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Republic vs.

Mangotara (2010)
G.R. No. 170375 | 2010-07-07

Subject: Filing of consolidated petitions under both Rules 45 and 65;


Hierarchy of courts; The proper parties in the expropriation proceedings;
Forum shopping; Expropriation vis--vis reversion; Petitions for review
under Rule 45; Jurisdiction vis--vis exercise of jurisdiction; Ordinary civil
action for reconveyance vis--vis special proceeding for quieting of title;
Title in quieting of title; Prescription; The requirements of posting a
supersedeas bond and depositing rent to stay execution; Preliminary
injunction to stay execution of RTC judgment against defendant in an
ejectment case; Cause of action for reversion; Res judicata.

THE PRECEDING CASES


All the petitions have for their common genesis the two cases discussed
below:
The 1914 Cacho Case
(Cacho v. Government of the United States)
Facts:
The late Doa Demetria Cacho applied for the registration of two parcels of
land, both located in Iligan City.
Lot 1, the smaller parcel, was purchased from Gabriel Salzos, who in turn
bought it from Datto Darondon and his wife Alanga, evidenced by a deed of
sale in favor of Salzos signed solely by Alanga, on behalf of Datto
Darondon.
Doa Demetria purportedly purchased Lot 2, the larger parcel, from Datto
Bunglay. Datto Bunglay claimed to have inherited Lot 2 from his uncle,
Datto Anandog, who died without issue.
Only the Government opposed the registration on the ground that the
properties formed part of a military reservation.

Held:
1. As to Lot 1: The deed held by Doa Demetria is executed only by Alanga,
a Moro and wife of Datto Darondon, which is not permitted either by the
Moro laws or the Civil Code of the Philippines at the time. At the time of
application for registration, Datto Darondon is still alive, and thus he must
present a deed renouncing all his rights in the small parcel of land in favor
of the applicant, Doa Demetria, before registration can be admitted.
2. As to Lot 2: The Court found that Datto Bunglay did not have title to the
parcel of land as nephew of Datto Anandog, according to the Civil Code and
the "Luwaran Code" of the Moros, which states that the brothers and sisters
of a deceased Moro inherit his property to the exclusion of the more distant
relatives. However, since Datto Anandog's sister, Alanga, appeared as a
witness for the applicant Doa Demetria without having made any claim to
the land, she was deemed to have ratified the sale made by her nephew.
3. Only Lot 2 was granted to Doa Demetria for registration, and the
Court also ordered a new survey of the property excluding all the
land not cultivated by Datto Anandog (the "southern part").
The 1997 Cacho Case
Facts:
Teofilo Cacho, claiming to be the late Doa Demetrias son and sole heir,
filed before the RTC a petition for reconstitution of two original certificates
of title (OCTs) over Lots 1 and 2. The petition was opposed by the Republic,
National Steel Corporation (NSC), and the City of Iligan.
The RTC granted the petition, but the CA reversed, because the re-issuance
of the decree for Lot 2 could not be made in the absence of the new survey
ordered by this Court in the 1914 Cacho case; the heir of a registered
owner may lose his right to recover possession of the property and title
thereto by laches; and Teofilo failed to establish his identity and existence
and that he was a real party-in-interest.
Held:

1. The Court found that the decrees of 1914 had in fact been issued and
attained finality. Requiring the submission of a new plan as a condition for
the re-issuance of the decree would render the finality attained by
the Cacho vs. U.S. case nugatory, thus, violating the fundamental rule
regarding res judicata.
2. The Court also ruled that laches cannot bar the issuance of a decree. A
final decision in land registration cases can neither be rendered inefficacious
by the statute of limitations nor by laches.
3. Finally, the Court was satisfied that Teofilo's identity was sufficiently
established, relying on an Affidavit of Adjudication as Doa Demetrias sole
heir, which he executed before the Philippine Consulate General in Chicago,
U.S. Teofilo also appeared personally before the Vice Consul in Chicago to
execute a Special Power of Attorney in favor of Atty. Godofredo Cabildo
(Atty. Cabildo) who represented him in this case. The Court stressed that
the execution of public documents is entitled to the presumption of
regularity and proof is required to assail and controvert the same.
4. Thus, the decrees of registration were re-issued bearing new numbers
and OCTs were issued for the two parcels of land in Doa Demetrias name.
THE PETITIONS AT BAR

The case involves seven consolidated Petitions for Review on Certiorari and
a Petition for Certiorari under Rules 45 and 65 of the Rules of Court,
respectively, arising from actions for quieting of title, expropriation,
ejectment, and reversion, which all involve the same parcels of land.
Expropriation Case
(G.R. No. 170375)
Republic vs. Hon. Mangotara, MCFC, and PNB
Facts:
The Complaint for Expropriation was originally filed by the Iron and Steel
Authority (ISA), now the NSC, against Maria Cristina Fertilizer Corporation
(MCFC), and the latters mortgagee, the Philippine National Bank (PNB).

President Ferdinand E. Marcos issued Presidential Proclamation No. 2239,


reserving in favor of ISA a parcel of land in Iligan City. MCFC occupied
certain portions of this parcel of land. When negotiations with MCFC failed,
ISA was compelled to file a Complaint for Expropriation.
The Republic was allowed by the Supreme Court to substitute for ISA when
the latter's statutory existence expired (ISA case), following so the RTC
ordered the substitution. The Republic then filed a Motion for Leave to file a
Supplemental Complaint seeking to implead Teofilo Cacho and Demetria
Vidal and their respective successors-in-interest, Landtrade Realty
Corporation (LANDTRADE) and Azimuth International Development
Corporation (AZIMUTH), alleging that Lots 1 and 2 involved in the 1997
Cacho case encroached and overlapped the parcel of land subject of
expropriation. The Motion was denied due to the Republic's failure to file a
Motion for Execution in the substitution case. The RTC called its Order for
substitution an "honest mistake".
MCFC then filed a Motion to Dismiss the expropriation case for: (1) failure
of the Republic to implead indispensable parties because MCFC insisted it
was not the owner of the parcels of land sought to be expropriated; and (2)
forum shopping considering the institution by the Republic of an action for
the reversion of the same parcels subject of the instant case for
expropriation.
Judge Mangotara dismissed the case, stating that Cacho vs. U.S. was
conclusive on the question of ownership of the properties. MCFC as the only
defendant was thus not the proper party defendant. The Republic was also
held guilty of forum-shopping for not disclosing the action for reversion.
The Republic filed with this Court the consolidated Petition for Review on
Certiorari and Petition for Certiorari under Rules 45 and 65 of the Rules of
Court, respectively, docketed as G.R. No. 170375.
Held:
Filing of consolidated petitions under both Rules 45 and 65
1. The Republic filed a pleading with the caption Consolidated Petitions for
Review on Certiorari (Under Rule 45) and Certiorari (Under Rule 65) of the
Rules of Court. (See MWSS vs. Court of Appeals)
2. The distinction of the two modes of appeal is clear. (See Nunez vs. GSIS

Family Bank) The most apparent is that errors of jurisdiction are best
reviewed in a special civil action for certiorari under Rule 65 while
errors of judgment can only be corrected by appeal in a petition for
review under Rule 45.
3. The Republic availed itself of the wrong mode of appeal by filing
Consolidated Petitions for Review under Rule 45 and for Certiorari under
Rule 65, when these are two separate remedies that are mutually exclusive
and neither alternative nor successive. Nevertheless, the Court treated the
Consolidated Petitions as a Petition for Review on Certiorari under Rule 45
and the allegations therein as errors of judgment.
Hierarchy of courts
4. The direct filing of the instant Petition with this Court did not violate the
doctrine of hierarchy of courts. According to Rule 41, Section 2(c) of
the Rules of Court, a decision or order of the RTC may be appealed
to the Supreme Court by petition for review on certiorari under Rule
45, provided that such petition raises only questions of law.
5. A question of law exists when the doubt or controversy concerns the
correct application of law or jurisprudence to a certain set of facts; or when
the issue does not call for an examination of the probative value of the
evidence presented, the truth or falsehood of facts being admitted. A
question of fact exists when the doubt or difference arises as to the truth or
falsehood of facts or when the query invites calibration of the whole
evidence considering mainly the credibility of the witnesses, the existence
and relevancy of specific surrounding circumstances, as well as their
relation to each other and to the whole, and the probability of the situation.
6. The Petition of the Republic raises pure questions of law, i.e., whether the
expropriation case should have been dismissed for failure to implead
indispensable parties and for forum shopping. Thus, the direct resort by the
Republic to this Court is proper.
The proper parties in the expropriation proceedings
7. The right of the Republic to be substituted for ISA as plaintiff is
affirmed. The failure of the Republic to actually file a motion for
execution does not render the substitution void. A writ of execution
requires the sheriff or other proper officer to whom it is directed to enforce
the terms of the writ. The Order of the RTC should be deemed as voluntary

compliance with a final and executory judgment of this Court, already


rendering a motion for and issuance of a writ of execution superfluous.
8. No substantive right was violated by the voluntary compliance by the
RTC with the directive in the ISA case even without a motion for execution
having been filed. To the contrary, the RTC merely enforced the judicially
determined right of the Republic to the substitution.
9. Defendants in an expropriation case are not limited to the owners
of the property to be expropriated, and just compensation is not
due to the property owner alone.(See De Knecht vs. Court of Appeals)
At the time of the Complaint for Expropriation, possessory/occupancy rights
of MCFC over the properties sought to be expropriated were undisputed. As
such, it MCFC can be named the defendant in the expropriation case.
10. The RTC also erred when it dismissed the case for having been filed
only against MCFC, and not against the owners. Dismissal is not the
remedy for misjoinder or non-joinder of parties, even for
indispensable parties. Only when there is refusal to implead such
indispensable party despite the order of the court should the case
be dismissed. (See Vda. De Manguerra vs. Risos)
11. An indispensable party is a party-in-interest without whom no final
determination can be had of an action. The owner of the property is not
necessarily an indispensable party in an expropriation case. When
the property already appears to belong to the Republic, there is no sense in
the Republic instituting expropriation proceedings against itself. It can still,
however, file a complaint for expropriation against the private persons
occupying the property. In such an expropriation case, the owner of the
property is not an indispensable party.
12. Presidential Proclamation No. 2239 explicitly states that the parcels of
land reserved to NSC are part of the public domain, hence, owned by the
Republic. Letter of Instructions No. 1277 recognized only the occupancy
rights of MCFC and directed NSC to institute expropriation proceedings to
determine the just compensation for said occupancy rights. Therefore, the
owner of the property is not an indispensable party in the original Complaint
for Expropriation.
Forum shopping
13. The Republic did not commit forum shopping. Forum-shopping takes

place when a litigant files multiple suits involving the same parties, either
simultaneously or successively, to secure a favorable judgment. It exists
where the elements of litis pendentia are present:
(a) Identity of parties, or at least parties who represent the same interests;
(b) Identity of rights asserted and reliefs prayed for;
(c) Identity with respect to the two preceding particulars in the two cases is
such that any judgment that may be rendered in the pending case,
regardless of which party is successful, would amount to res judicata in the
other case.
14. The elements of litis pendentia are wanting. There is no identity of
rights asserted and reliefs prayed for.
Expropriation vis--vis reversion
15. The Republic is not engaging in contradictions when it instituted both
expropriation and reversion proceedings for the same parcels of land. The
expropriation and reversion proceedings are distinct remedies that are not
necessarily exclusionary of each other.
16. The filing of a complaint for reversion does not preclude the
institution of an action for expropriation. Even if the land is reverted
back to the State, the same may still be subject to expropriation as
against the occupants thereof.
17. Hence, the filing by the Republic of the Supplemental Complaint for
Expropriation impleading Teofilo, Vidal, LANDTRADE, and AZIMUTH, is not
necessarily an admission that the parcels of land sought to be expropriated
are privately owned. At most, the Republic merely acknowledged in its
Supplemental Complaint that there are private persons also claiming
ownership of the parcels of land. The Republic can still consistently assert,
in both actions for expropriation and reversion, that the subject parcels of
land are part of the public domain.
The Quieting of Title Case
(G.R. Nos. 178779 and 178894)
LANDTRADE vs. Vidal and AZIMUTH; Cacho and/or Atty. Cabildo vs. Vidal
and AZIMUTH

Facts:
Demetria Vidal and AZIMUTH filed a Petition for Quieting of Title against
Teofilo, Atty. Cabildo, and the Register of Deeds of Iligan City. LANDTRADE
was allowed to intervene as owner of a portion of the subject parcel's of
land.
Vidal claimed that she and not Teofilo was the late Doa Demetrias sole
surviving heir, entitled to the parcels of land. AZIMUTH, for its part, filed the
Petition as Vidals successor-in-interest with respect to a portion of the
subject parcels of land pursuant to the Memorandum of Agreement and
Deed of Conditional Conveyance which Vidal executed in favor of AZIMUTH.
The RTC ruled in favor of Vidal and AZIMUTH. On appeal, the CA declared
that the 1997 Cacho case only determined the validity and efficacy of the
Affidavit of Adjudication that Teofilo executed before the Philippine
Consulate General in the U.S.A. The 1997 Cacho case, which had become
final and executory, did not vest upon Teofilo ownership of the parcels of
land as it merely ordered the re-issuance of a lost duplicate certificate of
title in its original form and condition. It also held that the RTC had
jurisdiction over Teofilo and LANDTRADE, since they voluntarily submitted to
its jurisdiction when they filed their answers. Moreover, Teofilo and
LANDTRADE were guilty of estoppel by laches for failing to assail the
jurisdiction of the RTC at the first opportunity and even actively
participating in the trial of the case and seeking affirmative reliefs.
The CA was also satisfied as to Vidal's identity as the granddaughter and
sole heiress of Doa Demetria, and that her rights to the property have not
yet prescribed having been filed within thirty years from when her rights
accrued (upon the death of her grandmother).
LANDTRADE filed with this Court a Petition for Review on Certiorari under
Rule 45 of the Rules of Court, which was docketed as G.R. No. 178779.
Teofilo and Atty. Cabildo filed their own Petition for Review on Certiorari
under Rule 45 of the Rules of Court, which was docketed as G.R. No.
178894.
Held:
Petitions for review under Rule 45

1. The Petitions contain factual and legal issues. In a petition for review
on certiorari under Rule 45 of the Rules of Court, only questions of
law may be raised as the Supreme Court is not a trier of facts. It is
settled that as a rule, the findings of fact of the Court of Appeals
especially those affirming the trial court are final and conclusive
and cannot be reviewed on appeal to the Supreme Court. The
exceptions to this rule are: (a) when the conclusion is a finding grounded
entirely on speculations, surmises or conjectures; (b) when the inference
made is manifestly mistaken, absurd or impossible; (c) when there is grave
abuse of discretion; (d) when the judgment is based on a misapprehension
of facts; (e) when the findings of fact are conflicting; (f) when the Court of
Appeals, in making its findings, went beyond the issues of the case and the
same is contrary to the admissions of both appellant and appellee; (g)
where the Court of Appeals manifestly overlooked certain relevant facts not
disputed by the parties and which, if properly considered, would justify a
different conclusion; and (h) where the findings of fact of the Court of
Appeals are contrary to those of the trial court, or are mere conclusions
without citation of specific evidence, or where the facts set forth by the
petitioner are not disputed by the respondent, or where the findings of fact
of the Court of Appeals are premised on absence of evidence but are
contradicted by the evidence on record. None of these exceptions are
present in the case at bar.
Jurisdiction vis--vis exercise of jurisdiction
2. Jurisdiction is not the same as the exercise of jurisdiction. As
distinguished from the exercise of jurisdiction, jurisdiction is the
authority to decide a cause, and not the decision rendered therein.
Where there is jurisdiction over the person and the subject matter,
the decision on all other questions arising in the case is but an
exercise of the jurisdiction. And the errors which the court may commit
in the exercise of jurisdiction are merely errors of judgment which are the
proper subject of an appeal.
3. Jurisdiction over the subject matter or nature of the action is
conferred only by the Constitution or by law. Once vested by law on a
particular court or body, 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. The power to change the jurisdiction of the
courts is a matter of legislative enactment, which none but the legislature
may do. Congress has the sole power to define, prescribe and apportion the
jurisdiction of the courts.

4. The RTC had jurisdiction over the subject matter and the parties. It also
has jurisdiction over an action for quieting of title under the circumstances
described in Section 19(2) of Batas Pambansa Blg. 129, as the value of the
properties fall within P20,000 and P50,000.
5. Considering that the RTC jurisdiction over the subject matter and parties,
then it can rule on all issues in the case, including those on Vidals status,
filiation, and heirship, in exercise of its jurisdiction.
The Agapay and Yaptinchay cases
6. LANDTRADE, Teofilo, and/or Atty. Cabildo cannot rely on the cases
of Agapay andYaptinchay to support their position that declarations on
Vidals status, filiation, and heirsip, should be made in special proceedings.
The vital factual distinction is that both cases arose from an action for
reconveyance, while the instant Petitions are for quieting of title. The two
are distinct remedies.
Ordinary civil action for reconveyance vis-a-vis special proceeding
for quieting of title
7. An action for reconveyance is an action in personam available to
a person whose property has been wrongfully registered under the
Torrens system in anothers name. Although the decree is recognized as
incontrovertible and no longer open to review, the registered owner is not
necessarily held free from liens. As a remedy, an action for reconveyance is
filed as an ordinary action in the ordinary courts of justice and not with the
land registration court. Reconveyance is always available as long as the
property has not passed to an innocent third person for value.
8. Quieting of title is a common law remedy for the removal of any
cloud upon or doubt or uncertainty with respect to title to real
property. Suits to quiet title are characterized as proceedings quasi
in rem. A quasi in rem judgment is conclusive only between the parties.
Generally, the registered owner of a property is the proper party to bring an
action to quiet title. However, this remedy may also be availed of by a
person other than the registered owner. Lack of an actual certificate of title
to a property does not necessarily bar an action to quiet title.
9. The Court pronounced in the Agapay and Yaptinchay cases that a
declaration of heirship cannot be made in an ordinary civil action such as an

action for reconveyance, but must only be made in a special proceeding, for
it involves the establishment of a status or right. The appropriate special
proceeding would have been the settlement of the estate of the decedent.
Nonetheless, an action for quieting of title is also a special proceeding,
specifically governed by Rule 63 of the Rules of Court on declaratory relief
and similar remedies.
10. The case herein is an action for quieting of title, a special proceeding
wherein the court is precisely tasked to determine the rights of the parties
as to a particular parcel of land, so that the complainant and those claiming
under him/her may be forever free from any danger of hostile claim.
11. There are also instances when the declaration of heirship need not be
made in a special proceeding. Where special proceedings had been
instituted but had been finally closed and terminated, or if a
putative heir has lost the right to have himself declared in the
special proceedings as co-heir and he can no longer ask for its reopening, then an ordinary civil action can be filed for his declaration
as heir in order to bring about the annulment of the partition or
distribution or adjudication of a property or properties belonging to
the estate of the deceased. (See Portugal vs. Portugal-Beltran)
Title in quieting of title
12. In an action for quieting of title, the subject matter is the title sought to
have quieted.Title is not limited to the certificate of registration
under the Torrens System (i.e., OCT or TCT). Pursuant to Article 477
of the Civil Code, the plaintiff must have legal or equitable title to,
or interest in, the real property subject of the action for quieting of
title. The plaintiff need not even be in possession of the property. If
she is indeed Doa Demetrias sole heir, Vidal already has equitable title to
or interest in the two parcels of land by right of succession, even though
she has not yet secured certificates of title to the said properties in her
name.
13. The issue of Teofilos heirship was not the lis mota of the 1997 Cacho
case. It was addressed by the Court in the 1997 Cacho case for the simple
purpose of determining Teofilos legal interest in filing a petition for the reissuance of the lost decrees. The Court merely found therein that Teofilos
Affidavit of Adjudication, executed in the U.S.A. before the Philippine
Consulate General, enjoyed the presumption of regularity and, thus,

sufficiently established Teofilos legal interest. The 1997 Cacho case,


however, did not conclusively settle that Teofilo is indeed Doa Demetrias
only heir and the present owner, by right of succession, of the subject
properties.
Factual findings of the RTC and the Court of Appeals
14. LANDTRADE, Teofilo, and/or Atty. Cabildo challenged the reliance of the
RTC on Vidals baptismal certificate, arguing that it has no probative value
and is not conclusive proof of filiation. However, the Court stated that
alternative means of proving an individuals filiation have been recognized.
(See Heirs of Ignacio Conti vs. Court of Appeals) It may be appreciated
together with other documents.
15. In contrast, LANDTRADE, Teofilo, and/or Atty. Cabildo failed to present
any evidence at all in support of their claims.
Prescription
16. It is too late for LANDTRADE to raise the issue of prescription for the
first time. In this jurisdiction, the defense of prescription cannot be
raised for the first time on appeal. Such defense may be waived,
and if it was not raised as a defense in the trial court, it cannot be
considered on appeal, the general rule being that the CA is not
authorized to consider and resolve any question not properly raised
in the lower court.
17. But even considering this defense, it still fails. An action for quieting of
title, as in this case, is a real action. Article 1141 of the Civil Code plainly
provides that real actions over immovables prescribe after thirty years.
Doa Demetria died in 1974, transferring by succession, her title to the two
parcels of land to her only heir, Vidal. Teofilo, through Atty. Cabildo, filed a
petition for reconstitution of the certificates of title covering said properties
in 1978. This is the first palpable display of Teofilos adverse claim to the
same properties, supposedly, also as Doa Demetrias only heir. When Vidal
and AZIMUTH instituted the case in 1998, only 20 years had passed, and
the prescriptive period for filing an action for quieting of title had not yet
prescribed.
18. Article 1411 of the Civil Code also clearly states that the 30-year
prescriptive period for real actions over immovables is without prejudice to
what is established for the acquisition of ownership and other real rights by

prescription. Thus, the Court must also look into the acquisitive prescription
periods of ownership and other real rights. Ordinary acquisitive prescription
requires possession of things in good faith and with just title for the time
fixed by law, which is ten years.
19. LANDTRADE cannot insist on the application of the 10-year ordinary
acquisitive prescription period since it cannot be considered a possessor in
good faith. The good faith of the possessor consists in the reasonable belief
that the person from whom he received the thing was the owner thereof,
and could transmit his ownership. LANDTRADE came to possession of the
two parcels of land after purchasing the same from Teofilo. However, Teofilo
is not the registered owner of the subject properties. The said properties
are still registered in Doa Demetrias name. The Affidavit of Adjudication,
by which Teofilo declared himself to be the sole heir of Doa Demetrias
estate, is not even annotated on the OCTs. Worse, LANDTRADE is not
dealing directly with Teofilo, but only with the latters attorney-in-fact, Atty.
Cabildo. One who buys from a person who is not a registered owner is not a
purchaser in good faith.
20. Extraordinary acquisitive prescription period of 30 years set by Article
1137 of the Civil Code does not apply either. LANDTRADE adversely
possessed the subject properties no earlier than 1996, when it bought the
same from Teofilo, and the case was already instituted two years later in
1998. LANDTRADE cannot tack its adverse possession of the two parcels of
land to that of Teofilo considering that there is no proof that the latter, who
is already residing in the U.S.A., adversely possessed the properties at all.
The Ejectment or Unlawful Detainer Case
(G.R. Nos. 170505, 173355-56, and 173563-64)
LANDTRADE vs. NAPOCOR and TRANSCO; NAPOCOR vs. CA and
LANDTRADE; NAPOCOR vs. CA and LANDTRADE
Facts:
The National Power Corporation (NAPOCOR) took possession of two parcels
of land in Iligan City where it built a sub-station and a warehouse. For more
than 30 years, NAPOCOR occupied and possessed said parcels of land
pursuant to its charter. The National Transmission Corporation (TRANSCO)
subsequently took over the sub-station.

Claiming ownership of the parcels of land where the Overton Sub-station


and Agus 7 Warehouse are located, LANDTRADE filed with the MTCC a
Complaint for Unlawful Detainer against NAPOCOR and TRANSCO.
LANDTRADE alleged that it acquired from Teofilo, through Atty. Cabildo, two
parcels of land in Iligan City, portions of which were being occupied by the
sub-station and warehouse only through the tolerance of LANDTRADE.
The MTCC ruled in favor of LANDTRADE.
On appeal to the RTC, NAPOCOR and TRANSCO filed a Joint Motion to
Suspend Proceedings citing Amagan vs. Marayag which ruled that if
circumstances should require, the proceedings in an ejectment case may be
suspended in whatever stage it may be found. They alleged that the
ejectment case should be held in abeyance pending the resolution of other
cases in which title over the same properties are in issue, i.e. annulment of
deed of sale by Teofilo against LANDTRADE and the Quieting of Title case by
Vidal and AZIMUTH against Teofilo and Atty. Cabildo.
The RTC denied the Joint Motion, holding that the pendency of other actions
involving the same parcels of land could not stay execution pending appeal
of the MTCC judgment because NAPOCOR and TRANSCO failed to post the
required bond and pay the monthly rentals. It then granted LANDTRADE's
Motion for Execution of the MTCC judgment pending appeal.
The CA, on the instance of NAPOCOR and TRANSCO, issued a TRO enjoining
the enforcement and implementation of the execution. It then held that the
public respondents committed grave abuse of discretion in allowing and/or
effecting the execution of the MTCC judgment pending appeal, since
NAPOCOR and TRANSCO were legally excused from complying with the
requirements for a stay of execution specified in Rule 70, Section 19 of the
Rules of Court, particularly, the posting of a supersedeas bond and periodic
deposits of rental payments. LANDTRADE appealed to the SC via a Petition
for Review on Certiorari under Rule 45 of the Rules of Court, which was
docketed as G.R. No. 170505.
With the impending lapse of the effectivity of the TRO, NAPOCOR filed with
the CA a Manifestation and Motion praying for the resolution of its
application for preliminary injunction. Afterwards, LANDTRADE filed an
Omnibus Motion seeking the issuance of a writ of execution pending appeal.
The CA granted the issuance of a writ of execution in favor of LANDTRADE
and denied the application for writ of preliminary injunction of NAPOCOR

and TRANSCO because Rule 70, Section 21 of the Rules of Court explicitly
provides that the RTC judgment in an ejectment case, which is adverse to
the defendant and pending appeal before the Court of Appeals, shall be
immediately executory and can be enforced despite further appeal.
Therefore, the execution of the RTC judgment pending appeal is the
ministerial duty of the Court of Appeals, specifically enjoined by law to be
done.
Held:
The requirements of posting a supersedeas bond and depositing
rent to stay execution
1. Rule 70, Section 19 of the Rules of Court lays down the requirements for
staying the immediate execution of the MTCC judgment against the
defendant in an ejectment suit:
(a) Appeal has been perfected;
(b) Defendant files a sufficient supersedeas bond;
(c) Deposits with the appellate court the amount of rent due from time to
time under the contract, if any, during the pendency of the appeal.
2. Rule 70, Section 19 of the Rules of Court applies only when the
judgment of a Municipal Trial Court (and any same level court such
as the MTCC) in an ejectment case is pending appeal before the
RTC. When the RTC had already resolved the appeal and its
judgment, in turn, is pending appeal before the Court of Appeals,
then Rule 70, Section 21 of the Rules of Court governs (See Uy vs.
Santiago): [t]he judgment of the Regional Trial Court against the
defendant shall be immediately executory, without prejudice to a further
appeal that may be taken therefrom. It no longer provides for the stay of
execution at such stage.
3. Thus, subsequent events have rendered the Petition of LANDTRADE in
G.R. No. 170505 moot and academic. It will serve no more purpose for the
Court to require NAPOCOR and TRANSCO to still comply with the
requirements of filing a supersedeas bond and depositing rent to stay
execution pending appeal of the MTCC judgment, as required by Rule 70,
Section 19 of the Rules of Court, when the appeal had since been resolved
by the RTC.
Preliminary injunction to stay execution of RTC judgment against

defendant in an ejectment case


4. NAPOCOR and TRANSCO argue that neither the rules nor jurisprudence
explicitly declare that Rule 70, Section 21 of the Rules of Court bars the
application of Rule 58 on preliminary injunction. Regardless of the
immediately executory character of the RTC judgment in an ejectment case,
the CA, before which said judgment is appealed, is not deprived of power
and jurisdiction to issue a writ of preliminary injunction when circumstances
so warrant.
5. Even if RTC judgments in unlawful detainer cases are immediately
executory, preliminary injunction may still be granted. There need only be
clear showing that there exists a right to be protected and that the acts
against which the writ is to be directed violate said right. (See Benedicto
vs. Court of Appeals)
6. Substantial considerations exist herein that compels the Court to issue a
writ of preliminary injunction enjoining the execution of the MTCC Decision.
First, the two parcels of land claimed by LANDTRADE are the subject of
several other cases. Second, NAPOCOR and TRANSCO have built a substation and warehouse over which the execution of the MTCC Decision will
have serious consequences, primordial of which is the widespread
disruption of the electrical power supply. Lastly, allowing execution pending
appeal would result in the payment of an astronomical amount in rentals.
The Cancellation of Titles and Reversion Case
(G.R. No. 173401)
Republic vs. Cacho, represented by alleged heirs Vidal and/or Cacho,
AZIMUTH, and LANDTRADE
Facts:
The Republic filed a Complaint for the Cancellation of OCT Nos. 0-1200
(a.f.) and 0-1201 (a.f.) and Reversion against the late Doa Demetria,
represented by her alleged heirs, Vidal and/or Teofilo, together with
AZIMUTH and LANDTRADE. The titles were issued under the authority of the
1914 Cacho case. The Republic alleged that the titles covered a much larger
area than that granted by the 1914 decision, which only granted the "larger
portion" (Lot 2). However, the technical description in OCT No. 0-1201
makes reference to Lot 1. OCT No. 0-1200 meanwhile did not comply with

the new survey of the "southern part" of the property as required by the
Court.
Vidal and AZIMUTH filed a Motion to Dismiss on the grounds that (1) the
Republic has no cause of action; (2) assuming that the Republic has a cause
of action, its Complaint failed to state a cause of action; (3) assuming that
the Republic has a cause of action, the same is barred by prior judgment;
(4) assuming further that the Republic has a cause of action, the same was
extinguished by prescription; and (4) the Republic is guilty of forum
shopping.
The RTC ruled in their favor. It stated that there was no showing that the
late Doa Demetria committed any wrongful act or omission in violation of
any right of the Republic. The Regalian doctrine does not apply in this case
because the titles were already issued to Doa Demetria and segregated
from the mass of the public domain. Likewise, the arguments of the
Republic, i.e., the absence of a new survey plan and deed, the titles covered
properties with much larger area than that granted by the LRC had been
answered squarely in the 1997 Cacho case. Also, the Complaint failed to
allege that fraud had been committed in having the titles registered and
that the Director of Lands requested the reversion of the subject parcels of
land. The Complaint was barred by res judicata because the 1914 Cacho
case already decreed the registration of the parcels of land in the late Doa
Demetrias name and the 1997 Cacho case settled that there was no merit
in the argument that the conditions imposed in the first case have not been
complied with. The cause of action has also prescribed and found the
Republic guilty of forum shopping.
Held:
Cause of action for reversion
1. Rule 2, Section 2 of the Rules of Court defines a cause of action as the
act or omission by which a party violates a right of another. Its essential
elements are the following: (1) a right in favor of the plaintiff; (2) an
obligation on the part of the named defendant to respect or not to violate
such right; and (3) such defendants act or omission that is violative of the
right of the plaintiff or constituting a breach of the obligation of the former
to the latter.
2. Reversion is an action where the ultimate relief sought is to
revert the land back to the government under the Regalian doctrine.

Considering that the land subject of the action originated from a


grant by the government, its cancellation is a matter between the
grantor and the grantee. The remedy of reversion can only be
availed of in cases of fraudulent or unlawful inclusion of the land in
patents or certificates of title. (See Republic vs. Guerrero)
3. The right of the Republic to institute an action for reversion is rooted in
the Regalian doctrine. Under the Regalian doctrine, all lands of the
public domain belong to the State, and that the State is the source
of any asserted right to ownership in land and charged with the
conservation of such patrimony. This same doctrine also states that
all lands not otherwise appearing to be clearly within private
ownership are presumed to belong to the State.
4. While the Republic does not dispute that that two parcels of land were
awarded to Doa Demetria in the 1914 Cacho case, it alleges that these
were not the same as those covered by OCT Nos. 0-1200 (a.f.) and 0-1201
(a.f.) issued in Doa Demetrias name 84 years later. If, indeed, the parcels
of land covered by said OCTs were not those granted to Doa Demetria in
the 1914 Cacho case, then it can be presumed, under the Regalian doctrine,
that said properties still form part of the public domain belonging to the
State.
5. Just because OCTs were already issued in Doa Demetrias name does
not bar the Republic from instituting an action for reversion, for the basic
premise in an action for reversion is that the certificate of title fraudulently
or unlawfully included land of the public domain, hence, calling for the
cancellation of said certificate. It is actually the issuance of such a
certificate of title which constitutes the third element of a cause of action
for reversion.
6. The Court further finds that the Complaint of the Republic sufficiently
states a cause of action for reversion, even though it does not allege that
fraud was committed in the registration or that the Director of Lands
requested the reversion. The existence of a cause of action is
determined by the allegations in the complaint. If the allegations in
the complaint furnish sufficient basis by which the complaint can be
maintained, the same should not be dismissed regardless of the defense
that may be assessed by the defendants. The Republic was able to
satisfactorily allege the unlawful inclusion, for lack of an explicit grant from
the Government, of parcels of public land into Doa Demetrias OCTs,
which, if true, will justify the cancellation of said certificates and the return

of the properties to the Republic.


7. The authority to institute an action for reversion, on behalf of the
Republic, is primarily conferred upon the OSG. While the OSG, for most of
the time, will file an action for reversion upon the request or
recommendation of the Director of Lands, there is no basis for saying that
the former is absolutely bound or dependent on the latter.
Res judicata
8. The doctrine of res judicata comprehends two distinct concepts: (1) bar
by former judgment, and (2) conclusiveness of judgment. For res judicata
to serve as an absolute bar to a subsequent action, the following requisites
must concur: (1) the former judgment or order must be final; (2) the
judgment or order must be on the merits; (3) it must have been rendered
by a court having jurisdiction over the subject matter and parties; and (4)
there must be between the first and second actions, identity of parties, of
subject matter, and of causes of action. When there is no identity of
causes of action, but only an identity of issues, there exists res
judicata in the concept of conclusiveness of judgment. Although it
does not have the same effect as res judicata in the form of bar by
former judgment which prohibits the prosecution of a second action
upon the same claim, demand, or cause of action, the rule on
conclusiveness of judgment bars the relitigation of particular facts
or issues in another litigation between the same parties on a
different claim or cause of action.
9. The 1914 Cacho case does not bar the Complaint for reversion by res
judicata in either of its two concepts. There is no bar by prior judgment
because the 1914 Cacho case and said Complaint do not have the same
causes of action and, even possibly, they do not involve identical subject
matters.
10. Land registration cases, such as that from which the 1914 Cacho case
arose, are special proceedings where the concept of a cause of action in
ordinary civil actions does not apply. In special proceedings, the purpose is
to establish a status, condition or fact; in land registration proceedings, the
ownership by a person of a parcel of land is sought to be established. An
action for reversion is that where the cause of action is the unlawful
inclusion of parcels of public land that were not among those granted to
Doa Demetria in the 1914 Cacho case. The Republic no longer questions
that Doa Demetria was adjudged the owner of two parcels of land in the

1914 Cacho case. The Republic is only insisting on the strict adherence to
the judgment of the Court in the 1914 Cacho case.
11. Bar by prior judgment does not apply for lack of identity of causes of
action between the 1997 Cacho case and the case herein. The 1997 Cacho
case involves a petition for re-issuance of decrees of registration. In the
absence of principles and rules specific for such a petition, the Court refers
to those on reconstitution of certificates of title, being almost of the same
nature and granting closely similar reliefs.
12. Reconstitution denotes a restoration of the instrument which is
supposed to have been lost or destroyed in its original form or
condition. The purpose of the reconstitution of title or any
document is to have the same reproduced, after observing the
procedure prescribed by law, in the same form they were when the
loss or destruction occurred. Reconstitution is another special
proceeding where the concept of cause of action in an ordinary civil
action finds no application.
13. The 1997 Cacho case only settled the issuance, existence, and
subsequent loss of Decree Nos. 10364 and 18969. Consequently, said
decrees could be re-issued in their original form or condition. The Court,
however, could not have passed upon in the 1997 Cacho case the issues on
whether Doa Demetria truly owned the parcels of land covered by the
decrees and whether the decrees and the OCTs subsequently issued
pursuant thereto are void for unlawfully including land of the public domain
which were not awarded to Doa Demetria.(See Heirs of Susana de
Guzman Tuazon vs. Court of Appeals)
14. Whatever findings the Court made on the issue of ownership in the
1997 Cacho case are mere obiter dictum. (See Amoroso vs. Alegre, Jr.)
15. The 1997 Cacho case, by reason of conclusiveness of judgment,
prevents the Republic from again raising as issues the issuance and
existence of the decrees, but not the validity of said decrees, as well as the
certificates of title issued pursuant thereto.
Forum shopping
16. Given the preceding disquisition of the Court that the 1914 and 1997
Cacho cases do not constitute res judicata, then the Court also cannot
sustain the dismissal by the RTC of the Complaint of the Republic for forum

shopping.
Prescription
17. Prescription does not run against the State and its subdivisions.
When the government is the real party in interest, and it is
proceeding mainly to assert its own right to recover its own
property, there can as a rule be no defense grounded on laches or
prescription. Public land fraudulently included in patents or
certificates of title may be recovered or reverted to the State in
accordance with Section 101 of the Public Land Act. The right of
reversion or reconveyance to the State is not barred by
prescription. (See Republic vs. Court of Appeals, G.R. No. 60169)
18. Thus, despite the lapse of one year from the entry of a decree of
registration/certificate of title, the State, through the Solicitor General, may
still institute an action for reversion when said decree/certificate was
acquired by fraud or misrepresentation. Indefeasibility of a title does not
attach to titles secured by fraud and misrepresentation. Well-settled is the
doctrine that the registration of a patent under the Torrens system does not
by itself vest title; it merely confirms the registrants already existing one.
Verily, registration under the Torrens system is not a mode of acquiring
ownership.
19. The Court had several times in the past recognized the right of the
State to avail itself of the remedy of reversion in other instances when the
title to the land is void for reasons other than having been secured by fraud
or misrepresentation. (See Spouses Morandarte vs. Court of Appeals;
Republic of the Phils. vs. CFI of Lanao del Norte, Br. IV) If the Republic is
able to establish after trial and hearing that the decrees and OCTs in Doa
Demetrias name are void for some reason, then the trial court can still
order the reversion of the parcels of land covered by the same because
indefeasibility cannot attach to a void decree or certificate of title. The RTC
jumped the gun when it declared that the cause of action of the Republic for
reversion was already lost or extinguished by prescription based on the
Complaint alone.
Ma. Teresa Biaco vs Philippine Countryside Rural Bank
Ernesto Biaco, husband of Teresa Biaco, acquired several loans from Philippine
Countryside Rural Bank (PCRB) from 1996 to 1998. To secure the loans, he
mortgaged certain property in favor of the bank. He was able to pay loans from 1996 to

1997 but he defaulted in loans obtained in 1998 which amounted to more than a million
pesos.
Eventually, PCRB filed a complaint for foreclosure against the spouses Biaco.
Summons were issued by the trial judge. The Sherriff served the summons to Ernesto
at the latters office. No summons was served to Teresa.
Ernesto did not file a responsive pleading (so did Teresa because she was not aware
sans the summons being served her). The case was heard ex-parte and the spouses
were ordered to satisfy the debt and failure to do so will authorize the Sheriff to auction
the mortgaged the property.
Eventually, the mortgaged property was auctioned for P150k which is not sufficient to
cover the P1 M+ debt. Upon motion by PCRB, a notice of levy was issued against the
personal properties of Teresa to satisfy the deficiency.
It was only at this point that Teresa learned of the previous ex parte proceedings. She
then sought to have the judgment annulled as she now claims that she was deprived of
due process when she did not receive summons; that it was only her husband who
received the summons; that there was extrinsic fraud because her husband
deliberately hid the fact of the foreclosure proceeding.
PRCB argued that the foreclosure proceeding is an action quasi in rem, hence Teresas
participation is not required so long as the court acquires jurisdiction over the res which
is what happened in the case at bar; that Teresa cannot invoke extrinsic fraud because
such situation cannot occur in her case because she is a co-defendant of Ernesto.
ISSUE: Whether or not the judgment of the trial court should be annulled.
HELD: Yes. It is admitted that the proceeding is a quasi in rem proceeding and that the
presence of Teresa is not required because the trial court was able to acquire
jurisdiction over the res (mortgaged property). HOWEVER, her constitutional right to
due process is superior over the procedural matters mentioned. Her right to due
process was violated when she did not receive summons. Teresa, as a resident
defendant, who does not voluntary appear in court must be personally served with
summons as provided under Section 6, Rule 14 of the Rules of Court. Even if the
action is quasi in rem, personal service of summons is essential in order to afford her
due process. The substituted service made by the sheriff at her husbands office
cannot be deemed proper service absent any explanation that efforts had been made
to personally serve summons upon her but that such efforts failed. Further, the order of
the trial court compelling Teresa to pay off the debt using her personal property is a

judgment in personam which the court cannot do because it only acquired jurisdiction
over the res and not over the person of Teresa.
On the issue of extrinsic fraud, the Court of Appeals, agreeing with PCRB, is correct
that there is none in the case at bar. Extrinsic fraud exists when there is a fraudulent
act committed by the prevailing party outside of the trial of the case, whereby
the defeated party was prevented from presenting fully his side of the case by fraud or
deception practiced on him by the prevailing party. Extrinsic fraud is present where
the unsuccessful party had been prevented from exhibiting fully his case, by fraud or
deception practiced on him by his opponent, as by keeping him away from court, a
false promise of a compromise; or where the defendant never had knowledge of the
suit, being kept in ignorance by the acts of the plaintiff; or where an attorney
fraudulently or without authority assumes to represent a party and connives at his
defeat; or where the attorney regularly employed corruptly sells out his clients interest
to the other side. The above is not applicable in the case of Teresa. It was not PCRB
which made any fraud. It should be noted that spouses Biaco were co-defendants in
the case and shared the same interest.
VELAYO-FONG V. SPOUSES VELAYOFacts:
-Spouses Raymond and Maria Hedy Velayo filed a complaint for collection of sum of
money against Velayo-Fong.
-In the complaint, Spouses Velayo alleged that Velayo-Fong was a resident of
Honolulu, Hawaii, USA.
-Since Velayo-Fong was a non-resident and not found in the Philippines, Spouses
Velayo-Fong prayed for a writ to attach Velayo-Fong's properties found inthe
Philippines.
-However, before the application for the writ can be acted upon by the RTC, Spouses
Velayofiled an Urgent Motion praying that the summons be served toVelayo-Fong at
her Two Condominium Suites. One at Roxas Boulevard, Pasay City and another, at
Burgos Street, T. Towers Condominium, Makati.Subsequently, the RTC granted the
said motion.
-Then, the Process Server indicated on his Officers Return that after several failed
attempts to serve the copy of summons and complaints issued at thegiven addresses
of Velayo-Fong, finally, the Process Server was able to serve personally the summons
together with the copy of the complaint upon Velayo-Fong, not at her two addresses
but at the lobby of a hotel, right in the presence of a lobby counter personnel but
Velayo-Fong refused to sign in receipt thereof.
-Later, the RTC in its Order declared Velayo-Fong in default for failure to file an answer.

-Velayo-Fong, upon knowing the order of the RTC, filed a Motion to Set Aside Order of
Default claiming that she was prevented from filing a responsive pleading and
defending herself against respondents' complaint because of fraud, accident or
mistake; that contrary to the Officer's Return, no summons wasserved upon her; that
she has valid and meritorious defenses to refute respondents' material allegations.
-The RTC denied the Motion and CA affirmed RTCs order.
-Now, Velayo-Fong questioned the propriety and validity of the service of summons
made upon her as she did not remember having been served withsummons but
remembers that a man hurled some papers at her while she was entering the elevator
and, not knowing what the papers were all about, shethrew back the papers to the man
before the elevator closed; that she has a valid and meritorious defense to refute the
material allegations of respondents' complaint.
-She also argued that the summons should have been served through extraterritorial
service since she is a non-resident.
I SSUES: 1. How may service of summons be effected on a non-resident?2. WON
there was a valid service of summons on Velayo-Fong. YES.Ruling:
1.Under Sec. 17, Rule 14, when the defendant is a nonresident and he is not found in
the country, summons may be served extraterritorially. This kind of service of summons
applies only where the action is in rem because in in remand quasi in rem actions,
jurisdiction over the person of the defendant is not a prerequisite to confer jurisdiction
on the court provided that the court acquires jurisdiction over the res.a.
Where the action is in personam and when the defendant is a non-resident, personal
service of summons within the state is essential to theacquisition of jurisdiction over the
person. This cannot be done, however, if the defendant is not physically present in the
country, and thus, thecourt cannot acquire jurisdiction over his person and therefore
cannot validly try and decide the case against him.b.
In the present case, Spouses Velayo's cause of action and their prayer that actual and
moral damages, plus attorney's fees, be awarded in their favor affect the parties alone,
not the whole world. Any judgment therein is binding only upon the parties properly
impleaded. Thus, it is an actionin personam. As such, personal service of summons
upon the defendants is essential in order for the court to acquire jurisdiction over
their persons.c.

Although in the complaint, Velayo-Fong was alleged to be a non-resident who is not


found in the Philippines for which reason the Spouses first prayed that a writ of
preliminary attachment be issued against her properties within the Philippines to confer
jurisdiction upon the RTC. However,the spouses did not pursue its application for said

writ when Velayo-Fong was subsequently found physically present in the Philippines
and personal service of summons was effected on her.
2 A process server's certificate of service is prima facie evidence of the facts as set out
in the certificate.
Between the claims of non-receipt of summons by a party against the assertion of an
official whose duty is to send notices, the latter assertion is secured by the presumption
that official duty has been regularly performed.
To overcome the presumption of regularity of performance of official functions in favor
of such Officer's Return, the evidence against it must beclear and convincing.
In this case, Velayo-Fong failed to come forward with the requisite quantum of proof to
the contrary, the presumption of regularity of performanceon the part of the process
server stands.NOTEs:
-the party seeking to have the order of default lifted must first show that her failure to
file an answer or any other responsive pleading was due to fraud,accident, mistake, or
excusable neglect and then she must show that she has a valid and meritorious
defense.
-In this case, petitioner failed to show that her failure to file an answer was due to
fraud, accident, mistake or excusable neglect. Except for her bareunsupported
allegation that the summons were only thrown to her at the elevator, petitioner did not
present any competent evidence to justify the settingaside of the order of default.
-she must also show that she has a meritorious defense or that something would be
gained by having the order of default set aside.
-In the present case, petitioner contented herself with stating in her affidavit of merit
that the cases against respondent Raymond were filed at the instance of her father.
41 Such allegation is a conclusion rather than a statement of facts showing a
meritorious defense. The affidavit failed to controvert the facts alleged by the
respondents. Petitioner has not shown that she has a meritorious defense.
-Velayo-Fong failed to show that her failure file an answer was not due to fraud,
accident, mistake, or excusable neglect; and that she had a valid and meritorious
defense, there is no merit to her prayer for a liberal interpretation of procedural rules.

LEGASPI TOWERS 300, INC., LILIA MARQUINEZ PALANCA, ROSANNA D. IMAI,


GLORIADOMINGO and RAY VINCENT,
Petitioners,vs.
AMELIA P. MUER, SAMUEL M. TANCHOCO, ROMEO TANKIANG, RUDEL
PANGANIBAN,DOLORES AGBAYANI, ARLENEDAL A. YASUMA, GODOFREDO M.
CAGUIOA and EDGARDO M.SALANDANAN,
Respondents.
FACTS:
Pursuant to the by-laws of Legaspi Towers 300, Inc., petitioners Lilia Marquinez
Palanca, Rosanna D.Imai, Gloria Domingo and Ray Vincent, the incumbent Board of
Directors, set the annual meeting of themembers of the condominium corporation and
the election of the new Board of Directors at the lobby of Legaspi Towers 300, Inc. The
Committee on Elections of Legaspi Towers 300, Inc., however, foundmost of the proxy

votes, at its face value, irregular, thus, questionable; and for lack of time toauthenticate
the same, petitioners adjourned the meeting for lack of quorum.However, the group of
respondents challenged the adjournment of the meeting. Despite petitioners'insistence
that no quorum was obtained during the annual meeting held on April 2, 2004,
respondentspushed through with the scheduled election and were elected as the new
Board of Directors andofficers of Legaspi Towers 300, Inc. and subsequently submitted
a General Information Sheet to theSecurities and Exchange Commission (SEC).
On plaintiffs motion to admit amended complaint (to include Legaspi Towers 300,
Inc. as plaintiff),the RTC ruled denying the motion for being improper. Then, petitioners
filed with the Court of Appealsand held that Judge Antonio I. De Castro of the Regional
Trial Court (RTC) of Manila, did not commitgrave abuse of discretion in issuing the
Orders denying petitioners Motion to Admit Second Amended
Complaint and that petitioners the justified the inclusion of Legaspi Towers 300, Inc. as
plaintiff byinvoking thedoctrine of derivative suit.
Petitioners motion for reconsideration was denied by the Court of Appeals thereafter.
Hence thispetition.
ISSUE:Whether or not Derivative Suit is proper in this case.
RULING:
The Supreme Court DENIED the petition and AFFIRMED the Decision of the Court of
Appeals.Derivative Suit is not applicable.Since it is the corporation that is the real
party-in-interest in a derivative suit, then the reliefs prayedfor must be for
the benefit or interest of the corporation
. When the reliefs prayed for do not pertainto the corporation, then it is an improper
derivative suit.The requisites for a derivative suit are as follows:a) the party bringing
suit should be a shareholder as of the time of the act or transactioncomplained of, the
number of his shares not being material;b) he has tried to exhaust intra-corporate
remedies, i.e., has made a demand on the board of directors for the appropriate relief
but the latter has failed or refused to heed his plea; andc) the cause of action actually
devolves on the corporation, the wrongdoing or harm having been, or being caused to
the corporation and not to the particular stockholder bringing the suit.
As stated by the Court of Appeals, petitioners complaint seek to nullify the said
election, and to protect and enforce their individual right to vote. The cause of action
devolves on petitioners, not thecondominium corporation, which did not have the right
to vote. Hence, the complaint for nullification of the election is a direct action by
petitioners, who were the members of the Board of Directors of thecorporation before
the election, against respondents, who are the newly-elected Board of Directors.Under
the circumstances, the derivative suit filed by petitioners in behalf of the
condominiumcorporation in the Second Amended Complaint is improper.

JUANA COMPLEX I HOMEOWNERS ASSOCIATION, INC., et al.- versus -FILESTATE LAND, INC., et al.March 5, 2012
Facts:
Juana Complex I Homeowners Association, Inc.
(JCHA) , together with individual residents of Juana Complex I and other neighboring
subdivisions (collectively referred as JCHA, et. al.),
instituted a complaint for damages, in its own behalf and as a classsuit representing
the regular commuters and motorists of Juana Complex I and neighboring subdivisions
who were deprived of theuse of La Paz Road, against Fil-Estate Land, Inc. Accordingly,
JCHA, et al. also prayed for the immediate issuance of a Temporary Restraining Order
(TRO) or a writ of preliminary injunction (WPI) to enjoin Fil-Estate, et al. from stopping
and intimidating them in their use of La Paz Road.Fil-Estate, et al. filed a motion to
dismiss arguing that the complaint failed to state a cause of action and that it was
improperly filedas a class suit. . They claim that the excavation of La Paz Road would
not necessarily give rise to a common right or cause of action for JCHA, etal. against
them since each of them has a separate and distinct purpose and each may be
affected differently than the others. With regard to the issuance of the WPI, the
defendants averred that JCHA, et al. failed to show that they had a clear and
unmistakable right to the use of La Paz Road; and further claimed that La Paz Road
was a torrens registered private road and there was neither a voluntary nor legal
easement constituted over it.
Issues:

A)Whether or not the complaint states a cause of action;B)Whether or not the


complaint was properly filed as a class suit C)Whether or not a WPI is warranted
Held:
A) The question of whether the complaint states a cause of action is determined by its
averments regarding the actscommitted by the defendant. Thus, it must contain a
concise statement of the ultimate or essential facts constituting the plaintiffs cause of
action.The test of sufficiency of facts alleged in the complaint as constituting a cause of
action is whether or not admitting thefacts alleged, the court could render a valid
verdict in accordance with the prayer of said complaint.In the present case, the Court
finds the allegations in the complaint sufficient to establish a cause of action.
First, JCHA, et al.s averments in the complaint show a demandable right over La Paz
Road.
These are:
(1)their right to use the road on the basis of their allegation that they had been using
the road for more than 10 years; and(2) an easement of a right of way has been
constituted over the said roads
B) The necessary elements for the maintenance of a class suit are:
1) the subject matter of controversy is one of common or general interest to
many persons;2) the parties affected are so numerous that it is impracticable to bring
them all to court; and3) the parties bringing the class suit are sufficiently numerous or
representative of the class and can fully protectthe interests of all concerned.In this
case, the suit is clearly one that benefits all commuters and motorists who use La
Paz Road. The individuals sought to be represented by private respondents in the suit
are so numerous that it is impracticable to join them all as parties and be named
individually as plaintiffs in the complaint.
C) A writ of preliminary injunction is available to prevent a threatened or continuous
irremediable injury to parties before their claims can bethoroughly studied and
adjudicated.
The requisites for its issuance are: (1) the existence of a clear and unmistakable right
that must be protected;and (2) an urgent and paramount necessity for the writ to
prevent serious damage.For the writ to issue, the right sought to be protected must be
a present right, a legal right which must be shown to be clear and positive.This means
that the persons applying for the writ must show that they have an ostensible right to
the final relief prayed for in their complaint.In the case at bench, JCHA, et al. failed
to establish a

prima facie proof of violation of their right to justify the issuance of a WPI. Their right to
the useof La Paz Road is disputable since they have no clear legal right therein.
.

Banda v. Ermita
G.R. No. 166620 April 20, 2010
FACTS:
President GMA issued Executive Order No. 378 on 2004 amending Section 6
of Executive Order No. 285by, inter alia, removing the exclusive jurisdiction
of the NPO (National Printing Office) over the printingservices requirements
of government agencies and instrumentalities.Pursuant to Executive Order
No. 378, government agencies and instrumentalities are allowed to source
their printing services from the private sector through competitive bidding,
subject to the condition that theservices offered by the private supplier be
of superior quality and lower in cost compared to what wasoffered by the
NPO. Executive Order No. 378 also limited NPOs appropriation in the
GeneralAppropriations Act to its income. Perceiving Executive Order No. 378
as a threat to their security of tenure as employees of the NPO,petitioners
now challenge its constitutionality, contending that: (1) it is beyond the
executive powers of President Arroyo to amend or repeal Executive Order
No. 285 issued by former President Aquino when thelatter still exercised
legislative powers; and (2) Executive Order No. 378 violates petitioners
security of tenure, because it paves the way for the gradual abolition of the
NPO.
Issue: Whether or not the complaint was properly filed as a class suit
Held:
Before proceeding to resolve the substantive issues, the Court must first
delve into a procedural matter. Since petitioners instituted this case as a
class suit, the Court, thus, must first determine if the petition indeed
qualifies as one. In Board of Optometry v. Colet,[2] we held that [c]ourts
must exercise utmost caution before allowing a class suit, which is the
exception to the requirement of joinder of all indispensable parties. For
while no difficulty may arise if the decision secured is favorable to the
plaintiffs, a quandary would result if the decision were otherwise as those
who were deemed impleaded by their self-appointed representatives would
certainly claim denial of due process.

Section 12, Rule 3 of the Rules of Court defines a class suit, as follows:
Sec. 12. Class suit. When the subject matter of the controversy is one of
common or general interest to many persons so numerous that it is
impracticable to join all as parties, a number of them which the court finds
to be sufficiently numerous and representative as to fully protect the
interests of all concerned may sue or defend for the benefit of all. Any party
in interest shall have the right to intervene to protect his individual interest.
From the foregoing definition, the requisites of a class suit are: 1) the
subject matter of controversy is one of common or general interest to many
persons; 2) the parties affected are so numerous that it is impracticable to
bring them all to court; and 3) the parties bringing the class suit are
sufficiently numerous or representative of the class and can fully protect the
interests of all concerned.
In Mathay v. The Consolidated Bank and Trust Company,[3] the Court held
that:
An action does not become a class suit merely because it is designated as
such in the pleadings. Whether the suit is or is not a class suit depends upon
the attending facts, and the complaint, or other pleading initiating the
class action should allege the existence of the necessary facts, to wit,
the existence of a subject matter of common interest, and the existence of a
class and the number of persons in the alleged class, in order that
the court might be enabled to determine whether the members of
the class are so numerous as to make it impracticable to bring
them all before the court, to contrast the number appearing on the
record with the number in the class and to determine whether
claimants on record adequately represent the class and the subject
matter of general or common interest. (Emphases ours.)
Here, the petition failed to state the number of NPO employees who would
be affected by the assailed Executive Order and who were allegedly
represented by petitioners. It was the Solicitor General, as counsel for
respondents, who pointed out that there were about 549 employees in the
NPO.[4] The 67 petitioners undeniably comprised a small fraction of the NPO
employees whom they claimed to represent. Subsequently, 32 of the
original petitioners executed an Affidavit of Desistance, while one signed a
letter denying ever signing the petition, [5] ostensibly reducing the number of
petitioners to 34. We note that counsel for the petitioners challenged the
validity of the desistance or withdrawal of some of the petitioners and
insinuated that such desistance was due to pressure from people close to
the seat of power.[6] Still, even if we were to disregard the affidavit of
desistance filed by some of the petitioners, it is highly doubtful that a
sufficient, representative number of NPO employees have instituted this

purported class suit. A perusal of the petition itself would show that of the
67 petitioners who signed the Verification/Certification of Non-Forum
Shopping, only 20 petitioners were in fact mentioned in the jurat as having
duly subscribed the petition before the notary public. In other words, only
20 petitioners effectively instituted the present case.
Indeed, in MVRS Publications, Inc. v. Islamic Dawah Council of the
Philippines, Inc.,[7] we observed that an element of a class suit or
representative suit is the adequacy of representation. In determining
the question of fair and adequate representation of members of a class, the
court must consider (a) whether the interest of the named party is
coextensive with the interest of the other members of the class; (b) the
proportion of those made a party, as it so bears, to the total membership of
the class; and (c) any other factor bearing on the ability of the named party
to speak for the rest of the class.
Previously, we held in Ibaes v. Roman Catholic Church[8] that where the
interests of the plaintiffs and the other members of the class they seek to
represent are diametrically opposed, the class suit will not prosper.
It is worth mentioning that a Manifestation of Desistance, [9] to which the
previously mentioned Affidavit of Desistance[10] was attached, was filed by
the President of the National Printing Office Workers Association
(NAPOWA). The said manifestation expressed NAPOWAs opposition to the
filing of the instant petition in any court. Even if we take into account the
contention of petitioners counsel that the NAPOWA President had no legal
standing to file such manifestation, the said pleading is a clear indication
that there is a divergence of opinions and views among the members of the
class sought to be represented, and not all are in favor of filing the present
suit. There is here an apparent conflict between petitioners interests and
those of the persons whom they claim to represent. Since it cannot be said
that petitioners sufficiently represent the interests of the entire class, the
instant case cannot be properly treated as a class suit.
Public interest center v Roxas
Facts:
On February 9, 1976, respondent National Power Corporation (NPC) entered
into a contract (the Contract) with respondent Westinghouse Electric S.A.
(WESA), an affiliate or subsidiary of respondent Westinghouse Electric
Corporation (WESTINGHOUSE), whereby WESA undertook to construct in
favor of the NPC a 620-megawatt nuclear power plant at
Morong, Bataan and to supply equipment, machineries and services
therefor.[1]

WESA subsequently executed a deed of assignment transferring all its


rights and responsibilities in the Contract to its construction arm-agent,
respondent Westinghouse International Projects Company (WIPCO). [2]
In 1986, President Corazon Aquino issued Executive Order (E.O.) No. 55,
which was later amended by E.O. No. 98, transferring ownership of the
already constructed power plant, which had become known as the Bataan
Nuclear Power Plant (BNPP), its equipment, materials and facilities, records
and uranium fuel, to the National Government or its duly constituted
agency.[3] Pursuant to E.O. No. 55, as amended, the National Government
assumed all remaining foreign and local obligations incurred by the NPC in
financing the construction of the BNPP.[4]
In 1988, the Aquino administration instituted a complaint against
WESTINGHOUSE in New Jersey, U.S.A. WESTINGHOUSE later filed an
arbitration case in Geneva,Switzerland.[5]
On September 27, 1995, President Fidel Ramos authorized the following
government officials as members of a Government Panel to conduct
exploratory discussions with WESTINGHOUSE for the possible settlement of
pending legal proceedings: Chief Presidential Legal Counsel Antonio T.
Carpio,[6] Solicitor General Raul T. Goco, Assistant Secretary Cyril Del Callar,
General Counsel Alberto L. Pangcog, and Counsel Mark Augenblick. [7]
Subsequently or on October 4, 1995, President Ramos issued E.O. No. 265,
which amended E.O. No. 315 dated January 1, 1988, creating the
Presidential Committee on the Bataan Nuclear Power Plant (PC-BNPP
Committee).
E.O. No. 265 provided that the PC-BNPP Committee [8] shall be the
coordinating and policy-making body on the BNPP, including policies arising
from negotiations for a fair commercial settlement of all pending legal
claims that will provide a substantial net benefit to the country, which shall
submit its recommendations on BNPP-related policies to the President for
approval.[9]
On October 11, 1995, the PC-BNPP Committee issued a RESOLUTION
ADOPTING THE ESSENTIAL TERMS AND CONDITIONS ARRIVED AT BY THE
GOVERNMENT PANEL AND WESTINGHOUSE REPRESENTATIVES DURING THE
EXPLORATORY DISCUSSIONS FROM SEPTEMBER 29, 1995 TO OCTOBER 9,
1995 FOR A COMPROMISE SETTLEMENT OF THE BNPP CONTROVERSY AND
FAVORABLY RECOMMENDING APPROVAL THEREOF TO HIS EXCELLENCY, THE
PRESIDENT.
On October 13, 1995, the Settlement Agreement reflected in the abovequestioned Resolution of the PC-BNPP was forged by the Republic and NPC
on one hand, and respondentWESTINGHOUSE corporations on the other.[11]

On November 14, 1995, petitioners, as taxpayers, filed with the Regional


Trial Court (RTC) of Quezon City a Complaint against herein private
respondents, for declaration of nullity of the BNPP contract with application
for the issuance of a temporary restraining order and preliminary injunction.
[12]

Herein public respondent, Branch 227 of the Quezon City RTC, set the
hearing of petitioners application for the issuance of a temporary restraining
order on November 28, 1995 on which date only petitioners
and respondents Republic and NPC appeared. No representative of
the WESTINGHOUSE corporations having showed up, public respondent
directed petitioners to secure a certification from the Securities and
Exchange Commission (SEC) on who the resident agent, if any, of said
corporations[13] was.
On the same scheduled date of hearing, the Solicitor General, on behalf
of respondents Republic and NPC, moved for the dismissal of the Complaint
on the ground that petitioners were engaged in forum-shopping, their
counsel Atty. Crispin T. Reyes having previously filed cases [14] with causes of
action identical thereto.
While Atty. Reyes did not deny having previously filed, in Manila, a
complaint, he argued that he was not among the plaintiffs in the complaint
filed in Quezon City.Nevertheless, he withdrew as counsel for the plaintiffs
herein petitioners.[15]
On December 4, 1995, petitioners filed an Amended Complaint
In essence, the Amended Complaint assailed the validity of and sought to
nullify the following contracts:
(a) The BNPP Contract;
(b) The loan contracts entered into by the Republic and NPC to finance the
construction of the BNPP; and
(c) The Settlement Agreement entered into by the Republic and NPC
with WESTINGHOUSE on October 13, 1995 in settlement of the claims
arising from the Contract.

The Republic filed a Motion to Dismiss (With Opposition to the Application


for Preliminary Mandatory Injunction)[17] to petitioners Amended Complaint
on the following grounds: (a) lis pendens and/or forum-shopping; (b) lack of
legal capacity of petitioners to sue; and (c) lack of cause of action. [18]
For its part, the NPC filed its Comment/Motion To Dismiss Plaintiffs Amended
Complaint,[19] alleging that the Amended Complaint failed to state a cause of
action against it.
By Order of January 25, 1996, public respondent directed, among other
things, petitioners and the Republic and NPC to file their respective
memoranda.[20]
On February 26, 1996, petitioners, in compliance with public respondents
order, filed a manifestation that per certification of the SEC, the new
resident agent of WIPCO was ACCRA Agents, Inc. Summons was thereupon
served upon ACCRA Agents, Inc.
WIPCO soon filed a Motion to Dismiss[21] petitioners Amended Complaint on
the following grounds: (a) petitioners have no legal capacity to sue; (b) the
Amended Complaint states no cause of action; and (c) assuming the
existence of a cause of action, the same is nonetheless barred by the
statute of limitations.
By the assailed Resolution of April 17, 1996, public respondent DISMISSED
petitioners complaint
Petitioners Motion for Reconsideration of public respondents Resolution
dismissing their complaint having been denied by the other assailed Order
of June 18, 1996, they filed the present Petition for Certiorari and Mandamus
With Application for A Writ Of Preliminary Injunction And Prayer For A
Temporary Restraining Order directly with this Court in view of the
transcendental importance of the issues involved.
Petitioners contend that in dismissing their Amended Complaint, public
respondent abdicated its constitutional duty to exercise judicial review over
the validity of the BNPP Contract, the loan contracts, and the 1995
Settlement Agreement.

Petitioners further contend that, contrary to the finding of public


respondent, petitioners did not commit forum-shopping since there is no
identity of parties and causes of action in the instant case and in the
complaint filed before the Manila RTC.
Finally, petitioners contend that they have sufficiently established that the
injury caused to them by the contracts are actual, direct and immediate to
thus clothe them with standing.
The Solicitor General and WIPCO, opposing the petition, argue that no grave
abuse of discretion attended the issuance by public respondent of the
assailed resolutions considering that, among other things, petitioners are
guilty of forum-shopping; petitioners have no legal standing; and the
propriety of entering into a settlement agreement involves a political
question and is not subject to judicial review.
Issue: Whether or not the complaint is a class suit.
Held:
Petitioners assert that a taxpayers suit is not a class suit, hence, judgment
in one case does not amount to res judicata in the other.
At all events, petitioners contend that there is no absolute identity of causes
of action since their Amended Complaint includes the nullification of the
Settlement Agreement, which was not raised in the first set of cases.
Petitioners position does not impress.
A taxpayers action has been defined as follows:
A taxpayer's bill is essentially a class bill and can be filed only in
the common interest of all the taxpayers of the municipality, to
prevent the wrongful expenditure of the money of the municipality or the
wasting of its assets. Schlanger v. West Berwick Borough, 261 Pa. 605, 608,
104 A. 764. A class bill, as its name implies, is a bill by several
members of a class, on behalf of themselves and all others in the
class, and no relief can be granted upon it, except upon a ground which is
common to all the members of the class. [Citing cases]. Ashcom v.
Westmont Borough, 298 Pa. 203, 208, 148 A. 112, 114.[35] (Emphasis
supplied)

As to plaintiffs, both suits are brought by the plaintiff as a citizen


and taxpayer, besides as an individual, and therefore they are
taxpayer class actions. x x x,
In Holman v. Bridges, 165 Ga. 296(2), 140 S.E. 886, this court held: Where a
taxpayer or property owner brings an action against a county or its officers
upon a matter of public or general interest to all other taxpayers of such
political subdivision, and the action either expressly or by necessary
implication is on their behalf, they are equally bound by the adjudication ,
anda judgment is a bar to any subsequent proceeding by them or
any of them seeking similar relief upon the same facts. x x
x[36] (Emphasis supplied)

The general principle of class actions that a judgment in favor of or against


the parties representing the general class is, under the doctrine of res
judicata, in favor of or against all who are thus represented applies to
litigations instituted by taxpayers.
Accordingly, in a suit brought by citizens and taxpayers to determine a
public right or a matter of public interest, all citizens and taxpayers are
regarded as parties to the proceedings by representation and are bound by
the judgment rendered therein.[37]
The plaintiff there was another taxpayer of the city, suing in the status of
citizen and taxpayer, and the city itself was a co-defendant. The action was
instituted September 3, 1958. The first count of the complaint, Inter
alia, charged the affiliation agreement here in question to be void, illegal
and of no effect because the City ignored the requirements of the local
budget law,N.J.S. 40:2-1 et seq., particularly 40:2-29 and the law pertaining
to municipal contracts, particularly 40:50-6, as to the necessity for either
budgeting the contract or passing an appropriation ordinance * * *.'
Subsequently the plaintiff in that action made a motion for summary
judgment on the first count alone, and defendants moved for summary
judgment on all counts. We have examined the briefs and affidavits
submitted to the trial court on those motions, and it appears therefrom that
the matter of the alleged invalidity of the affiliation agreement for alleged
noncompliance with N.J.S.A. 40:2-29 and 40:50-6 was argued to the

court. The judgment of the court denied plaintiff's motion and granted those
of defendants. No appeal therefrom was taken.
xxxx
Petitioner first seeks to avoid the effect of the prior judgment on the ground
that the subject matter of the two respective proceedings differs.
However, this is not, properly speaking, a case of different subject matter,
but of different causes of action. Such a difference is immaterial if a
postulate of law essential to the success of the party in the later proceeding
has been distinctly put in issue and adjudicated Contra in the earlier,
particularly where, as here, the subject matter in both proceedings arises
out of the same transaction. See 30A Am.Jur., Judgments, s 360, p.
401; Restatement, Judgments, ss 68, 70, comment pp. 319, 320; N.J.
Highway Authority v. Renner, 18 N.J. 485, 493, 494, 114 A.2d 555
(1955); Mazzilli v. Accident, etc., Casualty Ins. Co., etc., 26 N.J. 307, 314,
139 A.2d 741 (1958) (quotation from City of Paterson v. Baker, 51 N.J.Eq. 49,
26 A. 324 (Ch.1893)).
Nor will it avail petitioner that the taxpayer in the earlier action
was one other than herself. A taxpayer attacking governmental
action in which he has no peculiar personal or special interest is
taken to be suing as a representative of all taxpayers as a class.
The general rule is that in the absence of fraud or collusion a
judgment for or against a governmental body in such an action is
binding and conclusive on all residents, citizens and taxpayers with
respect to matters adjudicated which are of general and public
interest.50 C.J.S. Judgments s 796, p. 337; cf. Edelstein v. Asbury Park, 51
N.J.Super. 368, 389, 143 A.2d 860 (App.Div.1958); see also 18 McQuillin,
Municipal Corporations (3d ed. 1950), s 52.50, pp. 124, 125; 52 Am.Jur.,
Taxpayers' Actions, s 38, p. 26.[38] (Emphasis and underscoring supplied)
Hence, it is to no avail that petitioners invoke lack of identity of parties. For
petitioners in the first set of cases and in the instant case are suing under a
common or general interest on a subject matter in a representative
capacity, for the benefit of all taxpayers as a class. As this Court has
repeatedly ruled, identity of parties needed to satisfy the requirement in lis
pendens or res judicata requires only an identity of interest, not a literal
identity of parties.