdated check. 1985. [1] whereby the Court of Appeals (CA) affirmed the judgment rendered on August 28. Interchem. Branch 144 for injunction and damages. Genato (Genato). As a result.[6] In December 1983. Makati City. 2004. and attorneys fees as might be proven during the trial. realty taxes. J. as well as to moral and exemplary damages. FDC reinstated the contract to sell and allowed Agcaoili to temporarily install two window-type air-conditioners in Unit 411.000. which was raffled to Branch 150 in Makati City.[3] and formed the Fedman Suite Condominium Corporation (FSCC) to manage FSB and hold title over its common areas. . that the disconnection had seriously affected his law practice and had caused him sufferings.

that FSCC. that FDCs cancellation of the contract to sell was improper.000. FSCC filed an answer. FDC comes to us on further appeal. that Agcaoili failed to comply with the terms of the contract to sell. and that Agcaoili was entitled to damages.539.00 as exemplary damages. ₱50.that the payment of interest sought by FDC and FSCC under the contract to sell was illegal.00.60 as actual damages. attorneys fees amounting to ₱100. b.000. light and others). agents commission. 1986. elevator.000. and ordering defendant FDC/FSCC to reinstate the contract to sell.106. He also prayed that FDC and FSCC be directed to return the excessive amounts collected for real estate taxes. but the CA affirmed the RTC. that he was justified in suspending the payment of his monthly amortizations.[18] On August 28.16 as of April 1987. respectively. judgment is hereby rendered in favor of the plaintiff and as against both defendants.[19] FDC appealed. and to return to plaintiff the excess amount collected from him for real estate taxes. FDC contended that it had a personality separate from that of FSCC. that FDC and FSCC had no separate personalities. holding that his complaint for damages was not barred by res judicata. declaring the increased rates sought by defendants to be illegal. applying the amount to the payment of liquidated damages. and that FDC and FSCC were one and the same corporation. that it had no obligation or liability in favor of Agcaoili. The amount of ₱21.00 and costs of suit.000.84 from October 1985 to May 1986. FDC cancelled the contract to sell and forfeited the amount of ₱219. [15] In its answer. c.701. As compulsory counterclaim. that it allowed Agcaoili to obtain electric supply from other units because Agcaoili promised to settle his accounts but he reneged on his promise. and that the complaint for damages was barred by the principle of res judicata because the issues raised therein were covered by the RTC decision dated August 26.[16] On its part. Both defendants are likewise ordered to pay plaintiff: a. 1985. SO ORDERED. Agcaoili did not pay the amortizations due from November 1983 to March 1985 and the surcharges. that the interest increase from 12% to 24% per annum was authorized under the contract to sell in view of the adverse economic conditions then prevailing in the country. resulting in FSCC being unable to pay the electric bills on time to the Manila Electric Company resulting in the disconnection of the electric supply of FSB. the RTC rendered judgment in favor of Agcaoili. that Agcaoilis complaint for damages was baseless and was intended to cover up his delinquencies. ₱500.00 as moral damages. FSCC sought moral damages and attorneys fees of ₱100.00 as and for attorneys fees. as well as to provide/restore the air-conditioning services/electric supply to plaintiffs unit.000. and cost of suit.063. the total amount of which was ₱376. [17] By way of counterclaim. It averred that it did not repair the air-conditioning unit because of dwindling collections caused by the failure of some unit holders to pay their obligations on time. but averring that the disconnection was justified because of Agcaoilis failure to pay the monthly amortizations and condominium dues despite repeated demands. that it demanded that Agcaoili vacate Unit 411. but its demand was not heeded.883. that despite demands. being the manager of FSB and the title-holder over its common areas. and interest.00.00 and ₱50. was in charge of maintaining all central and appurtenant equipment and installations for utility services (like air-conditioning unit.000.[21] Issues . that Agcaoilis total obligation was ₱55. that Agcaoili did not pay his monthly amortizations of ₱1.97 paid by Agcaoili. The RTC disposed thuswise: WHEREFORE. ₱50. that due to the non-payment.40. and that the electric supply of Unit 411 could not be restored until Agcaoili paid his condominium dues totaling ₱14. that the unit holders were notified of the electricity disconnection. and d.09. admitting that the electric supply of Unit 411 was disconnected for the second time on April 22. 1998. FDC prayed for an award of moral and exemplary damages each amounting to ₱1.000.000.626.[20] Hence.

Agcaoili must remit any docket fee deficiency to the RTCs clerk of court. the clerk of court or his duly authorized deputy has the responsibility of making a deficiency assessment.[33] Nonetheless. (SIOL) v. Book III. considering that the deficiency will be collected as a fee in lien within the contemplation of Section 2. as provided in the applicable laws. the trial court nonetheless continues to have jurisdiction over the complaint. [23] In an action where the reliefs sought are purely for sums of money and damages.[32] The reason is that to penalize the party for the omission of the clerk of court is not fair if the party has acted in good faith. provided there is no bad faith or intent to defraud the Government on the part of the plaintiff. without jurisdiction being automatically lost. particularly Chapter 3. unless the party liable is guilty of a fraud in that regard. I The filing of the complaint or other initiatory pleading and the payment of the prescribed docket fee are the acts that vest a trial court with jurisdiction over the claim. and that. If the amount of docket fees paid is insufficient in relation to the amounts being sought. and the plaintiff will be required to pay the deficiency. barring prescription. 00-2-01SC). [24] Ideally. the docket fees paid by Agcaoili were insufficient considering that the complaint did not specify the amounts of moral damages. that the payment of the prescribed docket fee by Agcaoili was necessary for the RTC to acquire jurisdiction over the case. and as such were solidarily liable to Agcaoili for damages. consequently. and the deficiency is not paid as a result. therefore. the clerk of court or his duly authorized deputy retained the responsibility of making a deficiency assessment. Even where the clerk of court fails to make a deficiency assessment. the RTC did not acquire jurisdiction over this case.[27] The prescriptive period that bars the payment of the docket fees refers to the period in which a specific action must be filed. Ltd. resolving the issue of the failure to pay the correct amount of docket fees due to the inadequate assessment by the clerk of court. the trial court still acquires jurisdiction upon full payment of the fees within a reasonable time as the court may grant. [25] The non-specification of the amounts of damages does not immediately divest the trial court of its jurisdiction over the case. Nonetheless. the docket fees are assessed on the basis of the aggregate amount being claimed. it is not disputed that Agcaoili paid the assessed docket fees. Such payment negated bad faith or intent to defraud the Government. No. and attorneys fees. Del Rosario. of the Civil Code. and (c) that FDC and FSCC were one and same corporation. Title V. and the party filing the action could be required to pay the deficiency. [26] The prevailing rule is that if the correct amount of docket fees are not paid at the time of filing. Herein. and that both the RTC and the CA erred in ruling: ( a) that Agcaoili had the right to suspend payment of his monthly amortizations..[29] the Court. Relying on Sun Insurance Office. exemplary damages. (b) that FDC had no right to cancel the contract to sell. so that in every case the docket fees must be paid before the lapse of the prescriptive period.[30] the Court opined that the filing of the complaint or appropriate initiatory pleading and the payment of the prescribed docket fees vested a trial court with jurisdiction over the claim.M. II .FDC claims that there was a failure to pay the correct amount of docket fee herein because the complaint did not specify the amounts of moral damages.[28] In Rivera v. the complaint or similar pleading must specify the sums of money to be recovered and the damages being sought in order that the clerk of court may be put in a position to compute the correct amount of docket fees. FDC also claims that the proceedings in the RTC were void because the jurisdiction over the subject matter of the action pertained to the Housing and Land Use Regulatory Board (HLURB).ruled that jurisdiction over the complaint was still validly acquired upon the full payment of the docket fees assessed by the Clerk of Court. Asuncion. [22] Ruling The petition has no merit. [31]Rule 141 (as revised by A. the principal law on prescription of actions. exemplary damages and attorneys fees. and although the docket fees paid were insufficient in relation to the amount of the claim.

[36] dictates that FDCs active participation in both RTC proceedings and its seeking therein affirmative reliefs now precluded it from denying the RTCs jurisdiction. and because he found FDCs cancellation of the contract to sell as improper. to wit: In the instant case. the court sees no valid reason for defendant FDC to cancel the contract to sell on ground of default or non-payment of monthly amortizations. Thus. FDC did not assert the HLURBs jurisdiction in its answer to Agcaoilis second complaint (filed on March 6. is to provide protection to buyers of real estate on installment payments. paragraph d of the Contract to Sell entered into by the parties states that. which is based on equity and public policy. otherwise known as the Maceda Law. the declared public policy espoused by Republic Act No. In all that time. Agcaoili and FDC executed a compromise agreement on August 16. Although Section II. [35] The principle of estoppel. Also. Defendant FDC cannot by its own forfeit the payments already made by the plaintiff which as of the same date amounts to ₱263. the increased interest rates said defendant is imposing on plaintiff is not justified. FDC apparently recognized the RTCs jurisdiction by its voluntary submission of the compromise agreement to the RTC for approval. FDC also thereby sought affirmative relief from the RTC through its counterclaim. 1990. For this reason. Thus. FDC should have refund the appellee the cash surrender value of the payments on the property equivalent to fifty percent of the total payments made. not the RTC. should there be an increase in bank interest rate for loans and/or other financial accommodations. p. Its acknowledgment of the RTCs jurisdiction and its subsequent denial of such jurisdiction only after an unfavorable judgment were inappropriate and intolerable. Agcaoili filed a complaint against FDC in the RTC on February 28.73. and after the RTC granted Agcaoilis motion to enjoin FDC from cancelling the contract to sell. had jurisdiction over the case.(RTC rollo. Instead. FDC never challenged the RTCs jurisdiction nor invoked the HLURBs authority. but attacking the judgment for lack of jurisdiction if it is not.FDC is now barred from asserting that the HLURB. pp. the contract to sell which defendant FDC cancelled as per its letter dated August 17. As clearly specified in Section 3. find no error on the part of the lower court when it ruled that: There is nothing in the record to show that the aforementioned requisites for a valid cancellation of a contract where complied with by defendant FDC. 1985. [34] or more than five years from the time the prior case was commenced on February 28. in order for FDC to have validly cancelled the existing contract to sell. thus we quote with approval the findings of the lower court. The Court abhors the practice of any litigant of submitting a case for decision in the trial court. 1987 remains valid and subsisting. and then accepting the judgment only if favorable. the rate of interest provided for in this contract shall be automatically amended to equal the said increased bank interest rate. 79-80) It was also grave error on the part of the FDC to cancel the contract to sell for non-payment of the monthly amortizations without taking into consideration Republic Act 6552. its validity or compliance cannot be left to the will of one of them. [37] III In upholding Agcaoilis right to suspend the payment of his monthly amortizations due to the increased interest rates imposed by FDC. 1985 approving the compromise agreement already barred Agcaoili from filing the second complaint under the doctrine of res judicata. it even averred in that answer that the decision of August 26. the CA found and ruled as follows: It is the contention of the appellee that he has the right to suspend payments since the increase in interest rate imposed by defendant-appellant FDC is not valid and therefore cannot be given legal effect. However. the said increase still needs to [be] accompanied by valid proofs and not one of the parties must unilaterally alter what was originally agreed upon. FDC failed to substantiate the alleged increase with sufficient proof. 6552 is to protect buyers of real estate on installment payments against onerous and oppressive conditions. defendant FDC failed to show by evidence that it incurred loans and /or other financial accommodations to pay interest for its loans in developing the property. 1985. Hence. we. 1308 The contract must bind both contracting parties. as embodied in its title. 81)[38] . 1985 after FDC disconnected the electric supply of Unit 411. The policy of law. it must have first complied with Section 3 (b) of RA 6552.637. 1987). FDC invoked HLURBs authority only on September 10. the date of said amendment to coincide with the date of said increase in interest rate. The RTC approved the compromise agreement through its decision of August 26. 1985. (RTC rollo. As already stated. Article 1308 of the Civil Code provides: Art. At this point. On the contrary. and to allow the same is tantamount to unilaterally altering the terms of the contract which the law proscribes.

SECOND DIVISION JESSE U.We sustain the aforequoted findings and ruling of the CA.[41] But FDC and FSCC failed to repair the centralized air-conditioning unit of the fourth floor of FSB despite repeated demands from Agcaoili. FDC was liable for damages. and those who in any manner contravene the tenor thereof are liable for damages. Article 1171 of the Civil Code provides that those who in the performance of their obligations are guilty of fraud. Factual findings and rulings of the CA are binding and conclusive upon this Court if they are supported by the records and coincided with those made by the trial court. [44] The fire exit and elevator were also defective. and were consistent with the findings and ruling of the RTC.[39] FDCs claim that it was distinct in personality from FSCC is unworthy of consideration due to its being a question of fact that cannot be reviewed under Rule 45.R. WHEREFORE. FDC disconnected the electric supply of his Unit 411 and unilaterally increased the interest rate without justification. FDC and FSCC failed to provide water supply to the comfort room and to clean the corridors. or delay.[43] Also. negligence. rightly compelled Agcaoili to suspend the payment of his monthly amortizations and condominium dues. Instead of addressing his valid complaints. G. Rule 141 of theRules of Court.[40] Among the obligations of FDC and FSCC to the unit owners or purchasers of FSBs units was the duty to provide a centralized air-conditioning unit. among other circumstances. 190710 Present: . Makati City. we DENY the petition for review. Branch 150. electricity.[42] To alleviate the physical discomfort and adverse effects on his work as a practicing attorney brought about by the breakdown of the air-conditioning unit. AFFIRM the decision of the Court of Appeals. and water. SO ORDERED. or his duly authorized deputy to assess and collect the additional docket fees from the respondent as fees in lien in accordance with Section 2. and to maintain adequate fire exit.[45] These defects. he installed two window-type air-conditioners at his own expense. No. Petitioner. LUCAS. lighting. [46] Clearly. and cleanliness in each floor of the common areas of FSB. elevators. which were supported by the records and relevant laws. and DIRECT the Clerk of Court of the Regional Trial Court.

PERALTA. Promulgated: Respondent. and MENDOZA. Assailed in this petition are the Court of Appeals (CA) Decision [1] dated September 25. LUCAS. J. 2009. 2009 and Resolution dated December 17.. 2011 x----------------------------------------------------------------------------------------------x DECISION NACHURA.: Is a prima facie showing necessary before a court can issue a DNA testing order? In this petition for review on certiorari. June 6. . J. we address this question to guide the Bench and the Bar in dealing with a relatively new evidentiary tool. JJ. JESUS S.CARPIO. NACHURA.versus - Chairperson. ABAD. .

Jesse U. finding the petition to be sufficient in form and substance. respondent also filed a Manifestation and Comment on Petitioners Very Urgent Motion to Try and Hear the Case. While petitioner was growing up. 2007 Order. Branch 72. On one occasion. as a musical prodigy. and that the Solicitor General be furnished with copies of the Order and the petition in order that he may appear and represent the State in the case. he should be served with summons. Nonetheless. Elsie would oftentimes accompany Belen to work. On August 1. filed a Petition to Establish Illegitimate Filiation (with Motion for the Submission of Parties to DNA Testing) [2] before the Regional Trial Court (RTC). The court also directed that the Order be published once a week for three consecutive weeks in any newspaper of general circulation in the Philippines. petitioner. issued the Order [3] setting the case for hearing and urging anyone who has any objection to the petition to file his opposition. When the relationship of Elsie and respondent ended. Petitioner filed with the RTC a Very Urgent Motion to Try and Hear the Case. 2007. On September 4. Lucas. petitioner was baptized at San Isidro Parish. (e) Certificate of Recognition from the University of the Philippines. respondent learned of the petition to establish filiation. Hence. Elsie eventually got pregnant and. respondent filed a Special Appearance and Comment. and (4) notice by publication of the petition and the hearing was improper because of the confidentiality of the subject matter. Jesus S. Petitioner narrated that. on March 11. at Belens workplace. his mother. (3) should the court agree that summons was required. on September 3. College of Music. Attached to the petition were the following: (a) petitioners certificate of live birth. Elsie made several attempts to introduce petitioner to respondent. but all attempts were in vain. His counsel therefore went to the trial court on August 29. Elsie later on told petitioner that his father is respondent. [4] On September 14. the RTC. and (f) clippings of several articles from different newspapers about petitioner. 2007. showing that he graduated from Saint Louis University in Baguio City with a degree in Psychology. However. 2007. (c) petitioners college diploma. she gave birth to petitioner. as follows: On July 26. hence. 2007 and obtained a copy of the petition. Respondent was not served with a copy of the petition. Pasay City. Elsie Uy (Elsie). (b) petitioners baptismal certificate. Respondent allegedly extended financial support to Elsie and petitioner for a period of about two years. Lucas. and an intimate relationship developed between the two. Lucas. 1969. 1969. 2007. . Taft Avenue. migrated to Manila from Davao and stayed with a certain Ate Belen (Belen) who worked in a prominent nightspot in Manila. Valenzuela City. (2) the petition was adversarial in nature and therefore summons should be served on him as respondent. Elsie got acquainted with respondent. The name of petitioners father was not stated in petitioners certificate of live birth. sometime in 1967. Respondent reiterated that the petition for recognition is adversarial in nature. He manifested inter alia that: (1) he did not receive the summons and a copy of the petition. Elsie refused to accept respondents offer of support and decided to raise petitioner on her own. (d) his Certificate of Graduation from the same school.The antecedents of the case are. unaware of the issuance of the September 3. Jesse U. he was waiving service of summons and making a voluntary appearance.

thus: WHEREFORE. Petitioner failed to establish a prima facie case considering that (a) his mother did not personally declare that she had sexual relations with respondent.After learning of the September 3. respondent had no obligation to present any affirmative defenses. [5] Respondent averred that the petition was not in due form and substance because petitioner could not have personally known the matters that were alleged therein. the RTC. The court opined that. the Order dated July 30. 2008. This case is DISMISSED without prejudice. which may include incriminating acts or scientific evidence like blood group test and DNA test results. there was no allegation that he was treated as the child of respondent by the latter or his family.[7] there are four significant procedural aspects of a traditional paternity action which the parties have to face: a prima facie case. Let the Petition (with Motion for the Submission of Parties to DNA Testing) be set for hearing on January 22. in accordance with Section 1. and it contained a plain. presumption of legitimacy. The dispositive portion of the said Order therefore reads: WHEREFORE. on October 20. 2008 is hereby reconsidered and set aside. and physical resemblance between the putative father and the child. Rule 8 of the Rules of Court. 2008. having failed to establish a prima facie case. The court remarked that the allegation . The court remarked that. based on the case of Herrera v. and petitioners statement as to what his mother told him about his father was clearly hearsay. On July 30. 2008. and (c) although petitioner used the surname of respondent. Moreover. his motion for the submission of parties to DNA testing to establish paternity and filiation is hereby DENIED.[10] This time. concise. (b) the certificate of live birth was not signed by respondent. 2007 Order. acting on respondents motion for reconsideration. the RTC held that the ruling on the grounds relied upon by petitioner for filing the petition is premature considering that a full-blown trial has not yet taken place. which the RTC resolved in his favor. Thus. in view of the foregoing. The court opined that petitioner must first establish these four procedural aspects before he can present evidence of paternity and filiation. affirmative defenses. Alba. jurisprudence is still unsettled on the acceptability of DNA evidence. He argued that DNA testing cannot be had on the basis of a mere allegation pointing to respondent as petitioners father. It was verified. it issued the Order [9]setting aside the courts previous order. for failure of the petitioner to establish compliance with the four procedural aspects of a traditional paternity action in his petition. issued an Order [6] dismissing the case. The court observed that the petition did not show that these procedural aspects were present. respondent filed a motion for reconsideration.[8] Petitioner seasonably filed a motion for reconsideration to the Order dated July 30. SO ORDERED. The court stressed that the petition was sufficient in form and substance. and direct statement of the ultimate facts on which petitioner relies on for his claim. xxxx SO ORDERED. it included a certification against forum shopping. 2009 at 8:30 in the morning.

30-V-07 is DISMISSED. and (b) there was no prima facie case. The RTC denied the motion in the Order dated January 19. the instant petition for certiorari is hereby GRANTED for being meritorious. The CA remarked that petitioner filed the petition to establish illegitimate filiation. Although respondent likewise questioned the courts jurisdiction over the subject matter of the petition. thus: While the tenor [of Section 4. Such will be the situation in this particular case if a court may at any time order the taking of a DNA test.that the statements in the petition were not of petitioners personal knowledge is a matter of evidence. The assailed Orders dated October 20. 2009. Accordingly. It could have not meant to be an instrument to promote disorder. or extortion. If the DNA test in . Rule on DNA Evidence] appears to be absolute. It noted that petitioner failed to show that the four significant procedural aspects of a traditional paternity action had been met. questioning the Orders dated October 20.[12] reiterating that (a) the petition was not in due form and substance as no defendant was named in the title. 2008 and January 19. and rescheduled the hearing. Proceeding Case No. Respondent filed a Motion for Reconsideration of Order dated October 20. 2008 and for Dismissal of Petition. Respondents special appearance could not be considered as voluntary appearance because it was filed only for the purpose of questioning the jurisdiction of the court over respondent. harassment. and that jurisprudence is still unsettled on the acceptability of DNA evidence. It could have not been intended to legalize unwarranted expedition to fish for evidence. specifically seeking a DNA testing order to abbreviate the proceedings. It noted that the new Rule on DNA Evidence[11] allows the conduct of DNA testing. the same is not equivalent to a waiver of his right to object to the jurisdiction of the court over his person. thus: WHEREFORE. 2009. Branch 172 of Valenzuela City in SP. the rule could not really have been intended to trample on the substantive rights of the parties. and all the basic allegations were hearsay. 2008 and January 19. 30-V-07 are REVERSED and SET ASIDE. Proceeding Case No. respondent filed a petition for certiorari with the CA. whether at the courts instance or upon application of any person who has legal interest in the matter in litigation.[14] The CA held that the RTC did not acquire jurisdiction over the person of respondent. The court also dismissed respondents arguments that there is no basis for the taking of DNA test. On September 25. which made the petition susceptible to dismissal. The CA further held that a DNA testing should not be allowed when the petitioner has failed to establish a prima facie case. the case docketed as SP. 2009 both issued by the Regional Trial Court. the CA decided the petition for certiorari in favor of respondent. 2009. [13] Aggrieved. as no summons had been served on him.

I. WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT ORDERED THE DISMISSAL OF THE PETITION BY REASON OF THE MOTION (FILED BY THE PETITIONER BEFORE THE COURT A QUO) FOR THE CONDUCT OF DNA TESTING. x x x If at anytime. II. I. the Court would like to stress that it sees the danger of allowing an absolute DNA testing to a compulsory recognition test even if the plaintiff/petitioner failed to establish prima facie proof. then the prominent and well-to-do members of our society will be easy prey for opportunists and extortionists. For no cause at all. Unscrupulous women. motu proprio and without pre-conditions. 2009. petitioner raises the following issues: I. IS CONTROLLING. [16] In this petition for review on certiorari. [15] Petitioner moved for reconsideration.compulsory recognition cases is immediately available to the petitioner/complainant without requiring first the presentation of corroborative proof.C WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT ESSENTIALLY RULED THAT THE TITLE OF A PLEADING. unsure of the paternity of their children may just be taking the chances-just in case-by pointing to a sexual partner in a long past one-time encounter.A WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT RULED THAT JURISDICTION WAS NOT ACQUIRED OVER THE PERSON OF THE RESPONDENT. I. On December 17. then a dire and absurd rule would result.A . xxxx At the risk of being repetitious. Indeed an absolute and unconditional taking of DNA test for compulsory recognition case opens wide the opportunities for extortionist to prey on victims who have no stomach for scandal. WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT RESOLVED THE ISSUE OF LACK OF JURISDICTION OVER THE PERSON OF HEREIN RESPONDENT ALBEIT THE SAME WAS NEVER RAISED IN THE PETITION FOR CERTIORARI. RATHER THAN ITS BODY. Such will encourage and promote harassment and extortion. or even for [sic] casual sexual indiscretions in their younger years could be used as a means to harass them. the court can indeed order the taking of DNA test in compulsory recognition cases. II.B WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT FAILED TO REALIZE THAT THE RESPONDENT HAD ALREADY SUBMITTED VOLUNTARILY TO THE JURISDICTION OF THE COURT A QUO. the CA denied the motion for lack of merit.

[19] Petitioner avers that these procedural aspects are not applicable at this point of the proceedings because they are matters of evidence that should be taken up during the trial. Petitioner argues that the case was adversarial in nature. on the issue of lack of jurisdiction. aside from lack of jurisdiction over the person of the defendant. it should have simply denied the motion. WHETHER OR NOT THE COURT OF APPEALS ERRED WITH ITS MISPLACED RELIANCE ON THE CASE OF HERRERA VS. However. [18] Petitioner points out that Section 4 of the Rule on DNA Evidence does not require that there must be a prior proof of filiation before DNA testing can be ordered. the CA had no legal basis to discuss the same. He insists that the alleged waiver and voluntary appearance was conditional upon a finding by the court that summons is indeed required. petitioner asserts that the motion for DNA testing should not be a reason for the dismissal of the petition since it is not a legal ground for the dismissal of cases. 2007. (b) Ex Parte Motion to Resolve Motion for Reconsideration of the Order dated November 6.[17] Petitioner contends that respondent never raised as issue in his petition for certiorari the courts lack of jurisdiction over his person. such as the (a) Motion for Reconsideration of the Order dated September 3. Hence. cannot be considered as waiver of the defense of lack of jurisdiction over such person. Hence. because issues not raised are deemed waived or abandoned. III.WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT ESSENTIALLY RULED THAT DNA TESTING CAN ONLY BE ORDERED AFTER THE PETITIONER ESTABLISHES PRIMA FACIE PROOF OF FILIATION. Respondent denies that he waived his right to the service of summons. Petitioner points out that respondent even expressly admitted that he has waived his right to summons in his Manifestation and Comment on Petitioners Very Urgent Motion to Try and Hear the Case. He maintains that the body of the petition is controlling and not the caption. respondent supports the CAs ruling on most issues raised in the petition for certiorari and merely reiterates his previous arguments. If the CA entertained any doubt as to the propriety of DNA testing. Finally. respondent had already voluntarily submitted to the jurisdiction of the trial court by his filing of several motions asking for affirmative relief. Although the caption of the petition does not state respondents name. the issue is already moot and academic. ESPECIALLY AS REGARDS THE FOUR SIGNIFICANT PROCEDURAL ASPECTS OF A TRADITIONAL PATERNITY ACTION. ALBA. He avers that the assertion of affirmative defenses. Alba.[20] In his Comment. as enunciated in Herrera v. contrary to petitioners assertion. . 2008 and for Dismissal of Petition. At any rate. he raised the issue before the CA in relation to his claim that the petition was not in due form and substance. and (c) Motion for Reconsideration of the Order dated October 20. respondent counters that. the body of the petition clearly indicates his name and his known address. He adds that the CA erroneously relied on the four significant procedural aspects of a paternity case. 2007.

The grounds for dismissal relied upon by respondent were (a) the courts lack of jurisdiction over his person due to the absence of summons. In other words. as it leaves something to be done by the court before the case is finally decided on the merits. but its object is to subject that person's interest in a property to a corresponding lien or obligation. Neither can a denial of a motion to dismiss be the subject of an appeal unless and until a final judgment or order is rendered. we emphasize that the assailed Orders of the trial court were orders denying respondents motion to dismiss the petition for illegitimate filiation. in rem. Primarily. As such. is an action in rem. an action in rem is directed against the thing itself instead of the person. that is. was the service of summons jurisdictional? The answer to this question depends on the nature of petitioners action. we discern no grave abuse of discretion on the part of the trial court in denying the motion to dismiss.[21] In the present case. An action in personam is lodged against a person based on personal liability. A petition directed against the "thing" itself or the res.[22] . which is a remedy designed to correct errors of jurisdiction and not errors of judgment. whether it is an action in personam. An order denying a motion to dismiss is an interlocutory order which neither terminates nor finally disposes of a case. which concerns the status of a person. We find that the primordial issue here is actually whether it was necessary. whether the court acquired jurisdiction over the person of respondent. the court has granted the extraordinary remedy of certiorari on the denial of the motion to dismiss but only when it has been tainted with grave abuse of discretion amounting to lack or excess of jurisdiction. or quasi in rem. In a number of cases. like a petition for adoption. the general rule is that the denial of a motion to dismiss cannot be questioned in a special civil action for certiorari. We need not belabor the issues on whether lack of jurisdiction was raised before the CA. which is equivalent to failure to state a cause of action. or correction of entries in the birth certificate. and (b) defect in the form and substance of the petition to establish illegitimate filiation. or whether respondent waived his right to the service of summons. in the first place.The petition is meritorious. annulment of marriage. to serve summons on respondent for the court to acquire jurisdiction over the case. while an action quasi in rem names a person as defendant.

If at all.[24] Through publication. In a proceeding in rem or quasi in rem. The petition to establish filiation is sufficient in substance. we further hold that the herein petition to establish filiation was sufficient in form. Jurisdiction over the resis acquired either (a) by the seizure of the property under legal process. [25] This is but proper in order to afford the person concerned the opportunity to protect his interest if he so chooses. as in this case. which requires the complaint to contain a plain. To address respondents contention that the petition should have been adversarial in form. [28] A complaint states a cause of action when it contains the following elements: (1) the legal right of plaintiff. A fact is essential if it cannot be stricken out without leaving the statement of the cause of action inadequate. which undoubtedly had jurisdiction over the subject matter of the petition. jurisdiction over the person of the defendant is not a prerequisite to confer jurisdiction on the court. service of summons or notice is made to the defendant. in fact. failure to serve summons will not deprive the court of its jurisdiction to try and decide the case. considering that he has participated in the proceedings in this case and he has the opportunity to file his opposition to the petition to establish filiation. as directed by the trial court. the opportunity to file his opposition. [23] The herein petition to establish illegitimate filiation is an action in rem. [26] Hence. Publication is notice to the whole world that the proceeding has for its object to bar indefinitely all who might be minded to make an objection of any sort to the right sought to be established. [29] . It was indeed adversarial in nature despite its caption which lacked the name of a defendant. but merely for satisfying the due process requirements. and the non-service of summons upon respondent. We find that the due process requirement with respect to respondent has been satisfied. the latter thereby acquired jurisdiction over the case. and (3) the act or omission of the defendant in violation of said legal right. and direct statement of the ultimate facts upon which the plaintiff bases his claim. provided that the latter has jurisdiction over the res. In such a case. it is not for the purpose of vesting the court with jurisdiction. the failure to implead respondent as defendant. all interested parties are deemed notified of the petition. (2) the correlative obligation of the defendant. concise. By the simple filing of the petition to establish illegitimate filiation before the RTC.In an action in personam. An in rem proceeding is validated essentially through publication.[27] In this petitionclassified as an action in remthe notice requirement for an adversarial proceeding was likewise satisfied by the publication of the petition and the giving of notice to the Solicitor General. or (b) as a result of the institution of legal proceedings. in which the power of the court is recognized and made effective. Rule 8 of the Rules of Court. whereby it is brought into actual custody of the law. It satisfies Section 1. jurisdiction over the person of the defendant is necessary for the court to validly try and decide the case. A proceeding is adversarial where the party seeking relief has given legal warning to the other party and afforded the latter an opportunity to contest it. the lack of summons may be excused where it is determined that the adverse party had.

Such matter is clearly a matter of evidence that cannot be determined at this point but only during the trial when petitioner presents his evidence. It provides the prescribed parameters on the requisite elements for . In a motion to dismiss a complaint based on lack of cause of action. Clearly then. when only the petition to establish filiation has been filed.The petition sufficiently states the ultimate facts relied upon by petitioner to establish his filiation to respondent. for said motion must hypothetically admit the truth of the facts alleged in the complaint. In fact. the latter has just set the said case for hearing. They are matters of evidence that cannot be determined at this initial stage of the proceedings. thus. we find that there is a need to supplement the Rule on DNA Evidence to aid the courts in resolving motions for DNA testing order. as yet. [31] The test of the sufficiency of the facts alleged in the complaint is whether or not. address the question of whether a prima facie showing is necessary before a court can issue a DNA testing order. the court could render a valid judgment upon the same in accordance with the prayer of the complaint. admitting the facts alleged. We. A party is confronted by these so-called procedural aspects during trial. under the circumstances. contends that the allegations in the petition were hearsay as they were not of petitioners personal knowledge. The Rule on DNA Evidence was enacted to guide the Bench and the Bar for the introduction and use of DNA evidence in the judicial system. a DNA testing order is warranted considering that no such order has yet been issued by the trial court. Respondent. Alba[34] that there are four significant procedural aspects in a traditional paternity case which parties have to face has been widely misunderstood and misapplied in this case. and no other. More essentially. it was also not the opportune time to discuss the lack of a prima facie case vis--vis the motion for DNA testing since no evidence has. it is premature to discuss whether. it is incumbent upon the court to deny the motion to dismissand require the defendant to answer and go to trial to prove his defense. In light of this observation. however. [30] The inquiry is confined to the four corners of the complaint. when the parties have presented their respective evidence. particularly in paternity and other filiation cases. the CAs view that it would be dangerous to allow a DNA testing without corroborative proof is well taken and deserves the Courts attention. ascertained at the trial of the case on the merits. The CAs observation that petitioner failed to establish a prima facie casethe first procedural aspect in a paternity caseis therefore misplaced. been presented by petitioner. [32] If the allegations of the complaint are sufficient in form and substance but their veracity and correctness are assailed. The veracity of the assertions of the parties can be [33] The statement in Herrera v. the question submitted to the court for determination is the sufficiency of the allegations made in the complaint to constitute a cause of action and not whether those allegations of fact are true. A prima facie case is built by a partys evidence and not by mere allegations in the initiatory pleading. At any rate.

and a proper showing of sufficient justification under the particular factual circumstances of the case must be made before a court may order a compulsory blood test. at the behest of any party. In some states. which the court may consider as potentially affecting the accuracy or integrity of the DNA testing. order a DNA testing. It seeks to ensure that the evidence gathered. is utilized effectively and properly. the proper procedures.e. was imposed in civil actions as a counterpart of a finding of probable cause.). including law enforcement agencies. using various methods of DNA analysis. there must be a show cause hearing wherein the applicant must first present sufficient evidence to establish a prima facie case or a reasonable possibility of paternity or good cause for the holding of the test. during the hearing. etc. at any time. under their Constitutions (as in ours). either motu proprio or on application of any person who has a legal interest in the matter in litigation. but the results may require confirmation for good reasons. The appropriate court may. protocols. Such order shall issue after due hearing and notice to the parties upon a showing of the following: (a) A biological sample exists that is relevant to the case. and (e) The existence of other factors. not criminal. (d) The DNA testing has the scientific potential to produce new information that is relevant to the proper resolution of the case. necessary laboratory reports. rather than prejudice the public. This does not mean. This Rule shall not preclude a DNA testing. [36] In these states.. the available objections to the admission of DNA test results as evidence as well as the probative value of DNA evidence. (c) The DNA testing uses a scientifically valid technique. before a suit or proceeding is commenced. the possible sources of error. Courts in various jurisdictions have differed . a court order for blood testing is considered a search. the said conditions are established. Hence. that a DNA testing order will be issued as a matter of right if. which.reliability and validity (i. Application for DNA Testing Order. or (ii) was previously subjected to DNA testing. the requirement of a prima facie case. The Supreme Court of Louisiana eloquently explained Although a paternity action is civil. (b) The biological sample: (i) was not previously subjected to the type of DNA testing now requested. if any. Section 4 states: SEC. to warrant the issuance of the DNA testing order. the constitutional prohibition against unreasonable searches and seizures is still applicable. without need of a prior court order. 4.[35] Not surprisingly. Section 4 of the Rule on DNA Evidence merely provides for conditions that are aimed to safeguard the accuracy and integrity of the DNA testing. shall continue to ensure that DNA analysis serves justice and protects. however. [and] shall not be misused and/or abused and. more importantly. or reasonable possibility. must be preceded by a finding of probable cause in order to be valid.

We agree. in cases in which paternity is contested and a party to the action refuses to voluntarily undergo a blood test. before the court may issue an order for compulsory blood testing. Thus. as a preliminary matter. and find that. during the hearing on the motion for DNA testing. but those jurisdictions have almost universally found that a preliminary showing must be made before a court can constitutionally order compulsory blood testing in paternity cases. As explained hereafter. the moving party must show that there is a reasonable possibility of paternity. the petitioner must present prima facie evidence or establish a reasonable possibility of paternity.regarding the kind of procedures which are required.[37] The same condition precedent should be applied in our jurisdiction to protect the putative father from mere harassment suits. . a show cause hearing must be held in which the court can determine whether there is sufficient evidence to establish a prima facie case which warrants issuance of a court order for blood testing.

SO ORDERED. January 19. it should be stressed that the issuance of a DNA testing order remains discretionary upon the court. the court may. 2009 and Resolution dated December 17. 2008 and the Regional Trial Court of Valenzuela City are AFFIRMED.Notwithstanding these. consider whether there is absolute necessity for the DNA testing. disallow a DNA testing. If there is already preponderance of evidence to establish paternity and the DNA test result would only be corroborative. 2009 areREVERSED and SET ASIDE. premises considered. 2009 of . WHEREFORE. The court may. for example. in its discretion. the petition is GRANTED. The Court of Appeals Decision dated September 25. The Orders dated October 20.

and Alfredo Suarez. PVB had since foreclosed on the mortgages and bought the same at public auction in 1982. CATGERUBE CASTRO.[4] It also denied in a resolution dated June 2. The court noted the uncertainty as to the ownership of such properties but took no action to grant BCDA's prayer in its complaint that it determine the question of ownership of the same pursuant to Section 9. filed several expropriation actions before the various branches of the Regional Trial Court (RTC) of Angeles City.chanrobles|lawlibrary The Facts and the Case In late 2003 respondent Bases Conversion Development Authority (BCDA).: This case is about the authority of the court in an expropriation case to adjudicate questions of ownership of the subject properties where such questions involve the determination of the validity of the issuance to the defendants of Certificates of Land Ownership Awards (CLOAs) and Emancipation Patents (EPs). Christian Marcelo. CHRISTIAN MARCELO. Ricardo Bucud. DECISION ABAD. No.[6] The Issue Presented The issue presented in this case is whether or not the CA erred in holding that PVB was not entitled to intervene in the expropriation cases before Branch 58 of the Angeles City RTC. Pablo Santos. Pampanga.chanrobles|lawlibrary The defendants in Branch 58 cases were respondents Armando Simbillo. BASES CONVERSION DEVELOPMENT AUTHORITY. Catgerube Castro. in its order of August 18. prompting the bank to file a petition for certiorari with the Court of Appeals (CA).[2] Branch 58 denied PVB's motion for intervention on the ground that the intervention amounts to a third-party complaint that is not allowed in expropriation cases and that the intervention would delay the proceedings in the cases before it. petitioner Philippine Veterans Bank (PVB) filed motions to intervene in all the cases with attached complaints-in-intervention. questions that fall within the jurisdiction of the Department of Agrarian Reform Adjudication Board (DARAB). ARMANDO SIMBILLO. said Branch 58. Another defendant was Land Bank of the Philippines. Ten of these cases were raffled to Branch 58 of the court[1] and it is these that are the concern of the present petition. the bank had been unable to consolidate ownership in its name. CARLITO MERCADO AND ALFREDO SUAREZ. for acquisition of lands needed for the construction of the Subic-Clark-Tarlac Expressway Project. 2006 Branch 58 issued separate decisions in all 10 cases before it. which mortgaged the lands to PVB in 1976. Respondents. 2006 the CA rendered a decision. Conrado Espeleta. Rule 67 of the 1997 Rules of Civil Procedure. Rolando David. Petitioner. PABLO SANTOS. Unfortunately. ROLANDO DAVID. the mortgagee of the lands by virtue of the loans it extended for their acquisition.[3] On January 26. which authorizes the court adjudicating the expropriation case to hear and decide . J.chanrobles|lawlibrary PVB filed its motion for reconsideration but Branch 58 denied the same. Besides. RICARDO BUCUD. 2011] PHILIPPINE VETERANS BANK. AGRIFINA ENRIQUEZ. The lands in these cases were located in Porac and Floridablanca.chanrobles|lawlibrary But. on April 3. CONRADO ESPELETA. v. a remedy that it adopted in similar cases with the other branches. LAND BANK OF THE PHILIPPINES. Agrifina Enriquez. 173085 : January 19. They were the registered owners of the expropriated lands that they acquired as beneficiaries of the comprehensive agrarian reform program.chanrobles|lawlibrary On learning of the expropriation cases before Branch 58.SECOND DIVISION [G.chanrobles|lawlibrary The Court's Ruling PVB maintains that in deciding the case. a government corporation.R. Carlito Mercado. 2006[5] PVB's motion for reconsideration. granting the expropriation of the subject properties. PVB alleged that the covered properties actually belonged to Belmonte Agro-Industrial Development Corp. PVB had a pending action for annulment of the titles issued to the individual defendants and this was pending before Branch 62 of the court. dismissing the petition for lack of merit. Rule 67 of the Revised Rules of Civil Procedure. 2004. the RTC and the CA ignored Section 9.chanrobles|lawlibrary Meanwhile.

chanrobles|lawlibrary WHEREFORE. the CA was in error in not reconsidering its decision. subsequently. Uncertain ownership. 2006 in CA-G. a co-equal branch of the same court.chanrobles|lawlibrary Actually. 2006. But such rule obviously cannot apply to PVB for the following reasons:chanrobles|virtuallawlibrary 1. 9. 2006 and its resolution dated June 2. or TCTs emanating from such titles were already pending before Angeles City RTC Branch 62. SP 88144. PVB's point regarding the authority of the court in expropriation cases to hear and adjudicate conflicting claims over the ownership of the lands involved in such cases is valid.chanrobles|lawlibrary But PVB's withdrawal of its actions from Branch 62 cannot give Branch 58 comfort.R. Branch 58 had no authority to pre-empt Branch 62 of its power to hear and adjudicate claims that were already pending before it.[7] that jurisdiction over cases involving the annulment of CLOAs and EPs were vested by Republic Act 6657 in the DARAB. At the time PVB tried to intervene in the expropriation cases. pointing out that it had in the meantime already withdrawn the actions it filed with Branch 62 after learning from the decision of the Supreme Court in Department of Agrarian Reform v. or there are conflicting claims to any part thereof. Cuenca. jurisdiction over the annulment of the individual defendants' CLOAs and EPs (which titles if annulled would leave PVB's titles to the lands unchallenged) lies with the DARAB. or retain it for the public use or purpose if entry has already been made. Section 9 provides:chanrobles| virtuallawlibrary Sec. the Court DENIES the petition and AFFIRMS the decision of the Court of Appeals dated January 26.If the ownership of the property taken is uncertain.chanrobles|lawlibrary SO ORDERED. . its conflict with the farmer beneficiaries who held CLOAs. PVB's remedy was to secure an order from Branch 58 to have the proceeds of the expropriation deposited with that branch in the meantime.chanrobles|lawlibrary 2. the court may order any sum or sums awarded as compensation for the propertyto be paid to the court for the benefit of the person adjudged in the same proceeding to be entitled thereto.[8] PVB now points out that. Branch 58 would still have no power to adjudicate the issues of ownership presented by the PVB's intervention. Section 9 above empowers the court to order payment to itself of the proceeds of the expropriation whenever questions of ownership are yet to be settled. But the judgment shall require the payment of the sum or sums awarded to either the defendant or the court before the plaintiff can enter upon the property. after the CA dismissed PVB's petition on January 26. pending adjudication of the issues of ownership of the expropriated lands by the DARAB. the latter filed a motion for reconsideration. . As PVB itself insists.conflicting claims regarding the ownership of the properties involved while the compensation for the expropriated property is in the meantime deposited with the court. EPs. Of course. since there was no longer any impediment in RTC Branch 58 taking cognizance of its motion for intervention and adjudicating the parties' conflicting claims over the expropriated properties. There is no reason why this rule should not be applied even where the settlement of such questions is to be made by another tribunal. conflicting claims.

PANGILINAN OF PHILIPPINE LONG DISTANCE TELEPHONE COMPANY (PLDT) IN HIS CAPACITY AS MANAGING DIRECTOR OF FIRST PACIFIC CO. GAMBOA. BERSAMIN. LTD.. RESPECTIVELY. . JR.EN BANC WILSON P. CHAIRMAN MANUEL V. CHAIR FE BARIN OF THE SECURITIES EXCHANGE COMMISSION. and PRESIDENT FRANCIS LIM OF THE PHILIPPINE STOCK EXCHANGE.versus CORONA. No. CHAIRMAN ANTHONI SALIM OF FIRST PACIFIC CO. PEREZ. Present: ... G. 176579 Petitioner. FINANCE UNDERSECRETARY JOHN P. ABAD. C. AND COMMISSIONER RICARDO ABCEDE OF THE PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT (PCGG) IN THEIR CAPACITIES AS CHAIR AND MEMBERS. DEL CASTILLO.. NAZARENO OF PHILIPPINE LONG DISTANCE TELEPHONE COMPANY. MENDOZA.J.. JJ. BRION. SEVILLA. and SERENO. IN HIS CAPACITY AS DIRECTOR OF METRO PACIFIC ASSET HOLDINGS INC.. OF THE PRIVATIZATION COUNCIL. LTD. PRESIDENT NAPOLEON L.R. PERALTA. VILLARAMA. CARPIO. LEONARDO-DE CASTRO. Respondents. VELASCO. FINANCE SECRETARY MARGARITO B. TEVES. JR..

... an affiliate of First Pacific Company Limited (First Pacific)... . including Roland Gapud and Jose Campos. acquired the remaining 54 percent of the outstanding capital stock of PTIC. First Pacific.PABLITO V.. 2011 x. Hong Kong-based investment firm. (MPAH). SANIDAD and Promulgated: ARNO V.: The Case This is an original petition for prohibition. General Telephone and Electronics Corporation (GTE). sold 26 percent of the outstanding common shares of PLDT to PTIC.. 3436 which granted PLDT a franchise and the right to engage in telecommunications business.. declaratory relief and declaration of nullity of the sale of shares of stock of Philippine Telecommunications Investment Corporation (PTIC) by the government of the Republic of the Philippines to Metro Pacific Assets Holdings...... through a public bidding to be conducted on 4 December 2006.415 PTIC shares... according to petitioner Wilson P.415 shares of stock of PTIC held by PHI were sequestered by the Presidential Commission on Good Government (PCGG)... SANIDAD. (PHI) was incorporated by several persons. Parallax Venture Fund XXVII (Parallax) and Pan-Asia Presidio Capital.. In 1977. the Philippine Legislature enacted Act No... Subsequently. Jr.125 percent of the outstanding capital stock of PTIC. Petitioners-in-Intervention. the public bidding was reset to 8 December 2006.. In 1986. and only two bidders. On 20 November 2006.. an American company and a major PLDT stockholder..415 PTIC shares.. Inc. injunction.2 In 1999.. The 111.. the Inter-Agency Privatization Council (IPC) of the Philippine Government announced that it would sell the 111. Prime Holdings.6 billion or US$510 million. Gamboa. a Bermuda-registered.125 percent of the outstanding capital stock of PTIC....... Inc... June 28.. which represent about 46. Parallax won with a bid of P25..415 shares of stock of PTIC by virtue of three Deeds of Assignment executed by PTIC stockholders Ramon Cojuangco and Luis Tirso Rivilla. are as follows:1 On 28 November 1928.. PHI became the owner of 111..-x DECISION CARPIO. In 1969.. submitted their bids. were later declared by this Court to be owned by the Republic of the Philippines. or 46.. Subsequently. the 111... a stockholder of Philippine Long Distance Telephone Company (PLDT). The Antecedents The facts. J..

First Pacifics common shareholdings in PLDT increased from 30. MPAH.4 percent of the outstanding common shares of stock of PLDT.415 PTIC shares. the sale by the Philippine Government of 46.556.217. yielded its right to PTIC itself which was then given by IPC until 2 March 2007 to buy the PTIC shares. Respondent Pangilinan denies the other allegations of facts of petitioner.217.034.415 PTIC shares bore due diligence.263 PLDT common shares. with the Philippine Government for the price of P25. Respondents Teves and Sevilla were among those who attended the public hearing. During the 8 December 2006 bidding. entered into a Conditional Sale and Purchase Agreement of the 111. which represent 6. and (d) on 28 February 2007.580.556. as the disposing entity. An invitation to bid was published in seven different newspapers from 13 to 24 November 2006. Article XII of the 1987 Philippine Constitution which limits foreign ownership of the capital of a public utility to not more than 40 percent. the 111.125 percent of PTIC shares is actually an indirect sale of 12 million shares or about 6. composed of the Department of Finance and the PCGG. First Pacific announced that it would exercise its right of first refusal as a PTIC stockholder and buy the 111. The government notified First Pacific. First Pacific failed to do so by the 1 February 2007 deadline set by IPC and instead.125 percent of the outstanding capital stock of PTIC.415 PTIC shares. PTIC was incorporated and had since engaged in the business of investment holdings.556. the sale was consummated when MPAH paid IPC P25. the House of Representatives (HR) Committee on Good Government conducted a public hearing on the particulars of the then impending sale of the 111. PTIC held 26. and (b) First Pacifics intended acquisition of the governments 111. However. The extension was published in nine different newspapers. Undersecretary John P. the majority owner of PTIC shares. or 46. Since PTIC is a stockholder of PLDT. Respondent Manuel V. On 20 November 2006.415 PTIC shares resulting in First Pacifics 100% ownership of PTIC will not violate the 40 percent constitutional limit on foreign ownership of a public utility since PTIC holds only 13. transparency and conformity with existing legal procedures.415 PTIC shares. 2270 concluded that: (a) the auction of the governments 111. Pangilinan admits the following facts: (a) the IPC conducted a public bidding for the sale of 111.Thereafter. or 13.47 percent. First Pacific. Teves. and became the owner of 111.000 and the government delivered the certificates for the 111. of the bidding results and gave First Pacific until 1 February 2007 to exercise its right of first refusal in accordance with PTICs Articles of Incorporation. was incorporated in 1977. (c) pursuant to the right of first refusal in favor of PTIC and its shareholders granted in PTICs Articles of Incorporation.847 percent of the total outstanding common shares of PLDT. In 1986.217. The sale was completed on 28 February 2007. on the other hand.000 or US$510. This violates Section 11. With the sale. Sevilla. and the original deadline for bidding scheduled on 4 December 2006 was reset to 8 December 2006.556.3 On the other hand.5 On 28 February 2007. First Pacific completed the acquisition of the 111. and designated the Inter-Agency Privatization Council (IPC).000. and subsequently declared by this Court as part of the ill-gotten wealth of former President Ferdinand Marcos. MPAH.7 percent to 37 percent. The Philippine Government decided to sell the 111. The HR Committee Report No. On 31 January 2007. (b) Parallax offered the highest bid amounting to P25.3 percent of the outstanding common shares of PLDT.415 PTIC shares held by PHI were sequestered by the PCGG.217.415 PTIC shares. exercised its right of first refusal by matching the highest bid offered for PTIC shares on 13 February 2007.189. public respondents Finance Secretary Margarito B.000. First Pacific announced its intention to match Parallaxs bid.415 shares of stock of PTIC. . thereby increasing the common shareholdings of foreigners in PLDT to about 81. through its subsidiary. and PCGG Commissioner Ricardo Abcede allege the following relevant facts: On 9 November 1967. Parallax Capital Management LP emerged as the highest bidder with a bid of P25.847 percent of the total PLDT outstanding common shares.415 PTIC shares or 46 percent of the outstanding capital stock of PTIC (the remaining 54 percent of PTIC shares was already owned by First Pacific and its affiliates). PHI. On 14 February 2007. The sequestered PTIC shares were reconveyed to the Republic of the Philippines in accordance with this Courts decision4 which became final and executory on 8 August 2006.415 PTIC shares or 46.125 percent of the outstanding capital stock of PTIC by virtue of three Deeds of Assignment executed by Ramon Cojuangco and Luis Tirso Rivilla.415 PTIC shares by matching the bid price of Parallax. a pre-bid conference was held. a First Pacific affiliate.

Hence. Sanidad and Arno V. In the Resolution of 28 August 2007. x x x. (2) whether public respondents committed grave abuse of discretion in allowing the sale of the 111. that the sale of the 111. Petitioners-in-intervention join petitioner Wilson Gamboa x x x in seeking. among others. Pablito V. which is the worlds largest wireless telecommunications firm.com) showed that those foreign entities. Petitioner claims.6 Petitioner asserts: If and when the sale is completed. Petitioners-in-intervention claim that.47 percent of PLDTs common equity. the Court granted the motion and noted the Petition-in-Intervention. and declaration of nullity of sale of the 111. as PLDT subscribers. xx x With the completion of the sale.415 PTIC shares to First Pacific or assignee. would result to a total foreign common shareholdings in PLDT of 51. x x x x x x as the annual disclosure reports. a public utility. . Adhering to this well-settled principle. which own at least five percent of common equity. Factual questions such as those raised by petitioner. to enjoin and/or nullify the sale by respondents of the 111. data culled from the official website of the New York Stock Exchange (www.9 which indisputably demand a thorough examination of the evidence of the parties. declaratory relief.0 percent of its common or voting. also referred to as Form 20-K reports x x x which PLDT submitted to the New York Stock Exchange for the period 2003-2005. the Court shall confine the resolution of the instant controversy solely on the threshold and purely legal issueof whether the term capital in Section 11. x x x7 Petitioner raises the following issues: (1) whether the consummation of the then impending sale of 111.56 percent of PLDT common equity. and (3) whether the sale of common shares to foreigners in excess of 40 percent of the entire subscribed common capital stock violates the constitutional limit on foreign ownership of a public utility.8 On 13 August 2007. and this. will collectively own 81. in violation of the nationality restrictions of the Philippine Constitution. among others.415 PTIC shares. combined with Japanese NTT DoCoMos common shareholdings in PLDT.415 PTIC shares to First Pacific.7 percent to 37 percent. owning 51. the consummation of the sale will put the two largest foreign investors in PLDT First Pacific and Japans NTT DoCoMo. First Pacifics equity in PLDT will go up from 30. are generally beyond this Courts jurisdiction. unquestionably a public utility. revealed that First Pacific and several other foreign entities breached the constitutional limit of 40 percent ownership as early as 2003.nyse. injunction.stockholdings. petitioner filed the instant petition for prohibition.56 percent which is over the 40 percent constitutional limit. Sanidad filed a Motion for Leave to Intervene and Admit Attached Petition-inIntervention.On 28 February 2007. they have a stake in the outcome of the controversy x x x where the Philippine Government is completing the sale of government owned assets in [PLDT]. Article XII of the Constitution refers to the total common shares only or to the total outstanding capital stock (combined total of common and non-voting preferred shares) of PLDT.415 PTIC shares to First Pacific violates the constitutional limit on foreign ownership of a public utility. The Issue This Court is not a trier of facts. The Ruling of the Court The petition is partly meritorious.415 PTIC shares would result in an increase in First Pacifics common shareholdings in PLDT from 30.7 percent to 37.

garnishment or any other order or process of any court. petitioner seeks primarily the interpretation of the term capital in Section 11.13 the Court treated the petition for declaratory relief as one for mandamus considering the grave injustice that would result in the interpretation of a banking law. the question was: Are the branches. The Court held that injustice would result especially to a citizen aggrieved by a foreign guest like accused x x x that would negate Article 10 of the Civil Code which provides that in case of doubt in the interpretation or application of laws.556. Specifically. The actions for declaratory relief. including government owned or controlled corporations included among the four employers under Presidential Decree No.14 the Court similarly brushed aside the procedural infirmity of the petition for declaratory relief and treated the same as one for mandamus. inapplicable due to the peculiar circumstances of the case. the local bank. Thus. 11 the Court shall nevertheless refrain from discussing the grounds in support of the petition for prohibition since on 28 February 2007. subdivisions. exempting foreign currency deposits from attachment. In short. only the petition for prohibition is within the original jurisdiction of this court. the questioned sale was consummated when MPAH paid IPC P25. Article XII of the Constitution. it is well-settled that this Court may treat a petition for declaratory relief as one for mandamus if the issue involved has farreaching implications. However. and the accused to comply with the writ of execution issued in the civil case for damages and to release the dollar deposit of the accused to satisfy the judgment. 851 which are required to pay their employees x x x a thirteenth (13th) month pay x x x ? The Constitutional principle involved therein affected all government employees. the petition could have been dismissed outright.15 (Emphasis supplied) In the present case. He prays that this Court declare that the term capital refers to common shares only. and that such shares constitute the sole basis in determining foreign equity in a public utility. Minister of Labor.217. since the threshold and purely legal issue on the definition of the term capital in Section 11.12 In Salvacion v.415 PTIC shares.Petition for declaratory relief treated as petition for mandamus At the outset. and annulment of sale are not embraced within the original jurisdiction of the Supreme Court. In Alliance. who were government employees. petitioner is faced with a procedural barrier. the issue was whether the government unlawfully excluded petitioners. clearly justifying a relaxation of the technical rules of procedure. Among the remedies petitioner seeks. . agencies. which involved the crime of rape committed by a foreign tourist against a Filipino minor and the execution of the final judgment in the civil case for damages on the tourists dollar deposit with a local bank. the Court declared Section 113 of Central Bank Circular No. exceptions to this rule have been recognized.10 injunction. The Court therefore required respondents Central Bank of the Philippines. where the petition has far-reaching implications and raises questions that should be resolved. On this ground alone. As this Court held inSalvacion: The Court has no original and exclusive jurisdiction over a petition for declaratory relief. In that case. However. from the enjoyment of rights to which they were entitled under the law. Article XII of the Constitution has far-reaching implications to the nationaleconomy. and certainly requiring the interpretation of the assailed presidential decree. which however is not exclusive but is concurrent with the Regional Trial Court and the Court of Appeals. Central Bank of the Philippines. it is presumed that the lawmaking body intended right and justice to prevail. 960. the Court treats the petition for declaratory relief as one for mandamus. and instrumentalities of the Government. In Alliance of Government Workers v. Petitioner further asks this Court to declare any ruling inconsistent with such interpretation unconstitutional. it may be treated as one for mandamus. While direct resort to this Court may be justified in a petition for prohibition.000 and the government delivered the certificates for the 111.

a . became final on 21 December 2004.20 in Section 10. Article XVI on the ownership of advertising companies.22 and in Section 11(2). 21 in Section 4(2). Indeed. a resolution of this issue will determine whether Filipinos are masters. or second class citizens.16 That case involved the same public utility (PLDT) and substantially the same private respondents. 23 Petitioner has locus standi There is no dispute that petitioner is a stockholder of PLDT. in their own country. the Court asserted that when the issue concerns a public right and the object of mandamus is to obtain the enforcement of a public duty. the Court declined to resolve the case on the merits. which appears not only in Section 11. not only for the benefit of the litigants. What is at stake here is whether Filipinos or foreigners will have effective control of the national economy.24 the Court upheld the right of a citizen to bring a suit on matters of transcendental importance to the public. In Chavez v. Tuvera. but also in Section 2. the people are regarded as the real parties in interest.18 Besides. and instead denied the same for disregarding the hierarchy of courts. present and future foreign investors in this country deserve. petitioner Fernandez assailed on a pure question of law the Regional Trial Courts Decision of 21 February 2003 via a petition for review under Rule 45. as a matter of basic fairness. thus: In Taada v. and because it is sufficient that petitioner is a citizen and as such is interested in the execution of the laws. in the words of the Constitution. As such. involving the national economy and the economic welfare of the Filipino people. More importantly. The Courts Resolution. a dire consequence directly affecting petitioners interest as a stockholder. and to future generations of Filipinos. the petitioners sought to enforce their right to be informed on matters of public concern. In fact. There is no reason for this Court to evade this ever recurring fundamental issue and delay again defining the term capital. Article XII on the reservation of certain investments to Filipino citizens. Article XII of the Constitution. he need not show that he has any legal or special interest in the result of the action. Article XII of the Constitution in the case of Fernandez v. to ensure. If the sale indeed violates the Constitution. Article XII of the Constitution has far-reaching implications to the national economy. Despite its far-reaching implications to the national economy. Article XIV on the ownership of educational institutions. Article XII of the Constitution. it is the threshhold legal issue presented in this case. 157360.R. Despite the importance and novelty of the constitutional issue raised therein and despite the fact that the petition involved a purely legal question. The instant petition therefore presents the Court with another opportunity to finally settle this purely legal issue which is of transcendental importance to the national economy and a fundamental requirement to a faithful adherence to our Constitution. In the aforesaid case. PCGG. 19 in Section 7.The interpretation of the term capital in Section 11. No. denying the petition. there is no question that the instant petition raises matters of transcendental importance to the public. a categorical ruling from this Court on the extent of their participation in the capital of public utilities and other nationalized businesses. then there is a possibility that PLDTs franchise could be revoked. in the light of vague and confusing positions taken by government agencies on this purely legal issue. Article XII on co-production and joint venture agreements for the development of our natural resources. which he claims to violate the nationality requirement prescribed in Section 11. a self-reliant and independent national economy effectively controlled by Filipinos.17 There. The fundamental and threshold legal issue in this case. Article XII on ownership of private lands. if ever there is a legal issue that has far-reaching implications to the entire nation. The Court first encountered the issue on the definition of the term capital in Section 11. far outweighs any perceived impediment in the legal personality of the petitioner to bring this action. he has the right to question the subject sale. but more significantly for the benefit of the entire Filipino people. Cojuangco. docketed as G. this purely legal issue has remained unresolved for over 75 years since the 1935 Constitution. The Court must forthwith seize such opportunity.

. (Emphasis supplied) The above provision substantially reiterates Section 5. in connection with the rule that laws in order to be valid and enforceable must be published in the Official Gazette or otherwise effectively promulgated. alteration. the Court declared that the right they sought to be enforced is a public right recognized by no less than the fundamental law of the land. Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment. the disclosure provision in the Constitution would constitute sufficient authority for upholding the petitioners standing. certificate. at least sixty per centum of whose capital is owned by such citizens. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital. management and operation of the Manila International Container Terminal. we said that while expenditure of public funds may not have been involved under the questioned contract for the development. Legaspi v. Article XII of the 1987 Constitution Section 11. The State shall encourage equity participation in public utilities by the general public. or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines at least sixty per centum of the capital of which is owned by such citizens. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in the capital thereof. Definition of the Term Capital in Section 11. No franchise. the petitioner has the requisite locus standi. Article IV of the 1973 Constitution. Civil Service Commission. or repeal by the National Assembly when the public interest so requires. or authorization be exclusive in character or for a longer period than fifty years. while reiterating Taada. in the economic development of the country and the magnitude of the financial consideration involved. to wit: Section 11. No franchise. involves matters of transcendental public importance. certificate. Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment. or authorization be exclusive in character or for a longer period than fifty years. since the instant petition. or repeal by the Congress when the common good so requires. (Emphasis supplied) . alteration. brought by a citizen. The State shall encourage equity participation in public utilities by the general public. or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines. Article XIV of the 1973 Constitution. public interest [was] definitely involved considering the important role [of the subject contract] . as a consequence. In ruling for the petitioners legal standing. thus: Section 5. certificate. further declared that when a mandamus proceeding involves the assertion of a public right. Further. nor shall such franchise. and all the executive and managing officers of such corporation or association must be citizens of the Philippines.right then recognized in Section 6. part of the general public which possesses the right. Reyes. therefore. We concluded that. certificate. in Albano v. the requirement of personal interest is satisfied by the mere fact that petitioner is a citizen and. . Article XII (National Economy and Patrimony) of the 1987 Constitution mandates the Filipinization of public utilities. nor shall such franchise. (Emphasis supplied) Clearly.

More importantly. Respondents. Bernas. or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or other entities organized under the laws of the Philippines sixty per centum of the capital of which is owned by citizens of the Philippines. 25 The 1987 Constitution provides for the Filipinization of public utilities by requiring that any form of authorization for the operation of public utilities should be granted only to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines at least sixty per centum of whose capital is owned by such citizens. viz: Section 8. patently violating the 40 percent foreign equity limitation in public utilities prescribed by the Constitution.The foregoing provision in the 1973 Constitution reproduced Section 8.27 This specific provision explicitly reserves to Filipino citizens control of public utilities. a leading member of the 1986 Constitutional Commission. requiring every applicant of a PLDT telephone line to subscribe to non-voting preferred shares to pay for the investment cost of installing the telephone line.J. No franchise or right shall be granted to any individual.54% of the total outstanding common stock.29 Any citizen or juridical entity desiring to operate a public utility must therefore meet the minimum nationality requirement prescribed in Section 11. which may be inimical to the national interest.26 The evident purpose of the citizenship requirement is to prevent aliens from assuming control of public utilities. or corporation. Article XII of the Constitution. under the corporate set-up of PLDT. Petitioner posits that the term capital in Section 11. Article XII of the Constitution refer to common shares or to the total outstanding capital stock (combined total of common and non-voting preferred shares)? Petitioner submits that the 40 percent foreign equity limitation in domestic public utilities refers only to common shares because such shares are entitled to vote and it is through voting that control over a corporation is exercised. reminds us that the Filipinization provision in the 1987 Constitution is one of the products of the spirit of nationalism which gripped the 1935 Constitutional Convention. or authorization be exclusive in character or for a longer period than fifty years. No franchise. 30 This arose from Presidential Decree No. which class of shares alone. 32 Petitioners-in-intervention basically reiterate petitioners arguments and adopt petitioners definition of the term capital. alteration.31 issued on 16 June 1973 by then President Ferdinand Marcos. on the other hand. Article XII of the Constitution refers to the ownership of common capital stock subscribed and outstanding. certificate. at least 60 percent of its capital must be owned by Filipino citizens. Article XIV of the 1935 Constitution. S.. (Emphasis supplied) Father Joaquin G. nor shall such franchise. 217. which means that foreigners exercise significant control over PLDT. private respondents Nazareno andPangilinan of PLDT do not dispute that more than 40 percent of the common shares of PLDT are held by foreigners. It is undisputed that PLDTs non-voting preferred shares are held mostly by Filipino citizens. The provision is [an express] recognition of the sensitive and vital position of public utilities both in the national economy and for national security. or repeal by the Congress when the public interest so requires. do not offer any definition of the term capital in Section 11. certificate. firm. can vote and elect members of the board of directors. . pursuant to an overriding economic goal of the 1987 Constitution: to conserve and develop our patrimony28 and ensure a self-reliant and independent national economy effectively controlled by Filipinos. Does the term capital in Section 11. 33 Petitioners-inintervention allege that the approximate foreign ownership of common capital stock of PLDT x x x already amounts to at least 63. except under the condition that it shall be subject to amendment. for a corporation to be granted authority to operate a public utility. The crux of the controversy is the definition of the term capital. Hence. Article XII of the Constitution.

Respondent Nazareno does not deny petitioners allegation of foreigners dominating the common shareholdings of PLDT. Cojuangco. and Chairman Fe Barin.e. respondent Manuel V. institutions and corporations (such as the Philippine National Oil Company-Energy Development Corporation or PNOCEDC) of including both preferred shares and common shares in controlling interest in view of testing compliance with the 40% constitutional limitation on foreign ownership in public utilities. i. In the earlier case of Fernandez v. Nazareno invokes denial of due process on behalf of the foreign common shareholders. respondent Pangilinan alleges that the issue should be whether owners of shares in PLDT as well as owners of shares in companies holding shares in PLDT may be required to relinquish their shares in PLDT and in those companies without any law requiring them to surrender their shares and also without notice and trial. (4) non-availability of declaratory relief. including PLDT. [Article XII of the Constitution] imposes no nationality requirement on the shareholders of the utility company as a condition for keeping their shares in the utility company. x x x . noninclusion of interested parties. contended that the term capital in the 1987 Constitution refers to shares entitled to vote or the common shares. (2) the PSE allegedly implemented its rules and required all listed companies. the foreign natural and juridical PLDT shareholders must be impleaded in this suit so that they can be heard. consisting of 73 pages. Article XII of the Constitution. harps mainly on the procedural infirmities of the petition and the supposed violation of the due process rights of the affected foreign common shareholders. Thus. Article XII of the Constitution. Section 11 does not authorize taking one persons property (the shareholders stock in the utility company) on the basis of another partys alleged failure to satisfy a requirement that is a condition only for that other partys retention of another piece of property (the utility company being at least 60% Filipino-owned to keep its franchise). Neither does he refute petitioners claim of foreigners holding more than 40 percent of PLDTs common shares. (3) mootness of the petition. respondent Nazarenos Memorandum. Fernandez explained thus: The forty percent (40%) foreign equity limitation in public utilities prescribed by the Constitution refers to ownership of shares of stock entitled to vote. Respondent Pangilinan emphasizes in his Memorandum (1) the absence of this Courts jurisdiction over the petition. which in effect requires a full-blown trial where all the parties in interest are given their day in court.38 Respondent Francisco Ed Lim. While Nazareno does not introduce any definition of the term capital. lack of jurisdiction. The OSG does not present any definition or interpretation of the term capital in Section 11.. representing public respondents Secretary Margarito Teves.35 Similarly. Respondent Pangilinan further asserts that Section 11. Commissioner Ricardo Abcede. and lack of basis for injunction. Nazarenostressed mainly that the petition seeks to divest foreign common shareholders purportedly exceeding 40% of the total common shareholdings in PLDT of their ownership over their shares.36 The OSG. petitioner Fernandez who claimed to be a stockholder of record of PLDT. Pangilinan does not define the term capital in Section 11.In particular. i. does not also define the term capital and seeks the dismissal of the petition on the following grounds: (1) failure to state a cause of action against Lim.34 Essentially. (2) petitioners lack of standing.e. lack of standing. impleaded as President and Chief Executive Officer of the Philippine Stock Exchange (PSE). The OSG contends that the petition actually partakes of a collateral attack on PLDTs franchise as a public utility. and (3) the reliefs prayed for in the petition would adversely impact the stock market. the OSG also limits its discussion on the supposed procedural defects of the petition. In its Memorandum 37 dated 24 September 2007. is likewise silent on the definition of the term capital. common shares. to make proper and timely disclosures. respondent Pangilinan focuses on the procedural flaws of the petition and the alleged violation of the due process rights of foreigners. and (5) the denial of due process rights. Instead. considering that it is through voting that control is being exercised. According to him. he states that among the factual assertions that need to be established to counter petitioners allegations is the uniform interpretation by government agencies (such as the SEC). Sevilla. Undersecretary John P. Moreover.

and Orlando B.99%. thus: 16. it would be possible for the ownership structure of a public utility corporation to be divided into one percent (1%) common stocks and ninety-nine percent (99%) preferred stocks. therefore. Antonio O. Article XII of the Constitution allegedly refers to the sum total of the shares subscribed and paid-in by the shareholder and it allegedly is immaterial how the stock is classified. In this regard. control the public utility corporation. Elma. Helen Y. argued that the term capital in Section 11. Del Rosario. Albert F. xxxx Clearly.Obviously. Vea. whether as common or preferred. there is. Magdangal B. Nebres. Otherwise. respondents therein. Parenthetically. Dee. Furthermore. i. x x x In this connection. therefore. Espinosa. Carlos A.39 On the other hand.e. Cojuangco. Moreover. Ray C. said Opinions are merely advisory and cannot prevail over the clear intent of the framers of the Constitution. Fr. Article XII of the Constitution includes preferred shares since the Constitution does not distinguish among classes of stock. in the case of petitioner PLDT. 1987 cited by the Trial Court to support the proposition that the meaning of the word capital as used in Section 11. Napoleon L. Consequently. the intent of the framers of the Constitution in imposing limitations and restrictions on fully nationalized and partially nationalized activities is for Filipino nationals to be always in control of the corporation undertaking said activities. Article XII of the Constitution is at best merely advisory for it is the courts that finally determine what a law means. the forty percent (40%) foreign equity limitation in public utilities prescribed by the Constitution refers to ownership of shares of stock entitled to vote. Following the Trial Courts ruling adopting respondents arguments. 1988 and April 14. Pangilinan. a violation of Section 11.. cannot stand in the face of a clear legislative policy as stated in the FIA which took effect in 1991 or way after said opinions were rendered. and as clarified by the above-quoted Amendments. common shares. if the Trial Courts ruling upholding respondents arguments were to be given credence. xxxx Thus. Nazareno. the Opinions dated February 15. BienvenidoF. Arellano. Manuel V. suffice it to state that as between the law and an opinion rendered by an administrative agency. without distinction as to classes of shares. In the same vein. the law indubitably prevails. ownership of record of shares will not suffice but it must be shown that the legal and beneficial ownership rests in the hands of Filipino citizens. Article XII of the Constitution. The Constitution applies its foreign ownership limitation on the corporations capital. the common shares can be owned entirely by foreigners thus creating an absurd situation wherein foreigners. the Corporation Code which was already in force at the time the present (1987) Constitution was drafted defined outstanding capital stock as follows: . the SECs construction of Section 11. since it is already admitted that the voting interests of foreigners which would gain entry to petitioner PLDT by the acquisition of SMART shares through the Questioned Transactions is equivalent to 82. and the nominee arrangements between the foreign principals and the Filipino owners is likewise admitted. Mariles Cacho-Romulo. who are supposed to be minority shareholders. the 40% foreign ownership limitation should be interpreted to apply to both the beneficial ownership and the controlling interest.

and building and loan associations shall not be permitted to issue no-par value shares of stock. or such other preferences as may be stated in the articles of incorporation which are not violative of the provisions of this Code: Provided. A corporation may.Section 137. Classification of shares.00) pesos per share: Provided.The shares of stock of stock corporations may be divided into classes or series of shares. as used in this Code. That no share may be deprived of voting rights except those classified and issued as preferred or redeemable shares. unless otherwise provided in this Code: Provided. public utilities. The term capital in Section 11. Outstanding capital stock defined. except treasury shares. the SEC the government agency primarily responsible for implementing the Corporation Code. Consequently. trust companies. The language of the Constitution should be understood in the sense it has in common use. Section 137 of the Corporation Code also does not distinguish between common and preferred shares. That there shall always be a class or series of shares which have complete voting rights. Preferred shares of stock issued by any corporation may be given preference in the distribution of the assets of the corporation in case of liquidation and in the distribution of dividends. further. The term outstanding capital stock. xxxx 17. . and thus in the present case only to common shares. The Corporation Code of the Philippines42 classifies shares as common or preferred. or both. nor exclude either class of shares. Shares of capital stock issued without par value shall be deemed fully paid and non-assessable and the holder of such shares shall not be liable to the corporation or to its creditors in respect thereto: Provided.40 We agree with petitioner and petitioners-in-intervention. 6. That shares without par value may not be issued for a consideration less than the value of five (P5. insurance companies. Article XII of the Constitution refers only to shares of stock entitled to vote in the election of directors. That preferred shares of stock may be issued only with a stated par value. 41 and not to the total outstanding capital stock comprising both common and non-voting preferred shares. means the total shares of stock issued under binding subscription agreements to subscribers or stockholders. any of which classes or series of shares may have such rights. may fix the terms and conditions of preferred shares of stock or any series thereof: Provided. But even assuming that resort to the proceedings of the Constitutional Commission is necessary. where authorized in the articles of incorporation. privileges or restrictions as may be stated in the articles of incorporation: Provided. That such terms and conditions shall be effective upon the filing of a certificate thereof with the Securities and Exchange Commission. and which also has the responsibility of ensuring compliance with the Constitutions foreign equity restrictions as regards nationalized activities x x x has categorically ruled that both common and preferred shares are properly considered in determining outstanding capital stock and the nationality composition thereof. furthermore. further. however. thus: Sec. That banks. in determining the outstanding capital stock (the capital) of a corporation. . In addition. classify its shares for the purpose of insuring compliance with constitutional or legal requirements. whether or not fully or partially paid. Any or all of the shares or series of shares may have a par value or have no par value as may be provided for in the articles of incorporation: Provided. there is nothing in the Record of the Constitutional Commission (Vol. That the entire consideration received by the corporation for its no-par value shares shall be treated as capital and shall not be available for distribution as dividends. The Board of Directors. petitioners suggestion to reckon PLDTs foreign equity only on the basis of PLDTs outstanding common shares is without legal basis. xxxx 18. III) which petitioner misleadingly cited in the Petition x x x which supports petitioners view that only common shares should form the basis for computing a public utilitys foreign equity.

namely. 3. preferred shareholders are often excluded from any control. under the Corporation Code only preferred or redeemable shares can be deprived of the right to vote. 60-40 in Section 9 and 2/3-1/3 in Section 15. that is. capital refers to the voting stock or controlling interest of a corporation. 6. Merger or consolidation of the corporation with another corporation or other corporations. 47 Considering that common shares have voting rights which translate to control. Indisputably. the term capital in Section 11. 4. However. . and 8. the vote necessary to approve a particular corporate act as provided in this Code shall be deemed to refer only to stocks with voting rights. the holders of such shares shall nevertheless be entitled to vote on the following matters: 1. 9 and 15. Article XII of the Constitution refers only to common shares. each share shall be equal in all respects to every other share. In Sections 3. the term capital in Section 11. Article XII of the Constitution refers only to shares of stock that can vote in the election of directors. preferred shares have the same voting rights as common shares. Amendment of the articles of incorporation. pledge or other disposition of all or substantially all of the corporate property. the Committee stated local or Filipino equity and foreign equity. if the preferred shares also have the right to vote in the election of directors. 2. 7. That is right. MR. and any provision in the articles of incorporation restricting the right of common shareholders to vote is invalid. VILLEGAS. mortgage. Sale. Incurring. as opposed to preferred shares which usually have no voting rights. Where the articles of incorporation provide for non-voting shares in the cases allowed by this Code. to wit: MR. NOLLEDO. exchange. 43 This is exercised through his vote in the election of directors because it is the board of directors that controls or manages the corporation. deprived of the right to vote in the election of directors and on other matters. on the theory that the preferred shareholders are merely investors in the corporation for income in the same manner as bondholders. Except as provided in the immediately preceding paragraph. 44 In the absence of provisions in the articles of incorporation denying voting rights to preferred shares. lease. one of the rights of a stockholder is the right to participate in the control or management of the corporation. Increase or decrease of capital stock. creating or increasing bonded indebtedness. In short. This interpretation is consistent with the intent of the framers of the Constitution to place in the hands of Filipino citizens the control and management of public utilities. Dissolution of the corporation. Investment of corporate funds in another corporation or business in accordance with this Code. As revealed in the deliberations of the Constitutional Commission. then the term capital shall include such preferred shares because the right to participate in the control or management of the corporation is exercised through the right to vote in the election of directors.46 Common shares cannot be deprived of the right to vote in any corporate meeting. 60-40 in Section 3. However.Except as otherwise provided in the articles of incorporation and stated in the certificate of stock. Adoption and amendment of by-laws. 5.45 In fact.

MR. We have just had a long discussion with the members of the team from the UP Law Center who provided us a draft. In teaching law. The portion accepted by the Committee is the deletion of the phrase voting stock or controlling interest. Yes. Yes.MR. That must be based on the subscribed capital stock. May I be clarified as to that portion that was accepted by the Committee. we need additional Filipino capital? MR. on the subscribed capital stock. NOLLEDO. Thank you. So if the Davide amendment is lost. VILLEGAS. because unless declared delinquent. NOLLEDO. unpaid capital stock shall be entitled to vote. does the Committee adopt the grandfather rule? MR. MR. MR. VILLEGAS. AZCUNA. or on the paid-up capital stock of a corporation? Will the Committee please enlighten me on this? MR. the committee report would read: corporations or associations at least sixty percent of whose CAPITAL is owned by such citizens. MR. we are always faced with this question: Where do we base the equity requirement. AZCUNA. VILLEGAS. is it on the authorized capital stock. . MR. MR. MR. VILLEGAS. NOLLEDO. MR. a corporation with 60-40 percent equity invests in another corporation which is permitted by the Corporation Code. The phrase that is contained here which we adopted from the UP draft is 60 percent of voting stock. AZCUNA. Yes. without the Davide amendment. NOLLEDO. That is right. we are stuck with 60 percent of the capital to be owned by citizens. VILLEGAS.48 xxxx MR. Hence. Therefore. With respect to an investment by one corporation in another corporation. that is the understanding of the Committee. VILLEGAS. say.

or a trustee of funds for pension or other employee retirement or separation benefits. or a corporation organized under the laws of the Philippines of which at least sixty percent (60%) of the capital stock outstanding and entitled to vote is owned and held by citizens of the Philippines. is the definition of a Philippine national in the Foreign Investments Act of 1991. But the control can be with the foreigners even if they are the minority. . but it is the voting capital. That is right. Provided. MR. MR. Philippine national shall mean a citizen of the Philippines or a domestic partnership or association wholly owned by the citizens of the Philippines. MR. Reinforcing this interpretation of the term capital. or a corporation organized abroad and registered as doing business in the Philippines under the Corporation Code of which one hundred percent (100%) of the capital stock outstanding and entitled to vote is wholly owned by Filipinos or a trustee of funds for pension or other employee retirement or separation benefits. (Emphasis supplied) In explaining the definition of a Philippine national. the Implementing Rules and Regulations of the Foreign Investments Act of 1991 provide: b. 60 percent of the capital assumes. or a corporation organized under the laws of the Philippines of which at least sixty percent [60%] of the capital stock outstanding and entitled to vote is owned and held by citizens of the Philippines. whereas. the reason we eliminated the word stock as stated in the 1973 and 1935 Constitutions is that according to Commissioner Rodrigo.As used in this Act: a. in order that the corporation.that where a corporation its non-Filipino stockholders own stocks in a Securities and Exchange Commission [SEC] registered enterprise. In the case of stock corporations. BENGZON. or a domestic partnership or association wholly owned by citizens of the Philippines. No. So we can have a situation where the corporation is controlled by foreigners despite being the minority because they have the voting capital. the Filipinos own the nonvoting shares. or should result in. where the trustee is a Philippine national and at least sixty percent (60%) of the fund will accrue to the benefit of Philippine nationals: Provided. controlling interest in the corporation. at least sixty percent (60%) of the capital stock outstanding and entitled to vote of each of both corporations must be owned and held by citizens of the Philippines and at least sixty percent (60%) of the members of the Board of Directors of each of both corporations must be citizens of the Philippines. That is the anomaly that would result here. as referring to controlling interest or shares entitled to vote. Let us say 40 percent of the capital is owned by them. BENGZON. shall be considered a Philippine national. it is assumed. 3. That where a corporation and its non-Filipino stockholders own stocks in a Securities and Exchange Commission (SEC) registered enterprise.49 (Emphasis supplied) Thus.50 to wit: SEC. at least sixty percent [60%] of the capital stock outstanding and entitled to vote of both corporations must be owned and held by citizens of the Philippines and at least sixty percent [60%] of the members of the Board of Directors of each of both corporation must be .MR. there are associations that do not have stocks. AZCUNA. where the trustee is a Philippine national and at least sixty percent [60%] of the fund will accrue to the benefit of the Philippine nationals. The term Philippine national shall mean a citizen of the Philippines. We should not eliminate the phrase controlling interest. That is why we say CAPITAL. Definitions. MR. VILLEGAS. AZCUNA.

Some of these laws are: (1) Regulation of Award of Government Contracts or R.D. but only such stocks which are generally entitled to vote are considered. grossly contravenes the intent and letter of the Constitution that the State shall develop a self-reliant and independent national economy effectively controlled by Filipinos. Small and Medium Enterprises or R. No. No. To construe broadly the term capital as the total outstanding capital stock. 7471. (2) Philippine Inventors Incentives Act or R. 1521. and (7) Ship Mortgage Decree or P. coupled with appropriate voting rights is essential. This is obviously absurd. 6977. No. Thus. Article XII of the Constitution is also used in the same context in numerous lawsreserving certain areas of investments to Filipino citizens. the corporation is considered as non-Philippine national[s].A. Under the broad definition of the term capital. Full beneficial ownership of 60 percent of the outstanding capital stock. or such higher percentage as Congress may prescribe.A. in numerous laws Congress has reserved certain areas of investments to Filipino citizens or to corporations at least sixty percent of the capital of which is owned by Filipino citizens. (6) Philippine Technology Transfer Act of 2009 or R. (5) Domestic Shipping Development Act of 2004 or R. Full beneficial ownership of the stocks. We shall illustrate the glaring anomaly in giving a broad definition to the term capital. Article XII of the Constitution.citizens of the Philippines. No. is required. No. including both common and non-voting preferred shares. For stocks to be deemed owned and held by Philippine citizens or Philippine nationals. in order that the corporation shall be considered a Philippine national. which necessarily equates to control of the public utility.A. . (Emphasis supplied) Mere legal title is insufficient to meet the 60 percent Filipino-owned capital required in the Constitution. (3) Magna Carta for Micro. with both classes of share having a par value of one peso (P1.A. Thus. Let us assume that a corporation has 100 common shares owned by foreigners and 1.00) per share.000 non-voting preferred shares owned by Filipinos. 3850. the term capital in Section 11. 5183. (4) Philippine Overseas Shipping Development Act or R. No.000. The legal and beneficial ownership of 60 percent of the outstanding capital stock must rest in the hands of Filipino nationals in accordance with the constitutional mandate. 10055. A broad definition unjustifiably disregards who owns the all-important voting stock. Compliance with the required Filipino ownership of a corporation shall be determined on the basis of outstanding capital stock whether fully paid or not. such corporation would be considered compliant with the 40 percent constitutional limit on foreign equity of public utilities since the overwhelming majority. 9295. stocks.999 percent. coupled with 60 percent of the voting rights. No. Hence. or more than 99.A. The control test shall be applied for this purpose. certain areas of investments. mere legal title is not enough to meet the required Filipino equity. the voting rights of which have been assigned or transferred to aliens cannot be considered held by Philippine citizens or Philippine nationals.A. Congress may reserve to citizens of the Philippines or to corporations or associations at least sixty per centum of whose capital is owned by such citizens. Otherwise. of the total outstanding capital stock is Filipino owned. Individuals or juridical entities not meeting the aforementioned qualifications are considered as non-Philippine nationals. Under Section 10.

As shown in PLDTs 2010 GIS. The example given is not theoretical but can be found in the real world. under PLDTs Articles of Incorporation.56 In other words. the Filipinos. In fact. while holders of preferred shares have no voting right for any purpose whatsoever. . Such amount of control unmistakably exceeds the allowable 40 percent limit on foreign ownership of public utilities expressly mandated in Section 11. Moreover. holders of common shares are granted the exclusive right to vote in the election of directors. they also have very little and obviously negligible dividend earning capacity compared to common shares. only holders of common shares can vote in the election of directors. blatantly violating the constitutional requirement of 60 percent Filipino control and Filipino beneficial ownership in a public utility. or to receive notice of any meeting of stockholders. who have no voting rights in the election of directors.00 per share.00 per share. It also renders illusory the State policy of an independent national economy effectively controlled by Filipinos. and the holders of Common Capital Stock shall have the exclusive right to vote for the election of directors and for all other purposes. have no control over the public utility. In other words. based on PLDTs 2010 General Information Sheet (GIS).00 per share. In fact. it is clear that foreigners exercise control over PLDT.56% of the preferred shares. 99.61 Worse.001 percent.046. and in fact exists in the present case. Since holding a majority of the common shares equates to control.690 common shares of PLDT whereas Filipinos hold only 66.00 per share. as well as the clear language of the Constitution. with a minuscule equity of less than 0. and respondents do not dispute. Article XII of the Constitution. PLDT declared dividends for the common shares at P70. holders of preferred shares. while the declared dividends for the preferred shares amounted to a measly P1.750. even if they hold only 100 shares. preferred shares have twice the par value of common shares but cannot elect directors and have only 1/70 of the dividends of common shares.In the example given.59 So the preferred shares not only cannot vote in the election of directors.51 On the other hand. that foreigners hold a majority of the common shares of PLDT. PLDTs Articles of Incorporation52 state that each holder of Common Capital Stock shall have one vote in respect of each share of such stock held by him on all matters voted upon by the stockholders.54which is a document required to be submitted annually to the Securities and Exchange Commission. cannot vote in the election of directors and hence.27% of the total number of PLDTs common shares. PLDTs Articles of Incorporation expressly state that the holders of Serial Preferred Stock shall not be entitled to vote at any meeting of the stockholders for the election of directors or for any other purpose or otherwise participate in any action taken by the corporation or its stockholders. the Dividend Declarations of PLDT for 2009. whereas the par value of preferred shares is P10. only the foreigners holding the common shares have voting rights in the election of directors. shows that per share the SIP58 preferred shares earn a pittance in dividends compared to the common shares.73%. It must be stressed.60 as submitted to the SEC.999 percent of the equity. holding more than 99. do not have any control over PLDT. to place the control of public utilities in the hands of Filipinos. Moreover.85% of the authorized capital stock of PLDT while common shares constitute only 22.53 In short. This starkly circumvents the intent of the framers of the Constitution. while Filipinos hold only 35.57 as submitted to the SEC. Holders of PLDT preferred shares are explicitly denied of the right to vote in the election of directors.44% of the preferred shares are owned by Filipinos while foreigners own only a minuscule 0.55 foreigners hold 120. holders of common shares have voting rights for all purposes. meaning only common shareholders exercise control over PLDT. preferred shares constitute 77. On the other hand. exercise control over the public utility. Conversely. the par value of PLDT common shares is P5. 62 This undeniably shows that beneficial interest in PLDT is not with the non-voting preferred shares but with the common shares. foreigners hold 64.15%. The foreigners.622 common shares.

The legal and beneficial ownership of 60 percent of the outstanding capital stock must rest in the hands of Filipinos in accordance with
the constitutional mandate. Full beneficial ownership of 60 percent of the outstanding capital stock, coupled with 60 percent of the
voting rights, is constitutionally required for the States grant of authority to operate a public utility. The undisputed fact that the PLDT
preferred shares, 99.44% owned by Filipinos, are non-voting and earn only 1/70 of the dividends that PLDT common shares earn,
grossly violates the constitutional requirement of 60 percent Filipino control and Filipino beneficial ownership of a public utility.
In short, Filipinos hold less than 60 percent of the voting stock, and earn less than 60 percent of the dividends, of PLDT. This
directly contravenes the express command in Section 11, Article XII of the Constitution that [n]o franchise, certificate, or any other
form of authorization for the operation of a public utility shall be granted except to x x xcorporations x x x organized under the laws of
the Philippines, at least sixty per centum of whose capital is owned by such citizens x x x.

To repeat, (1) foreigners own 64.27% of the common shares of PLDT, which class of shares exercises the sole right to vote in the
election of directors, and thus exercise control over PLDT; (2) Filipinos own only 35.73% of PLDTs common shares, constituting a
minority of the voting stock, and thus do not exercise control over PLDT; (3) preferred shares, 99.44% owned by Filipinos, have no
voting rights; (4) preferred shares earn only 1/70 of the dividends that common shares earn;63 (5) preferred shares have twice the par
value of common shares; and (6) preferred shares constitute 77.85% of the authorized capital stock of PLDT and common shares only
22.15%. This kind of ownership and control of a public utility is a mockery of the Constitution.

Incidentally, the fact that PLDT common shares with a par value of P5.00 have a current stock market value of P2,328.00 per
share,64 while PLDT preferred shares with a par value ofP10.00 per share have a current stock market value ranging from only P10.92
to P11.06 per share,65 is a glaring confirmation by the market that control and beneficial ownership of PLDT rest with the common
shares, not with the preferred shares.

Indisputably, construing the term capital in Section 11, Article XII of the Constitution to include both voting and non-voting shares
will result in the abject surrender of our telecommunications industry to foreigners, amounting to a clear abdication of the States
constitutional duty to limit control of public utilities to Filipino citizens. Such an interpretation certainly runs counter to the
constitutional provision reserving certain areas of investment to Filipino citizens, such as the exploitation of natural resources as well
as the ownership of land, educational institutions and advertising businesses. The Court should never open to foreign control what the
Constitution has expressly reserved to Filipinos for that would be a betrayal of the Constitution and of the national interest. The Court
must perform its solemn duty to defend and uphold the intent and letter of the Constitution to ensure, in the words of the Constitution,
a self-reliant and independent national economy effectively controlled by Filipinos.

Section 11, Article XII of the Constitution, like other provisions of the Constitution expressly reserving to Filipinos specific areas of
investment, such as the development of natural resources and ownership of land, educational institutions and advertising business,
is self-executing. There is no need for legislation to implement these self-executing provisions of the Constitution. The rationale why
these constitutional provisions are self-executing was explained in Manila Prince Hotel v. GSIS,66 thus:
x x x Hence, unless it is expressly provided that a legislative act is necessary to enforce a constitutional mandate, the
presumption now is that all provisions of the constitution are self-executing. If the constitutional provisions are treated as
requiring legislation instead of self-executing, the legislature would have the power to ignore and practically nullify the
mandate of the fundamental law. This can be cataclysmic. That is why the prevailing view is, as it has always been, that

. . . in case of doubt, the Constitution should be considered self-executing rather than non-self-executing. . . . Unless the
contrary is clearly intended, the provisions of the Constitution should be considered self-executing, as a contrary rule
would give the legislature discretion to determine when, or whether, they shall be effective. These provisions would be
subordinated to the will of the lawmaking body, which could make them entirely meaningless by simply refusing to pass the
needed implementing statute. (Emphasis supplied)

In Manila Prince Hotel, even the Dissenting Opinion of then Associate Justice Reynato S. Puno, later Chief Justice, agreed that
constitutional provisions are presumed to be self-executing. Justice Puno stated:

Courts as a rule consider the provisions of the Constitution as self-executing, rather than as requiring future legislation for
their enforcement. The reason is not difficult to discern. For if they are not treated as self-executing, the mandate of the
fundamental law ratified by the sovereign people can be easily ignored and nullified by Congress. Suffused with
wisdom of the ages is the unyielding rule that legislative actions may give breath to constitutional rights but
congressional inaction should not suffocate them.

Thus, we have treated as self-executing the provisions in the Bill of Rights on arrests, searches and seizures, the rights of a
person under custodial investigation, the rights of an accused, and the privilege against self-incrimination. It is recognized
that legislation is unnecessary to enable courts to effectuate constitutional provisions guaranteeing the fundamental rights of
life, liberty and the protection of property. The same treatment is accorded to constitutional provisions forbidding the taking
or damaging of property for public use without just compensation. (Emphasis supplied)

Thus, in numerous cases,67 this Court, even in the absence of implementing legislation, applied directly the provisions of the 1935,
1973 and 1987 Constitutions limiting land ownership to Filipinos. In Soriano v. Ong Hoo,68 this Court ruled:

x x x As the Constitution is silent as to the effects or consequences of a sale by a citizen of his land to an alien, and as both
the citizen and the alien have violated the law, none of them should have a recourse against the other, and it should only be
the State that should be allowed to intervene and determine what is to be done with the property subject of the violation. We
have said that what the State should do or could do in such matters is a matter of public policy, entirely beyond the scope of
judicial authority. (Dinglasan, et al. vs. Lee Bun Ting, et al., 6 G. R. No. L-5996, June 27, 1956.)While the legislature has
not definitely decided what policy should be followed in cases of violations against the constitutional prohibition,
courts of justice cannot go beyond by declaring the disposition to be null and void as violative of the Constitution.
x x x (Emphasis supplied)

To treat Section 11, Article XII of the Constitution as not self-executing would mean that since the 1935 Constitution, or over the last
75 years, not one of the constitutional provisions expressly reserving specific areas of investments to corporations, at least 60 percent
of the capital of which is owned by Filipinos, was enforceable. In short, the framers of the 1935, 1973 and 1987 Constitutions
miserably failed to effectively reserve to Filipinos specific areas of investment, like the operation by corporations of public utilities,
the exploitation by corporations of mineral resources, the ownership by corporations of real estate, and the ownership of educational
institutions. All the legislatures that convened since 1935 also miserably failed to enact legislations to implement these vital
constitutional provisions that determine who will effectively control the national economy, Filipinos or foreigners. This Court cannot
allow such an absurd interpretation of the Constitution.

This Court has held that the SEC has both regulatory and adjudicative functions.69 Under its regulatory functions, the SEC can be
compelled by mandamus to perform its statutory duty when it unlawfully neglects to perform the same. Under its adjudicative or
quasi-judicial functions, the SEC can be also be compelled by mandamus to hear and decide a possible violation of any law it
administers or enforces when it is mandated by law to investigate such violation.

Under Section 17(4)70 of the Corporation Code, the SEC has the regulatory function to reject or disapprove the Articles of
Incorporation of any corporation where the required percentage of ownership of the capital stock to be owned by citizens of the
Philippines has not been complied with as required by existing laws or the Constitution. Thus, the SEC is the government agency
tasked with the statutory duty to enforce the nationality requirement prescribed in Section 11, Article XII of the Constitution on the
ownership of public utilities. This Court, in a petition for declaratory relief that is treated as a petition for mandamus as in the present
case, can direct the SEC to perform its statutory duty under the law, a duty that the SEC has apparently unlawfully neglected to
do based on the 2010 GIS that respondent PLDT submitted to the SEC.
Under Section 5(m) of the Securities Regulation Code,71 the SEC is vested with the power and function to suspend or revoke, after
proper notice and hearing, the franchise or certificate of registration of corporations, partnerships or associations, upon any of
the grounds provided by law. The SEC is mandated under Section 5(d) of the same Code with the power and function to investigate
x x x the activities of persons to ensure compliance with the laws and regulations that SEC administers or enforces. The GIS that all
corporations are required to submit to SEC annually should put the SEC on guard against violations of the nationality requirement
prescribed in the Constitution and existing laws. This Court can compel the SEC, in a petition for declaratory relief that is treated as a
petition for mandamus as in the present case, to hear and decide a possible violation of Section 11, Article XII of the Constitution in
view of the ownership structure of PLDTs voting shares, as admitted by respondents and as stated in PLDTs 2010 GIS that PLDT
submitted to SEC.

WHEREFORE, we PARTLY GRANT the petition and rule that the term capital in Section 11, Article XII of the 1987 Constitution
refers only to shares of stock entitled to vote in the election of directors, and thus in the present case only to common shares, and not
to the total outstanding capital stock (common and non-voting preferred shares). Respondent Chairperson of the Securities and
Exchange Commission is DIRECTED to apply this definition of the term capital in determining the extent of allowable foreign
ownership in respondent Philippine Long Distance Telephone Company, and if there is a violation of Section 11, Article XII of the
Constitution, to impose the appropriate sanctions under the law.

SO ORDERED.

SECOND DIVISION

182. J. 7949 authorizing the City Mayor to acquire by expropriation. Patria R. JJ. In its Complaint. negotiation or by any other legal means the parcel of land co-owned by defendants. 196063 FE A.4 The Facts The present case originated from a complaint for eminent domain filed by respondent City of Manila against Remedios V. RAYOS-DELA PAZ.20 square meters. Teofila B. denying reconsideration of the trial courts Order of 11 March 2010 3 which denied the motion to dismiss filed by petitioners Orlando A. PEREZ. RAYOS. Sison.R. Reyes. Chairperson. G. captioned as a petition for review on certiorari and declaratory relief. No. December 14. 03108154.5 the City of Manila alleged that it passed Ordinance No. J. Leticia R. Laureano M.. docketed as Civil Case No.000. and ENGR.: The Case This petition. Rosalinda R. Fe A. BRION. The City of Manila offered to purchase the property atP1. represented by Present: DR.versus . and . Serrano.1 assails the Order of 6 January 20112 of the Regional Trial Court of Manila.ORLANDO A.00 per square meter. MANUEL A.REYES. . Rayos. ANTONIO A. Manuel A. Promulgated: Respondent. Paz B. Ventanilla. and Engr. Branch 49. 227512 and with an area of 1. Barrozo (defendants). which is covered by TCT No. RAYOS. Sison. SERENO. RAYOS. Rayos Dela Paz. CARPIO. De Caronongan. THE CITY OF MANILA. Rayos. Petitioners. 2011 x-----------------------------------------------------------------------------------------x R ES OLUTION CARPIO.

Laureano. Inc. SO ORDERED.00 per square meter which they claimed was the fair market value of the land at the time. On 7 December 2009. No appeal may be taken from: . namely. Labra7 and Jesus Is Lord Christian School Foundation. (1) Ordinance No. Fe A. Municipality (now City) of Pasig. Municipality (now City) of Pasig.000. An order denying a motion to dismiss is interlocutory and not appealable. the trial court denied the motion for reconsideration. the Motion to Dismiss cannot be granted. Rayos. Rayos. Subject of appeal. In the course of the proceedings. petitioners Orlando A. not appealable. The trial court ruled that the motion to dismiss did not show any compelling reason to convince the court that the doctrine of stare decisis applies. and Engr. As such. Rule 41 of the Rules of Court provides: SECTION 1. and in effect. continue with the trial for the determination of just compensation on July 7. allows the case to proceed until the final adjudication thereof by the court. Rayos filed a Motion to Dismiss on the grounds that (1) Ordinance No. Labra10 and Jesus Is Lord Christian School Foundation. died on 1 December 2003 and was substituted by his son petitioner Manuel A. one of the defendants.An appeal may be taken from a judgment or final order that completely disposes of the case.13 Section 1(c). petitioner OrlandoA. Meanwhile. In order to prevent further delay to the prejudice of all the proper parties in this case. the trial court denied the motion to dismiss. Rayos Dela Paz. 7949 is unconstitutional and (2) the cases of Lagcao v. On 11 March 2010. The trial court disposed of the motion to dismiss in this wise: In view of the foregoing. Rayos intervened while petitioner Fe A. Metro Manila11 apply squarely to this case. it is merely interlocutory in nature and thus. Inc. v. or of a particular matter therein when declared by these Rules to be appealable. and (2) the cases of Lacgaov. but at the price of P50. The Ruling of the Court We deny the petition. Petitioners failed to demonstrate how or why the facts in this case are similar with the cited cases in order that the issue in this case be resolved in the same manner. Rayos Dela Paz was added as a defendant. 2010 at one oclock in the afternoon. and after intense evaluation of the records on hand. .12 An order denying a motion to dismiss does not finally dispose of the case. Metro Manila8 apply squarely to the present case. Petitioners filed with this Court the present petition reiterating the arguments in their motion to dismiss. Manuel A.6 defendants conveyed their willingness to sell the property to the City of Manila.9 On 6 January 2011.In their Answer. 7949 is unconstitutional. v.

no appeal. Petitioners invoke the cases of Lagcao v. While this Court may treat a petition for declaratory relief as one for prohibition22 or mandamus. Clearly.16 citingPeople v. v. the Court of Appeals and the Regional Trial Courts exercise concurrent jurisdiction to issue writs of certiorari. clearly and specifically set out in the petition. xxx In all the above instances where the judgment or final order is not appealable. however. In this case. which is the proper remedy to challenge the order denying the motion to dismiss. Even if the Court treats the present petition as a petition for certiorari under Rule 65.15 In Heirs of Bertuldo Hinog v. to be taken as according to parties seeking any of the writs an absolute. Labra18 and Jesus Is Lord Christian School Foundation. assuming the present petition is one for declaratory relief. and not a petition for review on certiorari under Rule 45 of the Rules of Court. That hierarchy is determinative of the venue of appeals. This petitionersfailed to do. A becoming regard for that judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against first level (inferior) courts should be filed with the Regional Trial Court. 7949 without. 7949 is repugnant to the Constitution. and to prevent further over-crowding of the Courts docket.There is after all a hierarchy of courts. 24 . may be taken from an interlocutory order. 21 as can be gleaned from the caption of the petition. mandamus.17 the Court held: This Courts original jurisdiction to issue writs of certiorari is not exclusive. Petitioners merely rehashed the arguments in their motion to dismiss. petitioners should have filed a petition for certiorari under Rule 65 to assail such order. This is [an] established policy. and not directly with this Court. prohibition. This concurrence of jurisdiction is not.23 it must be stressed that this special treatment is undertaken only in cases with far reaching implications and transcendental issues that need to be resolved. Nor did petitioners specifically and sufficiently set forth any extraordinary and important reason to justify direct recourse to this Court. the immediate remedy available to the aggrieved party is to file a special civil action for certiorari under Rule 65 of the Rules of Court. since the trial courts order denying the motion to dismiss is not appealable. however. the same must be dismissed for violation of the principle of hierarchy of courts.xxx (c) An interlocutory order. the aggrieved party may file an appropriate special civil action under Rule 65. over which this Court exercises original jurisdiction. the present petition deserves outright dismissal.14 However. Indeed.) In short. showing clearly the applicability and similarity of those cases to the present controversy. Neither did petitioners explain why Ordinance No. to warrant a direct recourse to this Court. and those against the latter. A direct invocation of the Supreme Courts original jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor. In case of denial of an interlocutory order. such concurrence in jurisdiction does not give petitioners unbridled freedom of choice of court forum. It is shared by this Court with Regional Trial Courts and with the Court of Appeals. with the Court of Appeals. It is a policy necessary to prevent inordinate demands upon the Courts time and attention which are better devoted to those matters within its exclusive jurisdiction. petitioners must show exceptional and compelling reasons therefor. habeas corpusand injunction. unrestrained freedom of choice of the court to which application therefor will be directed. For being a wrong remedy. and also serves as a general determinant of the appropriate forum for petitions for the extraordinary writs. jurisdiction over such a petition. this Court. clearly and specifically set out in the petition. not original. Municipality (now City) of Pasig. This well-settled principle dictates that petitioners should file the petition for certiorari with the Court of Appeals. Metro Manila19 in challenging the constitutionality of Ordinance No. Cuaresma.20 Likewise. quo warranto. Melicor. (Emphasis supplied. which consist mainly of unsubstantiated allegations. under Rule 45 of the Rules of Court. Inc. this Court has only appellate.

WHEREFORE.R.In the present case. we DENY the petition. G. LEGASPI IV. and . No. 193247 EMILIO Y. there is absolutely nothing which shows that it has far-reaching implications and involves transcendental questions deserving of this Courts treatment of the petition as one for prohibition or mandamus. SECOND DIVISION SERGIO I. CARBONILLA. SO ORDERED.

. CONTINENTAL MICRONESIA AIRLINES. NORTHWEST AIRLINES. LTD.ADONAIS Y. CHINA SOUTHERN AIRLINES. SAUDI ARABIAN AIRLINES. JAPAN AIRLINES. ETIHAD AIRWAYS.. GULF AIR. Petitioners. ROYAL BRUNEI AIRLINES. KUWAIT AIRWAYS CORPORATION. .versus BOARD OF AIRLINES REPRESENTATIVES (MEMBER AIRLINES: ASIANA AIRLINES. PHILIPPINE AIRLINES. KOREAN AIR. SWISS INTERNATIONAL AIRLINES. LTD... AIR FRANCE-KLM ROYAL DUTCH AIRLINES. MALAYSIA AIRLINES. CHINA AIRLINES. EVA AIR AIRWAYS. QATAR AIRLINES. INC. FEDERAL EXPRESS CORPORATION. SINGAPORE AIRLINES. REJUSO. CEBU PACIFIC AIRLINES. QANTAS AIRWAYS. and THAI INTERNATIONAL AIRWAYS). CATHAY PACIFIC AIRWAYS. EMIRATES. LUFTHANSA GERMAN AIRLINES.

EMIRATES. CHINA SOUTHERN AIRLINES. A. SECRETARY OF FINANCE. PAQUITO N. x--------------------------------------x OFFICE OF THE PRESIDENT. CESAR V. No. Petitioners. CEBU PACIFIC AIRLINES.* in his capacity as EXECUTIVE SECRETARY. and represented by HON. PEREZ. Present: DEPARTMENT OF FINANCE. CARPIO.*** and THE BUREAU OF CUSTOMS. CONTINENTAL MICRONESIA AIRLINES. KOREAN AIR.R. G.versus BOARD OF AIRLINES REPRESENTATIVES (MEMBER AIRLINES: ASIANA AIRLINES.Respondents. ALVAREZ**** in his capacity as COMMISSIONER OF CUSTOMS. DEL CASTILLO. JJ. FEDERAL EXPRESS CORPORATION. represented by HON. KUWAIT AIRWAYS CORPORATION. J. 194276 represented by HON. PURISIMA** in his capacity as BRION. GULF AIR. Chairperson. . AIR FRANCE-KLM ROYAL DUTCH AIRLINES. CHINA AIRLINES. LUFTHANSA .. OCHOA. JAPAN AIRLINES. ANGELITO SERENO. EVA AIR AIRWAYS. CATHAY PACIFIC AIRWAYS. ETIHAD AIRWAYS.

: The Cases Before the Court are two petitions for review1 assailing the Decision2 promulgated on 9 July 2009 by the Court of Appeals in CA-G.. SINGAPORE AIRLINES.... Respondents. No.R.. In G. Carbonilla. September 14.. LTD.... are as follows: . and the Bureau of Customs (BOC). SAUDI ARABIAN AIRLINES.. et al.... Emilio Y.. Alvarez in his capacity as Commissioner of Customs (Office of the President. represented by Angelito A. SP No... represented by Cesar V. J. petitioners Office of the President. SP No..) assail the Resolution3 promulgated on 5 August 2010 by the Court of Appeals in CA-G... ROYAL BRUNEI AIRLINES..x DECISION CARPIO. and Adonais Y....R...... QATAR AIRLINES.R. 103250....... et al.. petitioners Sergio I.GERMAN AIRLINES. 103250. PHILIPPINE AIRLINES.... QANTAS AIRWAYS. SP No. and THAI INTERNATIONAL Promulgated: AIRWAYS).Purisima in his capacity as Secretary of Finance. MALAYSIA AIRLINES.... as gathered from the assailed Decision of the Court of Appeals.. NORTHWEST AIRLINES. 2011 x... Legaspi IV. In G. represented by Paquito N.. Department of Finance. INC. 194276. LTD.. 193247...). 103250..R. assail the Resolution4 promulgated on 26 October 2010 by the Court of Appeals in CA-G... Rejuso (Carbonilla. No. The Antecedent Facts The facts.R. SWISS INTERNATIONAL AIRLINES... Ochoa in his capacity as Executive Secretary.

Sec. De Leon. The Decision of the Office of the President In a Decision13 dated 12 March 2007.6 The Department of Finance7 approved CAO 1-2005 on 9 February 2006. Cruz (Cruz). alleged that for a period of more than two years from the creation of the committee. BOC-NAIA.The Bureau of Customs5 issued Customs Administrative Order No. BAR still requested for an audience with the Secretary of Finance which was granted on 12 October 2005. The BOC then sent a letter to BARs member airlines demanding payment of overtime services to BOC personnel in compliance with CAO 1-2005. On 13 December 2006. 18 dated 12 February 1987. the increase in the overtime rates became effective on 16 March 2005. BAR wrote a letter addressed to Edgardo L. the Acting District Collector of BOC informed BAR that the Secretary of Finance already approved CAO 1-2005 on 9 February 2005. Bonded Warehouse Division. the BOC created on 23 April 2002 a committee to review the overtime pay of Customs personnel in Ninoy Aquino International Airport (NAIA) and to propose its adjustment from the exchange rate of P25 to US$1 to the then exchange rate of P55 to US$1.11 Cruz requested the Office of the President and the Office of the Executive Secretary to review the decision of Usec. In a letter dated 3 March 2005. On the other hand. the appeal was filed out of time because BAR received the letter-decision of the Secretary of Finance on 4 September 2006 but it filed its appeal only on 4 December 2006. As such. In a letter dated 31 August 2006. informing the latter of its objection to the proposed increase in the overtime rates. BAR wrote the Secretary of Finance on 31 January 2005 and 21 February 2005 reiterating its concerns against the issuance of CAO 12005. Mendoza. several meetings were conducted with the agencies concerned. The BARs member airlines refused and manifested their intention to file a petition with the Commissioner of Customs and/or the Secretary of Finance to suspend the implementation of CAO 1-2005. Department of Finance informed BAR. The Office of the President further ruled that. much less to suspend its implementation or effectivity and that its implementation effective 16 March 2005 is legally proper. alleged that prior to the amendment of CAO 7-92. its validity and constitutionality may only be assailed through a direct action before the regular courts. On 23 August 2004. The Office of the President ruled that the BOC was merely exercising its rule-making or quasi-legislative power when it issued CAO 1-2005. that they find no valid ground to disturb the validity of CAO 1-2005. assuming that BARs recourse before the Office of the President was proper and in order. Cruz manifested the objection of the International Airlines operating in the Philippines to CAO 1-2005. BAR paid the appeal fee and submitted its appeal memorandum on 19 January 2007. Mendoza). CAO 7-92 and CAO 1-2005 were promulgated pursuant to Section 35068 in relation to Section 6089 of the Tariff and Customs Code of the Philippines (TCCP). (Usec. 1-2005 (CAO 1-2005) amending CAO 7-92. Chief. Gaite (Deputy Exec. including respondent Board of Airlines Representatives (BAR).10 Undersecretary Gaudencio A. Gaite) issued an Order12 requiring BAR to pay its appeal fee and submit an appeal memorandum within 15 days from notice. Legal and Revenue Operations Group. Mendoza. through its Chairman Felix J. BAR alleged that it learned of the proposed increase in the overtime rates only sometime in 2004 and only through unofficial reports. The Office of the President ruled that since CAO 1-2005 was issued in the exercise of BOCs rule-making or quasi-legislative power. The Office of the President. the Office of the President denied the appeal of BAR and affirmed the Decision of the Department of Finance. BAR further requested for a meeting to discuss the matter. . et al. In separate letters both dated 4 December 2006. et al. Jr. Petitioners Office of the President. to discuss the proposed rate adjustment that would be embodied in an Amendatory Customs Administrative Order. beyond the 30-day period provided under Administrative Order No. Deputy Executive Secretary Manuel B.

Gaite treated the letters of BAR as an appeal and required it to pay appeal fee and to submit an appeal memorandum. The Office of the President ruled that there is a legal presumption that the rates fixed by an administrative agency are reasonable. et al. the Court of Appeals held that BAR could not be faulted for not filing a case before the Court of Tax Appeals (CTA) because the Office of the President admitted that it preempted any action before the CTA. CAO 7-92 and CAO 1-2005 unenforceable against BAR. the Court of Appeals promulgated the assailed 9 July 2009 Decision which set aside the 12 March 2007 Decision and 14 March 2008 Resolution of the Office of the President and declared Section 3506 of the TCCP. The Court of Appeals ruled that Section 3506 of the TCCP only authorized payment of additional compensation for overtime work. The Court of Appeals ruled that Section 8. unless specifically authorized by law. and that the fixing of the rates by the Government. Sec. filed an Omnibus Motion to Intervene before the Court of Appeals on the ground that as customs personnel. also adopted the Comment filed by the Office of the Solicitor General (OSG). filed a motion for reconsideration of the 26 February 2009 resolution. Deputy Exec. BAR did not oppose the exchange rate used in CAO 7-92 which was the exchange rate at that time and thus. et al. the BOCNAIA Collection District found it strange that BAR was questioning the fixing of the adjusted pay rates which were lower than the rate provided under Section 3506 of the TCCP. and (3) that increase in rate was ill-timed. et al. (2) that the foreign exchange cannot be a basis for rate increase. Carbonilla. should pursue their case in a separate proceeding against the proper respondents. Petitioners Carbonilla. In its Resolution14 dated 14 March 2008. The Court of Appeals .s motion for reconsideration. namely. the payment of traveling and meal allowances under CAO 7-92 and CAO 1-2005 are unconstitutional and could not be enforced against BAR members. BAR filed a petition for review under Rule 45 before the Court of Appeals. Petitioners Carbonilla. The Court of Appeals further ruled that what the Office of the President treated as a decision of the Department of Finance was merely an advisory letter dated 31 August 2006 and to treat it as a decision from which an appeal could be taken and then rule that it was not perfected on time would deprive BAR of its right to due process. and thus. The Court of Appeals ruled that Carbonilla. The Court of Appeals ruled that the phrase other persons served did not provide for descriptive terms and conditions that might be completely understood by the BOC. Without resolving Carbonilla. were already deliberated during the meetings held between the BOC and the stakeholders and were also considered by the Secretary of Finance. The Office of the President further adopted the position of the BOC that several public hearings and consultations were conducted by the BOC-NAIA Collection District. which were in substantial compliance with Section 9. Book VII of the Administrative Code of 1987. the Office of the President denied BARs motion for reconsideration. The Decision of the Court of Appeals In its 26 February 2009 Resolution. et al. The Court of Appeals further ruled that it has the power to resolve the constitutional issue raised against CAO 7-92 and CAO 1-2005. double or indirect compensation. The Court of Appeals ruled that Section 3506 of the TCCP failed the completeness and sufficient standard tests to the extent that it attempted to cover BAR members through CAO 7-92 and CAO 1-2005. Ruling that it could take cognizance of BARs appeal. they would be directly affected by the outcome of the case. (1) the failure to comply with the publication requirement.The Office of the President also ruled that the grounds raised by BAR. The Court of Appeals ruled that the petition before it involved the resolution of whether the decision of the Office of the President was correctly rendered. through its authorized agents.15 the Court of Appeals denied the motion for intervention filed by Carbonilla. BAR filed a motion for reconsideration. et al. involved the exercise of reasonable discretion. The Court of Appeals held that the intervenors case was for collection of their unpaid overtime services and their interests could not be protected or addressed in the resolution of the case. Chapter I. et al. ArticleIX(B) of the Constitution prohibits an appointive public officer or employee from receiving additional.

194276. 2009 in denying petitioners intervention and motion for reconsideration dated August 3. No. In a Resolution promulgated on 26 October 2010. since the Court of Appeals 9 July 2009 Decision had not attained finality pending the resolution of the motion for reconsideration filed by the Office of the President. IV. as amended by CAO 1-2005. The Court of Appeals ruled that BAR unlawfully withheld the rightful overtime payment of BOC employees when it stopped paying its obligations under CAO 7-92. 2009. came to this Court via a petition for review. The Honorable Court of Appeals seriously erred in law in not ruling that estoppel and/or laches should have prevented the BAR from questioning CAO 1-2005.17 The Office of the President. in a Resolution promulgated on 12 May 2010. the appealed Decision dated March 12. III. filed a petition for review before this Court. Meanwhile. aircraft owners and operators should not have been lumped together with importers and shippers. the Court of Appeals granted BARs 26 May 2010 motion for reconsideration and denied the 28 July 2009 motion for reconsideration of the Office of the President. Declaring Section 3506 of the TCCP as well as CAO 7-92 and CAO 1-2005 to be unenforceable as against the petitioners. docketed as G. 2008 are hereby SET ASIDE. The Court of Appeals also ruled that Section 3506 of the TCCP failed the sufficient standard test because it does not contain adequate guidelines or limitations needed to map out the boundaries of the delegates authority. et al. No. raising the following grounds: . et al. The Honorable Court of Appeals seriously erred in law in ruling that the Court of Tax Appeals did not have jurisdiction on the subject controversy.ruled that devoid of common distinguishable characteristic. on the following grounds: I. 2007 and Resolution dated March 14. In its 5 August 2010 Resolution. 193247. the petition is GRANTED. et al.R. The dispositive portion of the Court of Appeals Decision reads: WHEREFORE. the Court of Appeals. also filed a motion for reconsideration dated 28 July 2009 assailing the 9 July 2009 Decision of the Court of Appeals. among others. denied Carbonilla.s motion for reconsideration. The Office of the President. Carbonilla. filed their motion for reconsideration of the 9 July 2009 Decision.16 Petitioners Carbonilla. SO ORDERED. The Honorable Court of Appeals seriously erred in law in ruling that CAO 7-92 as amended by CAO 1-2005 as well as Section 3506 of the TCCP are not enforceable against BARs members.18 the Court of Appeals directed BAR to continue complying with the 12 March 2007 Decision of the Office of the President. BAR filed a motion for reconsideration dated 26 May 2010 for the reversal of the 12 May 2010 Resolution of the Court of Appeals. V. et al. The Honorable Court of Appeals seriously erred in law in ruling that Section 3506 of the TCCP failed the completeness and sufficient standard tests. The Honorable Court of Appeals seriously erred in law in issuing the decision dated July 9. et al. docketed as G. II. et al.R. et al.

Said law and its implementing regulations neither constitute undue delegation of legislative power nor authorize overpayment of BOC personnel. invalid. 1-2005 is invalid as the increased overtime pay rates and meal and transportation allowances fixed therein are unreasonable and confiscatory. II. 1-2005 and CAO No. IV. III. 19 The Issues For resolution in these cases are the following issues: 1. Respondents BAR and its member airlines are guilty of laches and estoppel and thus are effectively barred from questioning the authority of the Commissioner of Customs to promulgate pursuant to Section 608 in relation to Section 3506 of the Tariff and Customs Code (TCCP). Some of respondents BAR member airlines country managers who executed the verification and certification of non-forum shopping of their petition for review did not have the necessary authorization of the said member airlines for them to execute the same. Granting arguendo that the Court of Appeals has jurisdiction over the said issues raised by the BAR and its member airlines. to wit: 1. I.I. Administrative procedural due process was observed in the promulgation by the Commissioner of Customs of the questioned CAO No. 2. These issues involve the validity and collection of money charges authorized by the Customs Law and thus the Court of Tax Appeals (CTA) has exclusive jurisdiction thereof. 1-2005. . 3. not only CAO No. 7-92. Whether the Court of Appeals has jurisdiction over BARs petition. 1-2005. functions and responsibilities is legally impermissible and. 3. Whether the Court of Appeals committed a reversible error in denying the intervention of Carbonilla. Whether BARs appeal before the Office of the President was filed on time. the Court of Appeals should have dismissed their petition for review filed under Rule 45 of the Rules of Court on the following grounds: 1. et al. BARs appeal to the Office of the President questioning the 31 August 2006 Decision of the Department of Finance (DOF). and 4. CAO No. CAO No. The Court of Appeals erred in going beyond the issues raised by respondents BAR and its member airlines not only in the pleadings filed by them in the proceedings below but also in their petition for review. A petition for review under Ruled 43 of the Rules of Court cannot be filed to question the quasi-legislative or rule-making power of the Commissioner of Customs. 2. but also CAO No. The act of the Bureau of Customs charging and/or collecting from BARs member airlines the cost of the overtime pay and meal and transportation allowances of Bureau of Customs (BOC) personnel in connection with the discharge of their government duties. and 2. Whether the officers of some of BARs member airlines who executed the verification and certification of non-forum shopping have the necessary authorization to execute them. therefore. 7-92 are valid. The Court of Appeals erred in giving due course to respondents BAR and its member airlines petition for review because it had no jurisdiction over the issues raised therein by respondents. 4. 1-2005 is valid. as amended. finding that CAO No. Section 3506 of the TCCP.. was filed out of time.

A person who has a legal interest in the matter in litigation. and Whether the Court of Appeals committed a reversible error in declaring Section 3506 of the TCCP. 7. et al. Movants-Intervenors urgently need their respective [differential]/back payments representing overtime services rendered from 16 March 2005 to the present pursuant to the implementation of CAO No. et al.R. herein movants-intervenors were stripped of their respective overtime duties by the District Collector of Customs at NAIA for reasons only known to the latter. . Movant-Intervenor Carbonilla has retired from government service last September 2007 without his being paid the additional rates set by CAO No. with leave of court.5. 8. No. the Court of Appeals denied Carbonilla. 193247 On the matter of the intervention of Carbonilla. 2005 or for all the time material to the issue in this case. No. and CAO 1-2005 unenforceable against BAR. Intervention is not a matter of right but it may be permitted by the courts when the applicant shows facts which satisfy the requirements authorizing intervention.22 Clearly. . 6. 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.R. The said movants-intervenors all held offices or were stationed at the Ninoy Aquino International Airport [NAIA] and who have all been rendering overtime services thereat for so many years. Carbonilla. Whether BAR was guilty of laches and/or estoppel. 1-2005 which became effective on March 16. A reading of the Carbonilla. Section 1. 5. 1-2005 would be of great help to the movantsintervenors considering that as of 24 January 2008.. Rule 19 of the 1997 Rules of Civil Procedure provides: Section 1. or an interest against both. and whether or not the intervenors rights may be fully protected in a separate proceeding. The full implementation of CAO No. 6.R. Hence.s Omnibus Motion21 supports the ground invoked by the Court of Appeals in denying the motion. Who may intervene. it is noteworthy to mention that all the movants-intervenors all rendered overtime services since March 16. The Omnibus Motion states: 3. No. 194276 is meritorious. be allowed to intervene in the action. CAO 7-92. No. The effectivity and implementation of the said CAO No.s motion for intervention in its 26 February 2009 Resolution on the ground that the case was for collection of unpaid overtime services and thus should be pursued in a separate proceeding against the proper respondents. 193247 has no merit while the petition in G. 2007. Thus. 1-2005 is the main issue in this case. The Ruling of this Court The petition in G. Said differential/back payments pursuant to CAO No. the Court of Appeals correctly denied the motion for intervention. 1-2005. or in the success of either of the parties. 193247. 1-2005 would not only benefit the cause and financial needs of herein movants-intervenors but also that of the other 900 or so employees of the Bureau of Customs-NAIA who are rendering overtime services thereat up to the present.20 In G. were really after the payment of their differential or back payments for services rendered. The court shall consider whether or not the intervention will unduly delay or prejudice the adjudication of the rights of the original parties.R. et al. 4. et al. Intervention in G.

Sec. The jurisdiction of the Court of Appeals over BARs petition stems from Section 1 in relation to Section 3.23 The permissive tenor of the Rules of Court shows the intention to give the courts the full measure of discretion in allowing or disallowing the intervention. admitted in their petition that their motion for reconsideration of the 26 February 2009 Resolution of the Court of Appeals had been denied in open court during the oral arguments held by the Court of Appeals on 16 December 2009. may be taken to the Court of Appeals.It should be stressed that the allowance or disallowance of a motion for intervention is addressed to the sound discretion of the courts. et al. The Court of Appeals held that Deputy Exec.26 Carbonilla. final orders or resolutions of or authorized by any quasi-judicial agency in the exercise of its quasi judicial functions[. did not act on the denial of this motion but only pursued their motion for reconsideration of the 9 July 2009 Decision of the Court of Appeals. Sec.24 Once the courts have exercised this discretion. The exercise by the Court of Appeals of its appellate jurisdiction over the decision of the Office of the President is entirely distinct from the issue of whether BAR committed a procedural error in elevating the case before the Office of the President instead of filing its appeal before the CTA. As noted by the Court of Appeals. 194276. et al. et al. Gaite stopped BAR from pursuing any recourse with the CTA.25 Carbonilla. argue that the Court of Appeals should have denied BARs petition because it had no jurisdiction over the issues raised. 194276. In addition. the Office of the President took cognizance of Cruzs letter dated 4 December 2006 requesting for a review of the 31 August 2006 letter of Usec. involving the validity and collection of money charges authorized by Customs Law. et al. Hence. which are under the jurisdiction of the CTA. No. Timeliness of the Appeal before the Office of the President The Court of Appeals ruled that the question of whether BARs appeal before the Office of the President was filed on time was rendered academic when BAR paid the appeal fee and submitted its appeal memorandum on time.R. We do not agree. BARs only recourse is to file a petition for review before the Court of Appeals under Rule 43 of the 1997 Rules on Civil Procedure. Thereafter. the Office of the President issued its 12 March 2007 Decision affirming the decision of the Department of Finance and then denied BARs motion for reconsideration in its 14 March 2008 Resolution. to intervene. The Court of Appeals further ruled that the Office of the President did not explain how the 31 August 2006 letter of Usec. et al. Jurisdiction of the Court of Appeals The Office of the President. after its perfection. We now discuss the issues raised in G. Carbonilla. Rule 43 of the 1997 Rules of Civil Procedure which states that appeals from awards. failed to show that the Court of Appeals rendered its resolution in an arbitrary or capricious manner. Mendoza became a decision of the Secretary of Finance when it was only an advisory letter.R.s motion for intervention had already attained finality. The Court of Appeals ruled that the 13 December 2006 Order of Deputy Exec. No. Gaite required BAR to pay the appeal fee and submit its appeal memorandum. that the appeal was not filed on time. we see no reason to rule on the other issues they raise unless raised in G. BARs petition for review to the Court of Appeals from the 12 March 2007 Decision and 14 March 2008 Resolution of the Office of the President falls within the jurisdiction of the Court of Appeals. Deputy Exec. it could not be reviewed by certiorari or controlled by mandamus unless it could be shown that the discretion was exercised in an arbitrary or capricious manner. Sec. the denial of Carbonilla. et al. Mendoza. . Gaite could not validly require BAR to perfect its appeal in his 13 December 2006 Order and then rule.] which includes the Office of the President. judgments. Having ruled against the right of Carbonilla.

the Collector renders a decision adverse to the Government. resolution or order complained of or appealed from. 18. If the Collectors decision is reversed by the Commissioner. Under Section 11 of RA 9282. Decisions of the Commissioner of Customs in vases involving liability for customs duties. of the Tariff and Customs Code of the Philippines x x x.We do not agree with the Court of Appeals. the same shall be deemed dismissed. within fifteen (15) days after notification on writing by the Collector of his action or decision. in relation to Section 3506. 928228 (RA 9282) which reads: Section 7. such decision shall automatically be reviewed by the Commissioner and the records of the case shall be elevated within five (5) days from the promulgation of the decision of the Collector. 1937 (RA 1937)29 provides: Section 2313. However. Provided. However. fines forfeitures or other penalties in relation thereto. The Office of the President is not precluded from issuing the assailed decision in the same way that this Court is not proscribed from accepting a petition before it. Eduardo Ermita are not in the nature of an appeal provided for under Administrative Order No. The Commissioner shall render a decision on the automatic appeal within thirty (30) days from receipts of the records of the case. Jurisdiction. seizure. Mendozas 31 August 2006 letter. The decision of the Office of the President did not foreclose BARs remedy to bring the matter to the regular courts. was exhausting its administrative remedies. Section 3 mentions pauper litigants. as what BAR asked the Office of the President to do in this case. and addresses of the parties. Sec. requiring the payment of docket fees. Cruzs 4 December 2006 letters to then President Gloria Macapagal Arroyo and then Exec. However. the appeal provided under AO 18 refers to adversarial cases. or if within thirty (30) days from . instead of filing an appeal before its office. Section 2313. BAR could still go to the regular courts after the Office of the President acted on its request for a review of Usec. Book II of Republic Act No.The person aggrieved by the decision or action of the Collector in any matter presented upon protest or by his action in any case of seizure may. detention or release of property affected. In sum. if the Collectors decision is affirmed. fees and other money charges. in writing the Office of the President. Review of Commissioner. CAO 1-2005 is an amendment to CAO 7-92. If in any seizure proceedings.27 Section 1 of AO 18 provides that an appeal to the Office of the President shall be taken within 30 days from receipt by the aggrieved party of the decision. and after studying the case. BAR. should have filed an appeal before the CTA in accordance with Section 7 of Republic Act No. . or other matters arising under the Customs Law or other laws administered by the Bureau of Customs. It does not refer to a review of administrative rules and regulations. modify or reverse the action or decision of the Collector and take such steps and make such orders as may be necessary to give effect to his decision. On this score. Section 2 of AO 18 cites caption. CAO 7-92 was issued [b]y authority of Section 608. who shall approve. we do not agree with the Office of the President that BAR. an appeal to the CTA should be taken within 30 days from receipt of the assailed decision or ruling. BAR is assailing the issuance and implementation of CAO 1-2005. directing the respondent to comment on the petition. to review by appeal. file a written notice to the Collector with a copy furnished to the Commissioner of his intention to appeal the action or decision of the Collector to the Commissioner. the decision of the Commissioner shall be final and executory. as herein provided: xxxx 4.The CTA shall exercise: (a) Exclusive appellate jurisdiction. series of 1987 (AO 18). docket number of the case as presented in the office of origin. from ruling that the petition was filed out of time or that it lacks merit. Thereupon the Collector shall forthwith transmit all the records of the proceedings to the Commissioner. . That when an appeal is filed beyond the period herein prescribed.

allege that the Court of Appeals should have dismissed the petition because of BARs failure to comply fully with the requirements of verification and certification of non-forum shopping.33 This is in line with the principle that cases should be decided only after giving all parties the chance to argue their causes and defenses. 7-92 (Rules and Regulations Governing the Overtime Pay and Other Compensations Related Thereto Due to Customs Personnel at the NAIA). further.35 .32 As regards the certification of non-forum shopping. the Office of the President erred in holding that BARs appeal was filed late because BAR can still raise the issue before the regular courts. or if within thirty (30) days from receipt of the records of the proceedings by the Secretary of Finance. subject to the approval of the Secretary of Finance. That if the decision of the Commissioner or of the Collector under appeal.34 Technicality and procedural imperfections should not serve as basis of decisions and should not be used to defeat the substantive rights of the other party. or of the Commissioner. including seeking an audience with the Secretary of Finance. xxxx Section 2402 of RA 1937 further provides: Section 2402. We agree with the Court of Appeals in its liberal interpretation of the Rules. is affirmed by the Secretary of Finance. as the case may be. Hence. CAO 1-2005 was issued pursuant to Section 608 of the TCCP which provides: Section 608. that is.31 The requirement is simply a condition affecting the form of the pleading and non-compliance with the requirement does not render the pleading fatally defective. Review by Court of Appeals. BARs actions. Provided. no decision is rendered. this Court may relax the rigid application of the rules to afford the parties the opportunity to fully ventilate their cases on the merits.receipt of the record of the case by the Commissioner no decision is rendered of the decision involves imported articles whose published value is five million pesos (P5. as the case may be. . It is not within the jurisdiction of the Office of the President or the CTA. Commissioner to Make Rules and Regulations. as the case may be.The Commissioner shall. requirement. Verification of a pleading is a formal. which is not the subject of BARs appeal in these cases. of CAO 1-2005. the decision of the Secretary of Finance. shall become final and executory. what is appealable to the CTA are cases involving protest or seizure. promulgate all rules and regulations necessary to enforce the provisions of this Code. or of the Collector under appeal. in the manner and within the period prescribed by law and regulations. are part of the administrative process to question the validity of the issuance of an administrative regulation.000. x x x The jurisdiction over the validity and constitutionality of rules and regulations issued by the Commissioner under Section 608 of the TCCP lies before the regular courts. et al. .000) or more. not jurisdictional. such decision shall be deemed automatically appealed to the Secretary of Finance and the records of the proceedings shall be elevated within five (5) days from the promulgation of the decision of the Commissioner or of the Collector under appeal. entitled Amendments to Customs Administrative Order No.The party aggrieved by a ruling of the Commissioner in any matter brought before him upon protest or by his action or ruling in any case of seizure may appeal to the Court of Tax Appeals. 30 as well as writing to the Executive Secretary and the Office of the President. Clearly. Verification and Certification of Non-Forum Shopping The Office of the President.

Book VII. Rule 51 of the 1997 Rules of Civil Procedure also states: Section 8. BAR is questioning the validity of CAO 1-2005 on the following grounds: (1) that it was approved in violation of BARs right to due process because its approval did not comply with the required publication notice under Section 9(2). Iraqi war. Even during the pendency of these cases before the Court of Appeals. Questions that may be decided. will be considered unless stated in the assignment of errors. Chapter I.No error which does not affect the jurisdiction over the subject matter or the validity of the judgment appealed from or the proceedings therein. argue that a direct attack of CAO 1-2005 is a collateral attack of CAO 792 since CAO 7-92 is the main administrative regulation enacted to implement Section 3506 of the TCCP. Constitutionality of CAO 7-92. The Court has ruled that the Court of Appeals is imbued with sufficient authority and discretion to review matters. Article VII of the 1987 Constitution. BAR members continued to pay the rates prescribed under CAO 792. of the Administrative Code of the Philippines. Section 8. avian flu and the unprecedented increase in fuel prices. et al. or closely related to or dependent on an assigned error and properly argued in the brief.Estoppel and Laches The Office of the President. et al. in the exercise of sound discretion. while it is true that the issue of constitutionality must be raised at the first opportunity. . BAR is not questioning the validity of CAO 7-92 or Section 3506 of the TCCP. not otherwise assigned as errors on appeal. allege that BAR is guilty of estoppel and laches because it did not question CAO 7-92 which had been in effect since 1992.S. save as the court may pass upon plain errors and clerical errors. We do not agree with the Office of the President. Hence. if it finds that their consideration is necessary in arriving at a complete and just resolution of the case or to serve the interests of justice or to avoid dispensing piecemeal justice. It was only upon the promulgation of the Court of Appeals Decision declaring CAO 7-92 and CAO 1-2005 unconstitutional that BAR recommended to its members to stop paying the charges imposed by the BOC. (2) that CAO 12005 inappropriately based its justification on the declining value of the Philippine peso versus the U. can take cognizance of the constitutional issues raised by the parties in accordance with Section 5(2)(a).36 Further. et al. BAR is not estopped from questioning CAO 1-2005 on the ground alone that it did not question the validity of CAO 7-92. The argument has no merit. BAR did not question the validity of CAO 7-92 itself. allege that the Court of Appeals acted beyond its jurisdiction when it passed upon the validity of CAO 7-92 and Section 3506 of the TCCP.37 . CAO 1-2005 and Section 3506 of the TCCP The Office of the President. dollar when services of the BOC are rendered without spending any foreign currency. The Court of Appeals deemed it necessary to rule on the issue for the proper determination of these cases. et al. and (3) that the increase in BOC rates aggravates the already high operating cost paid by the airlines which are still reeling from the impact of consecutive negative events such as SARS. this Court. BARs objection to CAO 1-2005 could not be considered a direct attack on CAO 7-92 because BAR was merely objecting to the amendments to CAO 7-92. The Office of the President.

and (3) the airline companies which are expected to pass on the overtime pay to passengers. . and operators are among other persons served by the BOC employees. that is. BOC employees who serve beyond the regular office hours are entitled to overtime pay for the services they render. and it provides that the payments shall be made by the importers. The term other persons served refers to all other persons served by the BOC employees. BOC employees rendering overtime services are not receiving double compensation for the overtime pay. Clearly. the law must be complete in all its terms and conditions when it leaves the legislature such that when it reaches the delegate. would lapse into constitutionality by the mere failure of the proper party to promptly file a case to challenge the same. The overtime pay. Section 3506 provides that the rates shall not be less than that prescribed by law to be paid to employees of private enterprise. Contrary to the ruling of the Court of Appeals. the only thing he will have to do is to enforce it. We do not agree with the Court of Appeals in excluding airline companies. travel and meal allowances provided for under CAO 7-92 and CAO 1-2005. the processing of embarking and disembarking from aircrafts of passengers. even those who do not travel abroad will shoulder the payment of the overtime pay. one who engages the services of a carrier of goods. and operators are among the persons served by the BOC under Section 3506 of the TCCP. travel and meal allowances are payment for additional work rendered after regular office hours and do not constitute double compensation prohibited under Section 8. only those who benefit from the overtime services will pay for the services rendered. aircraft owners. Section 3506 of the TCCP complied with these requirements. That the question of constitutionality has not been raised before is not a valid reason for refusing to allow it to be raised later. airline companies. the party assailing the regulation must show that the question of constitutionality has been raised at the earliest opportunity. aircraft owners. The Court of Appeals ruled that. Here.39 The second test requires adequate guidelines or limitations in the law to determine the boundaries of the delegates authority and prevent the delegation from running riot. A contrary rule would mean that a law. Article IX(B) of the 1987 Constitution41 as they are in fact authorized by law or Section 3506 of the TCCP. However. applying the principle of ejusdem generis. . shippers or other persons served.The Court has further ruled: When an administrative regulation is attacked for being unconstitutional or invalid. as well as their baggages and cargoes. otherwise unconstitutional. one who tenders goods to a carrier for transportation. aircraft owners. Such determination by Congress is not subject to judicial review. This is a policy decision on the part of Congress that is within its discretion to determine. aircraft owners. airline passengers pass through the BOC to declare whether they are bringing goods that need to be taxed. Airline companies. forms part of the BOC functions. and operators are not in the same category as importers and shippers because an importer brings goods to the country from a foreign country and pays custom duties while a shipper is one who ships goods to another. The rates to be fixed shall not be less than that prescribed by law to be paid to employees of private enterprise. The passengers cannot leave the airport of entry without going through the BOC.Customs employees may be assigned by a Collector to do overtime work at rates fixed by the Commissioner of Customs when the service rendered is to be paid by the importers. shippers or other persons served. Section 3506 also fixed the standard to be followed by the Commissioner of Customs when it provides that the rates shall not be less than that prescribed by law to be paid to employees of private enterprise. If the overtime pay is taken from all taxpayers. For the Court to exercise its power of judicial review. The law is complete in itself that it leaves nothing more for the BOC to do: it gives authority to the Collector to assign customs employees to do overtime work. a party may raise its unconstitutionality or invalidity on every occasion that the regulation is being enforced. This requisite should not be taken to mean that the question of constitutionality must be raised immediately after the execution of the state action complained of. airline companies. the airline companies. If the overtime pay is taken directly from the passengers or from the airline companies. Assignment of Customs Employees to Overtime Work. the Commissioner of Customs fixes the rates. Congress deemed it proper that the payment of overtime services shall be shouldered by the other persons served by the BOC. and operators from the coverage of Section 3506 of the TCCP. The overtime pay of BOC employees may be paid by any of the following: (1) all the taxpayers in the country.40 Contrary to the ruling of the Court of Appeals. We do not agree with the Court of Appeals that Section 3506 of the TCCP failed the completeness and sufficient standard tests. As pointed out by the OSG. 38 Section 3506 of the TCCP provides: Section 3506. Under the first test. (2) the airline passengers.

The BOC created a committee to re-evaluate the proposed increase in the rate of overtime pay and for two years. No. or 15 days after its publication.. we DENY the petition in G. Chairperson. Chapter I. SECOND DIVISION MANILA INTERNATIONAL AIRPORT AUTHORITY. several meetings were conducted with the agencies concerned to discuss the proposal. as far as practicable.R. Petitioner. No. Section 9(2) provides: Sec. an agency shall. .(1) If not otherwise required by law. the BOC-NAIA still deferred BARs compliance until 16 March 2005. 185535 Present: CARPIO. WHEREFORE.BAR raises the alleged failure of BOC to publish the required notice of public hearing and to conduct public hearings to give all parties the opportunity to be heard prior to the issuance of CAO 1-2005 as required under Section 9(2). SP No. a newspaper of general circulation in the Philippines on 18 February 200542 and while it was supposed to take effect on 5 March 2005. Public Participation. (3) In cases of opposition. BARs argument has no merit. Petitioner Bureau of Customs is DIRECTED to implement CAO 1-2005 immediately. No. SO ORDERED. . Book VII of the Administrative Code of the Philippines. J. G. (2) In the fixing of rates. the rules on contested cases shall be observed.R. 194276 and SET ASIDE the 9 July 2009 Decision and 26 October 2010 Resolution of the Court of Appeals in CA-G. We GRANT the petition in G. BAR and the Airline Operators Council participated in these meetings and discussions.R. 193247. BAR cannot claim that it was denied due process in the imposition of the increase of the overtime rate. CAO 1-2005 was published in the Manila Standard. NACHURA. 103250. no rule or final order shall be valid unless the proposed rates shall have been published in a newspaper of general circulation at least two (2) weeks before the first hearing thereon. 9. Hence. publish or circulate notices of proposed rules and afford interested parties the opportunity to submit their views prior to the adoption of any rule.R.

618 square meter parcel of land located along the MIAA Road in Pasay City from its owner. Still. the trial court dismissed the case.: This is a petition for review on certiorari under Rule 45 filed by the Manila International Airport Authority (MIAA) seeking to reverse and set aside the June 16. SP No. 2005. Before the expiration of the lease sometime in 1993.[9] Among the remaining occupants were respondents Calixto E.[5] Thereafter. granting MIAAs motion to correct a clerical error and granting the motion for the issuance of a writ of execution. 2011 X ---------------------------------------------------------------------------------------X DECISION MENDOZA. Reymundo Avila (Avila). 2008 Decision [2] of the Court of Appeals (CA) in CA-G. 2006. and SPS. They further stated that the subject premises had already been set aside as a government housing project by virtue of Presidential Proclamation No. 2006[3] and the November 13. The RTC Sheriff partially succeeded in evicting the Estate. On February 18. and MENDOZA. Branch 47 (MeTC). [10] In essence. The Estate. 64-04-CFM. Unheeded.On September 20. MIAA sent letters of demand to the heirs asking them to vacate the subject land. it appears that in June 1968. the RTC granted the motion to quash filed by the remaining occupants. in Civil Case No.[7] the RTC gave due course to the appeal and affirmed the MeTC decision in toto.. Tarrosa appealed before the CA but to no avail. When Tarrosa passed away. 1998. J. The Estate then filed a motion for reconsideration while MIAA sought the correction of a clerical error in the MeTC decision as well as the issuance of a writ of execution. all of them interposed that they were not covered by the writ of execution because they did not derive their rights from the Estate since they entered the subject premises only after the expiration of the lease contract between MIAA and Tarrosa. through Balilo. where it was docketed as Civil Case No. MIAA instituted an ejectment suit against the Estate of Tarrosa(Estate) before the Metropolitan Trial Court of Pasay City. . 97536 which annulled the August 7. a notice to vacate was served on the occupants of the subject premises. who filed separate special appearances with motions to quash the writ of execution. Branch 117 (RTC). JJ. the late Tereso Tarrosa (Tarrosa) leased a 4. he was substituted by his estate represented by his heirs attorney-in-fact. Tarrosa filed a case against MIAA to allow him to exercise his pre-emptive right to renew the lease contract. On June 9. Aguirre (Aguirre). the MeTC rendered its decision [6]ordering the Estate and all persons claiming rights under it to vacate the premises. others remained in the premises. docketed as Civil Case No. PERALTA. appealed the case to the RTC. Annie Balilo (Balilo). the RTC issued an omnibus order [8] denying the Estates motion for reconsideration. including Avila and the Quilangs. 595). attorneys fees and costs of suit. 2005 Decision.versus - REYNALDO (REYMUNDO[1]) AVILA. 2005. 05-0399-CFM. Respondents. 05-0399-CFM. ABAD. Finding that Tarrosa violated certain provisions of its contract with MIAA. the CA decision became final and executory.[11] On May 5. Promulgated: January 31. From the records. In its July 22. CALIXTO AGUIRRE. On the strength of the writ of execution issued by the RTC. Balilo and some other occupants. MIAA. peacefully return possession thereof to MIAA and pay rentals. and spouses Rolando and Angelita Quilang (Quilangs).R. ROLANDO and ANGELITA QUILANG. 2006 [4] Resolutions of the Regional Trial Court of Pasay City. 595 (Proclamation No.

(underscoring supplied)[13] On August 7. Therefore. Relatedly. Calixto Aguirre will not qualify as beneficiary under Republic Act 7279. under the supervision of the Housing and Urban Development Coordinating Council (HUDCC) and in . Gingoyon). 595 because the mandate to determine the same rested with the National Housing Authority (NHA). and also utilizing the property for rent. namely: Mr. is occupying more or less 500 square meters and the same is actually use[d] as an apartment for lease/ rent. however. 2006 and November 13. REYNALDO (REYMUNDO) AVILA. is more or less 1. the RTC denied the motion to quash filed by Aguirre. It is important to emphasize at this juncture that during the ocular inspection conducted by this court (Thru Presiding Judge. In its August 7. from the very nature of the utilization of the property the same is beyond doubt not covered and the same is contrary to the letter and spirit of the aforementioned Presidential Proclamation No. As provided in said Proclamation No. its finding that they were not qualified beneficiaries under Proclamation No. Let the corresponding Writ of Execution against the afore-mentioned persons be issued. ROLANDO QUILANG AND ANGELITA QUILANG. ROMEO CAGAS AND JEANNETE LOPEZ are tenants of Calixto Aguirre. Calixto Aguirre.000 square meters.On August 4. Sps. the result of the ocular inspection revealed that some of the 28 Oppositors. from the very nature of the utilization of the property the same is beyond doubt not covered and the same is contrary to the letter and spirit of the aforementioned Presidential Proclamation No. 2008. premises considered. the area alone possessed by Mr. Thus. JEANETTE LOPEZ. the CA rendered the subject decision annulling the RTC resolutions dated August 7. the National Housing Authority (NHA). SPS. 2006. Henrick F. Rolando and Angelita Quilang will not qualify as beneficiaries under Republic Act 7279. WHEREFORE. the Order dated May 5. premises considered. records reveal that the area occupied by Mr. citing the provision of the law pertaining to qualified occupants or beneficiaries who can avail of the privilege. In its August 4.Thus. REYMUNDO AVILA. Aguirre. (underscoring supplied)[14] The above findings were reiterated in the assailed RTCs Joint Resolution dated November 13. a similar finding was made with regard to Avila and the Quilangs when the RTC resolved MIAAs motion for reconsideration. Calixto Aguirre. 2006 which denied the separate motions for reconsideration of the respondents. 595. On account of this. On June 16. 595 in relation to Republic Act 7279. the said occupancy is not covered under Republic Act 7279 in order to be considered qualified beneficiaries. Thus. 2006 Resolution. 595. According to the CA. are using the property subject to this case not as family dwelling but rather utilized as business establishments. SO ORDERED. 2006 is hereby MODIFIED in so far as Oppositors REYNALDO (REYMUNDO) AVILA. SO ORDERED. records reveal that the area occupied by Mr. ROMEO CAGAS AND JEANETTE LOPEZ are concerned. the area as shown in the result of the ocular inspection is used by them as business establishment and in fact some of them were even subject for lease. 595 in relation to the provision of Republic Act 7279 is unwarranted under the circumstances.[12] the RTC stated: It is important to emphasize at this juncture that during the ocular inspection conducted by this court (Thru Presiding Judge. Gingoyon). therefore that the Writ of Execution cannot be implemented against the afore-named persons on the ground that they are qualified beneficiaries under Presidential Proclamation No. Reynaldo (Reymundo) Avila. Moreover. Thus: X x x. Calixto Aguirre is hereby DENIED for lack of merit. Calixto Aguirre as business establishment and in fact some of them were even subject for lease. 2006. ROLANDO AND ANGELITA QUILANG. Therefore. the area alone possessed by Mr. the instant Motion to Quash Writ of Execution and Set Aside Judgment filed by Mr. there was a grave abuse of discretion on the part of the RTC in ruling that respondents could not invoke Proclamation No. Avila and the Quilangs went to the CA on certiorari questioning the propriety of the RTCs disposition. the RTC likewise wrote: Unfortunately. as he claimed. Sps. WHEREFORE. 2006 Resolution. citing the provision of the law pertaining to qualified occupants or beneficiaries who can avail of the privilege. more particularly. is occupying the premises by virtue of the rights vested by their father. 595. ROMEO CAGAS. Moreover. 2006. Sps. Henrick F. ROLANDO QUILANG and ANGELITA QUILANG. the result of the ocular inspection revealed that the area is used by Mr.

Eventually. This doctrine is but a necessary . 96477. [19] Respondents Aguirre. came to this Court via a petition for review but it was summarily denied for having been filed out of time and for their failure to show any reversible error on the part of the CA. 2008 CA Decision. MIAA also went to the CA on certiorari questioning the RTCs grant of another motion to quash its writ of execution filed by other remaining occupants. 2006 Resolution.Said occupants are not parties in this case. 595 as they were potential beneficiaries of the same. the Estate. The case was docketed as CA-G. SP No. Any adjudication with regard to the issue of ownership is only provisional and will not bar another action between the same parties which may involve the title to the land. the court may still pass on the same although only for the purpose of determining the question of possession. 2006 which dismissed the separate motions for reconsideration of the respondents. Some of the occupants/aggrieved parties therein. Going over the RTCs findings and disposition. In its opposition. 595 WHETHER OR NOT A NAKED CLAIM OF POTENTIAL QUALIFIED BENEFICIARIES OF A SOCIALIZED HOUSING PROGRAM PREVAIL OVER THE RIGHTS OF THE PERSON WITH PRIOR PHYSICAL POSSESSION AND A BETTER RIGHT OVER THE DISPUTED REAL PROPERTY[18] The Court finds the petition meritorious. Balilo and some occupants were evicted. 2009. who took over from Judge Gingoyon. conducted an ocular inspection on the premises. the MIAA submitted documents prepared and signed by Balilo showing that the respondents were tenants of Tarrosa or Balilo. The denial became final and executory on July 23.[21] The same finding was reached with respect to Avila and the Quilangs in the August 7. reproduced the findings of the latter in his August 4. It is settled in ejectment suits that a defendants claim of ownership over a disputed property will not divest the first level courts of their summary jurisdiction. 9 and 12 of Republic Act 7279 and other pertinent laws. 2006 Resolution of the RTC [22] and reiterated in its Joint Resolution dated November 13.coordination with the MIAA. the writ of execution issued in the ejectment case could be enforced against them even though they were not named parties in the ejectment suit.[16] In said case. The MeTC decision was affirmed by the RTC. the late Henrick F. through its then Presiding Judge. even if the pleadings raise the issue of ownership. Gingoyon (Judge Gingoyon).R. MIAA comes now to this Court questioning its annulment of the RTC resolutions by raising the following: ISSUES: WHETHER OR NOT THE COURT OF APPEALS ERRED IN FINDING THAT PUBLIC RESPONDENT JUDGE ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION WHEN HE ARROGATED UPON HIMSELF THE DETERMINATION THAT PRIVATE RESPONDENTS ARE NOT QUALIFIED BENEFICIARIES UNDER PROCLAMATION NO. Mupas. filed their separate special appearances and sought to quash the RTCs writ of execution. As mentioned earlier. Thus. [20] The RTC. the CA ruled that the said occupants were mere trespassers or squatters who had no right to possess the same. Avila and the Quilangs. the controversy stemmed from an ejectment suit filed by MIAA against the Estate represented by Balilo wherein the MeTC ordered the eviction of the Estate. Alejandro Aguirre (son of Calixto Aguirre) and Norberto Aguirre (brother of Calixto Aguirre). Accordingly. taking note that the occupants themselves admitted that they had entered the subject premises without the permission of either the MIAA or the Estate. the Court is of the considered view that it acted well within its jurisdiction. They claimed that they did not derive their right to occupy the premises from the Estate or from Balilo but rather from Proclamation No. shall be the agency primarily responsible for the administration and disposition of the lots subject thereof in favor of the bona fide occupants therein. pursuant to the provisions of Sections 8. namely. Judge Jesus B. Balilo and all those claiming rights under them. together with some other remaining occupants.[17] Going back to the June 16. [15] In a related case.

Branch 117. SP No. 595.R. it was emphasized that the courts should expeditiously resolve the issue of physical possession to prevent disorder and breaches of peace. 595 cannot be given any consideration. respondents bare claim that they could be beneficiaries of Proclamation No.[23] Granting that their occupation of the subject premises was not derived from either Tarrosa or Balilo. Juxtaposed against the evidence adduced by the MIAA showing that respondents were once tenants of either Tarrosa or Balilo. Republic of the Philippines Supreme Court Manila SECOND DIVISION . 05-0399-CFM. The June 16. the Court reiterated that the determination of the rights of claimants to public lands is distinct from the determination of who has better right of physical possession. While it was held therein that the CA erred in making a premature determination of the rights of the parties under Proclamation No. in Civil Case No. 137. 595. this bare anticipation on their part should not be permitted to defeat the right of possession by the owner. 2006 Resolutions of the Regional Trial Court of Pasay City. [24] Thus.[26] the very case relied upon by the respondents and later cited by the CA in its assailed decision.[25] in another action. Certainly. as earlier stated. 97536 is hereby REVERSED and SET ASIDE and another judgment entered reinstating the August 7. they claim that they were potential beneficiaries of Proclamation No. to thwart the decision of the court. At any rate. In Pajuyo v. the petition is GRANTED. the postulation of the respondents makes them mere trespassers or squatters acquiring no vested right whatsoever to the subject property. 2008 Decision of the CA in CA-G. CA. SO ORDERED. the ruling on the inapplicability of Proclamation No. from making a determination of respondents qualifications as beneficiaries. MIAA. 595 is only provisional and will certainly not bar the NHA or any other agency of the government tasked to implement Proclamation No. WHEREFORE.consequence of the nature of ejectment cases where the only issue up for adjudication is the physical or material possession over the real property. 2006 and the November 13.

. J. assailing the Court of Appeals (CA) Decision[1] dated June 28. 179558 Petitioner. and UNIVAC DEVELOPMENT. NACHURA. FIRST AIKKA DEVELOPMENT. Promulgated: June 11. SP No.R. G.R.. and MENDOZA. INC.versus CARPIO. 97408. ABAD. 2007 in CA-G. INC. PERALTA. No. 2007 and Resolution[2] dated August 29. JJ. J. Chairperson. Respondents.. 2011 x------------------------------------------------------------------------------------x DECISION NACHURA.: This is a petition for review on certiorari under Rule 45 of the Rules of Court. Present: .ASIATRUST DEVELOPMENT BANK.

whether for money or otherwise. and sureties. against petitioner. Respondents contested petitioners claim and demanded for an accounting to determine the correct and true amount of their obligations. Though they have sufficient assets to pay their loan. (UDI) are domestic corporations engaged in the construction and/or development of roads. infrastructure projects.00. their guarantors.95. respondents averred that they were not liquid. 2006. [7] On May 10.[4] The aggregate amount of the loan obtained by respondents was P114.[10] By way of rehabilitation. respondents also sought the determination of the true and correct amount of their loan obligation with petitioner. Inc. investors. and other industrial and commercial projects for the government or any private entity or individual. instead of paying in cash. but during the Asian Financial Crisis. Respondents alleged that they were unable to pay their loan based on the claim of petitioner.[12] the pertinent portions of which read: After an examination of the contents of the petition setting forth with sufficient particularity and material facts pursuant to Section 2 of Rule 4 of the Interim Rules of Procedures (sic) of Corporate Rehabilitation and the supporting documents attached thereto and finding the same to be sufficient in form and substance. [5] This prompted respondents to negotiate with petitioner for different modes of payment that the former might avail of. subdivisions. bridges.[11] On May 16. Inc. Petitioner thus agreed that respondents assign the receivables of their various contracts to sell involving the lots in the residential subdivision projects they were developing. The case was docketed as Civil Case No. respondents could not pay their obligations in cash. 6267-R. [9] Respondents prayed that an order be issued staying the enforcement of any and all claims of their creditors. [6] Notwithstanding the above agreement. Respondents denied that they were in default because of the assignment of their receivables to petitioner. which directly and adversely affected mainly the construction and real estate industry.220. housing. FADI and UDI availed of separate loan accommodations or credit lines with petitioner Asiatrust Development Bank. petitioner insisted on collecting the loan per the loan documents. (FADI) and Univac Development. Respondents religiously and faithfully complied with their loan obligations.The Facts Respondents First Aikka Development. memorial parks.[3] In the course of their business. They also stated that they were threatened by petitioner with various cases aimed at disrupting the operations of respondents which might eventually lead to the cessation of their business.000. and suppliers.830. respondents filed a consolidated Petition for Corporate Rehabilitation with Prayer for Suspension of Payments [8] with the Regional Trial Court (RTC) of Baguio City. land.000. Petitioner claimed that respondents were already in default and demanded the payment of P145. the RTC issued an Order. the Court hereby: . 2006. Branch 59.

2. In particular[. an officer of petitioner. their] guarantors and [sureties] not solidarily liable with the debtors. when the case was called for hearing. together with a written document authorizing the sheriff to secure a copy thereof. went to Baguio City to secure a copy of the petition for rehabilitation but failed to do so because.[14] On the day of the initial hearing.] all creditors. the rehabilitation court issued an Order granting the motion filed by petitioner and gave it a certified true copy of the petition. [16] In an Order[17] dated July 17. The rehabilitation court recognized the appearance of Ong only to inform the court that the counsel for petitioner could not attend the hearing. against the debtors (herein petitioners)[. etc. On June 9. the rehabilitation court terminated the initial hearing and directed the rehabilitation receiver to evaluate respondents rehabilitation plan and then report the results thereof to the court. the RTC denied the motion and explained: Under par.[18] On July 31. the date of the initial hearing that Asiatrust filed its Motion with Leave to Admit Opposition. 2006.[13] On June 2. 2006. through its counsel Atty. 2006. FIXES the initial hearing on the petition on June 29. however. 9 of the Stay Order[.] ASIATRUST BANK BE STAYED from proceeding with the foreclosure and auction sale of the mortgaged properties.00) pesos. required petitioner to file a motion to that effect. Lorenzo). petitioner. Lorenzo (Atty. Petitioner then tried to secure a copy of the petition through the sheriff of the RTC of La Trinidad. xxxx 7. Enrico J. There being no other oppositors or creditors in court despite due notices. 2006.000. CAOILE as interim rehabilitation receiver with a bond of two million (P2. The rehabilitation court. Robert Cuchado. Benguet. 2006. the personnel of the rehabilitation court were attending the Judicial Service Training. ORDERS STAYING enforcement of all claims whether for money or otherwise and whether such enforcement is by court action or otherwise. Ong (Ong) appeared as representative of petitioner because the latters counsel could not go to court due to the cancellation of his flight as a result of bad weather. went to court with a Motion for Leave of Court to Admit Opposition to Rehabilitation Petition [15] with the attached Opposition to Petition for Rehabilitation. at that time.000.[19] . APPOINTS PATRICK V. were given ten (10) days before the initial hearing to file their comment or opposition to the petition and putting them on notice that failure to do so will bar them from participating in the proceedings.1. The motion partakes of the nature of a motion for extension of time to file pleading which is a prohibited pleading under Rule 3(e) of the Interim Rules of Procedure on Corporate Rehabilitation.. 2006 at 11:00 oclock (sic) in the morning. Mario C. It is only on June 29.

On October 13, 2006, the rehabilitation receiver called for a conference and presented the draft of the
rehabilitation report to petitioner, represented by Atty. Lorenzo and Ong, and to respondents. Petitioner
filed a manifestation and motion in court calling its attention to the alleged refusal of the receiver to hear
its side. Petitioner thus asked for judicial assistance to enable it to actively participate in the rehabilitation
proceedings and protect its interest. The receiver finalized and later on filed his evaluation report in court.
He recommended the approval of the rehabilitation plan. [20]

On December 5, 2006, the RTC issued an Order,[21] the pertinent portions of which read:

On the same ground under Rule 3 of the Interim Rules, the Motion of Oppositor
Asiatrust to participate in the Rehabilitation Proceedings is DENIED. This pleading partakes
of a [P]etition for Relief which is also a prohibited pleading under par. d of Rule 3 of the same
rule. Moreover, the motion has also the purpose to reconsider the courts ruling in denying
the admission of their opposition to the [P]etition for Rehabilitation.

It must be stressed that under par. 9 of the Stay Order, All creditors, etc., were given ten
(10) days before the initial hearing to file their comment or opposition to the petition
and putting them on notice that failure to do so will bar them from participating in
the proceedings.

As to the Rehabilitation Report and the Integrated Revised Rehabilitation Plan and Schedule
of the petitioners, the court, after a careful and thorough examination and review of the
report, it is its considered judgment that the rehabilitation of the debtor is feasible and
hereby APPROVES the Rehabilitation Report and the REVISED REHABILITATION PLAN.

xxxx

WHEREFORE, premises all duly considered, the Motion of Asiatrust to participate in
the Rehabilitation Proceedings is hereby DENIED, the Rehabilitation Report and the
Integrated Revised Rehabilitation Plan of Receiver Patrick Caoile is APPROVED and the Notice
of the Appearance of the Cabato Law Office as collaborating counsel for Oppositor Asiatrust
is NOTED.

The court appointed Receiver shall submit his report every three (3) months and a
yearly report on the status of the progress of the rehabilitation and the implementation and
monitoring of the same.

SO ORDERED.[22]

Aggrieved, petitioner elevated the case to the CA via a Petition for Review [23] under Rule 43 of the Rules of
Court.

On June 28, 2007, the appellate court affirmed the above RTC Orders. The appellate court emphasized that
petitioners failure to participate in the rehabilitation proceedings was due to its own fault. First, petitioner
failed to file on time its opposition to the petition for rehabilitation and still failed to present good reason
for it to be belatedly admitted. Second, on the date of the second hearing, its counsel failed to go to court
allegedly due to the cancellation of his flight, which, to the mind of the court, was inexcusable. Lastly,
instead of filing a comment to the rehabilitation proceedings, petitioner filed a motion to participate in the
rehabilitation proceedings, which is a prohibited pleading. The CA thus concluded that petitioner was given
every opportunity to be heard in the rehabilitation proceedings, but it failed to avail of these remedies. On
the propriety of the joint petition for rehabilitation, the CA opined that the Interim Rules of Procedure on
Corporate Rehabilitation (the Rules) contains no prohibition. Finally, the CA stressed that rehabilitation
proceedings are non-adversarial and summary in nature which, therefore, necessitate the proper
observance of the period and procedures provided for by law and the Rules. [24]

The Issues

Undaunted, petitioner comes before this Court, raising the following errors:

A.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ERRORS OF
LAW WHEN IT FAILED TO RULE THAT PETITIONER WAS UNJUSTLY DEPRIVED OF ITS PROPERTY
WITHOUT DUE PROCESS OF LAW WHEN IT WAS NOT ALLOWED TO PROVE THE TRUE AND
CORRECT AMOUNT OF THE LOAN OBLIGATIONS OWING TO IT BY THE RESPONDENTS BASED
ON A MERE TECHNICALITY, IN BLATANT DISREGARD OF THE APPLICABLE LAWS AND
DECISIONS OF THIS HONORABLE COURT.

B.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ERRORS OF
LAW WHEN IT AFFIRMED THE APPROVAL OF THE REHABILITATION PLAN DESPITE THE
REHABILITATION COURTS FAILURE TO CONDUCT A CLARIFICATORY HEARING TO RESOLVE
THE UNSETTLED ISSUE ON THE AMOUNT OF INDEBTEDNESS OF PRIVATE RESPONDENTS AND
THE REHABILITATION RECEIVERS FAILURE TO MAKE A CREDIBLE AND INDEPENDENT
INVESTIGATION ON THE AMOUNT OF INDEBTEDNESS OF RESPONDENT CORPORATIONS,
THEREBY DEVIATING FROM THE USUAL AND ACCEPTED COURSE OF JUDICIAL
PROCEEDINGS.C.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ERRORS OF
LAW WHEN IT INEXPLICABLY AFFIRMED THE REHABILITATION COURTS APPROVAL OF THE
CONSOLIDATED PETITION FOR REHABILITATION, DESPITE THE SUBSTANTIAL EVIDENCE
SHOWING THAT THE PETITION WAS FILED IN THE WRONG VENUE INSOFAR AS RESPONDENT
UNIVAC DEVELOPMENT IS CONCERNED AND WAS FATALLY DEFECTIVE ON ITS FACE.

D.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED A SERIOUS ERROR OF
LAW WHEN IT REFUSED TO RULE ON THE SUBSTANTIAL AND FORMAL DEFECTS OF THE
REHABILITATION PLAN ON THE PRETEXT THAT THE REHABILITATION COURTS APPROVAL OF
THE RESPONDENTS REHABILITATION IS BINDING ON IT, DESPITE THE ABSENCE OF
SUBSTANTIAL EVIDENCE THAT WOULD SUPPORT THE DECISION OF THE REHABILITATION
COURT.

E.

WHETHER OR NOT THE HONORABLE COURTS EXERCISE OF ITS DISCRETIONARY REVIEW
POWERS IS WARRANTED UNDER THE CIRCUMSTANCES.[25]

Petitioners Arguments

Petitioner avers that it was denied due process when the rehabilitation court refused to admit its
opposition to the petition for rehabilitation and to comment on the rehabilitation plan. [26] It explains that
the late submission of the opposition was brought about by the baseless and unfounded requirements
imposed by the court.[27] Considering that there are valid and substantial grounds for the dismissal of the
petition for rehabilitation, petitioner insists that its comment and opposition should have been admitted by
the rehabilitation court. Petitioner points out that while the court denied its motion for leave to admit its
opposition, it (the court) allowed the Securities and Exchange Commission to submit its comment long
after the prescribed period.[28]

Petitioner adds that the rehabilitation courts unwarranted refusal to recognize the appearance of its
duly authorized representative constitutes a denial of its right to due process. [29] Petitioner also insists that
mere delay in the submission of the comment on the petition for rehabilitation does not warrant the denial
of petitioners right to participate in the rehabilitation proceedings. It likewise assails the rehabilitation
courts jurisdiction over UDI, whose principal place of business is in Pasig City, which is beyond the

July 17. on the other hand. 2006.[39] In its Opposition to the petition for rehabilitation. It is well-settled that the courts jurisdiction may be assailed at any stage of the proceedings. [35] They explain that in the Orders dated May 16. petitioner already questioned . even for the first time on appeal. the rehabilitation court denied petitioners motion for leave to admit its comment on the petition for rehabilitation. 2006. In other words. the filing of the comment on the petition is a condition precedent to the filing of the comment on the rehabilitation plan. Respondents thus opine that petitioner could no longer assail them in this petition for review. A perusal of petitioners pleadings clearly shows that it had repeatedly raised the jurisdictional question. 2006. aver that the petition is legally infirm as there are no special important reasons for the Court to exercise its sound judicial discretion to review the assailed CA Decision. the same did not amount to estoppel that would bar it from questioning the rehabilitation courts jurisdiction. [36] Respondents likewise insist that petitioner could no longer participate in the rehabilitation proceedings because of its failure to file its comment on the petition. [33] They also argue that petitioners failure to participate in the rehabilitation proceedings could be attributed to its counsels own slackness and disregard for the rules. While it is true that petitioner had been asking the rehabilitation and appellate courts that it be allowed to participate. including the receipt of payments in accordance with the approved rehabilitation plan. respondents counter that petitioner could no longer assail it as petitioner actively participated and continues to participate in the rehabilitation proceedings. respondents said. [38] The Courts Ruling Though the rehabilitation proceedings had gone as far as the approval and the subsequent implementation of the rehabilitation plan. [30] Moreover. thus. The reason is that jurisdiction is conferred by law. and July 31.jurisdiction of the RTC of Baguio City. ignored this issue as they did not recognize petitioners right to participate in the rehabilitation proceedings. challenges the consolidated petition for rehabilitation. Petitioners failure to assail the above orders rendered them final and immutable.[37] On the amount of the loan obligation. [31] Lastly. It. the court declared that there is merit in the petition which was given due course. [34] On the issue of the rehabilitation courts jurisdiction. It clarifies that it accepted the check payments subject to the outcome of this case. petitioner denies that it is estopped from assailing the rehabilitation plan as it already received payment from respondents based on the rehabilitation plan. we must confront the issue of the rehabilitation courts jurisdiction to hear and decide the case insofar as respondent UDI is concerned. and lack of it affects the very authority of the court to take cognizance of and to render judgment on the action. petitioner avers that respondents failed to show that they had adequate capital to sustain their operations during the interim period of corporate rehabilitation. respondents claim that there was a valid basis and there was a determination of the true and correct amount thereof. [32] Respondents Arguments Respondents. The courts below. contrary to respondents contention. however. the rehabilitation court held that the petition is sufficient in form and substance.

the court evaluates the assets and liabilities of each of these corporations separately and not jointly with other corporations. namely. petitioner explained that it received payments subject to the results of its appeal. with principal place of business in Baguio City. the two corporations are separate. Considering that UDIs principal office is located in Pasig City. Neither can estoppel be imputed to petitioner for its receipt of payments made by respondents in accordance with the rehabilitation plan. in determining the feasibility of rehabilitation. We cannot. but it failed to obtain a favorable decision. . Moreover. Section 2. In any event. As such. the petition should have been filed with the RTC in Pasig City and not in Baguio City. On appeal to the CA. each with a personality distinct from the other. Respondent FADI is a real estate corporation duly organized and existing under and by virtue of Philippine laws. To be sure. and that they have interlocking directors. owners.the courts jurisdiction over UDI. and officers. Petitions for rehabilitation pursuant to these Rules shall be filed in the Regional Trial Court having jurisdiction over the territory where the debtors principal office is located. owners. the rule applicable at the time of the filing of the petition. 2. Rule 3 of the Rules.[43] Respondents explain in their petition that they filed the consolidated petition because they availed of separate but intertwined loan obligations or credit lines. the rehabilitation of one will entail the rehabilitation of the other. Besides. is a real estate corporation with principal place of business in Pasig City.[42] Respondent UDI. on the other hand.[44] We find that the consolidation of the petitions involving these two separate entities is not proper. FADI and UDI. Although FADI and UDI have interlocking directors. therefore. the reviewing court would still not be precluded from ruling on the matter of jurisdiction. It is not estopped from raising the jurisdictional issue even at this stage. The latter court cannot. It has been established that in its letters to respondents. it is a basic rule that estoppel does not confer jurisdiction on a tribunal that has none over the cause of action or subject matter of the case. consequently. and officers and intertwined loans.[40] Records show that the Petition for Corporate Rehabilitation with Prayer for Suspension of Payments [41] was filed by two corporations. take cognizance of the rehabilitation petition insofar as UDI is concerned for lack of jurisdiction. Venue. it again raised the same issue. a full and complete settlement of the loan obligations will involve the two corporations and. say that petitioner slept on its rights. therefore. provides: Sec. even if petitioner had not raised the issue of jurisdiction.

respondents could pay the other creditors in the same manner as that stipulated in their contracts but could not abide by the terms of their contracts with petitioner. [45] These Rules are to be construed liberally to obtain for the parties a just. Nonetheless. Time and again. In those rare cases where we did not stringently apply the procedural rules. petitioner filed a Motion for Leave of Court to Admit Opposition to Rehabilitation Petition[49] with the attached Opposition to Petition for Rehabilitation [50] on the date of the initial hearing. we have held that cases should. Their strict and rigid application should be relaxed when they hinder rather than promote substantial justice.This error. it is our considered opinion that the RTC gravely abused its discretion when it refused to grant the motion. petitioner and respondents differ in their assessment and computation of the latters obligations to the former. there always existed a clear need to prevent the commission of a grave injustice. the RTC denied the motion. Admittedly. In cases where we dispense with the technicalities. as in the present case. not on mere technicalities. while the latter only admit a total obligation of P24.[52] Our judicial system and the courts have always tried to maintain a healthy balance . While the court has the discretion whether or not to admit the opposition belatedly filed by petitioner. as affirmed by the CA.220. This disparity in the parties claims makes it more important for the rehabilitation court to have given petitioner the opportunity to be heard. respondents sought the determination of the true and correct amount of their loan with petitioner. strict application of technical rules of procedure should be shunned when they hinder rather than promote substantial justice. even as the factual circumstances of the case require that the Rules be liberally construed in the interest of justice. and the rehabilitation court should have admitted petitioners comment on the petition for rehabilitation and allowed petitioner to participate in the proceedings. we answer in the negative. we do not mean to undermine the force and effectivity of the periods set by law.015. Moreover. The parties even explained that the new payment scheme adopted in the approved rehabilitation plan maintained the same scheme as that stipulated in the contracts between respondents and their creditors except that of petitioner.95. strict compliance with the rules of procedure is essential to the administration of justice. On the issue of whether the rehabilitation court. Besides. and inexpensive disposition of the case. In other words. [47] Otherwise stated. Because the pleading was not filed on time. [46] To be sure. technical rules of procedure are mere tools designed to facilitate the attainment of justice. [51] We consider this as a compelling reason for the liberal interpretation of the Rules. petitioner is respondents major creditor. as much as possible. in their petition before the RTC. will not result in the dismissal of the entire petition since the RTC of Baguio City had jurisdiction over the petition of FADI in accordance with the above-quoted provision of the Rules.[48] In this case.830. Petitioner claims that respondents owe itP145.202. correctly denied petitioners prayer to participate in the rehabilitation proceedings because of the belated filing of its Comment/Opposition to respondents petition for rehabilitation. however. expeditious. instead of filing its opposition to the petition for rehabilitation at least ten days before the date of the initial hearing as required by the Rules. be resolved on the merits. The Court promulgated the Rules in order to provide a remedy for summary and non-adversarial rehabilitation proceedings of distressed but viable corporations.

[57] As much as we would like to honor the rehabilitation plan approved by the rehabilitation court.[59] WHEREFORE. more if the corporation continues as a going concern than if it is immediately liquidated. Consequently. [55] The purpose of rehabilitation proceedings is to enable the company to gain a new Lease on life and thereby allow creditors to be paid their claims from its earnings.[53] Corporate rehabilitation connotes the restoration of the debtor to a position of successful operation and solvency. premises considered. . A remand of the case to the rehabilitation court is. [58] Banks operate (and earn income) by extending credit facilities financed primarily by deposits from the public. if we are to ensure that rehabilitation is indeed feasible.R. The Court of Appeals Decision dated June 28. the petition is PARTIALLY GRANTED. as affirmed by the CA. On the one hand. redistribute wealth in the economy by channeling idle savings to profitable investments. Consequently.[56] The determination of the true and correct amount due petitioner is important in assessing whether FADI may be successfully rehabilitated. It is especially important in this case to hear petitioner. to provide debtors with a fresh start by relieving them of the weight of their outstanding debts and permitting them to reorganize their affairs. It is thus necessary that petitioner be given the opportunity to be heard by the rehabilitation court. we cannot sustain the decision of the court. and the economy in general. [54] Rehabilitation proceedings in our jurisdiction have equitable and rehabilitative purposes. SP No. particularly because it has already been partially implemented. imperative. much importance is given to sound lending practices and good corporate governance. They borrow the publics excess money and lend out the same.between the strict enforcement of procedural laws and the guarantee that every litigant be given the full opportunity for the just and proper disposition of his cause. They plough back the bulk of said deposits into the economy in the form of loans. and on the other. Banks are entities engaged in the lending of funds obtained through deposits from the public. therefore. the successful rehabilitation of a distressed corporation will benefit its debtors. creditors. 97408 are SET ASIDE. if it is shown that its continued operation is economically feasible and its creditors can recover by way of the present value of payments projected in the rehabilitation plan. banking is undeniably imbued with public interest. 2007 and Resolution dated August 29. employees. they attempt to provide for the efficient and equitable distribution of an insolvent debtors remaining assets to its creditors. The court should admit petitioners comment on or opposition to FADIs petition for rehabilitation and allow petitioner to participate in the rehabilitation proceedings to determine if indeed FADI could maintain its corporate existence. To be sure. For this reason. as the major creditor of the distressed corporation. since it is a banking institution. 2006 and those issued subsequent thereto are hereby NULLIFIED. Banks. their viability depends largely on their ability to return those deposits on demand. Since banks deal with the publics money. therefore. 2007 in CA-G. the Order of the RTC dated July 17.

versus - THE BOARD OF DIRECTORS. Inc. JR. Branch 59. 156556-57 Present: CORONA. SO ORDERED. Inc..We REMAND the records of the case pertaining to the petition for rehabilitation of First Aikka Development. BETOY. BRION. Petitioner. C. Republic of the Philippines Supreme Court Manila ENRIQUE U. PERALTA. REYES. BERSAMIN. for further proceedings. VILLARAMA. Nos.. . PEREZ. Branch 59. NATIONAL EN BANC G. and PERLAS-BERNABE.J. CARPIO. SERENO. Promulgated: October 4.R. VELASCO. JR. MENDOZA. 2011 . to the Regional Trial Court of Baguio City. ABAD. is likewise ORDERED to DISMISS the petition for rehabilitation of Univac Development.. The Regional Trial Court of Baguio City. for lack of jurisdiction. DEL CASTILLO. LEONARDO-DE CASTRO. JJ. The court is ORDERED to admit petitioner Asiatrust Development Banks Comment/Opposition to the petition for rehabilitation and to allow petitioner to participate in said proceedings.

.. Betoy. equity... 2001. thus. 2003 and shall be entitled to separation benefits. and as well as the disclosure of public transaction provisions of the 1987 Constitution because during its proceeding the National Power Board had acted with grave abuse of discretion and disregarding constitutional and statutory injunctions on removal of public servants and non-diminution of social benefits accrued to separated employees. to wit: 1..: Before this Court is a special civil action for certiorari[1] and supplemental petition for mandamus.. 2002124[7] which. resolved that all NPC personnel shall be legally terminated on January 31. J......... The facts of the case are as follows: On June 8.. On the other hand. if qualified. to wit: Section 63..POWER CORPORATION. pursuant to Section 77[4] of the EPIRA.. shall be given preference in the hiring of the manpower requirements of the privatized companies.. as well as Sections 11. That those who avail of such privileges shall start their government service anew if absorbed by any government-owned successor company.A. the NPB passed NPB Resolution No.. 48..-x DECISION PERALTA. In no case shall there be any diminution of benefits under the separation plan until the full implementation of the restructuring and privatization. however.. Separation Benefits of Officials and Employees of Affected Agencies. the EPIRA was enacted by Congress with the goal of restructuring the electric power industry and privatization of the assets of the National Power Corporation (NPC).. the fact [that] it was done with extraordinary haste and in secrecy without the able participation of the Napocor Employees Consolidated Union (NECU) to represent all career civil service employees on issues affecting their rights to due process.. together with thousands of his co-employees from the NPC were terminated..National Government employees displaced or separated from the service as a result of the restructuring of the electricity industry and privatization of NPC assets pursuant to this Act. 9136. .. On February 27... otherwise known as the Electric Power Industry Reform Act of 2001 (EPIRA). petitioner Enrique U. 52 and 63 of Republic Act (R. 2002-125 [8]which created a transition team to manage and implement the separation program.. 2002-124 and No. shall be entitled to either a separation pay and other benefits in accordance with existing laws. 34. . As a result of the foregoing NPB Resolutions. Displaced or separated personnel as a result of the privatization.... x x x[5] Rule 33[6] of the IRR provided for the coverage and the guidelines for the separation benefits to be given to the employees affected. among others.. Also assailed is Rule 33 of the Implementing Rules and Regulations (IRR) of the EPIRA.... On November 18. security of tenure... pursuant to Section 63 of the EPIRA and Rule 33 of the IRR. a new National Power Board of Directors (NPB) was created.. the NPB passed NPB Resolution No.. rules or regulations or be entitled to avail of the privileges provided under a separation plan which shall be one and one-half month salary for every year of service in the government: Provided..[2] specifically assailing National Power Board Resolutions No. 2002. Hence.. 38... social benefits accrued to them... x . On the same day.... Respondent.. 2002-124 and 2002-125 and its Annex B Null and Void. herein petition for certiorari with petitioner praying for the grant of the following reliefs from this Court. amounting to excess of jurisdiction...) No. Pursuant to Section 48[3] of the EPIRA. the Secretary of the Department of Energy promulgated the IRR.. 2002-125... Declaring National Power Board Resolution Nos. Section 63 of the EPIRA provides for separation benefits to officials and employees who would be affected by the restructuring of the electric power industry and the privatization of the assets of the NPC. 2002.....

2. Striking down Section 11, Section 48 and Section 52 of RA 9136 (EPIRA) for being violative of Section
13, Article VII of the 1987 Constitution and, therefore, unconstitutional;
3. Striking Section 34 of RA 9136 (EPIRA) for being exorbitant display of State Power and was not
premised on the welfare of the FILIPINO PEOPLE or principle of salus populi est suprema lex;
4. Striking down Section 38 for RA 9136 (EPIRA) for being a prelude to Charter Change without a valid
referendum for ratification of the entire voter citizens of the Philippine Republic;
5. Striking down all other provisions of RA 9136 (EPIRA) found repugnant to the 1987 Constitution;
6. Striking down all provisions of the Implementing Rules and Regulations (IRR) of the EPIRA found repugnant to
the 1987 Constitution;
7. Striking down Section 63 of RA 9136 (EPIRA) for classifying such provisions in the same vein with
Proclamation No. 50 used against MWSS employees and its failure to classify which condition comes first whether
the restructuring effecting total reorganization of the electric power industry making NPC financially viable or the
privatization of NPC assets where manpower reduction or sweeping/lay-off or termination of career civil service
employees follows the disposal of NPC assets. This is a clear case of violation of the EQUAL PROTECTION
CLAUSE, therefore, unconstitutional;
8. Striking down Rule 33 of the Implementing Rules [and] Regulations (IRR) for disregarding the constitutional and
statutory injunction on arbitrary removal of career civil service employees; and
9. For such other reliefs deemed equitable with justice and fairness to more than EIGHT THOUSAND (8,000)
EMPLOYEES of the National Power Corporation (NPC) whose fate lies in the sound disposition of the Honorable
Supreme Court.[9]

In addition, petitioner also filed a supplemental petition for mandamus praying for his reinstatement.
The petition is without merit.
Before anything else, this Court shall first tackle whether it was proper for petitioner to directly question the constitutionality of the
EPIRA before this Court.
Section 5(1) and (2), Article VIII of the 1987 Constitution provides that:
SECTION 5. The Supreme Court shall have the following powers:
1. Exercise original jurisdiction over cases affecting ambassadors, other public ministers and consuls, and
over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus.
2. Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the rules of court may
provide, final judgments and orders of lower courts in:
(a)
All cases in which the constitutionality or validity of any treaty, international or
executive agreement, law, presidential decree, proclamation, order, instruction, ordinance, or
regulation is in question.[10]

Based on the foregoing, this Court's jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, and habeas corpus,
while concurrent with that of the Regional Trial Courts and the Court of Appeals, does not give litigants unrestrained freedom of
choice of forum from which to seek such relief. [11] The determination of whether the assailed law and its implementing rules and
regulations contravene the Constitution is within the jurisdiction of regular courts. The Constitution vests the power of judicial review
or the power to declare a law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or
regulation in the courts, including the Regional Trial Courts.[12]

It has long been established 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 call for the exercise
of our primary jurisdiction.[13] Thus, herein petition should already be dismissed at the outset; however, since similar petitions have
already been resolved by this Court tackling the validity of NPB Resolutions No. 2002-124 and No. 2002-125, as well as the
constitutionality of certain provisions of the EPIRA, this Court shall disregard the procedural defect.

Validity of NPB Resolutions No. 2002-124 and No. 2002-125
The main issue raised by petitioner deals with the validity of NPB Resolutions No. 2002-124 and No. 2002-125.

In NPC Drivers and Mechanics Association (NPC DAMA) v. National Power Corporation (NPC),[14] this Court had already ruled that
NPB Resolutions No. 2002-124 and No. 2002-125 are void and of no legal effect.
NPC Drivers involved a special civil action for Injunction seeking to enjoin the implementation of the same assailed NPB
Resolutions. Petitioners therein put in issue the fact that the NPB Resolutions were not concluded by a duly constituted Board of
Directors since no quorum in accordance with Section 48 of the EPIRA existed. In addition, petitioners therein argued that the assailed
NPB Resolutions cannot be given legal effect as it failed to comply with Section 47 of the EPIRA which required the endorsement of
the Joint Congressional Power Commission and the President of the Philippines. Ruling in favor of petitioners therein, this Court ruled
that NPB Resolutions No. 2002-124 and No. 2002-125 are void and of no legal effect for failure to comply with Section 48 of the
EPIRA, to wit:
We agree with petitioners. In enumerating under Section 48 those who shall compose the National Power Board of
Directors, the legislature has vested upon these persons the power to exercise their judgment and discretion in
running the affairs of the NPC. Discretion may be defined as the act or the liberty to decide according to the
principles of justice and ones ideas of what is right and proper under the circumstances, without willfulness or favor.
Discretion, when applied to public functionaries, means a power or right conferred upon them by law of acting
officially in certain circumstances, according to the dictates of their own judgment and conscience, uncontrolled by
the judgment or conscience of others. It is to be presumed that in naming the respective department heads as
members of the board of directors, the legislature chose these secretaries of the various executive departments on the
basis of their personal qualifications and acumen which made them eligible to occupy their present positions as
department heads. Thus, the department secretaries cannot delegate their duties as members of the NPB, much less
their power to vote and approve board resolutions, because it is their personal judgment that must be exercised in the
fulfilment of such responsibility.
xxxx
In the case at bar, it is not difficult to comprehend that in approving NPB Resolutions No. 2002-124 and No. 2002125, it is the representatives of the secretaries of the different executive departments and not the secretaries
themselves who exercised judgment in passing the assailed Resolution, as shown by the fact that it is the signatures
of the respective representatives that are affixed to the questioned Resolutions. This, to our mind, violates the duty
imposed upon the specifically enumerated department heads to employ their own sound discretion in exercising the
corporate powers of the NPC. Evidently, the votes cast by these mere representatives in favor of the adoption of the
said Resolutions must not be considered in determining whether or not the necessary number of votes was garnered
in order that the assailed Resolutions may be validly enacted. Hence, there being only three valid votes cast out of
the nine board members, namely those of DOE Secretary Vincent S. Perez, Jr.; Department of Budget and
Management Secretary Emilia T. Boncodin; and NPC OIC-President Rolando S. Quilala, NPB Resolutions No.
2002-124 and No. 2002-125 are void and are of no legal effect.[15]

However, a supervening event occurred in NPC Drivers when it was brought to this Court's attention that NPB Resolution No. 200755 was promulgated on September 14, 2007confirming and adopting the principles and guidelines enunciated in NPB Resolutions No.
2002-124 and No. 2002-125.
On December 2, 2009, this Court promulgated a Resolution [16] clarifying the amount due the individual employees of NPC in view of
NPB Resolution No. 2007-55. In said Resolution, this Court clarified the exact date of the legal termination of each class of NPC
employees, thus:
From all these, it is clear that our ruling, pursuant to NPB Resolution No. 2002-124, covers all employees of the
NPC and not only the 16 employees as contended by the NPC. However, as regards their right to reinstatement, or
separation pay in lieu of reinstatement, pursuant to a validly approved Separation Program, plus backwages, wage
adjustments, and other benefits, the same shall be computed from the date of legal termination as stated in NPC
Circular No. 2003-09, to wit:
a) The legal termination of key officials, i.e., the Corporate Secretary, Vice-Presidents and Senior VicePresidents who were appointed under NP Board Resolution No. 2003-12, shall be at the close of office hours
of January 31, 2003.
b) The legal termination of personnel who availed of the early leavers' scheme shall be on the last day of
service in NPC but not beyond January 15, 2003.
c) The legal termination of personnel who were no longer employed in NPC after June 26, 2001 shall be the date
of actual separation in NPC.
d) For all other NPC personnel, their legal termination shall be at the close of office hours/shift schedule
of February 28, 2003.[17]

As to the validity of NPB Resolution No. 2007-55, this Court ruled that the same will have a prospective effect, to wit:
What then is the effect of the approval of NPB Resolution No. 2007-55 on 14 September 2007? The approval of
NPB Resolution No. 2007-55, supposedly by a majority of the National Power Board as designated by law, that
adopted, confirmed and approved the contents of NPB Resolutions No. 2002-124 and No. 2002-125 will have
a prospective effect, not a retroactive effect. The approval of NPB Resolution No. 2007-55 cannot ratify and
validate NPB Resolutions No. 2002-124 and No. 2002-125 as to make the termination of the services of all NPC
personnel/employees on 31 January 2003 valid, because said resolutions were void.
The approval of NPB Resolution No. 2007-55 on 14 September 2007 means that the services of all NPC
employees have been legally terminated on this date. All separation pay and other benefits to be received by said
employees will be deemed cut on this date. The computation thereof shall, therefore, be from the date of their illegal
termination pursuant to NPB Resolutions No. 2002-124 and No. 2002-125 as clarified by NPB Resolution No. 200311 and NPC Resolution No. 2003-09 up to 14 September 2007. Although the validity of NPB Resolution No. 200755 has not yet been passed upon by the Court, same has to be given effect because NPB Resolution No. 2007-55
enjoys the presumption of regularity of official acts. The presumption of regularity of official acts may be rebutted
by affirmative evidence of irregularity or failure to perform a duty. Thus, until and unless there is clear and
convincing evidence that rebuts this presumption, we have no option but to rule that said resolution is valid
and effective as of 14 September 2007.[18]

Based on the foregoing, this Court concluded that the computation of the amounts due the employees who were terminated and/or
separated as a result of, or pursuant to, the nullified NPB Board Resolutions No. 2002-124 and No. 2002-125 shall be from their date
of illegal termination up to September 14, 2007 when NPB Resolution No. 2007-55 was issued.
Thus, the resolution of the validity of NPB Board Resolutions No. 2002-124 and No. 2002-125 is, therefore, moot and academic in
view of the Court's pronouncements in NPC Drivers.
Anent the question of the constitutionality of Section 63 of RA 9136, as well as Rule 33 of the IRR, this Court finds that the same is
without merit.
A reorganization involves the reduction of personnel, consolidation of offices, or abolition thereof by reason of economy or
redundancy of functions.[19] It could result in the loss of ones position through removal or abolition of an office. However, for a
reorganization for the purpose of economy or to make the bureaucracy more efficient to be valid, it must pass the test of good faith;
otherwise, it is void ab initio.[20]
It is undisputed that NPC was in financial distress and the solution found by Congress was to pursue a policy towards its privatization.
The privatization of NPC necessarily demanded the restructuring of its operations. To carry out the purpose, there was a need to
terminate employees and re-hire some depending on the manpower requirements of the privatized companies. The privatization and
restructuring of the NPC was, therefore, done in good faith as its primary purpose was for economy and to make the bureaucracy more
efficient.
In Freedom from Debt Coalition v. Energy Regulatory Commission, [21] this Court discussed why there was a need for a shift towards
the privatization and restructuring of the electric power industry, to wit:
One of the landmark pieces of legislation enacted by Congress in recent years is the EPIRA. It established a new
policy, legal structure and regulatory framework for the electric power industry.
The new thrust is to tap private capital for the expansion and improvement of the industry as the large government
debt and the highly capital-intensive character of the industry itself have long been acknowledged as the critical
constraints to the program. To attract private investment, largely foreign, the jaded structure of the industry had to be
addressed. While the generation and transmission sectors were centralized and monopolistic, the distribution side
was fragmented with over 130 utilities, mostly small and uneconomic. The pervasive flaws have caused a low
utilization of existing generation capacity; extremely high and uncompetitive power rates; poor quality of service to
consumers; dismal to forgettable performance of the government power sector; high system losses; and an inability
to develop a clear strategy for overcoming these shortcomings.
Thus, the EPIRA provides a framework for the restructuring of the industry, including the privatization of the assets
of the National Power Corporation (NPC), the transition to a competitive structure, and the delineation of the roles

[22] Petitioner argues that bad faith is clearly manifested as the reorganization has an eye to replace current favorite less competent appointees. including government-owned or controlled corporations or their subsidiaries. 13. The President. The law ordains the division of the industry into four (4) distinct sectors. the law only speaks of preference and by no stretch of the imagination can the same amount to a legal right to the position. directly or indirectly practice any other profession. by way of mandamus. pursuant to a bona fide reorganization. performance and merit. In addition. Article VII of the 1987 Constitution provides: Sec. however.[27] 48. agency. namely: generation. Clearly. cannot. participate in any business. the Members of the Cabinet. Article VII of the 1987 Constitution. petitioner contends that qualifications and behavioral aspect were being set aside. The existence of any or some of the following circumstances may be considered as evidence of bad faith in the removals made as a result of the reorganization. Rule 33 of the IRR clearly state that the displaced or separated personnel as a result of the privatization.[25] which is absent in the case at bar. b) Where an office is abolished and another performing substantially the same functions is created. c) Where incumbents are replaced by those less qualified in terms of status of appointment. giving rise to a claim for reinstatement or reappointment by an aggrieved party: a) Where there is a significant increase in the number of positions in the new staffing pattern of the department or agency concerned. or instrumentality thereof. They shall strictly avoid conflict of interest in the conduct of their office. A valid cause for removal exist when. or consolidate positions in order to meet the exigencies of the service. Undoubtedly. more so. x x x x. or be financially interested in any contract with. The Solicitor General. unless otherwise provided in this Constitution. Vice-President.[28] and 52[29] of the EPIRA are unconstitutional for violating Section 13. Validity of Sections 11. a position has been abolished or rendered redundant or there is a need to merge. shall be given preference in the hiring of the manpower requirements of the privatized companies. not all the terminated employees will be re-hired by the selection committee as the manpower requirement of the privatized companies will be different. 48. They shall not. No.A. during said tenure. or special privilege granted by the Government or any subdivision. 6656[24] cites certain circumstances showing bad faith in the removal of employees as a result of any reorganization. [26] Such being the case.of various government agencies and the private entities. since there is no evidence showing that said committee acted with grave abuse of discretion or that the re-hired employees were merely accommodated and not qualified. hold any other office or employment during their tenure. thus: Sec. and their deputies or assistants shall not. petitioner has no legal or vested right to be reinstated as Section 63 of the EPIRA as well as Section 5. distribution and supply. [23] Section 2 of R. d) Where there is a reclassification of offices in the department or agency concerned and the reclassified offices perform substantially the same functions as the original offices. We agree. if qualified. Section 13. It must be proved by clear and convincing evidence. and 52 of RA 9136 Petitioner argues that Sections 11. transmission. It is settled that bad faith must be duly proved and not merely presumed. or other lawful causes allowed by the Civil Service Law. the NPC generating plants have to be privatized and its transmission business spun off and privatized thereafter. No officer or employee in the career service shall be removed except for a valid cause and after due notice and hearing. Corollarily. and e) Where the removal violates the order of separation provided in Section 3 hereof. 2. petitioner. divide. the selection of employees for purposes of re-hiring them necessarily entails the exercise of discretion or judgment. argues that petitioner has not shown any circumstance to prove that the restructuring of NPC was done in bad faith. In addition. As correctly observed by the Solicitor General. compel the selection committee to include him in the re-hired employees. Petitioner's allegation that the reorganization was merely undertaken to accommodate new appointees is at most speculative and bereft of any evidence on record. or in any franchise.[30] .

to wit: SECTION 2. (b) To ensure the quality. (h) To promote the utilization of indigenous and new and renewable energy resources in power generation in order to reduce dependence on imported energy. Examples of designations to positions by virtue of one's primary functions are the Secretaries of Finance and Budget. and the Secretaries of National Defence. however. As can be gleaned from the foregoing enumeration. as ex-officio members of the NPB. 115 (December 24. The reason is that these posts do not comprise "any other office" within the contemplation of the constitutional prohibition but are properly an imposition of additional duties and functions on said officials. this Court explained that mandating additional duties and functions to Cabinet members which are not inconsistent with those already prescribed by their offices or appointments by virtue of their special knowledge. security and affordability of the supply of electric power. Neither can the Vice-President. The additional duties must not only be closely related to. Declaration of Policy. (c) To ensure transparent and reasonable prices of electricity in a regime of free and fair competition and full public accountability to achieve greater operational and economic efficiency and enhance the competitiveness of Philippine products in the global market. budgetary and environmental concerns as well as coordination with local government units. and (k) To encourage the efficient use of energy and other modalities of demand side management. (f) To protect the public interest as it is affected by the rates and services of electric utilities and other providers of electric power. It is only in Section 52 creating the Power Sector Assets and . (i) To provide for an orderly and transparent privatization of the assets and liabilities of the National Power Corporation (NPC). The respective undersecretaries and assistant secretaries. among which are: The President of the Philippines cannot chair the National Security Council reorganized under Executive Order No. xxxx The term "primary" used to describe "functions" refers to the order of importance and thus means chief or principal function.[33] The production and supply of energy is undoubtedly one of national interest and is a basic commodity expected by the people. It is a practice justified by the demands of efficiency. It is hereby declared the policy of the State: (a) To ensure and accelerate the total electrification of the country. transmission and distribution sectors. This Court is not unmindful. Justice. valid. however. (e) To ensure fair and non-discriminatory treatment of public and private sector entities in the process of restructuring the electric power industry. continuity and coordination among the different offices in the Executive Branch in the discharge of its multifarious tasks of executing and implementing laws affecting national interest and general welfare and delivering basic services to the people. Section 2 of the EPIRA clearly shows that the policy toward privatization would involve financial. Labor and Employment and Local Government sit in this Council. reliability. the Executive Secretary.[32] The designation of the members of the Cabinet to form the NPB does not violate the prohibition contained in our Constitution as the privatization and restructuring of the electric power industry involves the close coordination and policy determination of various government agencies. (d) To enhance the inflow of private capital and broaden the ownership base of the power generation. which would then have no reason to exist for lack of a chairperson and members. (g) To assure socially and environmentally compatible energy sources and infrastructure. In Civil Liberties. Article VII of the 1987 Constitution does not apply to posts occupied by the Executive officials specified therein without additional compensation in an ex-officio capacity as provided by law and as required by the primary function of said official's office. is a practice long-recognized in many jurisdictions. finds the designation of the respective members of the Cabinet. that Section 48 of the EPIRA is not categorical in proclaiming that the concerned Cabinet secretaries compose the NPB Board only in anex-officio capacity. therefore.In Civil Liberties Union v. Executive Secretary. The term is not restricted to the singular but may refer to the plural. and the Secretary of Transportation and Communications. expertise and skill in their respective executive offices. sitting as members of the Monetary Board. but must be required by the official's primary functions. This Court.[31] this Court explained that the prohibition contained in Section 13. to wit: The prohibition against holding dual or multiple offices or employment under Section 13. the restructuring of the electric power industry inherently involves the participation of various government agencies. 1986). would also be prohibited.To characterize these posts otherwise would lead to absurd consequences. policy direction. acting as Chairman of the Maritime Industry Authority and the Civil Aeronautics Board. Article VII of the Constitution must not. (j) To establish a strong and purely independent regulatory body and system to ensure consumer protection and enhance the competitive operation of the electricity market. be construed as applying to posts occupied by the Executive officials specified therein without additional compensation in an ex-officio capacity as provided by law and as required by the primary functions of said officials' office.

It is clear from the wordings of the law that it was the intention of Congress that the subject posts will be adjunct to the respective offices of the official designated to such posts. such other allowances as the Board may prescribe. . and not a mere designation. The reason is that these services are already paid for and covered by the compensation attached to his principal office. the Secretary of the DTI and the President of the PSALM as ex-officio members thereof. a designation does not entitle the officer to receive the salary of the position. such additional compensation is prohibited by the Constitution. By whatever name it is designated. Section 6. which come under the jurisdiction of his department. or some other such euphemism.[35] Hence. i. Section 14 of the EPIRA provides: SEC. TRANSCO Board of Directors. It should be obvious that if. the Secretary of the DENR. The foregoing discussion. Designation connotes an imposition of additional duties. and three (3) members to be appointed by the President of the Philippines. The delegation of the said official to the respective Board of Directors were designation by Congress of additional functions and duties to the officials concerned. thus: The ex-officio position being actually and in legal contemplation part of the principal office. Board Per Diems and Allowances. considering that the concerned Cabinet secretaries were merely imposed additional duties and their posts in the NPB do not constitute any other office within the contemplation of the constitutional prohibition.Without an appointment. by a Board of Directors which shall be composed of the Secretary of the DOF as the Chairman.. All the powers of the TRANSCO shall be vested in and exercised by a Board of Directors. one of whom shall be the President of PSALM. Nonetheless. For such attendance. usually by law. The members of the Board shall receive per diem for each regular or special meeting of the board actually attended by them and. upon approval of the Secretary of the Department of Finance. he is not entitled to collect any extra compensation. 14. Congress specifically intended that the position of member of the Board of NPB shall be ex-officio or automatically attached to the respective offices of the members composing the board.e. the President of TRANSCO. this Court agrees with the contention of the Solicitor General that the constitutional prohibition was not violated. they were designated as members of the Board of Directors. the concerned officials should not receive any additional compensation pursuant to their designation as ruled in Civil Liberties. the Director-General of the NEDA. whether it be in the form of a per diem or an honorarium or an allowance. and the Secretary of the DOE. In relation thereto. PSALM Board of Directors. The Secretary of the DOF shall be the ex-officio Chairman of the Board. and its powers and functions exercised. the Secretary of Finance attends a meeting of the Monetary Board as an ex-officio member thereof. [34] Designation does not entail payment of additional benefits or grant upon the person so designated the right to claim the salary attached to the position. The other members of the TRANSCO Board shall include the Secretary of the DOE. The legal basis of an employee's right to claim the salary attached thereto is a duly issued and approved appointment to the position. the Secretary of the DOJ. notwithstanding. the Secretary of the DBM.Liabilities Management Corporation (PSALM) that they are so designated in an ex-officiocapacity. Visayas and Mindanao. Sections 4 and 6 of the EPIRA provides: Section 4. x x x x. it follows that the official concerned has no right to receive additional compensation for his services in the said position. therefore. The Board shall be composed of a Chairman and six (6) members. say. each representing Luzon. he is actually and in legal contemplation performing the primary function of his principal office in defining policy in monetary and banking matters. upon a person already in the public service by virtue of an earlier appointment. PSALM shall be administered.

there are only three constitutionally-recognized Commissions. there must be a clear and unequivocal breach of the Constitution and not one that is doubtful. it is clear that such emoluments or additional compensation to be received by the members of the NPB do not apply and should not be received by those covered by the constitutional prohibition.[41] It is basic that the determination of whether or not a tax is excessive oppressive or confiscatory is an issue which essentially involves a question of fact and. seems a prelude to Charter Change. Visayas. Validity of Section 38[42] of the EPIRA Petitioner argues that the abolishment of the ERB and its replacement of a very powerful quasi-judicial body named the Energy Regulatory Commission (ERC).[40] In Gerochi. any amount received by them in their capacity as members of the Board of Directors should be reimbursed to the government. petitioners failed to overcome this presumption in favor of the EPIRA. pursuant to Section 38 up to Section 43 of the EPIRA or RA 9136. and to justify its nullification. who would be representing the interests of those in Luzon. [39] to wit: Finally. Moreover. thus. which is tasked to dictate the dayto-day affairs of the entire electric power industry. who may be entitled to such honorarium or allowance if they do not fall within the constitutional prohibition. i. the said cabinet officials cannot receive any form of additional compensation by way of per diems and allowances. It is to be noted that three of the members of the NPB are to be appointed by the President.[37] Constitutionality of Section 34[38] of the EPIRA The Constitutionality of Section 34 of the EPIRA has already been passed upon by this Court in Gerochi v. or argumentative. The Universal Charge is imposed to ensure the viability of the country's electric power industry. the Commission on Audit (COA) and the Commission on Elections (COMELEC). every law has in its favor the presumption of constitutionality. speculative.[43] . Petitioner submits that under the 1987 Constitution. The other members of the TRANSCO Board include the Secretary of the Department of Energy and the Secretary of the Department of Environment and Natural Resources. 34 of the EPIRA and Rule 18 of its IRR are unconstitutional and void.e. rather than defeat it. This is an exorbitant display of State Power at the expense of its people. the Cabinet secretaries. this Court ruled that the Universal Charge is not a tax but an exaction in the exercise of the State's police power. These interpretations are consistent with the fundamental rule of statutory construction that a statute is to be read in a manner that would breathe life into it. and Mindanao. Department of Energy.Section 14 relates to Section 11 which sets the composition of the TRANSCO Board naming the Secretary of the Department of Finance as the ex officio Chairman of the Board. this Court is precluded from reviewing the same. We find no clear violation of the Constitution which would warrant a pronouncement that Sec. It would mean that the electricity-consuming public will suffer in carrying this burden for the errors committed by those in power who runs the affairs of the State. Indubitably. [36] and is supported by the criteria in cases of this nature that all reasonable doubts should be resolved in favor of the constitutionality of a statute. Hence. they are: the Civil Service Commission (CSC). Petitioner argues that the imposition of a universal charge to address the stranded debts and contract made by the government through the NCC-IPP contracts or Power Utility-IPP contracts or simply the bilateral agreements or contracts is an added burden to the electricity-consuming public on their monthly power bills.However.. considering the constitutional prohibition. since they are prohibited from collecting additional compensation by the Constitution.

172 on 8 May 1987. who has rendered a total of at least twenty years of service. 1616.A. the constitutionality of the abolition of the ERB and the creation of the ERC has already been settled in Kapisanan ng mga Kawani ng Energy Regulatory Board v. then exercising her legislative powers. there must be a clear and unequivocal breach of the Constitution. No.A. 9136. No.[44] In any case. created the ERB by issuing Executive Order No. It did not proscribe the payment of retirement benefits to qualified retirees under R. [52] Presidential Decree (P.A. Q-03-50681. Aquino. a gratuity benefit is given to qualified retiring members of the GSIS.A. There should not be any controversy if there is an explicit declaration of abolition in the law itself. appointive or elective. No. Section 63 of the EPIRA and Section 33 of the IRR of the EPIRA did not impair the vested rights of NPC personnel to claim benefits under existing laws. In addition to said gratuity benefits. 186. A public office is created by the Constitution or by law or by an officer or tribunal to which the power to create the office has been delegated by the legislature. To justify the nullification of a law.D. It effectively amended Section 12 (c) of C. it must be clarified that this Courts pronouncements in Herrera that separated and retired employees of the NPC are not entitled to receive retirement benefits under C. No. docketed as Civil Case SCA No.A. President Corazon C. The power to create an office carries with it the power to abolish. consisting of personal contributions of the employee plus interest. [54] and other GSIS and social security laws. 186. It is to be noted that this Court ruled in the case of Herrera v. [56] Under R. Section 38 of RA 9136 explicitly abolished the ERB.A.) No. 1616.A. Neither does the EPIRA cut short the years of service of the employees concerned.[53] R. there was a valid abolition of the ERB. 186. Unable to resolve the issue with its former employees amicably.[49] that Section 63 of the EPIRA precluded the receipt by the terminated employee of both separation and retirement benefits under the Government Service Insurance System (GSIS) organic law. National Power Corporation.[45] to wit: All laws enjoy the presumption of constitutionality. The question of whether a law abolishes an office is a question of legislative intent. this Court ruled that because of the expansion of the ERC's functions and concerns. No. No. regardless of age and employment status. [51] which was to be paid by NPC as the last employer. referred only to the gratuity benefits granted by R. the last three years of which are . in Kapisanan. 8291. and government share without interest. 1616 over and above the separation benefits granted by R.A. it is but logical that those who availed of such privilege will start their government service anew if they will later be employed by any government-owned successor company or government instrumentality.A.[55] before the Regional Trial Court of Quezon City. NPC filed a petition for declaratory relief. raising the issue of whether or not the employees of NPC are entitled to receive retirement benefits under R.[50] However. Commissioner Fe Barin.A. No. KERB failed to show any breach of the Constitution. No. The factual and procedural antecedents of Herrera reveal that it arose from a case between NPC and several of its separated employees who were asking additional benefits from NPC under R. 9136. we should have to call first a referendum to amend or totally change the People's Charter. the qualified employee shall also be entitled to a refund of retirement premiums paid.A. payable by the GSIS.) No. x x x[46] Moreover. 1146. as follows: (c) Retirement is likewise allowed to any official or employee. This Court cannot subscribe to petitioners thesis that in order for the newly-enacted RA 9136 or EPIRA to become a valid law. which is payable by the last employer. No. If an employee availed of the separation pay and other benefits in accordance with existing laws or the superior separation pay under the NPC restructuring plan. 1616 after receiving from the former separation benefits under Section 63 of R.[47] Validity of Section 63[48] Contrary to petitioner's argument. or Commonwealth Act (C. No. 660.Petitioners argument that the creation of the ERC seems to be a prelude to charter change is flimsy and finds no support in law.

9136. 1616. [64] Even in the deliberations of Congress during the passage of R. be only a gratuity equivalent to one month's salary for every year of the first twenty years of service. Servier Philippines. and the monetary value of any accumulated vacation and sick leaves. No. in relation to R.. Petitioners most respectfully submit that since R. entitlement to separation pay will not disqualify the separated employee who is qualified to retire from receiving retirement benefits allowed under another law. plus one and one-half months salary for every year of service over twenty but below thirty years and two months salary for every year of service over thirty years in case of employees based on the highest rate received and in case of elected officials on the rates of pay as provided by law. Inc. Separation pay is a statutory right designed to provide the employee with the wherewithal during the period that he/she is looking for another employment.[62] citing Aquino v.[59] it is apparent that the case was limited only to the interpretation of Section 63 of R.A. x x x[57] (Emphasis supplied. 9136 (EPIRA). This gratuity is payable on the rates of pay as provided by law.This gratuity is payable by the employer or officer concerned which is hereby authorized to provide the necessary appropriation or pay the same from any unexpended items of appropriations or savings in its appropriations. while retirement benefits are given during ones unemployable years. No. in addition to the return of his personal contributions with interest compounded monthly and the payment of the corresponding employer's premiums described in subsection (a) of Section five hereof.A. on the matter of retirement benefits.continuous. No. It was even categorically stated that petitioners therein were entitled to a refund of their contributions to the retirement fund. Hence.A. granting separation pay to terminated NAPOCOR employees. 9136. 186.[58] Petitioners therein then sought recourse directly to this Court on a pure question of law. In the preparatory statement of the Petition for Review on Certiorari. 1616 but also were not entitled to receive retirement benefits under Commonwealth Act No. in the Decision dated December 18. The benefit shall. the RTC rendered a Decision ruling against the NPC employees. retirement benefits are intended to help the employee enjoy the remaining years of his life. In the first place. Congress guaranteed their entitlement to a separation pay to tide them over in the meantime. In the case of Santos v. 1616 in addition to separation pay under Republic Act No. To assure the worried and uneasy NPC employees. which they may have to their credit at the time of retirement. Respondents NAPOCOR and DEPARTMENT OF BUDGET AND MANAGEMENT erroneously contend that the entitlement to the separation pay under R. 9136. No. to its separated employees. it was held that petitioners therein were not only entitled to receive retirement benefits under R.A. [65] More importantly. 9136 forfeits the retirement benefit under R. the decretal portion of which reads: WHEREFORE. which.A. without interest. No. Officials and employees retired under this Act shall be entitled to the commutation of the unused vacation and sick leave. on the matter of retirement benefits. R. Herrera should have affected only the payment of gratuity benefits by NPC. 9136 and R. they are not mutually exclusive. being the last employer. based on the highest rate received. it was never an issue.A. x x x[60] However.A. A separation pay is given during ones employable years.A.A. to . in effect. 1616. No. 1616. 1616 are not inconsistent with each other and they have distinct noble purposes.A. lessening the burden of worrying about his financial support. as amended.[63] We declared that the receipt of retirement benefits does not bar the retiree from receiving separation pay. Republic Act No. No. 9136 DID NOT SPECIFICALLY AUTHORIZE the National Power Corporation to grant retirement benefits under Republic Act No. to wit: This is a case of first impression limited to the interpretation of Section 63. and are a form of reward for his loyalty and service to the employer.A.) After trial. might lead to the conclusion that the declaration encompassed all other benefits granted by C. [61] which is clearly congruous to the mandate of R. The matter of availment of retirement benefits of qualified employees under any other law to be paid by the GSIS should not and was not covered by the decision.A. 1616.A. 2009. premises considered. 186 to its qualified members. SO ORDERED. it was manifest that it was not the intention of the law to infringe upon the vested rights of NPC personnel to claim benefits under existing laws. On the other hand. 1616. in relation to R. National Labor Relations Commission. In relation to R.

OSMENA (J). You will receive retirement benefits.further allay the fears of the NPC employees. together with its amendatory laws. the other labor representation here is Mr. J. separation pay. Okay. BADELLES). under R. if they are considered terminated. . especially those who were nearing retirement age. THE CHAIRMAN (SEN. SEN. In R. Separation . . No. the Joint Congressional Power Commission was held. ANGULUAN: We have prepared a paper which we have sent to the honorable members of the Bicam. . BADELLES). 186. OSMENA (J). I dont think anyone is going to deprive you of your rights under the law. retirement benefits under C. No. THE CHAIRMAN (REP.A. The transcripts of the Public Consultative Meeting on the Power Bill held on February 16. Precisely. SEN. different sources of fundsand different intents. what would be paid by the last employer. OSMENA). SEN. No. BADELLES). they would still receive their retirement benefits. 2001. No. 1616 and C. You consider . 2002. 1616. OSMENA). are to be paid by the GSIS. You will enjoy all your rights. Your Honor. What we have objected to in the Senate is retirement benefits higher than what everybody else gets. Stated otherwise. we have objected to that. on February 12. But they are not being . as amended by R. BADELLES). separation benefits. BADELLES). NPC has the discretion whether to reabsorb or hire back those that avail of the separation benefits. . a retirement plan is a different program from a separation package. 8291. okay. We are not speaking of retirement here. it is clear that a separation pay at the time of the reorganization of the NPC and retirement benefits at the appropriate future time are two separate and distinct entitlements. THE CHAIRMAN (REP. J. J. THE CHAIRMAN (REP. No. and GSIS would merely refund the retirement premiums consisting of personal contributions of the . No. 1616. THE CHAIRMAN (SEN.A. x x x. So. SEN. . A retirement plan is a different program than separation. ANGULUAN: Yes. There is a whale of a difference between R.[67] Thus. No.A. On the other hand. okay. would be gratuity benefits. OSMENA (J). THE CHAIRMAN (REP. MR. Congress repeatedly assured them in several public and congressional hearings that on top of their separation benefits. Stated otherwise. like 150 percent or subject to the approval of the board which means sky is the limit. we are speaking of their separation benefits .A. The transcripts of the hearing bare the following: xxxx THE CHAIRMAN (REP. Will you present your paper? MR. OSMENA). OSMENA (J). you will get under the law and nobody will deprive you of that. Okay. and all of the rights that are provided to you by law. Well.[66] A year later. But what you are entitled to under the law. as long as they would qualify and meet the requirements for its entitlement. They will still be subject to the same conditions. All right. NPC. Anguluan.. the retirees are entitled to gratuity benefits to be paid by the last employer and refund of premiums to be paid by the GSIS. Meaning.A. They have different legal bases. disclose the following: xxxx THE CHAIRMAN (SEN. which is the subject issue in Herrera. so they are but what we are giving them is a special concession of retiring early. No.A.the plants are not being sold. . Separation benefits. 186. All right.

Article III of the 1987 Constitution [78] or the provision on nonimpairment of contracts. No. he would be able to enjoy the benefits provided in said laws. the retired employees earned their vested right under their contract of insurance after they religiously paid premiums to GSIS. No. 186 are not even considered as compensation.A. without notice and opportunity to be heard. Cruz. if misinterpreted as proscribing payment of retirement benefits under the GSIS law. that is. Section 8 of Article IX (B) of the 1987 Constitution reads: SEC.A. 1616. when an employee has complied with the statutory requirements to be entitled to receive his retirement benefits. a pensioner acquires a vested right to benefits that have become due as provided under the terms of the public employees pension statute. No. any present.A. No law can deprive such person of his pension rights without due process of law. under the different amendatory laws of C.[70] P.A. No. they have met all the conditions prescribed by law and are therefore entitled to receive their retirement benefits. No. where the employee retires and meets the eligibility requirements. No elective or appointive public officer or employee shall receive additional. Under C. He regularly pays the dues prescribed therefore. and who will retire. nor accept without the consent of the Congress.A. or indirect compensation.[75] this Court ratiocinated that: A retirement law such as C. 186. No. 186 and amendatory laws is in the nature of a contract between the government and its employees. It would be cruel to deny him the benefits he had been expecting at the end of his service by imposing conditions for his retirement. Moreover. double or indirect compensation. 8291 states: Whenever other laws provide similar benefits for the same contingencies covered by this Act. 186 like R. office. 8291 is not applicable. double. In Marasigan v.[69] It could not have meant to affect those employees who retired.employee plus interest. the member who qualifies to the benefits shall have the option to choose which benefits will be paid to him. No. 1146[71] and R. Pensions or gratuities shall not be considered as additional. Retirees enjoy a protected property interest whenever they acquire a right to immediate payment under preexisting law.A. GSIS is bound to pay the retirement benefits as it received the premiums from the employees and NPC. as amended. No. as they have different legal bases.[76] Thus. and the employers share without interest. he acquires a vested right to benefits that is protected by the due process clause. which are not found in the law. the exclusiveness of benefits rule provided under R. entitlement of qualified employees to receive separation pay and retirement benefits is not proscribed by the 1987 Constitution. Section 2 (e) of C. No. retirement benefits under C. with several amendments to C.A.A. When an employee joins the government service. Section 55 of R. In view of the fact that separation pay and retirement benefits are different entitlements. Indeed. It is believed to be a legal duty as well as a moral obligation on the part of the government to honor its commitments to its employees when as in this case. emolument. 8291. 660. would be unconstitutional as it would be violative of Section 10. No.[74] Under the GSIS law.[72] At any rate. 186. [77] Verily. or title of any kind from any foreign government. and different intents. Thus. .A. Under the contract.A.[73] Moreover. his right to retire and receive what is due him by virtue thereof becomes vested and may not thereafter be revoked or impaired. he has a right to expect that after rendering the required length of service and fulfilled the conditions stated in the laws on retirement. 8. No. unless specifically authorized by law. it is the GSIS who would pay the qualified employees their retirement benefits.A. different sources of funds.[68] the Court finds it necessary to clarify Herrera and categorically declare that it affected only those seeking benefitsunder R. Section 63 of the EPIRA law.D. 186 categorically states that  Benefits granted by this Act by virtue of such life or retirement insurance shall not be considered as compensation or emolument.

and not one that is doubtful. reasonableness and expediency of any law is primarily the function of the legislature. SO ORDERED. the Court reiterates: 1] that the dispositive portion in Herrera holding that separated and retired employees are not entitled to receive retirement benefits under Commonwealth Act No. . and continue to receive. however. Thus. The formulation of State policy is a legislative concern.D. Petition for Mandamus As for petitioner's prayer that he be reinstated. retiring. there must be a clear and unequivocal breach of the Constitution.A. and to justify its nullification. speculative or argumentative. [83] WHEREFORE.A. No. wisdom. which was to be paid by NPC. go into policy decisions which this Court must not delve into less we violate separation of powers. and retired employees should receive. displaced. R. No. the Court declares that separated. 1616. 1146.Accordingly. 660. retiring. and other GSIS and social security laws. or expedient is not for this Court to decide. suffice it to state that the issue has been rendered moot by the Decision and Resolutions of this Court in the case of NPC Drivers and Mechanics Association (NPC DAMA) v. No. National Power Corporation (NPC). the retirement benefits to which they are legally entitled. The wisdom of the privatization of the NPC cannot be looked into by this Court as it would certainly violate this guarded principle. Petitioner belabored on alleging facts to prove his point which. National Power Corporation (NPC) [79] and by the above disquisitions. and retired employees of NPC are legally entitled to the retirement benefits pursuant to the intent of Congress and as guaranteed by the GSIS laws. adequacy. being the last employer. the primary judge of the necessity. 2] that it did not proscribe the payment of the retirement benefits to qualified retirees under R. 186. rehired. 8291. premises considered and subject to the above disquisitions. it is not the proper subject of herein petition. In Conclusion While we commend petitioner's attempt to argue against the privatization of the NPC.[81] As in National Power Corporation Employees Consolidated Union (NECU) v.[82] this Court held: Whether the States policy of privatizing the electric power industry is wise. The wisdom and propriety of legislation is not for this Court to pass upon. just. [80] Every law has in its favor the presumption of constitutionality. and 3] that separated. the Petition for Certiorari and the Supplemental Petition for Mandamus are DISMISSED for lack of merit. referred only to the gratuity benefits under R. No. P.A. Hence.