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1. G.R. No.

178911

September 17, 2014

EDUARDO D. MONSANTO, DECOROSO D. MONSANTO, SR., and REV. FR. PASCUAL D.


MONSANTO, JR.,Petitioners,
vs.
LEONCIO LIM and LORENZO DE GUZMAN, Respondents.
DECISION
DEL CASTILLO, J.:
"Filing the appropriate initiatory pleading and the payment of the prescribed docket fees vest a trial court
with jurisdiction over the subject matter."1
Assailed in this Petition for Review on Certiorari 2 are the March 12, 2007 Decision3 of the Court of
Appeals (CA) which denied the Petition for Certiorari in CA-G.R. CEB-SP No. 01343 and its July 6,
2007 Resolution4 denying the herein petitioners' Motion for Reconsideration. 5
Factual Antecedents
In a letter6 dated February 18, 2004, Flordelis B. Menzon, Regional Director of the Home Development
Mutual Fund (Pag-IBIG), requested the intervention of Executive Judge Sinforiano A. Monsanto
(Executive Judge Monsanto) of the Regional Trial Court (RTC) of Catbalogan, Samar on the alleged
anomalous auction sale conducted by Sheriff IVLorenzo De Guzman (De Guzman). According to PagIBIG, De Guzman previously acceded to its request to move the date of the auction sale to January 20,
2004; however, to its surprise, the sale proceeded as originally scheduled on January 15, 2004. Pag-IBIG
also claimed that the winning bid of Leoncio Lim (Leoncio) in the amount of P500,000.00 was grossly
disadvantageous to the government considering that the outstanding loan obligations of the mortgagor,
Eduardo Monsanto (Eduardo), was more than the bid amount. Pag-IBIG thus manifested that
It is for this reason that we are making this protest. Sheriff de Guzman failed to comply with our request
for deferment despitehis [acquiescence]. We are requesting for your intervention to nullify the results of
the auction sale conducted last January 15, 2004. This will give our office a chance to be able to
participate and recoup our investment.
We trust that you will give thismatter preferential attention. 7
Executive Judge Monsantorefrained from acting on the letter considering that Eduardo is his relative;
instead he re-assigned the same to Judge Sibanah E. Usman (Judge Usman) 8 of Branch 28.
In an Order9 dated May 3, 2004 and captioned "In the Matter of the Extrajudicial Foreclosure of Mortgage
Filed by the Home Development Mutual Fund (Pag-IBIG Fund)," Judge Usman declared that on even
date, RTC-Branch 28 conducted a hearing; that Atty. Cesar Lee argued on behalf of Pag-IBIG; and that
Pascual Monsanto (Pascual) appeared on behalf of Eduardo. However, Judge Usman noted that no formal

petition orcomplaint was actually filed which presents a judicial issue; moreover, the acts complained of
partake of administrative matter. Consequently, Judge Usman referred the matter to the Office of the
Court Administrator (OCA) for further action.
Subsequently, Pascual filed with the OCA, copy furnished the RTCCatbalogan, Samar, Branches 27 and
28, a Motion to Lift Writ of Execution and Notice to Vacate 10 dated March 13, 2004. Pascual alleged
thaton March 5, 2005, De Guzman, Sheriff of Branch 27, issueda Notice to Vacate; that the same is being
enforced with grave threats and harassment; thatthe protest of Pag-IBIG remains pending with and
unresolved by OCA; thatthe trial court did not transmit the records of the case tothe OCA; that the
winning bid of P500,000.00 submitted by Leoncio is disadvantangeous to the government; that Eduardos
loan with PagIBIG is being proposed for restructuring; and that the writ of execution and notice to vacate
would gravely prejudice their rights. Pascual thus prayed that:
A. An order be issued lifting the Writ of Execution and the Notice to Vacate;
B. An order be issued enjoining or restraining the subject Sheriff from enforcing the said Notice
to vacate; and
C. Court officials or personnel above mentioned be made to explain respecting the handling of the
above captioned case as cited above, and if found negligent be so sanctioned in accordance with
the law.11
Acting on the aforesaid Motion to Lift Writ of Execution and Notice to Vacate, the OCA, in a
letter12 dated May 9, 2005 directed Judge Usman to
(1) conduct an investigation on the missing records of Home Development Mutual Fund (Pag-IBIG) vs.
Eduardo Monsanto and to report thereon within THIRTY (30) days from notice; and (2) take action on
(a) Items A and B of the Motion to Lift Writ ofExecution and Notice to Vacate and (b) the letter of Home
Development Mutual Fund dated 18 February 2004, a copy of which is annexed to the Motion to Lift
Writ of Execution and Notice to Vacate, herewith attached. 13 Pursuant to the above directive, Judge
Usman notified Pag-IBIG, Eduardo, and Leoncio of a hearing scheduled on June 14, 2005. 14 This time,
the case was captioned as "Home Development Mutual Fund (Pag-IBIG Fund), mortgagee, v. Eduardo
Monsanto, mortgagor."
In a Manifestation15 dated June 7, 2005 and filed before Branch 28, PagIBIG informed the trial court that
the loan of Eduardo had been restructured and that Eduardo had commenced paying monthly
amortizations; that as a result of the restructuring, Pag-IBIG is withdrawing its Petition for Extra-judicial
Foreclosure; and that it is no longer interested in pursuing an administrative action against De Guzman.
Leoncio opposed Pag-IBIGs manifestation.16
Meanwhile, the record shows that on April 11, 2005, Leoncio filed with Branch 27 a Manifestation with
Ex-Parte Motion for Issuance of Writ of Possession 17 claiming that the reglementary period had elapsed
without Eduardo redeeming the subject property; as such, he is already entitled to the issuance of a writ of
possession.

On July 15, 2005, Decoroso D. Monsanto and Pascual moved to intervene in the case. 18 Both claimed that
they are co-owners and actual possessors of the subject property.
Ruling of the Regional Trial Court Branch 28
In an Order19 dated July 1, 2005, the RTC-Branch 28, Catbalogan, Samar resolved two pending motions,
i.e., (1) the motion for issuance of writ of possession filed by Leoncio with Branch 27; and (2) the motion
to lift writ of execution and notice to vacate filed by Pascual with the OCA butcopy furnished the RTC
Catbalogan, Samar, Branches 27 and 2820 viz:
After careful and judicious scrutiny of the records of thiscase, this Court is highly convinced that the
public auction sale conducted by Mr. De Guzman and Atty. Ma. Luz Lampasa-Pabilona, Clerk of Court
whereby Mr. Leoncio Lim emerged as the highest bidder and purchaser of the subject property in good
faith, and also given a Certificate of Sale issued by the Sheriff and the same was registered with the
Registry of Deeds on March 5, 2004 are in order. The impugned Sheriff De Guzman had accordingly
performed his functions. Accordingly, there is no showing that hehas abuse[d] his authority during the
conduct of the public auction. Such being the case, this Court is further convinced that the motion filed by
Leoncio Lim through counsel Atty. Labid being meritorious should be given due course. On the other
hand, the motion to lift writ of execution and notice to vacatefiled by Rev. Fr. Pascual D. Monsanto, Jr.
being devoid of merit should be denied.
Atty. Cesar E. Lee filed a manifestation dated June 7, 2005, praying that an order be issued directing
Lorenzo deGuzman, Sheriff to make the necessary notice to all concern[ed] of the fact that the mortgagee
has restructured his loan with the mortgagor, and in effect, redeemed his obligation subject matter of this
foreclosure proceeding.
Mr. De Guzman explained that even assuming that there was restructuring of the [mortgage] loan it is
very clear that it was done after the lapse of the one (1) year redemption period and also there was no
notice given to the Office of the Clerk of Court. Moreover,if there was actual payment the Office of the
Clerk of Court was never x x x informed by Mr. Monsanto. WHEREFORE, premises considered, this
Court finds that the instant motion to lift writ of execution and notice to vacate the [premises] is devoid of
merit, hence denied; likewise the manifestation of Atty. Cesar Lee dated June 7, 2005 being devoid of
merit is also denied. The motion for issuance of writ of possession filed by Leoncio Lim through counsel
Atty. Labid being meritorious is hereby ordered GRANTED, hence let a writ of possession be issued
immediately in favor of Mr. Leoncio Lim purchaser in good faith.
Let a copy of this order be furnished the Hon. Presbitero J. Velasco, Jr., Court Administrator for his
information and guidance.
SO ORDERED.21
Eduardo, Pascual,and Pag-IBIG filed motions for reconsideration; however, the same were denied by the
trial court in its August 30, 2005 Order.22
Ruling of the Court of Appeals

Petitioners thus filed a Petition for Certiorari 23 with the CA, which was docketed as CA-G.R. CEB SP No.
01343. They claimed that the RTC committed grave abuse of discretion indenying their Motion to Lift
Writ of Execution and Notice to Vacate and in granting Lims Ex ParteMotion for Issuance of Writ of
Possession through its July 1, 2005 Order, arguing that Lims motion was not made under oath; that there
are third parties in possession of the subject property; that they were not notified of the confirmation of
the sale; that the mere filing of the Certificate of Sale withthe Register of Deeds without presenting the
owners duplicate copy is not tantamount to registration; that since the Certificate of Sale was not
registered, then the period to redeem did not begin to run; that De Guzmans March 7, 2005 Notice to
Vacate was illegal, since at the time, no writ of possession was yet issued; that De Guzmans actions in
enforcing the writ of possession on July 8 and 15, 2005 while their motion for reconsideration was
pending is inhuman and violated their constitutional rights; and that out of justice and equity, they
should be allowed to redeem the property. Petitioners prayed for the reversal of the RTCs July 1, 2005
and August 30, 2005 Orders and for the CA to restore the status quo ante.
On March 12, 2007, the CA issued the assailed Decision finding no grave abuse of discretion on the part
of the RTC and affirming its July 1, 2005 and August 30, 2005 Orders, viz:
ACCORDINGLY, in line with the foregoing disquisitions, the petition is hereby DENIED. The assailed
Orders dated 1 July 2005 and 30 August 2005 are AFFIRMED IN TOTO.
SO ORDERED.24
Petitioners filed their Motion for Reconsideration, which the CA denied in its assailed July 6, 2007
Resolution.
Hence, the present Petition.
Issues
Petitioners raise the following grounds for the Petition:
1. THE HONORABLE COURT OF APPEALS 20TH DIVISION, CEBU CITY ERRED IN
RULING THAT NO GRAVE ABUSE OF DISCRETION WAS COMMITTED BY THE
HONORABLE REGIONAL TRIAL COURT BRANCH 27, EIGHTH JUDICIAL REGION,
CATBALOGAN, SAMAR IN ITS ISSUANCE OF THE WRIT OF POSSESSION AND ITS
ISSUANCE DOES NOT NEED A MOTION FOR THE CONFIRMATION OF SALE WHICH
REQUIRES A HEARING;
2. THE HONORABLE COURT OF APPEALS 20TH DIVISION, CEBU CITY ERRED IN
FINDING THAT THE CERTIFICATE OF SALE WAS REGISTERED OR THAT THE
MEREFILING WITH THE REGISTER OF DEEDS OF THE SAME IS TANTAMOUNT TO
ITS REGISTRATION, THUS THE REDEMPTION PERIOD HAD STARTED TO RUN, ON
THE COURTS CONJECTURE THAT P.D. 1529 IMPLIEDLY REPEALED ACT NO. 3135,
PARTICULARLY SECTION 6, THEREOF;

3. THE HONORABLE COURT OF APPEALS 20TH DIVISION, CEBU CITY ERRED IN


AFFIRMING THE COURT A QUOS FINDINGS THAT ALL THE PETITIONERS WERE
DULY NOTIFIED BUT FAILED TO APPEAR DURING THE HEARING ON THE MOTION
FOR THE ISSUANCE OF THE WRIT OFPOSSESSION. IT ERRED IN ALLUDING THAT IN
THE COURSE OF THE PROCEEDINGS OF THIS INSTANT CASE, PETITIONERS WERE
NOT DENIED DUE PROCESS OF LAW; AND
4. THE HONORABLE COURT OF APPEALS 20TH DIVISION, CEBU CITY ERRED IN
RULING THAT PETITIONERS DECOROSO AND FR. PASCUAL, JR. DO NOT HOLDTHE
FORECLOSED PROPERTY ADVERSELY TO THAT OF THE PETITIONER-MORTGAGOR,
FOR BEING MERE ASSIGNEES, THEYDERIVED THEIR POSSESSORY RIGHTS FROM
PETITIONER-MORTGAGOR.25
Petitioners Arguments
Praying that the assailed CA Decision and Resolution be set aside, petitioners reiterate intheir Petition and
Reply26the points they raised in their CA Petition. Thus, they argue that the ex partemotion for the
issuance of a writ of possession should be under oath, and requires prior notice and hearing; that the mere
filing of the sheriffs certificate of sale with the Register of Deeds is not equivalent to registration as
required in order for the one-year redemption period to commence; that Presidential Decree No. 1529 did
not repeal Act No. 3135; that the occupants of the subject property hold rights adverse to the mortgagor
Eduardo; and that the extrajudicial foreclosure proceedings was attended by numerous irregularities.
Respondent Lims Arguments
On the other hand, Leoncio in his Comment 27 insists in essence that the mere filing of the sheriffs
Certificate of Sale with the Samar Register of Deeds on March 5, 2004 was equivalent to the registration
thereof; that the Samar Registrar of Deeds assured him that merereceipt of the Certificate of Sale is
tantamount to registration; that he relied upon this representation and assurance in good faith; and that
petitioners remedy is to file a separate case for recovery of ownership and possession.
Our Ruling
The Petition is dismissed.
"Filing the appropriate initiatory pleading and the payment of the prescribed docket fees vest a trial court
with jurisdiction over the subject matter." 28 Section 5, Rule 1 of the Rules of Court specifically
providesthat "[a] civil action is commenced by the filing of the original complaint in court." Moreover,
"[e]very ordinary civil action must bebased on a cause of action." 29
No proper initiatory pleading was filed before the trial court.
In this case, records show that no formal complaint or petition was filed in court. The case was
supposedly "commenced" through a letter of Pag-IBIG asking the intervention of Executive Judge
Monsanto on the alleged anomalous foreclosure sale conducted by De Guzman. However, saidletter could

not in any way be considered as a pleading. Section 1, Rule 6 of the Rules of Court defines pleadings as
"written statements of the respective claims and defenses of the parties submitted to the court for
appropriate judgment." To stress, Pag-IBIGs letter could not be considered as a formal complaint or
petition. First, the parties to the case were not identified pursuant to Section 1, 30 Rule 3 and Section
1,31 Rule 7. Second, the so-called claim or cause of action was not properly mentioned or specified. Third,
the letter miserably failed to comply with the requirements of Rule 7, Rules of Court. The letter bore no
caption; it was not even assigned a docket number; the parties were not properly identified;the allegations
were not properly set forth; no particular relief issought; in fact, only the intervention of Executive Judge
Monsanto is requested; it was notsigned by a counsel; and most of all, there is no verification
orcertification against forum-shopping.
We have also noted that in its July1, 2005 Order, Judge Usman of Branch 28 resolved the following
incidents: (1) the motion for issuance of writ of possession filed by Leoncio; and (2) the motion to lift
writ of execution and notice to vacate. However, the said Manifestation with Ex Parte Motion for
Issuance of Writ of Possession was not even filed before Branch28; in fact, it was submitted for
consideration of Branch 27. Moreover, the Motion to Lift Writ of Execution and Notice to Vacatewas
filed by Pascual before the OCA; the RTC Branches 27 and 28 of Catbalogan, Samar, were only furnished
copies thereof.
In addition, it is quite unfortunate that Judge Usman proceeded to take cognizance of the case
notwithstanding his prior observation as stated in the May 3, 2004 Order that no formal petition or
complaint was actually filed and which presents a judicial issue.In fact, Judge Usman even opined that the
acts complained of partake of administrative matter and thus referred the same to the OCA for further
action. The May 9, 2005 letter of OCA directing Judge Usman to take action on the Motion to Lift Writ of
Execution and Notice to Vacatecould not be interpreted as vesting Judge Usman with the authority and
jurisdiction to take cognizance of the matter. Nothing to that effect could be inferred from the tenor of the
May 9, 2005 letter ofOCA. Jurisdiction is vested by law. When OCA directed Judge Usman to take action
on the Motion to Lift Writ of Execution and Notice to Vacate, it did not deprive the latter ofhis discretion
to dismiss the matter/case for lack of jurisdiction, if the matter/case so warrants.
In fine, there being no proper initiatory pleading filed, then the RTC Branch 28 did not acquire
jurisdiction over the matter/case.
No payment of docket fees.
We have also noted that no docket feeswere paid before the trial court. Section 1, Rule 141 of the Rules of
Court mandates that "[u]pon the filing of the pleading or other application which initiates an action or
proceeding, the fees prescribed therefor shall be paid in full." "It is hornbook law that courts acquire
jurisdiction over a case only upon payment of the prescribed docket fee." 32
In Far East Bank and Trust Company v. Shemberg Marketing Corporation, 33 we ruled thus: A court
acquires jurisdiction over a case only upon the payment of the prescribed fees. The importance of filing
fees cannot be gainsaid for these are intended to take care of court expenses inthe handling of cases in
terms of costs of supplies, use of equipment, salaries and fringe benefits of personnel, and others,
computed as to man-hours used in the handling of each case. Hence, the non-payment or insufficient

payment of docket fees can entail tremendous losses to government in general and to the judiciary in
particular.
In fine, since no docket or filing feeswere paid, then the RTC Branch 28 did not acquire jurisdiction over
the matter/case.1wphi1 It therefore erred in taking cognizance of the same. Consequently, all the
proceedings undertaken by the trial court are null and void,and without force and effect. In, particular, the
July 1, 2005 and August 30, 2005 Orders of the RTC are null and void.
It is settled jurisprudence that "[a]ny decision rendered without jurisdiction is a total nullity and may be
struck down at any time, even on appeal before this Court." 34 Prescinding from the foregoing, we hold
that the RTC-Branch 28 did not acquire jurisdiction over the instant matter/case there being no formal
initiatory pleading filed as well asnon-payment of docket fees. Consequently, all proceedings had before
the RTC Branch 28 were null and void for lack of jurisdiction.
WHEREFORE, the Petition is DENIED. The assailedMarch 12, 2007 Decision and July 6, 2007
Resolution of the Court of Appeals in CA-G.R. CEBSP No. 01343 are ANNULLED and SET ASIDE.
The July 1, 2005 and August 30, 2005 Orders of the Regional Trial Court of Catbalogan, Samar, Branch
28 are DECLARED NULL and VOID. All proceedings, processes and writs emanating therefrom are
likewise NULLIFIED and VOIDEDfor lack of jurisdiction.
SO ORDERED.
MARIANO
Associate Justice

C.

DEL

CASTILLO

2. PAGLAUM MANAGEMENT & DEVELOPMENT CORP. and HEALTH MARKETING


TECHNOLOGIES, INC. v. UNION BANK OF THE PHILIPPINES, NOTARY PUBLIC JOHN
DOE, and REGISTER OF DEEDS of Cebu City and Cebu Province, G.R. No. 179018, June 18, 2012
DECISION
SERENO, J.:
Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court,
assailing the Decision dated 31 May 2007 [1] and Resolution dated 24 July 2007 [2] issued by the Court of
Appeals (CA).
Petitioner Paglaum Management and Development Corporation (PAGLAUM) is the registered
owner of three parcels of land located in the Province of Cebu [3] and covered by Transfer Certificate of
Title (TCT) Nos. 112488,[4] 112489,[5] and T-68516.[6] These lots are co-owned by Benjamin B. Dy, the
president of petitioner Health Marketing Technologies, Inc. (HealthTech), and his mother and siblings. [7]

On 3 February 1994, respondent Union Bank of the Philippines (Union Bank) extended
HealthTech a credit line in the amount of 10,000,000. [8] To secure this obligation, PAGLAUM executed
three Real Estate Mortgages on behalf of HealthTech and in favor of Union Bank. [9] It must be noted that
the Real Estate Mortgage, on the provision regarding the venue of all suits and actions arising out of or in
connection therewith, originally stipulates:
Section 9. Venue. The venue of all suits and actions arising out of or in
connection with this Mortgage shall be in Makati, Metro Manila or in the place where
any of the Mortgaged Properties is located, at the absolute option of the Mortgagee, the
parties hereto waiving any other venue.[10] (Emphasis supplied.)

However, under the


following version appears:

two Real

Estate

Mortgages

dated

11 February

1994,

the

Section 9. Venue. The venue of all suits and actions arising out of or in
connection with this Mortgage shall be in Cebu City Metro Manila or in the place where
any of the Mortgaged Properties is located, at the absolute option of the Mortgagee,
the xxxxxxxxxxxxx any other venue.[11] (Emphasis supplied.)

Meanwhile, the same provision in the Real Estate Mortgage dated 22 April 1998 contains the
following:
Section 9. Venue. The venue of all suits and actions arising out of or in
connection with this Mortgage shall be in _________ or in the place where any of the
Mortgaged Properties is located, at the absolute option of the Mortgagee, the parties
hereto waiving any other venue.[12]

HealthTech and Union Bank agreed to subsequent renewals and increases in the credit line,
with the total amount of debt reaching 36,500,000. [14] Unfortunately, according to HealthTech, the
1997 Asian financial crisis adversely affected its business and caused it difficulty in meeting its
obligations with Union Bank.[15] Thus, on 11 December 1998, both parties entered into a Restructuring
Agreement,[16] which states that any action or proceeding arising out of or in connection therewith shall be
commenced in Makati City, with both parties waiving any other venue.[17]
[13]

Despite the Restructuring Agreement, HealthTech failed to pay its obligation, prompting Union
Bank to send a demand letter dated 9 October 2000, stating that the latter would be constrained to institute
foreclosure proceedings, unless HealthTech settled its account in full. [18]

Since HealthTech defaulted on its payment, Union Bank extra-judicially foreclosed the mortgaged
properties.[19] The bank, as the sole bidder in the auction sale, was then issued a Certificate of Sale dated
24 May 2001.[20] Thereafter, it filed a Petition for Consolidation of Title. [21]
Consequently, HealthTech filed a Complaint for Annulment of Sale and Titles with Damages and
Application for Temporary Restraining Order and Writ of Injunction dated 23 October 2001, praying for:
(a) the issuance of a temporary restraining order, and later a writ of preliminary injunction, directing
Union Bank to refrain from exercising acts of ownership over the foreclosed properties; (b) the annulment
of the extra-judicial foreclosure of real properties; (c) the cancellation of the registration of the
Certificates of Sale and the resulting titles issued; (d) the reinstatement of PAGLAUMs ownership over
the subject properties; and (e) the payment of damages. [22] The case was docketed as Civil Case No. 011567 and raffled to the Regional Trial Court, National Capital Judicial Region, Makati City, Branch 134
(RTC Br. 134), which issued in favor of PAGLAUM and HealthTech a Writ of Preliminary Injunction
restraining Union Bank from proceeding with the auction sale of the three mortgaged properties. [23]
On 23 November 2001, Union Bank filed a Motion to Dismiss on the following grounds: (a) lack
of jurisdiction over the issuance of the injunctive relief; (b) improper venue; and (c) lack of authority of
the person who signed the Complaint. [24] RTC Br. 134 granted this Motion in its Order dated 11 March
2003, resulting in the dismissal of the case, as well as the dissolution of the Writ of Preliminary
Injunction.[25] It likewise denied the subsequent Motion for Reconsideration filed by PAGLAUM and
HealthTech.[26]
PAGLAUM and HealthTech elevated the case to the CA, which affirmed the Order dated 11
March 2003[27] and denied the Motion for Reconsideration.[28]
In the instant Petition, PAGLAUM and HealthTech argue that: (a) the Restructuring Agreement
governs the choice of venue between the parties, and (b) the agreement on the choice of venue must be
interpreted with the convenience of the parties in mind and the view that any obscurity therein was caused
by Union Bank.[29]
On the other hand, Union Bank contends that: (a) the Restructuring Agreement is applicable only
to the contract of loan, and not to the Real Estate Mortgage, and (b) the mortgage contracts explicitly state
that the choice of venue exclusively belongs to it. [30]
Meanwhile, intervenor J. King & Sons Company, Inc. adopts the position of Union Bank and
reiterates the position that Cebu City is the proper venue. [31]

The sole issue to be resolved is whether Makati City is the proper venue to assail the foreclosure
of the subject real estate mortgage. This Court rules in the affirmative.
Civil Case No. 01-1567, being an action for Annulment of Sale and Titles resulting from the
extrajudicial foreclosure by Union Bank of the mortgaged real properties, is classified as a real action.
In Fortune Motors v. Court of Appeals,[32] this Court held that a case seeking to annul a foreclosure of a
real estate mortgage is a real action, viz:
An action to annul a real estate mortgage foreclosure sale is no different from an
action to annul a private sale of real property. (Muoz v. Llamas, 87 Phil. 737, 1950).
While it is true that petitioner does not directly seek the recovery of title or
possession of the property in question, his action for annulment of sale and his claim for
damages are closely intertwined with the issue of ownership of the building which, under
the law, is considered immovable property, the recovery of which is petitioners primary
objective. The prevalent doctrine is that an action for the annulment or rescission of a sale
of real property does not operate to efface the fundamental and prime objective and
nature of the case, which is to recover said real property. It is a real action. [33]

Being a real action, the filing and trial of the Civil Case No. 01-1567 should be governed by the
following relevant provisions of the Rules of Court (the Rules):
Rule 4
VENUE OF ACTIONS
Section 1. Venue of real actions. Actions affecting title to or possession of real
property, or interest therein, shall be commenced and tried in the proper court which
has jurisdiction over the area wherein the real property involved, or a portion
thereof, is situated.
Forcible entry and detainer actions shall be commenced and tried in the
municipal trial court of the municipality or city wherein the real property involved, or a
portion thereof, is situated.
Sec. 3. When Rule not applicable. This Rule shall not apply
(a)

In those cases where a specific rule or law provides otherwise; or

(b)
Where the parties have validly agreed in writing before the filing
of the action on the exclusive venue thereof. (Emphasis supplied.)

In Sps. Lantin v. Lantion,[34] this Court explained that a venue stipulation must contain words that
show exclusivity or restrictiveness, as follows:
At the outset, we must make clear that under Section 4 (b) of Rule 4 of the 1997
Rules of Civil Procedure, the general rules on venue of actions shall not apply where the

parties, before the filing of the action, have validly agreed in writing on an exclusive
venue. The mere stipulation on the venue of an action, however, is not enough to preclude
parties from bringing a case in other venues. The parties must be able to show that
such stipulation is exclusive. In the absence of qualifying or restrictive words, the
stipulation should be deemed as merely an agreement on an additional forum, not as
limiting venue to the specified place.
xxxxxxxxx
Clearly, the words exclusively and waiving for this purpose any other venue
are restrictive and used advisedly to meet the requirements.[35] (Emphasis supplied.)

According to the Rules, real actions shall be commenced and tried in the court that has
jurisdiction over the area where the property is situated. In this case, all the mortgaged properties are
located in the Province of Cebu. Thus, following the general rule, PAGLAUM and HealthTech should
have filed their case in Cebu, and not in Makati.

However, the Rules provide an exception, in that real actions can be commenced and tried in a
court other than where the property is situated in instances where the parties have previously and
validly agreed in writing on the exclusive venue thereof. In the case at bar, the parties claim that such
an agreement exists. The only dispute is whether the venue that should be followed is that contained in
the Real Estate Mortgages, as contended by Union Bank, or that in the Restructuring Agreement, as
posited by PAGLAUM and HealthTech. This Court rules that the venue stipulation in the
Restructuring Agreement should be controlling.
The Real Estate Mortgages were executed by PAGLAUM in favor of Union Bank to secure the
credit line extended by the latter to HealthTech. All three mortgage contracts contain a dragnet clause,
which secures succeeding obligations, including renewals, extensions, amendments or novations thereof,
incurred by HealthTech from Union Bank, to wit:
Section 1. Secured Obligations. The obligations secured by this Mortgage (the
Secured Obligations) are the following:
a)
All the obligations of the Borrower and/or the Mortgagor under: (i)
the Notes, the Agreement, and this Mortgage; (ii) any and all instruments or documents
issued upon the renewal, extension, amendment or novation of the Notes, the Agreement
and this Mortgage, irrespective of whether such obligations as renewed, extended,
amended or novated are in the nature of new, separate or additional obligations; and (iii)
any and all instruments or documents issued pursuant to the Notes, the Agreement and
this Mortgage;
b)
All other obligations of the Borrower and/or the Mortgagor in favor
of the Mortgagee, whether presently owing or hereinafter incurred and whether or not
arising from or connected with the Agreement, the Notes and/or this Mortgage; and

c)
Any and all expenses which may be incurred in collecting any and
all of the above and in enforcing any and all rights, powers and remedies of the
Mortgagee under this Mortgage.[36]

On the other hand, the Restructuring Agreement was entered into by HealthTech and Union Bank
to modify the entire loan obligation. Section 7 thereof provides:
Security. The principal, interests, penalties and other charges for which the
BORROWER may be bound to the BANK under the terms of this Restructuring
Agreement, including the renewal, extension, amendment or novation of this
Restructuring Agreement, irrespective of whether the obligations arising out of or in
connection with this Restructuring Agreement, as renewed, extended, amended or
novated, are in the nature of new, separate or additional obligations, and all other
instruments or documents covering the Indebtedness or otherwise made pursuant to this
Restructuring Agreement (the Secured Obligations), shall continue to be secured by the
following security arrangements (the Collaterals):
a.
Real Estate Mortgage dated February 11, 1994 executed by
Paglaum Management and Development Corporation over a 474 square meter property
covered by TCT No. 112489;
b.
Real Estate Mortgage dated February 11, 1994 executed by
Paglaum Management and Development Corporation over a 2,796 square meter property
covered by TCT No. T-68516;
c.
Real Estate Mortgage dated April 22, 1998 executed by Paglaum
Management and Development Corporation over a 3,711 square meter property covered
by TCT No. 112488;
d.

Continuing Surety Agreement of Benjamin B. Dy;

Without need of any further act and deed, the existing Collaterals, shall remain in
full force and effect and continue to secure the payment and performance of the
obligations of the BORROWER arising from the Notes and this Restructuring
Agreement.[37] (Emphasis supplied.)
Meanwhile, Section 20 of the Restructuring Agreement as regards the venue of actions state:
20. Venue Venue of any action or proceeding arising out of or connected with
this Restructuring Agreement, the Note, the Collateral and any and all related
documents shall be inMakati City, [HealthTech] and [Union Bank] hereby waiving any
other venue.[38] (Emphasis supplied.)

These quoted provisions of the Real Estate Mortgages and the later Restructuring Agreement
clearly reveal the intention of the parties to implement a restrictive venue stipulation, which applies not

only to the principal obligation, but also to the mortgages. The phrase waiving any other venue plainly
shows that the choice of Makati City as the venue for actions arising out of or in connection with the
Restructuring Agreement and the Collateral, with the Real Estate Mortgages being explicitly defined as
such, is exclusive.
Even if this Court were to consider the venue stipulations under the Real Estate Mortgages, it
must be underscored that those provisions did not contain words showing exclusivity or restrictiveness. In
fact, in the Real Estate Mortgages dated 11 February 1994, the phrase parties hereto waiving from the
entire phrase the parties hereto waiving any other venue was stricken from the final executed contract.
Following the ruling in Sps. Lantin as earlier quoted, in the absence of qualifying or restrictive words, the
venue stipulation should only be deemed as an agreement on an additional forum, and not as a restriction
on a specified place.
Considering that Makati City was agreed upon by the parties to be the venue for all actions
arising out of or in connection with the loan obligation incurred by HealthTech, as well as the Real Estate
Mortgages executed by PAGLAUM, the CA committed reversible error in affirming the dismissal of Civil
Case No. 01-1567 by RTC Br. 134 on the ground of improper venue.
WHEREFORE, the Petition for Review is GRANTED. The Decision dated 31 May 2007 and
Resolution dated 24 July 2007 in CA-G.R. CV No. 82053 of the Court of Appeals, as well as the Orders
dated 11 March 2003 and 19 September 2003 issued by the Regional Trial Court, Makati City, Branch
134, are REVERSED and SET ASIDE.The Complaint in Civil Case No. 01-1567 is
hereby REINSTATED.

SO ORDERED.
3. G.R. No. 155701, March 11, 2015
LIM TECK CHUAN, Petitioner, v. SERAFIN UY AND LEOPOLDA CECILIO, LIM SING CHAN
@ HENRY LIM, Respondents.
DECISION
REYES, J.:
Before this Court is a petition for review on certiorari1 under Rule 45 filed by Lim Teck Chuan
(petitioner) assailing the Orders dated April 25, 2002 2 and October 21, 20023 of the Regional Trial
Court (RTC) of Lapu-lapu City, Branch 27, in Civil Case No. 4786-L, which dismissed the case upon a
joint motion of respondents Serafin Uy (Serafin) and Leopolda Cecilio (Leopolda) despite an opposition
and manifestation of the petitioner to have his counterclaim prosecuted in the same action, and denied the
petitioners motion
for
reconsideration
for
being
barren
of
merit,
respectively.

The

antecedent

facts

are

as

follows:

The subject matter of the present controversy is a piece of land known as Lot 5357 with an area of 33,610
square meters, covered by Transfer Certificate of Title (TCT) No. T-0500, situated in BarrioAgus, Lapulapu City, Cebu, owned and registered under the name of Antonio Lim Tanhu (Antonio), married to Dy
Ochay.
Lot 5357 was sold by Antonio to the spouses Francisco Cabansag (Francisco) and Estrella Cabansag
(Spouses Cabansag) as evidenced by a Deed of Sale executed on January 8, 1966. Apparently, Francisco
failed to transfer the title of the property to their names because of his work and frequent travels
abroad.4cralawred
In 1988, Spouses Cabansag sold the lot to Serafin, as evidenced by a Deed of Sale dated April 8, 1988.
To pave the way for the transfer of title to Serafins name, Spouses Cabansag attempted to have the same
transferred under their names first. However, Francisco failed to do so as he lost the owners copy of
TCT No. T-0500 together with other documents pertaining to the sale of the subject lot. This prompted
Serafin to exert efforts to secure copies of the lost documents himself. On May 15, 1996, Serafin filed a
petition before the RTC, docketed as Cadastral Case No. 21 praying for the issuance of a new owners
duplicate TCT in his name, thereby cancelling TCT No. T-0500 in the name of Antonio. 5cralawred
Serafins petition for the issuance of a new owners copy of TCT No. T-0500 was raffled to the RTC of
Lapu-lapu City, Branch 27, then sitting as a cadastral court (Cadastral Court). After due notice and
hearing, the Cadastral Court issued an Order 6 on June 14, 1996 directing the Register of Deeds of Lapulapu
City to
issue
a
new
owners duplicate
copy of
TCT No.
T-0500.
However, the aforesaid order was recalled and nullified on September 3, 19967 on the ground that the
petitioner filed an Opposition and/or Motion for Reconsideration with Manifestation for Special
Appearance8 dated August 22, 1996 alleging that he is one of the six legitimate descendants of Antonio;
and that the original owners copy of TCT No. T-0500 was not lost and has always been in his custody.
The court further directed the petitioner to deposit the said owners copy of TCT No. T-0500 with said
court.
In the meantime, on August 2, 1996, Lim Sing Chan alias Henry Lim (Henry) executed an Affidavit of
Sole Adjudication/Settlement of the Estate of Antonio Lim Tanhu with Deed of Sale 9 (Affidavit of SelfAdjudication) claiming that he is the only surviving heir of Antonio. In the same document, Henry sold
Lot
5357
to
Leopolda
in
the
amount
of
P500,000.00.
With this turn of events, Serafin filed on July 25, 1997 a Complaint 10 for quieting of title, surrender of
owners copy of certificate of title, declaration of nullity of affidavit of adjudication and sale,
annulment of tax declaration, and other reliefs with a prayer for preliminary injunctionbefore the
RTC, docketed as Civil Case No. 4786-L. Impleaded as defendants were Leopolda, Henry, and the herein
petitioner.
Leopolda filed her Answer11 (with counterclaim, and cross-claim against Henry), asserting that she was
the buyer in good faith and for value of Lot 5357. She alleged that the said property was never
encumbered to any person during the lifetime of Antonio; that the deed of sale in favor of Spouses
Cabansag was simulated and spurious; and that the said document was never registered with the proper
government agency, nor was it ever annotated on the certificate of title covering the said property. She
claimed that the lot in question was sold to her as evidenced by the Affidavit of Self-Adjudication
executed by Henry; that she caused the issuance of a new tax declaration over the said property in her

name; that since then, she has been in open, actual and material possession of the subject lot in the
concept
of
an
owner.
For his part, the petitioner averred in his Answer12 (with counterclaim, and cross-claims against Leopolda
and Henry), that Lot 5357 was never transferred nor encumbered to any person during Antonios
lifetime. The deed of sale in favor of Spouses Cabansag was simulated and spurious, and was intended to
defraud the estate of Antonio. Furthermore, the petitioner questioned Henrys claim that he was an heir of
Antonio, much less the only surviving heir of the latter. Corollarily, the petitioner questioned the validity
of Henrys Affidavit of Self-Adjudication and Leopoldas claim of title to the subject property.
On November 11, 1997, Leopolda filed her Answer13 to the petitioners cross-claim. She basically
reiterated
her
allegations
raised
in
her
Answer
to
Serafins
complaint.
Henry

did

not

file

an

answer

to

any

of

the

claims

against

him.

On December 22, 1998, the pre-trial conference14 was conducted where the parties agreed to the following
stipulation of facts:chanRoblesvirtualLawlibrary
[T]hat Antonio Lim Tanhu was the registered owner of Lot 5357 of the Cadastral Survey of Opon located
in Lapu-lapu City[;] that Antonio Lim Tanhu died on April 13, 1991[;] that Antonio Lim Tanhu was
succeeded upon his death by his six children, namely, the defendant Lim Teck Chuan, Lim Sing Tai,
Helen Lim, Lenesita Lim, Warlito Lim and Michael Lim Tan Ho[;] that the defendant Lim Sing Chan is
actually a fictitious person[;] that there exists an ancient document denominated as Deed of Absolute Sale
of Lot 5357 executed on January 8, 1966 by Antonio Lim Tanhu in favor of the spouses Francisco
Cabansag and Estrella M. Cabansag (Exhibit A)[;] that there also exists a document denominated as Deed
of Absolute Sale (Exhibit B) of Lot 5357 executed on April 8, 1988 by the spouses Francisco Cabansag
and Estrella M. Cabansag in favor of the plaintiff[;] and that there exists, too, a document denominated as
Affidavit of [Sale] Adjudication/Settlement of Estate of Antonio Lim Tanhu with Deed of Sale executed
on May 2, 1996 by a certain Lim Sing Chan (Exhibit 1-Cecilio). x x x. 15cralawlawlibrary
The parties also agreed to the following issues:chanRoblesvirtualLawlibrary
1. Whether or not the plaintiff has valid causes of action for quieting of title, declaration of nullity of
documents of sale and tax declarations, reconveyance of title and damages against the
defendants[;]
2. Whether or not the defendants Leopolda Cecilio and Lim Teck Chuan have valid counterclaims
against the plaintiff; and
3. Whether or not the defendant Lim Teck Chuan has a valid cross-claim against the defendant
Leopolda Cecilio.16
cralawlawlibrary
Thereafter, the pre-trial order was amended such that it should not be considered as established and
stipulated facts that Henry is a fictitious person and that the Deed of Sale of Lot 5357 purportedly
executed by Antonio on January 8, 1966 is genuine and authentic since there were actually no admissions
made
on
these
circumstances.17cralawred
In the same Order18 dated July 17, 1999, the RTC denied Serafins motion for summary judgment19because

under the circumstances, there were actually genuine issues of fact to be resolved and passed upon by the
court.
Eventually, the RTC set the initial trial of the case on March 28, 2001. 20 However, it was postponed upon
motion of Leopoldas counsel and upon the manifestation of Serafins counsel that there was an on-going
negotiation for an amicable settlement. For his part, the petitioners counsel manifested that the petitioner
was not involved in any negotiation for amicable settlement. The scheduled hearing was reset to July 11,
200121 and
later
to
November
12,
2001.22cralawred
On September 20, 2001, Serafin and Leopolda submitted a Joint Motion to Dismiss.23 They averred
that:chanRoblesvirtualLawlibrary
1. That the case at [bench] is filed by the Plaintiff Serafin Uy against the defendants for quieting of
title, surrender of owner of certificate of title, declaration of nullity of affidavit of adjudication
and sale annulment of tax declaration, and other reliefs consistent with law, justice and
equity[?];ChanRoblesVirtualawlibrary
2. That in the case at bench, Plaintiff Serafin Uy seeks the quieting of title on his right over Lot
5357 of the Cadastral Survey of Opon situated at Barangay Agus, Lapu-lapu City, in view of the
affidavit of adjudication and Sale dated August 2, 1996 (Annex F) of the Complaint, and Tax
Decl. No. 01532 issued in the name of Leopolda Cecilio both of which documents affected Lot
5357 (Annex G to the Complaint);ChanRoblesVirtualawlibrary
3. That Plaintiff Serafin Uy and Defendant Leopolda Cecilio have amicably settled their differences
in the case at bench and Def. Leopolda Cecilio has agreed to waive her counterclaim for damages
in the instant case;ChanRoblesVirtualawlibrary
4. That Plaintiff Serafin Uy has already secured a certificate of title to Lot No. 5357 in his name
dated July 26, 2001, and has also agreed for the cancellation of the same, and for issuance of a
new one, over said Lot 5357, in their common names;ChanRoblesVirtualawlibrary
5. That whatever claim defendant Lim Teck Chuan may have on said Lot No. 5357, the same may
be ventilated by said defendant in an appropriate independent action that he may initiate and
file[.]
PRAYER
WHEREFORE, this Honorable Court is most respectfully prayed and humbly implored to dismiss the
Complaint and the respective counterclaims of the defendants in the case at bench. 24cralawlawlibrary
On October 4, 2001, the petitioner filed his Opposition/Comment25 praying for the denial of the Joint
Motion to Dismiss on the ground of bad faith, and to prohibit Serafin and Leopolda from undertaking any
further transaction involving the subject lot. The pertinent portion of his opposition reads as
follows:chanRoblesvirtualLawlibrary
1. That the [petitioner] opposes the Joint Motion to Dismiss filed by [Serafin] and [Leopolda] on the
grounds:
1.1

that there [is] BAD FAITH on the part of [Serafin] and [Leopolda];

1.2.

That the [petitioner] was not involved in any amicable settlements between [Serafin] and
[Leopolda] because both [Serafin] and [Leopolda] connived to MISLEAD this Honorable
Court and to DEFRAUD the estate of [Antonio];
1.3.
That the [petitioner] has valid counterclaims against [Serafin] for moral damages of P
5,000,000[.00]; exemplary damages of P 1,200,000[.00]; and Attorneys fees of P 50,000[.00];
on the ground that [Serafin] maliciously and deliberately presented to this Honorable Court the
FALSIFIED AND FICTITIOUS deed of sale PURPORTEDLY executed by [Antonio] in
favor of [Francisco];
1.4.
That the [petitioner] has valid cross[-]claims against Cross-defendants Lim Sing Chan alias
Henry Lim whose real name is Henry Lim Ormoc, and [Leopolda] for moral damages of P
5,000,000[.00] each, attorneys fees of P 50,000[.00] each, and exemplary damages of P
1,000,000[.00] for [Henry] and P 1,600,000[.00] for [Leopolda] because [Henry] and
[Leopolda] connived with each other to defraud the estate of [Antonio] on the ground that
[Henry] MISREPRESENTED himself as an heir of [Antonio] while [Leopolda] has
KNOWLEDGE of such MISREPRESENTATION;
1.5.
That the [petitioner] manifest[s] to this Honorable Court of his preference that the abovecounterclaims and cross-claims be resolved in the present case[.] 26
cralawlawlibrary
The petitioner further averred that the transfer of Antonios title under TCT No. T-0500 in the name of
Serafin is irregular and illegal since the true owners copy of TCT No. T-0500 remained in his possession.
Henry

continued

to

remain

silent.

On October 10, 2001, Serafin filed his Reply 27 to the comment/opposition of the petitioner. He
substantially averred that:
1. With the end in view of registering Lot 5357 in his name, he instituted the instant case due to the
existence of certain documents affecting his title thereto, namely: Henrys Affidavit of SelfAdjudication with Deed of Sale dated August 2, 1996 naming Leopolda as the buyer, and Tax
Declaration No. 01532 issued in the name of the latter;ChanRoblesVirtualawlibrary
2. Under his Affidavit of Self-Adjudication, Henry already transferred whatever right and interest
he had on the subject lot to Leopolda. On the other hand, by reason of the amicable settlement
between him (Serafin) and Leopolda, the latter waived and abandoned all her rights to Lot 5357.
Ergo, as far as Leopolda is concerned, her waiver negated all the legal consequences of Tax
Declaration No. 01532 and Henrys Affidavit of Self-Adjudication. Since the same were the very
documents that cast clouds on his (Serafin) title over Lot 5357, his main causes of action in the
case at bench had become moot and academic as his title to the said lot had been
quieted;ChanRoblesVirtualawlibrary
3. The petitioner was impleaded because of the following points: a) he alleged that he is one of the
heirs of the late Antonio; b) he contested the claim of Henry that the latter is the only surviving
heir of said decedent, and prayed upon the court to declare Henry as an impostor; and c) he
challenged the genuineness and due execution of the deed of absolute sale between Antonio and
Spouses Cabansag;ChanRoblesVirtualawlibrary
4. Aside from his claim for damages, the petitioners counterclaim sought the nullification of the
Deed of Absolute Sale dated January 8, 1966 between Antonio and Spouses Cabansag which
required the impleading of persons who were not parties in the case. These persons included

Spouses Cabansag who was indispensable party to any action for the annulment of the deed
which was executed in their favor. However, to implead the said persons, there was a need to
summon them so that the court can acquire jurisdiction over them - and in order that they can be
summoned, there was a need for the petitioner to file a formal complaint against
them;ChanRoblesVirtualawlibrary
5. Moreover, the cross-claim of the petitioner against Henry can also be resolved in a separate action
for the declaration of the true heirs of Antonio wherein all the heirs of the latter will be
impleaded, and where the petitioner can prove that he was indeed one of the heirs of said
decedent especially so that there is yet no judicial or extra-judicial declaration as to who were
Antonios heirs;ChanRoblesVirtualawlibrary
6. The dismissal of the case will not affect the rights of the petitioner because whatever claim he had
on the subject lot and against any party may be ventilated in an appropriate and separate action.
On November 6, 2001, the petitioner, through counsel, filed his Motion to Implead Indispensable Parties
and Supplemental Opposition to Joint Motion to Dismiss. 28 Invoking Section 1129 of Rule 3 of the Rules
of Court, the petitioner averred that there is a need to implead Spouses Cabansag in order that a final
determination
of
all
the
issues
could
be
had
in
the
case.
Acting on the Joint Motion to Dismiss, the RTC issued the assailed Order 30 dated April 25, 2002
granting the same and denying the petitioners motion to implead Spouses Cabansag. The order is
quoted as follows:chanRoblesvirtualLawlibrary
Going over the arguments of the parties, the Court finds the arguments of the movants as tenable. For
what is the use of so continuously litigating this case when [Serafin] admits and confirms that the
principal reliefs he prayed for have already been met or satisfied as his title to the property in question has
already been quieted with him having already secured a certificate of title to Lot No. 5357 in his name
dated July 26, 2001, and has also agreed for the cancellation of the same, and for the issuance of a new
one, over said Lot 5357, in their common names. In fact, even without said reliefs having been met or
satisfied, nobody, not even the courts of justice, can compel a party-litigant in a civil action like [Serafin]
to
so
continuously
litigate
his
case
if
he
does
not
want
to
anymore.
Finding therefore, the subject motion to dismiss to be proper and in order, this case is ordered dismissed
so with the respective counterclaims of the defendants. Considering however, that [the petitioner] is
not a party and even opposed the subject motion to dismiss, the dismissal of his counterclaims and
cross-claim is without prejudice to give him his day in court. And with this pronouncement of
dismissal, the motion to implead indispensable parties of [the petitioner] becomes moot and academic and
therefore is denied.31cralawlawlibrary
On May 30, 2002, the petitioner filed a Motion for Reconsideration 32 which was denied in the
Order33dated
October
21,
2002.
Aggrieved, the petitioner went up to this Court via a petition for review on certiorari under Rule 45
raising the lone assignment of error that:chanRoblesvirtualLawlibrary
THE LOWER COURT ERRED IN DISMISSING CIVIL CASE 4786-L UPON A JOINT MOTION TO
DISMISS FILED BY THE RESPONDENTS WHO ARE PLAINTIFF AND ONE OF THE
DEFENDANTS, RESPECTIVELY, IN THE AFOREMENTIONED CASE DESPITE THE
OPPOSITION BY HEREIN PETITIONER AND THE MANIFESTATION OF THE LATTER OF HIS

PREFERENCE MADE WITHIN FIFTEEN (15) DAYS FROM THE JOINT MOTION TO DISMISS, TO
HAVE HIS COUNTERCLAIM, AS WELL AS HIS CROSS-CLAIM, PROSECUTED IN THE SAME
ACTION, IN ACCORDANCE WITH SECTION 2, RULE 17 OF THE 1997 RULES OF CIVIL
PROCEDURE.34cralawlawlibrary
The petitioner faults the RTC for dismissing the case in its entirety in spite of his counterclaim and crossclaim. He asserts that within 15 days from notice of the filing of the joint motion to dismiss, he filed his
opposition thereto and expressed his preference to have his counterclaim and cross-claim be resolved in
the same action. Therefore, pursuant to the provisions of Section 2, Rule 17 of the Rules of Court, his
timely expression of such preference should be enough for the trial court not to dismiss the case in its
entirety,
and
to
limit
its
action
to
the
dismissal
of
the
complaint.
Preliminarily, the respondents question the petitioners recourse to this Court in filing the instant petition
alleging that no appeal may be taken from an order of the RTC dismissing an action without prejudice. 35
Nonetheless, the Rules of Court do not prohibit any of the parties from filing a Rule 45 petition with this
Court in case only questions of law are raised or involved. 36 In Bukidnon Doctors Hospital, Inc. v.
Metropolitan Bank & Trust Co.,37 the Court explained that:chanRoblesvirtualLawlibrary
Section 2(c), Rule 41 of the Rules of Court categorically provides that in all cases where only questions of
law are raised, the appeal from a decision or order of the Regional Trial Court shall be to the Supreme
Court by petition for review on certiorari in accordance with Rule 45. Section 2(c) of Rule 41 of the
Rules
of
Court
reads:
SEC. 2. Modes of appeal.
(a) Ordinary appeal. The appeal to the Court of Appeals in cases decided by the Regional Trial Court in
the exercise of its original jurisdiction shall be taken by filing a notice of appeal with the court which
rendered the judgment or final order appealed from and serving a copy thereof upon the adverse party.
No record on appeal shall be required except in special proceedings and other cases of multiple or
separate appeals where the law or these Rules so require. In such cases, the record on appeal shall be
filed
and
served
in
like
manner.
(b) Petition for review. The appeal to the Court of Appeals in cases decided by the Regional Trial Court
in the exercise of its appellate jurisdiction shall be by petition for review in accordance with Rule 42.
(c) Appeal by certiorari. In all cases where only questions of law are raised or involved, the appeal shall
be to the Supreme Court by petition for review on certiorari in accordance with Rule 45.cralawlawlibrary
Section 1 of Rule 45 provides:
SECTION 1. Filing of petition with Supreme Court. A party desiring to appeal by certiorari from a
judgment or final order or resolution of the Court of Appeals, the Sandiganbayan, the Regional Trial
Court or other courts whenever authorized by law, may file with the Supreme Court a verified petition for
review on certiorari. The petition shall raise only questions of law which must be distinctly set forth.
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.38 (Citation omitted)cralawlawlibrary
Considering that the issue in the instant case is clearly one of law as it calls for the correct application of

the

Rules

of

Court,

the

petitioners

direct

resort

to

this

Court

is

proper.

The Court now looks into the propriety of the order of the RTC in dismissing the case. Needless to state,
the Court is again confronted with the issue of whether the dismissal of the complaint, specifically upon
motion of the plaintiff under Section 2 of Rule 17 of the Rules of Court also calls for the dismissal of the
defendants
counterclaim,
as
in
the
case
at
bar.
Rule 17 of the Rules of Civil Procedure provides the following:chanRoblesvirtualLawlibrary
SECTION 1. Dismissal upon notice by plaintiff. A complaint may be dismissed by the plaintiff by filing
a notice of dismissal at any time before service of the answer or of a motion for summary judgment. Upon
such notice being filed, the court shall issue an order confirming the dismissal. Unless otherwise stated in
the notice, the dismissal is without prejudice, except that a notice operates as an adjudication upon the
merits when filed by a plaintiff who has once dismissed in a competent court an action based on or
including
the
same
claim.
SECTION 2. Dismissal upon motion of plaintiff. Except as provided in the preceding section, a
complaint shall not be dismissed at the plaintiffs instance save upon approval of the court and upon such
terms and conditions as the court deems proper. If a counterclaim has been pleaded by a defendant prior
to the service upon him of the plaintiffs motion for dismissal, the dismissal shall be limited to the
complaint. The dismissal shall be without prejudice to the right of the defendant to prosecute his
counterclaim in a separate action unless within fifteen (15) days from notice of the motion he manifests
his preference to have his counterclaim resolved in the same action. Unless otherwise specified in the
order, a dismissal under this paragraph shall be without prejudice. A class suit shall not be dismissed or
compromised
without
the
approval
of
the
court.
SECTION 3. Dismissal due to fault of plaintiff. If, for no justifiable cause, the plaintiff fails to appear
on the date of the presentation of his evidence in chief on the complaint, or to prosecute his action for an
unreasonable length of time, or to comply with these Rules or any order of the court, the complaint may
be dismissed upon motion of the defendant or upon the courts own motion, without prejudice to the right
of the defendant to prosecute his counterclaim in the same or in a separate action. This dismissal shall
have the effect of an adjudication upon the merits, unless otherwise declared by the court.
SECTION 4. Dismissal of counterclaim, cross-claim, or third-party complaint. The provisions of this
Rule shall apply to the dismissal of any counterclaim, cross-claim, or third-party complaint. A voluntary
dismissal by the claimant by notice as in Section 1 of this Rule, shall be made before a responsive
pleading or a motion for summary judgment is served or, if there is none, before the introduction of
evidence at the trial or hearing.cralawlawlibrary
The RTC granted the Joint Motion to Dismiss upon the behest of Serafin, the plaintiff therein on the main
ground that the case had become moot and academic since his title to Lot 5357 had been allegedly quieted
and the reliefs prayed for were obtained. In the Order dated October 21, 2002 denying the motion for
reconsideration, the RTC elucidated that:chanRoblesvirtualLawlibrary
The Court in issuing the dismissal order dated April 25, 2002 had already made its position on the matter
very clearly such that it finds no reason to disturb the subject order. As clarified, a party-litigant in a civil
action like the plaintiff herein, cannot be compelled to so continuously litigate his case if he does not want
to anymore as was obtaining in this case. More so that the principal reliefs prayed for in the complaint
had already been served as was so admitted by the plaintiff. Being so, this Court finds it repugnant to go
on with the hearing of movants-defendants counterclaim for what is to be countered by the movant when
the claim of the plaintiff, at his own instance, had already been dismissed it having been served and

satisfied as aforestated. And this is so because what is contemplated under the Rules authorizing the
hearing of defendants counterclaim is when the dismissal is not at the instance of the
plaintiff.39cralawlawlibrary
As can be gleaned from the assailed orders, the RTC erred when it dismissed the case when the present
rules state that the dismissal shall be limited only to the complaint. A dismissal of an action is different
from a mere dismissal of the complaint. For this reason, since only the complaint and not the action is
dismissed, the defendant in spite of said dismissal may still prosecute his counterclaim in the same
action.40 The case of Pinga v. Heirs of German Santiago 41 is quite instructive which this Court finds
worth reiterating. In Pinga, the Court clearly stated that the dismissal of the complaint does not
necessarily result to the dismissal of the counterclaim, abandoning the rulings in Metals Engineering
Resources Corporation v. Court of Appeals, 42International Container Terminal Services, Inc. v. Court of
Appeals,43 and BA Finance Corporation v. Co.44 The Court held that:chanRoblesvirtualLawlibrary
At present, even Section 2, concerning dismissals on motion of the plaintiff, now recognizes the right of
the defendant to prosecute the counterclaim either in the same or separate action notwithstanding the
dismissal of the complaint, and without regard as to the permissive or compulsory nature of the
counterclaim.
In his commentaries on the 1997 Rules of Civil Procedure, Justice Regalado expounds on the effects of
the amendments to Section 2 and 3 of Rule 17:
2. Under this revised section 2, where the plaintiff moves for the dismissal of his complaint to which a
counterclaim has been interposed, the dismissal shall be limited to the complaint. Such dismissal shall be
without prejudice to the right of the defendant to either prosecute his counterclaim in a separate action or
to have the same resolved in the same action. Should he opt for the first alternative, the court should
render the corresponding order granting and reserving his right to prosecute his claim in a separate
complaint. Should he choose to have his counterclaim disposed of in the same action wherein the
complaint had been dismissed, he must manifest such preference to the trial court within 15 days from
notice to him of plaintiffs motion to dismiss. These alternative remedies of the defendant are available
to him regardless of whether his counterclaim is compulsory or permissive. x x x.45 (Italics in the
original)
cralawlawlibrary
In the instant case, the petitioners preference to have his counterclaim (and cross-claims) be
prosecuted in the same action was timely manifested. The records show that Serafin and Leopolda
furnished the petitioners counsel with a copy of their Joint Motion to Dismiss by posting it (via registered
mail) on September 19, 2001.46 Said motion was filed in court the following day. 47 On October 4, 2001,
the petitioner filed his Opposition/Comment thereto.48 Copies of the said opposition were personally
served upon the opposing parties on the same date. 49 In paragraph 1.550 of said opposition, the petitioner
expressed his preference to have his counterclaim and cross-claim prosecuted in the same case, as he thus
stated:chanRoblesvirtualLawlibrary
1.5 That the undersigned defendant manifest to this Honorable Court of his preference that the above[ ]
counterclaims and cross-claims be resolved in the present case. 51
cralawlawlibrary
There are valid reasons why the petitioner vehemently objected to the dismissal of the case upon the joint
motion of Serafin and Leopolda and insisted to have his counterclaim prosecuted in the same action.
Serafin instituted the instant case due to the existence of certain documents affecting his title, namely:
Henrys Affidavit of Self-Adjudication with Deed of Sale which names Leopolda as the buyer; and Tax

Declaration No. 01532 which was issued in the name of the latter. In his Affidavit of Self-Adjudication,
Henry transferred whatever right and interest he had on the subject lot to Leopolda. Subsequently, by
reason of the amicable settlement between Serafin and Leopolda, the latter waived and abandoned all her
rights
to
Lot
5357.
On the other hand, the petitioner asserts that the subject property was never transferred nor
encumbered to any person during Antonios lifetime. He insists that the deed of sale in favor of
Spouses Cabansag is simulated and spurious, and was intended to defraud the estate of Antonio. Further,
he
asserts
that
said
Spouses
Cabansag
are
mere
creations
of
Serafin.
Forthwith, the foregoing contentions touch on the very merits of the case which this Court is not prepared
to rule upon for want of sufficient factual basis since this case was dismissed by the RTC even before the
parties were able to present their evidence on the merits. Nonetheless, the records show that Serafin had
been aware of the petitioners claim over the property as descendants of Antonio and Dy Ochay even
before the institution of this case, which was why he impleaded the petitioner in this case. Then, the Joint
Motion to Dismiss was filed by Serafin and Leopolda on the ground that both parties were able to settle
their differences. It is rather intriguing that in said joint motion, it was alleged that Serafin was already
able to secure a certificate of title in his name dated July 26, 2001 and that both parties agreed for its
cancellation and have a title over said property issued in their common names.52 Clearly, the petitioner
was peremptorily left out of the picture. From the cases inception, the petitioners interests and that of
his siblings over the subject property were vigilantly defended as evidenced by the numerous and
exchange of pleadings made by the parties. It can not therefore be denied that the petitioner has certainly
valid defenses and enforceable claims against the respondents for being dragged into this case. Thus, the
petitioners manifestation of his preference to have his counterclaim prosecuted in the same action is valid
and
in
accordance
with
Section
2,
Rule
17
of
the
Rules
of
Court.
WHEREFORE, premises considered, the petition is PARTIALLY GRANTED. The Orders dated April
25, 2002 and October 21, 2002 of the Regional Trial Court of Lapu-lapu City, Branch 27 in Civil Case
No. 4786-L are MODIFIED in that the counterclaim of Lim Teck Chuan as defendant in Civil Case No.
4786-L is REINSTATED. The Regional Trial Court is ORDERED to hear and decide Lim Teck
Chuans
counterclaim
with
dispatch.
SO ORDERED.cralawlawlibrary

4. G.R. No. 188944

July 9, 2014

SPOUSES
RODOLFO
vs.
FELIPE C. SIAPNO, Respondent.

BEROT

AND

LILIA

BEROT, Petitioners,

DECISION
SERENO, CJ:
Before us is a Petition for Review on Certiorari under Rule 45 of the 1997 Revised Rules on Civil
Procedure assailing the Court of Appeals (CA) Decision dated 29 January 2009 in CA-G.R. CV No.
87995.1 The assailed CA Decision affirmed with modification the Decision 2 in Civil Case No. 2004-0246-

D issued by the Regional Trial Court (RTC), First Judicial Region of Dagupan City, Branch 42. The RTC
Decision allowed the foreclosure of a mortgaged property despite the objections of petitioners claiming,
among others, that its registered owner was impleaded in the suit despite being deceased.
THE FACTS
Considering that there are no factual issues in this case, we adopt the findings of fact of the CA, as
follows:
On May 23, 2002, Macaria Berot (or "Macaria") and spouses Rodolfo A. Berot (or "appellant") and Lilia
P. Berot (or "Lilia") obtained a loan from Felipe C. Siapno (or "appellee") in the sum of P250,000.00,
payable within one year together with interest thereon at the rate of 2% per annum from that date until
fully paid.
As security for the loan, Macaria, appellant and Lilia (or "mortgagors", when collectively)mortgaged to
appellee a portion, consisting of 147 square meters (or "contested property"), of that parcel of land with
an area of 718 square meters, situated in Banaoang, Calasiao, Pangasinan and covered by Tax Declaration
No. 1123 in the names of Macaria and her husband Pedro Berot (or "Pedro"), deceased. On June 23, 2003,
Macaria died.
Because of the mortgagors default,appellee filed an action against them for foreclosure of mortgageand
damages on July 15, 2004 in the Regional Trial Court of Dagupan City (Branch 42). The action was
anchored on the averment that the mortgagors failed and refused to pay the abovementioned sum
of P250,000.00 plus the stipulated interest of 2% per month despite lapse of one year from May 23, 2002.
In answer, appellant and Lilia (or "Berot spouses", when collectively [referred to]) alleged that the
contested property was the inheritance of the former from his deceased father, Pedro; that on said property
is their family home; that the mortgage is void as it was constituted over the family home without the
consent of their children, who are the beneficiaries thereof; thattheir obligation is only joint; and that the
lower court has no jurisdiction over Macaria for the reason that no summons was served on her as she was
already dead.
With leave of court, the complaint was amended by substituting the estate of Macaria in her stead. Thus,
the defendants named in the amended complaint are now the "ESTATE OF MACARIA BEROT,
represented by Rodolfo A. Berot, RODOLFO A. BEROT and LILIA P. BEROT".
After trial, the lower court rendered a decision dated June 30, 2006, the decretal portion of which reads:
WHEREFORE, the Court hereby renders judgment allowing the foreclosure of the subject mortgage.
Accordingly, the defendants are hereby ordered to pay to the plaintiff within ninety (90) days from notice
of thisDecision the amount of P250,000.00 representing the principal loan, with interest at two (2%)
percent monthly from February, 2004 the month when they stopped paying the agreed interest up to
satisfaction of the claim and 30% of the amount to be collected as and for attorneys fees. Defendants are
also assessed to pay the sum of P20,000.00 as litigation expenses and another sum of P10,000.00 as
exemplary damages for their refusal to pay their aforestated loan obligation. If within the aforestated 90day period the defendants fail to pay plaintiff the above-mentioned amounts, the sale of the property
subject of the mortgage shall be made and the proceeds of the sale to be delivered to the plaintiff to cover
the debt and charges mentioned above, and after such payments the excess, if any shall be delivered to the
defendants.

SO ORDERED.
Appellant filed a motion for reconsideration of the decision but it was denied per order dated September
8, 2006. Hence, this appeal interposed by appellant imputing errors to the lower court in
1. SUBSTITUTING AS DEFENDANT THE ESTATE OF MACARIA BEROT WHICH HAS NO
PERSONALITY TO SUE AND TO BE SUED;
2. APPOINTING RODOLFO BEROT AS A REPRESENTATIVE OF THE ESTATE OF THE
DECEASED MACARIA BEROT TO THE PREJUDICE OF THE OTHER HEIRS, GRANTING FOR
THE SAKE OF ARGUMENT THAT THE ESTATE OF MACARIA BEROT HAS A PERSONALITY
TO SUE AND BE SUED;
3. NOT FINDING THE MORTGAGE NULL AND VOID, WHICH WAS ENTERED INTOWITHOUT
THE WRITTEN CONSENT OF THE BENEFICIARIES OF THE FAMILY HOME WHO WERE OF
LEGAL AGE;
4. MAKING DEFENDANTS LIABLE FOR THE ENTIRE OBLIGATION OF PH250,000.00, WHEN
THE OBLIGATION IS ONLY JOINT;
5. IMPOSING ATTORNEYS FEE(S) IN THE DISPOSITIVE PORTION WITHOUT MAKING A
FINDING OF THE BASIS THEREOF IN THE BODY; and
6. IMPOSING EXEMPLARY DAMAGES AND LITIGATION EXPENSES.
Appellant contends that the substitution of the estate of Macaria for her is improper as the estate has no
legal personality to be sued.3
On 29 January 2009, the CA, through its Seventh Division, promulgated a Decision that affirmed the RTC
Decision but with modification where it deleted the award of exemplary damages, attorneys fees and
expenses of litigation. The appellate court explained in its ruling that petitioners correctly argued that a
decedents estate is not a legal entity and thus, cannot sue or be sued. However,it noted that petitioners
failed to object to the trial courts exercise of jurisdiction over the estate of Macaria when the latter was
impleaded by respondents by amending the original complaint. 4 Adopting the rationale of the trial court
on this matter, the CA held:
As aptly observed by the trial court:
It may be recalled that when the plaintiff filed his Amended Complaint substituting the estate of Macaria
Berot in place of Macaria Berot as party defendant, defendants made no objection thereto. Not even an
amended answer was filed by the defendants questioning the substitution of the estate of Macaria Berot.
For these reasons, the defendants are deemed to have waivedany objection on the personality of the estate
of Macaria Berot. Section 1, Rule 9 of the Rules of Court provides that, Defenses and objections not
pleaded either in a motion to dismiss or in the answer are deemed waived. (Order dated September 8,
2006)5 [Underscoring supplied]
The CA also found the action of respondent to be procedurally correct under Section 7, Rule 86 of the
Rules ofCourt, when it decided to foreclose on the mortgage of petitioner and prove his deficiency as an
ordinary claim.6The CA did not make a categorical finding that the nature of the obligation was joint or

solidary on the part of petitioners. 7 It neither sustained their argument that the mortgage was invalidfor
having beenconstituted over a family home without the written consent of the beneficiaries who were of
legal age.8 However, it upheld their argument that the award of exemplary damages and attorneys fees in
favor ofrespondent was improper for lack of basis, 9 when it ruled thus:
WHEREFORE, the appealed decision is AFFIRMED with MODIFICATION in that the award of
exemplary damages, attorneys fees and expenses of litigation is DELETED.
SO ORDERED.10
Petitioners moved for the reconsideration of the CA Decision, but their motion was denied through a
Resolution dated 9 July 2009.11 Aggrieved by the denial of their Motion for Reconsideration, they now
come to us through a Petition for Review on Certiorari under Rule 45, proffering purely questions of law.
THE ISSUES
The following are the issues presented by petitioners for resolution by this Court:
The Court of Appeals erred in:
1. Holding that the intestate estate of Macaria Berot could be a proper party by waiver expressly or
impliedly by voluntary appearance;
2. In not holding that the obligation is joint12
THE COURTS RULING
We DENYthe Petition for lack of merit.
Petitioners were correct when they argued that upon Macaria Berots death on 23 June 2003, her legal
personality ceased, and she could no longer be impleaded as respondent in the foreclosure suit. It is also
true that her death opened to her heirs the succession of her estate, which in this case was an intestate
succession. The CA, in fact, sustained petitioners position that a deceased persons estate has no legal
personality to be sued. Citing the Courts ruling in Ventura v. Militante, 13 it correctly ruled that a decedent
does not have the capacity to be sued and may not be madea defendant in a case:
A deceased person does not have suchlegal entity asis necessary to bring action so much so that a motion
to substitute cannot lie and should be denied by the court. An action begun by a decedents estate cannot
be said to have been begun by a legal person, since an estate is not a legal entity; such an action is a
nullity and a motion to amend the party plaintiff will not, likewise, lie, there being nothing before the
court to amend. Considering that capacity to be sued isa correlative of the capacity to sue, to the same
extent, a decedent does not have the capacity to be sued and may not be named a party defendant in a
court action.
When respondent filed the foreclosure case on 15 June 2004 and impleaded Macaria Berot as respondent,
the latter had already passed away the previous year, on 23 June 2003. In their Answer 14 to the Complaint,
petitioners countered among others, that the trial court did not have jurisdiction over Macaria, because no
summons was served on her, precisely for the reason that she had already died. Respondent then amended
his Complaint with leave of court and substituted the deceased Macaria by impleading her intestate estate

and identified Rodolfo Berot as the estates representative. Thereafter, the case proceeded on the merits at
the trial, where this case originated and where the Decision was promulgated.
It can be gleaned from the records ofthe case that petitioners did not object when the estate of Macaria
was impleaded as respondent in the foreclosure case. Petitioner Rodolfo Berot did not object either when
the original Complaint was amended and respondent impleaded him as the administrator of Macarias
estate, in addition to his being impleaded as an individual respondent in the case. Thus, the trial and
appellate courts were correct in ruling that, indeed, petitionersimpliedly waived any objection to the trial
courts exercise of jurisdiction over their persons at the inception of the case. In resolving the Motion for
Reconsideration of petitioners as defendants in Civil Case No. 2004-0246-D, the RTC was in point when
it ruled:
It may be recalled that when the plaintiff filed his Amended Complaint substituting the estate of Macaria
Berot in place of Macaria Berot as party defendant, defendants made no objections thereto. Not even an
amended answer was filed by the defendants questioning the substitution of the estate of Macaria Berot.
For these reasons, the defendants are deemed to have waivedany objection on the personality of the estate
of Macaria Berot. Section 1, Rule 9 of the Rules of Court provides that, "Defenses and objections not
pleaded either in a motion to dismiss or in the answer are deemed waived. x x x. (Underscoring ours) 15
Indeed, the defense of lack of jurisdiction over the person of the defendant is one that may bewaived by a
party to a case. In order to avail of that defense, one must timely raise an objection before the court. 16
The records of the case show that on 9 November 2004, a hearing was held on the Motion for Leave to
Filefiled by respondent to have her amended Complaint admitted. During the said hearing, the counsel for
petitioners did not interpose an objection to the said Motion for Leave. 17 On 18 March 2005, a hearing
was held on respondents Motion to Admit Amended Complaint, wherein counselfor petitioners again
failed to interpose any objection. 18 Thus, the trial court admitted respondents Amended Complaint and
ordered thata copy and a summons be served anew on petitioners. 19
In an Order20 dated 14 April 2005, the RTC noted that petitioners received the summons and the copy of
the amended Complaint on 3 February 2005 and yet they did not file an Answer. During the trial on the
merits that followed, petitioners failed to interpose any objection to the trial courts exercise of
jurisdiction over the estate of Macaria Berot. Clearly, their full participation in the proceedings of the case
can only be construed as a waiver of any objection to or defense of the trial courts supposed lack of
jurisdiction over the estate.
In Gonzales v. Balikatan Kilusang Bayan sa Panlalapi, Inc., 21 we held that a partys appearance in a case
is equivalent to a service of summons and that objections must be timely raised:
In this regard, petitioners should be reminded of the provision in the Rules of Court that a
defendantsvoluntary appearance in an action shall be equivalent to service of summons. Further, the lack
of jurisdiction over the person of the defendant may be waived either expressly or impliedly. When a
defendant voluntarily appears, he is deemed to have submitted himself to the jurisdiction of the court. If
he does not wish to waive this defense, he must do so seasonably by motion, and object thereto.
It should be noted that Rodolfo Berot is the son of the deceased Macaria 22 and as such, he is a compulsory
heir of his mother. His substitution is mandated by Section 16, Rule 3 of the Revised Rules of Court.
Notably, there is no indication inthe records of the case that he had other siblings who would have been
his co-heirs. The lower and appellate courts veered from the real issue whether the proper parties have
been impleaded. They instead focused on the issue whether there was need for a formal substitution when

the deceasedMacaria, and later its estate, was impleaded. As the compulsory heir of the estate of Macaria,
Rodolfo is the real party in interest in accordance with Section 2, Rule 3 of the Revised Rules of Court. At
the time of the filing of the complaint for foreclosure, as well as the time it was amended to implead the
estate of Macaria, it is Rodolfo as heir who is the real party in interest. He stands to be benefitted or
injured by the judgment in the suit.
Rodolfo is also Macarias co-defendant in the foreclosure proceedings in his own capacity as co-borrower
ofthe loan. He participated in the proceedings of the case, from the initial hearing of the case, and most
particularly when respondent filed his amended complaint impleading the estate of Macaria. When
respondent amended his complaint, Rodolfo did not file an amended Answer nor raise any objection, even
if he was also identified therein as the representative ofthe estate of the deceased Macaria. The lower
court noted this omission by Rodolfo in its Order dated 8 September 2006 ruling on his Motionfor
Reconsideration to the said courts Decision dated 30 June 2006. Thus, his continued participation in the
proceedings clearly shows that the lower court acquired jurisdiction over the heir of Macaria.
In Regional Agrarian Reform Adjudication Board v. Court of Appeals, 23 we ruled that:
[W]e have to point out that the confusion in this case was brought about by respondents themselves when
they included in their complaint two defendants who were already dead. Instead of impleading the
decedents heirs and current occupants of the landholding, respondents filed their complaint against the
decedents, contrary to the following provision of the 1994 DARAB Rules of Procedure:
RULE V
PARTIES, CAPTION AND SERVICE OF PLEADINGS
SECTION 1. Parties in Interest. Every agrarian case must be initiated and defended inthe name of the real
party in interest. x x x.
A real party in interest is defined as "the party who stands to be benefited or injured by the judgment in
the suit, or the party entitled to the avails of a suit." The real parties in interest, at the time the complaint
was filed, were no longer the decedents Avelino and Pedro, but rather their respective heirs who are
entitled to succeed to their rights (whether as agricultural lessees or as farmers-beneficiaries) under our
agrarian laws. They are the ones who, as heirs of the decedents and actualtillers, stand to be removed
from the landholding and made to pay back rentals to respondents if the complaint is sustained.
Since respondents failed to correcttheir error (they did not amend the erroneous caption of their complaint
to include the real parties-ininterest), they cannot be insulated from the confusion which it engendered in
the proceedings below. But at any rate, notwithstanding the erroneous caption and the absence of a formal
substitution of parties, jurisdiction was acquired over the heirs of Avelino and Pedro who voluntarily
participated in the proceedings below. This Court has ruled that formal substitution of parties is not
necessary when the heirs themselves voluntarily appeared, participated, and presented evidence during
the proceedings.
As such, formal substitution of the parties in this case is not necessary.
In Vda. De Salazar v. Court of Appeals 24 we ruled that a formal substitution of the heirs in place of the
deceased is no longer necessary if the heirs continued to appear and participated in the proceedings of the
case. In the cited case, we explained the rationale of our ruling and related it to the due process issue, to
wit:

We are not unaware of several cases where we have ruled that a party having died in an action that
survives, the trial held by the court without appearance of the deceased's legal representative or
substitution of heirs and the judgment rendered after such trial, are null and void because the court
acquired no jurisdiction over the persons of the legal representatives or of the heirs upon whom the trial
and the judgment would be binding. This general rule notwithstanding, in denying petitioner's motion for
reconsideration, the Court of Appeals correctly ruled that formal substitution of heirs is not necessary
when the heirs themselves voluntarily appeared, participated in the case and presented evidence in
defense of deceased defendant. Attending the case at bench, after all, are these particular circumstances
which negate petitioner's belated and seemingly ostensible claim of violation of her rights to due process.
We should not lose sight of the principle underlying the general rule that formal substitution of heirs must
be effectuated for them to be bound by a subsequent judgment. Such had been the general rule established
not because the rule on substitution of heirs and that on appointment of a legal representative are
jurisdictional requirements per se but because non-compliance therewith results in the undeniable
violation of the right to due process of those who, though not duly notified of the proceedings, are
substantially affected by the decision rendered therein. Viewing the rule on substitution of heirs in this
light, the Court of Appeals,in the resolution denying petitioner's motion for reconsideration, thus
expounded:
Although the jurisprudential rule is that failure to make the substitution is a jurisdictional defect, it should
be noted that the purpose of this procedural rule is to comply with due process requirements. The original
party having died, he could not continue, to defend himself in court despite the fact that the action
survived him. For the case to continue, the real party in interest must be substituted for the deceased. The
real party in interest is the one who would beaffected by the judgment. It could be the administrator or
executor or the heirs. In the instant case, the heirs are the proper substitutes. Substitution gives them the
opportunity to continue the defense for the deceased. Substitution is important because such opportunity
to defend is a requirement to comply with due process. Such substitution consists of making the proper
changes in the caption of the case which may be called the formal aspect of it. Such substitution also
includes the process of letting the substitutes know that they shall be bound by any judgment in the case
and that they should therefore actively participate in the defense of the deceased. This part may be called
the substantive aspect. This is the heart of the procedural rule because this substantive aspect is the one
that truly embodies and gives effect to the purpose of the rule. It is this court's view that compliance with
the substantive aspect of the rule despite failure to comply with the formal aspect may he considered
substantial compliance.Such is the situation in the case at bench because the only inference that could be
deduced from the following facts was that there was active participation of the heirs in the defense ofthe
deceased after his death:
1. The original lawyer did not stop representing the deceased. It would be absurd to think that the lawyer
would continue to represent somebody if nobody is paying him his fees. The lawyer continued to
represent him in the litigation before the trial court which lasted for about two more years. A dead party
cannot pay him any fee. With or without payment of fees, the fact remains that the said counsel was
allowed by the petitioner who was well aware of the instant litigation to continue appearing as counsel
until August 23, 1993 when the challenged decision was rendered;
2. After the death of the defendant, his wife, who is the petitioner in the instant case, even testified in the
court and declared that her husband is already deceased. She knew therefore that there was a litigation
against her husband and that somehow her interest and those of her children were involved;
3. This petition for annulmentof judgment was filed only after the appeal was decided against the
defendant on April 3, 1995, more than one and a half year (sic) after the decision was rendered (even if

we were to give credence to petitioner's manifestation that she was notaware that an appeal had been
made);
4. The Supreme Court has already established that there is such a thing as jurisdiction byestoppel. This
principle was established even in cases where jurisdiction over the subject matter was being questioned.
In the instant case, only jurisdiction over the person of the heirs is in issue. Jurisdiction over the person
may be acquired by the court more easily than jurisdiction over the subject matter. Jurisdiction over the
person may be acquired by the simple appearance of the person in court as did herein petitioner appear;
5. The case cited by the herein petitioner (Ferreria et al. vs. Manuela Ibarra vda. de Gonzales, etal.) cannot
be availed of to support the said petitioner's contention relative to nonacquisition of jurisdiction by the
court. In that case, Manolita Gonzales was not served notice and, more importantly, she never appeared in
court, unlike herein petitioner who appeared and even testified regarding the death of her husband.
In this case, Rodolfos continued appearance and participation in the proceedings of the case dispensed
with the formal substitution of the heirs in place of the deceased Macaria. The failure of petitioners to
timely object to the trial courts exercise of jurisdiction over the estate of Macaria Berot amounted to a
waiver on their part. Consequently, it would be too late for them at this point to raise that defense to merit
the reversal of the assailed decision of the trial court. We are left with no option other than to sustain the
CAs affirmation of the trial courts Decision on this matter.
On the second issue of whether the nature of the loan obligation contracted by petitioners is joint or
solidary, we rule that it is joint.
Under Article 1207 of the Civil Code of the Philippines, the general rule is that when there is a
concurrence of two or more debtors under a single obligation, the obligation is presumed to be joint:
Art. 1207. The concurrence of two or more creditors or of two or more debtors in one and the same
obligation does not imply that each one of the former has a right to demand, orthat each one of the latter
is bound to render, entire compliance with the prestations. There is a solidary liability only when the
obligation expressly so states, or when the law or the nature of the obligation requires solidarity.
The law further provides that to consider the obligation as solidary in nature, it must expressly be stated
as such, or the law or the nature of the obligation itself must require solidarity. In PH Credit Corporation
v. Court of Appeals,25we held that:
A solidaryobligation is one in which each of the debtors is liable for the entire obligation, and each of the
creditors is entitled to demand the satisfaction of the whole obligation from any or all of the debtors. On
the other hand, a jointobligation is one in which each debtors is liable only for a proportionate part of the
debt, and the creditor is entitled to demand only a proportionate part of the credit from each debtor. The
wellentrenched rule is that solidary obligations cannot be inferred lightly. They must be positively and
clearly expressed. A liability is solidary "only when the obligation expressly so states, when the law so
provides or when the nature of the obligation so requires."
In the instant case, the trial court expressly ruled that the nature of petitioners obligation to respondent
was solidary.26 It scrutinized the real estate mortgage and arrived at the conclusion that petitioners had
bound themselves to secure their loan obligation by way of a realestate mortgage in the event that they
failed to settle it.27But such pronouncement was not expressly stated in its 30 June 2006 Decision. This
was probably the reason why, when the trial court Decision was appealed to it, the CA did not squarely
address the issue when the latter ruled that:

It is noteworthy that the appealed decision makes no pronouncement that the obligation of the mortgagors
is solidary; and that said decision has not been modifiedby the trial court. Hence, it is unnecessary for US
to make a declaration on the nature of the obligation of the mortgagors. 28 However, a closer scrutiny of
the records would reveal that the RTC expressly pronounced that the obligation of petitioners to the
respondent was solidary. In resolving petitioners Motion for Reconsideration to its 30 June 2006
Decision, the trial court categorically ruled that:
Defendants [sic] obligation with plaintiff is solidary. A careful scrutiny of the Real Estate Mortgage(Exh.
"A") will show that all the defendants, for a single loan, bind themselves to cede, transfer, and convey by
way of real estate mortgage all their rights, interest and participation in the subject parcelof land including
the improvements thereon in favor of the plaintiff, and warrant the same to be free from liens and
encumbrances, and that should theyfail to perform their obligation the mortgage will be foreclosed. From
this it can be gleaned that each of the defendants obligated himself/herself to perform the said solidary
obligation with the plaintiff.29 We do not agree with this finding by the trial court.
We have scoured the records of the case, but found no record of the principal loan instrument, except an
evidence that the realestate mortgage was executed by Macaria and petitioners. When petitioner Rodolfo
Berot testified in court, he admitted that heand his mother, Macaria had contracted the loan for their
benefit:
Q: On the Real Estate Mortgage, you and your mother obtained a loan from Mr. Siapno in the
amountofP250,000.00, now as between you and your mother whose loan is that?
A: It is the loan of my mother and myself, sir.30
The testimony of petitioner Rodolfo only established that there was that existing loan to respondent, and
that the subject property was mortgaged as security for the said obligation. His admission of the existence
of the loan made him and his late mother liable to respondent. We have examined the contents of the real
estate mortgagebut found no indication in the plain wordings of the instrument that the debtors the late
Macaria and herein petitioners had expressly intended to make their obligation to respondent solidary in
nature. Absent from the mortgage are the express and indubitable terms characterizing the obligation as
solidary. Respondent was not able to prove by a preponderance of evidence that petitioners' obligation to
him was solidary. Hence, applicable to this case is the presumption under the law that the nature of the
obligation herein can only be considered as joint. It is incumbent upon the party alleging otherwise to
prove with a preponderance of evidence that petitioners' obligation under the loan contract is indeed
solidary in character.31
The CA properly upheld respondent's course of action as an availment of the second remedy provided
under Section 7, Rule 86 of the 1997 Revised Rules of Court. 32 Under the said provision for claims
against an estate, a mortgagee has the legal option to institute a foreclosure suit and to recover upon the
security, which is the mortgaged property.
During her lifetime, Macaria was the registered owner of the mortgaged property, subject of the assailed
foreclosure. Considering that she had validly mortgaged the property to secure a loan obligation, and
given our ruling in this case that the obligation is joint, her intestate estate is liable to a third of the loan
contracted during her lifetime. Thus, the foreclosure of the property may proceed, but would be
answerable only to the extent of the liability of Macaria to respondent. WHEREFORE, the CA Decision
in CA-G.R. CV No. 87995 sustaining the RTC Decision in Civil Case No. 2004-0246-D is hereby
AFFIRMED with the MODIFICATION that the obligation of petitioners and the estate of Macaria Berot
is declared as joint in nature.

SO ORDERED

5. G.R. No. 185969, November 19, 2014


AT&T COMMUNICATIONS SERVICES PHILIPPINES, INC., Petitioner, v. COMMISSIONER
OF INTERNAL REVENUE, Respondent.
DECISION
PEREZ, J.:
Before the Court is a Petition for Review on Certiorari seeking to reverse and set aside the 24 September
2008 Decision1 and the 13 January 2009 Resolution2 of the Court of Tax Appeals (CTA) En Banc in
C.T.A. EB No. 381 which affirmed the Decision and Resolution dated 12 December 2007 and 12 March
2008, respectively, of the First Division of the CTA (CTA in Division) 3 in C.T.A. Case No. 7221,
dismissing the petition for lack of merit; and accordingly, denied petitioner's claim for the refund or
issuance of a tax credit certificate (TCC) in the amount of P3,003,265.14 allegedly representing excess or
unutilized input Value-Added Tax (VAT) attributable to its zero-rated sales of services for the period
covering 1 January 2003 to 31 December 2003.chanrobleslaw
The Facts
The factual antecedents of this case reveal that petitioner AT&T Communications Services Philippines,
Inc. (petitioner), being a domestic corporation principally engaged in the business of rendering
information, promotional, supportive and liaison service, entered into a Service Agreement with AT&T
Communications Services International, Inc. (AT&T-CSI), a non-resident foreign corporation, on 1
January 1999, whereby compensation for such services is paid in US Dollars. 4chanrobleslaw
Petitioner has an Assignment Agreement with AT&T Solutions, Inc. (AT&T-SI) where the latter assigned
to petitioner the performance of services AT&T-SI was supposed to provide Mastercard International, Inc.
(a non-resident foreign corporation) under a Virtual Private Network Service Agreement. Likewise, the
compensation for such services is paid in US Dollars to be inwardly remitted to the Philippines by AT&TSI,
which
acts
as
the
collecting
agent
of
petitioner. 5chanrobleslaw
Thereafter, a second Assignment Agreement was executed and entered into by petitioner with AT&T-SI
for the purpose of performing the latter's obligation to Lexmark International, Inc. (also a non-resident
foreign corporation) by providing services to its affiliates in the Philippines, namely: Lexmark Research
and Development Corporation and Lexmark International (Philippines), Inc. (both Philippine Economic
Zone Authority [PEZA]-registered enterprises). Payment of petitioner's aforesaid services is as well paid
in
US
Dollars
through
telegraphic
transfer.6chanrobleslaw
Consequently, petitioner filed its Quarterly VAT Returns with the Bureau of Internal Revenue (BIR) for
the taxable year period covering 1 January 2003 to 31 December 2003, detailed hereunder as
follows:chanRoblesvirtualLawlibrary
Date of Filing
22 April 2003

Period Covered
1st Quarter

23 July 2003
22 October 2003
26 January 2004

2nd Quarter
3rd Quarter
4th Quarter

On 5 February 2004, petitioner filed its first Amended Quarterly VAT Return for the Fourth Quarter of
taxable year 2003; while on 26 April 2004, petitioner filed its Amended Quarterly VAT Returns for the
First
to
Fourth
Quarters
of
the
taxable
year
2003. 8chanrobleslaw
Petitioner filed on 13 April 2005 with the BIR an application for refund and/or tax credit of its unutilized
VAT input taxes for the aforesaid taxable period amounting to P3,003,265.14. However, there being no
action on said administrative claim, petitioner filed a Petition for Review before the CTA in Division on
20 April 2005 (or exactly seven [7] days from the time it filed its administrative claim) in order to
suspend the running of the prescriptive period provided under Section 229 of the National Internal
Revenue Code (NIRC) of 1997, as amended.9chanrobleslaw
The Ruling of the CTA in Division
In C.T.A. Case No. 7221, the CTA in Division rendered a Decision dated 12 December 2007 10dismissing
petitioner's claim for the refund or issuance of a TCC. It ruled that in order to be entitled to its refund
claim, petitioner must show proof of compliance with the substantiation requirements as mandated by law
and regulations. Therefore, considering that the subject revenues pertain to gross receipts from services
rendered by petitioner, valid official receipts and not mere sales invoices should have been presented and
submitted in evidence in support thereof. Without proper VAT official receipts, the foreign currency
payment received by petitioner from services rendered for the four (4) quarters of taxable year 2003
cannot qualify for zero-rating for VAT purposes. Since it is clear from the provisions of Section 112(A) of
the NIRC of 1997, as amended, that there must be zero-rated sales or effectively zero-rated sales in order
for a refund claim of input VAT could prosper, the claimed input VAT payments allegedly attributable
thereto
in
the
amount
of
P3,003,265.14
cannot
be
granted. 11chanrobleslaw
On 12 March 2008, the CTA in Division denied petitioner's Motion for Reconsideration for lack of merit
considering that no new matter was raised which were not taken into consideration in arriving at the
subject
Decision
that
would
warrant
its
reversal
or
modification. 12chanrobleslaw
Unsatisfied, petitioner filed a Petition for Review before the CTA En Banc pursuant to Section 18 of
Republic Act (R.A.) No. 1125, as amended by Section 11 of R.A. No. 9282, docketed as C.T.A. EB No.
381.13chanrobleslaw
The Ruling of the CTA En Banc
Finding no merit in petitioner's contentions, the CTA En Banc rendered the assailed 24 September 2008
Decision which affirmed both the Decision and Resolution rendered by the CTA in Division in C.T.A.
Case No. 7221. It categorically pronounced that official receipt cannot be interchanged with sales
invoice.14 It further emphasized that proof of inward remittances like bank credit advices cannot be used
in lieu of VAT official receipts to demonstrate petitioner's zero-rated transactions. Under Section 113 of
the NIRC of 1997, as amended, irrespective of the nature of transaction, be it taxable, exempt or zerorated sale, the law mandates that the taxpayer "for every sale, issue an invoice or receipt." Thus, the
enumerated zero-rated transactions under Sections 106 and 108 are those which are duly covered by VAT
invoices (in the case of sales of goods), and VAT official receipts (in the case of sales of services). 15 In
other words, the law itself clearly specified that an official receipt shall cover sales of services, and did
not provide for any other document which can be used as an alternative to or in lieu thereof.

Upon denial of petitioner's Motion for Reconsideration thereof, it filed the instant Petition for Review
on Certiorari before this Court seeking the reversal of the aforementioned Decision and the 13 January
2009
Resolution16 rendered
in
C.T.A.
EB
No.
381.
In support thereof, petitioner raises the following grounds: (1) the NIRC of 1997, as amended, does not
limit the proof of input or output VAT to a single document. There is no distinction of the evidentiary
value of the supporting documents. Hence, it is clear that invoices or receipts may be used
interchangeably to substantiate VAT; (2) the use of the VAT official receipt as proof of payment of the sale
of service loses its significance due to the requirement that petitioner must prove the validity of its inward
remittances; (3) petitioner presented substantial evidence that unequivocally proved its zero-rated
transactions for the taxable year 2003; and (4) in civil cases, such as claims for refund or issuance of a
TCC, a mere preponderance of evidence will suffice to justify the grant of the claim. 17chanrobleslaw
The Issue
The sole issue for this Court's consideration is whether or not petitioner is entitled to a refund or issuance
of a TCC in its favor amounting to P3,003,265.14 allegedly representing unutilized input VAT attributable
to petitioner's zero-rated sales for the period of 1 January 2003 to 31 December 2003, in accordance with
the provisions of the NIRC of 1997, as amended, other pertinent laws, and applicable jurisprudential
proclamations.chanrobleslaw
Our Ruling
At this juncture, it bears emphasis that jurisdiction over the subject matter or nature of an action is
fundamental for a court to act on a given controversy, 18 and is conferred only by law and not by the
consent or waiver upon a court which, otherwise, would have no jurisdiction over the subject matter or
nature of an action. Lack of jurisdiction of the court over an action or the subject matter of an action
cannot be cured by the silence, acquiescence, or even by express consent of the parties. 19 If the court has
no jurisdiction over the nature of an action, its only jurisdiction is to dismiss the case. The court could not
decide the case on the merits. 20 Needless to state, to obviate the possibility that its decision may be
rendered void, the Court can, by its own initiative, raise the question of jurisdiction, although not raised
by the parties.21 As a corollary thereto, to inquire into the existence of jurisdiction over the subject matter
is the primary concern of a court, for thereon would depend the validity of its entire
proceedings.22 Therefore, even if there was no jurisdictional issue raised by any party, the Court may look
into
it
at
anytime
of
the
proceedings,
even
during
this
appeal.
It has long been established that the CTA is a court of special jurisdiction. As such, it can only take
cognizance of such matters as are clearly within its jurisdiction. 23 Hence, when it appears from the
pleadings or the evidence on record that the court has no jurisdiction over the subject matter, the court
shall
dismiss
the
claim.24chanrobleslaw
Relevant thereto, the Court sitting En Banc has finally settled the issue on proper observance of the
prescriptive periods in claiming for refund of creditable input tax due or paid attributable to any zerorated or effectively zero-rates sales. Thus, in view of the jurisprudential pronouncements rendered
inCommissioner of Internal Revenue v. San Roque Power Corporation, Taganito Mining Corporation v.
Commissioner of Internal Revenue, and Philex Mining Corporation v. Commissioner of Internal Revenue
(San Roque case),25 this Court finds it imperative to first look into the factual findings of the CTA for the
purpose of achieving a complete . determination of the issue presented, particularly as to the timeliness of
its
administrative
and
judicial
claims.

In C.T.A. Case No. 7221, the CTA in Division solely ruled on petitioner's non-compliance with the
substantiation requirements, expressing that the evidence submitted by petitioner to prove its zero-rated
sales were insufficient so as to entitle it to the claim for refund or issuance of a TCC. Similar declaration
was made by the CTA En Banc in the assailed 24 September 2008 Decision and 13 January 2009
Resolution
in
C.T.A.
EB
No.
381.
Nonetheless, although it is true that the substantiation requirements in establishing a refund claim is a
valid issue for this Court to rule upon, the prior determination of whether or not the CTA properly
acquired jurisdiction over petitioner's claim covering the four (4) quarters of taxable year 2003, taking
into consideration the timeliness of the filing of the administrative and judicial claims pursuant to Section
112 of the NIRC of 1997, as amended, and consistent with the pronouncements made in the San
Roque case, is still our primary concern. Clearly, petitioner's claim can only proceed upon compliance
with
the
aforesaid
jurisdictional
requirement.
Section 112 of the NIRC of 1997, as amended, reads:chanRoblesvirtualLawlibrary
SEC.

112. Refunds

or

Tax

Credits

of

Input

Tax.

(A) Zero-rated or Effectively Zero-rated Sales. - Any VAT-registered person, whose sales are zero-rated or
effectively zero-rated may, within two (2) years after the close of the taxable quarter when the sales
were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid
attributable to such sales, except transitional input tax, to the extent that such input tax has not been
applied
against
output
tax:
x
x
x
x

(D)26Period within which Refund or Tax Credit of Input Taxes shall be Made. - In proper cases, the
Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one
hundred twenty (120) days from the date of submission of complete documents in support of the
application
filed
in
accordance
with
Subsection
(A)
hereof.
In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the
Commissioner to act on the application within the period prescribed above, the taxpayer affected
may, within thirty (30) days from the receipt of the decision denying the claim or after the
expiration of the one hundred twenty-day period, appeal the decision or the unacted claim with the
Court
of
Tax
Appeals.
x x x x (Emphases and underscoring supplied)
As mentioned earlier, the proper interpretation of the afore-quoted provision was finally settled in theSan
Roque case27 by this Court sitting En Banc. The relevant portions of the discussion pertinent to the focal
issue presented in this case are quoted hereunder, to wit:chanRoblesvirtualLawlibrary
First, Section 112(A) clearly, plainly, and unequivocally provides that the taxpayer "may, within two (2)
years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax
credit certificate or refund of the creditable input tax due or paid to such sales." In short, the law states
that the taxpayer may apply with the Commissioner for a refund or credit "within two (2) years," which
means at anytime within two years. Thus, the application for refund or credit may be filed by the
taxpayer with the Commissioner on the last day of the two-year prescriptive period and it will still strictly
comply with the law. The two-year prescriptive period is a grace period in favor of the
taxpayer and he can avail of the full period before his right to apply for a tax refund or credit is barred by

prescription.
Second, Section 112(C) provides that the Commissioner shall decide the application for refund or credit
"within one hundred twenty (120) days from the date of submission of complete documents in support of
the application filed in accordance with Subsection (A)." The reference in Section 112(C) of the
submission of documents "in support of the application filed in accordance with Subsection A" means that
the application in Section 112(A) is the administrative claim that the Commissioner must decide within
the 120-day period. In short, the two-year prescriptive period in Section 112(A) refers to the period
within which the taxpayer can file an administrative claim for tax refund or credit. Stated
otherwise, the two-year prescriptive period does not refer to the filing of the judicial claim with the
CTA but to the filing of the administrative claim with the Commissioner. As held in Aichi, the
"phrase 'within two years x x x apply for the issuance of a tax credit or refund' refers to applications for
refund/credit
with
the
CIR
and
not
to
appeals
made
to
the
CTA."
x

Section 112(A) and (C) must be interpreted according to its clear, plain, and unequivocal language.
The taxpayer can file his administrative claim for refund or credit at anytime within the two-year
prescriptive period. If he files his claim on the last day of the two-year prescriptive period, his claim
is still filed on time. The Commissioner will have 120 days from such filing to decide the claim. If
the Commissioner decides the claim on the 120th day, or does not decide it on that day, the taxpayer
still has 30 days to file his judicial claim with the CTA. This is not only the plain meaning but also
the only logical interpretation of Section 112(A) and (C). 28 (Emphases supplied)
It was moreover pronounced:chanRoblesvirtualLawlibrary
The Atlas doctrine, which held that claims for refund or credit of input VAT must comply with the twoyear prescriptive period under Section 229, should be effective only from its promulgation on 8 June
2007 until its abandonment on 12 September 2008 in Mirant. The Atlas doctrine was limited to the
reckoning of the two-year prescriptive period from the date of payment of the output VAT. Prior to
the Atlasdoctrine, the two-year prescriptive period for claiming refund or credit of input VAT
should be governed by Section 112(A) following the verba legis rule. The Mirant ruling, which
abandoned the Adas doctrine, adopted the verba legis rule, thus applying Section 112(A) in computing the
two-year prescriptive period in claiming refund or credit of input VAT.29 (Emphasis and underlining
supplied)
Applying the foregoing pronouncements, and considering that petitioner's administrative claim was filed
before the promulgation of the Atlas case,30 it is clear that petitioner only had a period of two (2)
years from the close of the taxable quarter when the zero-rated or effectively zero-rated sales were
made, to file an administrative claim for refund or issuance of a TCC in its favor. As aptly found by the
CTA in Division and the CTA En Banc, the administrative claim covering all four (4) quarters of taxable
year 2003, was filed by petitioner on 13 April 2005. However, although petitioner's administrative claim
was filed within the prescribed 2-year period under Section 112(A) of the NIRC of 1997, as amended,
insofar as to the Second, Third, and Fourth Quarters of taxable year 2003 are concerned, it appears that its
claim covering the First Quarter of taxable year 2003 was belatedly filed, detailed hereunder as
follows:chanRoblesvirtualLawlibrary
Taxable year 2003 (close of taxable Last day of filing administrative claims Filing date of the
quarters)
(within the 2-year period from the close administ
rative
of the taxable quarters)
claim

1st Quarter (31 March 2003)

30 March 200531

2nd Quarter (30 June 2003)

29 June 2005

rd

3 Quarter (30 September 2003)

29 September 2005

4th Quarter (31 December 2003)

30 December 2005

13 April 2005

Clearly, the CTA had no jurisdiction to rule on petitioner's refund claim covering the First Quarter of
taxable year 2003 since its administrative claim was filed beyond the 2-year prescriptive period as
mandated by law, or exactly fourteen (14) days after the last day to file the same.
On the other hand, as to petitioner's claims covering the remaining quarters of taxable year 2003, the
Court finds that petitioner has indeed properly filed its judicial claim before the CTA, even without
waiting for the expiration of the one hundred twenty (120)-day period, since at the time petitioner filed its
petition, BIR Ruling No. DA-489-03 issued on 10 December 2003 was already in effect. This ruling is not
without any legal basis. Thus:chanRoblesvirtualLawlibrary
Like San Roque, Taganito also filed its petition for review with the CTA without waiting for the 120day period to lapse. Also, like San Roque, Taganito filed its judicial claim before the promulgation of
the Atlas doctrine. Taganito filed a Petition for Review on 14 February 2007 with the CTA. This is
almost four months before the adoption of the Atlas doctrine on 8 June 2007. Taganito is similarly
situated as San Roque - both cannot claim being misled, misguided, or confused by the Atlas doctrine.
However, Taganito can invoke BIR Ruling No. DA-489-03 dated 10 December 2003, which expressly
ruled that the "taxpayer-claimant need not wait for the lapse of the 120-day period before it could
seek judicial relief with the CTA by way of Petition for Review." Taganito filed its judicial claim after
the issuance of BIR Ruling No. DA-489-03 but before the adoption of the Aichi doctrine. Thus, xxx
Taganito is deemed to have filed its judicial claim with the CTA on time.32(Emphasis supplied)
x

To repeat, a claim for tax refund or credit, like a claim for tax refund exemption, is construed strictly
against the taxpayer. One of the conditions for a judicial claim of refund or credit under the VAT System
is compliance with the 120+30 day mandatory and jurisdictional periods. Thus, strict compliance
with the 120+30 day periods is necessary for such a claim to prosper, whether before, during, or
after the effectivity of the Atlas doctrine, except for the period from the issuance of BIR Ruling No.
DA-489-03 on 10 December 2003 to 6 October 2010 when the Aichi doctrine was adopted, which
again reinstated the 120+30 day periods as mandatory and jurisdictional. 33 (Emphasis supplied)
Without doubt, it is evident from the foregoing jurisprudential pronouncements that as a general rule, a
taxpayer-claimant needs to wait for the expiration of the one hundred twenty (120)-day period before it
may be considered as "inaction" on the part of the Commissioner of Internal Revenue (CIR). Thereafter,
the taxpayer-claimant is given only a limited period of thirty (30) days from said expiration to file its
corresponding judicial claim with the CTA. However, with the exception of claims made during the
effectivity of BIR Ruling No. DA-489-03 (from 10 December 2003 to 5 October 2010), 34 petitioner has
indeed properly and timely filed its judicial claim covering the Second, Third, and Fourth Quarters of
taxable year 2003, within the bounds of the law and existing jurisprudence.
Now, the significance of the difference between a sales invoice and an official receipt as evidence for
zero-rated
transactions.

This

is

not

novel.

For emphasis, even prior to the enactment of R.A. No. 9337, 35 which clearly delineates the invoice and
official
receipt,
our
Tax
Code
has
already
.
made
the
distinction.
Section 113 of the NIRC of 1997, as amended is the focal provision, to wit:chanRoblesvirtualLawlibrary
SEC.

113.

Invoicing

and

Accounting

Requirements

for

VAT-registered

Persons.-

(A) Invoicing Requirements.- A VAT-registeredperson shall, for every sale, issue aninvoice or receipt. In
addition to the information required under Section 237, the following information shall be indicated in the
invoice
or
receipt:
(Emphasis
supplied)
xxxx
Although it appears under the above-quoted provision that there is no clear distinction on the evidentiary
value of an invoice or official receipt, it is worthy to note that the said provision is a general provision
which covers all sales of a VAT registered person, whether sale of goods or services. It does not
necessarily follow that the legislature intended to use the same interchangeably. The Court therefore
cannot conclude that the general provision of Section 113 of the NIRC of 1997, as amended, intended that
the invoice and official receipt can be used for either sale of goods or services, because there are specific
provisions of the Tax Code which clearly delineates the difference between the two transactions.
In this instance, Section 108 of the NIRC of 1997, as amended, provides:chanRoblesvirtualLawlibrary
SEC.

108. Value-added

Tax

on Sale

of

Services and

Use

or

Lease

of

Properties.-

(C) Determination of the Tax - The tax shall be computed by multiplying the total amount indicated in
the official receipt by one-eleventh (1/11). (Emphasis supplied)
Comparatively, Section 106 of the same Code covers sale of goods, thus:chanRoblesvirtualLawlibrary
SEC.
x

106. Value-added

Tax
x

on Sale

of

Goods
x

or

Properties,x

(D) Determination of the Tax. - The tax shall be computed by multiplying the total amount indicated in
the invoice by one-eleventh (1/11). (Emphasis supplied)
Apparently, the construction of the statute shows that the legislature intended to distinguish the use of an
invoice from an official receipt. It is more logical therefore to conclude that subsections of a statute under
the same heading should be construed as having relevance to its heading. The legislature separately
categorized VAT on sale of goods from VAT on sale of services, not only by its treatment with regard to
tax but also with respect to substantiation requirements. Having been grouped under Section 108, its
subparagraphs, (A) to (C), and Section 106, its subparagraphs (A) to (D), have significant relations with
each
other.
Legislative intent must be ascertained from a consideration of the statute as a whole and not of an isolated
part or a particular provision alone. This is a cardinal rule in statutory construction. For taken in the

abstract, a word or phrase might easily convey a meaning quite different from the one actually intended
and evident when the word or phrase is considered with those with which it is associated. Thus, an
apparently general provision may have a limited application if viewed together with the other
provisions.36chanrobleslaw
Settled is the rule that every part of the statute must be considered with the other parts. 37Accordingly, the
whole of Section 108 should be read in conjunction with Sections 113 and 237 so as to give life to all the
provisions intended for the sale of services. There is no conflict between the provisions of the law that
cover sale of services that are subject to zero rated sales; thus, it should be read altogether to reveal the
true
legislative
intent.
To finally settle this matter, this Court declared in KEPCO Philippines Corporation v. Commissioner of
Internal Revenue,38 that the VAT invoice is the seller's best proof of the sale of the goods or services to the
buyer while the VAT receipt is the buyer's best evidence of the payment of goods or services received
from the seller. Thus, the High Court concluded that VAT invoice and VAT receipt should not be confused
as referring to one and the same thing. Certainly, neither does the law intend the two to be used
interchangeably. Accordingly, we agree with the mling of the CTA in Division, as well as that of the
CTA En Banc, insofar as to its discussion on the relevancy of the aforesaid substantiation requirements.
WHEREFORE,

the

petition

is DENIED.

No

costs.

SO ORDERED.

6. G.R. No. 199133

September 29, 2014

ESPERANZA TUMPAG, substituted by her son, PABLITO TUMPAG BELNAS, JR., Petitioner,
vs.
SAMUEL TUMPAG, Respondent.
DECISION
BRION, J.:
We resolve the petition for review on certiorari 1 assailing the November 30, 2010 decision2 and the
September 28, 2011 resolution3 of the Court of Appeals (CA), Cebu City in CA-G.R. CV No. 78155. The
CA dismissed, without prejudice, the complaint for recovery of possession and damages that the
petitioner filed before the Regional Trial Court (RTC) because the complaint failed to allege the assessed
value of the disputed property in the case.
Brief Statement of Facts
On March 13, 1995, Esperanza Tumpag (petitioner) filed a complaint for recovery of possession with
damages (docketed as Civil Case No. 666) against Samuel Tumpag (respondent) before the RTC, Branch
61, Kabankalan City, Negros Occidental. The complaint alleged that:
1) Plaintiff (referring to the petitioner) is of legal age, widow, Filipino citizen and a resident of
Barangay Tuyom, Cauayan, Negros Occidental, while Defendant (referring to the respondent) is

also of legal age, married, Filipino and a residentof Barangay Tuyom, Cauayan, Negros
Occidental, where he maybe served with summons and other processes of this Honorable Court;
2) Plaintiff is the absolute owner of a parcel of land, identified as Lot No. 1880-A, Cauayan
Cadastre, containing an area of TWELVE THOUSAND NINE HUNDRED NINETY TWO
(12,992) SQUARE METERS, more or less, situated in Barangay Tuyom, Cauayan, Negros
Occidental, more particularly bounded and described in Transfer Certificate of Title No. T-70184,
dated April 27, 1983, issued by the Register of Deeds of Negros Occidental in favor of Plaintiff,
xerox copy of which is hereto attached as ANNEX "A" and made an integral part hereof;
3) Defendant has been occupying a portion of not less than ONE THOUSAND (1,000) SQUARE
METERS ofthe above-described parcel of land of the Plaintiff for more than TEN (10) years, at
the tolerance of Plaintiff;
4) Sometime in 1987, Plaintiff wanted to recover the portion occupied by Defendant but
Defendant refused to return to Plaintiff or vacate said portion he has occupied inspite of repeated
demands from Plaintiff. And, to prevent Plaintiff from recovering the portion he has occupied,
Defendant instigated his other relatives to file a case against the herein Plaintiff, and, in1988,
herein Defendant Samuel Tumpag, together with Luz Tagle Vda. De Tumpag and other relatives,
filed a civil case, number 400, before this court against herein Plaintiff, Esperanza Tumpag, for
cancellation of her title with damages;
5) Said Civil Case No. 400 was dismissed by this Honorable Court through its Resolution, dated
October 11, 1989, penned by the Presiding Judge, the late Artemio L. Balinas, prompting the
Plaintiffs in said case to elevate the said resolution of thisHonorable Court to the Court of
Appeals, and their appeal is identified as C.A. G.R. No. CV-25699;
6) On June 28, 1991, the Court of Appeals rendered a decision in the said appealed case, the
dispositive portion of which read:
"PREMISES CONSIDERED, the appealed Resolution dated October 11, 1989 is hereby
AFFIRMED."
and, that the same has become final on March 11, 1994 and was entered, on August 26,
1994, in the Book of Entries of Judgment, xerox copy of said Entry of Judgment of the
Court of Appeals is hereto attached as ANNEX "B" and made part hereof;
7) Herein Plaintiff needs the portion occupied by Defendant and she has orally demanded from
Defendant of the return of the same, but Defendant refused and still refuses todo so. Hence,
Plaintiff brought the matter before the Office of the Barangay Captain of Barangay Tuyom,
Cauayan, Negros Occidental, for conciliation, on March 3, 1995. But, unfortunately, Defendant
refused to vacate or return the portion he occupies to Plaintiff. Attached hereto as ANNEX "C,"
and made part hereof, is the Certification of the Barangay Captain of Barangay Tuyom, Cauayan,
Negros Occidental, certifying that this matter was brought to his attention for conciliation;
8) Defendants refusal to return the portion he occupies to Plaintiff has caused Plaintiff to suffer
actual damages in the amount of not less than TEN THOUSAND PESOS (P10,000.00), per
annum;
9) Defendants unjustifiable refusal to return the portion he occupies to Plaintiff has caused
Plaintiff to suffer mental anguish, embarrassment, untold worries, sleepless nights, fright and

similar injuries, entitling her to moral damages moderately assessed at not less than FIFTY
THOUSAND PESOS (P50,000.00);
10) To serve as deterrent (sic) toother persons similarly inclined and by way of example for the
public good, Defendant should be made to pay exemplary damages in the amountof not less than
TWENTY FIVE THOUSAND PESOS (P25,000.00);
11) The unjustifiable refusal of Defendant to return the property to the Plaintiff leaves Plaintiff no
other alternative but to file this present action, forcing her to incur litigation expenses amounting
to not less than ONE THOUSAND PESOS (P1,000.00), attorneys fees in the amount of
TWENTY THOUSAND PESOS (P20,000.00) plus ONE THOUSAND PESOS (P1,000.00) for
every court appearance.4
xxxx
Together with his answer (which was later amended), the respondent moved to dismiss the complaint on
the following grounds: failure to state a cause of action; that the action was barred by prior judgment; and
lack of jurisdiction.5
The RTC, in an order dated January 16, 1996, denied the respondents motion to dismiss and proceeded
with pre-trial and trial.6
During the pendency of the case, the petitioner died and was substituted by her son Pablito Tumpag
Belnas, Jr.7
In a decision8 dated June 3, 2002, the RTC ordered the respondent to return possession of the subject
portion of the property to the petitioner and to pay the petitioner P10,000.00 as actual
damages, P20,000.00 as moral damages, and P10,000.00 as attorneys fees.
In his appeal to the CA, among the grounds the respondent raised was the issue of the RTCs lack of
jurisdiction over the case.9
In its assailed decision,10 the CA agreed with the respondent and nullified the RTCs June 3, 2002 decision
and all proceedings before the trial court. It held that the petitioners failure to allege in her complaint the
assessed value of the disputed property warranted the complaints dismissal, although without prejudice,
because the courts jurisdiction over the case should be "determined by the material allegations of the
complaint"11 and "cannot be made to depend upon the defenses set up in court or upon a motion to dismiss
for, otherwise, the question of jurisdiction would depend almost entirely on the defendant." 12 The
petitioner moved to reconsider but the CA denied her motion in its resolution 13 dated September 28, 2011.
The CAs ruling and denial of the motion for reconsideration gave rise to the present petition for review
on certiorari filed with this Court.
The petitioner now argues that the respondent, after having actively participated in all stages of the
proceedings in Civil Case No. 666, is now estopped from assailing the RTCs jurisdiction; that the subject
case had been litigated before the RTC for more than seven (7) years and was pending before the CA for
almost eight (8) years. Further, she argues that the dismissal of her complaint was not warranted
considering that she had a meritorious case as attached to her complaint was a copy of a Declaration of
Real Property indicating that the assessed value of the disputed property is P20,790.00.
Our Ruling

We find MERIT in the present petition. The CAs dismissal of the petitioners complaint for recoveryof
possession iserroneous and unwarranted.
It is well-settled that jurisdiction over a subject matter is conferred by law, not by the parties action or
conduct,14 and is, likewise, determined from the allegations in the complaint. 15 Under Batas Pambansa
Blg. 129,16 as amended by Republic Act No. 7691, 17 the jurisdiction of Regional Trial Courts over civil
actions involving title to, or possession of, real property, orany interest therein, is limited to cases where
the assessed value of the property involved exceeds Twenty thousand pesos (P20,000.00) or, for civil
actions in Metro Manila, where such value exceeds Fifty thousand pesos (P50,000.00), except actions for
forcible entry into and unlawful detainer of lands or buildings. 18
Here, the petitioner filed a complaint for recovery of possession of real property before the RTC but failed
to allege in her complaint the propertys assessed value. Attached, however, to the petitioners complaint
was a copy of a Declaration of Real Property showing that the subject property has a market value
of P51,965.00 and assessed value of P20,790.00. The CA was fully aware ofthis attachment but still
proceeded to dismiss the petitioners complaint:
Record shows that the complaint was filed with the Regional Trial Court on December 13, 1995. There is
no allegation whatsoever in the complaint for accion publiciana concerning the assessed value of the
property involved. Attached however to the complaint is a copy of the Declaration of Real Property of
subject land which was signed by the owner stating that its market valueis P51,965 and its assessed value
is P20,790.00.(Emphasis ours)19
Generally, the court should only look into the facts alleged in the complaint to determine whether a suit is
within its jurisdiction.20 There may be instances, however, when a rigid application of this rule may result
in defeating substantial justice or in prejudice to a partys substantial right. 21 In Marcopper Mining Corp.
v. Garcia,22 we allowed the RTC to consider, in addition to the complaint, other pleadings submitted by
the parties in deciding whether or not the complaint should be dismissed for lack of cause of action. In
Guaranteed Homes, Inc. v. Heirs of Valdez, et al., 23we held that the factual allegations in a complaint
should be considered in tandem with the statements and inscriptions on the documents attached to it as
annexes or integral parts.
In the present case, we find reason not to strictly apply the abovementioned general rule, and to consider
the facts contained in the Declaration of Real Property attachedto the complaint in determining whether
the RTC had jurisdiction over the petitioners case. A mere reference to the attached document could
faciallyresolve the question on jurisdiction and would have rendered lengthy litigation on this point
unnecessary.
In his comment24 to the present petition, the respondent contends that the assessed value of the property
subjectof the case is actually much below than the value stated in the attached Declaration of Real
Property. However, the test of the sufficiency of the facts alleged in the complaint is whether, admitting
the facts alleged, the court can render a valid judgment upon the complaint in accordance withthe
plaintiffs prayer.25 The defendant, in filing a motion to dismiss, hypothetically admits the truth of the
factual and material allegations in the complaint, 26 as well as the documents attached to a complaint
whose due execution and genuineness are not denied under oath by the defendant; these attachments
mustbe considered as part of the complaint without need of introducing evidence thereon. 27
Lastly, we note that the present petitioner's situation comes close with those of the respondents in Honorio
Bernardo v. Heirs of Eusebio Villegas, 28 where the Villegas heirs, in filing their complaint for accion
publiciana before the RTC, failed to allege the assessed value of the subject property. On the complaints

omission, the defendant questioned the RTCs jurisdiction in his answer to the complaint and, again, in his
appeal before the CA.
In Bernardo v. Heirs of Villegas,29 we affirmed the CA ruling that upheld the RTCs jurisdiction over the
case despite the complaints failure to allege the assessed value of the property because the defendantpetitioner was found to have actively participatedin the proceedings before the trial court and was already
estopped from assailing the jurisdiction of the RTC. While we mention this case and its result, we cannot,
however, apply the principle of estoppel (on the question of jurisdiction)to the present respondent.
We rule that the respondent is notestopped from assailing the RTCs jurisdiction over the subject civil
case.1wphi1Records show that the respondent has consistently brought the issue of the court's lack of
jurisdiction in his motions, pleadings and submissions throughout the proceedings, until the CA dismissed
the petitioner's complaint, not on the basis of a finding of lack of jurisdiction, but due to the insufficiency
of the petitioner's complaint, i.e. failure to allege the assessed value of the subject property. Even in his
comment filed before this Court, the respondent maintains that the RTC has no jurisdiction over the
subject matter of the case.
Lack of jurisdiction over the subject matter of the case can always be raised anytime, even for the first
time on appeal,30 since jurisdictional issues, as a rule, cannot be acquired through a waiver or enlarged by
the omission of the parties or conferred by the acquiescence of the court. 31 Thus, the respondent is not
prevented from raising the question on the court's jurisdiction in his appeal, if any, to the June 3, 2002
decision of the RTC in Civil Case No. 666. WHEREFORE, premised considered, we GRANT the present
petition for review on certiorari and SET ASIDE the decision dated November 30, 2010 and resolution
dated September 28, 2011 of the Court of Appeals, Cebu City in CA-G.R. CV No. 78155.
Accordingly, we REINSTATE the decision dated June 3, 2002 of the Regional Trial Court, Branch 61,
Kabankalan City, Negros Occidental in Civil Case No. 666.
SO ORDERED.

7. G.R. No. 172505

October 1, 2014

ANTONIO
M.
vs.
FERRO CHEMICALS, INC., Respondent.

GARCIA, Petitioner,

DECISION
LEONEN, J.:
Before this court is a petition for review on certiorari 1 assailing the decision2 of the Court of Appeals
dated August 11, 2005 and its resolution3 dated April 27, 2006, denying petitioner Antonio Garcia's
motion for reconsideration.
Antonio Garcia, as seller, and Ferro Chemicals, Inc., through Ramon Garcia, as buyer, entered into a deed
of absolute sale and purchase of shares of stock on July 15, 1988. The deed was for the sale and purchase

of shares of stock from various corporations, including one class "A" share in Alabang Country Club, Inc.
and one proprietary membership in the Manila Polo Club, Inc. 4 These shares of stock were in the name of
Antonio Garcia.5 The contract was allegedly entered into to prevent these shares of stock from being sold
at public auction to pay the outstanding obligations of Antonio Garcia. 6
On March 3, 1989, a deed of right of repurchase over the same shares of stock subject of the deed of
absolute sale and purchase of shares of stock was entered into between Antonio Garcia and Ferro
Chemicals, Inc. Under the deed of right of repurchase, Antonio Garcia can redeem the properties sold
within 180 days from the signing of the agreement.7
Before the end of the 180-day period, Antonio Garcia exercised his right to repurchase the
properties.8 However, Ferro Chemicals, Inc. did not agree to the repurchase ofthe shares of stock. 9 Thus,
Antonio Garcia filed an action for specific performance and annulment of transfer of shares. 10
On September 6, 1989, the class "A" share in Alabang Country Club, Inc. and proprietary membership in
the Manila Polo Club, Inc., which were included in the contracts entered intobetween Antonio Garcia and
Ferro Chemicals, Inc., were sold at public auction to Philippine Investment System Organization. 11
On September 3, 1990, the information based on the complaint of Ferro Chemicals, Inc. was filed against
Antonio Garcia before the Regional Trial Court. 12 He was charged with estafaunder Article 318 (Other
Deceits) of the Revised Penal Code for allegedly misrepresenting to Ferro Chemicals, Inc. that the shares
subject of the contracts entered into were free from all liens and encumbrances. The information reads:
The undersigned Assistant Prosecutor accuses Antonio M. Garcia of the felony of Estafa as defined and
penalized under Art. 318 of the Revised Penal Code as amended, committed as follows:
THAT on or about 15 July 1988, in Makati, Metro Manila, Philippines, a place within the jurisdiction of
this Honorable Court, the above-named accused, with evident bad faith and deceit, did, then and there,
willfully, unlawfully and feloniously, misrepresent to FERRO CHEMICALS, INC. (FCI) represented by
Ramon M. Garcia, that his share of stock/proprietary share with Ayala Alabang Country Club, Inc. and
Manila Polo Club, Inc. collectively valued at aboutP10.00 Million Pesos, being part of other shares of
stock subject matter of a Deed of Absolute Sale and Purchase of Shares of Stock between the accused and
FCI, were free from all liens, encumbrances and claims by third persons, when in truth and in fact,
accused well knew that aforesaid share of stock/proprietary share had already been garnished in July 1985
and subsequently sold at public auction in September 1989, and which misrepresentation and assurance
FCI relied upon and paid the consideration in accordance with the stipulated condition/manner of
payment, all to the damage and prejudice of FCI in the aforestated amount of P10.00 Million Pesos.
Contrary to law.13
In the decision dated December 12, 1996 of the Regional Trial Court, Antonio Garcia was acquitted for
insufficiency of evidence.14 The Regional Trial Court held:
From the foregoing, it is very clear that private complainant was aware of the status of the subject CLUB
SHARES. Thus, the element of false pretense, fraudulent act or fraudulent means which constitute the

very cause or the only motive which induced the private complainant to enter into the questioned deed of
sale (Exh. "A") is wanting in the case at bar.15 (Underscoring in the original)
Ferro Chemicals, Inc. filed a motion for reconsideration, which was denied by the Regional Trial Court in
the order dated July 29, 1997.16
On August 25, 1997, Ferro Chemicals, Inc. appealed to the Court of Appeals the July 29, 1997 order of
the Regional Trial Court as to the civil aspect of the case. 17 The notice of appeal18 filed was entitled
"Notice of Appeal Ex Gratia Abudantia Ad Cautelam (Of The Civil Aspect of the Case)." It alleged:
4. Herein private complainant hereby gives notice, out of extreme caution, that it is appealing the
Decision dated 12 December 1996 and the Order dated 29 July 1997 on the civil aspect of the case to the
Court of Appeals on the ground that it is notin accordance with the law and the facts of the case.
5. This notice of appeal is without prejudice to the filing of an appropriate petition for certiorari under
Rule 65 of the Rules of Court on the criminal aspect, upon the giving of due course thereto, private
complainant shall endeavor to seek the consolidation of this appeal with the said petition. 19
On October 15, 1997, the Makati City Prosecutors Office and Ferro Chemicals, Inc. also filed a petition
for certiorari20 with this court, assailing the Regional Trial Courts December 12, 1996 decision and July
29, 1997 order acquitting Antonio Garcia.21
The petition for certiorari22 filed before this court sought to annul the decision of the trial court acquitting
Antonio Garcia. People of the Philippines and Ferro Chemicals, Inc. argued that the trial court "acted in
grave abuse of discretion amounting to lack or excess of jurisdiction when it rendered the judgment of
acquittal based on affidavits not at all introduced in evidence by either of the parties thereby depriving the
people of their substantive right to due process of law." 23 The verification/certification against forum
shopping, signed by Ramon Garcia as president of Ferro Chemicals, Inc., disclosed that the notice of
appeal was filed "with respect to the civil aspect of the case." 24
In the resolution25 dated November 16, 1998, this court dismissed the petition for certiorari filed, and
entry of judgment was made on December 24, 1998.26
On the other hand, the Court of Appeals,27 in its decision28 dated August 11, 2005, granted the appeal and
awarded Ferro Chemicals, Inc. the amount of P1,000,000.00 as actual loss with legal interest and
attorneys fees in the amount of P20,000.00.29 The appellate court found that Antonio Garcia failed to
disclose the Philippine Investment and Savings Organizations lien over the club shares. 30 Thus:
The issue in this case is whether or not Antonio Garcia disclosed to Ferro-Chemicals, during the
negotiation stage of the impending sale of the imputed club shares, the third attachment lien in favor of
Philippine Investment and Savings Organization (PISO) which, ultimately, became the basis of the
auction sale of said club shares. We have scrutinized the records of the case but found no evidence that
Antonio Garcia intimated to his brother the third attachment lien of PISO over the said club shares. While
it is true that Antonio Garcia divulged the two liens of Security Bank and Insular Bank of Asia and
America, the lien of PISO was clearly not discussed. The affidavits executed by the two lawyers to the

effect that the lien of PISO was considered but deliberately left out in the deed cannot be given much
weight as they were never placed on the witness stand and cross-examined by Ferro-Chemicals. If their
affidavits, although not offered, were considered inthe criminal aspect and placed a cloud on the
prosecutions thrust, theycannot be given the same probative value in this civil aspect as only a
preponderance of evidence is necessary to carry the day for the plaintiff, Ferro Chemicals.
While Antonio Garcia insists that no consideration was ever made over the club shares as the same were
merely given for safekeeping, the document denominated as Deed of Absolute Sale states otherwise. It is
a basic rule of evidence that between documentary evidence and oral evidence, the former carries more
weight.
Also, We have observed that in Antonio Garcias letter of redemption addressed to Ferro Chemicals, he
mentioned his interest in redeeming the company shares only. That he did not include the club shares only
meant that said club shares no longer had any much redeemable value as there was a lienover them. To
redeem them would be pointless.
If they had no redeemable value to Antonio Garcia, to Ferro Chemical they were certainly marketable
assets. The non-disclosure of the third lien in favor of PISO materially affected Ferro Chemicals since it
was not able to act on time to protect its interest when the auction sale over the club shares actually took
place. As a result, Ferro Chemicals suffered losses due to the unfortunate public auction sale. It is but just
and fair that Antonio Garcia be made to compensate the loss pursuant to Articles 21 and 2199 of the Civil
Code.
The actual loss suffered by Ferro Chemicals amounted to P1,000,000.00 which correspondents to the bid
value of the club shares at the time of the auction as evidenced by the Sheriffs Certificate of
Sale.31 (Citations omitted)
Antonio Garcia filed a motion for reconsideration and Ferro Chemicals, Inc. filed a partial motion for
reconsideration of the decision of the Court of Appeals. 32 These motions were denied in the
resolution33 dated April 27, 2006. Thus, Antonio Garcia filed this petition for review on
certiorari,34 assailing the decision and resolution of the Court of Appeals.
Antonio Garcia argues that the factual findings of the Court of Appeals were erroneous 35 and insists that
"[Ferro Chemicals, Inc.] was fully aware that the shares covered by the Deed of Absolute Sale, including
the Subject Club Shares, were not free from liens and encumbrances and that the Deed [of] Sale was
executed [to] warehouse [Antonio Garcias] assets based on, among other evidence, the affidavits
executed by Jaime Gonzales . . . and Rolando Navarro. . . ." 36
Antonio Garcia faults the Court of Appeals in disregarding the affidavits executed by Jaime Gonzales and
Rolando Navarro. Antonio Garcia argues that even thiscourt in G.R. No. 130880 entitled People of the
Philippines and Ferro Chemicals, Inc. v. Hon. Dennis Villa Ignacio and Antonio Garcia where the
admissibility of the affidavits was put in issue held that the trial court did not commit any grave abuse of
discretion in the challenged decision.37 He then reasoned that "pursuant to the law of the case, [the
affidavits of Gonzalez and Navarro] are admissible and should be given weight." 38

Finally, Antonio Garcia claims thatboth he and and Ferro Chemicals, Inc. acted in bad faith when they
entered into the deed of absolute sale as a scheme to defraud Antonio Garcias creditors. Thus, they are in
pari delicto and Ferro Chemicals, Inc. should not be allowed to recover from Antonio Garcia. 39
In its comment,40 Ferro Chemicals, Inc. points out that Antonio Garcia raised factual issues not proper ina
Rule 45 petition and reiterates the findings of the Court of Appeals. 41
There are pertinent and important issues that the parties failed to raise before the trial court, Court of
Appeals, and this court. Nonetheless, we resolve to rule on these issues.
As a general rule, this court through its appellate jurisdiction can only decide on matters or issues raised
by the parties.42 However, the rule admits of exceptions. 43 When the unassigned error affects jurisdiction
over the subject matter44 or when the consideration of the error is necessary for a complete resolution of
the case,45 this court can still decide on these issues.
We cannot turn a blind eye on glaring misapplications of the law or patently erroneous decisions or
resolutions simply because the parties failed to raise these errors before the court. Otherwise, we will be
allowing injustice by reason of the mistakes of the parties counsel and condoning reckless and negligent
acts of lawyers to the prejudice of the litigants. Failure to rule on these issues amounts to an abdication of
our duty to dispense justice to all parties.
The issues are:
I. Whether the Regional Trial Court had jurisdiction over the case
II. Whether the act of FerroChemicals, Inc. in filing the notice of appeal before the Court of
Appeals and the petition for certiorari assailing the same trial court decision amounted to forum
shopping
III. Whether Ferro Chemicals, Inc. was entitled to the awards given as civil liability ex delicto
The Regional Trial Court did not have jurisdiction
Jurisdiction of a court over the subject matter is vested by law.46 In criminal cases, the imposable penalty
of the crime charged in the information determines the court that has jurisdiction over the case. 47
The information charged Antonio Garcia with violation of Article 318 of the Revised Penal Code, which
is punishable by arresto mayor, or imprisonment for a period of one (1) month and one (1) day to six (6)
months. Article 318 states:
ART. 318: Other deceits. The penalty of arresto mayor and a fine of not less than the amount of the
damage caused and not more than twice such amount shall be imposed upon any person who shall
defraud or damage another by any other deceit not mentioned in the preceding articles of this chapter.

Any person who, for profit or gain, shall interpret dreams, make forecasts, tell fortunes, or take advantage
of the credulity of the public in any other similar manner, shall suffer the penalty of arresto mayoror a fine
not exceeding 200 pesos.
When the information was filed on September 3, 1990, the law in force was Batas Pambansa Blg. 129
before it was amended by Republic Act No. 7691. Under Section 32 of Batas Pambansa Blg. 129, the
Metropolitan Trial Court had jurisdiction over the case:
SEC. 32. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial
Courts in criminal cases.
....
2. Exclusive original jurisdiction over all offenses punishable with imprisonment of not exceeding four
years and two months, or a fine of not more than four thousand pesos, or both such fine and
imprisonment, regardless of other imposable accessory or other penalties, including the civil liability
arising from such offenses or predicated thereon, irrespective of kind, nature, value, or amount thereof:
Provided, however, That in offenses involving damage to property through criminal negligence they shall
have exclusive original jurisdiction where the imposable fine does not exceed twenty thousand pesos.
(Emphasis supplied)
The Regional Trial Court did not have jurisdiction to hear and decide the case. This lack of jurisdiction
resulted in voiding all of the trial courts proceedings and the judgment rendered. 48 Although the trial
courts lack of jurisdiction was never raised as an issue in any part of the proceedings and even until it
reached this court, we proceed with resolving the matter.
In Pangilinan v. Court of Appeals,49 this court held:
Thus, we apply the general rule thatjurisdiction is vested by law and cannot be conferred or waived by the
parties. Even on appeal and even if the reviewing parties did not raise the issue of jurisdiction, the
reviewing court is not precluded fromruling that the lower court had no jurisdiction over the case[.]
....
Having arrived at the conclusion that the Regional Trial Court did not have jurisdiction to try the case
against the appellant, it is no longer necessary to consider the other issues raised as the decision of the
Regional Trial Court is null and void.50
The trial courts lack of jurisdiction cannot be cured by the parties silence on the matter. 51 The failure of
the parties to raise the matter of jurisdiction also cannot be construed as a waiver of the parties.
Jurisdiction is conferred by law and cannot be waived by the parties.
The assailed decision is void, considering that it originates from a void decision of the Regional Trial
Court for lack of jurisdiction over the subject matter.

Ferro Chemicals, Inc. committed forum shopping


Forum shopping is defined as "theact of a litigant who repetitively availed of several judicial remedies in
different courts, simultaneously or successively, all substantially founded on the same transactions and the
same essential facts and circumstances, and all raising substantially the same issues either pending in, or
already resolved adversely by some other court . . . to increase his chances of obtaining a favorable
decision if not in one court, then in another."52 Once clearly established that forum shopping was
committed willfully and deliberately by a party or his or her counsel, the case may be summarily
dismissed with prejudice, and the act shall constitute direct contempt and a cause for administrative
sanctions.53
Forum shopping is prohibited, and sanctions are imposed on those who commit forum shopping as "it
trifles with the courts, abuses their processes, degrades the administration of justice and adds to the
already congested court dockets."54 This court has said:
What is critical is the vexation brought upon the courts and the litigants by a party who asks different
courts to rule on the same or related causes and grant the same or substantially the same reliefs and in the
process creates the possibility of conflicting decisions being rendered by the different fora upon the same
issues, regardless of whether the court in which one of the suits was brought has no jurisdiction over the
action.55 (Citation omitted)
The test and requisites that must concur to establish when a litigant commits forum shopping are the
following:
The test for determining the existence of forum shopping is whether the elements of litis pendentiaare
present, or whether a final judgment in one case amounts to res judicatain another. Thus, there is forum
shopping when the following elements are present: (a) identity of parties, or at least such parties
asrepresent the same interests in both actions; (b) identity of rights asserted and relief prayed for, the
relief being founded on the same facts; and (c) the identity of the two preceding particulars, such that any
judgment rendered in the other action will, regardless of which party is successful, amount to res
judicatain the action under consideration; said requisites are also constitutive of the requisites for auter
action pendant or lis pendens.56 (Citation omitted)
There is no question that Ferro Chemicals, Inc. committed forum shopping when it filed an appeal before
the Court of Appeals and a petition for certiorari before this court assailing the same trial court decision.
This is true even if Ferro Chemicals, Inc.s notice of appeal to the Court of Appeals was entitled "Notice
of Appeal Ex Gratia Abudantia Ad Cautelam (Of The Civil Aspect of the Case)." 57 The "civil aspect of the
case" referred to by Ferro Chemicals, Inc. is for the recovery of civil liability ex delicto. However, it
failed to make a reservation before the trial court to institute the civil action for the recovery of civil
liability ex delictoor institute a separate civil action prior to the filing of the criminal case.
There is identity of parties. Petitioner, Antonio Garcia, and respondent, Ferro Chemicals, Inc., are both
parties in the appeal filed before the Court of Appeals and the petition for certiorari before this court.

There is identity of the rights asserted and reliefs prayed for in both actions. At a glance, it may appear
that Ferro Chemicals, Inc. asserted different rights: The appeal before the Court of Appeals is purely on
the civil aspect of the trial courts decision while the petition for certiorari before this court is allegedly
only onthe criminal aspect of the case. However, the civil liability asserted by Ferro Chemicals, Inc.
before the Court of Appeals arose from the criminal act. It is in the nature of civil liability ex delicto.
Ferro Chemicals, Inc. did not reserve the right to institute the civil action for the recovery of civil liability
ex delictoor institute a separate civil action prior to the filing of the criminal case. 58 Thus, it is an adjunct
of the criminalaspect of the case.1wphi1 As held in Lim v. Kou Co Ping:59
The civil liability arising from the offense or ex delictois based on the acts or omissions that constitute the
criminal offense; hence, its trial is inherently intertwined with the criminal action.For this reason, the civil
liability ex delictois impliedly instituted with the criminal offense. If the action for the civil liability ex
delictois instituted prior to or subsequent to the filing of the criminal action, its proceedings are suspended
until the final outcome of the criminal action. The civil liability based on delict is extinguished when the
court hearing the criminal action declares that the act or omission from which the civil liability may arise
did not exist."60 (Emphasis supplied, citations omitted).
When the trial courts decision was appealed as to its criminal aspect in the petition for certiorari before
thiscourt, the civil aspect thereof is deemed included in the appeal. Thus, the relief prayed for by Ferro
Chemicals, Inc., that is, recovery of civil liability ex delicto, is asserted in both actions before this court
and the Court of Appeals.
Even the allegations in the notice of appeal readily show that Ferro Chemicals, Inc. committedforum
shopping, to wit:
5. This notice of appeal is without prejudice to the filing of an appropriate petition for certiorari under
Rule 65 of the Rules of Court on the criminal aspect, upon the giving of due course thereto, private
complainant shall endeavor to seek the consolidation of this appeal with the said petition. 61
As to the third requisite, on the assumption that the trial court had jurisdiction over the case, this courts
decision in G.R. No. 130880 affirming the trial courts decision acquitting the accused for lack of an
essential element of the crime charged amounts to res judicatato assert the recovery of civil liability
arising from the offense. This courts resolution dismissing the petition for certiorari filed by Ferro
Chemicals, Inc. states:
In any event, petitioners failed to sufficiently show that any grave abuse of discretion was committed by
the Regional Trial Court in rendering the challenged decision and order which, on the contrary, appear to
be in accord with the facts and the applicable law and jurisprudence. 62
Litigants cannot avail themselves of two separate remedies for the same relief in the hope that in one
forum, the relief prayed for will be granted. This is the evil sought tobe averted by the doctrine of nonforum shopping, and this is the problem that has happened in this case. This court denied the petition for
certiorari filed byFerro Chemicals, Inc. resulting in finality of the trial courts decision.1awp++i1 The
decision found Antonio Garcia not guilty of the offense charged, and no civil liability was awarded to

Ferro Chemicals, Inc. However, at present,there is a conflicting decision from the Court of Appeals
awarding Ferro Chemicals, Inc. civil indemnity arising from the offense charged.
When the civil action for the recovery of civil liability ex delicto is instituted with the criminal action,
whether by choice of private complainant (i.e., no reservation is made or no prior filing of a separate civil
action) or as required by the law or rules, the case will be prosecuted under the direction and control of
the public prosecutor.63 The civil action cannot proceed independently of the criminal case. This includes
subsequent proceedings on the criminal action such as an appeal. In any case, Ferro Chemicals, Inc.
joined the public prosecutor in filing the petition for certiorari before this court. Ramon Garcia, President
of Ferro Chemicals, Inc., signed the verification and certification of non-forum shopping of the petition
for certiorari.64
We must clarify, however, that private complainants in criminal cases are not precluded from filing a
motion for reconsideration and subsequently an appeal on the civil aspect of a decision acquitting the
accused. An exception to the rule that only the Solicitor General can bring actions in criminal proceedings
before the Court of Appeals or this court is "when the private offended party questions the civil aspect of
a decision of a lower court."65 As discussed in Mobilia Products, Inc. v. Hajime Umezawa: 66
In a criminal case in which the offended party is the State, the interest of the private complainant or the
offended party is limited to the civil liability arising there from. Hence, if a criminal case is dismissed by
the trial court or if there is an acquittal, a reconsideration of the order of dismissal or acquittal may be
undertaken, whenever legally feasible, insofar as the criminal aspect there of is concerned and may be
made only by the public prosecutor; or in the case of an appeal, by the State only, through the OSG. The
private complainant or offended party may not undertake such motion for reconsideration or appeal on the
criminal aspect of the case.However, the offended party or private complainant may file a motion for
reconsideration of such dismissal or acquittal or appeal therefrom but only insofar as the civil aspect
thereof is concerned. In so doing, the private complainant or offended party need not secure the
conformity of the public prosecutor. If the court denies his motion for reconsideration, the private
complainant or offended party may appeal or file a petition for certiorarior mandamus,if grave abuse
amounting to excess or lack of jurisdiction is shown and the aggrieved party has no right of appeal or
given an adequate remedy in the ordinary course of law.67 (Citations omitted)
This is in consonance with the doctrine that:
[T]he extinction of the penal action does not necessarily carry with it the extinction ofthe civil action,
whether the latter is instituted with or separately from the criminal action. The offended party may still
claim civil liability ex delictoif there is a finding in the final judgment in the criminal action that the act or
omission from which the liability may arise exists. Jurisprudence has enumerated three instances when,
notwithstanding the accuseds acquittal, the offended party may still claim civil liability ex delicto: (a) if
the acquittal is based on reasonable doubt as only preponderance of evidence is required; (b) if the court
declared that the liability of the accused is only civil;and (c) if the civil liability of the accused does not
arise from or is not based upon the crime of which the accused is acquitted. 68
However, if the state pursues an appeal on the criminal aspect of a decision of the trial court acquitting the
accused and private complainant/s failed to reserve the right to institute a separate civil action,the civil

liability ex delictothat is inherently attached to the offense is likewise appealed. The appeal of the civil
liability ex delictois impliedly instituted with the petition for certiorari assailing the acquittal of the
accused. Private complainant cannot anymore pursue a separate appeal from that of the state without
violating the doctrine of non-forum shopping.
On the other hand, the conclusion isdifferent if private complainant reserved the right to institute the civil
action for the recovery of civil liability ex delicto before the Regional Trial Court orinstitute a separate
civil action prior to the filing of the criminal case in accordance with Rule 111 of the Rules of Court. In
these situations, the filing of an appealas to the civil aspect of the case cannot be considered as forum
shopping.1wphi1 This is not the situation here.
We see no more reason to discuss the issues presented by the parties in light of the foregoing discussion.
Entry of judgment having been made on the resolution of the court in G.R. No. 130880 involving the
same parties and issues and by virtue of the doctrine of finality of judgment, we reiterate the resolution of
this court.
WHEREFORE, the resolution in G.R. No. 130880 is reiterated. We grant the petition insofar as it prays
for the setting aside of the Court of Appeals' decision d~ted August 11, 2005 and resolution dated April
27, 2006 as a final decision over the assailed Regional Trial Court decision that was rendered on
November 16, 1998 in G.R. No. 130880.
SO ORDERED.

8. G.R. No. 109645

January 21, 2015

ORTIGAS
&
COMPANY
LIMITED
PARTNERSHIP, Petitioner,
vs.
JUDGE TIRSO VELASCO and DOLORES V. MOLINA, Respondents.
x-----------------------x
G.R. No. 112564
DOLORES
V.
MOLINA, Petitioner,
vs.
HON. PRESIDING JUDGE OF RTC, QUEZON CITY, BR. 105 and MANILA BANKING
CORPORATION,Respondents.
x-----------------------x
G.R. No. 128422

DOLORES
V.
MOLINA, Petitioner,
vs.
THE HONORABLE COURT OF APPEALS and EPIMACO ORETA, Respondents.
x-----------------------x
G.R. No. 128911
THE MANILA BANKING CORPORATION and ALBERTO V. REYES, Petitioners,
vs.
DOLORES V. MOLINA and HON. MARCIANO BACALLA, in his capacity as Presiding Judge of
the Regional Trial Court of Quezon City, Branch 216, Respondents.
DECISION
LEONEN, J.:
These consolidated cases involve matters that have long been settled by this court. However, petitioner in
G.R. Nos. 112564 and 128422, Dolores V. Molina, remained incessant in filing suits that led to the
unnecessary clogging not only of this court's but the lower courts' dockets as well.
G.R. Nos. 109645 and 112564 were decided by this court on July 25, 1994. 1 A Motion for
Reconsideration was filed by Dolores V. Molina (Molina) on August 10, 1994. She later filed two
supplements to the Motion for Reconsideration. 2 Her Motion for Reconsideration was denied with finality
in the Resolution dated January 23, 1995. Despite the denial of Molina's Motion for Reconsideration, she
filed a "Motion for Leave to File the Herein Incorporated Second Motion for Reconsideration and to
Allow x x x Dolores V. Molina a Day in Court Relative to Her Petition for Reconstitution." 3 In the
Resolution dated March 1, 1995, this court denied with finality Molina's Motion for Reconsideration. 4
In the Resolution dated March 4, 1996, this court found Molina guilty of contempt of court and imposed a
fine ofP1,000.00.5
On August 15, 1997, this court decided the administrative case against Judge Tirso Velasco (Judge
Velasco).6
In order to fully comprehend the facts of G.R. Nos. 128422 and 128911, we summarize this courts
decision in G.R. Nos. 109645 and 112564.
I
G.R. No. 1096457
On November 14, 1991, Molina filed a Petition for Reconstitution of Transfer Certificate of Title (TCT)
No. 124088.8 She alleged that the original copy of TCT No. 124088 was lost when the Quezon City
Register of Deeds was gutted by fire on June 11, 1988 and that she has an "owners duplicate copy of the
title . . . and that the title is not subject of any document or contract creating a lien or encumbrance on the
land therein described."9

Several days later, Molina moved to withdraw her Petition, explaining that she had to go to the United
States. Judge Velasco granted her Motion to Withdraw and dismissed the case. 10
On April 3, 1992, Molina "filed an ex-parte motion for review of LRC Case No. Q-5404." 11 The Motion
was granted on the same date.12
The Office of the Solicitor General objected to the Ex-parte Motion on the ground that the owners of the
adjacent properties were not notified.13 In the Order dated July 3, 1992, Judge Velasco acknowledged that
his court had yet to acquire jurisdiction over the owners of the adjacent properties. 14
On July 13, 1992, Molina filed an Ex-parte Motion praying for Notices of Hearing to be served on the:
(a) "subject owners" of specified lots in the corresponding "Technical Description of the subject land;" (b)
the "President of the Corinthian Neighborhood Association or Corinthian Homeowners Association thru
the Barangay Chairman of Barangay Corinthian because the adjoining property designated as Vicente
Madrigal is now part of this Barangay Corinthian;" (c) the "Director, Bureau of Land, Plaza Cervantes
Manila as adjoining owner designated as Public Land;" and (d) the "City Engineer of Quezon City for the
adjoining boundaries designated as Roads or Road Lot."15
However, the Clerk of Court gave the Notices of Hearing only to the President of the Corinthian
Neighborhood Association, the Director of the Bureau of Lands, and the City Engineer of Quezon City.
Thus, the owners of the adjacent lots were not served copies of the Notices of Hearing. 16
At this point, Ortigas & Company Limited (Ortigas) found out about Molinas Petition and filed an
Opposition.17Ortigas subsequently filed a supplemental pleading and alleged the following: (1) The
"proliferation of syndicates taking advantage of the destruction by fire of land titles kept by the Quezon
City Register of Deeds."18
(2) Molina is a well-known land speculator as shown by the petitions she has previously filed. Further,
the bases for her claims are contradictory. In Land Registration Case No. Q-336 (WIDORA case), Molina
claimed ownership by acquisition through prescription, having been in open and adverse possession of the
property for more than thirty (30) years while in Civil Case No. 90-4749, she claimed that she purchased
the property from a certain Eusebia Molina. 19 (3) The Land Registration Authoritys report which states
that:
[T]he plan [being] relied upon by Molina, Psd-16740 "appears to be derived from two different surveys,
numbered Psu-1148 & Psu-20191, neither of which appear(s) to have been the subject of original
registration; thus it is presumed that no original title had been issued from which TCT-124088 could have
emanated;" that said plan "is a portion of (LRC) SWO-15352 which is being applied for registration of
title in Land Reg. Case No. Q-336, LRC Rec. No. N-50589," etc. 20
Ortigas counsel informed the Manila Mission of Jesus Christ of Latter Day Saints, Inc. (Mormons) of
Molinas pending Petition. Thus, the Mormons filed an Opposition. 21
During the hearing, Molina did not mention that she acquired the land through prescription. Instead, she
testified as follows:
[S]he and her late husband had acquired the two (2) parcels of land in question from the latter's relatives
in 1939; that she had in truth seen the deed of sale and the titles in her husband's possession; that her
husband was killed by the Japanese in 1944; that it was only in the 1960's that she attempted to obtain

titles to the property in her name, and sought the help of President Marcos, who "became her boyfriend;"
that Marcos had, in turn, referred her for legal assistance to former Judge Echeverri; that she had
subsequently left for the United States where she stayed until her return during the martial law regime at
which time, however, she could no longer get in touch with either Judge Echeverri or President Marcos;
that sometime in 1990 she met Gen. Fabian Ver in Singapore, and she was then told that Marcos had
given instructions for the delivery to her of the title to the disputed lands, to be accomplished back in
Manila; that the title (TCT 124088) was actually delivered to her by Col. Balbino Diego in November,
1990 at her house in Philam Life Homes Subdivision in Quezon City; that she learned that the title had
been entrusted to Col. Diego in 1986, when Gen. Ver and President Marcos fled the country, but Diego
had been unable to give her the title earlier because he was placed under house arrest shortly after Marcos'
deposal and remained under such restraint until May 11, 1988. 22
On September 23, 1992, Judge Velasco granted Molinas Petition and directed the Quezon City Register
of Deeds to reconstitute TCT No. 124088 in Molinas name.23
Ortigas and the Office of the Solicitor General filed their respective Notices of Appeal, while the
Mormons filed a Motion for Reconsideration.24
Meanwhile, Molina "filed a motion to strike the notice of appeal or in the alternative, to allow execution
of the decision pending appeal."25
Judge Velasco dismissed Ortigas Notice of Appeal, denied the Mormons Motion for Reconsideration,
and granted Molinas Motion for Execution pending appeal. 26 Consequently, Molina was issued TCT No.
RT-58287.27
The Solicitor Generals Notice of Appeal was dismissed in a separate Order on the ground that:
the Solicitor General has not filed any formal opposition to the petition and neither has it introduced
and/or formally offered any evidence to warrant its dismissal, it appearing on the contrary, that the Land
Management Bureau, the DENR, the Register of Deeds and the City Engineers Office of Quezon City,
which are the government agencies directly involved in this kind of proceeding has not registered any
opposition to the petition, the notice of appeal filed by him 28 was sham aside from being ten (10) days
late.29
The Mormons withdrew their Appeal because Molina recognized their ownership and possession of "an
area of8,860 sq. m. and covered by TCT No. 348048[.]"30
Molina subdivided the property covered by TCT No. RT-58287 into five parcels. One of the parcels of
land was purchased by Gateway Enterprises Co., Inc. 31
Ortigas then filed a Petition for Certiorari and Mandamus with prayer for the issuance of a temporary
restraining order.32 Ortigas prayed that this court:
(1) Invalidate Judge Velascos Orders dated October 14, 1992 and February 10, 1993; and
(2) That the TCTs issued, based on Judge Velascos Order dated October 14, 1992, "be declared
void abinitio and that, alternatively, respondent Judge be ordered to act on the notices of appeal
seasonably filed by forwarding the records of LRC Case No. Q-5404 to the Court of Appeals." 33

II
G.R. No. 11256434
G.R. No. 112564 originated from an action for "Annulment of Transfer Certificate of Title with Damages
and Prayer for Preliminary Injunction and Restraining Order" 35 filed by The Manila Banking Corporation
(TMBC) against Molina and Gateway Enterprises Company, Inc. This was docketed as Case No. Q9315920.36
TMBC alleged that it owned several parcels of land covered by TCT No. 124088. The subject properties
of TMBCs claim were "formerly covered by TCT Nos. 77652 and 77653" 37 under Ortigas name. These
properties were converted into a subdivision of several lots. Some of the lots were sold to Manila Inter
public Development Corporation and to Breeders Feeds, Inc. The lots purchased by these two
corporations were mortgaged to TMBC as security for their respective loans. The mortgages were
foreclosed, and titles were issued in TMBCs name "as the highest bidder at the foreclosure sales." 38
Molina filed a Motion to Dismiss, citing "litis pendentia, lack of jurisdiction, bar by prior judgment,
plaintiffs [referring to TMBC] lack of status as a real party in interest, and failure of the complaint to
state a cause of action."39
Molina also alleged that a restraining order was issued with regard to TCT No. 124088 and that the trial
court where Case No. Q93-15920 was pending "had no jurisdiction to annul the judgment of a coordinate
court."40
The trial court denied Molinas Motion to Dismiss.41
Molina filed supplemental pleadings to support her Motion to Dismiss, which were denied in the Order
dated November 25, 1993.42
Molina filed a Petition for Certiorari before this court, praying for the annulment of the Orders denying
her Motion to Dismiss. She also prayed that this court dismiss the action for annulment filed by TMBC. 43
Molina filed the same Petition for Certiorari before the Court of Appeals on December 9, 1993. 44
III
Ruling in G.R. Nos. 109645 and 112564
In the Decision dated July 25, 1994, this court granted Ortigas Petition for Certiorari in G.R. No.
109645and denied Molinas Petition in G.R. No. 112564. The dispositive portion of the Decision states:
WHEREFORE, the petition in G.R. No. 109645 is GRANTED; and that in G.R. No. 112564[,] DENIED
for lack of merit.
In G.R. No. 109645, the Decision dated September 23, 1992 of Respondent Judge Tirso Velasco,
Presiding Judge of Branch 88 of the Regional Trial Court of Quezon City, in LRC Case No. Q-5404, as
well as his Orders dated April 3, 1992, October 14, 1992, and February 10, 1993, are NULLIFIED AND
SET ASIDE; the titles of Dolores Molina upheld and reconstituted by said decision and orders namely,
Transfer Certificates of Title Numbered 124088 and RT-58287 and those derived therefrom and

subsequently issued namely, Transfer Certificates of Title Numbered 83163, 83164, 83165, 83166 and
83167 are all Declared NULL AND VOID and are hereby CANCELLED; said LRC Case No. Q-5404
of the Regional Trial Court of Quezon City is DISMISSED; and the temporary restraining order of this
Court of May 12, 1993 is MADE PERMANENT.
In G.R. No. 112564, the Orders of respondent Presiding Judge of Branch 105 of the Regional Trial Court
of Quezon City in Case No. Q-93-15920 dated September 17, 1993 and November 25, 1993 are
AFFIRMED; and said Judge is DIRECTED to proceed to dispose of said Case No. Q-93-15920 with all
deliberate dispatch conformably with this decision.
Dolores Molina and her counsel, Atty. Eufracio T. Layag, and Dr. Jose Teodorico V. Molina, are
ORDERED to SHOW CAUSE, within ten (10) days from notice of this judgment, why they should not be
pronounced liable, and correspondingly dealt with, for violation of the rule against forum-shopping.
SO ORDERED.45
This court explained that Judge Velasco had no jurisdiction to decide the reconstitution case since no
notice was given to the owners of the adjacent properties. 46 This defect was in violation of Republic Act
No. 26, Section 13.47
In addition, Judge Velasco erred in reviving the case after Molinas Motion to Withdraw had been granted.
This court discussed that:
[t]he dismissal of the case, and the lapse of the reglementary period to reconsider or set aside the
dismissal, effectively operated to remove the case from the Courts docket. Even assuming the dismissal
to be without prejudice, the case could no longer be reinstated or "revived" by mere motion in the original
docketed action, but only by the payment of the corresponding filing fees prescribed by law. . . . There
having been a dismissal or withdrawal of the action, albeit without prejudice, and the order considering
the action withdrawn having become final, revival of the case could not be done except through the
commencement of a new action, i.e., by the filing of another complaint and the payment of the
concomitant docketing fees.48
As to Molinas claim of ownership, her contradictory statements proved otherwise. In this courts
Decision, the following facts were noted:
(1) In the WIDORA case, Molina claimed that she, together with her predecessors-in-interest,
were in "open, public, adverse, continuous and uninterrupted possession" 49 of the property for
more than 30 years. Subsequently, she claimed to have acquired the property through purchase
from Eusebia Molina and her heirs.
(2) As to possession of document of title, Molina claimed that when she purchased the property
from Eusebia Molina, she had no time to attend to the propertys titling since "she was so
preoccupied as the sole breadwinner of the family." 50 She later changed her story and claimed that
she asked President Marcos to help her.51 Next, she claimed that she was in possession of the
owners duplicate copy of TCT No. 124088. 52 She again changed her story and claimed that the
owners duplicate copy was not in her possession but she had "a certification from the Land
Management Bureau [and] that there [was] a record of her property in a microfilm negative." 53
(3) The quitclaim and waiver she executed in favor of the Mormons was an "implied recognition
of Ortigas ownership."54

(4) Jurisprudence shows that the validity of Ortigas titles had been decided upon in several cases,
namely:
(a) Cia. Agricola de Ultramar v. Domingo55
(b) Ortigas v. Hon. Ruiz56
(c) Del Rosario v. Ortigas57
(d) Navarro v. Ortigas58
(e) Resolution dated August 7, 1992,where this court affirmed the Court of Appeals
Decision in CA G.R. SP No. 18085.59 The Court of Appeals stated that "Widora and
Molina had no more right to apply for the same lands which had already been titled in the
name of Ortigas."60
This court also held that Judge Velasco erred in dismissing the Notices of Appeal filed by Ortigas and the
Office of the Solicitor General61 and in granting Molinas Motion for Execution pending appeal. 62
The filing of numerous Petitions by Molina was noted, and this court held that she engaged in forum
shopping. Thus, the dispositive portion of the Decision ordered her and her counsel to show cause why
they should not be held in contempt.63
Ortigas filed a Motion for Reconsideration on the ground that its prayer, "that Hon. Judge Tirso D.C.
Velasco be purged from the judiciary,"64 was not granted.
On the other hand, Molina filed the Motion for Reconsideration dated August 10, 1994, and two
supplements to the Motion dated September 22, 1994. 65 The Motion and the supplements were denied in
the Resolution dated January 23, 1995. Thus, the Decision dated July 25, 1994 became final and
executory for G.R. No. 112564 and G.R. No. 109645.66
Also, the Resolution dated January 23, 1995 included the pronouncement that Dr. Teodorico Molina and
counsel Atty. Eufracio Layag were "guilty of contempt of court for willful violation of the rule against
forum shopping."67 A fine of P500.00 was imposed on each of them. 68 Despite the denial of her Motion
for Reconsideration, Molina still filed a "Motion for Leave to File the Herein Incorporated Second
Motion for Reconsideration and to Allow x x x Dolores V. Molina a Day in Court Relative to her Petition
for Reconstitution."69
The second Motion for Reconsideration was denied in the Resolution dated March 1, 1995. This court
further resolved:
TO DIRECT that no further pleadings, motions or papers be henceforth filed in these cases except only as
regards the issues directly involved in the Motion for Reconsideration (Re: Dismissal of Respondent
Judge) of Ortigas & Co. Ltd., dated August 15, 1994.
IT IS SO ORDERED.70
In the Resolution dated July 24, 1995,71 this court increased the fine imposed on Dr. Teodorico Molina
and counsel Atty. Eufracio Layag to P1,000.00 and resolved:

(2) To DECLARE THESE CASES CLOSED AND TERMINATED, DIRECT ENTRY OF JUDGMENT,
AND REITERATE the direction that no further pleadings, motion or papers be henceforth filed in these
cases except only as regards the issues directly involved in the Motion for Reconsideration (Re: Dismissal
of Respondent Judge) of Ortigas & Co. Ltd., dated August 15, 1994 and the proceedings for contempt
against Dr. Teodorico Molina and Atty. Eufracio Layag; and (3) To DIRECT the Clerk of Court to
transmit the mittimus of both these cases to the corresponding Courts of origin for appropriate action and
disposition.72
Despite these Resolutions stating that "no further pleadings, motions, or others papers" be filed, Molina
still filed the following:
(a) [m]otion to refer the cases to the Court En Banc dated April 5, 1995 (denied by Resolution of
June 19, 1995);
(b) [c]onsolidated motion dated July 25, 1995, for reconsideration of the June 19, 1995
Resolution (denied by Resolution dated August 28, 1995); and
(c) [m]otion dated August 21, 1995 for reconsideration of the July 24, 1995 Resolution (Re:
increasing fines on counsels and directing entry of judgment) (denied by Resolution dated
October 25, 1995).73
TMBC filed a Motion for Contempt74 dated September 18, 1995, praying that Molina be declared in
contempt of court and that her Motion for Reconsideration dated August 21, 1995 be denied.
In the Resolution dated March 4, 1996,75 this court found Molina guilty of contempt of court:
It is clear that petitioner [Dolores V. Molina] was bent on pursuing her claims despite the Courts
unequivocal declaration that her claims were lacking in merit, that the proceedings were terminated, and
that no further pleadings, motions or papers should be filed. Her persistence constitutes a deliberate
disregard, even defiance, of these Courts plain orders, and an abuse of the rules of procedure to delay the
termination of these cases.
....
Molina has had more than her day in court. She was accorded more than ample opportunity to present the
merits of her case. Her every argument was heard and considered. . . . There has been a final
determination of the issues in these cases and petitioner has been repeatedly directed to abide thereby. Her
deliberate violation of the orders of the Court [is] unjustified and inexcusable.
....
WHEREFORE, Dolores V. Molina is found GUILTY of contempt of court for willful disregard and
disobedience of the Resolutions of the Court, and a FINE OF ONE THOUSAND PESOS (1,000.00) is
hereby imposed on her, payable within five (5) days from receipt of this Resolution, with the warning that
any subsequent disregard and disobedience of this Courts orders will be dealt with more severely.
Let this Resolution be published in the authorized Court reports for the information and guidance of the
bench and the bar respecting the nature and effect of denials of motions for reconsideration of judgments

and final orders, the propriety of second motions for reconsideration, and the prohibition against the filing
of further pleadings, motions or other papers.
IT IS SO ORDERED.76 (Emphasis in the original)
With regard to the Administrative Complaint against Judge Velasco, TMBC joined Ortigas in praying that
he be removed from the judiciary.77
TMBCs Administrative Complaint against Judge Velasco was filed on July 12, 1993 ahead of Ortigas
Complaint and was docketed as Administrative Matter No. RTJ-93-1108. 78
In the Resolution dated August 15, 1997, this court held:
WHEREFORE, Judge Tirso D. C. Velasco is hereby DISMISSED from the service, with forfeiture of all
retirement benefits and accrued leave credits, and with prejudice to reemployment in any branch or
instrumentality of the government including government-owned or controlled corporations. Immediately
upon service on him of notice of this adjudgment, he shall be deemed to have VACATED his office and
his authority to act in any manner whatsoever as Judge shall be considered to have automatically
CEASED.
SO ORDERED.79 (Emphasis in the original)
IV
Facts of G.R. No. 128422
Respondent Epimaco V. Oreta (Oreta) filed a Complaint against Molina for falsification of public
document before the Office of the City Prosecutor in Quezon City. In his Affidavit-Complaint, 80 he stated
that he is "the Head of the Security Force hired to secure certain properties of The Manila Banking
Corporation (TMBC)"81 and that he is the "duly-appointed statutory receiver of TMBC." 82
Oreta alleged that TMBC owns several parcels of land in Greenmeadows, Quezon City. These parcels of
land were purchased at public auctions due to the extrajudicial foreclosure of the mortgages over the
lands.83
The registered owners of the properties in dispute purchased the land from Ortigas. 84
The one-year redemption period expired, and none of the mortgagors exercised their right to redeem.
Thus, "TMBC executed various Affidavits of Consolidation of Ownership" 85 and consolidated the titles to
the properties.
TMBC paid real estate taxes and transfer taxes relative to the sale and its consolidation of ownership. 86
In 1990, Molina filed "a case for Damages with Prayer for Reconveyance and Preliminary Mandatory
Injunction before Branch 88 of the Regional Trial Court of Quezon City[.]" 87
Molina claimed that she owns "[a] parcel of residential land situated at Ugong Norte, District of Cubao,
Quezon City . . . containing an area of one hundred twenty six thousand two hundred seventy eight
(126,278) square meters, more or less."88

Molina also claimed that she purchased the property in 1939 from Eusebia Molina, Avelino P. Ramos, and
Felix P. Micael.89
However, Molina was unable to attend to the titling of the property because "she was so preoccupied as
the sole breadwinner of the family with children to support[.]" 90
Several of the properties owned by TMBC overlapped with the properties being claimed by Molina. 91
Oreta presented documentary evidence to support his allegations:
(1) Report of Atty. Benjamin Bustos, 92 Chief of the Reconstitution Division of the Land Registration
Authority, a portion of which states:
Psd-16740 appears to be derived from two different surveys, numbered Psu-1148 and Psu-20191; neither
of which appear to have been the subject of original registration; thus it is presumed that no original title
had been issued from which TCT-124088 could have emanated.93
(2) Report of Privadi Dalire, Chief, Geodetic Survey Division of the Land Management Bureau, 94 stating
that:
The procedures in the assignment of subdivision number is [sic] for each kind of subdivision covering a
particular original survey such as the Psu survey. Since these two copies of Psd-16740, one covers Psu1148 and the other Psu-20191 both for the same survey claimant and located in the same locality, and
covered by same microfilm number gives rise to a questionable status of the documents. 95
(3) Certification of Mr. Norberto B. Orense, Assistant Chief of the Ordinary Decree Division of the Land
Registration Authority, stating that LRC Record No. 781:
from which TCT No. 124088 allegedly emanated, pertains to a land registration case in the province of
Palawan from which was issued Decree No. 2827 on 28 February 1908. Furthermore, it was likewise
certified that Molinas alleged plans Psu-Nos. 1148 (also appearing on the face of the alleged TCT No.
124088) and 20191 are not subject of any land registration proceedings. 96
(4) Certification of Ms. Carmelita Labrador, Administrative Officer V of the Land Registration Authority,
stating that the control number on Molinas TCT No. 124088 was issued on February 12, 1975, whereas
Molinas TCT was issued on October 30, 1967.97
Oreta further alleged that because of the issuance of TCT No. RT-58287 98 and the subsequent issuance of
TCT Nos. 83163, 83165, and 83167,99 an Information for coercion and other forms of trespass was filed
against him.100However, the basis of the charge against him was a false document. Thus, he prays that
Molina "be prosecuted for the crime of falsification of public document [under Article 171 and 172 of the
Revised Penal Code.]"101 Molina filed a Counter-affidavit, stating that she and her husband, Pio Molina,
had been in possession of the land covered by TCT No. 124088 since 1939. 102
In September 1991, TCT No. 124088 was lost "and unfortunately, the original thereof on file with the
Registry of Deeds for Quezon City was also lost or destroyed due to fire that gutted the said
office[.]"103 Molina claimed that she went to the Land Registration Authority to inquire where she could
find a copy of TCT No. 124088. She found a microfilm negative of TCT No. 124088, which the Land

Registration Authority found to be correct. Further, the existence of Psd-16740 was proven by Mr.
Armando Bangayan, Assistant Chief, Records Division, Land Management Bureau. 104
Molina questioned Oretas authority to file the Affidavit Complaint. 105
In the Resolution dated July 21, 1994,106 Assistant City Prosecutor Eduardo D. Resurreccion
recommended the dismissal of the case.107
Oreta filed a Motion for Reconsideration, which was denied by Second Assistant City Prosecutor Rogelio
U. Concepcion in the Resolution dated November 11, 1994.108
Oreta filed a Petition for Review 109 before the Department of Justice. Oreta pointed out that TCT No.
124088 was declared null and void by this court. 110 He also pointed out that the alleged microfilm
negative of Psd-16740 was never presented by Molina. 111
With regard to the certification of the Land Management Bureau that the microfilm negative was not
falsified, Oreta pointed out that the certification referred to Psd-16740 and not TCT No. 124088. 112
Molina filed a Comment,113 citing Judge Velascos Decision ordering the reconstitution of TCT No.
124088114 and arguing that Oretas Complaint had no basis.115
Chief State Prosecutor Zenon L. De Guia reversed the Resolution of the City Prosecutor and directed the
filing of "an information for falsification of public document" in the Resolution dated April 18, 1996. 116
Molina filed a Motion for Reconsideration with Manifestation to File Documents. 117 This was denied by
then Secretary of Justice Teofisto T. Guingona, Jr. (Secretary Guingona, Jr.) in the Resolution dated
November 29, 1996.118
Undaunted, Molina filed a Petition for Review on Certiorari 119 before the Court of Appeals.
In her Petition, Molina raises the following issue:
Whether the circumstances that [envelop] this case constitute either the offense of falsification of public
documents or use of falsified document in a judicial proceeding? 120
Molina imputes grave abuse of discretion on the part of the Department of Justice when it directed the
filing of an Information for Falsification of Public Document against her.121
The Court of Appeals dismissed Molinas Petition on technical grounds. The Court of Appeals Resolution
dated February 4, 1997 states:
It appearing that petitioner failed to submit the certified true copies of the assailed Resolutions dated April
18, 1996 and November 29, 1996, the instant petition for review is hereby DISMISSED outright pursuant
to Supreme Court Circular No. 3-96 and Section 3(b) and 3(d)(1), Rule 6 of the Revised Internal Rules of
this Court.
SO ORDERED.122

Molina filed a Motion for Reconsideration and to Admit Original Certified True Copies of Annexes "J"
and "K-1" to the Petition.123 She claimed that she complied with Supreme Court Circular No. 3-96 and
Section 3(b) of the Revised Internal Rules of the Court of Appeals, but due to inadvertence, the "original
certified true copies of the assailed resolutions . . . [were] not attached to the original copy of the petition
but to one of the ten (10) duplicates thereof."124
The Motion for Reconsideration was denied in the Resolution dated March 11, 1997. 125
The Court of Appeals found that contrary to Molinas assertion that she filed 10 duplicate copies, only
four were filed.126 Of the four duplicate copies, none included the "duplicate original or certified true copy
of the assailed Resolutions."127 Gabionza v. Court of Appeals, 128 cited by her, is not applicable because
there was substantial compliance with the rules of procedure in that case. 129
From the denial of her Motion for Reconsideration, Molina filed a Petition for Review on
Certiorari130 before this court.
V
Facts of G.R. No. 128911
On January 7, 1997, Molina filed an action for quieting of title and annulment of title before the Regional
Trial Court of Quezon City. The subject of the complaint was parcels of land covered by TCT Nos. 83163,
83164, 83165, and 83167. These titles were declared null and void by this court in G.R. No. 109645 and
G.R. No. 112564.131
The action for quieting of title was docketed as Civil Case No. Q-97-29856. 132 Molina then moved that
the case be consolidated with Civil Case No. Q-93-15920, which was a Petition for Annulment of Title. 133
TMBC filed a Motion to Dismiss Civil Case No. Q-97-29856, citing res judicata, conclusiveness of
judgment, bar by prior judgment, and forum shopping. In addition, the Regional Trial Court cannot annul
and set aside the Decision of this court.134
Molina opposed the Motion to Dismiss. 135 Subsequently, she filed a With Leave Motion to Admit
Amended Complaint dated February 24, 1997.136
TMBC and Alberto V. Reyes (Reyes)137 opposed Molinas Motion. However, the trial court admitted the
Amended Complaint and did not act on TMBCs Motion to Dismiss. The trial courts Order dated March
18, 1997 reads as follows:
Before this Court are the following:
1. Supplement to Complaint dated January 21, 1997
2. TMBC Motion to Dismiss
3. Bangko Sentral ng Pilipinas Motion to Dismiss
4. TMBC Motion to Strike Off and/or Dismiss Ad Cautelam Supplement to Complaint dated
January 21, 1997 with the respective comments/oppositions thereto.

Considering that it is undisputed that TMBC is under receivership, the Motion to Dismiss filed by Bangko
Sentral ng Pilipinas is hereby granted. This case is dismissed as against Bangko Sentral ng Pilipinas, it
appearing that Alberto Reyes is the receiver and not the said bank.
Accordingly, the Motion to Admit Amended Complaint with leave is hereby granted, and the amended
complaint attached thereto wherein TMBC is dropped as party-defendant and in lieu thereof, Alberto
Reyes is impleaded as such is admitted.
Let summons be served on the newly named defendant.
There is no need to act on TMBCs motion to dismiss given the above circumstances.
SO ORDERED.138
TMBC and Reyes filed a Motion for Reconsideration, which was denied. 139
TMBC and Reyes filed this Joint Petition for Certiorari and Prohibition with prayer for the issuance of a
writ of preliminary injunction/temporary restraining order.140
TMBC and Reyes argue that:
[p]ublic respondent Judge should have dismissed private respondent Molinas Complaint dated 06
January 1997 considering that on its face, it is clear that he has no jurisdiction to take cognizance of the
same as it prays for the court a quo to annul and set aside the final and executory decisions of the
Honorable Court and the Court of Appeals adjudicating in favor of petitioner TMBC the ownership and
possession of the subject properties, subject matter of the private respondent Molinas Complaint and
Amended Complaint.141
TMBC and Reyes also cite this courts Decisions in the other cases involving Molina. 142 They point out
that Molinas Complaint and Amended Complaint should have been dismissed outright for being a clear
case of forum shopping.143
VI
Procedural development
In G.R. No. 128422, this court granted the Motion for Extension of Time to file Petition for Certiorari and
required respondents to comment.144
Oreta filed a Motion to Consolidate 145 G.R. No. 128422 with G.R. Nos. 109645 and 112564. The Motion
to Consolidate was granted in the Resolution dated July 23, 1997. 146
In G.R. No. 128911, TMBC and Reyes filed a Motion to Consolidate 147 their Petition with G.R. Nos.
109645 and 112564.148
Molina filed an Opposition to the Motion to Consolidate.149
In the Resolution dated May 28, 1997,this court granted the Motion to Consolidate. 150

Molina filed a Motion for Reconsideration regarding the consolidation of the cases. 151
In the Resolution dated June 23, 1997,152 this court noted the following:
(a) The manifestation filed by TMBC stating that more than two years after the decision in G.R.
No. 109645 and G.R. No. 112564 was promulgated, the trial court where Civil Case No. Q-9315920 is pending had yet to act on TMBCs application for writ of preliminary injunction;
(b) Counter-manifestation filed by Molina;
(c) Opposition to the motion to consolidate; and
(d) Required respondents to comment on the petition for certiorari in G.R. No. 128911. 153 TMBC
and Reyes filed an Opposition to Molinas Motion for Reconsideration dated 16 June 1997. 154
On August 7, 1997, TMBC and Reyes filed a Manifestation and Urgent Motion to Resolve [Application
for Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction]. 155
TMBC and Reyes argue that in Ortigas & Company Limited Partnership v. Velasco, 156 this court ordered
that Civil Case No. Q-93-15920 be disposed with deliberate dispatch. Civil Case No. Q-97-29856 was
consolidated with Civil Case No. Q-93-15920. Thus, Judge Marciano Bacallas (Judge Bacalla)
cognizance of Civil Case No. Q-97-29856 in effect delayed the disposition of Civil Case No. Q-9315920.157
TMBC and Reyes also argue that:
[p]ublic respondent Judge Bacallas acts of assuming jurisdiction over Civil Case No. Q-97-29856 and
conducting proceedings in said case shall deprive petitioners of their unquestionable right to execute the
previous final and executory judgments promulgated by the Court of Appeals and the Honorable Court
declaring with finality petitioner TMBCs absolute title and right to possess the Subject Properties. To
compel petitioners to defend once again petitioner TMBCs absolute title and right to the Subject
Properties would evidently result in a grave injustice. 158
In the Resolution dated August 11, 1997, Molinas Motion for Extension to File Comment was granted,
and TMBCs Manifestation dated July 31, 1997 in G.R. No. 128911, "stating that the pretended issue on
the real party in interest in Civil Cases Nos. Q-93-15920 and Q-97-29856[,] has already been rendered
moot and academic with the effectivity of the 1997 Rules of Civil Procedure." 159
In the Resolution dated September 3, 1997,160 this court noted the following:
(a) In G.R. No. 128911:
(i) TMBCs Manifestation and Urgent Motion to resolve the application for issuance of a
temporary restraining order and/or writ of preliminary injunction dated August 5, 1997;
and
(ii) Comment filed by Dolores Molina.
(b) In G.R. No. 128422:

(i) Comment filed by Oreta;


(ii) Reply filed by Molina; and
(iii) Granted the Motion for Leave to File Rejoinder to Reply.
Oreta filed the Motion for Further Extension of Time to File Rejoinder 161 dated September 4, 1997. He
subsequently filed a Motion to Admit (Rejoinder dated 09 September 1997) 162 and attached a copy of the
Rejoinder.163
In the Resolution dated September 10, 1997,164 this court issued a temporary restraining order in favor of
TMBC stating as follows:
Premises considered, therefore, and pending determination of the proceeding at bar, the Court Resolved to
ISSUE A TEMPORARY RESTRAINING ORDER upon a bond in the sum of Ten Thousand Pesos
(P10,000.00) to be posted by petitioner, The Manila Banking Corporation (TMBC):
(1) COMMANDING the Presiding Judge of Branch 216 of the Regional Trial Court at Quezon
City, Judge Marciano Bacalla, to FORTHWITH CEASE AND DESIST from proceeding with and
acting on Civil Case No. Q-97-29856, and to PROCEED to hear and resolve the issue of damages
in Civil Case No. Q-93-15920 and such others as arise from the pleadings, absolutely and
scrupulously excluding any claim of ownership of Dolores Molina over the property in question
which claim has, as aforestated, been finally declared entirely spurious conformably with this
Courts Decision of July24, 1994 and Resolution of August 15, 1997; and
(2) PROHIBITING Dolores V. Molina, her children, assigns or successors in interest, or their
counsel, from ventilating and litigating in any guise, manner, shape, or form said Molinas claim
of title over the lands involved in any of the actions and proceedings at bar, or in any other action
or proceeding[.]165
In the same Resolution,166 this court issued a Show Cause Order to Molina and Judge Bacalla, stating as
follows:
The Court further Resolved to DENY the motion to dismiss incorporated in respondent Molinas
comment dated August 4, 1997, and to ORDER:
1) DOLORES V. MOLINA to SHOW CAUSE, within ten (10) days from notice of this Resolution, why
she should not be held in contempt of court for forum shopping and otherwise disregarding and defying
the judgment of July 24, 1994 and resolutions of this Court in G.R. Nos. 109645 and 112564 (234 SCRA
455); and JUDGE MARCIANO BACALLA, to EXPLAIN within the same period why he has taken and
is taking cognizance of Molinas allegation and claim of ownership despite his attention having been
drawn to the aforesaid judgment.167
TMBC subsequently filed a Manifestation and Motion [To Partially Withdraw the Joint Petition dated 07
May 1997].168
TMBC informed this court that Judge Bacalla ordered the withdrawal of Civil Case No. Q-97-29856 from
his docket169 and also ordered that Molinas "patently sham and dilatory pleadings" 170 be stricken off the
records of Civil Case No. Q-93-15920. Thus, TMBCs prayer for injunctive reliefs in the Petition for

Certiorari, related to Civil Case No. Q-97-29856, is moot and academic. 171 However, TMBC maintains its
other prayers for relief, specifically:
6.1. The issuance of a temporary restraining order and/or writ of preliminary injunction against private
respondent Molina and her alleged representatives, counsel and successors-in-interest from filing
pleadings asserting her baseless claims of ownership and possession over the properties subject matter of
the Joint Petition dated 07 May 1997;
6.2. The promulgation of a resolution and/or judgment citing private respondent Molina and her counsel,
Atty. Cesar Turiano in contempt of court for the contumacious acts of forum shopping, abuse of court
processes, deliberate disobedience of formal orders, resolutions and decisions of the Honorable Court and
obstruction of the orderly administration [of] justice; and imposing disciplinary sanctions on private
respondent Molinas counsel, Atty. Cesar Turiano, for violations of the Lawyers Oath and the Code of
Professional Responsibility and the final and executory decisions rendered by the Honorable Court set
forth in the Joint Petition dated 07 May 1997.172
From the records, this court issued the Resolution dated October 1, 1997 granting the Motions for
Extension of Time to File Rejoinder filed by counsel of Oreta in G.R. No. 128422 and the Motion to
Admit Rejoinder. In the same Resolution, this court noted Oretas Rejoinder, the Manifestation and
Motion of TMBC in G.R. No. 128911 partially withdrawing the Joint Petition, and "the [E]ntry of
[A]ppearance173 of Atty. Napoleon Uy Galit" as counsel for Molina in G.R. No. 128911. 174
VII
Issues
In G.R. No. 128422, Molina raises the following issues:
(1) Whether this Honorable Supreme Court is bound by the conclusion of the Honorable Court of
Appeals, which, in effect deprive[d] [Dolores V. Molinas] right to appeal[;] [and]
(2) Whether [Dolores V. Molinas] failure to comply strictly with the requirements in appealing a
decision is enough to deprive her of her right to appeal. 175
In G.R. No. 128911, TMBC and Reyes filed a Motion partially withdrawing their Petition. Thus, the
remaining issues for resolution are as follows:
(1) Whether there are grounds to issue a temporary restraining order/writ of preliminary
injunction to put an end to Dolores V. Molinas continuous filing of pleadings involving her
"baseless claims of ownership and possession"176 over TMBCs properties; and
(2) Whether there are grounds to cite Dolores V. Molina and her counsel, Atty. Cesar
Turiano,177 and Judge Marciano Bacalla in contempt of court.
VIII
Arguments of the parties
G.R. No. 128422

Molina argues that contrary to the Court of Appeals Resolution, copies of the certified true copy of the
assailed Letter-Resolution were attached as Annex "J" and Annex "K-1" to the Petition, 178 except that the
original copies were attached to the copies sent to the Department of Justice and Quezon City
Prosecutors Office.179 This mistake was the fault of Molinas counsels office secretary and should be
considered as an "honest mistake, inadvertence and oversight." 180
Molina points out that since copies of the assailed Letter-Resolution were attached to the Petitions filed
before the Court of Appeals, she should be considered as having substantially complied with SC
Administrative Circular No. 3-96 and Section 3(b) and (d) of the Revised Internal Rules of the Court of
Appeals.181
Molina further argues that the procedural infirmity in the filing of her Petition is not "enough to deprive
[her] of her right to appeal." 182 Hence, the dismissal of her Petition is a violation of her right to due
process.183
On the other hand, Oreta argues that Molinas Petition is a dilatory tactic. An alias warrant of arrest was
issued against Molina after she had failed to appear at her scheduled arraignment. 184
Molinas Petition may appear to raise procedural issues only. However, if this court grants her Petition,
she would be allowed to relitigate her claim based on TCT No. 124088. 185
Oreta cites the principles of "res judicata, conclusiveness of judgment and bar by prior judgment." 186 He
also cites Section 47 of Rule 39 of the 1997 Rules of Civil Procedure: 187 Section 47. Effect of judgments
or final orders. The effect of a judgment or final order rendered by a court of the Philippines, having
jurisdiction to pronounce the judgment or final order, may be as follows:
(a) In case of a judgment or final order against a specific thing, or in respect to the probate of a
will, or the administration of the estate of a deceased person, or in respect to the personal,
political, or legal condition or status of a particular person or his relationship to another, the
judgment or final order is conclusive upon the title to the thing, the will or administration or the
condition, status or relationship of the person, however, the probate of a will or granting of letters
of administration shall only be prima facie evidence of the death of the testator or intestate;
(b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or as
to any other matter that could have been missed in relation thereto, conclusive between the parties
and their successors in interest, by title subsequent to the commencement of the action or special
proceeding, litigating for the same thing and under the same title and in the same capacity; and
(c) In any other litigation between the same parties or their successors in interest, that only is
deemed to have been adjudged in a former judgment or final order which appears upon its face to
have been so adjudged, or which was actually and necessarily included therein or necessary
thereto. (49a)
Molina has not shown any justifiable or compelling reasons why the Court of Appeals Resolution should
be set aside.188
Since an Information against Molina was filed and docketed as Criminal Case No. 62889 before
Branch31 of the Metropolitan Trial Court of Quezon City, she "can no longer ask for the review of the
finding of a prima facie case by the DOJ against her considering that she has failed to obtain prior leave
from said court."189

Oreta points out that the Metropolitan Trial Court acquired jurisdiction over the case when the
Information was filed.190 Molina is considered a "fugitive from justice" since she did not appear at her
scheduled arraignment.191
In her Reply,192 Molina argues that although this court declared TCT No. 124088 null and void, "it does
not necessarily mean that it is falsified." 193 She also denies that she intends to relitigate her claim of
ownership based on TCT No. 124088.194
Molina denies forestalling her prosecution by filing this Petition for Review. She then reiterates her
argument that she substantially complied with Circular 3-96 and the Revised Internal Rules of the Court
of Appeals.195
Oreta filed a Rejoinder196 stating that the prosecutors finding of probable cause to believe that Molina
falsified a public document does not mean that she is guilty. Her proper remedy is to present her evidence
during trial, and not to file a Petition for Review.197
G.R. No. 128911
TMBC and Reyes cite Supreme Court Administrative Circular No. 04-94, the pertinent portion of which
states:
2. Any violation of this Circular shall be a cause for the dismissal of the complaint, petition, application or
other initiatory pleading, upon motion and after hearing. However, any clearly willful and deliberate
forum shopping by any party and his counsel through the filing of multiple complaints or other initiatory
pleadings to obtain favorable action shall be a ground for summary dismissal thereof and shall constitute
direct contempt of court. Furthermore, the submission of a false certification or non-compliance with the
undertakings therein, as provided in Paragraph 1 hereof, shall constitute indirect contempt of court,
without prejudice to disciplinary proceedings against the counsel and the filing of a criminal action
against the guilty party[.]198
Ownership over the properties has been decided and passed upon with finality in the following cases:
Ortigas & Company Limited Partnership v. Judge Tirso Velasco and Dolores V. Molina, 199 Dolores V.
Molina v. Hon. Presiding Judge of RTC, Quezon City, Br. 105 and Manila Banking
Corporation,200 Dolores V. Molina and ApronianoL. Timbol v. Court of Appeals and Epimaco V.
Oreta,201 Epimaco V. Oreta v. Hon. George Macliing, in his capacity as Presiding Judge of the Regional
Trial Court of Quezon City, Branch 100, and Dolores V. Molina and Aproniano L. Timbol. 202
Despite these Decisions, Molina still filed a Complaint for quieting of title 203 and an Amended
Complaint.204
TMBC and Reyes also point out that Molina submitted a false verification and certification in her
Complaint and Amended Complaint when she stated under oath the following:
That I hereby certify that I have not commenced any other action or proceeding involving the same issues
between the same parties in the Supreme Court, the Court of Appeals, or divisions thereof or any other
quasi-judicial body and I undertake to inform this Honorable Court of such fact within five (5) days from
knowledge thereof.205
Molina never informed this court of the previous Decisions declaring her titles null and void. 206

In her Comment,207 Molina explained that after she had filed an action for quieting of title docketed as
Civil Case No. Q-97-29856, TMBC filed a Motion to Dismiss and to Strike Off and/or Dismiss Ad
Cautelam Supplement to Complaint on the ground that the issue of ownership had been decided by this
court.208
She filed an Amended Complaint when she found out that TMBC was under receivership. The Amended
Complaint dropped TMBC as a party and included the Central Bank as the proper party.209
The Central Bank also moved to dismiss the Amended Complaint since TMBCs duly appointed receiver
was Reyes.210
The trial court issued the Order dated March 18, 1997, granting the Motion to Admit Amended
Complaint, dropping TMBC as a party, and impleading Reyes.211
TMBC filed a Motion for Reconsideration but was denied in the Order dated April 23, 1997. 212 Molina
argues that the trial court did not rule upon the merits of her case but only resolved who the real party in
interest was.213
Molina further argues that the delays in the resolution of Civil Case No. Q-97-29856 were due to TMBCs
failure to file its responsive pleading. In addition, TMBC should have filed its Answer instead of a
Petition for Certiorari when the trial court denied TMBCs Motion to Dismiss. 214 This court now rules as
follows:
G.R. No. 128422
The Court of Appeals erred in dismissing the Petition on procedural grounds. Nevertheless, we affirm the
Court of Appeals Resolutions dated February 4, 1997215 and March 11, 1997216 on the ground that Molina
availed herself of the wrong remedy.
Section 3(b) and Section 3(d)(1) of the Revised Internal Rules of the Court of Appeals, which were in
force when Molina filed her Petition for Review before the Court of Appeals, provide: Section 3. Petitions
for Review. Within the period to appeal, the petitioner shall file a verified petition in seven (7) legible
copies and (1) one copy thereof shall be served on each of the respondents. Upon proper motion presented
before the expiration of the original reglementary period, the Court may grant a non-extendible additional
period of fifteen (15) days save in exceptionally meritorious cases within which to file the petition for
review; Provided, however, that should there be no petition filed within the extended period, the case shall
be dismissed. A petition filed after the period shall be denied due course outright. The Regional Trial
Court shall be furnished a copy of the resolution to this effect.
....
b. What should be filed. The petition shall be accompanied by a certified true copy of the disputed
decisions, judgments, or orders, of the lower courts, together with true copies of the pleadings and other
material portions of the record as would support the allegations of the petition.
....
d. Judicial action. The Court may dismiss the petition, or require the private respondent to comment on
the petition, or give it due course.

(1) If the petition is not prima facie sufficient in form and substance, the Court may dismiss it outright
stating the reasons therefor. If instead of a petition for review, the appellant perfects his appeal pursuant to
Rule 41 of the Rules of Court, it shall nevertheless be dismissed even if the Regional Trial Court had
given it due course.
Supreme Court Administrative Circular No. 3-96217 dated April 17, 1996 provides:
1. The "duplicate original copy" shall be understood to be that copy of the decision, judgement,
resolution or order which is intended for and furnished to a party in the case or proceeding in the
court or adjudicative body which rendered and issued the same. The "certified true copy" thereof
shall be such other copy furnished to a party at his instance or in his behalf, duly authenticated by
the authorized officers or representatives or the issuing entity as hereinbefore specified.
....
3. The certified true copy must further comply with all the regulations therefor of the issuing
entity and it is the authenticated original of such certified true copy, and not a mere xerox copy
thereof, which shall be utilized as an annex to the petition or other initiatory pleading.
4. Regardless of whether a duplicate original copy or a certified true copy of the adjudicatory
document is annexed to the petition or initiatory pleading, the same must be an exact and
complete copy of the original, and all the pages thereof must be clearly legible and printed on
white bond or equivalent paper of good quality with the same dimensions as the original copy.
Either of the aforesaid copies shall be annexed to the original copy of the petition or initiatory
pleading filed in court, while plain copies thereof may be attached to the other copies of the
pleading.
5. It shall be the duty and responsibility of the party using the documents required by Paragraph
(3) of Circular No. 1-88 to verify and ensure compliance with all the requirements therefor as
detailed in the preceding paragraphs. Failure to do so shall result in the rejection of such annexes
and the dismissal of the case. Subsequent compliance shall not warrant any reconsideration unless
the court is fully satisfied that the non-compliance was not in any way attributable to the party,
despite due diligence on his part and that there are highly justifiable and compelling reasons for
the court to make such other disposition as it may deem just and equitable.
In Donato v. Court of Appeals,218 this court held that:
[i]n like manner, the failure of the petitioner to comply with Section 3, paragraph b, Rule 6 of the RIRCA,
that is, to append to his petition copies of the pleadings and other material portions of the records as
would support the petition, does not justify the outright dismissal of the petition. It must be emphasized
that the RIRCA gives the appellate court a certain leeway to require parties to submit additional
documents as may be necessary in the interest of substantial justice. Under Section 3, paragraph d of Rule
3 of the RIRCA, the CA may require the parties to complete the annexes as the court deems necessary,
and if the petition is given due course, the CA may require the elevation of a complete record of the case
as provided for under Section 3(d)(5) of Rule 6 of the RIRCA. At any rate, petitioner attached copies of
the pleadings and other material portions of the records below with his motion for reconsideration. 219
The ruling in Donatowas subsequently cited in Mendoza v. David 220 and Valdecantos v. People221 stating
that the submission of the required pleadings and attachments in the Motion for Reconsideration was
deemed substantial compliance.

In this case, the Court of Appeals admitted that Molina tried to rectify her mistake. A portion of the
Resolution dated March 11, 1997 states:
In the case at bar, the petition lacks the required certified true copy or duplicate original of the assailed
Resolutions which is clearly an omission violative of the rules. The fact that petitioner in the instant
motion has attached the certified true copy of the assailed Resolutions will not cure the defect. Pursuant to
Paragraph 5 of Administrative Circular No. 3-96, subsequent compliance shall not warrant any
reconsideration.222 (Emphasis supplied)
Thus, the Court of Appeals erred in dismissing Molinas Petition for Review on procedural grounds.
However, we affirm the dismissal of Molinas Petition based on other grounds.
Prior to the filing of the Information, Molina had filed a Motion for Reconsideration of the Resolution
dated April 18, 1996, which Resolution directed the City Prosecutor to file an Information against
her.223 The records show that the Information against Molina was filed on May 27, 1996. 224 Her Petition
for Review before the Court of Appeals was filed on January 16, 1997. 225
In other words, while the trial court had acquired jurisdiction over the case, Molina pursued another
remedy, specifically, a review of the City Prosecutors finding of probable cause.
In Crespo v. Judge Mogul:226
[t]he rule therefore in this jurisdiction is that once a complaint or information is filed in Court any
disposition of the case as its dismissal or the conviction or acquittal of the accused rests in the sound
discretion of the Court. Although the fiscal retains the direction and control of the prosecution of criminal
cases even while the case is already in Court he cannot impose his opinion on the trial court. The Court is
the best and sole judge on what to do with the case before it. The determination of the case is within its
exclusive jurisdiction and competence. A motion to dismiss the case filed by the fiscal should be
addressed to the Court who has the option to grant or deny the same. It does not matter if this is done
before or after the arraignment of the accused or that the motion was filed after a reinvestigation or upon
instructions of the Secretary of Justice who reviewed the records of the investigation.
In order therefor to avoid such a situation whereby the opinion of the Secretary of Justice who reviewed
the action of the fiscal may be disregarded by the trial court, the Secretary of Justice should, as far as
practicable, refrain from entertaining a petition for review or appeal from the action of the fiscal, when
the complaint or information has already been filed in Court. The matter should be left entirely for the
determination of the Court.227
The ruling in Crespo was clarified in Chan v. Formaran III, et al.: 228
In subsequent cases, the Court clarified that Crespo does not bar the Justice Secretary from reviewing the
findings of the investigating prosecutor in the exercise of his power of control over his subordinates. The
Justice Secretary is merely advised, as far as practicable, to refrain from entertaining a petition for review
of the prosecutors finding when the Information is already filed in court. In other words, the power or
authority of the Justice Secretary to review the prosecutors findings subsists even after the Information is
filed in court. The court, however, is not bound by the Resolution of the Justice Secretary, but must
evaluate it before proceeding with the trial. While the ruling of the Justice Secretary is persuasive, it is not
binding on courts.229

Chan v. Formaran III, et al. also discussed that the proper remedy to review the Resolutions of the
Secretary of Justice was the filing of a Petition for Certiorari under Rule 65. 230 It was further discussed
that:
[a]lbeit the findings of the Justice Secretary are not absolute and are subject to judicial review, this Court
generally adheres to the policy of non-interference in the conduct of preliminary investigations,
particularly when the said findings are well-supported by the facts as established by the evidence on
record. Absent any showing of arbitrariness on the part of the prosecutor or any other officer authorized to
conduct preliminary investigation, courts as a rule must defer to said officers finding and determination
of probable cause, since the determination of the existence of probable cause is the function of the
prosecutor. Simply stated, findings of the Secretary of Justice are not subject to review, unless made with
grave abuse of discretion.231 Thus, the Court of Appeals did not err in dismissing Molinas Petition.
In any case, a review of the records shows that no grave abuse of discretion can be attributed to Secretary
Guingona, Jr. when he affirmed the findings of Chief State Prosecutor Zenon L. De Guia (Chief State
Prosecutor De Guia).
Chief State Prosecutor De Guia, acting on the Petition for Review filed by Oreta, directed the City
Prosecutor in Quezon City "to file an information for falsification of public document against respondent
Dolores V. Molina."232He discussed the following:
Contrary to your finding, the issue in this case is not whether respondents reconstituted title may be
considered as a falsified document but whether or not respondent used a fictitious and non-existent title,
TCT No. 124088, in support of her application for reconstitution of title.
We have gone over the record and we find that the evidence presented by complainant supports a finding
that respondents photocopy of TCT No. 124088 was simulated and given the appearance of authenticity.
Several certifications and testimonies from personnel of the Land Registration Authority and the Register
of Deeds of Quezon City attest to the fact that the entries in said photocopy of TCT No. 124088 are
fictitious and totally inconsistent with the record on file. In fact, in the cases of Ortigas and Company
Limited Partnership vs. Judge Tirso Velasco and Dolores Molina, G.R. No. 109645; and Dolores Molina
vs. Hon. Presiding Judge of RTC, Quezon City, Branch 108 and Manila Banking Corporation, G.R. No.
112564, jointly resolved and promulgated on July 25, 1994, the Supreme Court declared null and void the
reconstituted title of respondent and expressly found respondent guilty of forum shopping by filing cases
one after another in order to obtain a judgment in her favor upholding her claim to the subject lands.
These facts support a prima facie finding that respondent presented a falsified transfer certificate of title
to support her application for reconstitution of title. 233
Molina filed a Motion for Reconsideration, which was denied in a Letter-Resolution dated November 29,
1996. Secretary Guingona, Jr. explained:
After an examination of your motion, we find no compelling reason to justify an amendment or reversal
of our earlier ruling. Your allegations as to the authenticity and genuineness of TCT No. 124088 have
earlier been considered and passed upon by this Office. We reiterate that respondents documentary
evidence can not [sic] be given greater weight than the documentary evidence submitted by complainant
which proves that the entries in TCT No. 124088 are spurious. The conflicting evidence submitted by
both parties is best left for the court to determine in a full[-]blown trial. Suffice it to say that the evidence
warrants a finding that the crime of falsification may have been committed and that respondent is
responsible therefor.234

Chief State Prosecutor De Guias Resolution extensively discussed why probable cause existed to file an
Information against Molina. He sufficiently explained the reason why he reversed the finding of the City
Prosecutor. Clearly, no grave abuse of discretion can be attributed to Secretary Guingona, Jr. when he
denied Molinas Motion for Reconsideration.
This court reminds Molina of the discussion in Punzalan v. Plata: 235
[T]he Court considers it a sound judicial policy to refrain from interfering in the conduct of preliminary
investigations and to leave the DOJ a wide latitude of discretion in the determination of what constitutes
sufficient evidence to establish probable cause for the prosecution of the supposed offenders. The rule is
based not only upon the respect for the investigatory and prosecutor powers granted by the Constitution to
the executive department but upon practicality as well. 236
G.R. No. 128911
In the Resolution dated September 10, 1997, 237 this court issued a temporary restraining order and made
the following pronouncements:
In its Decision dated July 24, 1994 in the consolidated cases of G.R. No. 109645 and G.R. No. 112564
(234 SCRA 455), this Court pertinently ruled that:
"Ordinarily, the relief indicated by the material facts would be the remand of the reconstitution case (LRC
No. Q-5404 [instituted by petitioner Molina]) to the Court of origin with instructions that Ortigas and the
Solicitor Generals appeals from the judgment rendered therein, which were wrongly disallowed, be given
due course and the records forthwith transmitted to the appellate tribunal. This, in fact, is a relief
alternatively prayed for by petitioner Ortigas. Considering however the fatal infirmities afflicting
Molinas theory or cause of action, evident from the records before this Court, such a remand and
subsequent appeal proceedings would be pointless and unduly circuitous. Upon the fact, it is not possible
for Molinas cause to prosper. To defer adjudication thereon would be unwarranted and unjust.
....
(T)he titles of Dolores Molina upheld and reconstituted by said decision (in LRC Case No. Q-54040 [sic]
and others namely Transfer Certificates of Title Numbered 124088 and RT-58287 and those derived
therefrom and subsequently issued namely, Transfer Certificates of Title Numbered 83163, 83164, 83165,
832166 [sic] and 83167 are all declared NULL AND VOID and are hereby CANCELLED; said LRC
Case No. Q-5404 of the Regional Trial Court of Quezon City is DISMISSED; and the temporary
restraining order of this Court of May 12, 1993 is MADE PERMANENT.
In G.R. No. 112564, the Orders of respondent Presiding Judge of Branch 105 of the Regional Trial Court
of Quezon City in Case No. Q-93-15920 dated September 17, 1993 and November 25, 1993 are
AFFIRMED; and said Judge is DIRECTED to proceed to dispose of said Case No. Q-93-15920 with all
deliberate dispatch conformably with this decision"
The case above referred to, No. Q-93-15920, was instituted in the Regional Trial Court of Quezon City by
The Manila Banking Corporation (TMBC) against Dolores V. Molina and Gateway Enterprises Company,
Inc., essentially praying for annulment of Molinas title (and others derived therefrom) and for damages.
The plain import of this Courts directions in said judgment of July 24, 1994 that "said
Judge ** proceed to dispose of said Case No. Q-93-15920 with all deliberate dispatch conformably with
this decision" is that the Judge should resolve the issue of damages only; NOT that he should allow re-

litigation of, and rehear again and pass upon, Molinas claim of adverse title which conformably with this
(Courts) decision, is bereft of any merit whatever. The spuriousness of Molinas claim of ownership
having already been adjudged definitively, authoritatively, and finally, that claim should not and could not
be legitimate subject ofany subsequent action or proceeding in any court, regardless of the guise, manner
or form in which it might later be presented.
Now, it appears that Dolores Molina has instituted a new action in the Regional Trial Court of Quezon
City, for quieting of title, docketed as Q-97-29856. In this case, she alleged ownership of the land
described in Certificates of Title Nos. 83163, 83164, 83165, 832166 [sic] and 83167 which are the very
same titles, already declared fictitious and worthless in this Courts judgment of July 24, 1994; and she
has succeeded in consolidating said Case No. Q-97-29856 with Case No. Q-93-15920, pending before
Branch 216 of the Quezon City RTC, presided over by Judge Marciano Bacalla. It further appears that
Judge Bacalla is disposed to take cognizance of and allow ventilation of the action involving Molinas
aforesaid fake titles; this, over the opposition of TMBC which insists that Case No. Q-97-29856 be
summarily dismissed in light of this Courts judgment of July 24, 1994.
Premises considered, therefore, and pending determination of the proceeding at bar, the Court Resolved to
ISSUE A TEMPORARY RESTRAINING ORDER upon a bond in the sum of Ten Thousand Pesos
(P10,000.00) to be posted by petitioner, The Manila Banking Corporation (TMBC):
(1) COMMANDING the Presiding Judge of Branch 216 of the Regional Trial Court at Quezon
City, Judge Marciano Bacalla, to FORTHWITH CEASE AND DESIST from proceeding with and
acting on Civil Case No. Q-97-29856, and to PROCEED to hear and resolve the issue of damages
in Civil Case No. Q-93-15920 and such others as arise from the pleadings, absolutely and
scrupulously excluding any claim of ownership of Dolores Molina over the property in question
which claim has, as aforestated, been finally declared entirely spurious conformably with this
Courts Decision of July24, 1994 and resolution of August 15, 1997; and
(2) PROHIBITING Dolores V. Molina, her children, assigns or successors in interest, or their
counsel, from ventilating and litigating in any guise, manner, shape, or form said Molinas claim
of title over the lands involved in any of the actions and proceedings at bar, or in any other action
or proceeding;
The Court further Resolved to DENY the motion to dismiss incorporated in respondent Molinas
comment dated August 4, 1997, and to ORDER:
(1) DOLORES V. MOLINA to SHOW CAUSE, within ten (10) days from notice of this Resolution, why
she should not be held in contempt of court for forum shopping and otherwise disregarding and defying
the judgment of July 24, 1994 and resolutions of this Court on G.R. Nos. 109645 and 112564 (234 SCRA
455); and JUDGE MARCIANO BACALLA, to EXPLAIN within the same period why he has taken and
is taking cognizance of Molinas allegation and claim of ownership despite his attention having been
drawn to the aforesaid judgment.
SO ORDERED.238
TMBC posted a cash bond amounting to P10,000.00 on October 2, 1997.239
Molina filed a With Leave of Court Explanation 240 in compliance with the September 10, 1997
Resolution. She explained that the cause of action in the reconstitution case was different from the cause
of action in the quieting of title case:241

3. The Reconstitution case decided by the Hon. Judge Velasco which was reversed by this Honorable
Court merely speaks on the existence of Molinas titles which reconstitution case is a special proceeding
and does not touch on the issue of the validity of the respective claim of ownership of Molina and
TMBC.242
Molina also pleads lack of malice in filing the cases. 243
In addition, TMBCs claim that it derived its ownership from Ortigas is negated by a certification from
the Quezon City Register of Deeds. TCT No. 77652 is under the name of Chua Sick Luan while TCT No.
77653 is under the names of Raselle V. Javier, Rodel V. Javier, Regina V. Javier, and Rubespierre V.
Javier.244
Judge Bacalla also filed his explanation.245 According to him, he was aware of this courts ruling in G.R.
Nos. 109645 and 112564. In fact, in Civil Case No. Q-93-15920 entitled Manila Banking Corporation v.
Dolores V. Molina, he granted TMBCs Motion to Strike Sham and Dilatory Pleadings in the Order dated
August 12, 1997.246Also, Civil Case No. Q-97-29856 was no longer pending since he granted Molinas
Motion to Withdraw in the Order dated August 11, 1997.247
Molina subsequently filed a "Supplemental Motion to Withdraw Complaint to have the same re-raffled to
other sala without necessarily dismissing the complaint (with entry of appearance)," but Judge Bacalla
stated that he did not act on the Motion since he considered Civil Case No. Q-97-29856 closed and
terminated.248
This court holds that Judge Bacallas explanation is satisfactory, while Molinas explanation is
unsatisfactory.
In the July 25, 1994 Decision in G.R. Nos. 109645 and 112564, this court clearly stated that:
WHEREFORE, the petition in G. R. No. 109645 is GRANTED; and that in G. R. No. 112564, DENIED
for lack of merit.
In G. R. No. 109645, the Decision dated September 23, 1992 of Respondent Judge Tirso Velasco,
Presiding Judge of Branch 88 of the Regional Trial Court of Quezon City, inLRC Case No. Q-5404, as
well as his Orders dated April 3, 1992, October 14, 1992, and February 10, 1993, are NULLIFIED AND
SET ASIDE; the titles of Dolores Molina upheld and reconstituted by said decision and orders namely,
Transfer Certificates of Title Numbered 124088 and RT-58287 and those derived therefrom and
subsequently issued namely, Transfer Certificates of Title Numbered 83163, 83164, 83165, 83166 and
83167 are all Declared NULL AND VOID and are hereby CANCELLED; said LRC Case No. Q-5404
of the Regional Trial Court of Quezon City is DISMISSED; and the temporary restraining order of this
Court of May 12, 1993 is MADE PERMANENT.
In G. R. No. 112564, the Orders of respondent Presiding Judge of Branch 105 of the Regional Trial Court
of Quezon City in Case No. Q-93-15920 dated September 17, 1993 and November 25, 1993 are
AFFIRMED; and said Judge is DIRECTED to proceed to dispose of said Case No. Q-93-15920 with all
deliberate dispatch conformably with this decision.
Dolores Molina and her counsel, Atty. Eufracio T. Layag, and Dr. Jose Teodorico V. Molina, are
ORDERED to SHOW CAUSE, within ten (10) days from notice of this judgment, why they should not be
pronounced liable, and correspondingly dealt with, for violation of the rule against forum-shopping.
SO ORDERED.249

That Molina actually filed an action for quieting of title, in clear violation of this courts ruling in G.R.
Nos. 109645 and 112564, constitutes deliberate forum shopping.
Forum shopping is defined as:
[w]hen a party repetitively avails of several judicial remedies in different courts, simultaneously or
successively, all substantially founded on the same transactions and the same essential facts and
circumstances, and all raising substantially the same issues either pending in or already resolved
adversely by some other court.250
Forum shopping consists of the following elements:
(a) identity of parties, or at least such parties as represent the same interests in both actions; (b)
identity of rights asserted and relief prayed for, the relief being founded on the same facts; and
(c) the identity of the two preceding particulars, such that any judgment rendered in the other
action will, regardless of which party is successful, amount to res judicata in the action under
consideration.251
All the elements of forum shopping are present in this case. The parties in G.R. No. 112564 and this case
are the same: Molina and TMBC.
For the second element, the test in determining whether the causes of action are the same: ascertain[s]
whether the same evidence will sustain both actions, or whether there is an identity in the facts essential
to the maintenance of the two actions. If the same facts or evidence would sustain both, the two actions
are considered the same, and a judgment in the first case is a bar to the subsequent action. 252
In this case, Molina asserts that the reconstitution case she previously filed was a special proceeding and
did not touch upon the issue of ownership. On the other hand, Civil Case No. Q-97-29856, an action for
quieting of title, involved the issue of ownership.253
Molinas arguments do not hold. These two cases involved relitigating her claim of ownership over the
properties covered by the nullified TCT No. 124088.
Further, the ruling in G.R. Nos.109645 and 112564 is res judicata on this case.
The elements of res judicata are:
(a) the former judgment must be final;
(b) it must have been rendered by a court having jurisdiction over the subject matter and the
parties;
(c) it must be a judgment on the merits; and
(d) there must be between the first and the second actions
(i) identity of parties,

(ii) identity of subject matter, and


(iii) identity of cause of action.254
These requisites are fulfilled. The former judgment, Ortigas & Company Limited Partnership v.
Velasco,255 is final and executory. This court had jurisdiction over the former case, and the judgment was
on the merits. Further, although the causes of action may appear to be different, the end result would be
the same: to determine the validity of Molinas claim of ownership over the properties covered by the
nullified TCT No. 124088.
This court also takes notice that Molina was previously found guilty of contempt of court and was
finedP1,000.00.256
This court held that:
[w]hat has been stated also suffices to dispose of Molinas theory that her second motion for
reconsideration, filed on February 27, 1995, was not covered by the Resolution of March 1, 1995 in
which this Court reiterated the denial with finality of her motions for reconsideration and, in addition,
ordered that "no further pleadings, motions or papers shall be filed x x x except only as regards the issues
directly involved in the Motion for Reconsideration (Re: Dismissal of Respondent Judge)"; and since
Manila bank had manifested that it was no longer filing an opposition thereto, said second motion for
reconsideration remains pending and unopposed. To repeat, the second motion for reconsideration, having
been filed without express leave, was nothing but a scrap of paper, mere surplusage, incapable of
producing any legal effects whatsoever.
....
Apart from the original directive in its Resolution of March 1, 1995, the Court twice reiterated the
admonition that no further pleadings, motions or papers should be filed in these cases, except only as
regards issues directly involved in the Motion for Reconsideration (Re: Dismissal of Respondent Judge).
This it did in its Resolutions dated July 24 and October 25, 1995, respectively.
Evidently, an order of this character is directed to parties who obstinately refuse to accept the Courts
final verdict and who, despite such verdict and in defiance of established procedural rules, mulishly
persist in still arguing the merits of their cause. They continue to take up the time of the Court needlessly,
by filing unauthorized, forbidden, even worthless pleadings, motions and papers, serving no real purpose
other than to delay termination of the case.
Evidently, too, the directive against the filing of any further pleadings, motions or papers is one that
exacts observance by all parties concerned, such that wil[l]ful and unjustifiable disregard or disobedience
thereof constitutes constructive contempt under Section 3 (b), Rule 71 of the Rules of Court. The record
shows just such wilful disobedience or resistance which is not satisfactorily explained in Molinas
"Comment/Answer" dated October 11, 1995, submitted on requirement by the Court.
....
Molina has had more than her day in court. She was accorded more than ample opportunity to present the
merits of her case.1wphi1 Her every argument was heard and considered. The Court cannot countenance
defiance of its authority on repetitious assertions of the meritoriousness of a partys cause, no matter how
sincerely or genuinely entertained. There has been a final determination of the issues in these cases and

petitioner has been repeatedly directed to abide thereby. Her deliberate violation of the orders of the Court
are unjustified and inexcusable. The refusal of petitioner Molina to concede defeat, manifested by her
unceasing attempts to prolong the final disposition of these cases, obstructs the administration of justice
and, therefore, constitutes contempt of Court.
WHEREFORE, Dolores V. Molina is found GUILTY of contempt of court for willful disregard and
disobedience of the Resolutions of the Court, and a FINE OF ONE THOUSAND PESOS (P1,000.00) is
hereby imposed on her, payable within five (5) days from receipt of this Resolution, with the warning that
any subsequent disregard and disobedience of this Courts orders will be dealt with more severely.
Let this Resolution be published in the authorized Court reports for the information and guidance of the
bench and the bar respecting the nature and effect of denials of motions for reconsideration of judgments
and final orders, the propriety of second motions for reconsideration, and the prohibition against the filing
of further pleadings, motions or other papers.
IT IS SO ORDERED.257 (Emphasis in the original)
Regarding TMBC and Reyes prayer that Atty. Cesar Turiano also be held in contempt, this court notes
that he was not included in the Show Cause Order in the Resolution dated September 10, 1997. 258 Further,
it appears that he withdrew his appearance as counsel prior to the issuance of the Show Cause Order.
Thus, this court shall refrain from making any pronouncements with regard to Atty. Cesar Turiano.
WHEREFORE, premises considered, the Petition for Review on Certiorari, docketed as G.R. No. 128422,
is DENIED for lack of merit.
In G.R. No. 128911, this court resolves to:
G.R. Nos. 109645, 112564, 128422, 128911
(1) DECLARE Dolores V. Molina GUILTY of contempt of court due to her willful and deliberate
violation of the rule against forum shopping, and for willful and deliberate disobedience of the
lawful orders of this court, and impose a fine of P10,000.00, payable within five (5) days from
receipt of this Decision;
(2) The temporary restraining order dated September 10, 1997 1s made PERMANENT; and
(3) Treble costs259 are imposed against Dolores V. Molina.
SO ORDERED.

9. G.R. No. 212496


NESTOR BRACERO, Petitioner,
vs.
RODULFO ARCELO and THE HEIRS OF VICTORIANO MONISIT, namely: LOURDES
MENCHAVEZ, ROGELIO RUELO, and MARTINIANAAPOR, Respondents.

DECISION
LEONEN, J.:
Nestor Bracero filed this Petition1 for Review assailing the Court of Appeals' (a) August 28, 2013
Decision2affirming in toto the Regional Trial Court Order3 denying his Urgent Motion to Vacate Order for
the Issuance of the Writ of Execution Against Defendants Spouses Nestor and Lilia Bracero and to
Furnish Copy of the Decision to their Counsel 4 (Urgent Motion to Vacate the Writ of Execution) and (b)
April 14, 2014 Resolution5 denying the motion for its reconsideration.
Nestor Bracero prays that this court nullify the assailed Court of Appeals Decision and Resolution, as well
as the Regional Trial Courts February 11, 2010 Order; compel the trial court to furnish his counsel with a
copy of its Decision so he may appeal this Decision within the 15-day period from counsels receipt;
prohibit the execution of the Regional Trial Court Decision; and reprimand or admonish the Regional
Trial Courts Clerk of Court for failing to send his counsel a copy of the Decision. 6
The heirs of Victoriano Monisit filed a Complaint 7 for Quieting of Titles/Ownership, Recovery of
Possession with Damages against Rodulfo Arcelo and Nestor Bracero over a 48,632-square-meter parcel
of land located in Lubo, Sogod, Cebu.8
The Complaint stated that Victoriano Monisit owned the 48,632- square-meter land. 9 The heirs of
Victoriano Monisit inherited this property identified as Lot No. 4327 upon his death and declared it under
their names for tax purposes in 2002.10
During Victoriano Monisits lifetime, 5,000 square meters of the land was mortgaged to Rodulfo Arcelos
grandmother, Damiana Mendoza. Damiana Mendozas death was followed by her sons death, and
Rodulfo Arcelo inherited the right over the mortgaged portion of the property.11
Sometime in 1982, Nestor Bracero, claiming to be Rodulfo Arcelos tenant, cultivated this 5,000-squaremeter mortgaged portion of the property.12
Sometime in 1993, Victoriano Monisit sued Nestor Bracero for the recovery of the property he cultivated
for his failure to share the products. 13 Nestor Bracero countered that the land he cultivated belonged to
Rodulfo Arcelo.14Both complaint and counterclaim were dismissed.15
Victoriano Monisit died single on August 3, 1995, and his legal heirs extra-judicially partitioned his
properties. His heirs Lourdes Menchavez, Rogelio Ruelo, and Martiniana Apor inherited Lot No. 4327 as
their share and immediately took possession.16
Meanwhile, Nestor Bracero expanded his occupation of the mortgaged portion of the property to the
entire 48,632 square meters. He consequently drove out Victoriano Monisits tenant worker Salvacion
Montecillo and his family.17 The heirs of Victoriano Monisit brought the matter to the Barangay Captain
"but no settlement was reached." 18 Thus, they filed their Complaint for Quieting of Title/ Ownership,
Recovery of Possession with Damages on January 8, 2004.19
Rodulfo Arcelo filed an Answer20 denying that Nestor Bracero was his tenant. 21 He claimed he was only
impleaded as respondent to help the heirs oust Nestor Bracero from the property. 22 Rodulfo Arcelo did not
claim ownership23of the 5,000-square-meter portion.24

Nestor Bracero filed a Motion to Dismiss arguing prematurity, res judicata, and lack of jurisdiction.25
The trial court denied Nestor Braceros Motion to Dismiss and also denied reconsideration. 26 The Court of
Appeals dismissed his Petition for Certiorari and/or Prohibition and also denied reconsideration. 27
Meanwhile, trial proceeded. On motion by the heirs of Victoriano Monisit, the Regional Trial Courts
November 18, 2004 Order declared Nestor Bracero in default for failure to file an answer. 28
On April 16, 2009, the trial court ruled in favor of the heirs of Victoriano Monisit. 29 On May 4, 2009, the
trial court served Nestor Bracero with a copy of its Decision. 30
The period to appeal lapsed. The heirs of Victoriano Monisit filed a motion for execution and furnished
the counsels of Nestor Bracero and Rodulfo Arcelo with copies. The trial court issued the Writ of
Execution on October 7, 2009 without opposition.31
Nestor Bracero received the Notice to Vacate on Execution 32 dated January 8, 2010.33 On the same day,
his counsel Atty. Danilo Pilapil filed the Urgent Motion to Vacate the Writ of Execution on the ground
that counsel was not furnished a copy of the Regional Trial Court Decision. 34 The heirs of Victoriano
Monisit filed their Comment.35
The Regional Trial Court, in its February 11, 2010 Order, denied the Urgent Motion to Vacate the Writ of
Execution.36
The Court of Appeals, in its August 28, 2013 Decision, affirmed in toto the Regional Trial Court
Order.37 It also denied reconsideration.38
Hence, petitioner Nestor Bracero filed this Petition.
Petitioners counsel alleges that even if the motion for execution indicated that he was furnished a copy,
he never received such copy. Respondent heirs did not present a post office certification to prove they
furnished counsel with a copy.39
Assuming petitioners counsel received a copy of this motion, he still could not have filed an opposition
since petitioner was declared in default and had lost standing to file any motion. He also could not have
appealed the Regional Trial Court Decision since he was not furnished with a copy.40
Petitioners counsel raises that the Regional Trial Courts Clerk of Court departed from usual procedure
by sending a copy of the Decision directly to petitioner. He explains that his client is a poor farmer who
lives in the remote mountain barangay of Lubo with no telephone connection, and these circumstances
made it easy to defeat his clients right to appeal. 41
Lastly, he argues that even if he received a copy of the motion for execution, "to require undersigned
counsel to verify the existence of the decision with the Regional Trial Court is to unfairly burden the
undersigned counsel and to unduly exonerate the clerk of court who was remiss in his duty in sending a
copy of the Decision to the undersigned counsel." 42 He explains that the court in Danao is 30 kilometers
away from his office in Mandaue.43
In their Comment,44 respondent heirs argue that petitioner has no legal claim on the property. 45 Petitioner
did not file an answer to the Complaint or a motion to set aside the Order declaring him in default. 46

Respondent heirs contend that petitioner no doubt received the Regional Trial Court Decision on May 4,
2009.47Petitioner insists, however, that his counsel was not furnished a copy, and clients receipt was not
equivalent to counsels receipt.48
Respondent heirs submit that Barangay Lubo is along the national highway from Sogod, has electricity,
and is "accessible to all kinds of transportation and communications." 49 Thus, petitioners counsels claim
that petitioner is a poor farmer who is barely literate and lives in the remote barangay of Lubo lacks
merit.50 Respondent heirs submit that petitioner hired a private counsel who had been legally assisting him
since 1985.51 Also, "petitioner could not be considered so nave not to be able to comprehend the
importance of a decision to his case for purposes of informing his counsel immediately upon receipt
thereof in the same manner that he informed his counsel on the same day, January 8, 2010 when he was
served by the Sheriff the Writ of Execution of the decision." 52
Respondent heirs contend that "[petitioners] counsel did not categorically say that he was not informed
by his client of the decision on the date of receipt on May 4, 2009." 53 Respondent heirs quote Santiago v.
Guadiz, Jr.54 in that "petitioners cannot invoke due process on the basis of feigned ignorance as lack of
formal notice cannot prevail against the fact of actual notice." 55
Petitioners counsel was also served a copy of the motion for execution on September 11, 2009, with
notice to submit the motion for court approval on September 15, 2009. Thus, petitioners counsel had
actual notice of the Decision, yet he did not file an opposition. 56 Respondent heirs argue that petitioner is
now in estoppel to assail the Regional Trial Court Order dated February 11, 2010. 57
Lastly, respondent heirs add that petitioners argument of lost standing in court lacks merit. The trial court
acted on his Urgent Motion to Vacate the Writ of Execution when it directed plaintiffs to comment on this
motion, and they did.58
For his part, respondent Rodulfo Arcelo filed the Manifestation 59 dated September 10, 2014 waiving his
right to file a Comment to the Petition.
This court finds no reversible error by the Court of Appeals in affirming the Regional Trial Court Order
dated February 11, 2010 denying petitioners Urgent Motion to Vacate the Writ of Execution.
The Court of Appeals found that petitioners counsel was furnished a copy of the motion for
execution.60Respondent heirs also alleged in their Comment to the Motion for Reconsideration 61 before
the Court of Appeals that:
[c]ontrary to the allegations that counsel for the movant-petitioner did not received [sic] [a] copy of the
Motion for Execution and that no certification from the post office was presented to this Honorable Court,
in the comments filed by private respondents dated July 11, 2011 to the petition (p.4, par.2) a copy of the
Motion for Execution was served on counsel for petitioner on September 11, 2009 with notice to submit
said Motion for the consideration of the Honorable Court on September 15, 2009 at 9:00 in the morning.
A certification to this effect was issued by Mandaue City Central postal office dated January 29, 2010
certifying that registry letter No. 971 addressed to Atty. Danilo Pilapil of Maguikay, Mandaue City was
actually delivered and received by Vergie Pilapil on September 11, 2009. Said certification was attached
to Annex "B" as Annex "A" thereof in the Comments to the Petition of herein private respondents dated
July 11, 2011.
This was not refuted then by movant-petitioner.62

Thus, the issue to be resolved before this court is whether receipt of petitioners counsel of a copy of the
motion for execution amounts to effective official notice of the Regional Trial Court Decision dated April
16, 2009 if he was not furnished a copy of the Decision.
Rule 13, Section 2 of the Rules of Court states in part that "[i]f any party has appeared by counsel, service
upon him shall be made upon his counsel or one of them, unless service upon the party himself is ordered
by the court."
Notice sent directly to client is not notice in law.63 Nevertheless, this rule admits of exceptions.
In Santiago, this court considered the filing of a motion for reconsideration as actual notice of the assailed
Decision:
The petitioners also maintain that they should have first been furnished with a copy of the final decision
before a writ of execution could be validly enforced against them. Formal service of the judgment is
indeed necessary as a rule but not, as it happens, in the case at bar. The reason is that the petitioners had
filed a motion for reconsideration of the decision of Judge Guadiz, which would indicate that they were
then already informed of such decision. The petitioners cannot now invoke due process on the basis of a
feigned ignorance as the lack of formal notice cannot prevail against the fact of actual notice. 64
In Ramos v. Spouses Lim,65 this court considered Atty. Estaniels receipt of Atty. Datukons Manifestation
informing the court that he had been formally substituted by Atty. Estaniel as counsel 66 as "an alerting
medium that a final ruling has been issued by the trial court[.]" 67 Atty. Datukon filed this Manifestation
after he was served a copy of the motion for execution. 68 Thus, this court held that Atty. Estaniels period
to appeal the trial court Decision commenced from his receipt of Atty. Datukons Manifestation on April
1, 1996, when he was put on effective official notice of the Decision:
The foregoing notwithstanding, the Court of Appeals ruled, and rightly so, that although Atty. Estaniel
was not officially sent a copy of the trial courts January 31, 1996 decision, he was however, put on
effective official notice thereof on April 1, 1996. He must, therefore, be made accountable for his failure
to seek, within the reglementary period counted from April 1, 1996, a review of said decision. . . .
....
The foregoing disposition and the premises holding it together commend themselves for concurrence. In
particular, we agree with the designation of April 1, 1996 as the controlling date when Atty. Estaniel is
considered to have effectively been put on notice of the trial courts decision and whence the period of
appeal should accordingly be reckoned.
There can be no quibbling that Atty. Estaniel received a copy of Atty. Datukons April 1, 1996
"MANIFESTATION" on the same date. Said manifestation carried all the basic earmarks of a proper
pleading or like papers filed in court. It carried the precise case number and title. The exact branch of the
handling RTC was particularly identified, the lawyers involved in the litigation were named and the
specific subject covered by the manifestation, i.e., motion for execution of the decision in Civil Case No.
580, was clearly discernible. Atty. Estaniel, therefore, cannot plausibly feign ignorance as to what
decision the motion for execution was about. . . .
....

In a very real sense, Atty. Datukons "MANIFESTATION" was an alerting medium that a final ruling has
been issued by the trial court, which should have thus prodded Atty. Estaniel and any prudent counsel
for that matter to act accordingly. Canon 18 of the Code of Professional Responsibility imposes upon a
lawyer the duty to "serve his client with competence and diligence." Subsumed in this imposition, which
commences from the time a lawyer is retained until his effective release from the case or final disposition
of the whole subject of the litigation, is the duty to safeguard his clients interest with the vigilance and
attention of a good father of the family. In line with his duty as defined in Canon 18 of the Code, it
behooved Atty. Estaniel, upon receipt of Atty. Datukons manifestation, to posthaste inquire from the trial
court or even from Atty. Datukon himself, about the status of petitioners case since the manifestation, a
copy of which he has thus been furnished, already made specific reference to a motion for execution filed
by the counsel of his clients adversary. Atty. Estaniel must thus be held to task for his failure to exercise
due diligence in the discharge of his duties as counsel. Petitioners, too, must suffer the consequence of
such failure because a client is bound by the conduct, negligence or mistakes of his counsel. 69 (Emphasis
in the original, citations omitted)
Petitioners counsel was furnished a copy of the motion for execution on September 11, 2009. 70 As
discussed by the Court of Appeals, this motion categorically states that the trial court rendered its
Decision on April 16, 2009, yet petitioners counsel filed no opposition. 71 At that time, he did not file any
motion asserting that he was not furnished a copy of the Decision. 72 It was only on January 8, 2010 when
his client informed him of the Writ of Execution did petitioners counsel file an Urgent Motion to Vacate
the Writ of Execution on the ground that he did not receive a copy of the Regional Trial Court
Decision.731wphi1
Jurisprudence reiterates that "[l]itigants who are represented by counsel should not expect that all they
need to do is sit back, relax and await the outcome of their cases." 74 This court has held that "equity aids
the vigilant, not those who slumber on their rights[,]" 75 and a party should "periodically keep in touch
with his counsel, check with the court, and inquire about the status of the case." 76
The explanation of petitioners counsel that his client only finished Grade 6 and lives in a remote
mountain barangay77 fails to convince. Petitioner immediately informed his counsel about the Notice to
Vacate on Execution on the same day he was served a copy. 78 This contradicts counsels explanation
implying difficulty in communicating with his client. This even raises the possibility that his client did
immediately inform him about the Regional Trial Court Decision upon receiving a copy.
Equally unconvincing and disappointing is the submission of petitioners counsel that even if he received
a copy of the motion for execution, "to require undersigned counsel to verify the existence of the decision
with the Regional Trial Court is to unfairly burden the undersigned counsel and to unduly exonerate the
clerk of court who was remiss in his duty in sending a copy of the Decision to the undersigned
counsel,"79 and that the court in Danao is 30 kilometers away from his office in Mandaue. 80 Counsels have
the duty to serve their clients with competence and diligence. 81 The distance from counsels office to the
court should not be used as an excuse by counsel from keeping himself updated with the status of the
cases he is handling.
This court has held that "[r]elief will not be granted to a party who seeks avoidance from the effects of the
judgment when the loss of the remedy at law was due to his own negligence. " 82 Petitioner, through his
counsel, did not file an answer to the Complaint. After the trial court declared petitioner in default for
failure to file an answer, his counsel did not file an opposition to or motion to lift the Order declaring him
in default. After petitioner's counsel was furnished a copy of the motion for execution, he did not
immediately file an opposition to the motion or raise the ground that he was not furnished a copy of the
Decision.

Petitioner Nestor Bracero, through his counsel Atty. Danilo Pilapil, had several opportunities to argue his
position before the courts but failed to take them. Petitioner should now be considered in estoppel from
assailing the Regional Trial Court Order dated February 11, 2010 denying petitioner's Urgent Motion to
Vacate the Writ of Execution, affirmed by the Court of Appeals. Also, "[t]o frustrate the winning party's
right through dilatory schemes is to frustrate all the efforts, time and expenditure of the courts, which
thereby increases the costs of litigation. "83
WHEREFORE, the Petition is DENIED.
SO ORDERED.

10. G.R. No. 157020

June 19, 2013

REINIER PACIFIC INTERNATIONAL SHIPPING, INC. and NEPTUNE SHIP MANAGEMENT


SVCS., PTE., LTD.,Petitioners,
vs.
CAPTAIN FRANCISCO B. GUEVARRA, Respondents.
DECISION
ABAD, J.:
This petition for review concerns the reckoning of the extended period for the tiling of a pleading that
ends on a Saturday, Sunday, or legal holiday. May the pleading be filed on the following working day?
The Facts and the Case
On May 3, 2000 petitioner Reinier Pacitic International Shipping, Inc. (Reinier Shipping), as agent of
Neptune Ship Management Services, PTE, Limited, hired respondent Captain Francisco B. Guevarra to
work as master of MY NOL SHEDAR. In the course of his work on board, Reinier Shipping sent him
Notice, relieving him of command of the vessel upon the insistence of its chatterers and owners. As a
result, Guevarra tiled a case for illegal dismissal and damages against Reinier Shipping and its principal.
Reinier Shipping countered that Guevarra had been negligent in the discharge of his duties as ship master.
One of the vessels hatch covers was damaged when it was discharging coal in Alabama, U.S.A. As a
result, the charterers were forced to shoulder the repair costs. Reinier had no choice but yield to the
demands of the chatterers for Guevarras replacement.
The Labor Arbiter found Guevarras dismissal illegal and ordered Reinier Shipping and its principal to
jointly and severally pay him the US$11,316.00 that represent his salaries for the remaining balance of the
contract plus attorneys fees of US$1,131.60. The Labor Arbiter found that Reinier Shipping denied
Guevarra his right to due process since it did not give him the opportunity to be heard. Guevarra claims
that the damage to the vessel had been caused by cargo-handling stevedores. Reinier Shipping did not
bother to ascertain his guilt; it merely invoked the demand of the chatterers and vessel owners that he be
replaced.

Reinier Shipping appealed to the National Labor Relations Commission (NLRC) but on February 22,
2002 the latter affirmed the Labor Arbiters decision.
The due date to file a petition for special civil action of certiorari before the Court of Appeals (CA) fell on
July 26, 2002, a Friday, but Reinier Shipping succeeded in obtaining an extension of 15 days, which
period counted from July 26 began to run on July 27, a Saturday, and fell due on August 10, a Saturday.
Reinier Shipping filed its petition on the following Monday, August 12, 2002.
On November 11, 2002 the CA dismissed the petition for having been filed out of time. 1 The CA ruled
that Reinier Shipping violated Supreme Courts A.M. 00-2-14-SC. Since August 10, 2002, the last day of
the extended period, fell on a Saturday, automatic deferment to the next working day did not apply and
Reinier Shipping should have filed its petition before August 10, a Saturday, considering that the court is
closed on Saturdays.
Issue Presented
Reinier Shipping filed the present petition raising the issue of whether or not the CA erred in dismissing
its petition for having been filed out of time.
The Courts Ruling
A.M. 00-2-14-SC clarifies the application of Section 1, Rule 22 of the Rules of Court when the last day
on which a pleading is due falls on a Saturday, Sunday, or legal holiday and the original period is
extended.2 The clarification states:
Whereas, the aforecited provision applies in the matter of filing of pleadings in courts when the due date
falls on a Saturday, Sunday, or legal holiday, in which case, the filing of the said pleading on the next
working day is deemed on time;
Whereas, the question has been raised if the period is extended ipso jure to the next working day
immediately following where the last day of the period is a Saturday, Sunday or legal holiday so that
when a motion for extension of time is filed, the period of extension is to be reckoned from the next
working day and not from the original expiration of the period;
NOW THEREFORE, the Court Resolves, for the guidance of the Bench and the Bar, to declare that
Section 1, Rule 22 speaks only of "the last day of the period" so that when a party seeks an extension and
the same is granted, the due date ceases to be the last day and hence, the provision no longer applies. Any
extension of time to file the required pleading should therefore be counted from the expiration of the
period regardless of the fact that said due date is a Saturday, Sunday or legal holiday. (Emphasis supplied)
Reinier Shippings last day for filing its petition fell on July 26, a Friday.1wphi1 It asked for a 15-day
extension before the period lapsed and this was granted. As it happened, 15 days from July 26 fell on
August 10, a Saturday. The CA held that Reinier Shipping should have filed its petition before August 10
(Saturday) or at the latest on August 9 (Friday) since, in an extended period, the fact that the extended due
date (August 10) falls on a Saturday is to be "disregarded." Reinier Shipping has no right to move the
extended due date to the next working day even if such due date fell on a Saturday. Since the courts were
closed on August 10 (Saturday), Reinier Shipping should have filed its petition, according to the CA, not
later than Friday, August 9.

But this is obviously wrong since it would mean compelling Reinier Shipping to file its petition one day
short of the 15-day extension granted it. That would unjustly deprive it of the full benefit of that
extension. Since its new due date fell on a Saturday when courts are close, however, the clear language of
Section 1, Rule 21, applies. This gives Reinier Shipping up to Monday (August 12), the next working day,
within which to file its petition.
The clarification provided in A.M. 00-2-14-SC actually covers a situation where the due date falls on a
Saturday, Sunday, or holiday. Precisely, what such clarification wanted to address is the erroneous claim
that "the period of extension" in such a case "is to be reckoned from the next working day and not from
the original expiration of the period." The correct rule, according to the clarification, is that "any
extension of time to file the required pleading should x x x be counted from the expiration of the period
regardless of the fact that said due date is a Saturday, Sunday or legal holiday."
For example, if a pleading is due on July 10 and this happens to be a Saturday, the time for filing it shall
not run, applying Section 1 of Rule 21, on July 1 0 (Saturday) nor on July 11 (Sunday) but will resume to
run on the next working day, which is July 12 (Monday). The pleading will then be due on the latter date.
If the period is extended by 10 days, such 10 days will be counted, not from July 12 (Monday) but from
the original due date, July 10 (Saturday) "regardless of the fact that said due date is a Saturday."
Consequently, the new due date will be 10 days from July 10 or precisely on July 20. As stated above, the
situation of Reinier Shipping is different.
WHEREFORE, the Court REVERSES and SETS ASIDE the Court of Appeals' Resolutions in CA-G.R.
SP 71861 dated November 11, 2002 and January 23, 2003 and DIRECTS it to give due course to
petitioner Reinier Pacific International Shipping, Inc.'s petition before it.
SO ORDERED.

11. G.R. No. 205249, October 15, 2014


SPOUSES BENEDICT AND SANDRA MANUEL, Petitioners, v. RAMON ONG, Respondent.
DECISION
LEONEN, J.:
This resolves a petition1 for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure,
praying that the June 28, 2012 decision2 and the December 19, 2012 resolution3 of the Court of Appeals in
CA-G.R.
SP
No.
119270
be
reversed
and
set
aside.
The assailed June 28, 2012 decision dismissed for lack of merit the petition for certiorari under Rule 65
of the 1997 Rules of Civil Procedure filed by petitioners Benedict and Sandra Manuel (the Spouses
Manuel) and sustained the November 30, 2010 and February 16, 2011 orders of the Regional Trial Court,
La Trinidad, Benguet.4 The assailed December 19, 2012 resolution of the Court of Appeals denied the
Spouses Manuel's motion for reconsideration. The Regional Trial Court's November 30, 2010 order
denied their motion to lift order of default, while its February 16, 2011 order denied their motion for
reconsideration.5
On December 21, 2009, respondent Ramon Ong (Ong) filed with the Regional Trial Court, La Trinidad,

Benguet, a complaint for accion reivindicatoria.6 Ong charged the Spouses Manuel with having
constructed improvements through force, intimidation, strategy, threats, and stealth on a property he
supposedly
owned.7 The
case
was
docketed
as
Civil
Case
No.
09-CV-2582. 8
On January 19, 2010, Ong filed an "amended complaint." 9 On February 3, 2010, summons was issued
directed
to
the
Spouses
Manuel.10
On April 23, 2010, Ong filed with the Regional Trial Court a motion to declare the Spouses Manuel in
default.11 Per the sheriffs return on summons, on February 12, 2010, Sheriff Joselito Sales, along with
Ong's counsel, Atty. Christopher Donaal, and a certain Federico Laureano, attempted to personally serve
summons on the Spouses Manuel at their address in Lower Bacong, Loacan, Itogon, Benguet. 12 The
Spouses Manuel, however, requested that service be made at another time considering that petitioner
Sandra Manuel's mother was then critically ill. 13 The sheriffs return further indicates that on March 16,
2010, another attempt at personal service was made. After Sheriff Joselito Sales had personally explained
to petitioner Sandra Manuel the content of the summons and the complaint, the latter refused to sign and
receive the summons and the complaint. Sheriff Joselito Sales was thus prompted to merely tender the
summons and complaint to petitioner Sandra Manuel and to advise her to file their answer within fifteen
(15) days.14 As the Spouses Manuel failed to file their answer within this period, Ong asked that they be
declared
in
default.15
On June 28, 2010, the Regional Trial Court issued an order granting Ong's motion to declare the Spouses
Manuel in default. Following this, Ong moved for the ex parte presentation of evidence, which the
Regional
Trial
Court
granted.16
On September 13, 2010, the Spouses Manuel filed a motion to lift the order of default. They alleged that it
is the siblings of petitioner Sandra Manuel who resided in Lower Bacong, Itogon, Benguet, while they
resided in Ambiong, La Trinidad, Benguet. Thus, summons could not have been properly served on them
in the former address. They surmised that Ong and his companions mistook petitioner Sandra Manuel's
siblings as the defendants in Civil Case No. 09-CV-2582. They further claimed that they only
subsequently received via registered mail copies of (1) a compliance and manifestation filed by Ong and
(2) the Regional Trial Court's order scheduling the ex parte presentation of evidence. Attached to the
Spouses
Manuel's
motion
to
lift
order
of
default
was
their
answer.17
In its order dated November 30, 2010, the Regional Trial Court denied the Spouses Manuel's motion to
lift order of default. It noted that, first, their motion was not sworn to, as required by the 1997 Rules of
Civil Procedure, and, second, they did not show that their failure to timely file an answer "was due to
fraud, accident, mistake or excusable negligence." 18 In its order dated February 16, 2011, the Regional
Trial
Court
denied
the
Spouses
Manuel's
motion
for
reconsideration. 19
Aggrieved, the Spouses Manuel filed a petition for certiorari before the Court of Appeals. 20
As mentioned, the assailed June 28, 2012 decision of the Court of Appeals dismissed the Spouses
Manuel's Rule 65 petition for lack of merit. The assailed December 19, 2012 resolution of the Court of
Appeals
denied
their
motion
for
reconsideration.
Hence,

this

petition.

For resolution is the sole issue of whether the Spouses Manuel may be granted relief from the Regional
Trial
Court's
June
28,
2010
order
of
default.
Jurisdiction

over

the

persons

of
acquired

the

Spouses

Manuel

As a preliminary matter, we rule on whether jurisdiction over the persons of the Spouses Manuel, as
defendants in Civil Case No. 09-CV-2582, was validly acquired. This preliminary matter is determinative
of whether the fifteen-day period within which they must file their answer started to run, thereby
facilitating the context in which they could have validly been declared to be in default.
We hold that jurisdiction over the persons of both defendants in Civil Case No. 09-CV-2582 the
Spouses Benedict and Sandra Manuel was validly acquired. This is so because personal service of
summons, via tender to petitioner Sandra Manuel, was made by Sheriff Joselito Sales on March 16, 2010.
Rule 14, Section 6 of the 1997 Rules of Civil Procedure provides:chanRoblesvirtualLawlibrary
SEC. 6. Service in person on defendant. Whenever practicable, the summons shall be served by
handing a copy thereof to the defendant in person, or, if he refuses to receive and sign for it, by tendering
it to him.
Tendering summons is itself a means of personal service as it is contained in Rule 14, Section 6. Personal
service, as provided by Rule 14, Section 6, is distinguished from its alternative : substituted service
as provided by Rule 14, Section 7:chanRoblesvirtualLawlibrary
SEC. 7. Substituted service. If, for justifiable causes, the defendant cannot be served within a
reasonable time as provided in the preceding section, service may be effected (a) by leaving copies of the
summons at the defendant's residence with some person of suitable age and discretion then residing
therein, or (b) by leaving the copies at defendant's office or regular place of business with some
competent person in charge thereof. (Emphasis supplied)
In this case, the sheriffs return on summons indicated that Sheriff Joselito Sales endeavored to personally
hand the summons and a copy of the complaint to the Spouses Manuel on two (2) separate occasions. He
relented from doing so on the first occasion in deference to the medical condition of petitioner Sandra
Manuel's mother. On the second occasion, he was constrained to tender the summons and copy of the
complaint
as
petitioner
Sandra
Manuel
refused
to
accept
them.
The Spouses Manuel did not deny the occurrence of the events narrated in the sheriffs return but claimed
that no valid service of summons was made. They claimed that they did not reside in Lower Bacong,
Loacan, Itogon, Benguet, where the service of summons, was made. From this, they surmised that the
"Sandra Manuel" who was specifically identified in the sheriffs return was someone other than petitioner
Sandra
Manuel.
The Spouses Manuel cannot capitalize on the supposed variance of address. Personal service of summons
has nothing to do with the location where summons is served. A defendant's address is inconsequential.
Rule 14, Section 6 of the 1997 Rules of Civil Procedure is clear in what it requires: personally handing
the summons to the defendant (albeit tender is sufficient should the defendant refuse to receive and sign).
What is determinative of the validity of personal service is, therefore, the person of the defendant, not the
locus
of
service.
In any case, the Court of Appeals is correct in pointing out that the Spouses Manuel's self-serving
assertion must crumble in the face of the clear declarations in the sheriffs return. 21 Pursuant to Rule 131,
Section 3(m) of the Revised Rules on Evidence, 22 the acts of Sheriff Joselito Sales and the events relating
to the attempt to personally hand the summons and a copy of the complaint to the Spouses Manuel, as

detailed in the sheriffs return, enjoy the presumption of regularity.23 Moreover, Sheriff Joselito Sales must
be presumed to have taken ordinary care and diligence in carrying out his duty to make service upon the
proper
person(s)
and
not
upon
an
impostor.24
A sheriffs return, if complete on its face, must be accorded the presumption of regularity and, hence,
taken to be an accurate and exhaustive recital of the circumstances relating to the steps undertaken by a
sheriff. In this case, the Spouses Manuel have harped on their (self-serving) claim of maintaining
residence elsewhere but failed to even allege that there was anything irregular about the sheriffs return or
that
it
was
otherwise
incomplete.
Having alleged irregularities in the service of summons, it was incumbent upon the Spouses Manuel to
adduce proof of their claims. All they mustered was their self-serving allegation of an alternative address.
If at all, this claim of maintaining residence elsewhere should not even be lent an iota of credibility
considering that, as respondent Ramon Ong pointed out, the barangay clearances, which the Spouses
Manuel themselves attached to one of their pleadings (as proof of their identities), actually indicated that
they were residents of Bacong Loacan, Itogon, Benguet. 25cralawred Their lie is, thus, revealed by their
own
pleading.
As the Spouses Manuel not only failed in discharging the burden of proving their allegation but even
succeeded in contradicting themselves, Sheriff Joselito Sales' recollection of events must be taken to be
true. Thus, valid personal service of summons, via tender to petitioner Sandra Manuel, was made. From
this, it follows that jurisdiction over the persons of petitioners Benedict and Sandra Manuel was acquired
by the Regional Trial Court, La Trinidad, Benguet, in Civil Case No. 09-CV-2582.
The
entitled
order

Spouses
to

Manuel
relief
of

are
from

not
the
default

As valid service of summons was made on them, it was incumbent upon the Spouses Manuel, pursuant to
Rule 11, Section 1 of the 1997 Rules of Civil Procedure, 26 to file their answer within fifteen (15) days
from March 16, 2011. Having failed to do so, they were rightly declared to be in default.
Rule 9, Section 3 of the 1997 Rules of Civil Procedure provides for when a party to an action may be
declared in default. Further, Rule 9, Section 3(b) governs the grant of relief from orders of
default:chanRoblesvirtualLawlibrary
SEC. 3. Default; declaration of. If the defending party fails to answer within the time allowed therefor,
the court shall, upon motion of the claiming party with notice to the defending party, and proof of such
failure, declare the defending party in default. Thereupon, the court shall proceed to render judgment
granting the claimant such relief as his pleading may warrant, unless the court in its discretion requires
the claimant to submit evidence. Such reception of evidence may be delegated to the clerk of court.
(a) Effect of order of default. A party in default shall be entitled to notice of subsequent proceedings
but
not
to
take
part
in
the
trial.
(b) Relief from, order of default. A party declared in default may at any time after notice thereof and
before judgment file a motion under oath to set aside the order of default upon proper showing that his
failure to answer was due to fraud, accident, mistake or excusable negligence and that he has a
meritorious defense. In such case, the order of default may be set aside on such terms and conditions as
the judge may impose in the interest of justice. (Emphasis supplied)

Pursuant to Rule 9, Section 3, a court may proceed to render judgment as the pleading may warrant
should a defendant fail to timely file his or her answer. However, a court may decline from immediately
rendering judgment and instead require the plaintiff to present evidence. Per Rule 9, Section 3(a), a party
declared to be in default shall nevertheless be "entitled to notice of subsequent proceedings," although he
or
she
may
no
longer
take
part
in
the
trial.
As explained in Spouses Delos Santos v. Carpio,27 "there are three requirements which must be complied
with by the claiming party before the court may declare the defending party in
default:chanRoblesvirtualLawlibrary
(1) the claiming party must file a motion asking the court to declare the defending party in default;
(2) the defending party must be notified of the motion to declare him in default;
(3) the claiming party must prove that the defending party has failed to answer within the period
provided by the Rule."28
All

these

requisites

were

complied

with

by

respondent

Ramon

Ong.

It is not disputed that Ong filed a motion to declare the Spouses Manuel in default. It is also not disputed
that the latter filed their answer after the fifteen-day period, counted from March 16, 2010, had lapsed.
The Spouses Manuel only filed their answer along with their motion to lift order of default on September
13,
2010.
It is similarly settled that the Spouses Manuel were notified that a motion to declare them in default had
been filed. They acknowledged in the present petition for certiorari that on June 23, 2010, Ong filed a
compliance to the Regional Trial Court's April 30, 2010 order that required the submission of the registry
return card evidencing the mailing to the Spouses Manuel of a copy of the motion to have them declared
in
default.
Not only were the requisites for declaring a party in default satisfied, the Spouses Manuel's motion to lift
order
of
default
was
also
shown
to
be
procedurally
infirm.
Consistent with Rule 9, Section 3(b) of the 1997 Rules of Civil Procedure, "the remedy against an order
of default is a motion to set it aside on the ground of fraud, accident, mistake, or excusable
negligence."[29 However, it is not only the motion to lift order of default which a defendant must file. As
this court emphasized in Agravante v. Patriarca,30 to the motion to lift order, of default must "be
appended an affidavit showing the invoked ground, and another, denominated affidavit of merit, setting
forth
facts
constituting
the
party's
meritorious
defense
or
defenses." 31
The heed for an affidavit of merit is consistent with Rule 8, Section 5 of the 1997 Rules of Civil
Procedure,32 which requires that "[i]n all averments of fraud or mistake, the circumstances constituting
fraud
or
mistake
must
be
stated
with
particularity."
In Montinola, Jr. v. Republic Planters Bank,33 this court noted that the three (3) requisites that must be
satisfied by a motion in order "to warrant the setting aside of an order of default for failure to file answer,
are:chanRoblesvirtualLawlibrary
(1) it must be made by motion under oath by one that has knowledge of the facts;
(2) it must be shown that the failure to file answer was due to fraud, accident, mistake or excusable
negligence; and
(3) there must be a proper showing of the existence of a meritorious defense." [34(Citations omitted)

Consistent with Agravante, it is through an affidavit of merit that a defendant seeking relief from an order
of default shows that "the failure to file answer was due to fraud, accident, mistake or excusable
negligence."35
In this case, the Court of Appeals noted that the Spouses Manuel's motion to lift order of default was not
made under oath. We add that this motion was not accompanied by an affidavit of merit specifying the
facts which would show that their non-filing of an answer within fifteen (15) days from March 16, 2010
was
due
to
fraud,
accident,
mistake,
or
excusable
negligence.
Failing both in making their motion under oath and in attaching an affidavit of merits, the Spouses
Manuel's motion to lift order of default must be deemed pro-forma. It is not even worthy of consideration.
Certainly, there is jurisprudence to the effect that an affidavit of merit is not necessary "where a motion to
lift an order of default is grounded on the very root of the proceedings [such as] where the court has not
acquired jurisdiction over the defendants." 36 Similarly, there is jurisprudence stating that "when a motion
to lift an order of default contains the reasons for the failure to answer as well as the facts constituting the
prospective defense of the defendant and it is sworn to by said defendant, neither a formal verification nor
a
separate
affidavit
of
merit
is
necessary." 37
However, in this case, the Spouses Manuel failed not only in attaching an affidavit of merit but also in
making their motion under oath. They are, therefore, left without any alternative on which to rest. Their
motion
is
utterly
ineffectual.
Apart from their failure to make their motion to lift order of default under oath and to attach to it an
affidavit of merit, the Court of Appeals also noted that the Spouses Manuel set their motion to lift order of
default for hearing on the same date that they filed it (i.e., September 13, 2010). Thus, they also violated
Rule 15, Section 4 of the 1997 Rules of Civil Procedure, 38 which requires that service of a motion upon an
adverse party must be made in such a manner that ensures receipt by the latter "at least three (3) days
before
the
date
of
hearing.
.
.
."
We do not lose sight of the admonitions that have been made in jurisprudence that, as a rule, courts should
be liberal in setting aside orders of default and that default judgments are frowned upon. 39Indeed, apart
from a motion to lift order of default, other remedies are available to a defaulted defendant even after
judgment has been rendered. Thus, if judgment had already been rendered but has not yet become final
and executory, an appeal asserting that the judgment was contrary to the law or to the evidence, 40 or a
motion for new trial under Rule 37, may be filed. 41 In the case of the latter, the same affidavits as are
required in a motion to lift order of default must be attached. 42 If judgment has become final and
executory, a defaulted defendant may file a petition for relief from judgment under Rule 38. 43 Still, should
the defaulted defendant fail to file a petition for relief, a petition for annulment of judgment on the ground
of
lack
of
jurisdiction
or
extrinsic
fraud
remains
available. 44
However, jurisprudence, too, has qualified the intent that animates this liberality. As this court stated
in Acance v. Court of Appeals:45
The issuance of the orders of default should be the exception rather than the rule, to beallowed only in
clear cases of obstinate refusal by the defendant to comply with the orders of the trial court. 46 (Emphasis
supplied)
Moreover, this liberality must be tempered with a recognition that, in the first place, it is. a defendant who
is
at
fault
in
failing
to
timely
file
an
answer.

Rule 9, Section 3(b) gives an exclusive list of only four (4) grounds that allow for relief from orders of
default. Moreover, these grounds extrinsic fraud, accident, mistake, and excusable negligence relate
to factors that are extraneous to a defendant, that is, grounds that show that a defendant was prevented, by
reasons
beyond
his
or
her
influence,
from
timely
filing
an
answer.
The recognition that it is the defendant who is at fault and must suffer the consequences of his or her own
failure is analogous to the dismissal of an action due to the fault of a plaintiff, as provided by Rule 17,
Section 3 of the 1997 Rules of Civil Procedure. Rule 17, Section 3 reads:chanRoblesvirtualLawlibrary
SEC. 3. Dismissal due to fault of plaintiff. If for no justifiable cause, the plaintiff fails to appear on
the date of the presentation of his evidence in chief on the complaint, or to prosecute his action for an
unreasonable length of time, or to comply with these Rules or any order of the court, the complaint may
be dismissed upon motion of the defendant or upon the court's own motion, without prejudice to the right
of the defendant to prosecute his counterclaim in the same or in a separate action. This dismissal shall
have the effect of an adjudication upon the merits, unless otherwise declared by the court.
Rule 17, Section 3 is qualified by the phrase "for no justifiable cause." Thus, in cases covered by Rule 17,
Section 3, should the failure to comply with court processes be the result of the plaintiffs own fault, it is
but logical that a plaintiff must suffer the consequences of his own heedlessness. Rule 9, Section 3 on
default

applies
the
same
logic
to
a
culpable
defendant.
In this case, the Spouses Manuel only have themselves to blame in not properly receiving the summons
and copy of the complaint served on them. It has been shown that their claim that service of summons
was made on persons other than them deserves no credence. Quite the contrary, it is quite apparent that
Sheriff Joselito Sales not only explained the contents of the summons and the complaint but actually told
them that they must file their answer in fifteen (15) days. It was petitioner Sandra Manuel who refused to
sign and receive the summons and the complaint. This is evidently an act of obstinate refusal to submit to
and to comply with court processes. Thus, the r Spouses Manuel are not deserving of any leniency.
WHEREFORE, the petition for review on certiorari is DENIED. The June 28, 2012 decision and the
December 19, 2012 resolution of the Court of Appeals in CA-G.R. SP No. 119270 are AFFIRMED.
SO ORDERED.

ch

12. G.R. No. 183795

November 12, 2014

PRUDENTIAL BANK (now Bank of the Philippine Islands) as the duly appointed
ADMINISTRATOR OF THE ESTATE OF JULIANA DIEZ VDA. DE GABRIEL,Petitioner,
vs.
AMADOR A. MAGDAMIT, JR., on his behalf and as substituted heir (son) of AMADOR
MAGDAMIT, SR., and AMELIA F. MAGDAMIT, as substituted heir (Widow) of AMADOR
MAGDAMIT, SR., Respondents.
DECISION

PEREZ, J.:
Before us is a Petition for Review under Rule 45 of the 1997 Rules of Civil Procedure assailing the
Decision1 and Resolution2 of the Court of Appeals (CA) dated 3 September 2007 and 18 July 2008,
respectively, in CA-G.R. SP No. 93368, affirming the Decision of the Regional Trial Court (RTC), 3 dated
18 January 2006, in Civil Case No. 05-112499, which reversed the ruling of the Metropolitan Trial Court
(MeTC) on the ground that the MeTC did not acquire jurisdiction over the person of the respondents due
to invalid service of summons.
The facts as culled from the records are as follows:
This is a case of unlawful detainer filed by petitioner Prudential Bank, now Bank of the Philippine Islands
(petitioner), in its capacity as administrator of the Estate of Juliana Diez Vda. De Gabriel (Estate). It is
based on the ground of respondents failure to pay rentals and refusal to vacate the subject property, which
is allegedly part of the Estate located at 1164 Interior, Julio Nakpil St., Paco, Manila, covered by Transfer
Certificate of Title No. 118317 of the Registry of Deeds of Manila.
In the Original Complaint4 filed before the MeTC, Branch 15 of Manila, petitioner impleaded Amador A.
Magdamit, Jr. (Magdamit, Jr.), as respondent.
Instead of filing an Answer, Magdamit, Jr. filed a Notice of Special Appearance with Motion to Dismiss.
Among others, Magdamit, Jr. argued that (1) petitioner was not duly authorized through a Board
Resolution to institute the complaint, (2) he was not the occupant of the subject property but instead, his
parents, as grantees or awardees of Juliana Diez Vda. De Gabriel, and (3) the MeTC did not acquire
jurisdiction over his person because the summons was served at his former address at 1164 Interior Julio
Nakpil St., Paco, Manila. On 30 April 2003, petitioner filed a Motion to Strike Out this pleading on the
ground that it is prohibited. Petitioner then filed an Amended Complaint, this time, impleading both
Magdamit, Jr. and Amador Magdamit, Sr. (Magdamit, Sr.).
In an Order5 dated 26 June 2003, the MeTC granted petitioners Motion to Strike Out Magdamit, Jr.s
Notice of Special Appearance with Motion to Dismiss and ordered Magdamit,Jr. to file an Answer. The
Order reads:
After due consideration of the matter and arguments stated therein, the Court resolves to DENY the
defendants Motion to dismiss, it appearing that the summons issued in this case was served, albeit
substituted nevertheless valid. It is of no consequence that defendant is also presently residing in Bacoor,
Cavite. Suffice it to say that summons was served upon him (although substituted) on the leased premises
which plaintiff is justified in assuming that he is also residing there at. Moreover, it appears that he knew
the person on whom summons was served (together with a copy of the complaint) as a certain Dara
Cabug only that he claims that the latter is not of "suitable age and discretion" to receive the summons.
Simply put, the requirement of due process has been satisfied. Be that as it may, it would not unduly
prejudice the rights of the plaintiff if defendant is given additional period of five (5) days from notice
hereof within which to file his Answer.6
In response to the Amended Complaint, both Magdamit, Jr. and Magdamit, Sr. filed their Answers
separately. On 9 July 2003, Magdamit, Jr., filed his Answerwith Counterclaim 7 (In a Special Appearance
Capacity). On the other hand, Magdamit, Sr. filed his Answer 8 on 13 November 2003. Magdamit, Sr.
argued that the MeTC did not acquire jurisdiction over his person because the summons was not properly
served as the summons was received by Madel Magalona, who is not authorized to receive summons
being a mere housemaid of Magdamit, Sr.s daughter, Arleen Marie Cabug. Also, Magdamit, Sr. argued

that in the 1960s, the Spouses Francisco and Juliana Gabriel assigned the subject property to him free of
charge as a reward and in recompense for the long, faithful, and devoted services he rendered to them.
Since then, he had been continuously exercising acts of ownership over the subject property, including
payment of real estate taxes. Magdamit, Sr. further argued that amendment of the Complaint in order to
implead him is improper. According to Magdamit, Sr., amendment cannot be allowed so as to confer
jurisdiction upon a court that never acquired it in the first place, and the ejectment case cannot be
instituted against Magdamit, Jr. because an action to recover possession cannot be maintained against one
who is not in actual or legal possession thereof. 9
Pending litigation of the case, Magdamit, Jr., who was made an original defendant in the MeTC,
substituted his deceased father, Magdamit, Sr.
Ruling of the MeTC
After trial, the MeTC ruled in favor of petitioner. According to the MeTC, "[t]he fact that the person who
received the summons was a 13-year old girl does not make the service of summons invalid. That she was
of sufficient age and discretion is shown by the fact that she was intelligent enough to immediately bring
to the attention of defendant Atty. Amador Magdamit, Jr. the summons and copy of the complaint she
received."10 The MeTC went on further, stating that Magdamit Sr.s claim of ownership is beyond its
jurisdiction because the onlyissue in an ejectment case is "possession de facto". The dispositive portion of
the MeTC Decision dated 21 March 2005 reads:
WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against defendants Amador
Magdamit, Sr.:
1. ordering said defendant and all persons claiming right under him to vacate the subject three (3)
lots covered by TCT No. 118317 of the Registry of Deeds of Manila, located at and also known
as 1164 Interior J. Nakpil St., Paco, Manila and to peacefully surrender possession thereof to
plaintiff;
2. ordering said defendant to pay plaintiff the sum of P180,000.00 representing rentals or
reasonable compensation for the use of the property due from August 2003 up to February 2005
and P10,000.00 per month thereafter until defendants fully vacate the subject property;
3. ordering said defendant to pay plaintiff the sum of P20,000.00 as attorneys fees; and
4. to pay the costs. The complaint is dismissed as against defendant Amador Magdamit, Jr. and
the latters counterclaim is likewise dismissed.
SO ORDERED.11
Ruling of the RTC
On appeal, the RTC set aside the decision of the MeTC and dismissed the case for lack of jurisdiction
over the person of the respondents.12 According to the RTC, amending the original complaint to implead
Magdamit, Sr. to cure a defect in the complaint and introduce a non-existing cause of action, which
petitioner did not possess at the outset, and to confer

jurisdiction upon the court that never acquired jurisdiction in the first place renders the complaint
dismissible. The RTC further stated that because the Return did not clearly indicate the impossibility of
service of summons within a reasonable time upon the respondents, the process servers resort to
substituted service of summons was unjustified. The decision of the RTC reads:
WHEREFORE, this Court finds merit on the appeal and consequently, the decision on appeal is hereby
set aside, and this case is accordingly dismissed for lack of jurisdiction over the persons of the
defendants.13
Ruling of the CA
Aggrieved, petitioner filed an appeal via a petition for review under Rule 42 of the Rules of Court
beforethe CA. The petitioner argued that the RTC erred in ruling thatthe MeTC did not acquire
jurisdiction over the person of the respondents due to improper service of summons considering that the
respondents participated in the proceedings in the MeTC by filing a Notice of Appearance with Motion to
Dismiss, Answer with Counterclaim, entering into pre-trial, submitting position papers, and presenting
evidence, which militate against the alleged improper service of summons. On 3 September 2007, the CA
denied the petition and affirmed the decision of the RTC.
According to the CA, the Return, with only a general statement and without specifying the details of the
attendant circumstances or of the efforts exerted to serve the summons, will notsuffice for purposes of
complying with the rules of substituted service of summons. The CA also rejected petitioners contention
that respondents voluntary submission to the jurisdiction of the court cured any defect in the substituted
service of summons when as early as during the infancy of the proceedings in the MeTC, Magdamit, Jr.
seasonably raised the ground of lack of jurisdiction over his person by filing a Notice of Appearance with
Motion to Dismiss, which the respondents incessantly reiterated in their pleadings even when the case
was elevated to the RTC, then to the CA. The dispositive portion of the decision of the CA reads:
Having found that the MeTC did notacquire jurisdiction over the persons (sic) of respondents, it would be
futile on Our part to still pass upon the other errors assigned by petitioner. WHEREFORE, premises
considered, the petition is DENIED. Costs against petitioner.
SO ORDERED.14
The motion for reconsideration was likewise denied for lack of merit.
Hence, this Petition, raising the following assignment of errors:
"I. Whether or not the Court of Appeals erred in dismissing the Petition for Review of the
Decision of the Regional Trial Court of Manila dated January 18,2006; and disposing of only the
issue of lack of jurisdiction over the person of respondents for alleged improper service of
summons;
II. Whether or not the Court of Appeals erred in not ruling on the material and substantial issues
in the case; and
III. Whether or not the Court of Appeals erred in affirming the decision of the Metropolitan Trial
Court of Manila dismissing of the Complaint against Magdamit, Jr., based on the ground that he
was no longer residing at the subject property prior to, and at the time of the filing of the
ejectment complaint."15

The pivotal issue is whether or not the MeTC acquired jurisdiction over the person of the respondents.
The petition is bereft of merit.
Both respondents, Magdamit, Jr. and Magdamit, Sr. argued that the MeTC did not acquire jurisdiction
overtheir persons due to defective or improper service of summons. Magdamit,Sr. argued that the MeTC
could not have acquired jurisdiction over his person due to improper/defective service of summons
because it was served upon an incompetent person, the housemaid of his daughter. Magdamit Sr. also
argued that the MeTC did not acquire jurisdiction over him because he was impleaded asa respondent
only after the inherently invalid original complaint was amended. According to Magdamit, Sr., the
original complaint was inherently invalid because it was instituted against Magdamit, Jr., against whom
an action to recover possession cannot be maintained, because he is not in actual or legal possession
thereof. Thus, the amendment of the inherently invalid original complaint for the purpose of curing a
defect to confer jurisdiction was invalid as the MeTC never acquired jurisdiction in the first
place.16 Pertinent to the position of Magdamit, Sr. is the Sheriffs Return dated 24 October 2003 on the
service of summons on Magdamit, Jr. which reads:
1. That, on October 22, 2003, he proceeded to the place of defendant Amador Magdamit, Sr. at
No. 1164 Int. Julio Nakpil St., Paco, Manila, for the purpose of serving the Summons issued in
the above-entitled case, but no service was effected because he was not around;
2. That, on October 23, 2003, undersigned repaired (sic) anew to the said place but for the second
time, he failed to reached (sic) said defendant. Thus, he elected (sic) substituted service by
serving the said summons together with the copy of the complaint and annexes attached thereat
(sic) to Ms. Madel Magalona, a person of sufficient age and living thereat who however refused
to acknowledge(d) receipt thereof;
3. That, undersigned explained to (this)Ms. Magalona the contents of the said process in a
language she fully understood and adviced (sic) her to gave (sic) the same to her employer as
soon as he arrives.17
On the other hand, Magdamit, Jr. argued that the MeTC did not acquire jurisdiction over his person
because the summons was not served at his residence but at the house of Magdamit, Sr., and on a person
not authorized to receive summons. The Sheriffs Return dated 25 March 2003 reads:
This is to certify, that on the 24th day of March, 2003, xxx served copy of the Summons together with the
copy of the Complaint and its attachment, upon defendant/s Amador A. Magdamit, Jr. at 1164 Int., J.
Nakpil St., Paco, Manila, by tendering the copy to Dara Cabug (grand daughter), a person of sufficient
age, discretion and residing therein who however refused to acknowledged (sic) receipt thereof.
That on several occasions despite deligent (sic) efforts exerted to serve the said processes personally to
defendant/s herein the same proved futile. Thus, substituted service was effected in accordance with the
provision of Sec. 8, Rule 14, Rules of Court.
In view of the foregoing, the original summons is now respectfully returned to the Honorable Court,
DULY SERVED.18
Fundamental is the rule that jurisdiction over a defendant in a civil case is acquired either through service
of summons or through voluntary appearance in court and submission to its authority. In the absence or

when the service of summons upon the person of the defendant isdefective, the court acquires no
jurisdiction over his person, and a judgment rendered against him is null and void. 19
In actionsin personamsuch as ejectment, the court acquires jurisdiction over the person of the defendant
through personal or substituted service of summons. However, because substituted service is in
derogation of the usual method of service and personal service of summons is preferred over substituted
service, parties do not have unbridled right to resort to substituted service of summons. 20 Before
substituted service of summons is resorted to, the parties must: (a) indicate the impossibility of personal
service of summons within a reasonable time; (b) specify the efforts exerted to locate the defendant; and
(c) state that the summons was served upon a person of sufficient age and discretion who is residing in the
address, or who is in charge of the office or regular place of business of the defendant. 21
In Manotoc v. Court of Appeals, 22 we have succinctly discussed a valid resort to substituted service of
summons:
We can break down this section into the following requirements to effect a valid substituted service:
(1) Impossibility of Prompt Personal Service
The party relying on substituted service or the sheriff must show that defendant cannot be served
promptly or there is impossibility of prompt service. Section 8, Rule 14 provides that the plaintiff or the
sheriff is given a "reasonable time" to serve the summons to the defendant in person, but no specific time
frame is mentioned. "Reasonable time" is defined as "so much time as is necessary under the
circumstances for a reasonably prudent and diligent man to do, conveniently, what the contract or duty
requires that should be done, having a regard for the rights and possibility of loss, if any, to the other
party." Under the Rules, the service of summons has no set period.
However, when the court, clerk of court,or the plaintiff asks the sheriff to make the return of the summons
and the latter submits the return of summons, then the validity of the summons lapses. The plaintiff may
then ask for an alias summons if the service of summons has failed. What then is a reasonable time for the
sheriff to effect a personal service in order to demonstrate impossibility of prompt service? To the
plaintiff, "reasonable time" means no more than seven (7) days since an expeditious processing of a
complaint is what a plaintiff wants. To the sheriff, "reasonable time" means 15 to 30 days because at the
end of the month, it is a practice for the branch clerk of court to require the sheriff to submit a return of
the summons assigned to the sheriff for service. The Sheriffs Return provides data to the Clerk of Court,
which the clerk uses in the Monthly Report of Cases to be submitted to the Office of the Court
Administrator within the first ten (10) days of the succeeding month. Thus, one month from the issuance
of summons can be considered "reasonable time" with regard to personal service on the defendant.
Sheriffs are asked to discharge their duties on the service of summons with due care, utmost diligence,
and reasonable promptness and speed so as not to prejudice the expeditious dispensation of justice. Thus,
they are enjoined to try their best efforts to accomplish personal service on defendant. On the other hand,
since the defendant is expected to try to avoid and evade service of summons, the sheriff must be
resourceful, persevering, canny, and diligent in serving the process on the defendant. For substituted
service of summons to be available, there must be several attempts by the sheriff to personally serve the
summons within a reasonable period [of one month] which eventually resulted in failure to prove
impossibility of prompt service. "Several attempts" means at least three (3) tries, preferably on at least
two different dates. In addition, the sheriff must cite why such efforts were unsuccessful. It is only then
that impossibility of service can be confirmed or accepted.

(2) Specific Details in the Return


The sheriff must describe in the Return of Summons the facts and circumstances surrounding the
attempted personal service. The efforts made to find the defendant and the reasons behind the failure must
be clearly narrated in detail in the Return.The date and time of the attempts on personal service, the
inquiries made to locate the defendant, the name/s of the occupants of the alleged residence or house of
defendant and all other acts done, though futile, to serve the summons on defendant must be specified in
the Return to justify substituted service. The form on Sheriffs Return of Summons on Substituted Service
prescribed in the Handbook for Sheriffs published by the Philippine Judicial Academy requires a narration
of the efforts made to find the defendant personally and the fact of failure. Supreme Court Administrative
Circular No. 5 dated November 9, 1989 requires that "impossibility of prompt service should be shown by
stating the efforts made to find the defendant personallyand the failure of such efforts," which should be
made in the proof of service.
(3) A Person of Suitable Age and Discretion
If the substituted service will be effected at defendants house or residence, it should be left with a person
of "suitable age and discretion then residing therein." A person of suitable age and discretion is one who
has attained the age of full legal capacity (18 years old) and is considered to have enough discernment to
understand the importance of a summons. "Discretion" isdefined as "the ability to make decisions which
represent a responsible choice and for which an understanding of what is lawful, right or wise may be
presupposed". Thus, to be of sufficient discretion, suchperson must know how to read and understand
English to comprehend the import of the summons, and fully realize the need to deliver the summonsand
complaint to the defendant at the earliest possible time for the person to take appropriate action. Thus, the
person must have the "relation of confidence" to the defendant, ensuring that the latter would receive orat
least be notified of the receipt of the summons. The sheriff must therefore determine if the person found
in the alleged dwelling or residence of defendant is of legal age, what the recipients relationship with the
defendant is, and whether said person comprehends the significance of the receipt of the summons and his
duty to immediately deliver it to the defendant or at least notify the defendant of said receipt of summons.
These matters must be clearly and specifically described in the Return of Summons.
(4) A Competent Person in Charge
If the substituted service will be done at defendants office or regular place of business, then it should be
served on a competent person in charge of the place. Thus, the person on whom the substituted service
will be made must be the one managing the office or business of defendant, such as the president or
manager; and such individual must have sufficient knowledge tounderstand the obligation of the
defendant in the summons, its importance, and the prejudicial effects arising from inaction on the
summons. Again, these details must be contained in the Return. 23 (Emphasis and underscoring supplied;
citations omitted)
The service of summons on Magdamit, Sr. failed to comply with the rule laid down in Manotoc. The
resort to substituted service after just two (2) attempts to personally serve the summons on Magdamit, Sr.,
is premature under our pronouncement that:
What then is a reasonable time for the sheriff to effect a personal service in order to demonstrate
impossibility of prompt service? To the plaintiff, "reasonable time"means no more than seven (7) days
since an expeditious processing of a complaint is what a plaintiff wants. To the sheriff, "reasonable time"
means 15 to 30 days because at the end of the month, it is a practice for the branch clerk of court to
require the sheriff to submit a return of the summons assigned to the sheriff for service. The Sheriffs

Return provides data to the Clerk of Court, which the clerk uses in the Monthly Report of Cases to be
submitted to the Office of the Court Administrator within the first ten (10) days of the succeeding month.
Thus, one month from the issuance of summons can be considered "reasonable time" with regard to
personal service on the defendant.24
Then too, the proof of service failed to specify the details of the attendant circumstances. The Return
merely expressed a general statement that because the Sheriff failed to reachMagdamit, Sr., he elected
substituted service of summons. The Return failed to state the impossibility to serve summons within a
reasonable time. And the further defect in the service was that the summons was served on a person not of
sufficient discretion, an incompetent person, Madel Magalona, a housemaid of Magdamit Sr.s daughter,
Arleen Marie Cabug.
Similar to the case of Magdamit, Sr., the service of summons on Magdamit, Jr. also failed to complywith
the rules laid down in Manotoc. The summons was served at 1163 Int., J. Nakpil St., Paco, Manila,
Magdamit, Jr.s former residence when at the time, Magdamit, Jr. was residing at 0369 Jupiter St.,
Progressive Village 20 and 21, Molino I, Bacoor, Cavite. In Keister v. Navarro, 25 we have defined
"dwelling house" or "residence" to refer to a place where the person named in the summons is living at
the time when the service is made, even though he may be temporarily out of the country at the time to
the time of service. Therefore, it is not sufficient for the Sheriff "to leave the copy at defendant's former
dwelling house, residence, or place ofabode, as the case may be, after his removal therefrom". 26
Worse, the Return did not make mention of any attempt to serve the summons at the actual residence of
Magdamit, Jr. The Return merely expressed a general statement that the sheriff exerted efforts to serve the
summons and that the same was futile, "[t]hat on several occasions despite deligent (sic) efforts exerted to
serve the said processes personally to defendant/s herein the same proved futile," without any statement
on the impossibility of service of summons within a reasonable time. Further, the summons was served on
a certain DaraCabug, a person not of suitable age and discretion, who is unauthorized to receive the same.
Notably, the requirement additionally is that
Thus, to be of sufficient discretion, such person must know how to read and understand English to
comprehend the import of the summons, and fully realize the need to deliver the summons and complaint
to the defendant at the earliest possible timefor the person to take appropriate action. Thus, the person
must have the "relation of confidence" to the defendant, ensuring that the latter would receive or at least
be notified of the receipt of the summons. The sheriff must therefore determine if the person found in the
alleged dwelling or residence of defendant is of legal age, what the recipients relationship with the
defendant is, and whether said person comprehends the significance of the receipt of the summons and his
duty to immediately deliver it tothe defendant or at least notify the defendant of said receipt of summons.
These matters must be clearly and specifically described in the Return of Summons. 27
The readily acceptable conclusion inthis case is that the process server at once resorted to substituted
service of summons without exerting enough effort to personally serve summons on respondents. In Sps.
Jose v. Sps. Boyon,28 we discussed the effect of failure to specify the details of the effort exerted by the
process serverto personally serve summons upon the defendants:
The Return of Summons shows no effort was actually exerted and no positive step taken by either the
process server or petitioners to locate and serve the summons personally on respondents. At best, the
Return merely states the alleged whereabouts of respondents without indicating that such information was
verified from a person who had knowledge thereof. Certainly, without specifying the details of the
attendant circumstances or of the efforts exerted to serve the summons, a general statement that such

efforts were made will not suffice for purposes of complying withthe rules of substituted service of
summons.29 (Emphasis and underscoring supplied)
In the case at bar, the Returns contained mere general statements that efforts at personal service were
made. Not having specified the details of the attendant circumstances or of the efforts exerted to serve the
summons,30there was a failure to comply strictly with all the requirements of substituted service, and as a
result the service of summons is rendered ineffective. 31
Filing an Answer does not amount to voluntary appearance
The petitioner asserted that assuming arguendo that the service of summons was defective, respondents
filing of their respective Answers and participation in the proceedings in the MeTC, such as attending the
pre-trial and presenting evidence, amount to voluntary appearance which vested the MeTC jurisdiction
over their persons.
Indeed, despite lack of valid service of summons, the court can still acquire jurisdiction over the person of
the defendant by virtue of the latters voluntary appearance. Section 20, Rule14 of the Rules of Court
clearly states:
Sec. 20. Voluntary appearance. The defendants voluntary appearance in the action shall be equivalent
to service of summons. The inclusion in a motion to dismiss of other grounds aside from lack of
jurisdiction over the person shall not be deemed a voluntary appearance.
However, such is not the case atbar. Contrary to petitioners contention, respondents are not deemed to
have voluntarily submitted to the courts jurisdiction by virtue of filing an Answer or other appropriate
responsive pleadings and by participating in the case.
The mandate under the Rules on Summary Proceedings that govern ejectment cases, is expeditious
administration of justice such that the filing of an Answer is mandatory. To give effect to the mandatory
character and speedy disposition of cases, the defendant is required to file an answer within ten (10) days
from service of summons, otherwise, the court, motu proprio, or upon motion of the plaintiff, shall render
judgment as may be warranted by the facts alleged in the complaint, limited to the relief prayed for by the
petitioner.32 Through this rule, the parties are precluded from resorting to dilatory maneuvers.
Compliantly, respondents filed their respective Answers. In the MeTC, at first, Magdamit, Jr. filed a
Notice of Special Appearance with Motion to Dismiss, where he seasonably raised the issue of lack of
jurisdiction, which the MeTC later ordered to be stricken out. In lieu thereof, Magdamit, Jr. filed an
Answer with Counterclaim (In a Special Appearance Capacity). Again, Magdamit, Jr. reiterated the lack
of jurisdiction over his person and the subject matter. On the other hand, Magdamit, Sr. filed an Answer
with an allegation by special defense that the original complaint
should be dismissed outright because the MeTC did not acquire jurisdiction over his person and the
subject matter.1wphi1 In sum, both respondents filed their Answers via special appearance.
In Philippine Commercial International Bank v. Spouses Wilson Dy Hong Pi and Lolita Dy, 33 we held that
filing of an answer in a special appearance cannot be construed as voluntary appearance or submission to
the courts jurisdiction:
Preliminarily, jurisdiction over the defendant in a civil case is acquired either by the coercive power of
legal processes exerted over his person, or his voluntary appearance in court. As a general proposition,

one who seeks an affirmative relief is deemed to have submitted to the jurisdiction of the court. It is by
reason of this rule that we have had occasion to declare that the filing of motions to admit answer, for
additional time to file answer, for reconsideration of a default judgment, and to lift order of default with
motion for reconsideration, is considered voluntary submission to the courts jurisdiction. This, however,
is tempered by the concept of conditional appearance, such that a party who makes a special appearance
to challenge, among others, the courts jurisdiction over his person cannot be considered to have
submitted to its authority.
Prescinding from the foregoing, it is thus clear that:
(1) Special appearance operates as an exception to the general rule on voluntary appearance;
(2) Accordingly, objections to the jurisdiction of the court over the person of the defendantmust
be explicitly made, i.e., set forth in an unequivocal manner; and
(3) Failure to do so constitutes voluntary submission to the jurisdiction of the court, especially in
instanceswhere a pleading or motion seeking affirmative relief is filed and submitted to the court
for resolution.34 (Emphasis supplied and underscoring supplied)
Parallel to our ruling in Philippine Commercial International Bank, the respondents act of filing their
respective Answers with express reservation should not be construed as a waiver of the lack of
jurisdiction of the MeTC over their person because of non-service/defective/improper service of
summons and for lack of jurisdiction over the subject matter. Hence, sans voluntary submission to the
courts jurisdiction, filing an answer in compliance with the rules on summary procedure in lieu of
obtaining an adverse summary judgment does not amount to voluntary submission. As we already held, a
party who makes a special appearance in court, challenging the jurisdiction of said court, is not deemed to
have submitted himself to the jurisdiction of the court. 35 It should not be construed as voluntary
submission to the jurisdiction of the court.
In view of the foregoing, the petition is DENIED. The Decision and
Resolution of the Court of Appeals in CA-G.R. SP No. 93368, which upheld the ruling of the Regional
Trial Court that the Metropolitan Trial Court in Civil Case No. 174798 did not acquire jurisdiction over
the person of the respondents due to invalid service of summons, are AFFIRMED.
SO ORDERED.

13. G.R. No. 194751, November 26, 2014


AURORA
N.
DE
CORPORATION, Respondent.
DECISION
LEONEN, J.:

PEDRO, Petitioner, v. ROMASAN

DEVELOPMENT

Regardless of the type of action whether it is in personam, in rem or quasi in rem the preferred
mode of service of summons is personal service. To avail themselves of substituted service, courts must
rely on a detailed enumeration of the sheriffs actions and a showing that the defendant cannot be served
despite diligent and reasonable efforts. The sheriffs return, which contains these details, is entitled to a
presumption of regularity, and on this basis, the court may allow substituted service. Should the sheriffs
return be wanting of these details, substituted service will be irregular if no other evidence of the efforts
to
serve
summons
was
presented.
Failure to serve summons will mean that the court failed to acquire jurisdiction over the person of the
defendant. However, the filing of a motion for new trial or reconsideration is tantamount to voluntary
appearance.
This Rule 45 petition seeks the review of the Court of Appeals July 7, 2010 decision in CA G.R. SP. No.
96471. The Court of Appeals denied petitioners action for annulment of the Regional Trial Court
decision,
which,
in
turn,
nullified
her
certificate
of
title.
This case originated from separate complaints for nullification of free patent and original certificates of
title, filed against several defendants. 1 One of the defendants is petitioner Aurora De Pedro (De Pedro). 2
The complaints were filed by respondent Romasan Development Corporation before the Regional Trial
Court
of
Antipolo
City
on
July
7,
1998. 3chanRoblesvirtualLawlibrary
Respondent Romasan Development Corporation alleged in its complaints that it was the owner and
possessor of a parcel of land in Antipolo City.4 The land was covered by Transfer Certificate of Title
(TCT)
No.
236044.5chanRoblesvirtualLawlibrary
Based on respondents narrative, its representative, Mr. Rodrigo Ko, discovered sometime in November
1996 that De Pedro put up fences on a portion of its Antipolo property. 6 Mr. Ko confronted De Pedro
regarding her acts, but she was able to show title and documents evidencing her
ownership.7chanRoblesvirtualLawlibrary
Mr. Ko informed respondent about the documents. 8 Upon checking with the Community Environment
and Natural Resources Office-Department of Environment and Natural Resources (CENRO-DENR), it
was discovered that the DENR issued free patents covering portions of respondents property to the
following:chanroblesvirtuallawlibrary
a. Defendant Nora Jocson, married to Carlito Jocson - OCT No. P-723, Free Patent No. 045802-91616;
b. Defendants Heirs of Marcelino Santos[,] represented by Cristino Santos - OCT No. P-727, Free
Patent No. 045802-91-919;
c. Defendant Aurora de Pedro married to Elpidio de Pedro - OCT No. 691, Free Patent No. 04580291-914;
d. Defendant Wilson Dadia - OCT No. P-722, Free Patent No. 045802-91-915; and
e. Defendant Prudencio Marana - OCT No. P-721, Free Patent N[o]. 045802-91-923. 9 (Emphasis
supplied)

Based on these free patents, the Register of Deeds issued titles covering portions of respondents
property.10 Original Certificate of Title (OCT) No. 691, Free Patent No. 045802-91-914 was signed by
the Provincial Environment and Natural Resources Office in favor of De Pedro on December 9,
1991.11chanRoblesvirtualLawlibrary
Respondent further alleged in its separate complaints that the government could not legally issue the free
patents because at the time of their issuance, the land was already released for disposition to private
individuals.12 OCT No. 438, from which respondents TCT No. 236044 originated, was already issued as
early
as
August
30,
1937.13chanRoblesvirtualLawlibrary
Respondent
also
prayed
for
the
damages.14chanRoblesvirtualLawlibrary

payment

of

attorneys

fees

and

exemplary

Attempts to personally serve summons on De Pedro failed. 15 The officers return, dated February 22,
1999 reads in part:chanroblesvirtuallawlibrary
OFFICERS RETURN
I HEREBY CERTIFY that on the 15 th and 18th day of February, 1999, I have served a copy of the
summons with complaint and annexes dated January 29, 1999 issued by Regional Trial Court, Fourth
Judicial Region, Branch 74, Antipolo City upon defendants in the above-entitled case on the following, to
wit;
1. AURORA N. DE PEDRO Unserved for the reason that according to the messenger of Post Office of
Pasig their [sic] is no person in the said given address. 16
Respondent
filed
a
motion
to
publication.17chanRoblesvirtualLawlibrary

serve

summons

and

the

complaint

by

On August 17, 1998, the Regional Trial Court granted the motion. 18 The summons and the complaint
were published in Peoples Balita on its April 24, May 1, and May 8, 1998
issues.19chanRoblesvirtualLawlibrary
On July 15, 1999, respondent moved to declare all defendants in its complaints, including De Pedro, in
default for failure to file their answers. 20 Respondent also moved to be allowed to present evidence ex
parte.21 The Regional Trial Court granted the motions on August 19, 1999. 22chanRoblesvirtualLawlibrary
On January 7, 2000, the Regional Trial Court issued an order declaring as nullity the titles and free
patents issued to all defendants in respondents complaint, including the free patent issued to De Pedro. 23
Thus:chanroblesvirtuallawlibrary
Accordingly the Court declares as a nullity the following titles and Free Patents issued to the Defendants.
a. Defendant Nora Jocson married to Carlito Jocson OCT No. P-723; Free Patent N[o]. 045802-91616;
b. Defendant Heirs of Marcelino Santos represented by Cristino Santos OCT N[o]. P-727; Free
Patent N[o]. 045802-91-919;

c. Defendant Aurora N. de Pedro married to Elpidio de Pedro OCT No. P-691; Free Patent No.
045802-91-914;
d. Defendant Wilson Dadia OCT No. P-722; Free Patent No. 045802-91-915;
e. Defendant Prudencio Marana OCT No. P-721; Free Patent N[o]. 045802-91-923.
There being clear bad faith on the part of the Private defendants in obtaining said Free Patents and titles in
their names covering the portions of the property of the plaintiff, said defendants are each ordered to pay
to the plaintiff the amount of P20,000.00 as attorneys fees, P3,000.00 as appearance fee and also
P50,000.00
as
moral
damages
with
costs
against
said
private
defendants.
Once the Decision becomes final and in order to give full force and effect to the Decision of the Court
nullifying the titles and patents issued to the defendants, the latter are directed to surrender the same
within a period of ten (10) days from the finality of said Decision to the Registry of Deeds of Marikina
City and failure on the part of the defendants to surrender the owners duplicate of the titles in their
possession, defendant Register of Deeds of Marikina City is authorized to cancel the same without the
presentation of said owners duplicate of titles in the possession of the defendants. 24 (Emphasis supplied)
In so ruling, the Regional Trial Court noted that none of the defendants, including De Pedro, filed an
answer to respondents complaints.25 The Regional Trial Court also noted the committee report admitting
CENROs irregularity in the issuance of the free patents to the defendants in the
case.26chanRoblesvirtualLawlibrary
The Regional Trial Court also found that the title and free patent issued to De Pedro were void. 27 As early
as August 30, 1937, or before the free patents were issued to the defendants in the case, OCT No. 438 was
already issued to the propertys original owner.28 Hence, the property was already segregated from the
mass of public domain that can be disposed by the government. 29chanRoblesvirtualLawlibrary
On March 30, 2000, De Pedro, through counsel, filed before the Regional Trial Court a motion for new
trial, alleging that the counsel received notice of the January 7, 2000 decision on March 16,
2000.30chanRoblesvirtualLawlibrary
De Pedro argued that the Regional Trial Court did not acquire jurisdiction over her person because of
improper and defective service of summons. Citing the officers return dated February 22, 1999, De
Pedro pointed out that summons was not personally served upon her for the reason that according to the
messenger of Post Office of Pasig their (sic) is no person in the said given
address.31chanRoblesvirtualLawlibrary
De Pedro also argued that the case should have been dismissed on the ground of litis pendentia. She
alleged that there was a pending civil case filed by her, involving the same property, when respondent
filed
the
complaints
against
her
and
several
others. 32chanRoblesvirtualLawlibrary
On September 30, 2002, the Regional Trial Court issued an order denying De Pedros motion for new
trial.33chanRoblesvirtualLawlibrary
The Regional Trial Court ruled that summons was validly served upon De Pedro through publication, in
accordance with the Rules of Court. 34 Moreover, counting from the date of the summons publication
beginning on March 2, 2000, the motion for new trial was filed beyond the 15-day period within which
the motion may be filed.35 Therefore, the Regional Trial Court decision had become final and

executory.36chanRoblesvirtualLawlibrary
The Regional Trial Court also ruled that the reckoning period for filing the motion for new trial cannot be
De Pedros counsels receipt of the decision. This is because at the time of the issuance of the courts
decision, which had already become final and executory, De Pedros counsel was yet to enter his
appearance
for
De
Pedro.37chanRoblesvirtualLawlibrary
De Pedro filed a petition for certiorari before the Court of Appeals, alleging that the Regional Trial Court
committed
grave
abuse
of
discretion
when
it
denied
her
motion
for
new
38
trial. chanRoblesvirtualLawlibrary
On March 30, 2006, the Court of Appeals dismissed the petition for certiorari for lack of merit, and
affirmed the denial of De Pedros motion for new trial. 39chanRoblesvirtualLawlibrary
The Court of Appeals noted De Pedros belated filing of her motion for new trial. The Court of Appeals
also noted De Pedros failure to allege any ground that would justify the grant of a motion for new trial
under Rule 37, Section 1 of the Revised Rules of Civil Procedure. 40chanRoblesvirtualLawlibrary
De Pedros motion for reconsideration was denied in the Court of Appeals resolution dated August 24,
2006.41chanRoblesvirtualLawlibrary
De Pedro elevated the case to this court, but this was likewise denied in the resolution dated October 4,
2006 for failure to pay the Special Allowance for the Judiciary and sheriffs
fees.42chanRoblesvirtualLawlibrary
On October 11, 2006, De Pedro filed before the Court of Appeals a petition for annulment of the January
7, 2000 judgment of the Regional Trial Court43 on grounds of lack of jurisdiction, litis pendentia, and for
having
been
dispossessed
of
her
property
without
due
process.
Citing Pantaleon v. Asuncion,44 De Pedro pointed out that [d]ue process of law requires personal service
to support a personal judgment, and, when the proceeding is strictly in personam brought to determine
the personal rights and obligations of the parties, personal service within the state or a voluntary
appearance in the case is essential to the acquisition of jurisdiction [so] as to constitute compliance with
the
constitutional
requirement
of
due
process.45chanRoblesvirtualLawlibrary
De Pedro also claimed to be the real owner of the property by virtue of OCT No. P-691. 46 She pointed out
that the same Regional Trial Court branch ordered the reconstitution of her title to the property in 1997. 47
The Regional Trial Court also issued a certificate of finality stating that an Entry of Judgment had
already been issued by the Court of Appeals dated January 16, 2006. 48chanRoblesvirtualLawlibrary
On July 7, 2010, the Court of Appeals promulgated its decision denying De Pedros petition for
annulment of judgment.49 The dispositive portion of the Court of Appeals decision
reads:chanroblesvirtuallawlibrary
WHEREFORE, this petition is hereby DENIED.50
The Court of Appeals ruled that since petitioner already availed herself of the remedy of new trial, and
raised the case before the Court of Appeals via petition for certiorari, she can no longer file a petition for
annulment
of
judgment.51chanRoblesvirtualLawlibrary
De Pedros motion for reconsideration was denied on December 3, 2010: 52chanRoblesvirtualLawlibrary

WHEREFORE, premises considered, the motion for reconsideration is DENIED for lack of merit.53
On January 13, 2011, De Pedro filed before this court a Rule 45 petition, seeking the reversal of the July
7, 2010 Court of Appeals decision and the December 3, 2010 Court of Appeals
resolution.54chanRoblesvirtualLawlibrary
The issues in this case are:
I.

Whether the trial court decision was void for failure of the trial court to acquire jurisdiction over
the person of petitioner Aurora N. De Pedro; and

II.

Whether filing a motion for new trial and petition for certiorari is a bar from filing a petition for
annulment of judgment.

Petitioner argues that respondents prayer for attorneys fees, appearance fees, exemplary damages, and
costs of suit sought to establish personal obligations upon petitioner in favor of respondent. 55 Hence, the
case filed by respondent before the Regional Trial Court was an action in personam, which required
personal service upon her for the courts acquisition of jurisdiction over her person. 56 In this case, the
Regional Trial Court allowed service of summons by publication instead of ordering that summons be
served by substituted service.57 Improper service of summons rendered the trial court decision null and
void.58 It means that the court could not acquire jurisdiction over the person of
petitioner.59chanRoblesvirtualLawlibrary
Petitioner also argues that respondents complaints were dismissible on the ground of litis
pendentia,pointing to the alleged pending case between the same parties and involving same subject
matter at the time when respondent filed its complaint before the Regional Trial Court in 1998. 60 The
alleged pending case was filed in 1997 by petitioner and her spouse against respondent, seeking
enforce[ment] of their rights as owners, and claim[ing] damages for the unlawful and illegal acts of
dispossession, terrorism and violence which they, their family and their close relatives were subjected to
by
[respondent].61chanRoblesvirtualLawlibrary
On her ownership of the property, petitioner argues that she was able to obtain OCT No. P-691 in 1991 in
strict and faithful compliance with all the requirements. 62 When the Register of Deeds lost the records
pertaining to the property, the Regional Trial Court ordered the reconstitution of the title on September
23, 1997.63 The same trial court issued the certificate of finality of the order on March 16,
2006.64chanRoblesvirtualLawlibrary
Moreover, petitioner refers to a counter-affidavit issued by a certain Jesus Pampellona, Deputy Public
Land Inspector of CENRO-Antipolo, in the preliminary investigation of a case before the Department of
Justice, docketed as I.S. No. 99-503 and entitled: Rodrigo Sy v. Maximo Pentino, et al. Petitioner
highlights Pampellonas statements that the free patent applicants for the property were found to be in
actual, public, adverse and continuous possession on the specific lots applied for by them with several
improvements like the house of Mrs. Aurora de Pedro and several fruit[-]bearing trees with an average
age of 20-25 years scattered within the twelve (12) hectares area applied for by the above named
applicants;65 Based on the affidavit, Pampellona was unaware, at the time, of any previous title issued
in favor of any person or entity covering the subject lots above mentioned as there was at that time, no
existing record, both in the CENRO, Antipolo, Rizal, or at the Land Management Bureau in Manila,
attesting to the issuance of previous titles on the subject lots. 66chanRoblesvirtualLawlibrary

Lastly, petitioner argues that the trial court decision was null and void, considering that petitioners title
was cancelled in contravention of Section 48 of Presidential Decree No. 1529, which prohibits collateral
attack
upon
certificates
of
title. 67chanRoblesvirtualLawlibrary
In its comment, respondent argues that the process server tried other forms of substituted service,
including
service
by
registered
mail. 68chanRoblesvirtualLawlibrary
Respondent also argues that petitioner was in evident malice and bad faith when she allegedly did not
disclose in her petition other actions taken by her after the Regional Trial Court had denied her motion for
new trial.69 Particularly, petitioner filed a petition for certiorari before the Court of Appeals, pertaining to
the trial courts denial of the motion for new trial. 70 When the petition for certiorari was denied, petitioner
also filed a petition for review before this court, which was also denied. 71 For these reasons, petitioners
petition for review before this court deserves outright dismissal. 72chanRoblesvirtualLawlibrary
I
The sheriffs return must show the details of the efforts exerted to personally serve summons upon
defendants or respondents, before substituted service or service by publication is availed
Courts may exercise their powers validly and with binding effect if they acquire jurisdiction over: (a) the
cause of action or the subject matter of the case; (b) the thing or the res; (c) the parties; and (d) the
remedy.
Jurisdiction over the subject matter refers to the power or authority of courts to hear and decide cases of a
general class.73 It is conferred by the Constitution or by law.74 It is not acquired through administrative
issuances or court orders. It is not acquired by agreement, stipulation, waiver, 75 or silence.76 Any decision
by a court, without a law vesting jurisdiction upon such court, is void.
Jurisdiction over the thing or res is the power of the court over an object or thing being litigated. The
court may acquire jurisdiction over the thing by actually or constructively seizing or placing it under the
courts
custody.77chanRoblesvirtualLawlibrary
Jurisdiction over the parties refers to the power of the court to make decisions that are binding on
persons. The courts acquire jurisdiction over complainants or petitioners as soon as they file their
complaints or petitions. Over the persons of defendants or respondents, courts acquire jurisdiction by a
valid service of summons or through their voluntary submission. 78 Generally, a person voluntarily
submits to the courts jurisdiction when he or she participates in the trial despite improper service of
summons.
Courts79 and litigants must be aware of the limits and the requirements for the acquisition of court
jurisdiction. Decisions or orders issued by courts outside their jurisdiction are void. Complaints or
petitions filed before the wrong court or without acquiring jurisdiction over the parties may be
dismissed.80chanRoblesvirtualLawlibrary
Petitioner argued that the trial court did not acquire jurisdiction over her person because she was not
properly served with summons. After the summons had returned unserved to petitioner because there
[was] no person in the said given address, 81 the trial court allowed the publication of the summons to
petitioner.
Jurisdiction over the parties is required regardless of the type of action whether the action is in
personam,
in
rem, or quasi
in
rem.

In actions in personam, the judgment is for or against a person directly.82 Jurisdiction over the parties is
required in actions in personam because they seek to impose personal responsibility or liability upon a
person.83chanRoblesvirtualLawlibrary
Courts need not acquire jurisdiction over parties on this basis in in rem and quasi in rem actions.
Actions in rem or quasi in rem are not directed against the person based on his or her personal
liability.84chanRoblesvirtualLawlibrary
Actions in rem are actions against the thing itself. They are binding upon the whole world.85 Quasi in
rem actions are actions involving the status of a property over which a party has interest. 86 Quasi in
rem actions are not binding upon the whole world. They affect only the interests of the particular
parties.87chanRoblesvirtualLawlibrary
However, to satisfy the requirements of due process, jurisdiction over the parties in in rem and quasi in
rem actions
is
required.
The phrase, against the thing, to describe in rem actions is a metaphor. It is not the thing that is the
party to an in rem action; only legal or natural persons may be parties even in in rem actions. Against
the thing means that resolution of the case affects interests of others whether direct or indirect. It also
assumes that the interests in the form of rights or duties attach to the thing which is the subject
matter of litigation. In actions in rem, our procedure assumes an active vinculum over those with interests
to
the
thing
subject
of
litigation.
Due process requires that those with interest to the thing in litigation be notified and given an opportunity
to defend those interests. Courts, as guardians of constitutional rights, cannot be expected to deny
persons their due process rights while at the same time be considered as acting within their jurisdiction.
Violation of due process rights is a jurisdictional defect. This court recognized this principle inAducayen
v. Flores.88 In the same case, this court further ruled that this jurisdictional defect is remedied by a
petition
for
certiorari.89chanRoblesvirtualLawlibrary
Similarly in Vda. de Cuaycong v. Vda. de Sengbengco,90 this court held that a decision that was issued in
violation of a persons due process rights suffers a fatal infirmity.91chanRoblesvirtualLawlibrary
The relation of due process to jurisdiction is recognized even in administrative cases wherein the standard
of evidence is relatively lower. Thus, in Montoya v. Varilla:92chanRoblesvirtualLawlibrary
The cardinal precept is that where there is a violation of basic constitutional rights, courts are ousted from
their jurisdiction. The violation of a partys right to due process raises a serious jurisdictional issue which
cannot be glossed over or disregarded at will. Where the denial of the fundamental right of due process is
apparent, a decision rendered in disregard of that right is void for lack of jurisdiction. 93
An action for annulment of certificate of title is quasi in rem. It is not an action against a person on the
basis of his personal liability, 94 but an action that subjects a persons interest over a property to a burden.
The action for annulment of a certificate of title threatens petitioners interest in the property. Petitioner is
entitled to due process with respect to that interest. The court does not have competence or authority to
proceed with an action for annulment of certificate of title without giving the person, in whose name the
certificate
was
issued
all
the
opportunities
to
be
heard.
Hence, regardless of the nature of the action, proper service of summons is imperative. A decision

rendered without proper service of summons suffers a defect in jurisdiction. Respondents institution of a
proceeding for annulment of petitioners certificate of title is sufficient to vest the court with jurisdiction
over the res, but it is not sufficient for the court to proceed with the case with authority and competence.
Personal service of summons is the preferred mode of service of summons. 95 Thus, as a rule, summons
must be served personally upon the defendant or respondent wherever he or she may be found. If the
defendant or respondent refuses to receive the summons, it shall be tendered to him or
her.96chanRoblesvirtualLawlibrary
If the defendant or respondent is a domestic juridical person, personal service of summons shall be
effected upon its president, managing partner, general manager, corporate secretary, treasurer, or in-house
counsel
wherever
he
or
she
may
be
found.97chanRoblesvirtualLawlibrary
Other modes of serving summons may be done when justified. Service of summons through other modes
will not be effective without showing serious attempts to serve summons through personal service. Thus,
the rules allow summons to be served by substituted service only for justifiable causes and if the
defendant or respondent cannot be served within reasonable time. 98 Substituted service is effected (a) by
leaving copies of the summons at the defendants residence with some person of suitable age and
discretion then residing therein, or (b) by leaving the copies at defendants office or regular place of
business with some competent person in charge thereof. 99chanRoblesvirtualLawlibrary
Service of summons by publication in a newspaper of general circulation is allowed when the defendant
or respondent is designated as an unknown owner or if his or her whereabouts are unknown and cannot
be ascertained by diligent inquiry. 100 It may only be effected after unsuccessful attempts to serve the
summons personally, and after diligent inquiry as to the defendants or respondents whereabouts.
Service of summons by extraterritorial service is allowed after leave of court when the defendant or
respondent does not reside or is not found in the country or is temporarily out of the
country.101chanRoblesvirtualLawlibrary
If a defendant or respondent voluntarily appears in trial or participates in the proceedings, it is generally
construed
as
sufficient
service
of
summons. 102chanRoblesvirtualLawlibrary
In

this

case,

summons

was

served

by

publication.

A look into the content of the sheriffs return will determine if the circumstances warranted the deviation
from the rule preferring personal service of summons over other modes of service. The sheriffs return
must contain a narration of the circumstances showing efforts to personally serve summons to the
defendants or respondents and the impossibility of personal service of summons. Citing Hamilton v.
Levy,103 this court said of substituted service in Domagas v. Jensen:104chanRoblesvirtualLawlibrary
The pertinent facts and circumstances attendant to the service of summons must be stated in the proof of
service or Officers Return; otherwise, any substituted service made in lieu of personal service cannot be
upheld. This is necessary because substituted service is in derogation of the usual method of service. It is
a method extraordinary in character and hence may be used only as prescribed and in the circumstances
authorized by statute. Here, no such explanation was made. Failure to faithfully, strictly, and fully
comply with the requirements of substituted service renders said service ineffective. 105
This court also said in Manotoc v. Court of Appeals:chanroblesvirtuallawlibrary

The date and time of the attempts on personal service, the inquiries made to locate the defendant, the
name/s of the occupants of the alleged residence or house of defendant and all other acts done, though
futile, to serve the summons on defendant must be specified in the Return to justify substituted service.
The form on Sheriffs Return of Summons on Substituted Service prescribed in the Handbook for Sheriffs
published by the Philippine Judicial Academy requires a narration of the efforts made to find the
defendant
personally
and
the
fact
of
failure.
.

However, in view of the numerous claims of irregularities in substituted service which have spawned the
filing of a great number of unnecessary special civil actions of certiorari and appeals to higher courts,
resulting in prolonged litigation and wasteful legal expenses, the Court rules in the case at bar that the
narration of the efforts made to find the defendant and the fact of failure written in broad and imprecise
words will not suffice. The facts and circumstances should be stated with more particularity and detail on
the number of attempts made at personal service, dates and times of the attempts, inquiries to locate
defendant, names of occupants of the alleged residence, and the reasons for failure should be included in
the Return to satisfactorily show the efforts undertaken. That such efforts were made to personally serve
summons on defendant, and those resulted in failure, would prove impossibility of prompt personal
service.
Moreover, to allow sheriffs to describe the facts and circumstances in inexact terms would encourage
routine performance of their precise duties relating to substituted servicefor it would be quite easy to
shroud or conceal carelessness or laxity in such broad terms. 106
A sheriffs return enjoys the presumption of regularity in its issuance if it contains (1) the details of the
circumstances surrounding the sheriffs attempt to serve the summons personally upon the defendants or
respondents; and (2) the particulars showing the impossibility of serving the summons within reasonable
time.107 It does not enjoy the presumption of regularity if the return was merely pro forma.
Failure to state the facts and circumstances that rendered service of summons impossible renders service
of summons and the return ineffective. In that case, no substituted service or service by publication can
be
valid.
This court in Manotoc explained that the presumption of regularity in the issuance of the sheriffs return
does not apply to patently defective returns. Thus:chanroblesvirtuallawlibrary
The court a quo heavily relied on the presumption of regularity in the performance of official duty. It
reasons out that [t]he certificate of service by the proper officer isprima facie evidence of the facts set
out herein, and to overcome the presumption arising from said certificate, the evidence must be clear and
convincing.
The Court acknowledges that this ruling is still a valid doctrine. However, for the presumption to apply,
the Sheriffs Return must show that serious efforts or attempts were exerted to personally serve the
summons and that said efforts failed. These facts must be specifically narrated in the Return. To reiterate,
it must clearly show that the substituted service must be made on a person of suitable age and discretion
living in the dwelling or residence of defendant. Otherwise, the Return is flawed and the presumption
cannot be availed of. As previously explained, the Return of Sheriff Caelas did not comply with the
stringent requirements of Rule 14, Section 8 on substituted service. (Emphasis supplied)
In the case of Venturanza v. Court of Appeals, it was held that x x x the presumption of regularity in the
performance of official functions by the sheriff is not applicable in this case where it is patent that the

sheriffs return is defective. (Emphasis supplied) While the Sheriffs Return in the Venturanza case had
no statement on the effort or attempt to personally serve the summons, the Return of Sheriff Caelas in
the case at bar merely described the efforts or attempts in general terms lacking in details as required by
the ruling in the case of Domagas v. Jensen and other cases. It is as if Caelas Return did not mention
any effort to accomplish personal service. Thus, the substituted service is void. 108
In this case, the sheriffs return states:
OFFICERS RETURN
I HEREBY CERTIFY that on the 15 th and 18th day of February, 1999, I have served a copy of the
summons with complaint and annexes dated January 29, 1999 issued by Regional Trial Court, Fourth
Judicial Region, Branch 74, Antipolo City upon defendants in the above-entitled case on the following, to
wit;
1. AURORA N. DE PEDRO Unserved for the reason that according to the messenger of Post Office of
Pasig their [sic] is no person in the said given address. 109
This return shows no detail of the sheriffs efforts to serve the summons personally upon petitioner. The
summons was unserved only because the post office messenger stated that there was no Aurora N. De
Pedro in the service address. The return did not show that the sheriff attempted to locate petitioners
whereabouts. Moreover, it cannot be concluded based on the return that personal service was rendered
impossible under the circumstances or that service could no longer be made within reasonable time.
The lack of any demonstration of effort on the part of the sheriff to serve the summons personally upon
petitioner is a deviation from this courts previous rulings that personal service is the preferred mode of
service, and that the sheriff must narrate in his or her return the efforts made to effect personal service.
Thus, the sheriffs return in this case was defective. No substituted service or service by publication will
be
allowed
based
on
such
defective
return.
The issuance of a judgment without proper service of summons is a violation of due process rights. The
judgment, therefore, suffers a jurisdictional defect. The case would have been dismissible had petitioner
learned about the case while trial was pending. At that time, a motion to dismiss would have been
proper. After the trial, the case would have been the proper subject of an action for annulment of
judgment.
Petitioner learned about the action for annulment of title only after trial. Instead of filing an action for
annulment of judgment, however, she filed a motion for new trial without alleging any proper ground.
Rule 37 of the Rules of Court provides that a party may move and the court may grant a new trial based
on the following causes:chanroblesvirtuallawlibrary
(a) Fraud, accident, mistake or excusable negligence which ordinary prudence could not have guarded
against and by reason of which such aggrieved party has probably been impaired in his rights; or
(b) Newly discovered evidence, which he could not, with reasonable diligence, have discovered and
produced at the trial, and which if presented would probably alter the result. 110
Petitioner insisted in her motion for new trial that the trial court did not acquire jurisdiction over her
person. She did not allege that fraud, accident, mistake, or excusable negligence impaired her rights.
Neither did she allege that she found newly discovered evidence that could have altered the trial court

decision. When her motion for new trial was denied, she filed a petition for certiorari, insisting that her
motion for new trial should have been granted on the ground of lack of jurisdiction over her person. The
Court of Appeals denied the petition for her failure to allege any ground for new trial. We cannot attribute
error on the part of the Court of Appeals for this denial because, indeed, lack of jurisdiction is not a
ground
for
granting
a
new
trial.
What cannot be denied is the fact that petitioner was already notified of respondents action for annulment
of petitioners title when she filed a motion for new trial and, later, a petition for certiorari. At that time,
petitioner was deemed, for purposes of due process, to have been properly notified of the action involving
her title to the property. Lack of jurisdiction could have already been raised in an action for annulment of
judgment.
Thus, when petitioner erroneously filed her motion for new trial and petition for certiorari instead of an
action for annulment of judgment, she was deemed to have voluntarily participated in the proceedings
against her title. The actions and remedies she chose to avail bound her. Petitioners failure to file an
action for annulment of judgment at this time was fatal to her cause. We cannot conclude now that she
was denied due process.cralawred
II
Petitioner
filing
judgment

is
a

already
petition

for

barred
annulment

from
of

A petition for annulment of judgment is a recourse that is equitable in character. 111 It is independent of the
case112 and is allowed only in exceptional cases as where there is no available or other adequate
remedy.113chanRoblesvirtualLawlibrary
An action for annulment of judgment may be filed to assail Regional Trial Court judgments when resort
to other remedies can no longer be had through no fault of petitioner. Section 1 of Rule 47 of the Rules of
Civil Procedure provides:chanroblesvirtuallawlibrary
Section 1. Coverage. This Rule shall govern the annulment by the Court of Appeals of judgments or
final orders and resolutions in civil actions of Regional Trial Courts for which the ordinary remedies of
new trial, appeal, petition for relief or other appropriate remedies are no longer available through no fault
of the petitioner.
An action for annulment of judgment may be based on only two grounds: 1) extrinsic fraud; and 2) lack
of jurisdiction. Section 2 of Rule 47 of the Rules of Court states:chanroblesvirtuallawlibrary
Section 2. Grounds for Annulment. The annulment may be based only on the grounds of extrinsic fraud
and
lack
of
jurisdiction.
Extrinsic fraud shall not be a valid ground if it was availed of, or could have been availed of, in a motion
for new trial or petition for relief.
Lack of jurisdiction being a valid ground for annulment of judgments, circumstances that negate the
courts acquisition of jurisdiction including defective service of summons are causes for an action
for
annulment
of
judgments.114chanRoblesvirtualLawlibrary
However, this court had an occasion to say that an action for annulment of judgment may not be invoked

(1) where the party has availed himself of the remedy of new trial, appeal, petition for relief, or other
appropriate remedy and lost; or (2) where he has failed to avail himself of those remedies through his own
fault or negligence.115 Thus, an action for annulment of judgment is not always readily available even if
there
are
causes
for
annulling
a
judgment.
In this case, petitioners main grounds for filing the action for annulment are lack of jurisdiction over her
person, and litis pendentia. These are the same grounds that were raised in the motion for new trial filed
before
and
denied
by
the
Regional
Trial
Court.
Applying the above rules, we rule that the Court of Appeals did not err in denying petitioners petition for
annulment of the Regional Trial Courts judgment. Petitioner had already filed a motion for new trial and
petition
for
certiorari
invoking
lack
of
jurisdiction
as
ground.
Petitioners filing of the petition for annulment of judgment after she had filed a motion for new trial and
lost, with both actions raising the same grounds, reveals an intent to secure a judgment in her favor by
abusing
and
making
a
mockery
of
the
legal
remedies
provided
by
law.
This kind of abuse is what this court tries to guard against when it limited its application, and stated in
some of the cases that an action for annulment of judgment cannot be invoked when other remedies had
already
been
availed.
As this court explained in Macalalag v. Ombudsman:116chanRoblesvirtualLawlibrary
Rule 47, entitled Annulment of Judgments or Final Orders and Resolutions, is a new provision under
the 1997 Rules of Civil Procedure albeit the remedy has long been given imprimatur by the courts. The
rule covers annulment by the Court of Appeals of judgments or final orders and resolutions in civil
actions of Regional Trial Courts for which the ordinary remedies of new trial, appeal, petition for relief or
other appropriate remedies could no longer be availed of through no fault of the petitioner. An action for
annulment of judgment is a remedy in law independent of the case where the judgment sought to be
annulled is rendered. The concern that the remedy could so easily be resorted to as an instrument to delay
a final and executory judgment, has prompted safeguards to be put in place in order to avoid an abuse of
the rule. Thus, the annulment of judgment may be based only on the grounds of extrinsic fraud and lack of
jurisdiction, and the remedy may not be invoked (1) where the party has availed himself of the remedy of
new trial, appeal, petition for relief or other appropriate remedy and lost therefrom, or (2) where he has
failed to avail himself of those remedies through his own fault or negligence. 117 (Emphasis supplied)
Similarly, this court ruled in Sigma Homebuilding Corporation v. Inter-Alia Management Corporation, et
al.:118chanRoblesvirtualLawlibrary
A petition for annulment of judgment is an extraordinary remedy and is not to be granted indiscriminately
by the Court. It is allowed only in exceptional cases and cannot be used by a losing party to make a
mockery of a duly promulgated decision long final and executory. The remedy may not be invoked where
the party has availed himself of the remedy of new trial, appeal, petition for relief or other appropriate
remedy and lost,or where he has failed to avail himself of those remedies through his own fault or
negligence.
Litigation must end sometime. It is essential to an effective and efficient administration of justice that,
once a judgment becomes final, the winning party should not be deprived of the fruits of the verdict.
Courts must therefore guard against any scheme calculated to bring about that undesirable result. Thus,
we deem it fit to finally put an end to the present controversy.119 (Emphasis supplied)

Thus, an action for annulment of judgment will not so easily and readily lend itself to abuse by parties
aggrieved by final judgments. 120 Petitioner cannot abuse the courts processes to revive a case that has
already been rendered final against her favor, for the purpose of securing a favorable judgment. An action
for annulment of judgment cannot be used by petitioner who has lost her case through fault of her own, to
make a complete farce of a duly promulgated decision that has long become final and
executory.121chanRoblesvirtualLawlibrary
III
Filing an action for annulment of
title is not a violation of Section
48 of Presidential Decree No. 1529
Petitioner insists that the annulment of her title was a violation of Section 48 of Presidential Decree No.
1529, which provides:chanroblesvirtuallawlibrary
Sec. 48. Certificate not subject to collateral attack. A certificate of title shall not be subject to collateral
attack. It cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law.
Petitioner is mistaken.
In Sarmiento,
said:chanroblesvirtuallawlibrary

et

al.

v.

Court

of

Appeals, 122 this

court

An action is deemed an attack on a title when the object of the action or proceeding is to nullify the title,
and thus challenge the judgment pursuant to which the title was decreed. The attack is direct when the
object of the action is to annul or set aside such judgment, or enjoin its enforcement. On the other hand,
the attack is indirect or collateral when, in an action to obtain a different relief, an attack on the judgment
is nevertheless made as an incident thereof. 123
An action for annulment of certificate of title is a direct attack on the title because it challenges the
judgment
decree
of
title.
In Goco v. Court of Appeals,124 this court said that [a]n action for annulment of certificates of title to
property [goes] into the issue of ownership of the land covered by a Torrens title and the relief generally
prayed for by the plaintiff is to be declared as the lands true owner. 125chanRoblesvirtualLawlibrary
Hence, there was no violation of Section 48 of Presidential Decree No. 1529 when petitioners title was
declared
null
and
void
by
the
Regional
Trial
Court.
Petitioner, however, points to the following statement made by this court in another case involving these
same parties:126chanRoblesvirtualLawlibrary
The resolution of the issue will not involve the alteration, correction or modification either of OCT No. P691 under the name of petitioner Aurora de Pedro, or TCT No. 236044 under the name of respondent
corporation. If the subject property is found to be a portion of the property covered by OCT No. P-691 but
is included in the technical description of the property covered by TCT No. 236044, the latter would have
to be corrected. On the other hand, if the subject property is found to be a portion of the property covered
by TCT No. 236044, but is included in the property covered by OCT NO. P-691, then the latter title must
be rectified. However, the rectification of either title may be made only via an action filed for the said
purpose,
comformably
with
Section
48
of
Act
No.
496

....
A. The action of the petitioners against respondents, based on the material allegations of the
complaint, if one for recovery of possession of the subject property and damages. However, such
action is not a direct but a collateral attack of TCT No. 236044. Neither did the respondents
directly attack OCT No. P-691 in their answer to the complaint. Although the respondents averred
in said answer, by way of special and affirmative defenses, that the subject property is covered by
TCT No. 236044 issued in the name of the respondent corporation, and as such the said
respondent is entitled to the possession thereof to the exclusion of the petitioners, such allegations
does not constitute a direct attack on OCT No. P-691, but is likewise a collateral attack
thereon...127
Petitioner misreads the import of what we said in that case. That case involves petitioners action for
recovery of possession and damages against respondents. It also involved respondents allegations that
the property was covered by a certificate of title in its name and, therefore, its entitlement to the
possession of the property. It does not involve an action for annulment of title.
When this court said that such action is not a direct but a collateral attack of TCT No. 236044 or that
such allegations does [sic] not constitute a direct attack on OCT No. P-691, but is likewise a collateral
attack thereon, we were referring to both parties action for and allegations of possessory rights over the
property. This court was not referring to an action for annulment of title, which is the case involved here.
To reiterate, an action for annulment constitutes a direct attack on a certificate of title.
IV
The requisites of litis pendentia are
not satisfied when respondent filed
its action for annulment of title
Petitioner argued that the case for annulment of title was dismissible on the ground of litis
pendentiabecause there was a pending civil case filed by her against respondent.
The requisites of litis pendentia are: (a) identity of parties, or interests in both actions; (b) identity of
rights asserted and relief prayed for, the relief being founded on the same facts; and (c) the identity of the
two preceding particulars is such that any judgment rendered in the other action, will, regardless of which
party is successful, amount to res judicata in the action under
consideration.128chanRoblesvirtualLawlibrary
Although both cases involve the same parcel of land, petitioner was not able to show that there was
identity of the relief prayed for. A review of the complaint in the said civil case shows that it was a case
for damages, for alleged improper conduct of respondent relating the property. The action filed by
respondent was an action for annulment of petitioners title.
Petitioner was also not able to show that the relief prayed for in both cases were founded on the same
facts. Petitioners complaint for damages was founded on the alleged misconduct of respondent.
Respondents action for annulment of title was founded on the alleged irregularity in the issuance of
petitioners title.

Hence, the petitioner was not able to show that all the requisites for litis pendentia are present.
Respondents action for annulment of title cannot be dismissed on this ground.
V
A

certificate

of

title

does

not

vest

ownership

Petitioner argues that her certificate of title was erroneously declared null and void because based on OCT
No.
P-691,
she
is
the
real
owner
of
the
property.
It is true that certificates of title are indefeasible and binding upon the whole world. However, certificates
of title do not vest ownership. 129 They merely evidence title or ownership of the property. 130 Courts may,
therefore, cancel or declare a certificate of title null and void when it finds that it was issued irregularly.
In this case, the trial court ruled based on the committee report that the free patents and original certificate
of
title
issued
to
petitioner
were
irregularly
issued,
and,
therefore,
invalid.
The principle of bar by prior judgment is embodied in Rule 39, Section 47(b) of the Rules of
Court:chanroblesvirtuallawlibrary
Section 47. Effect of judgments or final orders. The effect of a judgment or final order rendered by a
court of the Philippines, having jurisdiction to pronounce the judgment or final order, may be as follows:
.

(b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or as to any
other matter that could have been missed in relation thereto, conclusive between the parties and their
successors in interest, by title subsequent to the commencement of the action or special proceeding,
litigating for the same thing and under the same title and in the same capacity[.] (Emphasis supplied)
In this case, the trial court, by annulling petitioners certificate of title and declaring its issuance irregular,
directly adjudged petitioners certificate of title as void. Because petitioner failed to appeal and cause the
annulment of the trial courts judgment as to her titles validity, this question is already barred. This
judgment
has
already
attained
finality
and
can
no
longer
be
litigated.
This court explained in FGU Insurance Corporation v. Regional Trial Court 131 the doctrine of finality of
judgment, thus:chanroblesvirtuallawlibrary
Under the doctrine of finality of judgment or immutability of judgment, a decision that has acquired
finality becomes immutable and unalterable, and may no longer be modified in any respect, even if the
modification is meant to correct erroneous conclusions of fact and law, and whether it be made by the
court that rendered it or by the Highest Court of the land. Any act which violates this principle must
immediately be struck down.132
In any case, even if petitioners original certificate of title was not irregularly issued as she claims, her
original certificate of title was issued later than the title from which respondents title originated. As a
rule, original titles issued earlier prevail over another original title issued later. 133 Therefore, petitioners
later-issued title cannot prevail over respondents title, which was derived from an earlier issued original
certificate
of
title.

WHEREFORE, the petition is DENIED. The Court of Appeals July 7, 2010 decision in CA G.R. SP.
No.
96471
is AFFIRMED.
SO ORDERED.cralawlawlibrary

14. G.R. No. 205800, September 10, 2014


MICROSOFT
CORPORATION
AND
ADOBE
SYSTEMS
INCORPORATED, Petitioners, v. SAMIR FARAJALLAH, VIRGILIO D.C. HERCE, RACHEL P.
FOLLOSCO, JESUSITO G. MORALLOS, AND MA. GERALDINE S. GARCIA (DIRECTORS
AND OFFICERS OF NEW FIELDS (ASIA PACIFIC), INC.), Respondents.
DECISION
CARPIO, ACTING C.J.:
The Case
Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court which seeks to
reverse and set aside the Decision 1 of the Court of Appeals (CA) dated 28 June 2012 in CA-G.R. SP No.
116771 and the Resolution2 of the CA dated 30 January 2013. The Decision and Resolution sustained the
orders of the Regional Trial Court of Manila, Branch 21 (RTC) quashing Search Warrant Nos. 10-15912
and 10-15913.
The Facts
Microsoft Corporation and Adobe Systems Incorporated (petitioners) are corporations organized and
existing under the laws of the United States. Microsoft Corporation is the owner of all rights including
copyright relating to all versions and editions of Microsoft software 3 and the corresponding users
manuals, and the registered owner of the Microsoft MS DOS trademarks in the Philippines. Adobe
Systems Incorporated is the owner of all rights including copyright relating to all versions and editions of
Adobe
Software.4cralawred
Samir Farajallah, Virgilio D.C. Herce, Rachel P. Follosco, Jesusito G. Morallos and Ma. Geraldine S.
Garcia (respondents) are the directors and officers of New Fields (Asia Pacific), Inc., a domestic
corporation with principal office at Unit 1603, East Tower, Philippine Stock Exchange Center, Exchange
Road,
Ortigas
Center,
Pasig
City.
Petitioners claim that in September 2009, they were informed that New Fields was unlawfully
reproducing and using unlicensed versions of their software. Orion Support, Inc. (OSI) was engaged by
petitioners to assist in the verification of this information. Two OSI Market Researchers, Norma L.
Serrano (Serrano) and Michael A. Moradoz (Moradoz) were assigned to confirm the informant's tip.
Serrano and Moradoz were trained to detect unauthorized copies of Adobe and Microsoft
software.5cralawred
On 17 March 2010, counsel for petitioners filed a letter-complaint with the Chief of the Philippine
National Police Criminal Investigation and Detection Group. The case was assigned to Police Senior

Inspector

Ernesto

V.

Padilla

(Padilla). 6cralawred

On 26 March 2010, Padilla, Serrano, and Moradoz went to the office of respondents. Using a legitimate
business pretext, they were able to use two computers owned by New Fields and obtained the following
information regarding the installed Microsoft and Adobe software:ChanRoblesVirtualawlibrary
First computer
Installed Software
Microsoft Windows XP Pro V2002 SP2
Microsoft
Office
Word
2007
Edition 2007
Adobe Acrobat 8 Pro (1)

Second computer
Installed Software
Microsoft Windows XP Pro V2002 SP2
Microsoft
Office
Word
2007
Edition 2007
Adobe Acrobat 8 Pro (1)

Product I.D./Serial Number


55274-640-1582543-23775
Enterprise 89388-707-0358973-65509
1118-1061-0904-4874-2027

Product I.D./Serial Number


55274-640-1582543-23442
Enterprise 89388-707-0358973-65709
1118-1061-0904-4874-2027

Padilla was trained to distinguish original from counterfeit software, 7 and he saw the screens of the
computers used by the OSI staff, including the product I.D. Nos. of the installed software.
In their Joint Affidavit, Serrano and Moradoz stated that:ChanRoblesVirtualawlibrary
There are at least two (2) computers using common product identification and/or serial numbers of
MICROSOFT and ADOBE software. This is one indication that the software being used is unlicensed or
was illegally reproduced or copied. Based on the training we attended, all ADOBE and MICROSOFT
software should only be installed in one computer, unless they avail of an Open Licese Agreement from
the software developer, which is not the case in NEW FIELDS. In this case, the first three sets of numbers
of the Product I.D. Nos. of the MICROSOFT Windows XP Pro operating System software program
installed in the two (2) computer units we used, i.e., 55274-640-1582543-xxxxx, were the same. We
also observed that the first three sets of numbers of the Product I.D Nos. of the MICROSOFT Office 2007
(Word) software in the two (2) computers we used, i.e., 89388-707-0358973-xxxxx, were also the
same. Ostensibly, this means that NEW FIELDS only used one (1) installer of the MICROSOFT
Windows XP operating system software and one (1) installer of the MICROSOFT Office software
program on two (2) computers. Based on our training, if the first three sets of numbers of the Product
I.D. Nos. of the MICROSOFT software installed are the same, it signifies that it came from one
installer. It does not matter [if] the last 5 digits of the Product I.D. Nos. are different because this is
computer-generated and therefore varies with every installation. Apart from the MICROSOFT
software, the serial numbers of the ADOBE software installed in the computer units we used were
also the same, signifying that NEW FIELDS only used one (1) installer of the ADOBE software
program on two (2) computers.8(Emphasis supplied)
They also observed that New Fields had 90 computers in their office with Microsoft software, none of
which
had
the
Certificate
of
Authenticity
issued
by
Microsoft.

After being informed of the results of the investigation, petitioners then issued certifications that they
have not authorized New Fields to copy, print, reproduce and/or publish unauthorized copies of
Microsoft
and
Adobe
software
products. 9cralawred
An application for search warrants was filed by Padilla on 20 May 2010, before Judge Amor Reyes in her
capacity as Executive Judge of the RTC. Search Warrant Nos. 10-15912 and 10-15913 were issued on the
same
date.10cralawred
The warrants were served on respondents on 24 May 2010. New Fields employees witnessed the search
conducted by the authorities. Several items were seized, including 17 CD installers and 83 computers
containing
unauthorized
copies
of
Microsoft
and/or
Adobe
software.
On 6 June 2010, New Fields filed a motion seeking to quash one of the two warrants served (Search
Warrant No. 10-15912).11 The motion was received by petitioners on 10 June 2010 and was set for
hearing on 11 June 2010. During the hearing on the motion, petitioners were allowed by the RTC to file
their
Comment/Opposition
on
or
before
21
June
2010. 12cralawred
In their Comment/Opposition dated 21 June 2010,13 petitioners alleged that:ChanRoblesVirtualawlibrary
The Motion [to Quash] failed to comply with the mandatory 3-day notice rule under the Rules of Court.
Hence
it
is
nothing
but
a
worthless
piece
of
paper.
x

In this case, the Motion of Respondents was scheduled for hearing on 11 June 2010. However,
Respondents only furnished [petitioners] a copy of the Motion on 10 June 2010, or just 1 day before the
scheduled hearing, which was in clear violation of the 3-day notice rule. 14cralawred
On 29 June 2010, the RTC issued an Order quashing both warrants and directing that all the items seized
from the respondents be returned x x x. 15 According to the RTC, petitioners should have identified which
specific computer had the pirated software. 16 The RTC added that no criminal charge has been filed yet,
despite the fact that the seized items have been in petitioners possession for several weeks since the
warrants were issued. Lastly, the RTC dismissed the petitioners contention that the three-day notice rule
was not complied with because petitioners were already notified of the motion personally. 17cralawred
On 8 July 2010, petitioners received a copy of the Order, and Deputy Sheriff Edgardo Reyes of the RTC
also effected the return of the seized items, in compliance with the RTCs Order. 18cralawred
Petitioners filed an Urgent Manifestation and Motion for the Issuance of a Status Quo Order on 8 July
2010 wherein they alleged that: (1) they intend to file a Motion for Reconsideration of the Order; and (2)
the Order was not immediately executory.19 Respondents received a copy of the motion the day it was
filed.
On 9 July 2010, respondents moved to expunge petitioners motion for reconsideration, saying that
petitioners failed to comply with the three-day notice rule. 20 The hearing on the motion was set on 13 July
2010. A copy of the motion was received by petitioners on 20 July 2010. 21cralawred
On 15 July 2010, petitioners filed a motion for reconsideration of the Order. 22 Respondents filed their
Comment/Opposition23 to the motion, which was received by petitioners on 12 August 2010. 24cralawred

The RTC denied petitioners motion for reconsideration in its Order dated 27 August 2010. 25cralawred
Petitioners filed a petition for certiorari 26 under Rule 65 on 8 November 2010 before the Court of
Appeals. Petitioners alleged that the RTC committed grave abuse of discretion in granting the Motion to
Quash despite: (1) respondents failure to comply with the three-day notice requirement; and (2) the
existence of probable cause, and personal knowledge of the warrant applicant.
The Ruling of the CA
The CA denied the petition for certiorari . The appellate court held that:ChanRoblesVirtualawlibrary
In the instant case, when the court a quo ordered petitioners to submit their comment on the motion to
quash, it was, in effect, giving petitioners their day in court. Thus, while the [three]-day notice rule was
not strictly observed, its purpose was still satisfied when respondent judge did not immediately rule on the
motion giving petitioners x x x the opportunity to study and oppose the arguments stated in the
motion.27cralawred
Hence, this petition.
The Issue
The instant petition raised only one issue, to wit:ChanRoblesVirtualawlibrary
The Honorable Court of Appeals erred in ruling that Judge Amor Reyes of Branch 21, Regional Trial
Court of Manila did not commit grave abuse of discretion amounting to lack or excess of jurisdiction in
issuing its Orders dated 29 June 2010 and 27 August 2010, quashing Search Warrant Nos. 10- 15912 and
10-15913 and directing the immediate release of the items seized pursuant to the said warrants, despite the
pendency of appellate proceedings.28
The Ruling of the Court
We rule that strict compliance with the three-day notice rule may be relaxed in this case. However, we
sustain petitioners contention that there was probable cause for issuance of a warrant, and the RTC and
CA
should
have
upheld
the
validity
of
both
warrants.
Compliance

with

the

three-day

notice

rule

In Anama v. Court of Appeals,29 we ruled that the three-day notice rule is not absolute. The purpose of the
rule is to safeguard the adverse partys right to due process. Thus, if the adverse party was given a
reasonable opportunity to study the motion and oppose it, then strict compliance with the three-day notice
rule
may
be
dispensed
with.
As correctly pointed out by the CA:ChanRoblesVirtualawlibrary
In the instant case, when the court a quo ordered petitioners to submit their comment on the motion to
quash, it was, in effect, giving petitioners their day in court. Thus, while the [three]-day notice rule was
not strictly observed, its purpose was still satisfied when respondent judge did not immediately rule on the
motion giving petitioners x x x the opportunity to study and oppose the arguments stated in the
motion.30cralawred
Existence

of

probable

cause

Under Section 1 of Rule 45 of the Rules of Court, petitions for review by certiorari shall raise only
questions of law. A question of fact exists when there is a doubt as to the truth of certain facts, and it can
only be resolved through a reexamination of the body of evidence. 31cralawred
In Microsoft Corporation v. Maxicorp, Inc.,32 we ruled that the existence of probable cause is a question
of fact.33 In the same case, we also stated that:ChanRoblesVirtualawlibrary
Probable cause is dependent largely on the opinion and findings of the judge who conducted the
examination and who had the opportunity to question the applicant and his witnesses. For this reason, the
findings of the judge deserve great weight. The reviewing court should overturn such findings only upon
proof that the judge disregarded the facts before him or ignored the clear dictates of reason. 34
This Court is not a trier of facts. As a general rule, we defer to the lower courts appreciation and
evaluation of evidence.35 This general rule, however, is not absolute. We will review the factual findings
of the CA in any of the following instances:ChanRoblesVirtualawlibrary
(1) when the factual findings of the Court of Appeals and the trial court are contradictory;
(2) when the conclusion is a finding grounded entirely on speculation, surmises, or conjectures;
(3) when the inference made by the Court of Appeals from its findings of fact is manifestly mistaken,
absurd,
or
impossible;
(4) when there is a grave abuse of discretion in the appreciation of facts;
(5) when the Appellate Court, in making its findings, went beyond the issues of the case and such findings
are
contrary
to
the
admissions
of
both
appellant
and
appellee;
(6) when the judgment of the Court of Appeals is premised on a misapprehension of facts;
(7) when the Court of Appeals failed to notice certain relevant facts which, if properly considered, would
justify
a
different
conclusion;
(8)
when
the
findings
of
fact
are
themselves
conflicting;
(9) when the findings of fact are conclusions without citation of the specific evidence on which they are
based;
and
(10) when the findings of fact of the Court of Appeals are premised on the absence of evidence but such
findings are contradicted by the evidence on record. 36
In this case, we find reason to overturn the rulings of the RTC and CA, since there was grave abuse of
discretion in the appreciation of facts. The CA sustained the quashal of the warrant because the witnesses
had no personal knowledge of the facts upon which the issuance of the warrants may be justified, 37 and
the applicants and the witnesses merely relied on the screen shots acquired from the confidential
informant.38cralawred
We disagree with the conclusions
stated:ChanRoblesVirtualawlibrary

of

the

CA.

The

assailed

CA

Decision

itself

Initial hearsay information or tips from confidential informants could very well serve as basis for the
issuance of a search warrant, if followed up personally by the recipient and validated. 39cralawred
Looking at the records, it is clear that Padilla and his companions were able to personally verify the tip of
their informant. In his Affidavit submitted to Judge Amor Reyes prior to the issuance of the warrant,
Padilla stated that:ChanRoblesVirtualawlibrary
At the time that I was inside the office premises of the NEW FIELDS, I saw the Product Keys or Product
Identification Numbers of the ADOBE and MICROSOFT computer software programs installed in some
of the computer units. Ms. Serrano and Mr. Moradoz were able to pull up these data since they were

allowed to use some of the computers of the target companies in line with the pretext that we used to gain
entry into NEW FIELDS. I actively read and attentively observed the information reflected from the
monitor display unit of the computers that Ms. Serrano and Mr. Moradoz were able to use. x x x. 40
As mentioned earlier, Padilla has been trained to distinguish illegally reproduced Adobe and Microsoft
software. Thus, in his Affidavit, he stated that:ChanRoblesVirtualawlibrary
x

6. I suspect that the ADOBE and MICROSOFT computer software programs that are being used in the
premises of NEW FIELDS are unauthorized, illegal or unlicensed copies because of the following
reasons:ChanRoblesVirtualawlibrary
6.1. At least two (2) computer units are using a common Product Identification Number of MICROSOFT
and ADOBE software. This is one indication that the software being used is unlicensed or was illegally
reproduced or copied. All ADOBE and MICROSOFT computer software programs should only be used in
one computer unit, unless they avail of an Open License Agreement from the computer software
developer, which [was not obtained by] NEW FIELDS. x x x.41
The evidence on record clearly shows that the applicant and witnesses were able to verify the information
obtained from their confidential source. The evidence likewise shows that there was probable cause for
the issuance of a search warrant. Thus, the requirement of personal knowledge of the applicant and
witnesses
was
clearly
satisfied
in
this
case.
WHEREFORE, the petition is GRANTED. The Decision dated 28 June 2012 and the Resolution dated
30 January 2013 of the Court of Appeals, upholding the 29 June 2010 and 27 August 2010 Orders of the
Regional Trial Court, are hereby REVERSED and SET ASIDE. Search Warrant Nos. 10-15912 and 1015913
are
declared
valid.
SO ORDERED.cralawlaw library

15. G.R. No. 185922

January 15, 2014

HEIRS OF DR. MARIANO FAVIS SR. represented by their co-heirs and Attorneys-in-Fact
MERCEDES
A.
FAVIS
and
NELLY
FAVISVILLAFUERTE, Petitioners,
vs.
JUANA GONZALES, her son MARIANO G. FAVIS, MA. THERESA JOANA D. FAVIS, JAMES
MARK D. FAVIS, all minors represented herein by their parents SPS. MARIANO FAVIS and
LARCELITA D. FAVIS,Respondents.
DECISION
PEREZ, J.:

Before this Court is a petition for review assailing the 10 April 2008 Decision 1 and 7 January 2009
Resolution2 of the Court of Appeals in CA-G.R. CV No. 86497 dismissing petitioners complaint for
annulment of the Deed of Donation for failure to exert earnest efforts towards a compromise.
Dr. Mariano Favis, Sr. (Dr. Favis) was married to Capitolina Aguilar (Capitolina) with whom he had
seven children named Purita A. Favis, Reynaldo Favis, Consolacion Favis-Queliza, Mariano A. Favis, Jr.,
Esther F. Filart, Mercedes A. Favis, and Nelly Favis-Villafuerte. When Capitolina died in March 1944, Dr.
Favis took Juana Gonzales (Juana) as his common-law wife with whom he sired one child, Mariano G.
Favis (Mariano). When Dr. Favis and Juana got married in 1974, Dr. Favis executed an affidavit
acknowledging Mariano as one of his legitimate children. Mariano is married to Larcelita D. Favis
(Larcelita), with whom he has four children, named Ma. Theresa Joana D. Favis, Ma. Cristina D. Favis,
James Mark D. Favis and Ma. Thea D. Favis.
Dr. Favis died intestate on 29 July 1995 leaving the following properties:
1. A parcel of residential land located at Bonifacio St. Brgy. 1, Vigan, Ilocos Sur, consisting an
area of 898 square meters, more or less, bounded on the north by Salvador Rivero; on the East by
Eleutera Pena; on the South by Bonifacio St., and on the West by Carmen Giron; x x x;
2. A commercial building erected on the aforesaid parcel of land with an assessed value
of P126,000.00; x x x;
3. A parcel of residential land located in Brgy. VII, Vigan, Ilocos Sur, containing an area of 154
sq. ms., more or less, bounded on the North by the High School Site; on the East by Gomez St.,
on the South by Domingo [G]o; and on the West by Domingo Go; x x x;
4. A house with an assessed value of P17,600.00 x x x;
5. A parcel of orchard land located in Brgy. VI, Vigan, Ilocos Sur, containing an area of 2,257 sq.
ma. (sic) more or less, bounded on the North by Lot 1208; on the East by Mestizo River; on the
South by Lot 1217 and on the West by Lot 1211-B, 1212 and 1215 x x x.3
Beginning 1992 until his death in 1995, Dr. Favis was beset by various illnesses, such as kidney trouble,
hiatal hernia, congestive heart failure, Parkinsons disease and pneumonia. He died of "cardiopulmonary
arrest secondary to multi-organ/system failure secondary to sepsis secondary to pneumonia." 4
On 16 October 1994, he allegedly executed a Deed of Donation 5 transferring and conveying properties
described in (1) and (2) in favor of his grandchildren with Juana.
Claiming that said donation prejudiced their legitime, Dr. Favis children with Capitolina, petitioners
herein, filed an action for annulment of the Deed of Donation, inventory, liquidation and partition of
property before the Regional Trial Court (RTC) of Vigan, Ilocos Sur, Branch 20 against Juana, Spouses
Mariano and Larcelita and their grandchildren as respondents.
In their Answer with Counterclaim, respondents assert that the properties donated do not form part of the
estate of the late Dr. Favis because said donation was made inter vivos, hence petitioners have no stake
over said properties.6

The RTC, in its Pre-Trial Order, limited the issues to the validity of the deed of donation and whether or
not respondent Juana and Mariano are compulsory heirs of Dr. Favis. 7
In a Decision dated 14 November 2005, the RTC nullified the Deed of Donation and cancelled the
corresponding tax declarations. The trial court found that Dr. Favis, at the age of 92 and plagued with
illnesses, could not have had full control of his mental capacities to execute a valid Deed of Donation.
Holding that the subsequent marriage of Dr. Favis and Juana legitimated the status of Mariano, the trial
court also declared Juana and Mariano as compulsory heirs of Dr. Favis. The dispositive portion
reads:WHEREFORE, in view of all the foregoing considerations, the Deed of Donation dated October 16,
1994 is hereby annulled and the corresponding tax declarations issued on the basis thereof cancelled. Dr.
Mariano Favis, Sr. having died without a will, his estate would result to intestacy. Consequently, plaintiffs
Heirs of Dr. Mariano Favis, Sr., namely Purita A. Favis, Reynaldo A. Favis, Consolacion F. Queliza,
Mariano A. Favis, Jr., Esther F. Filart, Mercedes A. Favis, Nelly F. Villafuerte and the defendants Juana
Gonzales now deceased and Mariano G. Favis, Jr. shall inherit in equal shares in the estate of the late Dr.
Mariano Favis, Sr. which consists of the following:
1. A parcel of residential land located at Bonifacio St. Brgy. 1, Vigan City, Ilocos Sur, consisting
an area of 89 sq. meters more or less, bounded on the north by Salvador Rivero; on the East by
Eleutera Pena; on the South by Bonifacio St., and on the West by Carmen Giron;
2. A commercial building erected on the aforesaid parcel of land with an assessed value
of P126,000.00;
3. One-half (1/2) of the house located in Brgy. VI, Vigan City, Ilocos Sur[,] containing an area of
2,257 sq. meters more or less, bounded on the north by Lot 1208; on the east by Mestizo River;
on the South by Lot 1217 and on the West by Lot 1211-B, 1212 and 1215.
4. The accumulated rentals of the new Vigan Coliseum in the amount of One Hundred Thirty
[Thousand] (P130,000.00) pesos per annum from the death of Dr. Mariano Favis, Sr.8
Respondents interposed an appeal before the Court of Appeals challenging the trial courts nullification,
on the ground of vitiated consent, of the Deed of Donation in favor of herein respondents. The Court of
Appeals ordered the dismissal of the petitioners nullification case. However, it did so not on the grounds
invoked by herein respondents as appellant.
The Court of Appeals motu proprio ordered the dismissal of the complaint for failure of petitioners to
make an averment that earnest efforts toward a compromise have been made, as mandated by Article 151
of the Family Code. The appellate court justified its order of dismissal by invoking its authority to review
rulings of the trial court even if they are not assigned as errors in the appeal.
Petitioners filed a motion for reconsideration contending that the case is not subject to compromise as it
involves future legitime.
The Court of Appeals rejected petitioners contention when it ruled that the prohibited compromise is that
which is entered between the decedent while alive and compulsory heirs. In the instant case, the appellate
court observed that while the present action is between members of the same family it does not involve a
testator and a compulsory heir. Moreover, the appellate court pointed out that the subject properties
cannot be considered as "future legitime" but are in fact, legitime, as the instant complaint was filed after
the death of the decedent.

Undaunted by this legal setback, petitioners filed the instant petition raising the following arguments:
1. The Honorable Court of Appeals GRAVELY and SERIOUSLY ERRED in DISMISSING the
COMPLAINT.
2. Contrary to the finding of the Honorable Court of Appeals, the verification of the complaint or
petition is not a mandatory requirement.
3. The Honorable Court of Appeals seriously failed to appreciate that the filing of an intervention
by Edward Favis had placed the case beyond the scope of Article 151 of the Family Code.
4. Even assuming arguendo without admitting that the filing of intervention by Edward Favis had
no positive effect to the complaint filed by petitioners, it is still a serious error for the Honorable
Court of Appeals to utterly disregard the fact that petitioners had substantially complied with the
requirements of Article 151 of the Family Code.
5. Assuming arguendo that petitioners cannot be construed as complying substantially with
Article 151 of the Family Code, still, the same should be considered as a non-issue considering
that private respondents are in estoppel.
6. The dismissal of the complaint by the Honorable Court of Appeals amounts to grave abuse of
discretion amounting to lack and excess of jurisdiction and a complete defiance of the doctrine of
primacy of substantive justice over strict application of technical rules.
7. The Honorable Court of Appeals gravely and seriuosly erred in not affirming the decision of
the Court a quo that the Deed of Donation is void.9
In their Comment, respondents chose not to touch upon the merits of the case, which is the validity of the
deed of donation. Instead, respondents defended the ruling the Court of Appeals that the complaint is
dismissible for failure of petitioners to allege in their complaint that earnest efforts towards a compromise
have been exerted.
The base issue is whether or not the appellate court may dismiss the order of dismissal of the complaint
for failure to allege therein that earnest efforts towards a compromise have been made. The appellate
court committed egregious error in dismissing the complaint. The appellate courts decision hinged on
Article 151 of the Family Code, viz:
Art. 151. No suit between members of the same family shall prosper unless it should appear from the
verified complaint or petition that earnest efforts toward a compromise have been made, but that the same
have failed. If it is shown that no such efforts were in fact made, the case must be dismissed.
This rule shall not apply to cases which may not be the subject of compromise under the Civil Code.
The appellate court correlated this provision with Section 1, par. (j), Rule 16 of the 1997 Rules of Civil
Procedure, which provides:
Section 1. Grounds. Within the time for but before filing the answer to the complaint or pleading
asserting a claim, a motion to dismiss may be made on any of the following grounds:

xxxx
(j) That a condition precedent for filing the claim has not been complied with.
The appellate courts reliance on this provision is misplaced. Rule 16 treats of the grounds for a motion to
dismiss the complaint. It must be distinguished from the grounds provided under Section 1, Rule 9 which
specifically deals with dismissal of the claim by the court motu proprio. Section 1, Rule 9 of the 1997
Rules of Civil Procedure provides:
Section 1. Defenses and objections not pleaded. Defenses and objections not pleaded either in a motion
to dismiss or in the answer are deemed waived. However, when it appears from the pleadings or the
evidence on record that the court has no jurisdiction over the subject matter, that there is another action
pending between the same parties for the same cause, or that the action is barred by a prior judgment or
by statute of limitations, the court shall dismiss the claim.
Section 1, Rule 9 provides for only four instances when the court may motu proprio dismiss the claim,
namely: (a) lack of jurisdiction over the subject matter; (b) litis pendentia ; (c) res judicata ; and (d)
prescription of action.10Specifically in Gumabon v. Larin,11 cited in Katon v. Palanca, Jr.,12 the Court held:
x x x [T]he motu proprio dismissal of a case was traditionally limited to instances when the court clearly
had no jurisdiction over the subject matter and when the plaintiff did not appear during trial, failed to
prosecute his action for an unreasonable length of time or neglected to comply with the rules or with any
order of the court. Outside of these instances, any motu proprio dismissal would amount to a violation of
the right of the plaintiff to be heard. Except for qualifying and expanding Section 2, Rule 9, and Section
3, Rule 17, of the Revised Rules of Court, the amendatory 1997 Rules of Civil Procedure brought about
no radical change. Under the new rules, a court may motu proprio dismiss a claim when it appears from
the pleadings or evidence on record that it has no jurisdiction over the subject matter; when there is
another cause of action pending between the same parties for the same cause, or where the action is
barred by a prior judgment or by statute of limitations. x x x. 13
The error of the Court of Appeals is evident even if the consideration of the issue is kept within the
confines of the language of Section 1(j) of Rule 16 and Section 1 of Rule 9. That a condition precedent
for filing the claim has not been complied with, a ground for a motion to dismiss emanating from the law
that no suit between members from the same family shall prosper unless it should appear from the
verified complaint that earnest efforts toward a compromise have been made but had failed, is, as the Rule
so words, a ground for a motion to dismiss. Significantly, the Rule requires that such a motion should be
filed "within the time for but before filing the answer to the complaint or pleading asserting a claim." The
time frame indicates that thereafter, the motion to dismiss based on the absence of the condition precedent
is barred. It is so inferable from the opening sentence of Section 1 of Rule 9 stating that defense and
objections not pleaded either in a motion to dismiss or in the answer are deemed waived. There are, as
just noted, only four exceptions to this Rule, namely, lack of jurisdiction over the subject matter; litis
pendentia ; res judicata ; and prescription of action. Failure to allege in the complaint that earnest efforts
at a compromise has been made but had failed is not one of the exceptions. Upon such failure, the defense
is deemed waived.
It was in Heirs of Domingo Valientes v. Ramas 14 cited in P.L. Uy Realty Corporation v. ALS Management
and Development Corporation15 where we noted that the second sentence of Section 1 of Rule 9 does not
only supply exceptions to the rule that defenses not pleaded either in a motion to dismiss or in the answer
are deemed waived, it also allows courts to dismiss cases motu propio on any of the enumerated grounds.
The tenor of the second sentence of the Rule is that the allowance of a motu propio dismissal can proceed

only from the exemption from the rule on waiver; which is but logical because there can be no ruling on a
waived ground.
Why the objection of failure to allege a failed attempt at a compromise in a suit among members of the
same family is waivable was earlier explained in the case of Versoza v. Versoza, 16 a case for future support
which was dismissed by the trial court upon the ground that there was no such allegation of infringement
of Article 222 of the Civil Code, the origin of Article 151 of the Family Code. While the Court ruled that
a complaint for future support cannot be the subject of a compromise and as such the absence of the
required allegation in the complaint cannot be a ground for objection against the suit, the decision went
on to state thus:
The alleged defect is that the present complaint does not state a cause of action. The proposed amendment
seeks to complete it. An amendment to the effect that the requirements of Article 222 have been complied
with does not confer jurisdiction upon the lower court. With or without this amendment, the subjectmatter of the action remains as one for support, custody of children, and damages, cognizable by the court
below.
To illustrate, Tamayo v. San Miguel Brewery, Inc., 17 allowed an amendment which " merely corrected a
defect in the allegation of plaintiff-appellants cause of action, because as it then stood, the original
complaint stated no cause of action." We there ruled out as inapplicable the holding in Campos Rueda
Corporation v. Bautista,18 that an amendment cannot be made so as to confer jurisdiction on the court x x
x. (Italics supplied).
Thus was it made clear that a failure to allege earnest but failed efforts at a compromise in a complaint
among members of the same family, is not a jurisdictional defect but merely a defect in the statement of a
cause of action. Versoza was cited in a later case as an instance analogous to one where the conciliation
process at the barangay level was not priorly resorted to. Both were described as a "condition precedent
for the filing of a complaint in Court."19 In such instances, the consequence is precisely what is stated in
the present Rule. Thus:
x x x The defect may however be waived by failing to make seasonable objection, in a motion to dismiss
or answer, the defect being a mere procedural imperfection which does not affect the jurisdiction of the
court.20(Underscoring supplied).
In the case at hand, the proceedings before the trial court ran the full course. The complaint of petitioners
was answered by respondents without a prior motion to dismiss having been filed. The decision in favor
of the petitioners was appealed by respondents on the basis of the alleged error in the ruling on the merits,
no mention having been made about any defect in the statement of a cause of action. In other words, no
motion to dismiss the complaint based on the failure to comply with a condition precedent was filed in the
trial court; neither was such failure assigned as error in the appeal that respondent brought before the
Court of Appeals.
Therefore, the rule on deemed waiver of the non-jurisdictional defense or objection is wholly applicable
to respondent.1wphi1 If the respondents as parties-defendants could not, and did not, after filing their
answer to petitioners complaint, invoke the objection of absence of the required allegation on earnest
efforts at a compromise, the appellate court unquestionably did not have any authority or basis to motu
propio order the dismissal of petitioners complaint.
Indeed, even if we go by the reason behind Article 151 of the Family Code, which provision as then
Article 222 of the New Civil Code was described as "having been given more teeth" 21 by Section 1(j),

Rule 16 of the Rule of Court, it is safe to say that the purpose of making sure that there is no longer any
possibility of a compromise, has been served. As cited in commentaries on Article 151 of the Family
Code
This rule is introduced because it is difficult to imagine a sudden and more tragic spectacle than a
litigation between members of the same family. It is necessary that every effort should be made towards a
compromise before a litigation is allowed to breed hate and passion in the family. It is known that a
lawsuit between close relatives generates deeper bitterness than between strangers. 22
The facts of the case show that compromise was never an option insofar as the respondents were
concerned. The impossibility of compromise instead of litigation was shown not alone by the absence of a
motion to dismiss but on the respondents insistence on the validity of the donation in their favor of the
subject properties. Nor could it have been otherwise because the Pre-trial Order specifically limited the
issues to the validity of the deed and whether or not respondent Juana and Mariano are compulsory heirs
of Dr. Favis. Respondents not only confined their arguments within the pre-trial order; after losing their
case, their appeal was based on the proposition that it was error for the trial court to have relied on the
ground of vitiated consent on the part of Dr. Favis.
The Court of Appeals ignored the facts of the case that clearly demonstrated the refusal by the
respondents to compromise. Instead it ordered the dismissal of petitioners complaint on the ground that it
did not allege what in fact was shown during the trial. The error of the Court of Appeals is patent.
Unfortunately for respondents, they relied completely on the erroneous ruling of the Court of Appeals
even when petitioners came to us for review not just on the basis of such defective motu propio action but
also on the proposition that the trial court correctly found that the donation in question is flawed because
of vitiated consent. Respondents did not answer this argument. The trial court stated that the facts are:
x x x To determine the intrinsic validity of the deed of donation subject of the action for annulment, the
mental state/condition of the donor Dr. Mariano Favis, Sr. at the time of its execution must be taken into
account. Factors such as his age, health and environment among others should be considered. As testified
to by Dr. Mercedes Favis, corroborated by Dr. Edgardo Alday and Dra. Ofelia Adapon, who were all
presented as expert witnesses, Dr. Mariano Favis, Sr. had long been suffering from Hiatal Hernia and
Parkinsons disease and had been taking medications for years. That a person with Parkinsons disease for
a long time may not have a good functioning brain because in the later stage of the disease, 1/3 of death
develop from this kind of disease, and or dementia. With respect to Hiatal Hernia, this is a state wherein
organs in the abdominal cavity would go up to the chest cavity, thereby occupying the space for the lungs
causing the lungs to be compromised. Once the lungs are affected, there is less oxygenation to the brain.
The Hernia would cause the heart not to pump enough oxygen to the brain and the effect would be
chronic, meaning, longer lack of oxygenation to the brain will make a person not in full control of his
faculties. Dr. Alday further testified that during his stay with the house of Dr. Mariano Favis, Sr. (19921994), he noticed that the latter when he goes up and down the stairs will stop after few seconds, and he
called this pulmonary cripple a very advanced stage wherein the lungs not only one lung, but both lungs
are compromised. That at the time he operated on the deceased, the left and right lung were functioning
but the left lung is practically not even five (5%) percent functioning since it was occupied by abdominal
organ. x x x.
Dr. Mariano Favis, Sr. during the execution of the Deed of Donation was already 92 years old; living with
the defendants and those years from 1993 to 1995 were the critical years when he was sick most of the
time. In short, hes dependent on the care of his housemates particularly the members of his family. It is
the contention of the defendants though that Dr. Mariano Favis, Sr. had full control of his mind during the

execution of the Deed of Donation because at that time, he could go on with the regular way of life or
could perform his daily routine without the aid of anybody like taking a bath, eating his meals, reading
the newspaper, watching television, go to the church on Sundays, walking down the plaza to exercise and
most importantly go to the cockpit arena and bet. Dr. Ofelia Adapon, a neurology expert however,
testified that a person suffering from Parkinsons disease when he goes to the cockpit does not necessarily
mean that such person has in full control of his mental faculties because anyone, even a retarded person, a
person who has not studied and have no intellect can go to the cockpit and bet. One can do everything but
do not have control of his mind. x x x That Hiatal Hernia creeps in very insidiously, one is not sure
especially if the person has not complained and no examination was done. It could be there for the last
time and no one will know. x x x.
The Deed of Donation in favor of the defendants Ma. Theresa, Joana D. Favis, Maria Cristina D. Favis,
James Mark D. Favis and Maria Thea D. Favis, all of whom are the children of Mariano G. Favis, Jr. was
executed on [16 October] 1994, seven (7) months after Dra. Mercedes Favis left the house of Dr. Favis,
Sr. at Bonifacio St., Vigan City, Ilocos Sur, where she resided with the latter and the defendants.
Putting together the circumstances mentioned, that at the time of the execution of the Deed of Donation,
Dr. Mariano Favis, Sr. was already at an advanced age of 92, afflicted with different illnesses like Hiatal
hernia, Parkinsons disease and pneumonia, to name few, which illnesses had the effects of impairing his
brain or mental faculties and the deed being executed only when Dra. Mercedes Favis had already left his
fathers residence when Dr. Mariano Favis, Sr. could have done so earlier or even in the presence of Dra.
Mercedes Favis, at the time he executed the Deed of Donation was not in full control of his mental
faculties. That although age of senility varies from one person to another, to reach the age of 92 with all
those medications and treatment one have received for those illnesses, yet claim that his mind remains
unimpaired, would be unusual. The fact that the Deed of Donation was only executed after Dra. Mercedes
Favis left his father's house necessarily indicates that they don't want the same to be known by the first
family, which is an indicia of bad faith on the part of the defendant, who at that time had influence over
the donor.23
The correctness of the finding was not touched by the Court of Appeals. The respondents opted to rely
only on what the appellate court considered, erroneously though, was a procedural infirmity. The trial
court's factual finding, therefore, stands unreversed; and respondents did not provide us with any
argument to have it reversed.
The issue of the validity of donation was fully litigated and discussed by the trial court. Indeed, the trial
court's findings were placed at issue before the Court of Appeals but the appellate court chose to confine
its review to the procedural aspect. The judgment of the Court of Appeals, even if it dealt only with
procedure, is deemed to have covered all issues including the correctness of the factual findings of the
trial court. Moreover, remanding the case to the Court of Appeals would only constitute unwarranted
delay in the final disposition of the case.
WHEREFORE, the Decision of the Court of Appeals is REVERSED and SET ASIDE and the Judgment
of the Regional Trial Court of Vigan, Ilocos Sur, Branch 20 is AFFIRMED.
SO ORDERED.

16. G.R. No. 199990, February 04, 2015


SPOUSES ROLANDO AND HERMINIA SALVADOR, Petitioners, v. SPOUSES ROGELIO AND
ELIZABETH RABAJA AND ROSARIO GONZALES, Respondents.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari seeking to reverse and set aside the August 22, 2011 Decision 1
and the January 5, 2012 Resolution 2 of the Court of Appeals (CA) in CA-G.R. CV No. 90296 which
affirmed with modification the March 29, 2007 Decision of the Regional Trial Court Branch 214 (RTCBranch 214), Mandaluyong City in Civil Case No. MC-03-2175, for rescission of a contract ( rescission
case).
The

Facts

This case stemmed from a dispute involving the sellers, petitioner spouses Rolando and Herminia
Salvador (Spouses Salvador); the sellers agent, Rosario Gonzales (Gonzales); and the buyers, respondent
Spouses Rogelio and Elizabeth Rabaja (Spouses Rabaja), over a parcel of land situated at No. 25,
Merryland Village, 375 Jose Rizal Street, Mandaluyong City (subject property), covered by Transfer
Certificate of Title (TCT) No. 13426 and registered in the names of Spouses Salvador. From 1994 until
2002,
Spouses
Rabaja
were
leasing
an
apartment
in
the
subject
lot.
Sometime in July 1998, Spouses Rabaja learned that Spouses Salvador were looking for a buyer of the
subject property. Petitioner Herminia Salvador (Herminia) personally introduced Gonzales to them as the
administrator of the said property. Spouses Salvador even handed to Gonzales the owners duplicate
certificate of title over the subject property. On July, 3, 1998, Spouses Rabaja made an initial payment of
P48,000.00 to Gonzales in the presence of Herminia. Gonzales then presented the Special Power of
Attorney3 (SPA), executed by Rolando Salvador (Rolando) and dated July 24, 1998. On the same day, the
parties executed the Contract to Sell4 which stipulated that for a consideration of P5,000,000.00, Spouses
Salvador sold, transferred and conveyed in favor of Spouses Rabaja the subject property. Spouses Rabaja
made several payments totalling P950,000.00, which were received by Gonzales pursuant to the SPA
provided earlier as evidenced by the check vouchers signed by Gonzales and the improvised receipts
signed
by
Herminia.
Sometime in June 1999, however, Spouses Salvador complained to Spouses Rabaja that they did not
receive any payment from Gonzales. This prompted Spouses Rabaja to suspend further payment of the
purchase price; and as a consequence, they received a notice to vacate the subject property from Spouses
Salvador
for
non-payment
of
rentals.
Thereafter, Spouses Salvador instituted an action for ejectment against Spouses Rabaja. In turn, Spouses
Rabaja filed an action for rescission of contract against Spouses Salvador and Gonzales, the subject
matter
of
the
present
petition.
In the action for ejectment, the complaint was filed before the Metropolitan Trial Court of Mandaluyong
City, Branch 60 (MeTC), where it was docketed as Civil Case No. 17344. In its August 14, 2002
Decision,5 the MeTC ruled in favor of Spouses Salvador finding that valid grounds existed for the
eviction of Spouses Rabaja from the subject property and ordering them to pay back rentals. Spouses
Salvador were able to garnish the amount of P593,400.00 6 from Spouses Rabajas time deposit account

pursuant to a writ of execution issued by the MeTC. 7 Spouses Rabaja appealed to the Regional Trial
Court, Branch 212, Mandaluyong City (RTC-Br. 212) which reversed the MeTC ruling in its March 1,
2005 decision.8 The RTC-Br. 212 found that no lease agreement existed between the parties. Thereafter,
Spouses Salvador filed an appeal with the CA which was docketed as CA-G.R. SP No. 89259. On March
31, 2006, the CA ruled in favor of Spouses Salvador and reinstated the MeTC ruling ejecting Spouses
Rabaja.9 Not having been appealed, the CA decision in CA-G.R. SP No. 89259 became final and
executory
on
May
12,
2006.10chanroblesvirtuallawlibrary
Meanwhile, the rescission case filed by Spouses Rabaja against Spouses Salvador and Gonzales and
docketed as Civil Case No. MC No. 03-2175 was also raffled to RTC-Br. 212. In their complaint, 11dated
July 7, 2003, Spouses Rabaja demanded the rescission of the contract to sell praying that the amount of
P950,000.00 they previously paid to Spouses Salvador be returned to them. They likewise prayed that
damages be awarded due to the contractual breach committed by Spouses Salvador.
Spouses Salvador filed their answer with counterclaim and cross-claim 12 contending that there was no
meeting of the minds between the parties and that the SPA in favor of Gonzales was falsified. In fact, they
filed a case for falsification against Gonzales, but it was dismissed because the original of the alleged
falsified SPA could not be produced. They further averred that they did not receive any payment from
Spouses Rabaja through Gonzales. In her defense, Gonzales filed her answer 13 stating that the SPA was
not falsified and that the payments of Spouses Rabaja amounting to P950,000.00 were all handed over to
Spouses
Salvador.
The pre-trial conference began but attempts to amicably settle the case were unsuccessful. It was formally
reset to February 4, 2005, but Spouses Salvador and their counsel failed to attend. Consequently, the RTC
issued the pre-trial order14declaring Spouses Salvador in default and allowing Spouses Rabaja to present
their evidence ex parte against Spouses Salvador and Gonzales to present evidence in her favor.
A motion for reconsideration, 15 dated March 28, 2005, was filed by Spouses Salvador on the said pre-trial
order beseeching the liberality of the court. The rescission case was then re-raffled to RTC-Br. 214 after
the Presiding Judge of RTC-Br. 212 inhibited herself. In the Order, 16 dated October 24, 2005, the RTC-Br.
214 denied the motion for reconsideration because Spouses Salvador provided a flimsy excuse for their
non-appearance
in
the
pre-trial
conference.
Thereafter, trial proceeded and Spouses Rabaja and Gonzales presented their respective testimonial and
documentary
evidence.
RTC

Ruling

On March 29, 2007, the RTC-Br. 214 rendered a decision 17 in favor of Spouses Rabaja. It held that the
signature of Spouses Salvador affixed in the contract to sell appeared to be authentic. It also held that the
contract, although denominated as contract to sell, was actually a contract of sale because Spouses
Salvador, as vendors, did not reserve their title to the property until the vendees had fully paid the
purchase price. Since the contract entered into was a reciprocal contract, it could be validly rescinded by
Spouses Rabaja, and in the process, they could recover the amount of P950,000.00 jointly and severally
from Spouses Salvador and Gonzales. The RTC stated that Gonzales was undoubtedly the attorney-in-fact
of Spouses Salvador absent any taint of irregularity. Spouses Rabaja could not be faulted in dealing with
Gonzales
who
was
duly
equipped
with
the
SPA
from
Spouses
Salvador.
The RTC-Br. 214 then ruled that the amount of P593,400.00 garnished from the time deposit account of
Spouses Rabaja, representing the award of rental arrearages in the separate ejectment suit, should be
returned by Spouses Salvador.18 The court viewed that such amount was part of the purchase price of the

subject property which must be returned. It also awarded moral and exemplary damages in favor of
Spouses Rabaja and attorneys fees in favor of Gonzales. The dispositive portion of the said decision
reads:chanRoblesvirtualLawlibrary
WHEREFORE, this court renders judgment as follows:chanRoblesvirtualLawlibrary
a. Ordering the Contract to Sell entered into by the plaintiff and defendant spouses Rolando and
Herminia Salvador on July 24, 1998 as RESCINDED;chanrobleslaw
b. Ordering defendant spouses Rolando and Herminia Salvador and defendant Rosario S. Gonzales
jointly and severally liable to pay plaintiffs:chanRoblesvirtualLawlibrary
1. the amount of NINE HUNDRED FIFTY THOUSAND PESOS (P950,000.00),
representing the payments made by the latter for the purchase of subject
property;chanrobleslaw
2. the amount of TWENTY
damages;chanrobleslaw

THOUSAND

PESOS

(P20,000.00),

as

moral

3. the amount of TWENTY THOUSAND PESOS (P20,000.00), as exemplary


damages;chanrobleslaw
4. the amount of ONE HUNDRED THOUSAND PESOS (P100,000.00), as attorneys
fees;chanrobleslaw
5. the cost of suit.

c. Ordering defendant Spouses Rolando and Herminia Salvador to pay plaintiffs the amount of
FIVE HUNDRED NINETY THREE THOUSAND PESOS (P593,000.00) (sic), representing the
amount garnished from the Metrobank deposit of plaintiffs as payment for their alleged back
rentals;chanrobleslaw
d. Ordering the defendant Spouses Rolando and Herminia Salvador to pay defendant Rosario
Gonzales on her cross-claim in the amount of ONE HUNDRED THOUSAND PESOS
(P100,000.00);chanrobleslaw
e. Dismissing the counterclaims of the defendants against the plaintiff.
SO ORDERED.19
Gonzales filed a motion for partial reconsideration, but it was denied by the RTC-Br. 114 in its
Order,20 dated September 12, 2007. Undaunted, Spouses Salvador and Gonzales filed an appeal before the
CA.
CA

Ruling

On March 29, 2007, the CA affirmed the decision of the RTC-Br. 114 with modifications. It ruled that the
contract to sell was indeed a contract of sale and that Gonzales was armed with an SPA and was, in fact,
introduced to Spouses Rabaja by Spouses Salvador as the administrator of the property. Spouses Rabaja

could

not

be

blamed

if

they

had

transacted

with

Gonzales.

The CA then held that Spouses Salvador should return the amount of P593,400.00 pursuant to a separate
ejectment case, reasoning that Spouses Salvador misled the court because an examination of CA-G.R. SP
No. 89260 showed that Spouses Rabaja were not involved in that case. CA-G.R. SP No. 59260 was an
action between Spouses Salvador and Gonzales only and involved a completely different residential
apartment located at 302-C Jupiter Street, Dreamland Subdivision, Mandaluyong City.
The CA, however, ruled that Gonzales was not solidarily liable with Spouses Salvador. The agent must
expressly bind himself or exceed the limit of his authority in order to be solidarily liable. It was not
shown that Gonzales as agent of Spouses Salvador exceeded her authority or expressly bound herself to
be solidarily liable. The decretal portion of the CA decision reads:chanRoblesvirtualLawlibrary
WHEREFORE, the appeal is PARTLY GRANTED. The assailed Decision dated March 29, 2007 and the
Order dated September 12, 2007, of the Regional Trial Court, Branch 214, Mandaluyong City, in Civil
Case No. MC-03-2175, are AFFIRMED with MODIFICATION in that Rosario Gonzalez is not jointly
and severally liable to pay Spouses Rabaja the amounts enumerated in paragraph (b) of the Decision
dated
March
29,
2007.
SO ORDERED.21
Spouses Salvador filed a motion for reconsideration but it was denied by the CA in its January 5, 2012
Resolution.
Hence, this petition.
ASSIGNMENT OF ERRORS
I
THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE LOWER COURT
GRAVELY ABUSED ITS DISCRETION IN DECLARING PETITIONERS IN DEFAULT AND IN
DEPRIVING THEM OF THE OPPORTUNITY TO CROSS-EXAMINE RESPONDENTS SPS.
RABAJA AS WELL AS TO PRESENT EVIDENCE FOR AND IN THEIR BEHALF, GIVEN THE
MERITORIOUS DEFENSES RAISED IN THEIR ANSWER THAT CATEGORICALLY AND
DIRECTLY DISPUTE RESPONDENTS SPS. RABAJAS CAUSE OF ACTION.
II
THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE TRIAL COURT GRAVELY
ERRED IN GIVING CREDENCE TO THE TESTIMONY OF RESPONDENT GONZALES THAT
PAYMENTS WERE INDEED REMITTED TO AND RECEIVED BY PETITIONER HERMINIA
SALVADOR EVEN AS THE IMPROVISED RECEIPTS WERE EVIDENTLY MADE UP AND
FALSIFIED BY RESPONDENT GONZALES.
III
THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE TRIAL COURT GRAVELY
ERRED IN RESCINDING THE CONTRACT TO SELL WHEN THERE IS NOTHING TO
RESCIND AS NO VALID CONTRACT TO SELL WAS ENTERED INTO, AND IN DIRECTING
THE REFUND OF THE AMOUNT OF P950,000.00 WHEN THE EVIDENCE CLEARLY SHOWS
THAT SAID AMOUNT WAS PAID TO AND RECEIVED BY RESPONDENT GONZALES
ALONE WHO MISAPPROPRIATED THE SAME.

IV
THE COURT OF APPEALS ERRED IN AFFIRMING THE TRIAL COURTS DECISION FOR
PETITIONERS TO RETURN THE AMOUNT OF P543,400.00 REPRESENTING RENTALS IN
ARREARS GARNISHED OR WITHDRAWN BY VIRTUE OF A WRIT OF EXECUTION
ISSUED IN AN EJECTMENT CASE WHICH WAS TRIED AND DECIDED BY ANOTHER
COURT.
V
THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE LOWER COURT
GRAVELY ERRED IN AWARDING DAMAGES TO RESPONDENTS SPS. RABAJA, THERE
BEING NO FACTUAL AND LEGAL BASES FOR SUCH AWARD.
VI
THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE TRIAL COURT GRAVELY
ERRED IN AWARDING P100,000.00 TO RESPONDENT GONZALES AS ATTORNEYS FEES
WHEN RESPONDENT GONZALES, IN FACT, COMMITTED FORGERY AND
FALSIFICATION IN DEALING WITH THE PROPERTY OF PETITIONERS AND
MISAPPROPRIATED THE MONIES PAID TO HER BY RESPONDENTS SPS. RABAJA, THUS
GIVING PREMIUM TO HER FRAUDULENT ACTS.22
The foregoing can be synthesized into three main issues. First, Spouses Salvador contend that the order of
default must be lifted because reasonable grounds exist to justify their failure to attend the pre-trial
conference on February 4, 2005. Second, Spouses Salvador raise in issue the veracity of the receipts given
by Gonzales, the SPA and the validity of the contract to sell. They claim that the improvised receipts
should not be given credence because these were crude and suspicious, measuring only by 2 x 2 inches
which showed that Gonzales misappropriated the payments of Spouses Rabaja for herself and did not
remit the amount of P950,000.00 to them. As there was no consideration, then no valid contract to sell
existed. Third, Spouses Salvador argue that the ejectment case, from which the amount of P593,400.00
was garnished, already became final and executory and could not anymore be disturbed. Lastly, the award
of damages in favor of Spouses Rabaja and Gonzales was improper absent any legal and factual bases.
On January 21, 2013, Spouses Salvador filed their supplemental petition 23 informing the Court that RTCBr. 213 had rendered a decision in Civil Case No. MC00-1082, an action for rescission of the SPA. The
said decision held that Spouses Salvador properly revoked the SPA in favor of Gonzales due to loss of
trust and confidence. On September 11, 2013, Gonzales filed her comment to the supplemental
petition,24 contending that the RTC-Branch 213 decision had no bearing because it had not yet attained
finality. On even date, Spouses Rabaja filed their Comment, 25 asserting that the present petition is a mere
rehash of the previous arguments of Spouses Salvador before the CA. On November 15, 2013, Spouses
Salvador replied that they merely wanted to show that the findings by the RTC-Br. 213 should be given
weight as a full-blown trial was conducted therein. 26chanroblesvirtuallawlibrary
The Courts Ruling
As a general rule, the Courts jurisdiction in a Rule 45 petition is limited to the review of pure questions
of law. A question of law arises when the doubt or difference exists as to what the law is on a certain state
of facts. Negatively put, Rule 45 does not allow the review of questions of fact. A question of fact exists
when
the
doubt
or
difference
arises
as
to
the
truth
or
falsity of
the
allegations.27chanroblesvirtuallawlibrary

The present petition presents questions of fact because it requires the Court to examine the veracity of the
evidence presented during the trial, such as the improvised receipts, the SPA given to Gonzales and the
contract to sell. Even the petitioner spouses themselves concede and ask the Court to consider questions
of fact,28 but the Court finds no reason to disturb the findings of fact of the lower courts absent any
compelling
reason
to
the
contrary.
The failure of Spouses Salvador to attend pre-trial conference warrants the presentation of evidence ex
parte
by
Spouses
Rabaja
On the procedural aspect, the Court reiterates the rule that the failure to attend the pre-trial conference
does not result in the default of an absent party. Under the 1997 Rules of Civil Procedure, a defendant is
only declared in default if he fails to file his Answer within the reglementary period. 29On the other hand,
if a defendant fails to attend the pre-trial conference, the plaintiff can present his evidence ex parte.
Sections 4 and 5, Rule 18 of the Rules of Court provide:chanRoblesvirtualLawlibrary
Sec.
4.
Appearance
of
parties.
It shall be the duty of the parties and their counsel to appear at the pre-trial. The non-appearance of a
party may be excused only if a valid cause is shown therefor or if a representative shall appear in his
behalf fully authorized in writing to enter into an amicable settlement, to submit to alternative modes of
dispute resolution, and to enter into stipulations or admissions of facts and of documents.
Sec.

5.

Effect

of

failure

to

appear.

The failure of the plaintiff to appear when so required pursuant to the next preceding section shall be
cause for dismissal of the action. The dismissal shall be with prejudice, unless otherwise ordered by the
court. A similar failure on the part of the defendant shall be cause to allow the plaintiff to present
his evidence ex parte and the court to render judgment on the basis thereof.
[Emphasis supplied]
The case of Philippine American Life & General Insurance Company v. Joseph Enario 30 discussed the
difference between the non-appearance of a defendant in a pre-trial conference and the declaration of a
defendant in default in the present Rules of Civil Procedure. The decision
instructs:chanRoblesvirtualLawlibrary
Prior to the 1997 Revised Rules of Civil Procedure, the phrase "as in default" was initially included in
Rule 20 of the old rules, and which read as follows:chanRoblesvirtualLawlibrary
Sec. 2. A party who fails to appear at a pre-trial conference may be non-suited or considered as in
default.cralawred
It was, however, amended in the 1997 Revised Rules of Civil Procedure. Justice Regalado, in his book,
REMEDIAL LAW COMPENDIUM, explained the rationale for the deletion of the phrase "as in default"
in the amended provision, to wit:chanRoblesvirtualLawlibrary
1. This is a substantial reproduction of Section 2 of the former Rule 20 with the change that, instead of
defendant being declared "as in default" by reason of his non-appearance, this section now spells out that
the procedure will be to allow the ex parte presentation of plaintiffs evidence and the rendition of
judgment on the basis thereof. While actually the procedure remains the same, the purpose is one of
semantical propriety or terminological accuracy as there were criticisms on the use of the word "default"
in the former provision since that term is identified with the failure to file a required answer, not
appearance in court.cralawred
Still, in the same book, Justice Regalado clarified that while the order of default no longer obtained, its
effects were retained, thus:chanRoblesvirtualLawlibrary
Failure to file a responsive pleading within the reglementary period, and not failure to appear at the
hearing, is the sole ground for an order of default, except the failure to appear at a pre-trial conference

wherein the effects of a default on the part of the defendant are followed, that is, the plaintiff shall be
allowed to present evidence ex parte and a judgment based thereon may be rendered against
defendant.cralawred
From the foregoing, the failure of a party to appear at the pre-trial has indeed adverse consequences. If the
absent party is the plaintiff, then his case shall be dismissed. If it is the defendant who fails to appear, then
the plaintiff is allowed to present his evidence ex parte and the court shall render judgment based on the
evidence presented. Thus, the plaintiff is given the privilege to present his evidence without objection
from the defendant, the likelihood being that the court will decide in favor of the plaintiff, the defendant
having forfeited the opportunity to rebut or present its own evidence. 31 The stringent application of the
rules on pre-trial is necessitated from the significant role of the pre-trial stage in the litigation process.
Pre-trial is an answer to the clarion call for the speedy disposition of cases. Although it was discretionary
under the 1940 Rules of Court, it was made mandatory under the 1964 Rules and the subsequent
amendments in 1997.32 The importance of pre-trial in civil actions cannot be
overemphasized.33chanroblesvirtuallawlibrary
There is no dispute that Spouses Salvador and their counsel failed to attend the pre-trial conference set on
February 4, 2005 despite proper notice. Spouses Salvador aver that their non-attendance was due to the
fault of their counsel as he forgot to update his calendar.34 This excuse smacks of carelessness, and
indifference to the pre-trial stage. It simply cannot be considered as a justifiable excuse by the Court. As a
result of their inattentiveness, Spouses Salvador could no longer present any evidence in their favor.
Spouses Rabaja, as plaintiffs, were properly allowed by the RTC to present evidence ex parte against
Spouses Salvador as defendants. Considering that Gonzales as co-defendant was able to attend the pretrial conference, she was allowed to present her evidence. The RTC could only render judgment based on
the
evidence
presented
during
the
trial.
Gonzales, as agent of Spouses Salvador, could validly receive the payments of Spouses Rabaja
Even on the substantial aspect, the petition does not warrant consideration. The Court agrees with the
courts below in finding that the contract entered into by the parties was essentially a contract of sale
which could be validly rescinded. Spouses Salvador insist that they did not receive the payments made by
Spouses Rabaja from Gonzales which totalled P950,000.00 and that Gonzales was not their duly
authorized agent. These contentions, however, must fail in light of the applicable provisions of the New
Civil Code which state:chanRoblesvirtualLawlibrary
Art. 1900. So far as third persons are concerned, an act is deemed to have been performed within the
scope of the agent's authority, if such act is within the terms of the power of attorney, as written, even if
the agent has in fact exceeded the limits of his authority according to an understanding between the
principal and the agent.
xxxx
Art. 1902. A third person with whom the agent wishes to contract on behalf of the principal may require
the presentation of the power of attorney, or the instructions as regards the agency. Private or secret orders
and instructions of the principal do not prejudice third persons who have relied upon the power of
attorney or instructions shown them.
xxxx
Art. 1910. The principal must comply with all the obligations which the agent may have contracted within
the scope of his authority.cralawred
Persons dealing with an agent must ascertain not only the fact of agency, but also the nature and extent of
the agents authority. A third person with whom the agent wishes to contract on behalf of the principal

may require the presentation of the power of attorney, or the instructions as regards the agency. The basis
for agency is representation and a person dealing with an agent is put upon inquiry and must discover on
his
own
peril
the
authority
of
the
agent. 35chanroblesvirtuallawlibrary
According to Article 1990 of the New Civil Code, insofar as third persons are concerned, an act is
deemed to have been performed within the scope of the agent's authority, if such act is within the terms of
the power of attorney, as written. In this case, Spouses Rabaja did not recklessly enter into a contract to
sell with Gonzales. They required her presentation of the power of attorney before they transacted with
her principal. And when Gonzales presented the SPA to Spouses Rabaja, the latter had no reason not to
rely
on
it.
The law mandates an agent to act within the scope of his authority which what appears in the written
terms of the power of attorney granted upon him. 36 The Court holds that, indeed, Gonzales acted within
the scope of her authority. The SPA precisely stated that she could administer the property, negotiate the
sale and collect any document and all payments related to the subject property. 37 As the agent acted within
the scope of his authority, the principal must comply with all the obligations. 38As correctly held by the
CA, considering that it was not shown that Gonzales exceeded her authority or that she expressly bound
herself to be liable, then she could not be considered personally and solidarily liable with the principal,
Spouses
Salvador.39chanroblesvirtuallawlibrary
Perhaps the most significant point which defeats the petition would be the fact that it was Herminia
herself who personally introduced Gonzalez to Spouses Rabaja as the administrator of the subject
property. By their own ostensible acts, Spouses Salvador made third persons believe that Gonzales was
duly authorized to administer, negotiate and sell the subject property. This fact was even affirmed by
Spouses Salvador themselves in their petition where they stated that they had authorized Gonzales to look
for a buyer of their property.40 It is already too late in the day for Spouses Salvador to retract the
representation
to
unjustifiably
escape
their
principal
obligation.
As correctly held by the CA and the RTC, considering that there was a valid SPA, then Spouses Rabaja
properly made payments to Gonzales, as agent of Spouses Salvador; and it was as if they paid to Spouses
Salvador. It is of no moment, insofar as Spouses Rabaja are concerned, whether or not the payments were
actually remitted to Spouses Salvador. Any internal matter, arrangement, grievance or strife between the
principal and the agent is theirs alone and should not affect third persons. If Spouses Salvador did not
receive the payments or they wish to specifically revoke the SPA, then their recourse is to institute a
separate action against Gonzales. Such action, however, is not any more covered by the present
proceeding.
The

amount

of

P593,400.00

should

not

be

returned

by

Spouses

Salvador

Nevertheless, the assailed decision of the CA must be modified with respect to the amount of P593,400.00
garnished by Spouses Salvador and ordered returned to Spouses Rabaja. The RTC ordered the return of
the amount garnished holding that it constituted a part of the purchase price. The CA ruled that Spouses
Salvador misled the Court when they improperly cited CA-G.R. SP No. 89260 to prove their entitlement
to
the
said
amount.
Both
courts
erred
in
their
ruling.
First, the garnishment of the amount of P593,400.00 against Spouses Rabaja was pursuant to the CA
decision in CA-G.R. SP No. 89259, an entirely different case involving an action for ejectment, and it
does not concern the rescission case which is on appeal before this Court. Moreover, the decision on the
ejectment case is final and executory and an entry of judgment has already been made. 41 Nothing is more
settled in law than that when a final judgment is executory, it thereby becomes immutable and unalterable.
The judgment may no longer be modified in any respect, even if the modification is meant to correct what

is perceived to be an erroneous conclusion of fact or law, and regardless of whether the modification is
attempted to be made by the court which rendered it or by the highest Court of the land. The doctrine is
founded on consideration of public policy and sound practice that, at the risk of occasional errors,
judgments must become final at some definite point in time. 42chanroblesvirtuallawlibrary
The March 31, 2006 CA decision43in CA-G.R. SP No. 89259 has long been final and executory and
cannot any more be disturbed by the Court. Public policy dictates that once a judgment becomes final,
executory and unappealable, the prevailing party should not be denied the fruits of his victory by some
subterfuge devised by the losing party. Unjustified delay in the enforcement of a judgment sets at naught
the role and purpose of the courts to resolve justiciable controversies with
finality.44chanroblesvirtuallawlibrary
Meanwhile, in ruling that the garnishment was improper and thus ordering the return of the garnished
amount, the CA referred to its decision in CA-G.R. SP No. 89260. Spouses Salvador, however, clarified in
its motion for reconsideration45 before the CA and in the present petition 46 that the garnishment was
pursuant to CA-G.R. SP No. 89259, and not CA-G.R. SP No. 89260, another ejectment case involving
another property. A perusal of the records reveals that indeed the garnishment was pursuant to the
ejectment case in the MeTC, docketed as Civil Case No. 17344, 47where Spouses Rabaja were the
defendants. The MeTC decision was then reinstated by the CA in CA-G.R. SP No. 89259, not CA-G.R.
SP No. 89260. There, a writ of execution48 and notice of pay49 were issued against Spouses Rabaja in the
amount
of
P591,900.00.
Second, Spouses Rabajas appeal with the RTC never sought relief in returning the garnished
amount.50 Such issue simply emerged in the RTC decision. This is highly improper because the courts
grant of relief is limited only to what has been prayed for in the complaint or related thereto, supported by
evidence, and covered by the partys cause of action. 51chanroblesvirtuallawlibrary
If Spouses Rabaja would have any objection on the manner and propriety of the execution, then they must
institute their opposition to the execution proceeding a separate case. Spouses Rabaja can invoke the Civil
Code provisions on legal compensation or set-off under Articles 1278, 1279 and 1270. 52 The two
obligations appear to have respectively offset each other, compensation having taken effect by operation
of law pursuant to the said provisions of the Civil Code, since all the requisites provided in Art. 1279 of
the
said
Code
for
automatic
compensation
are
duly
present.
No

award

of

actual,

moral

and

exemplary

damages

The award of damages to Spouses Rabaja cannot be sustained by this Court. The filing alone of a civil
action should not be a ground for an award of moral damages in the same way that a clearly unfounded
civil action is not among the grounds for moral damages. 53 Article 2220 of the New Civil Code provides
that to award moral damages in a breach of contract, the defendant must act fraudulently or in bad faith.
In this case, Spouses Rabaja failed to sufficiently show that Spouses Salvador acted in a fraudulent
manner or with bad faith when it breached the contract of sale. Thus, the award of moral damages cannot
be
warranted.
As to the award of exemplary damages, Article 2229 of the New Civil Code provides that exemplary
damages may be imposed by way of example or correction for the public good, in addition to the moral,
temperate, liquidated or compensatory damages. 54 The claimant must first establish his right to moral,
temperate, liquidated or compensatory damages. In this case, considering that Spouses Rabaja failed to
prove moral or compensatory damages, then there could be no award of exemplary damages.
With regard to attorneys fees, neither Spouses Rabaja nor Gonzales is entitled to the award. The settled

rule is that no premium should be placed on the right to litigate and that not every winning party is
entitled to an automatic grant of attorneys fees. 55 The RTC reasoned that Gonzales was forced to litigate
due to the acts of Spouses Salvador. The Court does not agree. Gonzales, as agent of Spouses Salvador,
should have expected that she would be called to litigation in connection with her fiduciary duties to the
principal.
In view of all the foregoing, the CA decision should be affirmed with the following
modifications:chanRoblesvirtualLawlibrary
1. The order requiring defendant Spouses Rolando and Herminia Salvador to pay plaintiffs the
amount of Five Hundred Ninety Three Thousand (P593,000.00) Pesos, representing the amount
garnished from the Metrobank deposit of plaintiffs as for their back rentals should be
deleted;chanrobleslaw
2. The award of moral damages in the amount of Twenty Thousand (P20,000.00) Pesos; exemplary
damages in the amount of Twenty Thousand (P20,000.00) Pesos, and attorneys fees in the
amount of One Hundred Thousand (P100,000.00) Pesos in favor of Spouses Rabaja should be
deleted; and
3. The award of attorneys fees in amount of One Hundred Thousand (P100,000.00) Pesos in favor
of Gonzales should be deleted.
The other amounts awarded are subject to interest at the legal rate of 6% per annum, to be reckoned from
the
date
of
finality
of
this
judgment
until
fully
paid.
WHEREFORE, the petition is PARTLY GRANTED. The March 29, 2007 Decision of the Regional
Trial Court, Branch 214, Mandaluyong City, in Civil Case No. MC-03-2175, is MODIFIED to read as
follows:chanRoblesvirtualLawlibrary
WHEREFORE, this Court renders judgment as follows:chanRoblesvirtualLawlibrary
a. Ordering the Contract to Sell entered into by Spouses Rogelio and Elizabeth Rabaja and
Spouses Rolando and Herminia Salvador on July 24, 1998 as RESCINDED;chanrobleslaw
b. Ordering Spouses Rolando and Herminia Salvador to pay Spouses Rogelio and Elizabeth
Rabaja:chanRoblesvirtualLawlibrary
1. The amount of Nine Hundred Fifty Thousand (P950,000.00) Pesos, representing the
payments made by the latter for the purchase of the subject property; and
2. The cost of suit;chanrobleslaw
c. Dismissing the counterclaims of Spouses Rolando and Herminia Salvador and Rosario Gonzales
against Spouses Rogelio and Elizabeth Rabaja
The amounts awarded are subject to interest at the legal rate of 6% per annum to be reckoned from the
date of finality of this judgment until fully paid.
As aforestated, this is without prejudice to the invocation by either party of the Civil Code provisions on
legal
compensation
or
set-off
under
Articles
1278,
1279
and
1270.
SO ORDERED.

17. G.R. No. 204700

November 24, 2014

EAGLERIDGE DEVELOPMENT CORPORATION, MARCELO N. NAVAL and CRISPIN I.


OBEN, Petitioners,
vs.
CAMERON GRANVILLE 3 ASSET MANAGEMENT, INC., Respondent.
RESOLUTION
LEONEN, J.:
For resolution is respondent Cameron Granville 3 Asset Management, Inc. 's motion for
reconsideration1 of our April 10, 2013 decision, 2 which reversed and set aside the Court of Appeals'
resolutions3 and ordered respondent to produce the Loan Sale and Purchase Agreement (LSPA) dated
April 7, 2006, including its annexes and/or attachments, if any, in order that petitioners may inspect or
photocopy the same.
Petitioners Eagleridge Development Corporation, Marcelo N. Naval, and Crispin I. Oben filed on June 7,
2013 their motion to ad.mit attached opposition. 4 Subsequently, respondent filed its reply5 and petitioners
their motion to admit attached rejoinder.6
The motion for reconsideration raises the following points:
(1) The motion for production was filed out of time; 7
(2) The production of the LSPA would violate the parol evidence rule; and 8
(3) The LSPA is a privileged and confidential document.9
Respondent asserts that there was no "insistent refusal" on its part to present the LSPA, but that
petitioners filed their motion for production way out of time, even beyond the protracted pre-trial period
from September 2005 to 2011.10 Hence, petitioners had no oneto blame but themselves when the trial
court denied their motion as it was filed only during the trial proper.11
Respondent further submits that "Article 1634 [of the] Civil Code had been inappropriately cited by
[p]etitioners"12inasmuch as it is Republic Act No. 9182 (Special Purpose Vehicle Act) that is
applicable.13 Nonetheless, even assuming that Article 1634 is applicable, respondent argued that
petitioners are: 1) still liable to pay the whole of petitioner Eagleridge Development Corporations (EDC)
loanobligation, i.e., P10,232,998.00 exclusive of interests and/or damages; 14 and 2) seven (7) years late in
extinguishing petitioner EDCs loan obligation because pursuant to Article 1634, they should have
exercised their right of extinguishment within 30 days from the substitution of Export and Industry Bank
or EIB (the original creditor) by respondent in December 2006. 15 According to respondent, the trial court
order "granting the substitution constituted sufficient judicial demand as contemplated under Article
1634."16 Also, maintaining that the LSPA is immaterial or irrelevant to the case, respondent contends that
the "[o]rder of substitution settled the issue of [respondents] standing before the [c]ourt and its right to
fill in the shoes of [EIB]."17 It argues that the production of the LSPA will neither prevent respondent from

pursuing its claim of 10,232,998.00, exclusive of interests and penalties, from petitioner EDC, nor write
off petitioner EDCs liability to respondent. 18 The primordial issue of whether petitioners owe respondent
a sum of money via the deed of assignment can allegedly "be readily resolved by application of Civil
Code provisions and/or applicable jurisprudence and not by the production/inspection of the
LSPA[.]"19 Respondent also argues that "a consideration is not always a requisite [in assignment of
credits, and] an assignee may maintain an action based on his title and it is immaterial whether ornot he
paid any consideration [therefor][.]"20
Respondent also contends that: (1) the production of the LSPA will violate the parol evidence rule 21 under
Rule 130, Section 9 of the Rules of Court; (2) the LSPA is a privileged/confidential bank document; 22 and
(3) under the Special Purpose Vehicle Act, "the only obligation of both the assignor (bank) and the
assignee (the SPV; respondent Cameron) is to give notice to the debtor (Eagleridge, Naval,and Oben) that
its account has been assigned/transferred to a special purpose vehicle (Sec. 12, R.A. 9182) [and] [i]t does
not require of the special purpose vehicle or the bank to disclose all financial documents included in the
assignment/sale/transfer[.]"23
Finally, respondent points out that the deed of assignment is a contested document. "Fair play would be
violated if the LSPA is produced without [p]etitioners acknowledging that respondent Cameron Granville
3 Asset Management, Inc. is the real party-in-interest because petitioners . . . would [thereafter] use . . .
the contents of a document (LSPA) to its benefit while at the same time" 24 refuting the integrity of the
deed and the legal personality of respondent to sue petitioners. 25
For their part, petitioners counter that their motion for production was not filed out of time, and "[t]here is
no proscription, under Rule 27 or any provision of the Rules of Court, from filing motions for production,
beyond the pre-trial."26
Further, assuming that there was a valid transfer of the loan obligation of petitioner EDC, Article 1634 is
applicable and, therefore, petitioners must be informed of the actual transfer price, which information
may only be supplied by the LSPA. 27 Petitioners argue that the substitution of respondent in the case a
quowas "not sufficient demandas contemplated under Article 1634 of the Civil Code inasmuch
asrespondent Cameron failed . . . to inform petitioner EDC of the price it paid for the [transfer of the] loan
obligation,"28 which made it "impossible for petitioners to reimburse what was paid for the acquisition of
the . . . loan obligation [of EDC]."29 Additionally, petitioners contend that respondent was not a party to
the deed of assignment, but Cameron Granville Asset Management (SPV-AMC), Inc., hence, "as [to] the
actual parties to the Deed of Assignment are concerned, no such demand has yet been made." 30
Petitioners add that the amount of their liability to respondent is one of the factual issues to be resolved as
stated in the November 21, 2011 pretrial order of the Regional Trial Court, which makes the LSPA clearly
relevant and material to the disposition of the case. 31
Petitioners next argue that the parol evidence rule is not applicable to them because they were not parties
tothe deed of assignment, and "they cannot be prevented from seeking evidence to determine the
complete terms of the Deed of Assignment." 32 Besides, the deedof assignment made express reference to
the LSPA, hence,the latter cannot be considered as extrinsic to it. 33
As to respondents invocation that the LSPA is privileged/confidential, petitioners counter that "it has not
been shown that the parties fall under . . . or, at the very least . . . analogous to [any of the relationships
enumerated in Rule 130, Section 124] that would exempt [respondent] from disclosing information as to
their transaction."34

In reply, respondent argues that "[petitioners] cannot accept and reject the same instrument at the same
time."35According to respondent, by allegedly "uphold[ing] the truth of the contents as well as the validity
of [the] Deed of Assignment [in] seeking the production of the [LSPA]," 36 petitioners could no longer be
allowed to impugn the validity of the same deed.37
In their rejoinder, petitioners clarified that their consistent position was always to assail the validity of the
deed of assignment; that alternatively, they invoked the application of Article 1634 should the court
uphold the validity of the transfer of their alleged loan obligation; and that Rule 8, Section 2 of the Rules
of Court "permits parties to set forth alternative causes of action or defenses." 38
We
deny
the
Discovery
production/inspection
document
may
even
beyond
showing of good cause

motion
mode
be
pre-trial

for
availed
upon

reconsideration.
of
of
of
a

The availment of a motion for production, as one of the modes of discovery, is not limited to the pre-trial
stage. Rule 27 does not provide for any time frame within which the discovery mode of production or
inspection of documents can be utilized. The rule only requires leave of court "upon due application and a
showing of due cause."39 Rule 27, Section 1 of the 1997 Rules of Court, states:
SECTION 1. Motion for production or inspection order Upon motion of any party showing good cause
therefor the court in which an action is pending may (a) order any party to produce and permit the
inspection and copying or photographing, by or on behalf of the moving party, of any designated
documents, papers, books, accounts, letters, photographs, objects or tangible things, not privileged, which
constitute or contain evidence material to any matter involved in the action and which are in his
possession, custody or control[.] (Emphasis supplied)
In Producers Bank of the Philippines v. Court of Appeals, 40 this court held that since the rules are silent
asto the period within which modes of discovery (in that case, written interrogatories) may still be
requested, it is necessary to determine: (1) the purposeof discovery; (2) whether, based on the stage of the
proceedings and evidence presented thus far, allowing it is proper and would facilitate the disposition of
the case; and (3) whether substantial rights of parties would be unduly prejudiced. 41 This court further
held that "[t]he use of discovery is encouraged, for it operates with desirable flexibility under the
discretionary control of the trial court."42
In Dasmarias Garments, Inc. v. Reyes, 43 this court declared that depositions, as a mode ofdiscovery,
"may be taken at any time after the institution of any action [as there is] no prohibition against the taking
of depositions after pre-trial."44 Thus:
Dasmarias also contends that the "taking of deposition is a mode of pretrial discovery to be availed of
before the action comes to trial." Not so. Depositions may be taken at any time after the institution of any
action, whenever necessary or convenient. There is no rule that limits deposition-taking only to the period
of pre-trial or before it; no prohibition against the taking of depositions after pre-trial. Indeed, the law
authorizes the taking of depositions of witnesses before or after an appeal is taken from the judgment of a
Regional Trial Court "to perpetuate their testimony for use in the event of further proceedings in the said
court" (Rule 134, Rules of Court), and even during the process of execution of a final and executory
judgment (East Asiatic Co. v. C.I.R., 40 SCRA 521, 544).45

"The modes of discovery are accorded a broad and liberal treatment." 46 The evident purpose of discovery
procedures is "to enable the parties, consistent with recognized privileges, to obtain the fullest possible
knowledge of the issues and facts before civil trials" 47 and, thus, facilitating an amicable settlement or
expediting the trial of the case.48
Technicalities in pleading should be avoided in order to obtain substantial justice. In Mutuc v. Judge
Agloro,49 this court directed the bank to give Mutuc a complete statement asto how his debt was
computed, and should he be dissatisfied with that statement, pursuant to Rule 27 of the Rules of Court, to
allow him to inspect and copy bank records supporting the items in that statement. 50 This was held to be
"in consonance with the rules on discovery and the avowed policy of the Rules of Court . . . to require the
parties to lay their cards on the table to facilitate a settlement of the case before the trial." 51
We have determined that the LSPA isrelevant and material to the issue on the validity of the deed of
assignment raised by petitioners in the court a quo, and allowing its production and inspection by
petitioners would be more in keeping with the objectives of the discovery rules. We find no great practical
difficulty, and respondent continuously fails to allege any, in presenting the document for inspection and
copying of petitioners. On the other hand, to deny petitioners the opportunity to inquire into the LSPA
would bar their access to relevant evidence and impair their fundamental right to due process. 52
Article 1634 of the New Civil Code is applicable
Contrary to respondents stance, Article 1634 of the Civil Code on assignment of credit in litigation is
applicable.
Section 13 of the Special Purpose Vehicle Act clearly provides that in the transfer of the non-performing
loans to a special purpose vehicle, "the provisions on subrogation and assignment of credits under the
New Civil Code shall apply." Thus:
Sec. 13. Nature of Transfer. All sales or transfers of NPAs to an SPV shall be in the nature of a true sale
after proper notice in accordance with the procedures asprovided for in Section 12: Provided, That GFIs
and GOCCs shall be subject to existing law on the disposition of assets: Provided, further, That in the
transfer of the NPLs, the provisions on subrogation and assignment of credits under the New Civil Code
shall apply.
Furthermore, Section 19 of the Special Purpose Vehicle Act expressly states that redemption periods
allowed to borrowers under the banking law, the Rules of Court, and/or other laws are applicable. Hence,
the right of redemption allowed to a debtor under Article 1634 of the Civil Code is applicable to the case
a quo.
Accordingly, petitioners may extinguish their debt by paying the assignee-special purpose vehicle the
transfer price plus the cost of money up to the time of redemption and the judicial costs.
Petitioners
extinguish
yet lapsed

their

right
debt

has

to
not

Petitioners right to extinguish their debt under Article 1634 on assignment of credits has not yet lapsed.
The pertinent provision is reproduced here:

Art. 1634. When a credit or other incorporeal right in litigation is sold, the debtor shall have a right to
extinguish it by reimbursing the assignee for the price the latter paid therefor, the judicial costs incurred
by him, and the interest on the price from the day on which the same was paid. A credit or other
incorporeal right shall be considered in litigation from the time the complaint concerning the same is
answered.
The debtor may exercise his right within thirty days from the date the assignee demands payment from
him. (Emphasis supplied)
Under the last paragraph of Article 1634, the debtor may extinguish his or her debt within 30 days from
the date the assignee demands payment. In this case, insofar as the actual parties to the deed of
assignment are concerned, no demand has yet been made, and the 30-day period did not begin to run.
Indeed, petitioners assailed before the trial court the validity of the deed of assignment on the groundsthat
it did not comply with the mandatory requirements of the Special Purpose Vehicle Act, 53 and it referred to
Cameron Granville Asset Management (SPV-AMC), Inc., as the assignee, and not respondent Cameron
Granville 3 Asset Management, Inc. 54 The law requires that payment should be made only "to the person
in whose favor the obligation has been constituted, or his [or her] successor in interest, or any person
authorized to receive it."55 It was held that payment made to a person who is not the creditor, his or her
successor-in-interest, or a person who is authorized to receive payment, even through error or good faith,
is not effective payment which will bind the creditor or release the debtor from the obligation to
pay.56 Therefore, it was important for petitioners to determine for sure the proper assignee of the EIB
credit or who to pay, in order to effectively extinguish their debt.
Moreover, even assuming that respondent is the proper assignee of the EIB credit, petitioners could not
exercise their right of extinguishment because they were not informed of the consideration paid for the
assignment.57
Respondent must, pursuant to Article 1634 of the Civil Code, disclose how much it paid to acquire the
EIB credit, so that petitioners could make the corresponding offer to pay, by way of redemption, the same
amount in final settlement of their obligation.
Respondent insists that the transfer price of the EIB credit is P10,232,998.00 (the actual amount and value
of the credit), and that petitioners should have paid the said amount within 30 days from the December 8,
2006 order of the Regional Trial Court approving its substitution of EIB. 58 Petitioners believe otherwise,
and as the deed of assignment was silent on the matter, it becomes necessary to verify the amount of the
consideration from the LSPA.
Assuming indeed that respondent acquired the EIB credit for a lesser consideration, it cannot compel
petitioners to pay or answer for the entire original EIB credit, or more thanwhat it paid for the assignment.
Under the circumstances of this case, the 30-day period under Article 1634 within which petitioners could
exercise their right to extinguish their debt should begin to run only from the time they were informed of
the actual price paid by the assignee for the transfer of their debt. Parol evidence rule is not applicable
Claiming further the impropriety of allowing the production of the LSPA, respondent contends that the
presentation of the document and its annexes would violate the parol evidence rule in Rule 130, Section
9:

SEC. 9. Evidence of written agreements.When the terms of an agreement have been reduced to writing,
it is considered as containing all the terms agreed upon and there can be, between the parties and their
successors in interest, no evidence of such terms other than the contents of the written agreement.
However, a party may present evidence to modify, explain or add to the terms of the written agreement
ifhe puts in issue in his pleading:
(a) An intrinsic ambiguity, mistake or imperfection in the written agreement;
(b) The failure of the written agreement to express the true intent and agreement of the parties
thereto;
(c) The validity of the written agreement; or
(d) The existence of other terms agreed to by the parties or their successors in interest after the
execution of the written agreement.
The term "agreement" includes wills.
We disagree.
The parol evidence rule does notapply to petitioners who are not parties to the deed of assignment and do
not base a claim on it.59 Hence, they cannot be prevented from seeking evidence to determine the
complete terms of the deed of assignment.
Even assuming that Rule 130, Section 9 is applicable, an exception to the rule under the second paragraph
iswhen the party puts in issue the validity of the written agreement, as in the case a quo.
Besides, what is forbidden under the parol evidence rule is the presentation of oral or extrinsic evidence,
not those expressly referred to in the written agreement. "[D]ocuments canbe read together when one
refers to the other."60 By the express terms of the deed of assignment, it is clear that the deed of
assignment was meant to be read in conjunction with the LSPA.
As we have stated in our decision, Rule 132, Section 17 61 of the Rules of Court allows a party to inquire
into the whole of the writing or record when a part of it is given in evidence by the other party. Since the
deed of assignment was produced in court by respondent and marked as one of its documentary exhibits,
the LSPA which was made a part thereof by explicit reference and which is necessary for its
understanding may also be inquired into by petitioners.
The
LSPA
and confidential in nature

is

not

privileged

Respondents contention that the LSPAis privileged and confidential is likewise untenable.
Indeed, Rule 27 contains the proviso that the documents sought to be produced and inspected must not be
privileged against disclosure. Rule 130, Section 24 describes the types of privileged communication.
These are communication between or involving the following: (a) between husband and wife; (b) between
attorney and client; (c) between physician and patient; (d) between priest and penitent; and (e) public
officers and public interest.

Privileged communications under the rules of evidence is premised on an accepted need to protect a trust
relationship. It has not been shown that the parties to the deed of assignment fall under any of the
foregoing categories.
This court has previously cited other privileged matters such as the following: "(a) editors may not be
compelled to disclose the source of published news; (b) voters may not be compelled to disclose for
whom they voted; (c) trade secrets; (d) information contained in tax census returns; . . . (d) bank
deposits"62 (pursuant to the Secrecy of Bank Deposits Act); (e) national security matters and intelligence
information;63 and (f) criminal matters.64 Nonetheless, the LSPA does not fall within any of these classes
of information. Moreover, the privilegeis not absolute, and the court may compel disclosure where it is
indispensable for doing justice.
At any rate, respondent failed to discharge the burden of showing that the LSPA is a privileged
document.1wphi1Respondent did not present any law or regulation that considers bank documents such
as the LSPA as classified information. Its contention that the Special Purpose Vehicle Act 65 only requires
the creditor-bank to give notice to the debtor of the transfer of his or her account to a special purpose
vehicle, and that the assignee-special purpose vehicle has no obligation to disclose other financial
documents related to the sale, is untenable. The Special Purpose Vehicle Act does not explicitly declare
these financial documents as privileged matters. Further, as discussed, petitioners are not precluded from
inquiring as to the true consideration of the assignment, precisely because the same law in relation to
Article 1634 allows the debtor to extinguish its debt by reimbursing the assignee-special purpose vehicle
of the actual price the latter paid for the assignment.
An assignment of a credit "produce[s] no effect as against third persons, unless it appears ina public
instrument[.]"66 It strains reason why the LSPA, which by law must be a publicinstrument to be binding
against third persons such as petitioners-debtors, is privileged and confidential.
Alternative
allowed under the Rules

defenses

are

Finally, respondents contention that petitioners cannot claim the validity and invalidity of the deed
ofassignment at the same time is untenable.
The invocation by petitioners of Article 1634, which presupposes the validity of the deed of assignment
orthe transfer of the EIB credit to respondent, even if it would run counter to their defense on the
invalidity of the deed of assignment, is proper and sanctioned by Rule 8, Section 2 of the Rules of Court,
which reads:
SEC. 2. Alternative causes of action or defenses. A party may set forth two or more statements of a
claim or defense alternatively or hypothetically, either in one causeof action or defense or in separate
causes of action or defenses. When two or more statements are made in the alternative and one of them if
made independently would be sufficient, the pleading is not made insufficient by the insufficiency of one
or more of the alternative statements. (Emphasis supplied)
All told, respondent failed to allege sufficient reasons for us to reconsider our decision. Verily, the
production and inspection of the LSPA and its annexes fulfill the discovery-procedures objective of
making the trial "less a game of blind mans buff and morea fair contest with the basic issues and facts
disclosed to the fullest practicable extent."67
WHEREFORE, the motion for reconsideration is DENIED WITH FINALITY.

SO ORDERED.

18. . G.R. No. 197530, July 09, 2014


ABOITIZ EQUITY VENTURES, INC., Petitioner, v. VICTOR S. CHIONGBIAN, BENJAMIN D.
GOTHONG, AND CARLOS A. GOTHONG LINES, INC. (CAGLI), Respondents.
DECISION
LEONEN, J.:
This is a petition for review on certiorari with an application for the issuance of a temporary restraining
order and/or writ of preliminary injunction under Rule 45 of the Rules of Court. This petition prays that
the assailed orders dated May 5, 20111 and June 24, 20112 of the Regional Trial Court, Cebu City, Branch
10 in Civil Case No. CEB-37004 be nullified and set aside and that judgment be rendered dismissing with
prejudice the complaint3 dated July 20, 2010 filed by respondents Carlos A. Gothong Lines, Inc.
(CAGLI)
and
Benjamin
D.
Gothong.
On January 8, 1996, Aboitiz Shipping Corporation (ASC), principally owned by the Aboitiz family,
CAGLI, principally owned by the Gothong family, and William Lines, Inc. (WLI), principally owned
by the Chiongbian family, entered into an agreement (the Agreement), 4 whereby ASC and CAGLI
would transfer their shipping assets to WLI in exchange for WLIs shares of stock. 5 WLI, in turn, would
run their merged shipping businesses and, henceforth, be known as WG&A, Inc. (WG&A). 6cralawred
Sec. 11.06 of the Agreement required all disputes arising out of or in connection with the Agreement to be
settled by arbitration:chanRoblesvirtualLawlibrary
11.06 Arbitration
All disputes arising out of or in connection with this Agreement including any issue as to this
Agreements validity or enforceability, which cannot be settled amicably among the parties, shall be
finally settled by arbitration in accordance with the Arbitration Law (Republic Act No. 876) by an
arbitration tribunal composed of four (4) arbitrators. Each of the parties shall appoint one (1) arbitrator,
the three (3) to appoint the fourth arbitrator who shall act as Chairman. Any award by the arbitration
tribunal shall be final and binding upon the parties and shall be enforced by judgment of the Courts of
Cebu or Metro Manila.7
Among the attachments to the Agreement was Annex SL-V.8 This was a letter dated January 8, 1996, from
WLI, through its President (herein respondent) Victor S. Chiongbian addressed to CAGLI, through its
Chief Executive Officer Bob D. Gothong and Executive Vice President for Engineering (herein
respondent) Benjamin D. Gothong. On its second page, Annex SL-V bore the signatures of Bob D.
Gothong and respondent Benjamin D. Gothong by way of a conforme on behalf of CAGLI.
Annex SL-V confirmed WLIs commitment to acquire certain inventories of CAGLI. These inventories
would have a total aggregate value of, at most, P400 million, as determined after a special examination
of the [i]nventories.9 Annex SL-V also specifically stated that such acquisition was pursuant to the
Agreement.10cralawred

The entirety of Annex SL-Vs substantive portion reads:chanRoblesvirtualLawlibrary


We refer to the Agreement dated January 8, 1996 (the Agreement) among William Lines, Inc.
(Company C), Aboitiz Shipping Corporation (Company A) and Carlos A. Gothong Lines, Inc.
(Company B) regarding the transfer of various assets of Company A and Company B to Company C in
exchange for shares of capital stock of Company C. Terms defined in the Agreement are used herein as
therein
defined.
This will confirm our commitment to acquire certain spare parts and materials inventory (the
Inventories)
of
Company
B
pursuant
to
the
Agreement.
The total aggregate value of the Inventories to be acquired shall not exceed P400 Million as determined
after a special examination of the Inventories as performed by SGV & Co. to be completed on or before
the
Closing
Date
under
the
agreed
procedures
determined
by
the
parties.
Subject to documentation acceptable to both parties, the Inventories to be acquired shall be determined
not later than thirty (30) days after the Closing Date and the payments shall be made in equal quarterly
instalments over a period of two years with the first payment due on March 31, 1996. 11
Pursuant to Annex SL-V, inventories were transferred from CAGLI to WLI. These inventories were
assessed to have a value of P514 million, which was later adjusted to P558.89 million. 12 Of the total
amount of P558.89 million, CAGLI was paid the amount of ?400 Million. 13 In addition to the payment
of P400 million, petitioner Aboitiz Equity Ventures (AEV) noted that WG&A shares with a book value
of
P38.5
million
were
transferred
to
CAGLI. 14cralawred
As there was still a balance, in 2001, CAGLI sent WG&A (the renamed WLI) demand letters for the
return of or the payment for the excess [i]nventories. 15 AEV alleged that to satisfy CAGLIs demand,
WLI/WG&A returned inventories amounting to P120.04 million. 16 As proof of this, AEV attached copies
of delivery receipts signed by CAGLIs representatives as Annex K of the present petition. 17cralawred
Sometime in 2002, the Chiongbian and Gothong families decided to leave the WG&A enterprise and sell
their interest in WG&A to the Aboitiz family. As such, a share purchase agreement 18 (SPA) was entered
into by petitioner AEV and the respective shareholders groups of the Chiongbians and Gothongs. In the
SPA, AEV agreed to purchase the Chiongbian group's 40.61% share and the Gothong group's 20.66%
share
in
WG&As
issued
and
outstanding
stock. 19cralawred
Section 6.5 of the SPA provided for arbitration as the mode of settling any dispute arising from the SPA. It
reads:chanRoblesvirtualLawlibrary
6.5 Arbitration. Should there be any dispute arising between the parties relating to this Agreement
including the interpretation or performance hereof which cannot be resolved by agreement of the parties
within fifteen (15) days after written notice by a party to another, such matter shall then be finally settled
by arbitration in Cebu City in accordance with the Philippine Arbitration Law. Substantive aspects of the
dispute shall be settled by applying the laws of the Philippines. The decision of the arbitrators shall be
final and binding upon the parties hereto and the expense of arbitration (including without limitation the
award of attorneys fees to the prevailing party) shall be paid as the arbitrators shall determine. 20
Section 6.8 of the SPA further provided that the Agreement (of January 8, 1996) shall be deemed
terminated except its Annex SL-V. It reads:chanRoblesvirtualLawlibrary

6.8 Termination of Shareholders Agreement. The Buyer and the Sellers hereby agree that on Closing, the
Agreement among Aboitiz Shipping Corporation, Carlos A. Gothong Lines, Inc. and William Lines, Inc.
dated January 8, 1996, as the same has been amended from time to time (the Shareholders Agreement)
shall all be considered terminated, except with respect to such rights and obligations that the parties to the
Shareholders Agreement have under a letter dated January 8, 1996 (otherwise known as SL-V) from
William Lines, Inc. to Carlos A. Gothong Lines, Inc. regarding certain spare parts and materials inventory,
which rights and obligations shall survive through the date prescribed by the applicable statute of
limitations.21
As part of the SPA, the parties entered into an Escrow Agreement 22 whereby ING Bank N.V.-Manila
Branch was to take custody of the shares subject of the SPA. 23 Section 14.7 of the Escrow Agreement
provided that all disputes arising from it shall be settled through arbitration:chanRoblesvirtualLawlibrary
14.7 All disputes, controversies or differences which may arise by and among the parties hereto out of, or
in relation to, or in connection with this Agreement, or for the breach thereof shall be finally settled by
arbitration in Cebu City in accordance with the Philippine Arbitration Law. The award rendered by the
arbitrator(s) shall be final and binding upon the parties concerned. However, notwithstanding the
foregoing provision, the parties reserve the right to seek redress before the regular court and avail of any
provisional remedies in the event of any misconduct, negligence, fraud or tortuous acts which arise from
any extra-contractual conduct that affects the ability of a party to comply with his obligations and
responsibilities under this Agreement.24
As a result of the SPA, AEV became a stockholder of WG&A. Subsequently, WG&A was renamed
Aboitiz
Transport
Shipping
Corporation
(ATSC). 25cralawred
Petitioner AEV alleged that in 2008, CAGLI resumed making demands despite having already received
P120.04 million worth of excess inventories. 26 CAGLI initially made its demand to ATSC (the renamed
WLI/WG&A) through a letter 27 dated February 14, 2008. As alleged by AEV, however, CAGLI
subsequently resorted to a shotgun approach 28 and directed its subsequent demand letters to AEV 29 as
well
as
to
FCLC30 (a
company
related
to
respondent
Chiongbian).
AEV responded to CAGLIs demands through several letters. 31 In these letters, AEV rebuffed CAGLI's
demands noting that: (1) CAGLI already received the excess inventories; (2) it was not a party to
CAGLI's claim as it had a personality distinct from WLI/WG&A/ATSC; and (3) CAGLI's claim was
already
barred
by
prescription.
In a reply-letter32 dated May 5, 2008, CAGLI claimed that it was unaware of the delivery to it of the
excess inventories and asked for copies of the corresponding delivery receipts. 33 CAGLI threatened that
unless it received proof of payment or return of excess inventories having been made on or before March
31,
1996,
it
would
pursue
arbitration. 34cralawred
In letters written for AEV (the first dated October 16, 2008 by Aboitiz and Company, Inc.s Associate
General Counsel Maria Cristina G. Gabutina 35 and the second dated October 27, 2008 by SyCip Salazar
Hernandez and Gatmaitan36), it was noted that the excess inventories were delivered to GT Ferry
Warehouse.37 Attached to these letters were a listing and/or samples 38 of the corresponding delivery
receipts. In these letters it was also noted that the amount of excess inventories delivered (P120.04
million) was actually in excess of the value of the supposedly unreturned inventories (P119.89
million).39 Thus, it was pointed out that it was CAGLI which was liable to return the difference between
P120.04
million
and
P119.89
million.40cralawred
Its claims not having been satisfied, CAGLI filed on November 6, 2008 the first of two applications for

arbitration (first complaint)41 against respondent Chiongbian, ATSC, ASC, and petitioner AEV, before
the Cebu City Regional Trial Court, Branch 20. The first complaint was docketed as Civil Case No. CEB34951.
In response, AEV filed a motion to dismiss 42 dated February 5, 2009. AEV argued that CAGLI failed to
state a cause of action as there was no agreement to arbitrate between CAGLI and AEV. 43Specifically,
AEV pointed out that: (1) AEV was never a party to the January 8, 1996 Agreement or to its Annex SLV;44 (2) while AEV is a party to the SPA and Escrow Agreement, CAGLI's claim had no connection to
either agreement; (3) the unsigned and unexecuted SPA attached to the complaint cannot be a source of
any right to arbitrate;45 and (4) CAGLI did not say how WLI/WG&A/ATSC's obligation to return the
excess
inventories
can
be
charged
to
AEV.
On December 4, 2009, the Cebu City Regional Trial Court, Branch 20 issued an order 46 dismissing the
first complaint with respect to AEV. It sustained AEVs assertion that there was no agreement binding
AEV and CAGLI to arbitrate CAGLIs claim. 47 Whether by motion for reconsideration, appeal or other
means,
CAGLI
did
not
contest
this
dismissal.
On February 26, 2010, the Cebu City Regional Trial Court, Branch 20 issued an order 48 directing the
parties remaining in the first complaint (after the discharge of AEV) to proceed with arbitration.
The February 26, 2010 order notwithstanding, CAGLI filed a notice of dismissal 49 dated July 8, 2010,
withdrawing the first complaint. In an order 50 dated August 13, 2010, the Cebu City Regional Trial Court,
Branch
20
allowed
this
withdrawal.
ATSC (the renamed WLI/WG&A) filed a motion for reconsideration 51 dated September 20, 2010 to the
allowance of CAGLI's notice of dismissal. This motion was denied in an order 52 dated April 15, 2011.
On September 1, 2010, while the first complaint was still pending (n.b., it was only on April 15, 2011 that
the Cebu City Regional Trial Court, Branch 20 denied ATSCs motion for reconsideration assailing the
allowance of CAGLIs notice of disallowance), CAGLI, now joined by respondent Benjamin D. Gothong,
filed a second application for arbitration (second complaint) 53 before the Cebu City Regional Trial
Court, Branch 10. The second complaint was docketed as Civil Case No. CEB-37004 and was also in
view of the return of the same excess inventories subject of the first complaint.
On October 28, 2010, AEV filed a motion to dismiss 54 the second complaint on the following
grounds:55 (1) forum shopping; (2) failure to state a cause of action; (3) res judicata; and (4) litis
pendentia.
In the first of the two (2) assailed orders dated May 5, 2011, 56 the Cebu City Regional Trial Court, Branch
10
denied
AEV's
motion
to
dismiss.
On the matter of litis pendentia, the Regional Trial Court, Branch 10 noted that the first complaint was
dismissed with respect to AEV on December 4, 2009, while the second complaint was filed on September
1, 2010. As such, the first complaint was no longer pending at the time of the filing of the second
complaint.57 On the matter of res judicata, the trial court noted that the dismissal without prejudice of the
first complaint [left] the parties free to litigate the matter in a subsequent action, as though the
dismiss[ed] action had not been commenced. 58 It added that since litis pendentia and res judicata did not
exist, CAGLI could not be charged with forum shopping. 59 On the matter of an agreement to arbitrate, the
Regional Trial Court, Branch 10 pointed to the SPA as clearly express[ing] the intention of the parties to
bring to arbitration process all disputes, if amicable settlement fails. 60 It further dismissed AEVs claim
that it was not a party to the SPA, as already touching on the merits of the case 61 and therefore beyond

its

duty

to

determine

if

they

should

proceed

to

arbitration

or

not. 62cralawred

In the second assailed order63 dated June 24, 2011, the Cebu City Regional Trial Court, Branch 10 denied
AEV's
motion
for
reconsideration.
Aggrieved, AEV filed the present petition. 64 AEV asserts that the second complaint is barred by res
judicata and litis pendentia and that CAGLI engaged in blatant forum shopping. 65 It insists that it is not
bound by an agreement to arbitrate with CAGLI and that, even assuming that it may be required to
arbitrate, it is being ordered to do so under terms that are manifestly contrary to the . . . agreements on
which
CAGLI
based
its
demand
for
arbitration. 66cralawred
For resolution are the following issues:cralawlawlibrary
I.

Whether the complaint in Civil Case No. CEB-37004 constitutes forum shopping and/or is barred
by res judicata and/or litis pendentia

II.

Whether petitioner, Aboitiz Equity Ventures, Inc., is bound by an agreement to arbitrate with
Carlos A. Gothong Lines, Inc., with respect to the latters claims for unreturned inventories
delivered to William Lines, Inc./WG&A, Inc./Aboitiz Transport System Corporation

AEV
remedy
from

availed

of
in

the
seeking

this

wrong
relief
court

Before addressing the specific matters raised by the present petition, we emphasize that AEV is in error in
seeking relief from this court via a petition for review on certiorari under Rule 45 of the Rules of Court.
As such, we are well in a position to dismiss the present petition outright. Nevertheless, as the actions of
the Cebu City Regional Trial Court, Branch 10 are tainted with grave abuse of discretion amounting to
lack or excess of jurisdiction, this court treats the present Rule 45 petition as a Rule 65 petition and gives
it
due
course.
A petition for review on certiorari under Rule 45 is a mode of appeal. This is eminently clear from the
very title and from the first section of Rule 45 (as amended by A.M. No. 07-7-12SC):chanRoblesvirtualLawlibrary
Rule
APPEAL BY CERTIORARI TO THE SUPREME COURT

45

SECTION 1. Filing of petition with Supreme Court. A party desiring to appeal by certiorari from a
judgment, final order or resolution of the Court of Appeals, the Sandiganbayan, the Court of Tax Appeals,
the Regional Trial Court or other courts, whenever authorized by law, may file with the Supreme Court a
verified petition for review on certiorari. The petition may include an application for a writ of
preliminary injunction or other provisional remedies and shall raise only questions of law, which must be
distinctly set forth. The petitioner may seek the same provisional remedies by verified motion filed in the
same action or proceeding at any time during its pendency. (Emphasis supplied)
Further, it is elementary that an appeal may only be taken from a judgment or final order that completely
disposes of the case.67 As such, no appeal may be taken from an interlocutory order 68(i.e., one which
refers to something between the commencement and end of the suit which decides some point or matter

but it is not the final decision of the whole controversy 69). As explained inSime Darby Employees
Association v. NLRC,70 [a]n interlocutory order is not appealable until after the rendition of the judgment
on the merits for a contrary rule would delay the administration of justice and unduly burden the
courts.71cralawred
An order denying a motion to dismiss is interlocutory in character. Hence, it may not be the subject of an
appeal. The interlocutory nature of an order denying a motion to dismiss and the remedies for assailing
such an order were discussed in Douglas Lu Ym v. Nabua:72cralawred
An order denying a motion to dismiss is an interlocutory order which neither terminates nor finally
disposes of a case, as it leaves something to be done by the court before the case is finally decided on the
merits. As such, the general rule is that the denial of a motion to dismiss cannot be questioned in a special
civil action for certiorari which is a remedy designed to correct errors of jurisdiction and not errors of
judgment. 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. In order to justify the grant of the extraordinary remedy of certiorari, the
denial of the motion to dismiss must have been tainted with grave abuse of discretion amounting to lack
or excess of jurisdiction.73 (Emphasis supplied)
Thus, where a motion to dismiss is denied, the proper recourse is for the movant to file an
answer.74Nevertheless, where the order denying the motion to dismiss is tainted with grave abuse of
discretion amounting to lack or excess of jurisdiction, the movant may assail such order via a Rule 65
(i.e.,certiorari, prohibition, and/or mandamus) petition. This is expressly recognized in the third
paragraph of Rule 41, Section 1 of the Rules of Court. 75 Following the enumeration in the second
paragraph of Rule 41, Section 1 of the instances when an appeal may not be taken, the third paragraph
specifies that [in] any of the foregoing circumstances, the aggrieved party may file an appropriate special
civil
action
as
provided
in
Rule
65. 76cralawred
Per these rules, AEV is in error for having filed what it itself calls a Petition for Review on Certiorari
[Appeal by Certiorari under Rule 45 of the Rules of Court]. 77 Since AEV availed of the improper
remedy, this court is well in a position to dismiss the present petition.
Nevertheless, there have been instances when a petition for review on certiorari under Rule 45 was treated
by this court as a petition for certiorari under Rule 65. As explained in China Banking Corporation v.
Asian Construction and Development Corporation:78cralawred
[I]n many instances, the Court has treated a petition for review on certiorari under Rule 45 as a petition
for certiorari under Rule 65 of the Rules of Court, such as in cases where the subject of the recourse was
one of jurisdiction, or the act complained of was perpetrated by a court with grave abuse of discretion
amounting to lack or excess of jurisdiction.79
In this case, the May 5, 2011 and June 24, 2011 orders of the Cebu City Regional Trial Court, Branch 10
in Civil Case No. CEB-37004 are assailed for having denied AEVs motion to dismiss despite: first, the
second complaint having been filed in a manner constituting forum shopping; second, the prior judgment
on the merits made in Civil Case No. CEB-34951, thereby violating the principle of res judicata; and
third, the (then) pendency of Civil Case No. CEB-34951 with respect to the parties that, unlike AEV, were
not discharged from the case, thereby violating the principle of litis pendentia. The same orders are
assailed for having allowed CAGLIs application for arbitration to continue despite supposedly clear and
unmistakable evidence that AEV is not bound by an agreement to arbitrate with CAGLI.
As such, the Cebu City, Regional Trial Court, Branch 10s orders are assailed for having been made with
grave abuse of discretion amounting to lack or excess of jurisdiction in that the Cebu City Regional Trial

Court, Branch 10 chose to continue taking cognizance of the second complaint, despite there being
compelling reasons for its dismissal and the Cebu City, Regional Trial Court Branch 20s desistance.
Conformably, we treat the present petition as a petition for certiorari under Rule 65 of the Rules of Court
and
give
it
due
course.
The
No.
forum
by

complaint
shopping

in
CEB-37004
and
res

Civil
is

Case
constitutes
barred
judicata

The concept of and rationale against forum shopping were explained by this court in Top Rate
Construction & General Services, Inc. v. Paxton Development Corporation:80cralawred
FORUM SHOPPING is committed by a party who institutes two or more suits in different courts, either
simultaneously or successively, in order to ask the courts to rule on the same or related causes or to grant
the same or substantially the same reliefs, on the supposition that one or the other court would make a
favorable disposition or increase a party's chances of obtaining a favorable decision or action. It is an act
of malpractice for it trifles with the courts, abuses their processes, degrades the administration of justice
and adds to the already congested court dockets. What is critical is the vexation brought upon the courts
and the litigants by a party who asks different courts to rule on the same or related causes and grant the
same or substantially the same reliefs and in the process creates the possibility of conflicting decisions
being rendered by the different fora upon the same issues, regardless of whether the court in which one of
the suits was brought has no jurisdiction over the action. 81chanrobleslaw
Equally settled is the test for determining forum shopping. As this court explained in Yap v.
Chua:82cralawred
To determine whether a party violated the rule against forum shopping, the most important factor to ask is
whether the elements of litis pendentia are present, or whether a final judgment in one case will amount
to res judicata in another; otherwise stated, the test for determining forum shopping is whether in the two
(or more) cases pending, there is identity of parties, rights or causes of action, and reliefs sought. 83
Litis pendentia refers to that situation wherein another action is pending between the same parties for the
same cause of action, such that the second action becomes unnecessary and vexatious. 84 It requires the
concurrence of three (3) requisites: (1) the identity of parties, or at least such as representing the same
interests in both actions; (2) the identity of rights asserted and relief prayed for, the relief being founded
on the same facts; and (3) the identity of the two cases such that judgment in one, regardless of which
party
is
successful,
would
amount
to res
judicata in
the
other.85cralawred
In turn, prior judgment or res judicata bars a subsequent case when the following requisites concur: (1)
the former judgment is final; (2) it is rendered by a court having jurisdiction over the subject matter and
the parties; (3) it is a judgment or an order on the merits; (4) there is between the first and the second
actions identity of parties, of subject matter, and of causes of action. 86cralawred
Applying the cited concepts and requisites, we find that the complaint in Civil Case No. CEB-37004 is
barred
by
res
judicata
and
constitutes
forum
shopping.
First, between the first and second complaints, there is identity of parties. The first complaint was brought
by CAGLI as the sole plaintiff against Victor S. Chiongbian, ATSC, and AEV as defendants. In the second
complaint, CAGLI was joined by Benjamin D. Gothong as (co-)plaintiff. As to the defendants, ATSC was
deleted
while
Chiongbian
and
AEV
were
retained.

While it is true that the parties to the first and second complaints are not absolutely identical, this court
has clarified that, for purposes of forum shopping, [a]bsolute identity of parties is not required [and that
it]
is
enough
that
there
is
substantial
identity
of
parties. 87cralawred
Even as the second complaint alleges that Benjamin D. Gothong is . . . suing in his personal
capacity,88 Gothong failed to show any personal interest in the reliefs sought by the second complaint.
Ultimately, what is at stake in the second complaint is the extent to which CAGLI may compel AEV and
Chiongbian to arbitrate in order that CAGLI may then recover the value of its alleged unreturned
inventories. This claim for recovery is pursuant to the agreement evinced in Annex SL-V. Annex SL-V
was entered into by CAGLI and not by Benjamin D. Gothong. While it is true that Benjamin D. Gothong,
along with Bob D. Gothong, signed Annex SL-V, he did so only in a representative, and not in a personal,
capacity. As such, Benjamin D. Gothong cannot claim any right that personally accrues to him on account
of Annex SL-V. From this, it follows that Benjamin D. Gothong is not a real party in interest one who
stands to be benefitted or injured by the judgment in the suit or the party entitled to the avails of the
suit89 and that his inclusion in the second complaint is an unnecessary superfluity.
Second, there is identity in subject matter and cause of action. There is identity in subject matter as both
complaints are applications for the same relief. There is identity in cause of action as both complaints are
grounded on the right to be paid for or to receive the value of excess inventories (and the supposed
corresponding
breach
thereof)
as
spelled
out
in
Annex
SL-V.
The first and second complaints are both applications for arbitration and are founded on the same
instrument Annex SL-V. Moreover, the intended arbitrations in both complaints cater to the same
ultimate purpose, i.e., that CAGLI may recover the value of its supposedly unreturned inventories earlier
delivered
to
WLI/WG&A/ATSC.
In both complaints, the supposed propriety of compelling the defendants to submit themselves to
arbitration are anchored on the same bases: (1) Section 6.8 of the SPA, which provides that the January 8,
1996 Agreement shall be deemed terminated but that the rights and obligations arising from Annex SL-V
shall continue to subsist;90 (2) Section 6.5 of the SPA, which requires arbitration as the mode for settling
disputes relating to the SPA;91 and, (3) defendants refusal to submit themselves to arbitration vis-a-vis
Republic Act No. 876, which provides that [a] party aggrieved by the failure, neglect or refusal of
another to perform under an agreement in writing providing for arbitration may petition the court for an
order directing that such arbitration proceed in the manner provided for in such agreement. 92cralawred
Both complaints also rely on the same factual averments: 93cralawred
1. that ASC, CAGLI, and WLI
1996;chanroblesvirtuallawlibrary

entered

into

an

agreement

on

January

8,

2. that under Annex SL-V of the Agreement, WLI/WG&A committed to acquire certain
[inventories], the total aggregate value of which shall not exceed P400 Million; 94cralawred
3. that after examination, it was ascertained that the value of the transferred inventories exceeded
P400 million;chanroblesvirtuallawlibrary
4. that pursuant to Annex SL-V, WG&A paid CAGLI P400 million but that the former failed to
return or pay for spare parts representing a value in excess of P400
million;chanroblesvirtuallawlibrary

5. [t]hat on August 31, 2001, [CAGLI] wrote the WG&A through its AVP Materials Management,
Ms. Concepcion M. Magat, asking for the return of the excess spare parts; 95cralawred
6. that on September 5, 2001, WG&As Ms. Magat replied that the matter is beyond her authority
level and that she must elevate it to higher management;chanroblesvirtuallawlibrary
7. that several communications demanding the return of the excess spare parts were sent to WG&A
but these did not elicit any response; andChanRoblesVirtualawlibrary
8. [t]hat the issue of excess spare parts, was taken over by events, when on July 31, 2002, 96the
Chiongbians and Gothongs entered into an Escrow Agreement with AEV.
Third, the order dated December 4, 2009 of the Cebu City Regional Trial Court, Branch 20, which
dismissed the first complaint with respect to AEV, attained finality when CAGLI did not file a motion for
reconsideration,
appealed,
or,
in
any
other
manner,
questioned
the
order.
Fourth, the parties did not dispute that the December 4, 2009 order was issued by a court having
jurisdiction over the subject matter and the parties. Specifically as to jurisdiction over the parties,
jurisdiction was acquired over CAGLI as plaintiff when it filed the first complaint and sought relief from
the Cebu City Regional Trial Court, Branch 20; jurisdiction over defendants AEV, ATSC, and Victor S.
Chiongbian
was
acquired
with
the
service
of
summons
upon
them.
Fifth, the dismissal of the first complaint with respect to AEV was a judgment on the merits. As explained
in Cabreza, Jr. v. Cabreza:97cralawred
A judgment may be considered as one rendered on the merits when it determines the rights and liabilities
of the parties based on the disclosed facts, irrespective of formal, technical or dilatory objections; or
when the judgment is rendered after a determination of which party is right, as distinguished from a
judgment rendered upon some preliminary or formal or merely technical point. 98
Further, as this court clarified in Mendiola v. Court of Appeals,99 [i]t is not necessary . . . that there [be] a
trial100 in
order
that
a
judgment
be
considered
as
one
on
the
merits.
Prior to issuing the December 4, 2009 order dismissing the first complaint with respect to AEV, the Cebu
City Regional Trial Court, Branch 20 allowed the parties the full opportunity to establish the facts and to
ventilate their arguments relevant to the complaint. Specifically, the Cebu City Regional Trial Court,
Branch 20 admitted: 1) AEVs motion to dismiss; 101 2) CAGLIs opposition to the motion to dismiss;102 3)
AEVs reply and opposition;103 4) CAGLIs rejoinder;104 and 5) AEVs sur-rejoinder.105cralawred
Following these, the Cebu City Regional Trial Court, Branch 20 arrived at the following findings and
made a definitive determination that CAGLI had no right to compel AEV to subject itself to arbitration
with respect to CAGLIs claims under Annex SL-V:chanRoblesvirtualLawlibrary
After going over carefully the contentions and arguments of both parties, the court has found that no
contract or document exists binding CAGLI and AEV to arbitrate the formers claim. The WLI Letter
upon which the claim is based confirms only the commitment of William Lines, Inc. (WLI) to purchase
certain material inventories from CAGLI. It does not involve AEV. The court has searched in vain for any
agreement or document showing that said commitment was passed on to and assumed by AEV. Such
agreement or document, if one exists, being an actionable document, should have been attached to the

complaint. While the Agreement of January 8, 1996 and the Share Purchase Agreement provide for
arbitration of disputes, they refer to disputes arising from or in connection with the Agreements
themselves. No reference is made, as included therein, to the aforesaid commitment of WLI or to any
claim that CAGLI may pursue based thereon or relative thereto. Section 6.8 of the Share Purchase
Agreement, cited by plaintiff CAGLI, does not incorporate therein, expressly or impliedly, the WLI
commitment above-mentioned. It only declares that the rights and obligations of the parties under the
WLI Letter shall survive even after the termination of the Shareholders Agreement. It does not speak of
arbitration. Finally, the complaint does not allege the existence of a contract obliging CAGLI and AEV to
arbitrate CAGLIs claim under the WLI Letter. Consequently, there is no legal or factual basis for the
present complaint for application for arbitration.106 (Emphasis supplied)
In the assailed order dated May 5, 2011, the Cebu City Regional Trial Court, Branch 10 made much of the
Cebu City Regional Trial Court, Branch 20s pronouncement in the latters December 4, 2009 order that
the [first] complaint fails to state a cause of action. 107 Based on this, the Cebu City Regional Trial Court,
Branch 10 concluded that the dismissal of the first complaint was one made without prejudice, thereby
leav[ing] the parties free to litigate the matter in a subsequent action, as though the dismissal [sic] action
had
not
been
commenced.108cralawred
The Cebu City Regional Trial Court, Branch 10 is in serious error. In holding that the second complaint
was not barred by res judicata, the Cebu City Regional Trial Court, Branch 10 ignored established
jurisprudence.
Referring to the earlier cases of Manalo v. Court of Appeals109 and Mendiola v. Court of Appeals,110this
court emphasized in Luzon Development Bank v. Conquilla111 that dismissal for failure to state a cause of
action may very well be considered a judgment on the merits and, thereby, operate as res judicata on a
subsequent case:chanRoblesvirtualLawlibrary
[E]ven a dismissal on the ground of failure to state a cause of action may operate as res judicata on a
subsequent case involving the same parties, subject matter, and causes of action, provided that the order
of dismissal actually ruled on the issues raised. What appears to be essential to a judgment on the merits
is that it be a reasoned decision, which clearly states the facts and the law on which it is
based.112(Emphasis supplied)
To reiterate, the Cebu City Regional Trial Court, Branch 20 made a definitive determination that
CAGLI had no right to compel AEV to subject itself to arbitration vis-a-vis CAGLIs claims under
Annex SL-V. This determination was arrived at after due consideration of the facts established and the
arguments advanced by the parties. Accordingly, the Cebu City Regional Trial Court, Branch 20s
December 4, 2009 order constituted a judgment on the merits and operated as res judicata on the second
complaint.
In sum, the requisites for res judicata have been satisfied and the second complaint should, thus, have
been dismissed. From this, it follows that CAGLI committed an act of forum shopping in filing the
second complaint. CAGLI instituted two suits in two regional trial court branches, albeit successively and
not simultaneously. It asked both branches to rule on the exact same cause and to grant the exact same
relief. CAGLI did so after it had obtained an unfavorable decision (at least with respect to AEV) from the
Cebu City Regional Trial Court, Branch 20. These circumstances afford the reasonable inference that the
second
complaint
was
filed
in
the
hopes
of
a
more
favorable
ruling.
Notwithstanding our pronouncements sustaining AEVs allegations that CAGLI engaged in forum
shopping and that the second complaint was barred by res judicata, we find that at the time of the filing of
the second complaint, AEV had already been discharged from the proceedings relating to the first

complaint. Thus, as between AEV and CAGLI, the first complaint was no longer pending at the time of
the filing of the second complaint. Accordingly, the second complaint could not have been barred by litis
pendentia.
There
binding
CAGLI
arising

is
AEV
on

no
to
the

from

arbitrate
latters
Annex

agreement
with
claims
SL-V

For arbitration to be proper, it is imperative that it be grounded on an agreement between the parties. This
was adequately explained in Ormoc Sugarcane Planters Association, Inc. v. Court of
Appeals:113cralawred
Section 2 of R.A. No. 876 (the Arbitration Law) pertinently provides:
Sec. 2. Persons and matters subject to arbitration. Two or more persons or parties may submit to the
arbitration of one or more arbitrators any controversy existing between them at the time of the
submission and which may be the subject of an action, or the parties to any contract may in such contract
agree to settle by arbitration a controversy thereafter arising between them. Such submission or contract
shall be valid, enforceable and irrevocable, save upon such grounds as exist at law for the revocation of
any contract. . . . (Emphasis ours)
The foregoing provision speaks of two modes of arbitration: (a) an agreement to submit to arbitration
some future dispute, usually stipulated upon in a civil contract between the parties, and known as
an agreement to submit to arbitration, and (b) an agreement submitting an existing matter of difference to
arbitrators, termed thesubmission agreement. Article XX of the milling contract is an agreement to submit
to arbitration because it was made in anticipation of a dispute that might arise between the parties after
the
contracts
execution.
Except where a compulsory arbitration is provided by statute, the first step toward the settlement of a
difference by arbitration is the entry by the parties into a valid agreement to arbitrate. An agreement to
arbitrate is a contract, the relation of the parties is contractual, and the rights and liabilities of the parties
are controlled by the law of contracts. In an agreement for arbitration, the ordinary elements of a valid
contract must appear, including an agreement to arbitrate some specific thing, and an agreement to abide
by the award, either in express language or by implication. 114(Emphasis supplied)
In this petition, not one of the parties AEV, CAGLI, Victor S. Chiongbian, and Benjamin D. Gothong
has alleged and/or shown that the controversy is properly the subject of compulsory arbitration [as]
provided by statute.115 Thus, the propriety of compelling AEV to submit itself to arbitration must
necessarily
be
founded
on
contract.
Four (4) distinct contracts have been cited in the present petition:chanRoblesvirtualLawlibrary
1. The January 8, 1996 Agreement in which ASC, CAGLI, and WLI merged their shipping
enterprises, with WLI (subsequently renamed WG&A) as the surviving entity. Section 11.06 of
this Agreement provided for arbitration as the mechanism for settling all disputes arising out of or
in connection with the Agreement.
2. Annex SL-V of the Agreement between CAGLI and WLI (and excluded ASC and any other
Aboitiz-controlled entity), and which confirmed WLIs commitment to acquire certain
inventories, worth not more than P400 million, of CAGLI. Annex SL-V stated that the acquisition
was pursuant to the Agreement.116 It did not contain an arbitration clause.

3. The September 23, 2003 Share Purchase Agreement or SPA in which AEV agreed to purchase the
Chiongbian and Gothong groups' shares in WG&As issued and outstanding stock. Section 6.5 of
the SPA provided for arbitration as the mode of settling any dispute arising from the SPA. Section
6.8 of the SPA further provided that the Agreement of January 8, 1996 shall be deemed
terminated except its Annex SL-V.
4. The Escrow Agreement whereby ING Bank N.V.-Manila Branch was to take custody of the
shares subject of the SPA. Section 14.7 of the Escrow Agreement provided that all disputes
arising from it shall be settled via arbitration.
The obligation for WLI to acquire certain inventories of CAGLI and which is the subject of the present
petition was contained in Annex SL-V. It is therefore this agreement which deserves foremost
consideration. As to this particular agreement, these points must be underscored: first, that it has no
arbitration
clause;
second,
Annex
SL-V
is
only
between
WLI
and
CAGLI.
On the first point, it is clear, pursuant to this courts pronouncements in Ormoc Sugarcane Planters
Association, that neither WLI nor CAGLI can compel arbitration under Annex SL-V. Plainly, there is no
agreement
to
arbitrate.
It is of no moment that Annex SL-V states that it was made pursuant to the Agreement or that Section
11.06 of the January 8, 1996 Agreement provides for arbitration as the mode of settling disputes arising
out
of
or
in
connection
with
the
Agreement.
For one, to say that Annex SL-V was made pursuant to the Agreement is merely to acknowledge: (1)
the factual context in which Annex SL-V was executed and (2) that it was that context that facilitated the
agreement embodied in it. Absent any other clear or unequivocal pronouncement integrating Annex SL-V
into the January 8, 1996 Agreement, it would be too much of a conjecture to jump to the conclusion that
Annex SL-V is governed by the exact same stipulations which govern the January 8, 1996 Agreement.
Likewise, a reading of the Agreements arbitration clause will reveal that it does not contemplate disputes
arising
from
Annex
SL-V.
Section 11.06 of the January 8, 1996 Agreement requires the formation of an arbitration tribunal
composed of four (4) arbitrators. Each of the parties WLI, CAGLI, and ASC shall appoint one (1)
arbitrator, and the fourth arbitrator, who shall act as chairman, shall be appointed by the three (3)
arbitrators appointed by the parties. From the manner by which the arbitration tribunal is to be
constituted, the necessary implication is that the arbitration clause is applicable to three-party disputes
as will arise from the tripartite January 8, 1996 Agreement and not to two-party disputes as will arise
from
the
two-party
Annex
SL-V.
From the second point that Annex SL-V is only between WLI and CAGLI it necessarily follows
that none but WLI/WG&A/ATSC and CAGLI are bound by the terms of Annex SL-V. It is elementary
that contracts are characterized by relativity or privity, that is, that [c]ontracts take effect only between
the parties, their assigns and heirs.117 As such, one who is not a party to a contract may not seek relief for
such contracts breach. Likewise, one who is not a party to a contract may not be held liable for breach of
any
its
terms.
While the principle of privity or relativity of contracts acknowledges that contractual obligations are
transmissible to a partys assigns and heirs, AEV is not WLIs successor-in-interest. In the period relevant
to this petition, the transferee of the inventories transferred by CAGLI pursuant to Annex SL-V assumed

three (3) names: (1) WLI, the original name of the entity that survived the merger under the January 8,
1996 Agreement; (2) WG&A, the name taken by WLI in the wake of the Agreement; and (3) ATSC, the
name taken by WLI/WG&A in the wake of the SPA. As such, it is now ATSC that is liable under Annex
SL-V.
Pursuant to the January 8, 1996 Agreement, the Aboitiz group (via ASC) and the Gothong group (via
CAGLI) became stockholders of WLI/WG&A, along with the Chiongbian group (which initially
controlled WLI). This continued until, pursuant to the SPA, the Gothong group and the Chiongbian group
transferred their shares to AEV. With the SPA, AEV became a stockholder of WLI/WG&A, which was
subsequently renamed ATSC. Nonetheless, AEVs status as ATSCs stockholder does not subject it to
ATSCs
obligations
It is basic that a corporation has a personality separate and distinct from that of its individual
stockholders. Thus, a stockholder does not automatically assume the liabilities of the corporation of which
he is a stockholder. As explained in Philippine National Bank v. Hydro Resources Contractors
Corporation:118cralawred
A corporation is an artificial entity created by operation of law. It possesses the right of succession and
such powers, attributes, and properties expressly authorized by law or incident to its existence. It has a
personality separate and distinct from that of its stockholders and from that of other corporations to which
it may be connected. As a consequence of its status as a distinct legal entity and as a result of a conscious
policy decision to promote capital formation, a corporation incurs its own liabilities and is legally
responsible for payment of its obligations. In other words, by virtue of the separate juridical personality of
a corporation, the corporate debt or credit is not the debt or credit of the stockholder. This protection from
liability for shareholders is the principle of limited liability.119
In fact, even the ownership by a single stockholder of all or nearly all the capital stock of a corporation is
not, in and of itself, a ground for disregarding a corporations separate personality. As explained in Secosa
v. Heirs of Francisco:120cralawred
It is a settled precept in this jurisdiction that a corporation is invested by law with a personality separate
from that of its stockholders or members. It has a personality separate and distinct from those of the
persons composing it as well as from that of any other entity to which it may be related. Mere ownership
by a single stockholder or by another corporation of all or nearly all of the capital stock of a corporation
is not in itself sufficient ground for disregarding the separate corporate personality. A corporations
authority to act and its liability for its actions are separate and apart from the individuals who own it.
The so-called veil of corporation fiction treats as separate and distinct the affairs of a corporation and its
officers and stockholders. As a general rule, a corporation will be looked upon as a legal entity, unless and
until sufficient reason to the contrary appears. When the notion of legal entity is used to defeat public
convenience, justify wrong, protect fraud, or defend crime, the law will regard the corporation as an
association of persons. Also, the corporate entity may be disregarded in the interest of justice in such
cases as fraud that may work inequities among members of the corporation internally, involving no rights
of the public or third persons. In both instances, there must have been fraud and proof of it. For the
separate juridical personality of a corporation to be disregarded, the wrongdoing must be clearly and
convincingly established. It cannot be presumed. 121 (Emphasis supplied)
AEVs status as ATSCs stockholder is, in and of itself, insufficient to make AEV liable for ATSCs
obligations. Moreover, the SPA does not contain any stipulation which makes AEV assume ATSCs
obligations. It is true that Section 6.8 of the SPA stipulates that the rights and obligations arising from
Annex SL-V are not terminated. But all that Section 6.8 does is recognize that the obligations under

Annex SL-V subsist despite the termination of the January 8, 1996 Agreement. At no point does the text
of Section 6.8 support the position that AEV steps into the shoes of the obligor under Annex SL-V and
assumes
its
obligations.
Neither does Section 6.5 of the SPA suffice to compel AEV to submit itself to arbitration. While it is true
that Section 6.5 mandates arbitration as the mode for settling disputes between the parties to the SPA,
Section 6.5 does not indiscriminately cover any and all disputes which may arise between the parties to
the SPA. Rather, Section 6.5 is limited to dispute[s] arising between the parties relating to this
Agreement [i.e., the SPA].122 To belabor the point, the obligation which is subject of the present dispute
pertains to Annex SL-V, not to the SPA. That the SPA, in Section 6.8, recognizes the subsistence of Annex
SL-V is merely a factual recognition. It does not create new obligations and does not alter or modify the
obligations
spelled
out
in
Annex
SL-V.
AEV was drawn into the present controversy on account of its having entered into the SPA. This SPA
made AEV a stockholder of WLI/WG&A/ATSC. Even then, AEV retained a personality separate and
distinct from WLI/WG&A/ATSC. The SPA did not render AEV personally liable for the obligations of the
corporation
whose
stocks
it
held.
The obligation animating CAGLIs desire to arbitrate is rooted in Annex SL-V. Annex SL-V is a contract
entirely different from the SPA. It created distinct obligations for distinct parties. AEV was never a party
to Annex SL-V. Rather than pertaining to AEV, Annex SL-V pertained to a different entity: WLI (renamed
WG&A then
renamed ATSC). AEV
is,
thus,
not
bound
by Annex
SL-V.
On one hand, Annex SL-V does not stipulate that disputes arising from it are to be settled via arbitration.
On the other hand, the SPA requires arbitration as the mode for settling disputes relating to it and
recognizes the subsistence of the obligations under Annex SL-V. But as a separate contract, the mere
mention of Annex SL-V in the SPA does not suffice to place Annex SL-V under the ambit of the SPA or to
render it subject to the SPAs terms, such as the requirement to arbitrate.
WHEREFORE, the petition is GRANTED. The assailed orders dated May 5, 2011 and June 24, 2011 of
the Regional Trial Court, Cebu City, Branch 10 in Civil Case No. CEB-37004 are declared VOID. The
Regional Trial Court, Cebu City, Branch 10 is ordered to DISMISS Civil Case No. CEB-37004.
SO ORDERED.

19. G.R. No. 200759, March 25, 2015


FAJ CONSTRUCTION
SAULOG,Respondent.

&

DEVELOPMENT

CORPORATION, Petitioner, v. SUSAN

M.

DECISION
DEL CASTILLO, J.:
This case illustrates the oft-quoted principle that the Supreme Court is not a trier of facts and does not
normally undertake the re-examination of the evidence presented by the contending parties during trial.

This Petition for Review on Certiorari1 seeks to set aside the November 29, 2011 Decision2 and February
24, 2012 Resolution3 of the Court of Appeals (CA) in CA-G.R. CV No. 88385 affirming with
modification the January 30, 2006 Decision 4 of the Regional Trial Court (RTC) of Quezon City, Branch
220 in Civil Case No. Q-02-45865 and denying petitioners Partial Motion for
Reconsideration,5respectively.
Factual

Antecedents

On June 15, 1999, petitioner FAJ Construction and Development Corporation and respondent Susan M.
Saulog entered into an Agreement 6 (construction agreement) for the construction of a residential building
in San Lorenzo Village, Makati City for a contract price of P12,500,000.00. Payment to petitioner
contractor shall be on a progress billing basis, after inspection of the work by respondent.
Construction of the building commenced, and respondent made a corresponding total payment to
petitioner in the amount of P10,592,194.80. However, for the October 31 and November 6, 2000 progress
billing statements sent by petitioner in the total amount of P851,601.58, respondent refused to pay. After
performing additional work, petitioner made another request for payment, but respondent again refused to
pay, prompting petitioner to terminate the construction contract pursuant to Article 27(b) of the Uniform
General Conditions of Contract for Private Construction (or Document 102) of the Construction Industry
Authority
of
the
Philippines,
Department
of
Trade
and
Industry.7
Petitioner then sent demand letters to respondent on November 24, 2000 and September 28, 2001. In
reply, respondent claimed that petitioners work was defective, and that it should instead be made liable
thereon.
Petitioner thus filed with the RTC of Quezon City a civil case for collection of a sum of money with
damages against respondent. Docketed as Civil Case No. Q-02-45865 and assigned to Branch 220, the
Complaint8 alleged that despite faithful compliance with the construction agreement, respondent refused
to pay the outstanding balance of P851,601.58, which prompted it to stop construction of the building.
Petitioner thus prayed that respondent be ordered to pay the amounts of P851,601.58 representing the
unpaid billings; P625,000.00 representing the retention amount; P50,000.00 for litigation expenses; 20%
attorneys
fees
and
appearance
fees,
or
P170,000.00;
and
costs
of
suit.
In her Answer with Compulsory Counterclaim, 9 respondent claimed that while she religiously paid
petitioner pursuant to their construction agreement, petitioners work was defective and delayed; that
petitioner failed to remedy said defects; that as a result, rainwater seeped through the building and caused
extensive damage to the unfinished building; and that she had to incur additional substantial expenses for
the repair of the building, to remedy the defects caused by petitioner, and to finish construction of the
building. By way of counterclaim, respondent prayed for an award of actual damages in the amount of
P3,213,575.91; lost rentals amounting to P5,391,456.00; additional consequential damages of
P1,600,000.00 because she could not devote herself to her work; additional costs of ongoing repair;
P5,000,000.00 moral damages; P5,000,000.00 exemplary damages; P1,387,500.00 as penalties for delay;
attorneys fees and P4,000.00 appearance fees per hearing; interest; and costs of suit.
After

pre-trial,

the

case

was

set

for

trial

on

the

merits.

Petitioner presented its first witness on March 11, 2003. However, the presentation of the witnesss
testimony was not concluded as petitioners counsel did not have the required documentary evidence. 10
Thus,
petitioner
moved
for
a
continuance.
After several opportunities for the presentation of its first witness, petitioner failed to proceed with trial.

Its counsel moved and asked for several postponements of trial, which the trial court granted despite
respondents opposition. However, petitioners counsel and witness failed to appear during the scheduled
April 29, 2003 hearing, prompting the trial court, upon respondents motion, to dismiss the case for
failure
to
prosecute.11
Petitioner filed an unverified motion for reconsideration 12 of the April 29, 2003 dismissal order, claiming
that its counsel was unable to attend the scheduled hearing because he suffered arthritis of the knee;
however, the motion was not accompanied by an affidavit or certification to the effect that the character of
petitioners counsels illness is such as to render his non-attendance excusable. Respondent opposed the
motion.13 In a June 23, 2003 Order,14 the trial court granted petitioners motion for reconsideration, thus
recalling its April 29, 2003 dismissal order and setting the case for hearing on July 29, 2003 for the
continuation
of
the
presentation
of
petitioners
evidence.
On July 29, 2003, both petitioner and its counsel again failed to appear. The trial court reset the hearing
to September 4, 2003, with a warning that further postponement will not be tolerated. 15
Petitioner once more moved for the postponement of the September 4, 2003 hearing, citing conflict of
schedule.16 Respondent opposed the motion, claiming that there was a pattern on petitioners part to delay
the disposition of the case despite the trial courts admonition that no further postponement will be
allowed.
On September 4, 2003, petitioner and counsel again failed to appear for the continuation of trial. The trial
court, noting respondents manifestation, issued another Order dismissing the case for failure to
prosecute, ordering that the direct testimony of petitioners witness be stricken off the record, and setting
the
case
for
hearing
on
respondents
counterclaim. 17
Petitioner again filed a motion for reconsideration 18 of the above September 4, 2003 dismissal order,
which respondent opposed,19 and which the trial court denied in a December 16, 2003 Order. 20 Petitioner
filed a second motion for reconsideration, 21 but the same was denied in a January 14, 2004 Order. 22
Petitioner filed a petition for certiorari23 with the CA questioning the above December 16, 2003 and
January 14, 2004 Orders of the trial court, claiming that they were issued with grave abuse of discretion;
that the trial court erred in denying a postponement of trial, in striking off the testimony of its witness,
and in declaring that petitioner had the propensity to delay the case. The Petition was docketed as CAG.R.
SP
No.
82239.
On September 30, 2004, the CA issued its Decision 24 in CA-G.R. SP No. 82239 dismissing the petition
for certiorari and affirming the trial courts action, declaring that petitioner adopted a pattern of delay and
was guilty of employing dilatory maneuvers, trifling with respondents right to a speedy dispensation of
justice, abusing the patience of the trial court and wasting its time, squandering the peoples money, and
impeding the administration of justice. It held further that the trial court acted rightly in its resolution of
the case, treating petitioner with liberality despite its trifling with the expeditious administration of
justice; that petitioners complaint was correctly dismissed for failure to prosecute after it was given all
the opportunity to present its evidence; that said dismissal operates as an adjudication on the merits; that
petitioners right to due process was not violated; and that petitioners second motion for reconsideration
is not allowed under Section 5, Rule 37 of the 1997 Rules of Civil Procedure. 25 In addition, the appellate
court admonished petitioners counsel, reminding the latter not to delay his case, but rather to observe the
rules
of
procedure
and
not
misuse
them
to
defeat
the
ends
of
justice.
Petitioner took the matter to this Court, via a petition for review on certiorari docketed as G.R. No.
166336. However, in a March 7, 2005 Resolution, 26 the Petition was denied for failure to submit a

verified statement of material date of filing the motion for reconsideration of the assailed CA judgment,
and for failure to show that the appellate court committed any reversible error. In several other
Resolutions27 of this Court, petitioners motions for reconsideration and to refer the case to the Court en
banc were denied on the ground, among others, that it failed to sufficiently show that the CA committed
any
reversible
error.
On January 17, 2006, an Entry of Judgment28 was issued by the Court stating that on August 16, 2005, its
March 7, 2005 Resolution in G.R. No. 166336 became final and executory.
Ruling

of

the

Regional

Trial

Court

In Civil Case No. Q-02-45865, respondent was allowed to present her evidence on the counterclaim. As
found by the CA, respondents evidence is as follows:
x x x. She presented the testimony of Rhodora Calinawan, the architect who conducted a complete
inspection of the project first in September 2000, and, second, in November 2000, after typhoon Seniang.
Rhodora Calinawan narrated her findings and identified the photographs submitted as proofs of
appellants29 substandard work. Among the defects she pointed out were the sloppily done flooring, the
unaligned electrical outlet and switch, dried cement and paint stained flooring, incorrect colored cement
used to fill the gap between the tiles, need to repair door jamb, sloppily done grouting of tiles, incorrect
luggage compartment doors, bubbles in the varnishing works, unaligned sanding of parquet flooring, poor
termination of shower and enclosure and bull nose wood moulding, dirty window sill, lack of screws and
rubber on the window, damaged roof panels, need for plashing and installation of drift edges, and
improper installation of asphalt shingles on the roof. After the typhoon, appellee 30 also requested her to
make a second inspection. She prepared another report which listed the following additional defects: the
second floor parquet flooring was wet due to the typhoon because the windows were not properly sealed,
lacked
sealant
and
rubber
protector.
Susan Saulog took the stand on February 15, 2005. She testified on appellants defective work and the
damage caused by typhoon Seniang to the unfinished work, notwithstanding the fact that she had
already paid a total of P10,592,194.80. She refused to pay appellant the amount of P851,601.58 because
the latter already collected advance payment but had a lot of unfinished work before it abandoned the
project. She made a counter-demand for P4,600,000.00 that excluded the lost revenue for unearned
rentals, exemplary and moral damages. She was supposed to earn P160,000.00 per month from rentals
starting July 2000. After appellant abandoned the project, she still spent P3,820,796.21 to rectify and
complete the same. The accounts chargeable to appellant were listed in Exhibit 21, to wit:
ITEM NO.
A
B
C
D
E
F
G
H

PARTICULARS
AMOUNT
Bestbuilt Steel Builders
785,299.12
Sub-Contractor: Fizcon Enterprises
375,166.17
Labor Contracts & Quotations
243,461.40
Cash Advances for Materials by FAJ
186,236.62
Professional Fees
631,666.46
Rectification of Major Defective Works
422,563.77
Other Charges
647,629.71
Other Additional Construction Expenses for Rectification & Repair 528,772.96
Works
GRAND TOTAL AMOUNT
3,820,796.21

The penalty for delay is P12,500.00 per day. From July 30, 2000 up to November 17, 2000, the total
penalty amounted to P1,387,500.00. She suffered sleepless nights because she started to experience

frozen shoulder and trigger finger that necessitated the services of Dr. Alberto Lu, an acupuncturist.
Exhibits 30-34 comprised five receipts issued by Alberto M. Lou, evidencing payment of P400 for
services rendered. She claimed reimbursement for the amounts she paid to her counsel: P20,000.00 as
acceptance fees; P4,000.00 per appearance and cost of suit which totaled P100,000.00. She spent
P60,000.00 and P7,000.00, respectively, for the services of Architect Calinauan and an accountant to put
the records in order. She claimed moral damages of P5,000,000.00.31
On January 30, 2006, the trial court rendered its Decision on respondents counterclaim, declaring as
follows:
After carefully studying all the above evidence, this court resolves that defendant 32 has proven her
following
allegations
and
counterclaims,
to
wit:
(1) That, in fact, the construction work of plaintiff 33 was not only delayed, but defective; and that plaintiff
abandoned the construction work, incomplete and with many defects. The evidence on record is
overwhelming and in addition to the testimonies of Arch. Rhodora Calinawan and the defendant herself;
the same is proven by Exhs. 1 1-B-4; 2 2-A; 3; 4 4-H-2; 5 5-G-2; 6 6-G-2; 7 7-E-2; 8 8-C; 9

9-M;
9-N

9-EE;
15

15-A2;
15-B

15-B-5;
15-B2

15-Z.
(2) That defendant paid plaintiff the total amount of P10,592,194.80 before plaintiff abandoned the work
(Exhs.
16

16-Q).
(3) That defendant had to finish the work abandoned by plaintiff, incurring substantial additional
expenses therefor. This is also supported not only by her testimony, but by documentary evidence
presented by her (Exhs. 21; 20 20-A; 21 21-F; 22 22-CCC; 23 23-M; 24 24-JJJ; 25 25-S; 26
26-QQ;
28

28-AAAA-130;
29

29-JJJ).
(4) As to the claim of defendant for moral damages, the Court finds that she is entitled to moral damages,
but not for the amount she is claiming. The testimony given by defendant on how the problems created
by plaintiff affected her personally is believable; and furthermore, it is supported by official receipts of an
Acupuncture Consultant (Exhs. 30-34). This is one of the cases wherein moral damages are allowed by
Article 2220 of the New Civil Code. Breach of Contract where the defendant acted fraudulently or in bad
faith.
(5) With respect to exemplary damages, the Court perceives that same should be granted, but moderates
the same. Plaintiff being in the construction business to the public, should be deterred from doing to
others, what it did to defendant. This is one of the situations envisioned by Article 2229 of the New Civil
Code,
for
exemplary
damages.
(6) The Court is convinced that attorneys fees should also be adjudicated, considering the work that
counsel for defendant undertook. Attorneys fees should be adjudicated, in accordance with Article 2208
of
the
New
Civil
Code.
(7) The Court is also persuaded to grant penalties for delay, as provided for in the agreement between the
parties
(Exhs.
11-B-1
and
11-B-2).
(8) The Court, however, is not inclined to grant additional consequential damages of P1,600,000.00,
because
this
court
finds
that
this
claim has
not
been
properly supported.
(9) Finally, the Court is inclined to grant defendants claim, for lost rentals, which is properly supported

by the testimony of defendant and very plausible under the circumstances, because one of the duplex
apartments was constructed for rental income purposes and its completion and rental was very much
delayed,
because
of
the
fault
of
plaintiff.
IN VIEW OF ALL THE FOREGOING, plaintiff FAJ Construction & Development Corporation is hereby
ordered to pay defendant Susan Saulog, the following amounts:
(1)
(2)
(3)
(4)
(5)
(6)

P3,213,575.91 as actual damages;


Lost rentals of P5,391,456.00;
Moral damages of P500,000.00;
Exemplary damages of P500,000.00;
Penalties for delay amounting to P1,387,500.00;
Attorneys fees of P20,000.00, plus appearance fee of P4,000.00 per appearance, payable to Atty.
Alberto B. Guevara, Jr.;
(7) This court also grants 6% interest, on all the above amounts, commencing from the date of the filing
of the complaint, January 2, 2002.
This Court, however, dismisses the claim of Susan Saulog for additional consequential damages
amounting
to
P1,600,000.00,
which
has
not
been
proven.
SO ORDERED.34
Ruling

of

the

Court

of

Appeals

Petitioner filed an appeal with the CA. Docketed as CA-G.R. CV No. 88385, the appeal essentially
argued that the trial court erred in holding petitioner liable to the respondent for the amounts stated in the
decretal portion of the trial courts decision. In addition, petitioner contended that it was erroneous for the
trial court to have dismissed its complaint for failure to prosecute, as it should not be penalized for the
negligence of its counsel in the handling of Civil Case No. Q-02-45865, which is the sole reason for the
dismissal
thereof.
On November 29, 2011, the CA rendered the assailed Decision affirming with modification the January
30, 2006 Decision of the trial court, pronouncing thus:
Appellant35 now questions anew the propriety of the dismissal of the complaint on ground of failure to
prosecute. Appellant argues that it should not be made to suffer the consequences of the negligence or
mistakes
of
its
counsel.
This Court finds that any disquisition on this issue is improper for being barred by res judicata. x x x
More, appellants case was dismissed for failure to prosecute because of the numerous delays caused by
its counsel. Appellant cannot be excused from the actions of its counsel since it is likewise a settled rule
that mistake[s] of counsel binds the client. It is only in case of gross or palpable negligence of counsel
when courts must step in and accord relief to a client who suffered thereby. x x x
The next issue is: did appellee 36 adequately prove her right to actual damages for rectification of
appellants
defective
work?
Article
1715
of
the
Civil
Code
provides:
Article 1715. The contractor shall execute the work in such a manner that it has the qualities agreed upon
and has no defects which destroy or lessen its value or fitness for its ordinary or stipulated use. Should
the work be not of such quality, the employer may require that the contractor remove the defect or execute

another work. If the contractor fails or refuses to comply with this obligation, the employer may have the
defect
removed
or
another
work
executed,
at
the
contractors
cost.
Evidently, Article 1715 gives the employer the options to require the removal of the work, to rectify the
flaws in their work, or to have the work done at the expense of the contractor.
Here, the defective workmanship was amply proven by Architect Rhodora Calinawans testimony and
documentary evidence i.e., photographs, receipts, and list of the expenses needed to rectify appellants
poorly crafted work. Hence, We sustain the award of actual damages based on these testimonial and
documentary
evidence.
Regarding the penalty for delay in the amount of One Million Three Hundred Eighty Seven Thousand
Five Hundred Pesos (P1,387,500.00), the same should also be sustained. A contract is the law between
the parties, and they are bound by its stipulations so long as they are not contrary to law, customs, public
policy and public morals. The penalty for delay is agreed upon by the parties themselves. The fact that
appellant was already delayed in the completion of the duplex is undisputed. In fact, record shows that on
January 24, 2000, appellee approved the extension requested by appellant. This request for extension, by
itself, is already proof of delay. Thus, at the time appellant abandoned the project, it already incurred
delay. Verily, it is only proper that appellant be made to pay the penalty for delay after appellee no longer
agreed
to
any
further
extension.
We

now

go

to

the

issue

of

damages.

Moral damages are recoverable for breach of contract where the breach was wanton, reckless, malicious
or in bad faith, oppressive or abusive. However, moral damages are improperly awarded, absent a
specific finding and pronouncement from the trial court that a party acted in such manner. Here, the only
basis of the trial court in granting moral damages of P500,000.00 was appellees gratuitous claim that she
suffered sleepless nights for her frozen shoulder and trigger finger, supposedly evidenced by 5 official
receipts issued by her acupuncturist whom she paid P400.00 per receipt. No evidence, however, was
adduced showing that her frozen shoulder and trigger finger were the direct result of the delayed project.
The basis for such award is too shallow and evidently untenable, hence, the same must be deleted.
As a consequence, the award of exemplary damages should also be vacated. x x x
Also, appellee does not dispute the fact that the total contract price was P12,500,000.00. After paying
more than P10,500,000.00, appellee made several demands for the parts that did not meet the agreed
specifications. On the other hand, appellant was of the firm belief that it had the right to work stoppage,
as authorized under the contractors manual. Both parties honestly believed that their respective actions
were justified, hence, no bad faith can be attributed to either party to merit the award of damages.
Too, this Court finds that the trial court erred in holding appellant liable for lost rentals in the amount of
Five Million Three Hundred Ninety One Thousand Four Hundred Fifty Six Pesos (P5,391,456.00).
Unrealized profits fall under the category of actual or compensatory damages. If there exists a basis for
reasonable expectation of profits had there been no breach of contract, indemnification for damages based
on such expected profits is proper. Here, appellee did not present any evidence to show that there was
already a potential lessee to one of the units of the duplex. Even assuming that appellee may have
presented evidence to show the existence of a future lessee, she should have presented a contract of lease
showing the contract price. She should have also shown that the rental rate, at that time and in that area
was, similar or at least approximately close to the amount of P160,000.00 per month. Without any of
these evidence, damages based on lost rental is purely speculative. In the same way that one could
speculate that the unit will be rented out, a person cannot be precluded from speculating that the other unit

may be occupied by a close relative for free. The court must rely on competent evidence and must avoid
any speculation or give premium to self-serving allegations. As stated, the award of P5,391,456.00 is in
the nature of actual damages. To be recoverable, actual damages must not only be capable of proof, but
must actually be proved with a reasonable degree of certainty. Courts cannot simply rely on speculation,
conjecture, or guesswork in determining the fact and amount of damages. To justify an award of actual
damages, there must be competent proof of the actual amount of loss. Credence can be given only to
claims which are duly supported by receipts x x x. These are not present in the case at bar.
As for attorneys fees, it is well settled that the law allows judicial discretion to determine whether or not
attorneys fees are appropriate. The surrounding circumstances of each case are to be considered. Here,
We resolve to delete the award of attorneys fees since the trial court did not make any particular finding
that any of the instances enumerated in Art. 2208 of the Civil Code exists. More, it is settled that the
award of attorneys fees is the exception rather than the general rule. Counsels fees are not awarded
every time a party prevails in a suit because of the policy that no premium should be placed on the right to
litigate.
The trial court correctly imposed 6% interest on all awarded amounts commencing from the date of the
filing of the complaint. When an obligation, not constituting a loan or forbearance of money, is breached,
interest on the amount of damages awarded may be imposed at the discretion of the court at 6% per
annum.
ACCORDINGLY, the appealed decision is AFFIRMED WITH MODIFICATION, deleting the award of
lost rentals, moral damages, exemplary damages, and attorneys fees, including appearance fee.
SO ORDERED.37
Petitioner filed a Partial Motion for Reconsideration, but in a February 24, 2012 Resolution, the CA
denied
the
same.
Hence,
the
present
Petition.
Issues
In a January 28, 2013 Resolution,38 this Court resolved to give due course to the Petition, which raises the
following assignment of errors:
I.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT CONCLUDED THAT RES
JUDICATA APPLIES IN THE INSTANT CASE.
II.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT CONCLUDED THAT
PETITIONER IS LIABLE FOR ACTUAL DAMAGES, AND IN IMPOSING THE PENALTY FOR
DELAY AND AWARDING INTEREST ON ALL AMOUNTS DUE.39
Petitioners

Arguments

In its Petition and Reply40 seeking to reverse and set aside the assailed CA dispositions and praying that
judgment be rendered absolving it from the adjudged pecuniary liabilities or, in the alternative, that a new
trial of its case be held, petitioner argues that res judicata cannot be made as basis to deny it the
opportunity to question the dismissal of its case and to present its evidence because the dismissal of its

Petition in G.R. No. 166336 was not an adjudication of the case on its merits; that the dismissal of Civil
Case No. Q-02-45865 was not due to its fault, but solely the gross negligence of its counsel; that the case
should not have been dismissed as it was not guilty of lack of diligence in failing to continue with trial
with reasonable promptitude;41 that it should not be made liable for the adjudged liabilities as they are
bereft of factual and legal basis; that respondents witness, architect Rhodora Calinawan (Calinawan), was
not competent to testify, nor was she an objective, reliable, or trustworthy witness; that the supposed
actual damages suffered by respondent have not been adequately proved; that when respondent refused to
pay the outstanding balance, petitioner was justified in stopping work, and any damages suffered by
respondent thereafter may not be attributed to it but constitute damnum absque injuria; that the adjudged
penalty for its supposed delay is excessive; and that there is no basis to award interest.
Respondents

Arguments

In her Comment,42 respondent contends that the issue of whether the trial and appellate courts correctly
decided the amount of damages is a factual issue which is beyond the jurisdiction of this Court; that with
respect to the dismissal of petitioners case in Civil Case No. Q-02-45865 for failure to prosecute, res
judicata applies; that petitioners claim that it should not be bound by the negligence of its counsel cannot
stand because it was itself negligent in the prosecution of its case despite having been given by the trial
court all the opportunity to present evidence; that with respect to the issue of damages, the factual
findings of the trial and appellate courts may not be disturbed; that petitioner failed to present evidence to
controvert the trial and appellate courts findings; that the pecuniary liabilities were justified as petitioner
was guilty of delay, abandonment, and defective workmanship; that there is no ground to reduce the
amount of penalties for petitioners delay; and that the award of interest was proper.
Our Ruling
The

Court

denies

the

Petition.

Petitioners claim that res judicata cannot apply has no merit. This Court, in G.R. No. 166336, found
nothing wrong in the judgment of the CA in CA-G.R. SP No. 82239 affirming the dismissal of petitioners
Complaint in Civil Case No. Q-02-45865 for failure to prosecute. In fact, the Court found that the
appellate court had not committed any reversible error. This finding of lack of any reversible error is now
final with the entry of judgment in G.R. No. 166336. Thus, petitioner could no longer prove its case,
other than to present controverting evidence on respondents counterclaim.
The Court has repeatedly said that minute resolutions dismissing the actions filed before it constitute
actual adjudications on the merits. They are the result of thorough deliberation among the members of the
Court. When the Court does not find any reversible error in the decision of the CA and denies the
petition, there is no need for the Court to fully explain its denial, since it already means that it agrees with
and adopts the findings and conclusions of the CA. The decision sought to be reviewed and set aside is
correct. It would be an exercise in redundancy for the Court to reproduce or restate in the minute
resolution denying the petition the conclusions that the CA reached. 43
Next, petitioners argument that it should not be punished for the negligence of its counsel deserves the
same treatment. Suffice it to state that we have not seen any reason to reverse the CAs ruling on this
matter; on the other hand, the record will disclose that petitioner was itself neglectful of its duties relative
to its case, and it continued to retain the services of its counsel which it now conveniently claims to be
negligent, even after repeatedly suffering from the latters claimed lack of care. It appears that despite
witnessing firsthand the caliber of its lawyer during the initial presentation of its evidence in 2003,
petitioner changed counsel only after the trial courts January 30, 2006 Decision on respondents
counterclaim.44 The general rule still applies that the mistakes of counsel bind his client.

On the issue of liability, we find relying on the identical findings of the trial and appellate courts that
petitioner is guilty of violating the construction agreement, for its defective and incomplete work, delay,
and for unjustified abandonment of the project. Indeed, we find no reason to disturb the identical
pronouncements of the trial court and the CA. The same holds true with respect to the issue of damages
raised by petitioner; it requires an inquiry into the facts, which is no longer this Courts realm. In a case
previously decided by this ponente concerning a construction contract and where similar allegations of
abandonment, delay and defective workmanship were advanced, it was held that
Petitioner endeavors to convince us to determine, yet again, the weight, credence, and probative value of
the evidence presented. This cannot be done in this petition for review on certiorari under Rule 45 of the
Rules of Court where only questions of law may be raised by the parties and passed upon by us. In Fong
v. Velayo, we defined a question of law as distinguished from a question of fact, viz:
A question of law arises when there is doubt as to what the law is on a certain state of facts, while there is
a question of fact when the doubt arises as to the truth or falsity of the alleged facts. For a question to be
one of law, the same must not involve an examination of the probative value of the evidence presented by
the litigants or any of them. The resolution of the issue must rest solely on what the law provides on the
given set of circumstances. Once it is clear that the issue invites a review of the evidence presented, the
[question] posed is one of fact. Thus, the test of whether a question is one of law or of fact is not the
appellation given to such question by the party raising the same; rather, it is whether the appellate court
can determine the issue raised without reviewing or evaluating the evidence, in which case, it is a
question of law; otherwise, it is a question of fact.
It has already been held that the determination of the existence of a breach of contract is a factual matter
not usually reviewable in a petition filed under Rule 45. We will not review, much less reverse, the
factual findings of the Court of Appeals especially where, as in this case, such findings coincide with
those of the trial court, since we are not a trier of facts x x x. 45
There is no ground either to doubt the testimony of Calinawan, who testified on the defective quality of
petitioners work and the state of construction after the latter abandoned the project. Her testimony
merely corroborates already existing evidence such as photographs as well as the testimony of
respondent herself. All in all, these pieces of evidence collectively proved the facts in issue. Besides,
Calinawan need not be qualified as an expert witness in order to testify on facts which are readily
apparent to the eye, and even to the layman: it does not require an expert to conclude that flooring is
sloppily done, or that the electrical outlet and switch are not aligned, or that the flooring is stained with
paint, or that incorrect colored cement was used to fill the gap between tiles, or that a door jamb needs
repair, or that grouting of tiles is sloppily done, or that there are unwanted bubbles in the varnishing
works, or that the parquet flooring is unaligned or uneven, or that the window sills are dirty, or that
windows lacked the necessary screws and rubber, or that the roof panels are damaged, or that the
installation of asphalt shingles on the roof was improper. Any ordinary individual building a home would
readily
notice
such
defects.
Since respondent suffered damages as a result of petitioners defective and delayed work and unjustified
abandonment of the project, the principle of damnum absque injuria cannot apply. The principle cannot
apply
when
there
is
an
abuse
of
a
persons
right. 46
Coming now to the issue of delay, we find that the trial and appellate courts grant of P1,387,500.00 not
excessive; it is, in fact, liberal. Construction period was agreed upon at 240 days from receipt by
petitioner of a notice to proceed. 47 Said notice was issued on June 18, 1999, 48 thus giving petitioner
approximately eight months from said date, or roughly computed up to February 18, 2000, to
complete the project. Yet, petitioner was still working on the project as late as on November 22, 2000,
after which it stopped work and abandoned the project; this fact is not denied by petitioner. 49 Thus,

petitioner was already delayed for more than nine months that is, beginning March 2000 and ending
November of the same year or approximately 270 days. At P12,500.00 agreed penalty imposed for each
day of delay, petitioner should be correspondingly liable to respondent for P3,375,000.00 liquidated
damages, more or less, under the construction agreement. 50 Yet, the courts below awarded a mere
P1,387,500.00; this award is certainly not excessive and should remain, accepted as it is without question
by
the
respondent.
Finally, the imposition of 6% interest per annum is proper. Indeed, as correctly held by the CA, when an
obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of
damages awarded may be imposed at the discretion of the court at the rate of 6% per annum,51from the
filing
of
the
complaint
until
its
full
satisfaction.
WHEREFORE, the Petition is DENIED. The November 29, 2011 Decision and February 24, 2012
Resolution of the Court of Appeals in CA-G.R. CV No. 88385 are AFFIRMED.
SO ORDERED.

20. G.R. No. 190818

November 10, 2014

METRO MANILA SHOPPING MECCA CORP., SHOEMART, INC., SM PRIME HOLDINGS,


INC., STAR APPLIANCES CENTER, SUPER VALUE, INC., ACE HARDWARE PHILIPPINES,
INC., HEAL TH AND BEAUTY, INC., JOLLIMART PHILS. CORP., and SURPLUS
MARKETING
CORPORATION, Petitioners,
vs.
MS. LIBERTY M. TOLEDO, in her official capacity as the City Treasurer of Manila, and THE
CITY OF MANILA, Respondents.
RESOLUTION
PERLAS-BERNABE, J.:
The Court hereby resolves the Manifestation and Motion 1 dated August 2, 2013 filed by petitioners Metro
Manila Shopping Mecca Corp., Shoemart, Inc., SM Prime Holdings, Inc., Star Appliances Center, Super
Value, Inc., Ace Hardware Philippines, Inc., Health and Beauty, Inc., Jollimart Phils. Corp., and Surplus
Marketing Corporation (petitioners), seeking the approval of the terms and conditions of the parties'
Universal Compromise Agreement2dated June 1, 2012 (UCA) in lieu of the Court's Decision 3 dated June
5, 2013 (subject Decision) which denied petitioners' claim for tax refund/credit of their local business
taxes paid to respondent City of Manila.
In their Manifestation and Motion, petitioners alleged that pursuant to the UCA, the parties agreed to
amicably settle all cases between them involving claims for tax refund/credit, including the instant
case.4 The pertinent portions of the UCA provide:5
2.b. It is further agreed that there shall be no refunds/tax credit certificates to be given or issued
by the City of Manilain the following cases:
2.b.1. SC GR 190818 (CTA EB No. 480)entitled "Supervalue, Inc., Ace Hardware Philippines,
Inc., H and B Inc., Metro Manila Shopping Mecca Corp., SM Land, Inc. (formerly Shoemart,
Inc.), SM Prime Holdings, Inc., Star Appliance Center, Inc., Surplus Marketing Corp. versus The

City of Manila and the City Treasurer [of] Manila," which emanated from an Order in favour of
the SM Group issued by Branch 47 of the Regional Trial Court of Manila in Civil Case No. 03108175 entitled "Ace Hardware Phils., Inc., SM Prime Holdings, Inc., Star Appliance Center,
Inc., Supervalue, Inc., Watsons Personal Care Stores (Phils.) Inc. versus The City of Manila and
the City Treasurer of Manila," and is currently pending before the Supreme Court. (Emphases and
underscoring supplied)
In their Comment (with Manifestation of Earnest Apology to the Supreme Court) 6 dated June 4, 2014,
respondent City of Manila and Liberty Toledo, in her capacity as Treasurer of the City of Manila
(respondents), confirmed the authenticity and due execution of the UCA. They, however, submitted that
the UCA had no effect on the subject Decision since the taxes paid subject of the instant case was not
included in the agreement.7
The Court adopts the terms and conditions of the UCA pertinent to this case.
A compromise agreement is a contract whereby the parties, by making reciprocal concessions, avoid a
litigation or put an end to one already commenced. 8 It contemplates mutual concessions and mutual gains
to avoid the expenses of litigation; or when litigation has already begun, to end it because of the
uncertainty of the result.9 Its validity is dependent upon the fulfillment of the requisites and principles of
contracts dictated by law; and its terms and conditions must not be contrary to law, morals, good customs,
public policy, and public order.10 When given judicial approval, a compromise agreement becomes more
than a contract binding upon the parties. Having been sanctioned by the court, it is entered as a
determination of a controversy and has the force and effect of a judgment. It is immediately executory and
not appealable, except for vices of consent or forgery. The nonfulfillment of its terms and conditions
justifies the issuance of a writ of execution; in such an instance, execution becomes a ministerial duty of
the court.11
A review of the whereas clauses 12 of the UCA reveals the various court cases filed by petitioners,
including this case, for the refund and/or issuance of tax credit covering the local business taxes payments
they paid to respondent City of Manila pursuant to Section 21 of the latters Revenue Code. 13 Thus,
contrary to the submission of respondents, the local business taxes subject of the instant case is clearly
covered by the UCA since they were also paid in accordance with the same provision of the Revenue
Code of Manila.1wphi1
In this relation, it is observed thatthe present case would have been rendered moot and academic had the
parties informed the Court of the UCAs supervening execution. 14 Be that as it may, and considering that:
(a) the UCA appears to have been executed in accordance with the requirements of a valid compromise
agreement; (b) the UCA was executed more than a year prior to the promulgation of the subject Decision;
and (c) the result of both the UCA and the subject Decision are practically identical, i.e., that petitioners
are not entitled to any tax refund/credit, the Court herein resolves to approve and adopt the pertinent
terms and conditions of the UCA insofar as they govern the settlementof the present dispute.
WHEREFORE, the petitioners Manifestation and Motion dated August 2, 2013 is GRANTED. The
Decision dated June 5, 2013 of the Court is hereby SET ASIDE. In lieu thereof, the terms and conditions
of the Universal Compromise Agreement between the parties pertinent to the instant case are
APPROVED and ADOPTED as the Decision of the Court.
The parties are ordered to faithfully comply with the terms and conditions of the said agreement.
This case is considered closed and tenninated. No costs.

SO ORDERED.

21. G.R. No. 173802

April 7, 2014

NATIONAL HOUSING AUTHORITY, Petitioner,


vs.
COURT OF APPEALS, BERNABE NOBLE, WILLIAM GAN, JULIO RODRIGUEZ, JR.,
SAMUEL LIM, SANDRA YAP NG, ALFONSO UY, and BOARD OF
COMMISSIONERS, Respondents.
RESOLUTION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari 1 is the Resolution2 dated June 30, 2006 of the Court of
Appeals (CA) in CA-G.R. CV No. 73725 which dismissed petitioner National Housing Authority's
(NHA) appeal and held that the Order 3 dated August 3, 1998 of the Regional Trial Court (RTC) of
Cagayan de Oro City, Misamis Oriental (Misamis), Branch 17 (court a quo) in Civil Case No. 7847
(Assailed Order) had become final and executory.4
The Facts
On May 25, 1981, the NHA filed a case against respondents Bernabe Noble, et al. (respondentslandowners) for the expropriation of their properties situated in Lapasan, Cagayan de Oro City (subject
properties), pursuant to Letter of Instructions No. (LOI) 555, mandating a nationwide Slum Improvement
and Resettlement Program, and LOI 557, otherwise known as "Adopting Slum Improvement." The case
was docketed as Civil Case No. 7847 and originally raffled to Branch V of the then Court of First
Instance of Misamis Oriental, but was transferred to Branch 20 of the Misamis RTC (Branch 20), upon
the effectivity of Batas Pambansa Bilang 129.5 Consequently, Branch 20 issued a writ of possession
placing the respondent-landowners properties under the NHAs control. 6
Thereafter, the case was transferred to Branch 23 of the Misamis RTC (Branch 23), which appointed
commissioners who appraised the fair market value (FMV) of the subject properties at P470.00 per square
meter, as of 1984. Later on, the case was once more transferred to the court a quo, which then issued an
Order dated April 5, 1990, approving the aforementioned amount as just compensation, and ordering the
NHA to pay respondents-landowners the same. 7
Dissatisfied, the NHA appealed the commissioners valuation of the subject properties before the CA,
docketed as CA-G.R. CV No. 33832. On August 11, 1992, the CA rendered a decision remanding the case
to the court a quo for further proceedings on the issue of just compensation. On May 12, 1993, the CA
issued an Entry of Judgment which closed and terminated the said appeal proceeding. 8
Accordingly, the records were remanded to the court a quo for further proceedings, during which a new
set of commissioners was appointed to re-appraise the FMV of the subject properties. Eventually, the
commissioners pegged the just compensation at P705.00 per square meter, taking into consideration the
value of the subject properties in 1984 and the accumulated improvements thereon since then. 9

The Court A Quo Ruling


On August 3, 1998, the court a quo issued the Assailed Order, approving the commissioners valuation of
the subject properties at P705.00 per square meter and, thus, ordering the NHA to pay respondentslandowners the amounts due to them.10
Claiming that it only received a copy of the Assailed Order on March 3, 1999, the NHA filed a
Manifestation and Motion for Reconsideration (motion) on March 11, 1999, arguing that the FMV of the
subject properties should have been determined at the time the expropriation proceeding was instituted.
For its part, respondents-landowners opposed the NHAs motion on the ground that it was belatedly filed
and thus, the said order already became final and executory. In particular, respondents-landowners
contended that contrary to the NHAs claim, the registry return receipt on record shows that it received a
copy of the questioned Order on November 10, 1998.11
Finding respondents-landowners opposition to be well-taken, the court a quo denied the NHAs motion
on May 21, 1990. Aggrieved, the NHA appealed to the CA.12
The CA Ruling
In a Resolution13 dated September 9, 2002, the CA initially dismissed the NHAs appeal on the ground
that it failed to file its appellants brief on time. The NHA moved for reconsideration, which was granted
in a Resolution14 dated September 10, 2003. As such, the CA ordered respondents-landowners to file their
comment to said appeal. However, instead of filing their comment as directed, respondents-landowners
moved for the resolutions reconsideration, contending that the appeal should be dismissed since the
Assailed Order had long become final and executory due to the NHAs failure to timely file a motion for
reconsideration therefrom or perfect its appeal within the prescribed reglementary period. 15
In a Resolution16 dated June 30, 2006, the CA dismissed the appeal and held that the Assailed Order had
already become final and executory. Accordingly, it ordered that the entire records of the case be
remanded to the court a quo for execution proceedings. The CA held that contrary to NHAs claim that it
only received a copy of the Assailed Order on March 3, 1999 and, thus, timely filed its motion for
reconsideration on March 11, 1999, the registry return receipt on record clearly shows that it already
received a copy of the same on November 10, 1998. It opined that the issuance of the registry return
receipt enjoys the presumption of regularity, and, hence, the entries on said receipt should be given full
evidentiary weight, including, among others, the date indicated thereon. As a result, the Assailed Order
had long become final and executory and the outright dismissal of NHAs appeal was deemed to be
proper.1wphi117
At odds with the CAs ruling, the NHA filed the instant petition.
The Issue Before the Court
The primordial issue raised for the Courts resolution is whether or not the CA erred in finding that the
Assailed Order had already become final and executory.
The Courts Ruling
The petition is without merit.

It is well-settled that a decision that has acquired finality becomes immutable and unalterable, and may no
longer be modified in any respect, even if the modification is meant to correct erroneous conclusions of
fact and law, and whether it be made by the court that rendered it or by the Highest Court of the land. This
principle, commonly known as the doctrine of immutability of judgment, has a two-fold purpose, namely:
(a) to avoid delay in the administration of justice and thus, procedurally, to make orderly the discharge of
judicial business; and (b) to put an end to judicial controversies, at the risk of occasional errors, which is
precisely why courts exist. Verily, it fosters the judicious perception that the rights and obligations of
every litigant must not hang in suspense for an indefinite period of time. As such, it is not regarded as a
mere technicality to be easily brushed aside, but rather, a matter of public policy which must be faithfully
complied.18
In this case, the Court concurs with the CAs view that the Assailed Order had already become final and
executory at the time when the NHA sought to have it reconsidered before the court a quo. As evidenced
by the registry return receipt on record, the NHA received a copy of the Assailed Order on November 10,
1998. However, it moved for reconsideration therefrom only on March 11, 1999, or more than four (4)
months from notice. As the motion was filed way beyond the 15-day reglementary period prescribed
therefor, the court a quos judgment had already lapsed into finality. Consequently, the Assailed Order
cannot be made subject to further appellate review and now constitutes res judicata as to every matter
offered and received in the proceedings below as well as to any other matter admissible therein and which
might have been offered for that purpose.19
In an effort to remove itself from this quandary, the NHA points out that as per the registry return receipt
on record, it received a copy of the Assailed Order on November 10, 1998 through a certain Atty. Epifanio
P. Recafia (Atty. Recafia). The NHA claims that as early as January 1997, Atty. Recafia ceased to be
connected with it and thus, it contends that he could not have validly received a copy of the Assailed
Order in its behalf.20
The contention is untenable.
Other than its bare assertions and a self-serving certification 21 emanating from its own human resource
management department, the NHA has not shown any sufficient proof that the service of a copy of the
Assailed Order to it on November 10, 1998 is invalid. Moreover, the NHA could have easily presented
Atty. Recafia, or at least a statement of his, to disown any authority to receive a copy of the Assailed
Order in the former' s behalf but it failed to do so. Succinctly put, the NHA's unsubstantiated asservations
cannot prevail over the contrary statement of a postal official as embodied in the registry return receipt,
considering that it is the latter's primary duty to send mail matters and thus, accorded with the
presumption of regularity.22
WHEREFORE, the petition is DENIED. The Resolution dated June 30, 2006 of the Court of Appeals in
CA-G.R. CV No. 73725 is hereby AFFIRMED.
SO ORDERED.

22. R. No. 187836, November 25, 2014


SOCIAL JUSTICE SOCIETY (SJS) OFFICERS, NAMELY, SAMSON S. ALCANTARA, AND
VLADIMIR ALARIQUE T. CABIGAO, Petitioners, v. ALFREDO S. LIM, IN HIS CAPACITY AS
MAYOR OF THE CITY OF MANILA, Respondent.

G.R. NO. 187916


JOSE L. ATIENZA, JR., BIENVINIDO M. ABANTE, MA. LOURDES M. ISIP-GARCIA,
RAFAEL P. BORROMEO JOCELYN DAWIS-ASUNCION, MINORS MARIAN REGINA B.
TARAN, MACAILA RICCI B. TARAN, RICHARD KENNETH B. TARAN, REPRESENTED AND
JOINED BY THEIR PARENTS RICHARD AND MARITES TARAN, MINORS CZARINA
ALYSANDRA C. RAMOS, CEZARAH ADRIANNA C. RAMOS, AND CRISTEN AIDAN C.
RAMOS REPRESENTED AND JOINED BY THEIR MOTHER DONNA C. RAMOS, MINORS
JAZMIN SYLLITA T. VILA AND ANTONIO T. CRUZ IV, REPRESENTED AND JOINED BY
THEIR MOTHER MAUREEN C. TOLENTINO, Petitioners,v. MAYOR ALFREDO S. LIM, VICE
MAYOR FRANCISCO DOMAGOSO, COUNCILORS ARLENE W. KOA, MOISES T. LIM,
JESUS FAJARDO LOUISITO N. CHUA, VICTORIANO A. MELENDEZ, JOHN MARVIN C.
NIETO, ROLANDO M. VALERIANO, RAYMUNDO R. YUPANGCO, EDWARD VP MACEDA,
RODERICK D. VALBUENA, JOSEFINA M. SISCAR, SALVADOR PHILLIP H. LACUNA,
LUCIANO M. VELOSO, CARLO V. LOPEZ, ERNESTO F. RIVERA,1 DANILO VICTOR H.
LACUNA, JR., ERNESTO G. ISIP, HONEY H. LACUNA-PANGAN, ERNESTO M. DIONISO,
JR. AND ERICK IAN O. NIEVA, Respondents.
CHEVRON PHILIPPINES INC., PETRON CORPORATION AND PILIPINAS SHELL
PETROLEUM CORPORATION, Intervenors.
DECISION
PEREZ, J.:
Challenged in these consolidated petitions 2 is the validity of Ordinance No. 81873 entitled AN
ORDINANCE AMENDING ORDINANCE NO. 8119, OTHERWISE KNOWN AS THE MANILA
COMPREHENSIVE LAND USE PLAN AND ZONING ORDINANCE OF 2006, BY CREATING A
MEDIUM INDUSTRIAL ZONE (1-2) AND HEAVY INDUSTRIAL ZONE (1-3), AND PROVIDING
FOR ITS ENFORCEMENT enacted by the Sangguniang Panlungsod of Manila (Sangguniang
Panlungsod)
on
14
May
2009.
The creation of a medium industrial zone (1-2) and heavy industrial zone (1-3) effectively lifted the
prohibition against owners and operators of businesses, including herein intervenors Chevron Philippines,
Inc. (Chevron), Pilipinas Shell Petroleum Corporation (Shell), and Petron Corporation (Petron),
collectively referred to as the oil companies, from operating in the designated commercial zone an
industrial zone prior to the enactment of Ordinance No. 8027 4 entitled AN ORDINANCE
RECLASSIFYING THE LAND USE OF THAT PORTION OF LAND BOUNDED BY THE PASIG
RIVER IN THE NORTH, PNR RAILROAD TRACK IN THE EAST, BEATA ST. IN THE SOUTH,
PALUMPONG ST. IN THE SOUTHWEST AND ESTERO DE PANDACAN IN THE WEST, PNR
RAILROAD IN THE NORTHWEST AREA, ESTERO DE PANDACAN IN THE NORTHEAST, PASIG
RIVER IN THE SOUTHEAST AND DR. M. L. CARREON IN THE SOUTHWEST, THE AREA OF
PUNTA, STA. ANA BOUNDED BY THE PASIG RIVER, MARCELINO OBRERO ST., MAYO 28 ST.
AND THE F. MANALO STREET FROM INDUSTRIAL II TO COMMERCIAL I, and Ordinance No.
81195 entitled AN ORDINANCE ADOPTING THE MANILA COMPREHENSIVE LAND USE PLAN
AND ZONING REGULATIONS OF 2006 AND PROVIDING FOR THE ADMINISTRATION,
ENFORCEMENT AND AMENDMENT THERETO.ChanRoblesVirtualawlibrary
The Parties

Petitioners allege the parties respective capacity to sue and be sued, viz:
Suing capacity aside from being residents of
Petitioners
Residence in Manila
Manila/other personal circumstances
G.R. No. 187836
Manila
taxpayer;
One of the petitioners in SJS v. Atienza(G.R. No.
Not mentioned in the
SJS Officer Samson S.
156052);*
petition; holding office in
Alcantara (Alcantara)
Pesident of ABAKADA GURO PARTY LIST
Ermita, Manila
with members who are residents of the City of
Manila
SJS Officer Vladimir
One of the petitioners in SJS v. Atienza(G.R. No.
Alarique T. Cabigao Pandacan
156052)
(Cabigao)
* The allegation is inaccurate. SJS Officer Alcantara is actually one of the counsels for petitioner SJS in
G.R. No. 156052. The petitioners in that case are the SJS itself, Cabigao and Bonifacio S. Tumbokon
(Tumbokon).
G.R. No. 187916
Former

Former Mayor Jose L. Atienza, Jr. (Mayor Atienza)


Bienvinido M. Abante
Ma. Lourdes M. Isip-Garcia
Rafael P. Borromeo

of

Manila;

Secretary of Department of
San
Environment and Natural Resources
Andres (DENR)
Citizen and taxpayer;member of the
Sta. Ana House of Representatives
San
Incumbent City Councilor of the
Miguel City of Manila
Incumbent City Councilor of the
Paco
City of Manila
Sta.
Incumbent City Councilor of the
Mesa
City of Manila

Jocelyn Dawis-Asuncion
Minors Marian Regina B. Taran, Macalia Ricci B. Taran,
Richard Kenneth B. Taran, represented and joined by their
parents Richard and Marites Taran
Paco
Minors Czarina Alysandra C. Ramos, Cezarah Adrianna C.
Ramos, and Cristen Aidan C. Ramos represented and
joined by their mother Donna c. Ramos
Tondo
Minors Jasmin Syllita T. Vila and Antonio T. Cruz IV,
represented and joined by their mother Maureen C.
Tolentino
Sta. Ana
Respondents

Mayor

Citizens, real estate owners and


taxpayers
Citizens, real estate owners and
taxpayers
Citizens, real estate owners and
taxpayers

Sued in their capacity as

G.R. Nos. 187836 and 187916


Former Mayor Alfredo S. Lim (Mayor Lim)

Incumbent Mayor of Manila at the time of the filing

Respondents

of the present petitions


Sued in their capacity as

G.R. No. 187916


Vice-Mayor Francisco Domagoso (Vice-Mayor Vice-Mayor and Presiding Officer of the City
Domagoso)
Council of Manila
Arlene Woo Koa
Principal author of City Ordinance No. 8187
Moises T. Lim, Jesus Fajardo, Louisito N. Chua,
Victoriano A. Melendez, John Marvin Nieto,
Rolando M. Valeriano, Raymondo R. Yupangco,
Edward VP Maceda, Roderick D. Valbuena, Josefina Personal and official capacities as councilors who
M. Siscar, Phillip H. Lacuna, Luciano M. Veloso, voted and approved City Ordinance No. 8187
Carlo V. Lopez, Ernesto F. Rivera, 6 Danilo Victor H.
Lacuna, Jr., Ernesto G. Isip, Honey H. LacunaPangan, Ernesto M. Dionisio, Jr., Erick Ian O. Nieva
The following intervenors, all of which are corporations organized under Philippine laws, intervened: 7
Intervenors
Nature of Business
Chevron Philippines, Inc. importing, distributing and marketing of petroleum products in the
(CHEVRON)
Philippines since 1922
Pilipinas Shell Petroleum manufacturing, refining, importing, distributing and marketing of
Corporation (SHELL)
petroleum products in the Philippines
manufacturing, refining, importing, distributing and marketing of
Petron Corporation (PETRON)
petroleum products in the Philippines
They claim that their rights with respect to the oil depots in Pandacan would be directly affected by the
outcome of these cases.chanrobleslaw
The Antecedents
These petitions are a sequel to the case of Social Justice Society v. Mayor Atienza, Jr.8 (hereinafter
referred to as G.R. No. 156052), where the Court found: (1) that the ordinance subject thereof
Ordinance No. 8027 was enacted to safeguard the rights to life, security and safety of the inhabitants of
Manila;9 (2) that it had passed the tests of a valid ordinance; and (3) that it is not superseded by
Ordinance No. 8119.10 Declaring that it is constitutional and valid, 11 the Court accordingly ordered its
immediate enforcement with a specific directive on the relocation and transfer of the Pandacan oil
terminals.12chanrobleslaw
Highlighting that the Court has so ruled that the Pandacan oil depots should leave, herein petitioners now
seek the nullification of Ordinance No. 8187, which contains provisions contrary to those embodied in
Ordinance No. 8027. Allegations of violation of the right to health and the right to a healthful and
balanced
environment
are
also
included.
For a better perspective of the facts of these cases, we again trace the history of the Pandacan oil
terminals, as well as the intervening events prior to the reclassification of the land use from Industrial II to
Commercial I under Ordinance No. 8027 until the creation of Medium Industrial Zone and Heavy
Industrial
Zone
pursuant
to
Ordinance
No.
8187.

History
Oil

of

the

Pandacan
Terminals

We quote the following from the Resolution of the Court in G.R. No. 156052:
Pandacan (one of the districts of the City of Manila) is situated along the banks of the Pasig [R]iver. At
the turn of the twentieth century, Pandacan was unofficially designated as the industrial center of Manila.
The area, then largely uninhabited, was ideal for various emerging industries as the nearby river
facilitated the transportation of goods and products. In the 1920s, it was classified as an industrial zone.
Among
its
early
industrial
settlers
were
the
oil
companies.
x
x
x
On December 8, 1941, the Second World War reached the shores of the Philippine Islands. x x x [I]n their
zealous attempt to fend off the Japanese Imperial Army, the United States Army took control of the
Pandacan Terminals and hastily made plans to destroy the storage facilities to deprive the advancing
Japanese Army of a valuable logistics weapon. The U.S. Army burned unused petroleum, causing a
frightening conflagration. Historian Nick Joaquin recounted the events as follows:
After the USAFFE evacuated the City late in December 1941, all army fuel storage dumps were set on
fire. The flames spread, enveloping the City in smoke, setting even the rivers ablaze, endangering bridges
and all riverside buildings. For one week longer, the open city blazeda cloud of smoke by day, a
pillar of fire by night.
The fire consequently destroyed the Pandacan Terminals and rendered its network of depots and service
stations
inoperative.
After the war, the oil depots were reconstructed. Pandacan changed as Manila rebuilt itself. The three
major oil companies resumed the operation of their depots. But the district was no longer a sparsely
populated industrial zone; it had evolved into a bustling, hodgepodge community. Today, Pandacan has
become a densely populated area inhabited by about 84,000 people, majority of whom are urban poor
who call it home. Aside from numerous industrial installations, there are also small businesses, churches,
restaurants, schools, daycare centers and residences situated there. Malacaang Palace, the official
residence of the President of the Philippines and the seat of governmental power, is just two kilometers
away. There is a private school near the Petron depot. Along the walls of the Shell facility are shanties of
informal settlers. More than 15,000 students are enrolled in elementary and high schools situated near
these facilities. A university with a student population of about 25,000 is located directly across the depot
on
the
banks
of
the
Pasig
[R]iver.
The 36-hectare Pandacan Terminals house the oil companies distribution terminals and depot facilities.
The refineries of Chevron and Shell in Tabangao and Bauan, both in Batangas, respectively, are connected
to the Pandacan Terminals through a 114-kilometer underground pipeline system. Petrons refinery in
Limay, Bataan, on the other hand, also services the depot. The terminals store fuel and other petroleum
products and supply 95% of the fuel requirements of Metro Manila, 50% of Luzons consumption and
35% nationwide. Fuel can also be transported through barges along the Pasig [R]iver or tank trucks via
the South Luzon Expressway.13 (Citations omitted)
Memorandum
of
Agreement
(MOA)
dated
12
October
2001
between
the
oil
companies
and
the
Department
of
Energy
(DOE)
On 12 October 2001, the oil companies and the DOE entered into a MOA 14 in light of recent
international developments involving acts of terrorism on civilian and government
landmarks,15potential new security risks relating to the Pandacan oil terminals and the impact on the
surrounding community which may be affected,16 and to address the perceived risks posed by the
proximity of communities, businesses and offices to the Pandacan oil terminals, consistent with the

principle of sustainable development.17 The stakeholders acknowledged that there is a need for a
comprehensive study to address the economic, social, environmental and security concerns with the end
in view of formulating a Master Plan to address and minimize the potential risks and hazards posed by the
proximity of communities, businesses and offices to the Pandacan oil terminals without adversely
affecting the security and reliability of supply and distribution of petroleum products to Metro Manila and
the rest of Luzon, and the interests of consumers and users of such petroleum products in those
areas.18chanrobleslaw
The
against

enactment
the
continued

The

MOA,

of

Ordinance
of

stay
however,

No.
the

oil

was

8027
depots
short-lived.

On 20 November 2001, during the incumbency of former Mayor Jose L. Atienza, Jr. (Mayor Atienza)
now one of the petitioners in G.R. No. 187916 the Sangguniang Panlungsod enacted Ordinance No.
802719 reclassifying the use of the land in Pandacan, Sta. Ana, and its adjoining areas from Industrial II to
Commercial
I.
The owners and operators of the businesses thus affected by the reclassification were given six months
from the date of effectivity of the Ordinance within which to stop the operation of their businesses.
Nevertheless, the oil companies were granted an extension of until 30 April 2003 within which to comply
with
the
Ordinance
pursuant
to
the
following:chanroblesvirtuallawlibrary
(1) Memorandum of Understanding (MOU) 20 dated 26 June 2002 between the City of Manila and the
Department of Energy (DOE), on the one hand, and the oil companies, on the other, where the parties
agreed that the scaling down of the Pandacan Terminals [was] the most viable and practicable
option21 and committed to adopt specific measures22 consistent with the said objective;
(2) Resolution No. 97 dated 25 July 200223 of the Sangguniang Panlungsod, which ratified the 26 June
2002 MOU but limited the extension of the period within which to comply to six months from 25 July
2002;
and
(3) Resolution No. 13 dated 30 January 2003 24 of the Sanguniang Panlungsod, which extended the
validity of Resolution No. 97 to 30 April 2003, authorized then Mayor Atienza to issue special business
permits to the oil companies, and called for a reassessment of the ordinance.
Social
The
before
to

Justice
filing

Society

v.
of

Atienza
an

the
enforce

Ordinance

(G.R.
action
Supreme

No.
No.

156052):
for mandamus
Court
8027

In the interim, an original action for mandamus entitled Social Justice Society v. Atienza, Jr. docketed as
G.R. No. 15605225 was filed on 4 December 2002 by Tumbokon and herein petitioners SJS and Cabigao
against then Mayor Atienza. The petitioners sought to compel former Mayor Atienza to enforce
Ordinance No. 8027 and cause the immediate removal of the terminals of the oil
companies.26chanrobleslaw
Issuance
of

by
writs

the
of

Regional
preliminary

Trial
Court
prohibitory

(RTC)
injunction

and
and

preliminary
quo
order

status

in

favor

mandatory
of

the

oil

injunction,
companies

Unknown to the Court, during the pendency of G.R. No. 156052, and before the expiration of the validity
of Resolution No. 13, the oil companies filed the following actions before the Regional Trial Court of
Manila: (1) an action for the annulment of Ordinance No. 8027 with application for writs of preliminary
prohibitory injunction and preliminary mandatory injunction by Chevron; (2) a petition for prohibition
and mandamus also for the annulment of the Ordinance with application for writs of preliminary
prohibitory injunction and preliminary mandatory injunction by Shell; and (3) a petition assailing the
validity of the Ordinance with prayer for the issuance of a writ of preliminary injunction and/or temporary
restraining
order
(TRO)

by
Petron. 27chanrobleslaw
Writs of preliminary prohibitory injunction and preliminary mandatory injunction were issued in favor of
Chevron and Shell on 19 May 2003. Petron, on the other hand, obtained a status quo order on 4 August
2004.28chanrobleslaw
The
defining
and

Enactment
the

of
Manila
zoning

Ordinance
land

No.
use

8119
plan
regulations

On 16 June 2006, then Mayor Atienza approved Ordinance No. 8119 entitled An Ordinance Adopting
the Manila Comprehensive Land Use Plan and Zoning Regulations of 2006 and Providing for the
Administration,
Enforcement
and
Amendment
thereto. 29chanrobleslaw
Pertinent

provisions

relative

to

these

cases

are

the

following:chanroblesvirtuallawlibrary

(a) Article IV, Sec. 730 enumerating the existing zones or districts in the City of Manila;
(b) Article V, Sec. 2331 designating the Pandacan oil depot area as a Planned Unit Development/Overlay
Zone
(O-PUD);
and
(c) the repealing clause, which reads:
SEC. 84. Repealing Clause. All ordinances, rules, regulations in conflict with the provisions of this
Ordinance are hereby repealed; PROVIDED, That the rights that are vested upon the effectivity of this
Ordinance shall not be impaired.32
7
March
2007
Decision
in
G.R.
No.
156052;
The
mayor
has
the
mandatory
legal
duty
to
enforce
Ordinance
No.
8027
and
order
the
removal
of
the
Pandacan
terminals
On 7 March 2007, the Court granted the petition for mandamus, and directed then respondent Mayor
Atienza
to
immediately
enforce
Ordinance
No.
8027. 33chanrobleslaw
Confined to the resolution of the following issues raised by the petitioners, to wit:
1. whether respondent [Mayor Atienza] has the mandatory legal duty to enforce Ordinance No. 8027 and
order
the
removal
of
the
Pandacan
Terminals,
and
2. whether the June 26, 2002 MOU and the resolutions ratifying it can amend or repeal Ordinance No.
8027.34
the Court declared:

x x x [T]he Local Government Code imposes upon respondent the duty, as city mayor, to enforce all
laws and ordinances relative to the governance of the city. One of these is Ordinance No. 8027. As the
chief executive of the city, he has the duty to enforce Ordinance No. 8027 as long as it has not been
repealed by the Sanggunian or annulled by the courts. He has no other choice. It is his ministerial duty to
do
so.
x
x
x
x

The question now is whether the MOU entered into by respondent with the oil companies and the
subsequent resolutions passed by the Sanggunian have made the respondents duty to enforce Ordinance
No.
8027
doubtful,
unclear
or
uncertain.
x
x
x
We need not resolve this issue. Assuming that the terms of the MOU were inconsistent with Ordinance
No. 8027, the resolutions which ratified it and made it binding on the City of Manila expressly gave it full
force and effect only until April 30, 2003. Thus, at present, there is nothing that legally hinders
respondent
from
enforcing
Ordinance
No.
8027.
Ordinance No. 8027 was enacted right after the Philippines, along with the rest of the world, witnessed
the horror of the September 11, 2001 attack on the Twin Towers of the World Trade Center in New York
City. The objective of the ordinance is to protect the residents of Manila from the catastrophic
devastation that will surely occur in case of a terrorist attack on the Pandacan Terminals. No reason
exists why such a protective measure should be delayed. 35 (Emphasis supplied; citations omitted)
13
February
2008
Resolution
in
G.R.
No.
156052;
Ordinance
No.
8027
is
constitutional
The oil companies and the Republic of the Philippines, represented by the DOE, filed their motions for
leave to intervene and for reconsideration of the 7 March 2007 Decision. During the oral arguments, the
parties submitted to the power of the Court to rule on the constitutionality and validity of the assailed
Ordinance
despite
the
pendency
of
the
cases
in
the
RTC. 36chanrobleslaw
On 13 February 2008, the Court granted the motions for leave to intervene of the oil companies and the
Republic of the Philippines but denied their respective motions for reconsideration. The dispositive
portion of the Resolution reads:
WHEREFORE,
x
x
x
We reiterate our order to respondent Mayor of the City of Manila to enforce Ordinance No. 8027. In
coordination with the appropriate agencies and other parties involved, respondent Mayor is hereby
ordered to oversee the relocation and transfer of the Pandacan Terminals out of its present site. 37
13
February
2008
Resolution
in
G.R.
No.
156052;
Ordinance
No.
8027
was
not
impliedly
repealed
by
Ordinance
No.
8119
The Court also ruled that Ordinance No. 8027 was not impliedly repealed by Ordinance No. 8119. On this
score, the Court ratiocinated:
For the first kind of implied repeal, there must be an irreconcilable conflict between the two ordinances.
There is no conflict between the two ordinances. Ordinance No. 8027 reclassified the Pandacan area from
Industrial II to Commercial I. Ordinance No. 8119, Section 23, designated it as a Planned Unit
Development/Overlay Zone (O-PUD). In its Annex C which defined the zone boundaries, the
Pandacan area was shown to be within the High Density Residential/Mixed Use Zone (R-3/MXD). x x
x [B]oth ordinances actually have a common objective, i.e., to shift the zoning classification from
industrial to commercial (Ordinance No. 8027) or mixed residential commercial (Ordinance No. 8119)

Ordinance No. 8027 is a special law since it deals specifically with a certain area described therein (the
Pandacan oil depot area) whereas Ordinance No. 8119 can be considered a general law as it covers the
entire
city
of
Manila.cralawred
x

x x x The repealing clause of Ordinance No. 8119 cannot be taken to indicate the legislative intent to
repeal all prior inconsistent laws on the subject matter, including Ordinance No. 8027, a special
enactment, since the aforequoted minutes (an official record of the discussions in the Sanggunian)
actually indicated the clear intent to preserve the provisions of Ordinance No. 8027. 38
Filing
of
a
draft
Resolution
amending
Ordinance
No.
8027
effectively
allowing
the
oil
depots
to
stay
in
the
Pandacan
area;
Manifestation
and
Motion
to
forestall
the
passing
of
the
new
Ordinance
filed
in
G.R.
No.
156052
On 5 March 2009, respondent then Councilor Arlene W. Koa, filed with the Sangguniang Panlungsod a
draft resolution entitled An Ordinance Amending Ordinance No. 8119 Otherwise Known as The Manila
Comprehensive Land Use Plan and Zoning Ordinance of 2006 by Creating a Medium Industrial Zone (12) and Heavy Industrial Zone (1-3) and Providing for its Enforcement. 39 Initially numbered as Draft
Ordinance No. 7177, this was later renumbered as Ordinance No. 8187, the assailed Ordinance in these
instant
petitions.
Considering that the provisions thereof run contrary to Ordinance No. 8027, the petitioners in G.R. No.
156052 filed a Manifestation and Motion to: a) Stop the City Council of Manila from further hearing the
amending ordinance to Ordinance No. 8027; [and] b) Transfer the monitoring of the enforcement of the
Resolution of the Honorable Court on this case dated 13 February 2008 from Branch 39, Manila Regional
Trial
Court
to
the
Supreme
Court.40chanrobleslaw
28
Second
denied
likewise
without

April

2009
Motion
with
denied

Resolution

in

G.R.

No.

for
finality;
or

succeeding
otherwise

156052;
Reconsideration
motions
noted
action

On 28 April 2009, pending the resolution of the Manifestation and Motion, the Court denied with finality
the second motion for reconsideration dated 27 February 2008 of the oil companies. 41 It further ruled that
no
further
pleadings
shall
be
entertained
in
the
case. 42chanrobleslaw
Succeeding motions were thus denied and/or noted without action. And, after the Very Urgent Motion to
Stop the Mayor of the City of Manila from Signing Draft Ordinance No. 7177 and to Cite Him for
Contempt if He Would Do So filed on 19 May 2009 was denied on 2 June 2009 for being moot, 43 all
pleadings pertaining to the earlier motion against the drafting of an ordinance to amend Ordinance No.
8027
were
noted
without
action.44chanrobleslaw
The
allowing

Enactment
of
the
continued

stay

Ordinance
of

No.
the

oil

8187
depots

On 14 May 2009, during the incumbency of former Mayor Alfredo S. Lim (Mayor Lim), who succeeded
Mayor Atienza, the Sangguniang Panlungsod enacted Ordinance No. 8187.45chanrobleslaw
The new Ordinance repealed, amended, rescinded or otherwise modified Ordinance No. 8027, Section 23
of Ordinance No. 8119, and all other Ordinances or provisions inconsistent therewith 46 thereby allowing,
once again, the operation of Pollutive/Non-Hazardous and Pollutive/Hazardous manufacturing and
processing establishments and Highly Pollutive/Non-Hazardous[,] Pollutive/Hazardous[,] Highly
Pollutive/Extremely Hazardous[,] Non-Pollutive/Extremely Hazardous; and Pollutive/Extremely
Hazardous; and Pollutive/Extremely Hazardous manufacturing and processing establishments within the
newly created Medium Industrial Zone (1-2) and Heavy Industrial Zone (1-3) in the Pandacan area.
Thus, where the Industrial Zone under Ordinance No. 8119 was limited to Light Industrial Zone (I-1),
Ordinance No. 8187 appended to the list a Medium Industrial Zone (I-2) and a Heavy Industrial Zone (I3), where petroleum refineries and oil depots are now among those expressly allowed.
Hence these petitions.chanrobleslaw
The Petitions
G.R.

No.

187836

To support their petition for prohibition against the enforcement of Ordinance No. 8187, the petitioner
Social
Justice
Society
(SJS)
officers
allege
that:chanroblesvirtuallawlibrary
1. The enactment of the assailed Ordinance is not a valid exercise of police power because the measures
provided therein do not promote the general welfare of the people within the contemplation of the
following provisions of law:
a) Article III, Section 18 (kk) 47 of Republic Act No. 409 otherwise known as the Revised Charter of
the City of Manila, which provides that the Municipal Board shall have the legislative power to
enact all ordinances it may deem necessary and proper;
Section 1648 of Republic Act No. 7160 known as the Local Government Code, which defines the
scope of the general welfare clause;
2. The conditions at the time the Court declared Ordinance No. 8027 constitutional in G.R. No. 156052
exist
to
this
date;
b)

3. Despite the finality of the Decision in G.R. No. 156052, and notwithstanding that the conditions and
circumstances warranting the validity of the Ordinance remain the same, the Manila City Council passed
a contrary Ordinance, thereby refusing to recognize that judicial decisions applying or interpreting the
laws or the Constitution form part of the legal system of the Philippines; 49 and
4. Ordinance No. 8187 is violative of Sections 15 and 16, Article II of the Constitution of the Philippines
on the duty of the State to protect and promote the right to health of the people 50 and protect and
advance the right of the people to a balanced and healthful ecology. 51chanrobleslaw
Petitioners pray that Ordinance No. 8187 of the City of Manila be declared null and void, and that
respondent, and all persons acting under him, be prohibited from enforcing the same.
G.R.

No.

187916

The petition for Prohibition, Mandamus and Certiorari with Prayer for Temporary Restraining Order
and/or Injunction against the enforcement of Ordinance No. 8187 of former Secretary of Department of
Environment and Natural Resources and then Mayor Atienza, together with other residents and taxpayers
of the City of Manila, also alleges violation of the right to health of the people and the right to a healthful
and
balanced
environment
under
Sections
15
and
16
of
the
Constitution.
Petitioners likewise claim that the Ordinance is in violation of the following health and environmentrelated municipal laws, and international conventions and treaties to which the Philippines is a state
party:chanroblesvirtuallawlibrary
1. Municipal Laws
(a) Sections 4,52 12,53 1954 and 3055 of Republic Act No. 8749 otherwise known as the Philippine Clean Air
Act;
(b)
(c)

Environment
Toxic

and

Code
Hazardous

(Presidential
Wastes

Law

Decree

(Republic

Act

No.
No.

1152);
6969);

and

(d) Civil Code provisions on nuisance and human relations;


2. International Conventions and Treaties to which the Philippines is a state party
a. Section 1 of the Universal Declaration of Human Rights, which states that [e]veryone has the right to
life,
liberty
and
security
of
person;
b. Articles 6,56 2457 and 2758 of the Convention on the Rights of the Child, summarized by the petitioners
in the following manner:
1.
the
human
right
to
safe
and
healthy
environment[;]
2.

human

right

3.

the

human

to

the
right

highest
to

attainable

ecologically

standard
sustainable

of

health[;]

development[;]

4. the human right to an adequate standard of living, including access to safe food and water[;]
5. the human right of the child to live in an environment appropriate for physical and mental
development[;
and]
6. the human right to full and equal participation for all persons in environmental decision-making and
development planning, and in shaping decisions and policies affecting ones community, at the local,
national and international levels.59
Petitioners likewise posit that the title of Ordinance No. 8187 purports to amend or repeal Ordinance No.
8119 when it actually intends to repeal Ordinance No. 8027. According to them, Ordinance No. 8027 was
never mentioned in the title and the body of the new ordinance in violation of Section 26, Article VI of
the 1987 Constitution, which provides that every bill passed by Congress shall embrace only one subject
which
shall
be
expressed
in
the
title
thereof.
Also pointed out by the petitioners is a specific procedure outlined in Ordinance No. 8119 that should be

observed when amending the zoning ordinance. This is provided for under Section 81 thereof, which
reads:
SEC. 81. Amendments to the Zoning Ordinance. The proposed amendments to the Zoning Ordinance as
reviewed and evaluated by the City Planning and Development Office (CPDO) shall be submitted to the
City Council for approval of the majority of theSangguniang Panlungsod members. The amendments
shall be acceptable and eventually approved: PROVIDED, That there is sufficient evidence and
justification for such proposal; PROVIDED FURTHER, That such proposal is consistent with the
development goals, planning objectives, and strategies of the Manila Comprehensive Land Use Plan. Said
amendments shall take effect immediately upon approval or after thirty (30) days from application.
Petitioners thus pray that:
1. upon filing of [the] petition, [the] case be referred to the Court [E]n Banc, and setting (sic) the case for
oral
argument;
2. upon the filing of [the] petition, a temporary restraining order be issued enjoining the respondents from
publishing and posting Manila City Ordinance No. 8187 and/or posting of Manila City Ordinance No.
8187; and/or taking any steps to implementing (sic) and/or enforce the same and after due hearing, the
temporary
restraining
order
be
converted
to
a
permanent
injunction;
3. x x x Manila City Ordinance 8187 [be declared] as null and void for being repugnant to the
Constitution
and
existing
municipal
laws
and
international
covenants;
4. x x x the respondents [be ordered] to refrain from enforcing and/or implementing Manila City
Ordinance
No.
8187;
5. x x x respondent City Mayor Alfredo S. Lim [be enjoined] from issuing any permits (business or
otherwise) to all industries whose allowable uses are anchored under the provisions of Manila Ordinance
No.
8187;
and
6. x x x respondent Mayor of Manila Alfredo S. Lim [be ordered] to comply with the Order of the
Honorable Court in G.R. 156052 dated February 13, 2008.60
The
Respondents
Position
on the Consolidated Petitions
Respondent

former

Mayor

Lim

In his Memorandum,61 former Mayor Lim, through the City Legal Officer, attacks the petitioners lack of
legal standing to sue. He likewise points out that the petitioners failed to observe the principle of
hierarchy
of
courts.
Maintaining that Ordinance No. 8187 is valid and constitutional, he expounds on the following
arguments:chanroblesvirtuallawlibrary
On the procedural issues, he contends that: (1) it is the function of the Sangguniang Panlungsod to enact
zoning ordinances, for which reason, it may proceed to amend or repeal Ordinance No. 8119 without prior
referral to the Manila Zoning Board of Adjustment and Appeals (MZBAA) as prescribed under Section 80
(Procedure for Re-Zoning) and the City Planning and Development Office (CPDO) pursuant to Section
81 (Amendments to the Zoning Ordinance) of Ordinance No. 8119, especially when the action actually
originated from the Sangguniang Panlungsod itself; (2) the Sangguniang Panlungsod may, in the later
ordinance, expressly repeal all or part of the zoning ordinance sought to be modified; and (3) the
provision repealing Section 23 of Ordinance No. 8119 is not violative of Section 26, Article VI of the
1987 Constitution, which requires that every bill must embrace only one subject and that such shall be

expressed

in

the

title.

On the substantive issues, he posits that the petitions are based on unfounded fears; that the assailed
ordinance is a valid exercise of police power; that it is consistent with the general welfare clause and
public policy, and is not unreasonable; that it does not run contrary to the Constitution, municipal laws,
and international conventions; and that the petitioners failed to overcome the presumption of validity of
the
assailed
ordinance.
Respondents
and
in

the
favor

City
of

Vice-Mayor
Councilors
the

who
assailed

Domagoso
voted
ordinance

On 14 September 2012, after the Court gave the respondents several chances to submit their
Memorandum,62 they, through the Secretary of the Sangguniang Panlungsod, prayed that the Court
dispense
with
the
filing
thereof.
In their Comment,63 however, respondents offered a position essentially similar to those proffered by
former Mayor Lim.chanrobleslaw
The
on the Consolidated Petitions

Intervenors

Position

On the other hand, the oil companies sought the outright dismissal of the petitions based on alleged
procedural infirmities, among others, incomplete requisites of judicial review, violation of the principle of
hierarchy of courts, improper remedy, submission of a defective verification and certification against
forum
shopping,
and
forum
shopping.
As to the substantive issues, they maintain, among others, that the assailed ordinance is constitutional and
valid; that the Sangguniang Panlalawigan is in the best position to determine the needs of its constituents;
that it is a valid exercise of legislative power; that it does not violate health and environment-related
provisions of the Constitution, laws, and international conventions and treaties to which the Philippines is
a party; that the oil depots are not likely targets of terrorists; that the scaling down of the operations in
Pandacan pursuant to the MOU has been followed; and that the people are safe in view of the safety
measures
installed
in
the
Pandacan
terminals.
Incidentally, in its Manifestation dated 30 November 2010, 64 Petron informed the Court that it will cease
[the] operation of its petroleum product storage facilities 65 in the Pandacan oil terminal not later than
January 2016 on account of the following:
2.01 Environmental issues, many of which are unfounded, continually crop up and tarnish the Companys
image.
2.02. The location of its Pandacan terminal is continually threatened, and made uncertain preventing longterm planning, by the changing local government composition. Indeed, the relevant zoning ordinances
have been amended three (3) times, and their validity subjected to litigation. 66
Intervening
Events
On 28 August 2012, while the Court was awaiting the submission of the Memorandum of respondents
Vice-Mayor Domagoso and the councilors who voted in favor of the assailed Ordinance, theSangguniang
Panlungsod, which composition had already substantially changed, enacted Ordinance No. 8283 67 entitled
AN ORDINANCE AMENDING SECTION 2 OF ORDINANCE NO. 8187 BY RECLASSIFYING
THE AREA WHERE PETROLEUM REFINERIES AND OIL DEPOTS ARE LOCATED FROM

HEAVY INDUSTRIAL (1-3) TO HIGH INTENSITY COMMERCIAL/MIXED USE ZONE (C3/MXD).


The new ordinance essentially amended the assailed ordinance to exclude the area where petroleum
refineries
and
oil
depots
are
located
from
the
Industrial
Zone.
Ordinance No. 8283 thus permits the operation of the industries operating within the Industrial Zone.
However, the oil companies, whose oil depots are located in the High Intensity Commercial/Mixed Use
Zone (C3/MXD), are given until the end of January 2016 within which to relocate their terminals.
Former Mayor Lim, who was then the incumbent mayor, did not support the amendment. Maintaining
that the removal of the oil depots was prejudicial to public welfare, and, on account of the pending cases
in the Supreme Court, he vetoed Ordinance No. 8283 on 11 September 2012. 68chanrobleslaw
On 28 November 2012, former Mayor Lim filed a Manifestation informing this Court that
theSangguniang Panlungsod voted to override the veto, and that he, in turn, returned it again with his
veto. He likewise directed the Sangguniang Panlungsod to append his written reasons for his veto of the
Ordinance, so that the same will be forwarded to the President for his consideration in the event that his
veto
is
overridden
again.69chanrobleslaw
On

11

December

2012,

Shell

also

filed

similar

Manifestation. 70chanrobleslaw

Meanwhile, three days after former Mayor Lim vetoed the new ordinance, Atty. Luch R. Gempis, Jr.
(Atty. Gempis), Secretary of the Sangguniang Panlungsod, writing on behalf of respondents Vice-Mayor
Domagoso and the City Councilors of Manila who voted in favor of the assailed Ordinance, finally
complied with this Courts Resolution dated 17 July 2012 reiterating its earlier directives 71 to submit the
said
respondents
Memorandum.
In his Compliance/Explanation with Urgent Manifestation 72 dated 13 September 2012, Atty. Gempis
explained that it was not his intention to show disrespect to this Court or to delay or prejudice the
disposition
of
the
cases.
According to him, he signed the Comment prepared by respondents Vice-Mayor and the City Councilors
only to attest that the pleading was personally signed by the respondents. He clarified that he was not
designated as the legal counsel of the respondents as, in fact, he was of the impression that, pursuant to
Section 481(b)(3) of the Local Government Code, 73 it is the City Legal Officer who is authorized to
represent the local government unit or any official thereof in a litigation. It was for the same reason that
he thought that the filing of a Memorandum may already be dispensed with when the City Legal Officer
filed its own on 8 February 2010. He further explained that the Ordinance subject of these cases was
passed during the 7th Council (2007-2010); that the composition of the 8th Council (2010-2013) had
already changed after the 2010 elections; and that steps were already taken to amend the ordinance again.
Hence, he was in a dilemma as to the position of theSangguniang Panlungsod at the time he received the
Courts
Resolution
of
31
May
2011.
Atty. Gempis, thus, prayed that the Court dispense with the filing of the required memorandum in view of
the passing of Ordinance No. 8283.chanrobleslaw
Issue
The petitioners arguments are primarily anchored on the ruling of the Court in G. R. No. 156052
declaring Ordinance No. 8027 constitutional and valid after finding that the presence of the oil terminals
in Pandacan is a threat to the life and security of the people of Manila. From thence, the petitioners

enumerated constitutional provisions, municipal laws and international treaties and conventions on health
and environment protection allegedly violated by the enactment of the assailed Ordinance to support their
position.
The resolution of the present controversy is, thus, confined to the determination of whether or not the
enactment of the assailed Ordinance allowing the continued stay of the oil companies in the depots is,
indeed, invalid and unconstitutional.chanrobleslaw
Our Ruling
We see no reason why Ordinance No. 8187 should not be stricken down insofar as the presence of the oil
depots in Pandacan is concerned.chanrobleslaw
I
We first rule on the procedural issues raised by the respondents and the oil companies.
At the outset, let it be emphasized that the Court, in G.R. No. 156052, has already pronounced that the
matter of whether or not the oil depots should remain in the Pandacan area is of transcendental
importance
to
the
residents
of
Manila. 74chanrobleslaw
We may, thus, brush aside procedural infirmities, if any, as we had in the past, and take cognizance of the
cases75 if only to determine if the acts complained of are no longer within the bounds of the Constitution
and
the
laws
in
place. 76chanrobleslaw
Put otherwise, there can be no valid objection to this Courts discretion to waive one or some procedural
requirements if only to remove any impediment to address and resolve the serious constitutional
question77 raised in these petitions of transcendental importance, the same having far-reaching
implications insofar as the safety and general welfare of the residents of Manila, and even its neighboring
communities,
are
concerned.
Proper

Remedy

Respondents and intervenors argue that the petitions should be outrightly dismissed for failure on the part
of the petitioners to properly apply related provisions of the Constitution, the Rules of Court, and/or the
Rules of Procedure for Environmental Cases relative to the appropriate remedy available to them.
To begin with, questioned is the applicability of Rule 65 78 of the Rules of Court to assail the validity and
constitutionality
of
the
Ordinance.

speedy,
in

there
the

is

no
and
ordinary

appeal,
adequate
course

or

any
of

plain,
remedy
law

Rule 65 specifically requires that the remedy may be availed of only when there is no appeal, or any
plain, speedy, and adequate remedy in the ordinary course of law. 79chanrobleslaw
Shell argues that the petitioners should have sought recourse before the first and second level courts under
the Rules of Procedure for Environmental Cases, 80 which govern the enforcement or violations of
environmental and other related laws, rules and regulations. 81 Petron additionally submits that the most
adequate remedy available to petitioners is to have the assailed ordinance repealed by the Sangguniang

Panlungsod. In the alternative, a local referendum may be had. And, assuming that there were laws
violated, the petitioners may file an action for each alleged violation of law against the particular
individuals
that
transgressed
the
law.
It would appear, however, that the remedies identified by the intervenors prove to be inadequate to resolve
the present controversies in their entirety owing to the intricacies of the circumstances herein prevailing.
The scope of the Rules of Procedure for Environmental Cases is embodied in Sec. 2, Part I, Rule I
thereof. It states that the Rules shall govern the procedure in civil, criminal and special civil actions
before the Metropolitan Trial Courts, Municipal Trial Courts in Cities, Municipal Trial Courts and
Municipal Circuit Trial Courts, and the Regional Trial Courts involving enforcement or violations of
environmental and other related laws, rules and regulations such as but not limited to the following:
(k)
R.A.
No.
6969,
Toxic
Substances
and
Hazardous
Waste
Act;
x
(r)
x

x
R.A.

No.
x

x
8749,

Clean
x

x
Air

Act;
x

(y) Provisions in C.A. No. 141, x x x; and other existing laws that relate to the conservation,
development, preservation, protection and utilization of the environment and natural
resources.82 (Emphasis supplied)
Notably, the aforesaid Rules are limited in scope. While, indeed, there are allegations of violations of
environmental laws in the petitions, these only serve as collateral attacks that would support the other
position of the petitioners the protection of the right to life, security and safety.
Moreover, it bears emphasis that the promulgation of the said Rules was specifically intended to meet the
following objectives:
SEC. 3. Objectives.The objectives of these Rules are:chanroblesvirtuallawlibrary
(a) To protect and advance the constitutional right of the people to a balanced and healthful ecology;
(b) To provide a simplified, speedy and inexpensive procedure for the enforcement of environmental
rights and duties recognized under the Constitution, existing laws, rules and regulations, and
international agreements;
(c) To introduce and adopt innovations and best practices ensuring the effective enforcement of
remedies and redress for violation of environmental laws; and
(d) To enable the courts to monitor and exact compliance with orders and judgments in environmental
cases.83
Surely, the instant petitions are not within the contemplation of these Rules.
Relative to the position of Petron, it failed to consider that these petitions are already a sequel to G.R. No.
156052, and that there are some issues herein raised that the remedies available at the level of
the Sangguniang Panlungsod could not address. Neither could the filing of an individual action for each
law violated be harmonized with the essence of a plain, speedy, and adequate remedy.
From another perspective, Shell finds fault with the petitioners direct recourse to this Court when,
pursuant to Section 5, Article VIII of the Constitution, the Supreme Court exercises only appellate
jurisdiction over cases involving the constitutionality or validity of an ordinance. 84 Thus:

Section 5. The Supreme

Court shall have the following powers:chanroblesvirtuallawlibrary

xxxx
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:chanroblesvirtuallawlibrary
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. (Emphasis supplied)
To further support its position, it cites the case of Liga ng mga Barangay National v. City Mayor of
Manila,85 where the petitioners sought the nullification of the mayors executive order and the councils
ordinance concerning certain functions of the petitioners that are vested in them by law. There, the Court
held:
Second, although the instant petition is styled as a petition for certiorari, in essence, it seeks the
declaration by this Court of the unconstitutionality or illegality of the questioned ordinance and executive
order. It, thus, partakes of the nature of a petition for declaratory relief over which this Court has only
appellate, not original, jurisdiction.86 Section 5, Article VIII of the Constitution provides: x x x
As such, this petition must necessary fail, as this Court does not have original jurisdiction over a petition
for declaratory relief even if only questions of law are involved. 87
Assuming that a petition for declaratory relief is the proper remedy, and that the petitions should have
been filed with the Regional Trial Court, we have, time and again, resolved to treat such a petition as one
for prohibition, provided that the case has far-reaching implications and transcendental issues that need to
be
resolved,88 as
in
these
present
petitions.
On a related issue, we initially found convincing the argument that the petitions should have been filed
with the Regional Trial Court, it having concurrent jurisdiction with this Court over a special civil action
for
prohibition,
and
original
jurisdiction
over
petitions
for
declaratory
relief.
However, as we have repeatedly said, the petitions at bar are of transcendental importance warranting a
relaxation of the doctrine of hierarchy of courts. 89 In the case of Jaworski v. PAGCOR,90the Court
ratiocinated:
Granting arguendo that the present action cannot be properly treated as a petition for prohibition, the
transcendental importance of the issues involved in this case warrants that we set aside the
technical defects and take primary jurisdiction over the petition at bar. x x x This is in accordance
with the well-entrenched principle that rules of procedure are not inflexible tools designed to hinder
or delay, but to facilitate and promote the administration of justice. Their strict and rigid
application, which would result in technicalities that tend to frustrate, rather than promote
substantial justice, must always be eschewed. (Emphasis supplied)
persons
aggrieved
thereby
As to who may file a petition for certiorari, prohibition or mandamus, Petron posits that petitioners are
not among the persons aggrieved contemplated under Sections 1 to 3 of Rule 65 of the Rules of Court.
Chevron argues that petitioners, whether as citizens, taxpayers, or legislators, lack the legal standing
to assail the validity and constitutionality of Ordinance No. 8187. It further claims that petitioners failed
to show that they have suffered any injury and/or threatened injury as a result of the act complained
of.91chanrobleslaw
Shell also points out that the petitions cannot be considered taxpayers suit, for then, there should be a
claim that public funds were illegally disbursed and that petitioners have sufficient interest concerning the

prevention of illegal expenditure of public money.92 In G.R. No. 187916, Shell maintains that the
petitioners failed to show their personal interest in the case and/or to establish that they may represent the
general sentiments of the constituents of the City of Manila so as to be treated as a class suit. Even the
minors, it argues, are not numerous and representative enough for the petition to be treated as a class suit.
As to the city councilors who joined the petitioners in assailing the validity of Ordinance No. 8187, Shell
posits that they cannot invoke the ruling in Prof. David v. Pres. Macapagal-Arroyo,93 where the Court
held that legislators may question the constitutionality of a statute, if and when it infringes upon their
prerogatives as legislators, because of the absence of the allegation that the assailed ordinance indeed
infringes
upon
their
prerogatives.
Former Mayor Lim submitted a similar position supported by a number of cases on the concept oflocus
standi,94 the direct injury test,95 an outline of the stringent requirements of legal standing when suing as a
citizen,96 as a taxpayer,97 as a legislator and in cases where class suits are filed in behalf of all
citizens.98chanrobleslaw
Their

arguments

are

misplaced.

In G.R. No. 156052, we ruled that the petitioners in that case have a legal right to seek the enforcement of
Ordinance No. 8027 because the subject of the petition concerns a public right, and they, as residents of
Manila, have a direct interest in the implementation of the ordinances of the city. Thus:
To support the assertion that petitioners have a clear legal right to the enforcement of the ordinance,
petitioner SJS states that it is a political party registered with the Commission on Elections and has its
offices in Manila. It claims to have many members who are residents of Manila. The other petitioners,
Cabigao
and
Tumbokon,
are
allegedly
residents
of
Manila.
We need not belabor this point. We have ruled in previous cases that when amandamus proceeding
concerns a public right and its object is to compel a public duty, the people who are interested in the
execution of the laws are regarded as the real parties in interest and they need not show any specific
interest. Besides, as residents of Manila, petitioners have a direct interest in the enforcement of the citys
ordinances.99x x x (Citations omitted)
No different are herein petitioners who seek to prohibit the enforcement of the assailed ordinance, and
who deal with the same subject matter that concerns a public right. Necessarily, the people who are
interested in the nullification of such an ordinance are themselves the real parties in interest, for which
reason, they are no longer required to show any specific interest therein. Moreover, it is worth mentioning
that SJS, now represented by SJS Officer Alcantara, has been recognized by the Court in G.R. No. 156052
to have legal standing to sue in connection with the same subject matter herein considered. The rest of the
petitioners are residents of Manila. Hence, all of them have a direct interest in the prohibition proceedings
against
the
enforcement
of
the
assailed
ordinance.
In the case of Initiatives for Dialogue and Empowerment through Alternative Legal Services, Inc.
(IDEALS, INC.) v. Power Sector Assets and Liabilities Management Corporation (PSALM),100 involving a
petition for certiorari and prohibition to permanently enjoin PSALM from selling the Angat HydroElectric Power Plant (AHEPP) to Korea Water Resources Corporation (K-Water), the Court
ruled:chanRoblesvirtualLawlibrary
Legal standing or locus standi has been defined as a personal and substantial interest in the case such
that the party has sustained or will sustain direct injury as a result of the governmental act that is being
challenged, alleging more than a generalized grievance. x x x This Court, however, has adopted a liberal
attitude on the locus standi of a petitioner where the petitioner is able to craft an issue of transcendental

significance to the people, as when the issues raised are of paramount importance to the public. Thus,
when the proceeding involves the assertion of a public right, the mere fact that the petitioner is a
citizen
satisfies
the
requirement
of
personal
interest.
There can be no doubt that the matter of ensuring adequate water supply for domestic use is one of
paramount importance to the public. That the continued availability of potable water in Metro Manila
might be compromised if PSALM proceeds with the privatization of the hydroelectric power plant in the
Angat Dam Complex confers upon petitioners such personal stake in the resolution of legal issues in a
petition to stop its implementation.101 (Emphasis supplied; citations omitted)
In like manner, the preservation of the life, security and safety of the people is indisputably a right of
utmost importance to the public. Certainly, the petitioners, as residents of Manila, have the required
personal
interest
to
seek
relief
from
this
Court
to
protect
such
right.

in
or
amounting

excess
with
to

of
grave
lack

its
or

or
abuse
excess

his
of
of

jurisdiction,
discretion
jurisdiction

Petron takes issue with the alleged failure of the petitioners to establish the facts with certainty that would
show that the acts of the respondents fall within the parameters of the grave abuse of discretion clause
settled by jurisprudence, to wit:chanRoblesvirtualLawlibrary
x x x [G]rave abuse of discretion means such capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction. The abuse of discretion must be grave as where the power is exercised
in an arbitrary or despotic manner by reason of passion or personal hostility and must be so patent and
gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined by or
to act all in contemplation of law.102
It is pointless to discuss the matter at length in these instant cases of transcendental importance in view of
the Courts pronouncement, in Magallona v. Ermita.103 There it held that the writs of certiorariand
prohibition are proper remedies to test the constitutionality of statutes, notwithstanding the following
defects:chanRoblesvirtualLawlibrary
In praying for the dismissal of the petition on preliminary grounds, respondents seek a strict observance
of the offices of the writs of certiorari and prohibition, noting that the writs cannot issue absent any
showing of grave abuse of discretion in the exercise of judicial, quasi-judicial or ministerial powers
on the part of respondents and resulting prejudice on the part of petitioners.
Respondents submission holds true in ordinary civil proceedings. When this Court exercises its
constitutional power of judicial review, however, we have, by tradition, viewed the writs of certiorari and
prohibition as proper remedial vehicles to test the constitutionality of statutes, and indeed, of acts of
other branches of government. Issues of constitutional import x x x carry such relevance in the life
of this nation that the Court inevitably finds itself constrained to take cognizance of the case and
pass upon the issues raised, non-compliance with the letter of procedural rules notwithstanding. The
statute sought to be reviewed here is one such law.104 (Emphasis supplied; citations omitted)
Requisites

of

judicial

review

For a valid exercise of the power of judicial review, the following requisites shall concur: (1) the
existence of a legal controversy; (2) legal standing to sue of the party raising the constitutional question;
(3) a plea that judicial review be exercised at the earliest opportunity; and (4) the constitutional question
is
the lis
mota of
the
case.105chanrobleslaw
Only

the

first

two

requisites

are

put

in

issue

in

these

cases.

On the matter of the existence of a legal controversy, we reject the contention that the petitions consist of
bare allegations based on speculations, surmises, conjectures and hypothetical grounds.
The Court declared Ordinance No. 8027 valid and constitutional and ordered its implementation. With the
passing of the new ordinance containing the contrary provisions, it cannot be any clearer that here lies an
actual case or controversy for judicial review. The allegation on this, alone, is sufficient for the purpose.
The

second

Proof
of
of
the
shopping

requisite

has

identification
verification
in

already
required
and
G.R.

been

exhaustively

discussed.

the
against

notarization
forum
187916

in
certification
No.

At the bottom of the Verification and Certification against Forum Shopping of the petition in G.R. No.
187916 is the statement of the notary public to the effect that the affiant, in his presence and after
presenting an integrally competent proof of identification with signature and photograph, 106 signed the
document
under
oath.
Citing Sec. 163 of the Local Government Code, 107 which provides that an individual acknowledging any
document before a notary public shall present his Community Tax Certificate (CTC), Chevron posits that
the petitioners failure to present his CTC rendered the petition fatally defective warranting the outright
dismissal
of
the
petition.
We

disagree.

The verification and certification against forum shopping are governed specifically by Sections 4 and 5,
Rule
7
of
the
Rules
of
Court.
Section 4 provides that a pleading, when required to be verified, shall be treated as an unsigned pleading
if it lacks a proper verification while Section 5 requires that the certification to be executed by the
plaintiff
or
principal
party
be
under
oath.
These sections, in turn, should be read together with Sections 6 and 12, Rule 2 of the 2004 Rules on
Notarial
Practice.
Section 6108 of the latter Rules, specifically, likewise provides that any competent evidence of identity
specified under Section 12 thereof may now be presented before the notary public, to
wit:chanRoblesvirtualLawlibrary
SEC. 12. Competent Evidence of Identity. - The phrase competent evidence of identity refers to the
identification
of
an
individual
based
on:chanroblesvirtuallawlibrary
(a)

at least one current identification document issued by an official agency bearing the photograph and

signature of the individual, such as but not limited to passport, drivers license, Professional
Regulations Commission ID, National Bureau of Investigation clearance, police clearance, postal
ID, voters ID, Barangay certification, Government Service and Insurance System (GSIS) e-card,
Social Security System (SSS) card, Philhealth card, senior citizen card, Overseas Workers Welfare
Administration (OWWA) ID, OFW ID, seamans book, alien certificate of registration/immigrant
certificate of registration, government office ID, certification from the National Council for the
Welfare of Disable Persons (NCWDP), Department of Social Welfare and Development (DSWD)
certification; or
(b) x x x.109

Forum

shopping

Shell contends that the petitioners in G.R. No. 187836 violated the rule against forum shopping allegedly
because all the elements thereof are present in relation to G.R. No. 156052, to
wit:chanroblesvirtuallawlibrary
1. identity of parties, or at least such parties who represent the same interests in both actions
According to Shell, the interest of petitioner SJS in G.R. No. 156052 and the officers of SJS in G.R. No.
187836 are clearly the same. Moreover, both actions implead the incumbent mayor of the City of Manila
as respondent. Both then respondent Mayor Atienza in G.R. No. 156052 and respondent former Mayor
Lim
in
G.R.
No.
187836
are
sued
in
their
capacity
as
Manila
mayor.
2. identity of rights asserted and relief prayed for, the relief being founded on the same fact(s)
Shell contends that, in both actions, petitioners assert the same rights to health and to a balanced and
healthful ecology relative to the fate of the Pandacan terminal, and seek essentially the same reliefs, that
is,
the
removal
of
the
oil
depots
from
the
present
site.
3. the identity of the two preceding particulars is such that any judgment rendered in the pending case,
regardless of which party is successful, would amount to res judicata in the other
Relative to the filing of the Manifestation and Motion to: a) Stop the City Council of Manila from further
hearing the amending ordinance to Ordinance No. 8027 x x x (Manifestation and Motion) and Very
Urgent Motion to Stop the Mayor of the City of Manila from Signing Draft Ordinance No. 7177 [now
Ordinance No. 8187] and to Cite Him for Contempt if He Would Do So (Urgent Motion) both in G.R. No.
156052, Shell points out the possibility that the Court would have rendered conflicting rulings on cases
involving the same facts, parties, issues and reliefs prayed for. 110chanrobleslaw
We

are

not

persuaded.

In Spouses Cruz v. Spouses Caraos,111 the Court expounded on the nature of forum shopping.
Thus:chanRoblesvirtualLawlibrary
Forum shopping is an act of a party, against whom an adverse judgment or order has been rendered in one
forum, of seeking and possibly getting a favorable opinion in another forum, other than by appeal or
special civil action for certiorari. It may also be the institution of two or more actions or proceedings

grounded on the same cause on the supposition that one or the other court would make a favorable
disposition. The established rule is that for forum shopping to exist, both actions must involve the same
transactions, same essential facts and circumstances and must raise identical causes of actions, subject
matter, and issues. x x x112 (Citations omitted)
It bears to stress that the present petitions were initially filed, not to secure a judgment adverse to the first
decision, but, precisely, to enforce the earlier ruling to relocate the oil depots from the Pandacan area.
As to the matter of the denial of the petitioners Manifestation and Urgent Motion in G.R. No. 156052,
which were both incidental to the enforcement of the decision favorable to them brought about by the
intervening events after the judgment had become final and executory, and which involve the same
Ordinance assailed in these petitions, we so hold that the filing of the instant petitions is not barred byres
judicata.
In the same case of Spouses Cruz v. Spouses Caraos involving the re-filing of a complaint, which had
been earlier dismissed without qualification that the dismissal was with prejudice, and which had not been
decided on the merits, the Court declared that such re-filing did not amount to forum shopping. It
ratiocinated:chanRoblesvirtualLawlibrary
It is not controverted that the allegations of the respective complaints in both Civil Case No. 95-1387 and
Civil Case No. 96-0225 are similarly worded, and are identical in all relevant details, including
typographical errors, except for the additional allegations in support of respondents prayer for the
issuance of preliminary injunction in Civil Case No. 95-1387. It is similarly not disputed that both actions
involve the same transactions; same essential facts and circumstances; and raise identical causes of
actions,
subject
matter,
and
issues.cralawred
x

x x x The dismissal of Civil Case No. 95-1387 was without prejudice. Indeed, the Order dated 20
November 1995, dismissing Civil Case No. 95-1387 was an unqualified dismissal. More significantly, its
dismissal was not based on grounds under paragraphs (f), (h), and (i) of Section 1 of Rule 16 of the Rules
of Court, which dismissal shall bar the refiling of the same action or claim as crystallized in Section 5 of
Rule 16 thereof, thus:chanRoblesvirtualLawlibrary
SEC. 5. Effect of dismissal. Subject to the right of appeal, an order granting a motion to dismiss based
on paragraphs (f), (h), and (i) of section 1 hereof shall bar the refiling of the same action or claim.
From the foregoing, it is clear that dismissals under paragraphs (f), (h), and (i) of Section 1 of Rule 16 of
the Rules of Court constitute res judicata, to wit:chanRoblesvirtualLawlibrary
(f) That the cause of action is barred by a prior judgment or by the statute of limitations;
x

(h) That the claim or demand set forth in the plaintiffs pleading has been paid, waived, abandoned, or
otherwise
extinguished;
(i) That the claim on which the action is founded is unenforceable under the provisions of the statute of
frauds.

Res judicata or bar by prior judgment is a doctrine which holds that a matter that has been adjudicated by
a court of competent jurisdiction must be deemed to have been finally and conclusively settled if it arises
in any subsequent litigation between the same parties and for the same cause. Res judicata exists when
the following elements are present: (a) the former judgment must be final; (b) the court which rendered
judgment had jurisdiction over the parties and the subject matter; (3) it must be a judgment on the
merits; and (d) and there must be, between the first and second actions, identity of parties, subject matter,
and cause of action.113 (Emphasis supplied; citations omitted)
Here, it should be noted that this Court denied the said Manifestation and Urgent Motion, and refused to
act on the succeeding pleadings, for being moot. 114 Clearly, the merits of the motion were not considered
by the Court. The following disquisition of the Court in Spouses Cruz v. Spouses Caraos is further
enlightening:chanRoblesvirtualLawlibrary
The judgment of dismissal in Civil Case No. 95-1387 does not constitute res judicata to sufficiently bar
the refiling thereof in Civil Case No. 96-0225. As earlier underscored, the dismissal was one without
prejudice. Verily, it was not a judgment on the merits. It bears reiterating that a judgment on the
merits is one rendered after a determination of which party is right, as distinguished from a
judgment rendered upon some preliminary or formal or merely technical point. The dismissal of the
case without prejudice indicates the absence of a decision on the merits and leaves the parties free to
litigate the matter in a subsequent action as though the dismissed action had not been
commenced.115 (Emphasis supplied; citations omitted)
Considering that there is definitely no forum shopping in the instant cases, we need not discuss in detail
the elements of forum shopping.chanrobleslaw
II
The Local Government Code of 1991 expressly provides that the Sangguniang Panlungsod is vested with
the power to reclassify land within the jurisdiction of the city 116 subject to the pertinent provisions of
the Code. It is also settled that an ordinance may be modified or repealed by another ordinance. 117 These
have been properly applied in G.R. No. 156052, where the Court upheld the position of the Sangguniang
Panlungsod to reclassify the land subject of the Ordinance, 118 and declared that the mayor has the duty to
enforce Ordinance No. 8027, provided that it has not been repealed by the Sangguniang Panlungsod or
otherwise annulled by the courts. 119 In the same case, the Court also used the principle that
the Sanguniang Panlungsod is in the best position to determine the needs of its constituents 120 that the
removal of the oil depots from the Pandacan area is necessary to protect the residents of Manila from
catastrophic devastation in case of a terrorist attack on the Pandacan Terminals. 121chanrobleslaw
Do all these principles equally apply to the cases at bar involving the same subject matter to justify the
contrary
provisions
of
the
assailed
Ordinance?
We

answer

in

the

negative.

We summarize the position of the Sangguniang Panlungsod on the matter subject of these petitions. In
2001, the Sanggunian found the relocation of the Pandacan oil depots necessary. Hence, the enactment of
Ordinance
No.
8027.

In 2009, when the composition of the Sanggunian had already changed, Ordinance No. 8187 was passed
in favor of the retention of the oil depots. In 2012, again when some of the previous members were no
longer re-elected, but with the Vice-Mayor still holding the same seat, and pending the resolution of these
petitions, Ordinance No. 8283 was enacted to give the oil depots until the end of January 2016 within
which to transfer to another site. Former Mayor Lim stood his ground and vetoed the last ordinance.
In its Comment, the 7th Council (2007-2010) alleged that the assailed Ordinance was enacted to alleviate
the
economic
condition
of
its
constituents. 122chanrobleslaw
Expressing the same position, former Mayor Lim even went to the extent of detailing the steps 123 he took
prior to the signing of the Ordinance, if only to show his honest intention to make the right decision.
The fact remains, however, that notwithstanding that the conditions with respect to the operations of the
oil depots existing prior to the enactment of Ordinance No. 8027 do not substantially differ to this day, as
would later be discussed, the position of the Sangguniang Panlungsod on the matter has thrice changed,
largely depending on the new composition of the council and/or political affiliations. The foregoing, thus,
shows that its determination of the general welfare of the city does not after all gear towards the
protection of the people in its true sense and meaning, but is, one way or another, dependent on the
personal preference of the members who sit in the council as to which particular sector among its
constituents
it
wishes
to
favor.
Now that the City of Manila, through the mayor and the city councilors, has changed its view on the
matter, favoring the citys economic-related benefits, through the continued stay of the oil terminals, over
the protection of the very lives and safety of its constituents, it is imperative for this Court to make a final
determination on the basis of the facts on the table as to which specific right of the inhabitants of Manila
should prevail. For, in this present controversy, history reveals that there is truly no such thing as the will
of
Manila
insofar
as
the
general
welfare
of
the
people
is
concerned.
If in sacrilege, in free translation of Angara 124 by Justice Laurel, we say when the judiciary mediates we
do not in reality nullify or invalidate an act of the Manila Sangguniang Panlungsod, but only asserts the
solemn and sacred obligation assigned to the Court by the Constitution to determine conflicting claims of
authority under the Constitution and to establish for the parties in an actual controversy the rights which
that instrument secures and guarantees to them.chanrobleslaw
III
The measures taken by the intervenors to lend support to their position that Manila is now safe despite the
presence of the oil terminals remain ineffective. These have not completely removed the threat to the lives
of
the
inhabitants
of
Manila.
In G.R. No. 156052, the validity and constitutionality of Ordinance No. 8027 was declared as a guarantee
for the protection of the constitutional right to life of the residents of Manila. There, the Court said that
the enactment of the said ordinance was a valid exercise of police power with the concurrence of the two
requisites: a lawful subject to safeguard the rights to life, security and safety of all the inhabitants of
Manila;125 and a lawful method the enactment of Ordinance No. 8027 reclassifying the land use from
industrial to commercial, which effectively ends the continued stay of the oil depots in
Pandacan.126chanrobleslaw
In the present petitions, the respondents and the oil companies plead that the Pandacan Terminal has never

been one of the targets of terrorist attacks; 127 that the petitions were based on unfounded fears and mere
conjectures;128 and that the possibility that it would be picked by the terrorists is nil given the security
measures
installed
thereat. 129chanrobleslaw
The intervenors went on to identify the measures taken to ensure the safety of the people even with the
presence
of
the
Pandacan
Terminals.
Thus:chanroblesvirtuallawlibrary
1. Chevron claims that it, together with Shell and Petron, continues to enhance the safety and security
features of the terminals. They likewise adopt fire and product spill prevention measures in accordance
with the local standards set by the Bureau of Fire Protection, among others, and with the international
standards of the American Petroleum Industry (API) and the National Fire Prevention and Safety
Association (NFPSA); that since 1914, the oil depots had not experienced any incident beyond the
ordinary risks and expectations130 of the residents of Manila; and that it received a passing grade on
the safety measures they installed in the facilities from the representatives of the City of Manila who
conducted
an
ocular
inspection
on
22
May
2009;
and
2. Referring to the old MOU entered into between the City of Manila and the DOE, on the one hand, and
the oil companies, on the other, where the parties thereto conceded and acknowledged that the scale-down
option for the Pandacan Terminal operations is the best alternative to the relocation of the terminals, Shell
enumerates
the
steps
taken
to
scale
down
its
operations.
As to the number of main fuel tanks, the entire Pandacan Terminal has already decommissioned twentyeight out of sixty-four tanks. Speaking for Shell alone, its LPG Spheres, which it claims is the only
product that may cause explosion, was part of those decommissioned, thereby allegedly removing the
danger of explosion. Safety buffer zones and linear/green parks were likewise created to separate the
terminal from the nearest residential area. Shells portion of the oil depot is likewise allegedly equipped
with the latest technology to ensure air-quality control and water-quality control, and to prevent and cope
with possible oil spills with a crisis management plan in place in the event that an oil spill occurs. Finally,
Shell claims that the recommendations of EQE International in its Quantitative Risk Assessment (QRA)
study, which it says is one of the leading independent risk assessment providers in the world and largest
risk management consultancy, were sufficiently complied with; and that, on its own initiative, it adopted
additional measures for the purpose, for which reason, the individual risk level resulting from any
incident occurring from the Pandacan Terminal, per the QRA study, is twenty (20) times lower compared
to the individual risk level of an average working or domestic environment. 131chanrobleslaw
We

are

not

persuaded.

The issue of whether or not the Pandacan Terminal is not a likely target of terrorist attacks has already
been passed upon in G. R. No. 156052. Based on the assessment of the Committee on Housing,
Resettlement and Urban Development of the City of Manila and the then position of theSangguniang
Panlungsod,132 the Court was convinced that the threat of terrorism is imminent. It remains so convinced.
Even assuming that the respondents and intervenors were correct, the very nature of the depots where
millions of liters of highly flammable and highly volatile products, regardless of whether or not the
composition may cause explosions, has no place in a densely populated area. Surely, any untoward
incident in the oil depots, be it related to terrorism of whatever origin or otherwise, would definitely cause
not only destruction to properties within and among the neighboring communities but certainly mass
deaths
and
injuries.
With regard to the scaling down of the operations in the Pandacan Terminals, which the oil companies
continue to insist to have been validated and recognized by the MOU, the Court, in G.R. No. 156052, has

already put this issue to rest. It specifically declared that even assuming that the terms of the MOU and
Ordinance No. 8027 were inconsistent, the resolutions ratifying the MOU gave it full force and effect
only
until
30
April
2003.133chanrobleslaw
The steps taken by the oil companies, therefore, remain insufficient to convince the Court that the dangers
posed by the presence of the terminals in a thickly populated area have already beencompletely removed.
For, given that the threat sought to be prevented may strike at one point or another, no matter how remote
it is as perceived by one or some, we cannot allow the right to life to be dependent on the unlikelihood of
an event. Statistics and theories of probability have no place in situations where the very life of not just an
individual but of residents of big neighborhoods is at stake.chanrobleslaw
IV
It is the removal of the danger to life not the mere subdual of risk of catastrophe, that we saw in and made
us favor Ordinance No. 8027. That reason, unaffected by Ordinance No. 8187, compels the affirmance of
our
Decision
in
G.R.
No.
156052.
In striking down the contrary provisions of the assailed Ordinance relative to the continued stay of the oil
depots, we follow the same line of reasoning used in G.R. No. 156052, to
wit:chanRoblesvirtualLawlibrary
Ordinance No. 8027 was enacted for the purpose of promoting sound urban planning, ensuring health,
public safety and general welfare of the residents of Manila. TheSanggunian was impelled to take
measures to protect the residents of Manila from catastrophic devastation in case of a terrorist attack on
the Pandacan Terminals. Towards this objective, the Sanggunian reclassified the area defined in the
ordinance
from
industrial
to
commercial.
The following facts were found by the Committee on Housing, Resettlement and Urban Development of
the City of Manila which recommended the approval of the ordinance:
(1) the depot facilities contained 313.5 million liters of highly flammable and highly volatile products
which include petroleum gas, liquefied petroleum gas, aviation fuel, diesel, gasoline, kerosene and
fuel oil among others;
(2) the depot is open to attack through land, water or air;
(3) it is situated in a densely populated place and near Malacaang Palace; and
(4) in case of an explosion or conflagration in the depot, the fire could spread to the neighboring
communities.

The ordinance was intended to safeguard the rights to life, security and safety of all the inhabitants of
Manila and not just of a particular class. The depot is perceived, rightly or wrongly, as a representation of
western interests which means that it is a terrorist target. As long as it (sic) there is such a target in their
midst, the residents of Manila are not safe. It therefore became necessary to remove these terminals to
dissipate the threat. According to respondent:chanRoblesvirtualLawlibrary
Such a public need became apparent after the 9/11 incident which showed that what was perceived to be
impossible to happen, to the most powerful country in the world at that, is actually possible. The

destruction of property and the loss of thousands of lives on that fateful day became the impetus for a
public need. In the aftermath of the 9/11 tragedy, the threats of terrorism continued [such] that it became
imperative for governments to take measures to combat their effects.
x

Both law and jurisprudence support the constitutionality and validity of Ordinance No. 8027. Without a
doubt, there are no impediments to its enforcement and implementation. Any delay is unfair to the
inhabitants of the City of Manila and its leaders who have categorically expressed their desire for the
relocation of the terminals. Their power to chart and control their own destiny and preserve their lives and
safety should not be curtailed by the intervenors warnings of doomsday scenarios and threats of
economic disorder if the ordinance is enforced. 134
The same best interest of the public guides the present decision. The Pandacan oil depot remains a
terrorist target even if the contents have been lessened. In the absence of any convincing reason to
persuade this Court that the life, security and safety of the inhabitants of Manila are no longer put at risk
by the presence of the oil depots, we hold that Ordinance No. 8187 in relation to the Pandacan Terminals
is
invalid
and
unconstitutional.
There

is,

therefore,

no

need

to

resolve

the

rest

of

the

issues.

Neither is it necessary to discuss at length the test of police power against the assailed ordinance. Suffice
it to state that the objective adopted by the Sangguniang Panlungsod to promote the constituents general
welfare in terms of economic benefits cannot override the very basic rights to life, security and safety of
the
people.
In. G.R. No. 156052, the Court explained:chanRoblesvirtualLawlibrary
Essentially, the oil companies are fighting for their right to property. They allege that they stand to lose
billions of pesos if forced to relocate. However, based on the hierarchy of constitutionally protected
rights, the right to life enjoys precedence over the right to property. The reason is obvious: life is
irreplaceable, property is not. When the state or LGUs exercise of police power clashes with a few
individuals right to property, the former should prevail. 135
We thus conclude with the very final words in G.R. No. 156052:chanRoblesvirtualLawlibrary
On Wednesday, January 23, 2008, a defective tanker containing 2,000 liters of gasoline and 14,000 liters
of diesel exploded in the middle of the street a short distance from the exit gate of the Pandacan
Terminals, causing death, extensive damage and a frightening conflagration in the vicinity of the incident.
Need we say anthing about what will happen if it is the estimated 162 to 211 million liters [or whatever is
left of the 26 tanks] of petroleum products in the terminal complex will blow up? 136
V
As in the prequel case, we note that as early as October 2001, the oil companies signed a MOA with the
DOE obliging themselves to:chanRoblesvirtualLawlibrary

... undertake a comprehensive and comparative study ... [which] shall include the preparation of a Master
Plan, whose aim is to determine the scope and timing of the feasible location of the Pandacan oil
terminals and all associated facilities and infrastructure including government support essential for the
relocation such as the necessary transportation infrastructure, land and right of way acquisition,
resettlement of displaced residents and environmental and social acceptability which shall be based on
mutual benefit of the Parties and the public.
such that:chanRoblesvirtualLawlibrary
Now that they are being compelled to discontinue their operations in the Pandacan Terminals, they cannot
feign unreadiness considering that they had years to prepare for this eventuality. 137
On the matter of the details of the relocation, the Court gave the oil companies the following time frames
for compliance:chanRoblesvirtualLawlibrary
To ensure the orderly transfer, movement and relocation of assets and personnel, the intervenors Chevron
Philippines Inc., Petron Corporation and Pilipinas Shell Petroleum Corporation shall, within a nonextendible period of ninety (90) days, submit to the Regional Trial Court of Manila, Branch 39, the
comprehensive plan and relocation schedule which have allegedly been prepared. The presiding judge of
Manila RTC, Branch 39 will monitor the strict enforcement of this resolution. 138
The periods were given in the Decision in G.R. No. 156052 which became final on 23 April 2009. Five
years have passed, since then. The years of non-compliance may be excused by the swing of local
legislative
leads.
We
now
stay
the
sway
and
begin
a
final
count.
A comprehensive and well-coordinated plan within a specific time-frame shall, therefore, be observed in
the relocation of the Pandacan Terminals. The oil companies shall be given a fresh non-extendible period
of forty-five (45) days from notice within which to submit to the Regional Trial Court, Branch 39, Manila
an updated comprehensive plan and relocation schedule. The relocation, in turn, shall be completed not
later
than
six
months
from
the
date
of
their
submission.
Finally, let it be underscored that after the last Manifestation filed by Shell informing this Court that
respondent former Mayor Lim vetoed Ordinance No. 8283 for the second time, and was anticipating its
referral to the President for the latters consideration, nothing was heard from any of the parties until the
present petitions as to the status of the approval or disapproval of the said ordinance. As it is, the fate of
the Pandacan Terminals remains dependent on this final disposition of these cases.chanrobleslaw
VI
On the matter of the failure of Atty. Gempis to immediately comply with the directives of this Court to
file the Memorandum for the Vice-Mayor and the city councilors who voted in favor of the assailed
Ordinance, the records do not bear proof that he received a copy of any of the resolutions pertaining to the
filing
of
the
Memorandum.
A narration of the events from his end would show, however, that he was aware of the directive issued in
2009 when he stated that when the City Legal Officer filed its Memorandum dated 8 February 2010, [he]
thought the filing of a Memorandum for the other respondent city officials could be dispensed

with.139 There was also a categorical admission that he received the later Resolution of 31 May 2011 but
that he could not prepare a Memorandum defending the position of respondents vice-mayor and the city
councilors who voted in favor of Ordinance No. 8187 in view of the on-going drafting of Ordinance No.
8283, which would change the position of the Sanggunian, if subsequently approved.
The

reasons

he

submitted

are

not

impressed

with

merit.

That he was not officially designated as the counsel for the vice-mayor and the city councilors is beside
the point. As an officer of the court, he cannot feign ignorance of the fact that a resolution of this Court
is not a mere request but an order which should be complied with promptly and completely. 140 As early
as 2009, he should have immediately responded and filed a Manifestation and therein set forth his reasons
why he cannot represent the vice-mayor and the city councilors. And, even assuming that the 31 May
2011 Resolution was the first directive he personally received, he had no valid excuse for disregarding the
same. Worse, the Court had to issue a show cause order before he finally heeded.
Atty. Gempis should strive harder to live up to his duties of observing and maintaining the respect due to
the courts, respect for law and for legal processes and of upholding the integrity and dignity of the legal
profession in order to perform his responsibilities as a lawyer effectively. 141chanrobleslaw
In Sibulo v. Ilagan,142 which involves a lawyers repeated failure to comply with the directives of the
Court, the penalty recommended by the Integrated Bar of the Philippines was reduced from suspension to
reprimand and a warning. The Court ratiocinated:chanRoblesvirtualLawlibrary
Considering, however, that respondent was absolved of the administrative charge against him and is being
taken to task for his intransigence and lack of respect, the Court finds that the penalty of suspension
would
not
be
warranted
under
the
circumstances.cralawred
x

To the Courts mind, a reprimand and a warning are sufficient sanctions for respondents disrespectful
actuations directed against the Court and the IBP. The imposition of these sanctions in the present case
would be more consistent with the avowed purpose of disciplinary case, which is not so much to punish
the individual attorney as to protect the dispensation of justice by sheltering the judiciary and the public
from the misconduct or inefficiency of officers of the court. 143
We consider the participation of Atty. Gempis in this case and opt to be lenient even as we reiterate the
objective of protecting the dispensation of justice. We deem it sufficient to remind Atty. Gempis to be
more
mindful
of
his
duty
as
a
lawyer
towards
the
Court.
WHEREFORE, in light of all the foregoing, Ordinance No. 8187 is hereby
declaredUNCONSTITUTIONAL and INVALID with respect to the continued stay of the Pandacan Oil
Terminals.
The incumbent mayor of the City of Manila is hereby ordered to CEASE and DESIST from enforcing
Ordinance No. 8187. In coordination with the appropriate government agencies and the parties herein
involved, he is further ordered to oversee the relocation and transfer of the oil terminals out of the
Pandacan
area.
As likewise required in G.R. No. 156052, the intervenors Chevron Philippines, Inc., Pilipinas Shell
Petroleum Corporation, and Petron Corporation shall, within a non-extendible period of forty-five (45)

days, submit to the Regional Trial Court, Branch 39, Manila an updated comprehensive plan and
relocation schedule, which relocation shall be completed not later than six (6) months from the date the
required documents are submitted. The presiding judge of Branch 39 shall monitor the strict enforcement
of
this
Decision.
For failure to observe the respect due to the Court, Atty. Luch R. Gempis, Jr., Secretary of
theSangguniang Panlungsod, is REMINDED of his duties towards the Court and WARNED that a
repetition of an act similar to that here committed shall be dealt with more severely.
SO ORDERED.cra

23. G.R. No. 75000 February 27, 1987


DENSO (PHILS.), INC., petitioner,
vs.
THE INTERMEDIATE APPELLATE COURT AND KAYAMANAN DEVELOPMENT
CORPORATION, respondents.

NARVASA, J.:
On June 23, 1984, at about 11 o'clock in the evening, a fire broke out at the Nippondenso Building at
Pasong Tamo Ext., Makati, Metro Manila. The building was owned by the Kayamanan Development
Corporation (hereafter, simply referred to as KAYAMANAN), and was then under lease to Denso (Phils),
Inc. (hereafter, simply DENSO). The fire caused extensive damage. DENSO and its correspondent firm in
Japan, NIPPONDENSO, reportedly suffered losses amounting to P6,131,976.65 and P682,212.58,
respectively. On the other hand, KAYAMANAN's loss was placed at P1,750,000.00. 1
A year or so later, KAYAMANAN instituted an action against DENSO in the Regional Trial Court at
Makati, which was docketed as Civil Case No. 10768, for recovery of (a) unpaid rentals from June, 1984
to March, 1985, amounting to an aggregate of P471,546.69; (b) the cost of repairing the damage caused
by the fire to the leased building, it being alleged that DENSO was bound to bear said cost under their
lease agreement; and (c) unrealized monthly rents and attorney's fees. 2
Summons was served on DENSO on June 10, 1985. It would seem, however, that the summons (together
with the accompanying copy of the complaint) was not referred by DENSO to its counsel until June 22,
1985. This prompted the latter to file on June 25, 1985 a "MOTION FOR EXTENSION OF TIME TO
FILE ANSWER," pleading the late referral, the need to attend to other legal work of equal importance, as
well as the time requirement for study of the factual and legal points involved in the action, and praying,
in consequence, for an additional period of 15 days from June 25 within which to present the requisite
responsive pleading. 3 The motion closed with a "Notice of Hearing" addressed to the Clerk of Court,
asking that the motion be submitted to the court for consideration and approval immediately upon its

receipt; and a notation that a copy of the motion had been furnished plaintiff KAYAMANAN's
counsel. 4 The copy of the motion was actually received by KAYAMANAN's counsel the following day,
June 26, 1985 . 5
The motion for extension was however denied by Order of Judge Teofilo Guadiz, Jr. dated June 26, 1985,
"considering," according to His Honor, "that there was no proof of service that plaintiff received a copy of
said motion." 6 At 4 o'clock in the afternoon of that same day, June 26, 1985, KAYAMANAN presented
an "Ex parte Motion to Declare Defendant in Default" asserting that the reglementary period of 15 days
for DENSO to file answer had expired on June 25, 1985 without any answer having been filed, but
making no reference to DENSO's motion for extension which, as above stated, had been received by it on
June 26, 1985. 7 On the same day, June 26, l985, Judge Guadiz promulgated an Order deeming the motion
for default to be "well-taken," and accordingly declaring DENSO in default and setting the reception of
KAYAMANAN's evidence ex-parte on the following day, June 27, 1985, at 2 o'clock in the
afternoon. 8 At that appointed date and time, the Court-did receive KAYAMANAN's evidence ex-parte;
and four (4) days later, on July 1, 1985,Judge Guadiz rendered judgment by default, sentencing DENSO
to pay to KAYAMANAN P471,546.69 as accumulated monthly rentals and cost of services from June,
1984 to March 1985; P2,856,000.30 as the reasonable cost of repair of the "damage building" (sic); and
10% of the total amounts awarded, as attorney's fees. 9
While all this was happening, and evidently in complete ignorance thereof, DENSO's counsel drew up its
answer to the complaint, which was completed on July 5, 1985 and filed on July 8, 1985. To this pleading
were appended copies of letters from DENSO to KAYAMANAN appealing for a 30% rental rebate
due to the prejudicial consequences of the fire of June 23, 1984; giving notice of the termination of the
lease on May 12, 1985; and formally turning over the leased premisses-as well a copy of the Police Arson
Investigation Report of the fire. 10
Inevitably, DENSO learned of the order of default and the judgment by default. It then filed on August 2,
1985 a verified motion for reconsideration of said order and judgment. 11 Acting thereon, the Trial Court
promulgated an Order dated September 3, 1985, setting aside, "in the interest of substantial justice," the
order of default dated June 26, 1985 as well as the decision dated July 1, 1985; but hearing was
rescheduled only for the presentation of defendant DENSO's evidence, the Court explicitly stating that the
evidence already presented (by KAYAMANAN) would remain on record "without the right of cross
examination on the part of the defendant." 12 The hearing was set on October 2, 1985 but at DENSO's
instance, was re-scheduled on October 24, 1985.
At the hearing on October 24, 1985, DENSO orally asked the Court to reconsider its Order of September
3, 1985 and accord it the opportunity to cross-examine KAYAMANAN's witnesses, who had given their
testimony ex-parte. The Court opted to give DENSO time to move formally for reconsideration 13 and
reset the hearing to November 21, 1985 (which was again reset on January 9, 1986 because the Judge was
on official leave in November). 14
DENSO submitted its formal motion for reconsideration dated November 4, 1985 praying for the right
to cross-examine KAYAMANAN's witnesses on November 6, 1985. 15 The record does not show that
any opposition to the motion was ever filed. Two days later, however, on November 8, 1985, DENSO
received notice of the Order of the Court dated October 24, 1985 (the date of the hearing), denying its
(DENSO's) motion to be allowed to cross-examine KAYAMANAN's witnesses, and scheduling the initial
hearing for the presentation of the defense witnesses on November 21, 1985. 16 Four days afterwards, on
November 12, 1985, the Court promulgated another Order, denying DENSO's motion for reconsideration
of November 4, 1985 for lack of merit. According to the Court:

What is important is that defendant is afforded the opportunity to present its evidence and
thus enable the Court to see the other side of the coin, the defendant being offered a
chance to present its evidence in the Order dated September 3, 1985. 17
DENSO submitted not however receive a copy of his Order of November 12, 1985 until January 9, 1986,
the day finally set (by the Court) for the reception of its evidence. At this time, DENSO drew the Court's
attention to its motion for reconsideration of November 4, 1985 which, as far as it knew, was yet
unresolved. DENSO was thereupon furnished with a copy of the Order of November 12, 1985. DENSO
then asked for deferment of the hearing so that it might elevate this adverse ruling to a higher
court. 18 This was denied, and when DENSO declared itself as not ready to proceed with the presentation
of evidence, the Court dictated an Order stating that "this being the third time that defendant failed to
present its evidence notwithstanding the chance given to it, the 'Decision' dated July 1, 1985 is revived." 19
Without awaiting service of the Order dictated on January 9, 1986, DENSO filed on January 15, 1986 a
petition for certiorari with the Intermediate Appellate Court, docketed as AC-G.R. SP No. 08150, praying
for the annulment of the series of orders of Judge Guadiz already referred to, starting with the order of
default of June 26, 1985 and culminating in the order of January 9, 1986 reviving the judgment by
default.
The Intermediate Appellate Court (Fourth Special Cases Division) considered the crucial issue to be "the
propriety or impropriety" of the order of September 3, 1985 which, while setting aside the previous order
of default and the judgment by default, prescribed that the evidence already presented would remain in
the record and denied petitioner the right to cross-examine the respondent's witnesses who had testified at
the ex-parte hearing. It declared unnecessary further consideration of the order of default and judgment
by default thus set aside, and limited its review of the proceedings to the question of whether or not the
petitioner was properly denied the right of cross-examination. 20
On that question the Appellate Court ruled that the right of cross-examination, while a part of due process
so that denial thereof amounts to depriving a party of his day in court, is nonetheless waivable; that since
petitioner received on September 16, 1985 copy of the order of September 3, 1985 setting the
judgment by default aside and scheduling the case for hearing only for reception of defendant's evidence
without right to cross-examine plaintiff's witnesses but did not move for its reconsideration until
October 24, 1985, or after a lapse of 38 days, such inaction amounted to a waiver of the claimed right to
cross-examine; and, moreover, said motion for reconsideration came too late because the order sought to
be reconsidered was by then already final, the applicable period of appeal being only fifteen (15) days
from notice of said order, 21 and that (in any event) DENSO was guilty of laches. 22
The error in these pronouncements is immediately apparent. They assume that the order in question is a
final-and appealable order, when it is in fact interlocutory. The distinction between final and
interlocutory orders is a well-settled one.
The concept of "final" judgment, as distinguished from one which has "become final" (or
"executory" as of right [final and executory]), is definite and settled. A "final" judgment
or order is one that finally disposes of a case, leaving nothing more to be done by the
Court in respect thereto, e.g., an adjudication on the merits which, on the basis of the
evidence presented at the trial, declares categorically what the rights and obligations of
the parties are and which party is in the right; or a judgment or order that dismisses an
action on the ground, for instance, of res judicata or prescription. Once rendered, the task
of the Court is ended, as far as deciding the controversy or determining the rights and
liabilities of the litigants is concerned. Nothing more remains to be done by the Court

except to await the parties' next move (which among others, may consist of the filing of a
motion for new trial or reconsideration, or the taking of an appeal) and ultimately, of
course, to cause the execution of the judgment once it becomes 'final' or, to use the
established and more distinctive term, "final and executory." ...
xxx xxx xxx
Conversely, an order that does not finally dispose of the case, and does not end the
Court's task of adjudicating the parties' contentions and determining their rights and
liabilities as regards each other, but obviously indicates that other things remain to be
done by the Court, is "interlocutory," e.g., an order denying a motion to dismiss under
Rule 16 of the Rules, or granting a motion for extension of time to file a pleading, or
authorizing amendment thereof, or granting or denying applications for postponement, or
production or inspection of documents or things, etc. Unlike a "final" judgment or order,
which is appealable, as above pointed out, an "interlocutory" order may not be questioned
on appeal except only as part of an appeal that may eventually be taken from the final
judgment rendered in the case. 23
That the order of September 3, 1985 was interlocutory in character is beyond cavil. In setting aside the
order of default and the succeeding judgment by default, it left the case open for further proceedings
before the Trial Court, not the least of which was the reception of evidence for the petitioner. Therefore, it
could not become final in the sense that final judgments become "final and executory." No appeal
therefrom would lie except in the context and as part of an appeal from a subsequent final judgment on
the merits, and a motion for reconsideration thereof was not subject to the limiting fifteen-day period of
appeal prescribed for final judgments or orders.
Neither will the Court consider laches as having set in by reason of petitioner's allowing thirty-eight (38)
days to pass before seeking a reconsideration of the order, having in mind not only that such a relatively
brief period cannot by any reckoning be deemed an unreasonable length of time, but also the fact that
while laches is a defense which operates independently of the statute of limitations and is subject to no
fixed periods, it is also founded on equity and may be invoked only if the delay in asserting a claim has
worked a change in the conditions such as would render unjust or inequitable the grant of the relief
sought.
In order t hat the defense of laches may prosper, the following elements must be present:
(1) conduct on the part of defendant, or one under whom he claims, giving rise to the
situation complained of, (2) delay in asserting complainant's right after knowledge or
notice of defendant's conduct and an opportunity to sue, (3) lack of knowledge or notice
on the part of the defendant that complainant would assert the right on which he bases
suit, and (4) injury or prejudice to defendant in the event relief is accorded. *** 24
*** (I)t must be realized that, unlike prescription, the defense of laches is not dependent
on the existence of a statutory period of limitation. It can be invoked without reckoning
any specific or fixed period; it is sufficient that there be an unreasonable and unexplained
delay in bringing the action that its maintenance would already constitute inequity or
injustice to the party claiming it. *** 25
No perceivable prejudice would attach to the respondent if the petitioner were allowed to cross-examine
the witnesses it has presented. If said witnesses told the truth, respondent has nothing to fear from their
cross-examination, the effect of which would only be to enhance their credibility.

Petitioner's motion for reconsideration of the order of September 3, 1985, therefore, hardly deserved the
short shrift that it received from the Intermediate Appellate Court because it was in no sense untimely, and
neither lapse of a statutory period nor laches could correctly be invoked to justify the summary refusal to
inquire into the antecedents of said order. What that Court considered to be moot and academic an
inquiry into the merits of Judge Guadiz's separate orders of June 26, 1985 denying the motion for
extension of time to file answer and declaring the petitioner in default lay precisely at the heart of the
matter before it and now before this Court. Both orders were premised on what the Judge perceived to be
a failure to comply with the rule that notice of motions must be served by the movant on all parties
concerned at least three (3) days prior to the hearing thereof. 26 What His Honor evidently overlooked-and
this was error-was that the rule on notice is not unqualifiedly applicable to all motions, and that there are
motions which may be heard ex-parte, as the Rules themselves clearly acknowledge. 27 Among the latter
class of motions are precisely those seeking extension of time to plead, and the reason these are not
strictly held to the requirement of notice is that they are non-contentious and do not as a rule involve the
substantial rights of the other parties in the suit.
* * * The motion for extension of time within which a party may plead is not a litigated
motion where notice to the adverse party is necessary to afford the latter an opportunity
to resist the application, but an ex-parte motion' made to the court in behalf of one or the
other of the parties to the action, in the absence and usually without the knowledge of the
other party or parties.' As 'a general rule, notice of motion is required where a party has a
right to resist the relief sought by the motion and principles of natural justice demand that
his rights be not affected without an opportunity to be heard.
It has been said that "ex-parte motions are frequently permissible in procedural matters,
and also in situations and under circumstances of emergency; and an exception to a rule
requiring notice is sometimes made where notice or the resulting delay might tend to
defeat the objection (sic) of the motion." 28
Upon similar premises, this Court has consistently held, since as early as in 1946, 29 that motions for
extension of time to file record on appeal may be filed and passed upon ex-parte, and the rulings on that
point are applicable, without differentiation, to motions for extension of time to file answer.
Petitioner's motion for extension of time to file answer was, therefore, improperly denied for lack of proof
of service on the respondent, said motion having been seasonably filed and, as already fully shown, there
being no impediment to its being heard ex-parte. No pretense is made that the motion was denied as
having been filed merely for delay, but even if that ground were read into the otherwise clear terms of the
order of denial which do not even hint thereat, it would still be belied by the fact that what was sought
was only an extension of the originalreglementary period as well as that prima facie meritorious reasons
were pleaded for the desired extension. The petitioner's answer, alleging defenses 30 which, if established,
could defeat the respondent's claim, wholly or in part, was filed well within the period of extension
prayed for. All these considered, the order declaring petitioner in default for alleged failure to timely file
answer was clearly arbitrary; it ought not to have been issued and should be struck down.
While the order of default was in fact set aside by the Trial Judge on motion of the petitioner, he failed to
afford petitioner the complete relief that the arbitrary and improper issuance of said order and of the
earlier order denying the motion for extension clearly called for. Ideally, the slate should have been wiped
clean by setting aside also the hearing at which the respondent presented its evidence ex-parte, so that the
parties would stand on even terms with neither having the advantage of the other. Instead, the Judge
prescribed that the evidence presented by the KAYAMANAN would remain in the record without right
on the part of DENSO to cross-examine the witnesses who had already testified, and by necessary

implication, also denied DENSO the right to object to the documentary evidence submitted by
respondent. This, too, was abuse of discretion. If a defendant is improperly declared in default his time
to answer not having expired because of a timely ex-parte motion for extension he should be entitled
to relief which should consist not only in the admission of his responsive pleading, but of the right to
cross-examine the witnesses presented and to object to the exhibits offered in his absence, if not indeed to
have trial commence all over again. He should not, under these circumstances, be penalized by loss of the
right to cross-examine. This would be grossly unwarranted and unfair; it would amount to a denial of due
process.
The Appellate Court's observation that "*** it cannot be denied that the petitioner had other remedies at
hand after the court a quo had set aside the questioned Order of default and Default Judgment ***" 31 It is
somewhat perplexing. Given the character of said orders, particularly of the order of default, this Court is
hard put to conceive how DENSO could have acted to protect its rights otherwise than as it did here,
namely by exhausting all recourse toward a reconsideration before the Trial Court and then applying for
corrective relief in the Intermediate Appellate Court.
WHEREFORE, the petition is granted. The Decision of the Intermediate Appellate Court under review is
reversed and set aside. Petitioner's answer to the respondent's complaint in Civil Case No. 10768 is
ordered admitted. All the orders issued in said case and complained of in the petition, the judgment by
default rendered therein, and the ex-parte proceeding of June 27, 1985 at which the respondent presented
its evidence are vacated. Civil Case No. 10768 shall stand for proceedings de novo as if only complaint
and answer had been filed therein. Costs against the respondent.
SO ORDERED.

24. G.R. No. 189574, July 18, 2014


ESTRELLA D. S. BAEZ, Petitioner, v. SOCIAL SECURITY SYSTEM AND DE LA SALLE
UNIVERSITY, Respondents.
DECISION
PEREZ, J.:
In this Petition for Review on Certiorari under Rule 45 of the Rules of Court, Estrella Baez (petitioner)
assails the 4 November 2008 Resolution1 of the Court of Appeals in CA-G.R. SP No. 103693, which
dismissed her petition and affirmed the denial of her claim for death benefits by the Employees'
Compensation Commission (ECC) in its 4 April 2008 Decision.2 Likewise subject of the petition is the
10 September 2009 Court of Appeals Resolution3 which denied petitioners motion for reconsideration.
The undisputed facts are as follow:
Baylon R. Baez (Baylon), the husband of petitioner, was employed by De La Salle University (DLSU)
on 19 July 1967. From 25 January 1991 to 26 August 2006, Baylon worked as a Laboratory Technician at
the Chemistry Department of DLSU. Some of his duties and responsibilities, as described in his
Certificate of Employment, were:chanroblesvirtuallawlibrary

1. Primarily assigned to the operation of College of Science Chemistry Laboratories and stockrooms x x
x;
xxxx
2. Preparing reagents and other laboratory materials before each assigned laboratory class(es) and
dispensing them during classes even if on leave, prepares the reagents ahead of time;
xxxx
8. Maintaining cleanliness and general order in the stockrooms x x x;
9. Check[ing] and monitoring the continuous supply of fuel gas x x x;
xxxx
10. Facilitat[ing] the movement of gas order cylinders during installation and receiving the same in good
condition;
xxxx
15. Handl[ing] the inventory of laboratory stocks (e.g. chemicals, glassware, apparatus, laboratory
consumables, laboratory fixtures and furniture) x x x. 4
From 9-15 April 2006, Baylon was confined at Manila Doctors Hospital due to fever, weakness, dysuria
and flank pains. He was diagnosed to be suffering from urinary tract infection. 5 About a month later or
on 18 May 2006, he was confined again for seven (7) days for functional dyspepsia. 6 On 9 June 2006, he
was admitted at the Medical Center Manila on complaints of vomiting and weakness. He was diagnosed
to
be
suffering
from Systemic
Lupus
Erythematosus (SLE).
On 30 July 2006, Dr. Erle S. Castillo (Dr. Castillo) prepared a clinical abstract/toxicologic assessment on
Baylon and she stated that based on the occupational history of the patient, x x x the probability of a
chemically
induced
disease
[cannot
be
discounted]. 7
On 9 August 2006, Baylon was again admitted at the Medical Center Manila before he succumbed to the
complications of his disease on 27 August 2006. He died of SLE with Auto-Immune Hemolytic
Anemia, SLE Nephritis, SLE Vasculitis and Thrombocytopenia Secondary
to
SLE.8
On 30 October 2006, Baylons attending physician, Dr. Dennis Torres (Dr. Torres), issued a Medical
Certificate stating that Baylon who was confined and expired in Medical Center Manila for Systemic
Lupus Erythematosus may have been precipitated by the chronic exposure to chemicals which is an
occupational
hazard
in
his
performance
of
being
a
laboratory
technician. 9
Based on medical opinions of Dr. Castillo and Dr. Torres, petitioner filed a claim for death benefits under
the
Employees Compensation
Law
before
the
Social
Security
System
(SSS).
On 21 September 2007, SSS denied petitioners claim on two grounds: 1) the cause of death, cardiac
complication of SLE, is not considered work-related; and 2) SLE is not included in the list of
occupational
diseases.10
Petitioner appealed SSSs denial of her claim with the ECC. On 4 April 2008, the ECC affirmed the

denial of death benefits by the SSS. In denying the claim, the ECC delved into the nature of SLE and
found that, SLE is caused by a genetic tendency to mount an abnormal immune response against ones
own tissues or organs leading to their destruction or malfunction. The said disease is diagnosed by its
characteristic
clinical
presentation
and
by
DNA
studies. 11
Petitioner impugned the findings of the ECC in a Petition for Review before the Court of Appeals.
Petitioner initially moved for a 30-day extension to file a petition for review due to absence of counsel
and pending acceptance of her case by the UP Office of Legal Aid. The Court of Appeals granted a 15day extension so petitioner had until 15 June 2008 to file her petition for review. 12 She filed the same on
4
July
2008.
In a Resolution dated 4 November 2008, the Court of Appeals dismissed the petition for review because it
was
filed
out
of
time.
In the instant petition, petitioner explains that the petition for review before the Court of appeals was filed
beyond the 15-day extension period because she was in the process of obtaining free legal assistance in
the preparation of her appeal and she only received the Resolution of the Court of Appeals giving her only
15 days or until 15 June 2008 to file her petition on 26 June 2008. Petitioner urges the Court to relax the
rules
and
dispose
the
case
on
the
merits.
Petitioner argues in the main that the work of her husband as a Chemistry Laboratory Technician which
involved chronic exposure to chemicals might have precipitated the latters illness and eventual death.
Petitioner presented the Toxicologic Assessment made by Dr. Castillo, as well as the Medical Certificate
prepared by Dr. Torres to support her claim. She insisted that the medical opinions of the two physicians,
based on medical records and findings, constitute substantial evidence to back up her claim. She pointed
out that the ECC should not have disregarded medical records and opinions solely on the ground that the
nature of the illness was auto-immune. Citing jurisprudence, petitioner contends that medical opinion to
the contrary can be disregarded especially when there is some basis in facts for inferring a workconnection.
DLSU filed its Comment praying for the dismissal of the petition on grounds of lack of jurisdiction and
lack of cause of action. DLSU argues that it never participated in the proceedings and was never served
summons in any form or manner or even apprised of any claim, motion or decision whether in the SSS,
ECC or the Court of Appeals. Moreover, DLSU claims that petitioners claim for death benefits was
directed towards the SSS with no allegation of any responsibility that DLSU may have for the same.
In its Comment, SSS defends the appellate courts decision to dismiss the appeal, in that the perfection of
appeal in the manner and within the period prescribed by the rules is not only mandatory but
jurisdictional. SSS maintains that there is no probability, much less certainty, of establishing a causal
relation between the disease in question which cause the subject members death and his actual duties
during his employment. SSS asserts that petitioner failed to show relevant evidence to establish a causal
relationship.
There

is

no

merit

in

the

petition.

Petitioner received a copy of the Decision on 16 May 2008. Thus, she had until 31 May 2008 to file her
petition. Instead, petitioner filed a motion for extension of 30 days from 31 May 2008 within which to
file her petition. The Court of Appeals granted petitioner a mere 15-day extension pursuant to Section 4,
Rule 4313 of the Rules of Court, thus:chanroblesvirtuallawlibrary

However, in the interest of justice, the Court resolved to grant the petitioner-appellant anonextendible period of fifteen days from May 31, 2008 or until June 15, 2008 within which to file her
intended petition for review, otherwise, the instant case shall be dismissed. 14
Petitioner had until 15 June 2008 to file her petition. Petitioner filed the petition only 4 July 2008. Even
if the reckoning point is the extended period, the petition was filed out of time. The Court of Appeals
simply
applied
the
rule.
It is doctrinally entrenched that appeal is not a constitutional right, but a mere statutory privilege. Hence,
parties who seek to avail themselves of it must comply with the statutes or rules allowing it. 15 The rule is
that failure to file or perfect an appeal within the reglementary period will make the judgment final and
executory by operation of law. Perfection of an appeal within the statutory or reglementary period is not
only mandatory but also jurisdictional; failure to do so renders the questioned decision/resolution final
and executory, and deprives the appellate court of jurisdiction to alter the decision/resolution, much less
to entertain the appeal.16 Filing of an appeal beyond the reglementary period may, under meritorious
cases, be excused if the barring of the appeal would be inequitable and unjust in light of certain
circumstances
therein.17
While there are instances when the Court has relaxed the governing periods of appeal in order to serve
substantial justice, this was done only in exceptional cases. 18 We find no compelling reason to justify the
filing of the petition for review before the Court of Appeals beyond the reglementary period.
Just as significant, even if we grant petitioners prayer for a ruling on the merits of the case, denial of the
petition
cannot
be
avoided.
The findings of fact of the SSS are supported by substantial evidence and affirmed by the ECC and the
Court of Appeals. This Court is not a trier of facts. The Court accords great weight to the factual findings
of lower courts or agencies whose function is to resolve factual matters. It is not for the Court to weigh
evidence all over again. Moreover, findings of fact of administrative agencies and quasi-judicial bodies,
which have acquired expertise because their jurisdiction is confined to specific matters, are generally
accorded not only respect but finality when affirmed by the Court of Appeals. 19
In order for the beneficiary of an employee to be entitled to death benefits under the SSS, the cause of
death of the employee must be a sickness listed as an occupational disease by ECC; or any other illness
caused by employment, subject to proof that the risk of contracting the same is increased by the working
conditions.20
It is undisputed that SLE is not listed as an occupational disease under Annex A of the Rules on
Employees Compensation. Thus, petitioner has to prove by substantial evidence the causal relationship
between
her
husbands
illness
and
his
working
conditions.
For petitioners claim to prosper, she must submit such proof as would constitute a reasonable basis for
concluding either that the conditions of employment caused her husbands ailment or that such working
conditions
had
aggravated
the
risk
of
contracting
that
ailment. 21
Baylon was diagnosed with SLE. But petitioner filed her claim on the basis of the doctors and
toxicologists assessments that Baylons illness may have been precipitated by his exposure to chemicals.
Petitioner alleges that in the course of her husbands duty as a laboratory technician, he was chronically
exposed to the following chemicals: Ninhydrin, alpha napthol, ethanol, cupric acetate, glacial acetic
acid, phenylhydrazine, orcinol, sodium citrate, potassium tartrate, bromine, carbon tetrachloride, sodium
hydroxide, mercuric nitrate, arsenic, mercury, zinc chloride, ammonia, antimony, tricarboxylic acid,

benzidine, chromic acid, hydrogen sulfide, potassium permanganate, phenols, naphthalene, benzene,
lead,
thiourea, and heptanes, among
others.22
While there are certain chemicals accepted as increasing the risks of contracting SLE such as chlorinated
pesticides and crystalline silica,23 the law requires proof by substantial evidence, or such relevant
evidence which a reasonable mind might accept as adequate to justify a conclusion, that the nature of his
employment or working conditions increased the risk of contracting the ailment or that its progression or
aggravation
was
brought
about
thereby.24
Petitioner relied unqualifiedly on the toxicological report which failed to prove the causal relationship
between Baylons work and his illness. The report made an indirect link between SLE and chemicals
through
drug-induced
lupus.
SLE and Drug-Induced Lupus Erythematosus are both autoimmune diseases. Drug-induced lupus is a
temporary and mild form of lupus caused by certain prescription medications. They include some types of
high blood pressure drugs (such as hydralazine, ACE inhibitors, and calcium channel blockers)
and diuretics (hydrochlorothiazide). Symptoms resolve once the medication is stopped. 25
On record, Baylon contracted SLE. There was nothing on the record which shows that Baylon was
diagnosed
with
drug-induced
lupus.
Furthermore, the toxicological report made mention of certain drugs with chemical structures related to
aromatic amines or substituted hydrazines, listed in the inventory of the school, can affect the immune
system. This would include Benzenes, Naphthylamine, Toluene, Dinitrophenylhydrazine, etc. However,
these drugs were not proven to have been administered on Baylon. These substances which can induce
the disease all pertain to drugs which are orally administered on the patient. There is no showing that the
drugs given to Baylon had increased his risk of contracting Drug-Induced Lupus and SLE.
Once again, we reiterate our holding in Lorenzo v. Government Service Insurance System 26 that while we
sympathize with the petitioner, it is important to note that such sympathy must be balanced by the equally
vital interest of denying undeserving claims for compensation. Compassion for the victims of diseases
not covered by the law ignores the need to show a greater concern for the trust fund to which the tens of
millions of workers and their families look to for compensation whenever covered accidents, diseases and
deaths
occur.
With respect to the inclusion of DLSU as respondent, we find that the Court of Appeals erred in
impleading DLSU. The original case title before the ECC is, Estrella D.S. Baez v. Social Security
System (De La Salle University), to emphasize that DLSU is the Baylons employer. DLSU was not
furnished a copy of the ECCs Decision. When petitioner filed her motion for extension, as well as
petition for review, she did not implead DLSU, but the Court of Appeals in its Decision and Resolution
added DLSU as a respondent, without however furnishing it copies of the Decision and Resolution.
However, the erroneous inclusion made by the Court of Appeals appears to be inadvertent and harmless.
For clarification purposes, the case against DLSU should be dismissed in this case for lack of cause of
action
and
jurisdiction.
WHEREFORE, based on the foregoing, the petition is DENIED. The Resolution of the Court of
Appeals in CA-G.R. SP No. 103693 dated 4 November 2008 dismissing the petition for review, and its
Resolution dated 10 September 2009, which denied the motion for reconsideration, are AFFIRMED.
SO ORDERED.

25. G.R. No. 196249

July 21, 2014

ROSE HANA ANGELES, doing business under the name and style [of] LAS MARIAS GRILL
AND RESTAURANT[,] and ZENAIDA ANGELES[,] doing business, under the name and style [of]
CAFE TERIA BAR AND RESTAURANT, Petitioners,
vs.
FERDINAND M. BUCAD, CHARLESTON A. REYNANTE, BERNADINE B. ROAQUIN,
MARLON A. OMPOY, RUBEN N. LAROZA, EVAGELINE B. BUMACOD, WILMA CAINGLES,
BRIAN OGARIO, EVELYN A.BASTAN, ANACLITO A. BASTAN, MA. GINA BENITEZ,
HERMINIO AGSAOAY, NORBERTO BALLASTEROS, DEMETRIO L. BERDIN, JR., JOEL
DUCUSIN, JOVY R. BALATA, and MARIBEL ROAQUIN, Respondents.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 assails the November 30, 2010 Decision2
and March 22, 2011 Resolution3 of the Court of Appeals (CA) in CAG.R. SP No. 109083, which
affirmed, withmodification, the December 28, 2007 Decision 4 and March 30, 2009 Resolution5 of the
National Labor Relations Commission (NLRC) in NLRC CASE CA No. 026347-00. 6
Factual Antecedents
The facts, as summarized by the appellate court, are as follows:
This Petition for Certiorarihas its precursor in the consolidated Complaints for Illegal Dismissal and
Money Claimsfiled by x x x respondents against petitioners Las Marias Grill and Restaurant and Caf
Teria Bar and Restaurant, single proprietorships owned by petitionersRose Hana Angeles and Zenaida
Angeles, respectively.
x x x [R]espondents bewailed thatthey were underpaid workers employed on various dates [for] the
following positions, viz:
"Name
1. Ferdinand Bucad
2. Charleston Reynante
3. Bernardine7 Roaquin
4. Marlon Ompoy
5. Ruben Laroza
6. Evangeline Bumacod
7. Wilma Caingles
8. Brian Ogario
9. Joel Ducusin
10. Evelyn A. Bastan

Date Hired
4-30-97
9-1-98
9-7-99
4-1-99
8-6-99
10-10-99
5-19-99
9-7-99
5-19-99
1-1-2000
7-29-96

Position
Manager
Supervisor
Cook/helper
Driver
Janitor
Stock clerk
Waitress
-doWaiter
Dishwasher
Stock clerk

Daily Rate
P7,000.00/month
P 130.00
60.00
75.00
60.00
70.00
70.00
70.00
70.00
170.00
105.00

Date Dismissed
1-31-2000
1-31-2000
still employed
still employed
2-4-2000
still employed
7-1-99
still employed
2-19-2000
1-17-2000
5-8-99 resigned

11. Anacleto8 Bastan


12. Ma. Gina Benitez
13. Herminio Agsaoay
14. Norberto Ballesteros9
15. Demetrio Berdin, Jr.
16. Jovy R. Balanta10
17. Maribel Roaquin

8-10-97
1-13-96
10-7-99
11-24-99
8-6-99
2-22-97
9-22-99
9-22-99

Helper Cook
Waitress/Cashier
-doDishwasher
Cook helper
-doWaitress
-do-

80.00
83.33
83.33
60.00
60.00
100.00
60.00
60.00

5-8-98 resigned
10-20-98 resigned
4-6-2000
presently employed
2-4-2000
Oct. 99
10-31-99 resigned
still employed"

The employees hurled, inter alia, a litany of charges against petitioners, namely: 1) payment of salaries
below the minimum wage and which were oftentimes paid after much delay; 2) non-coverage under the
Social Security System (SSS); 3) termination from employment without giving just benefits despite long
service; 4) signing of blank payroll without indicating the amount; and, 5) non-payment of night
differential, holiday pay, COLA, commutation pay for sick leave and annual leave, 13th month pay and
service charges.
x x x [R]espondents likewise charged petitioners with enforcing long hours of service so that stay-in
employees rendered a minimum of 10 hours of work while stay-out employees were required to work for
a minimum of 9 hours. They avowed that petitioners heaped verbal abuses upon them, and worse,
maltreated them by splashing water to wakethem up when anyone fell asleep at work. Petitioners forced
sick employees to go home totheir respective provinces despite their illness. They professed that
petitioners failed to provide them security of tenure but only private respondents Joel Ducusin x x x, Ma.
Gina Benitez x x x and Demetrio Berdin, Jr. x x x sued for illegal dismissal.
In the midst of these imputations, petitioners offered not a tinge of explanation as they failed to submit
their Position Paper.
Ensuingly, the Labor Arbiter rendered a Decisiondated 30 June 2000 plowing solely through the
submissions of the x x x respondents, viz
"WHEREFORE, the (petitioner) Zenaida Angeles, doing business under the name and style (of) Las
Marias Grill and Restaurant is hereby adjudged guilty of illegal dismissal with respect to (respondents)
Joel Ducusin, Ma. Gina Benitez and Demetrio Berdin, Jr. and is hereby ordered to pay their backwages
computed from the time they were illegally dismissed on January 17, 2000, April 6, 2000and October
1999 respectively up to the date of this Decision and separation pay of one-month salary for every year of
service in lieu of reinstatement considering the strained relationship that exists between the parties; salary
differentials; overtime pay; premium pay for holidays and rest days; night shift differentials; 13th month
pay; service incentive leave pay; unpaid salaries of complainant Jovy Balanta for the month of October
1999, summarized as follows:
Name
1. Ferdinand M. Bucad

P19,250.00

2. Charleston A. Reynante

143,199.98

3. Bernadine B. Roaquin

76,240.01

4. Marlon A. Ompoy

182,515.03

5. Ruben N. Laroza

45,247.96

6. Evangeline B. Bumacod

66,465.10

7. Wilma Caingles

73,499.39

8. Brian Ogario

64,298.90

9. Joel Ducusin

37,717.33

10. Evelyn A. Bastan

114,790.57

11. Anacleto A. Bastan

38,801.68

12. Ma. Gina Benitez

130,070.88

13. Herminio Agsaoay

65,191.25

14. Norberto Ballesteros

30,767.55

15. Demetrio L. Berdin, Jr.

150,967.56

16. Jovy R. Balanta

9,624.87

17. Maribel B. Roaquin

38,472.65

Total

P1,287,120.71

The Computation Sheet is hereto attached and forms part of this Decision.
All other claims are hereby Denied for lack of merit.
SO ORDERED."
Aggrieved, petitioners seasonably appealed to the National Labor Relations Commission ("NLRC") flatly
denying the charges against them. They were surprised to discover that their former counsel did not file
any pleading in their behalf to refute x x x respondents accusations. Petitioners theorized that the
Complaintswere instigated by x x x respondent Ferdinand Bucad ("Bucad"),restaurant manager of
petitioner Las Marias Grill and Restaurant ("Las Marias"). Bucad had been performing unsatisfactorily
prompting management to conduct an inquiry as to his performance. Bucad feared that the results of the
investigation might implicate him so he convinced his fellow employees to fabricate baseless inculpations
against their employers. Petitioners proceeded to proffer documentary evidence against each of the x x x
respondents. Bucad was given a notice to explain certain violations he had allegedly committed. He
answered and explained his side but the management decided to conduct a hearing giving him the
opportunity to adduce his evidence. He replied that he would not attend the investigation for he had
already sought recourse before the Labor Arbiter which scheduled the hearing on 28 January 2000. With
Bucads absence on the day of the investigation, petitioners sent him a Notice of Terminationdated 31
January 2000.
Petitioners adduced the same documentary evidence with respect to x x x respondents Charleston
Reynante ("Reynante"), Brian Ogario, and Marlon Ompoy, to wit: the notice toexplain, notice of hearing
and of termination. Petitioners likewise propounded documentary evidence to prove that x x x
respondents Ruben Laroza, Marvin Ballesteros, Evangeline Bumacod, and Maribel Roaquin were
probationary employees whose employment were terminated only after they were servednotices of their
respective violations.

As for x x x respondents Bernadine Roaquin ("Roaquin") and Albert Agsaoay ("Agsaoay"), petitioners
insisted they voluntarily resigned from their posts. Roaquin signed a Release, Waiver and Quitclaimwhile
Agsaoay signed a Certificationto confirm that he received his salary and benefits and had no complaints
against petitioners. Along the same strain, petitioners presented the respective Sinumpaang Salaysayof
one Melba Pacheca and Nida Bahe. They were the employees who averred that Berdin likewise resigned
when he was caught surreptitiously taking food out of the kitchen for his girlfriend.
The Sinumpaang Salaysayof a certain Lando Villanueva, another employee, affirmed that x x x
respondent Ma. Gina Benitez ("Benitez") was caught sleeping with x x x respondent Reynante at the
workers quarters, in violation of management rules. The couple immediately left their jobs, but returned a
year later beseeching petitionersto accept them back. Petitioners took pity on them giving Reynante a job
albeit there was no vacancy at that time, and allowing the couple to live in the workers quarters. When
Reynantes employment was terminated on 31 January 2000, Benitez went with him voluntarily and left
her job.
Petitioners then claimed that x x x respondents-spouses Evelyn and Anacleto Bastan had a
misunderstanding with their co-employees. They decided to leave their posts, despite the managements
pleas for them to stay.
Still and all, the NLRCremained unperturbed and dismissed the Appeal in the assailed Decisiondated 28
December 2007. Petitioners moved for reconsideration thereof but obtained no favorable relief in the
challenged Resolutiondated 30 March 2009.11
Ruling of the National LaborRelations Commission
In dismissing the petitioners Appeal, the NLRC held in its December 28, 2007 Decision that After
considering the arguments presented by the respondents 12 in their memorandum of appeal, it appears that
the respondents failed to submit sufficient evidence to compel Us to reverse the findings of the Labor
Arbiter. There is no substantial proof presented that the money claims were paid to the
complainants.13 The best evidence of such payment is the payroll, whereas in this case, respondents
merely allege payment.
Moreover, respondents indirectly admit that they give less than the statutory benefits to the employees on
the ground that the latter were provided facilities computed in the amount of [P]75.00 per day x x x and
for advances and transportation expenses x x x. Article 97[f] of the Labor Code provides that wages
include the fair and reasonablevalue of board and lodging or other facilities customarily provided by the
employerto the employee. It is also wellsettled that in deducting the value of facilities from the
employees wages, three (3) requirements must first be complied with, to wit: 1) proof must be shown that
such facilities are customarily furnished by the trade; 2) the provision of deductible facilities must be
voluntarily accepted in writing by the employee; finally, 3) facilities must be charged atfair and
reasonable value (Mabeza vs. NLRC, et al., G.R. No. 118506, April 18, 1997). In this case, there is no
showing that these requirements were complied withby the respondents before deductions were made
from the employees wages. Respondents failed to prove that such deductions were voluntarily accepted
in writing by the employees and that these were customarily furnished by the trade. As such, deduction
[from] the salaries is erroneous.
Anent the issue of payment of backwages, the same is proper considering that the complainants
wereterminated without proof that their termination was with just cause and after observance of due
process.

WHEREFORE, premises considered, the appeal is DISMISSED for lack of merit, and the Decision of the
Labor Arbiter dated June30, 2000 is hereby AFFIRMED.
SO ORDERED.14
Petitioners filed a Motion for Reconsideration 15 of the above decision, but the NLRC denied the same via
its March 30, 2009 Resolution.16
Ruling of the Court of Appeals
Respondents went up to the CA viaan original Petition for Certiorari 17 questioning the above
pronouncements of the NLRC. On November 30, 2010, the CA issued the assailed Decision, decreeing as
follows:
WHEREFORE, the Decisiondated 28 December 2007 and Resolution dated 30 March 2009 of the
National Labor Relations Commission are AFFIRMED with MODIFICATION in that (1) the ruling that
private respondents Ma. Gina Benitez and Demetrio Berdin, Jr. were illegally dismissed is VACATED;
and (2) the awards of backwages and separation pay to private respondents Ma. Gina Benitez and
Demetrio Berdin, Jr. are DELETED.
SO ORDERED.18
The CA held that contrary to petitioners submission in their Petition, there is no proof that herein
respondent Joel Ducusin (Ducusin) who petitioners claimed hatched the plan to harass them through the
filing of labor complaints abandoned his employment. On the contrary, Ducusins immediate filing of
the labor complaint indicated that he did not abandon his employment; it characterizes him as one who
deeply feltwronged by his employer.
With regard to respondents Ma. Gina Benitez (Benitez) and Charleston A. Reynante, however, the CA
believed that based on the evidence, they voluntarily left their jobs in 1998 when they were caught by
managementhaving an illicit affair. This showedthat they abandoned their employment, which does not
entitle Benitez to an award of backwages and separation pay.
The CA further held that petitioners did not commit illegal dismissal with respect to respondent Demetrio
L. Berdin, Jr. (Berdin), since Berdin resigned from his position on September 25, 1999 after management
caught him sneaking food out for his girlfriend. There is thus no ground for awarding Berdin backwages
and separation pay as well.
On the issue of money claims, the CA ruled that apart from bare allegations of payment, petitioners have
not satisfactorily shown by adequate documentary evidence which should be in its custody and
possession that the salaries, benefits and other claims due to the respondents have been accordingly
paid; that petitioners failed to discharge the burden of proving payment; that their defense that the
relevant payroll and daily timerecords were stolenconstitutes a lame excuse which cannot excuse them
from proving that theyhave paid what they owed respondents.
Petitioners filed a Motion for Partial Reconsideration, 19 but in its assailed March 22, 2011 Resolution, the
CA stood itsground. Thus, the instant Petition.
Issue

Petitioners submit that the CA committed the following error:


THE HONORABLE COURT OF APPEALS ERRED IN CONCLUDING THAT PRIVATE
RESPONDENT JOEL DUCUSIN WAS ILLEGALLY TERMINATED AND THAT PETITIONERS
HAVE FAILED TO OVERCOME THE BURDEN OF PAYMENT OF THE MONEY CLAIMS OF
PRIVATE RESPONDENTS.20
Petitioners Arguments
In their Petition and Reply,21 petitioners insist that Ducusin abandoned his employment when he chose not
to report for work after January 15, 2000, after having worked with petitioners for only two weeks; that it
was only upon Bucads instigation that Ducusin and the other respondents filed unfounded labor
complaints against petitioners and not because they actually felt wronged; that in the first place, Ducusin
has not shown that he was terminated which is a prerequisite to a claim of illegal dismissal; that being a
stay-in employee, Ducusins failure to report for work and his having lefthis quarters bolster the theory of
abandonment; and that Ducusins filing of a labor complaint does not necessarily negate abandonment,
per thisCourts ruling in Leopard Integrated Services, Inc. and/orPoe v. Macalinao. 22
With respect to the awards on respondents money claims, petitioners maintain that they have paid what is
dueand owing to the respondents, and that the Labor Arbiter, the NLRC, and the CAawarded more than
what was being claimed. Petitioners direct the Courts attention to pieces of documentary evidence
attached to their Memorandum of Appeal 23 with the NLRC consisting of daily time records, cash
vouchers, signed receipts for the payment of 13th month pay, SSS records, releases and quitclaims, and
computation of monetary claims 24 supposedly indicating that they have settled their pecuniary
obligations to respondents. Petitioners claim that the CA failed to appreciate such evidence, which led the
appellate court to an erroneous conclusion.
Petitioners thus pray for the reversal of the assailed dispositions, as well as a declaration that Ducusin was
legally terminated and the deletion of the monetary awards in favor of respondents. Respondents
Arguments
In their Comment,25 respondents simply point out that petitioners do not present valid reasons that would
warrant a reversal; that petitioners have not sufficiently shown that indeed, Ducusin abandoned his job;
and that the CA is correct in finding that petitioners failed to discharge the burden of proving that
respondents have been paidtheir monetary claims.
Our Ruling
The Court affirms.
The petitioners would have this Court resolve issues which require a reevaluation of the evidence; issues
of fact relating to the dismissal of their employees respondent Ducusin particularly and the
computation of monetary claims, which have been passed upon by the Labor Arbiter, the NLRC, and the
CA.
What must be realized, however, is that this Court is not a trier of facts. "[T]he jurisdiction of the
Supreme Court in cases brought before it from the CA viaRule 45 of the 1997 Rules of Civil Procedure is
generally limited to reviewing errors of law. This Court is not a trier offacts. In the exercise of its power
of review, the findings of fact of the CA are conclusive and binding and consequently, it is not our
function to analyze or weigh evidence all over again." 26 This principle applies with greater force in labor

cases, where this Court has consistently held that findings of fact of the NLRC are accorded great respect
and even finality,27 especially if they coincide withthose of the LaborArbiter and are supported by
substantial evidence.28 "Judicial review by this Court does not extend to a reevaluation of the sufficiency
ofthe evidence uponwhich the proper labor tribunal has based its determination." 29Factual issues are
beyond the scope of this Courts authority to review on certiorari. 30
Moreover, "[f]actual findingsof administrative bodies charged with their specific field of expertise, are
affordedgreat weight by the courts, and in the absence of substantial showing that suchfindings were
madefrom an erroneous estimation of the evidence presented, they are conclusive, and in the interest of
stability of the governmental structure, should not be disturbed." 31
Likewise, the Petition fails in light ofthe Labor Arbiters and the NLRCs identical findings, which were
affirmed by the CA.32 The consistent rebuff of petitioners position convinces this Court of the weakness
of their arguments. This can only mean that their evidence which ismerely reiterated here for the fourth
time will not stand scrutiny by this Court, since it could not even convince the NLRC and CA to take a
view contrary to that taken by the Labor Arbiter.
Finally, there exists serious doubt with respect topetitioners proffered evidence, considering that the
relevant payroll and daily time records are missing as they were, according to petitioners, stolen. Setting
aside for a moment the CAs pronouncement that the "stolen records" angle is nothing but a lame excuse,
it would nonetheless be difficult if not impossible to validate and reconcile petitioners documentary
evidence and unilateral claims of payment, if the official payroll and daily time records are not taken into
account. Without them, there could be no sufficient basis for this Court to overturn the assailed Decision;
the Court can only rely on the findings of the Labor Arbiter, the NLRC, and the CA.
x x x The purpose of a time record is to show an employees attendance in office for work and to be paid
accordingly, taking into account the policy of "no work, no pay". A daily time record is primarily intended
to prevent damage or loss to the employer, which could result in instances where it pays an employee for
no work done; it is a mandatory requirement for inclusion in the payroll, and in the absence of an
employment agreement, it constitutes evidence of employment. 33 (Emphasis supplied)
x x x The punching of time card is undoubtedly work related. It signifies and records the commencement
of one's work for the day.1wphi1 It is from that moment that an employee dons the cape of duties and
responsibilities attached to his position in the workplace. It is the reckoning point of the employer's
corresponding obligation to him - to pay his salary and provide his occupational and welfare protection or
benefits. x x x34 (Emphasis supplied)
What "daily time records" petitioners refer to in this Petition pertain to the supposed attendance record of
several of the respondents, which however do not contain the latter's respective signatures and those of
their superiors. They appear to be incomplete as well; indeed, some are barely readable. 35 They can hardly
be considered proof sufficient enough for this Court to consider.
If petitioners believe that they have been prejudiced, then they only have themselves to blame, for not
offering sufficient proof to prove their case. For their blunder, they may not expect this Court to resort to
unnecessary factual nitpicking in an attempt to forestall the effects of an adverse judgment.
WHEREFORE, the Petition is DENIED. The November 30, 2010 Decision and March 22, 2011
Resolution of the Court of Appeals in CA-G.R. SP No. 109083 are AFFIRMED.
SO ORDERED.

26. G.R. No. 193650

October 8, 2014

GEORGE PIDLIP P. PALILEO and JOSE DE LA CRUZ, Petitioners,


vs.
PLANTERS DEVELOPMENT BANK, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari 1 assails the July 28, 2009 Amended Decision 2 of the Court of
Appeals (CA) in CA-G.R. SP No. 01317-MIN, entitled "Planters Development Bank, Petitioner, versus
Hon. Eddie R. Roxas (in his capacity as the former Pairing Judge), Hon. Panambulan M Mimbisa (in his
capacity as the Presiding Judge of RTC, Branch 37, General Santos City), Sheriff Marilyn P. Alano,
Sheriff Ramon A. Castillo, George Philip P. Palileo, and Jose Dela Cruz, Respondents," as well as its
August 23, 2010 Resolution3 denying reconsideration of the assailed amended judgment.
Factual Antecedents
In a June 15, 2006 Decision 4 rendered by the Regional Trial Court (RTC) of General Santos City, Branch
37, in an action for specific performance/sum of money with damages docketed as Civil Case No. 6474
and entitled "George Philip P. Palileo and Jose Dela Cruz, Plaintiffs, versus, Planters Development Bank,
Engr. Edgardo R. Torcende, Arturo R. delos Reyes, Benjamin N. Tria, Mao Tividad and Emmanuel
Tesalonia, Defendants," it was held thus:
Before this Court is a complaint for specific performance and/or sum of money and damages with prayer
for the issuance of writs of preliminary attachment and preliminary injunction filed by Plaintiff George
Philip Palileo and Jose L. Dela Cruz against Engr. Edgardo R. Torcende, Planters Development Bank
(defendant Bank), Arturo R. Delos Reyes, Benjamin N. Tria, Mao Tividad, and Emmanuel Tesalonia on
22 December 1998.
After summons together with the verified Complaint and its annexes were duly served upon defendants,
the latter answered. During Pre-Trial conference defendant Bank manifested [its] intention of settling the
case amicably and several attempts to explore the said settlement [were] made as per records of this case.
In the last pre-trial hearing dated 17 November 2000, only plaintiffs[,] George Philip Palileo and Jose L.
Dela Cruz[,] and their counsel appeared, thus, the latter move [sic] for the presentation of evidence exparte, which was granted by the Court with the reservation of verifying the return card [to determine]
whether the order for the pre-trial was indeed received by defendants. Finally, [at the] 21 November 2001
hearing, x x x defendants [again] failed to appear and their failure to file pre-trial brief was noted; thus
[plaintiffs were] allowed to present evidence ex-parte before the Clerk of Court.
xxxx

IN LIGHT OF THE FOREGOING, defendants are hereby ORDERED to jointly and severally PAY
plaintiffs as follows:
i) Actual Damages;
a) Plaintiff George Philip Palileo[,] the amount of Two Million Six Hundred Five
Thousand Nine [sic] Seventy Two Pesos and Ninety Two Centavos (P2,605,972.92), with
12% compounded interest [per annum] reckoned from the filing of this case until full
settlement thereof;
b) Plaintiff Jose R. Dela Cruz[,] the amount of One Million Five Hundred Twenty Nine
Thousand Five Hundred Eight Thousand [sic] and Eighty Centavos (P1,529,508.80), with
12% compounded interest [per annum] reckoned from the filing of this case until full
settlement thereof;
ii) Moral damages in the amount of Five Hundred Thousand Pesos (P500,000.00) each;
iii) Exemplary Damages in the amount of Five Hundred Thousand Pesos (P500,000.00) each;
iv) Attorneys Fees in the amount of Five Hundred Thousand [Pesos] (P500,000.00) each x x x
and to pay the costs.
SO ORDERED.5
Respondent Planters Development Bank (PDB) received a copy of the RTC Decision on July 17, 2006.
On July 31, 2006, PDB filed by private courier service specifically LBC 6 an Omnibus Motion for
Reconsideration and for New Trial, 7 arguing therein that the trial courts Decision was based on
speculation and inadmissible and selfserving pieces of evidence; that it was declared in default after its
counsel failed to attend the pre-trial conference on account of the distance involved and difficulty in
booking a flight to General Santos City; that it had adequate and sufficient defenses to the petitioners
claims; that petitioners claims are only against its codefendant, Engr. Edgardo R. Torcende [Torcende];
that the award of damages and attorneys fees had no basis; and that in the interest of justice, it should be
given the opportunity to cross-examine the petitioners witnesses, and thereafter present its evidence.
Petitioners copy of the Omnibus Motion for Reconsideration and for New Trial was likewise sent on July
31, 2006 by courier service through LBC, but in their address of record Tupi, South Cotabato there
was no LBC service at the time.
On August 2, 2006, PDB filed with the RTC another copy of the Omnibus Motion for Reconsideration
and for New Trial via registered mail; another copy thereof was simultaneously sent to petitioners by
registered mail as well.
Meanwhile, petitioners moved for the execution of the Decision pending appeal.
In an August 30, 2006 Order,8 the RTC denied the Omnibus Motion for Reconsideration and for New
Trial, while it granted petitioners motion for execution pending appeal, which it treated as a motion for
the execution of a final and executory judgment. The trial court held, as follows:

Anent the first motion, records show that the Omnibus Motion for Reconsideration and for New Trial
dated 28 July 2006 was initially filed via an LBC courier on 28 July 2006 and was actually received by
the Court on 31 July 2006, which was followed by filing of the same motion thru registered mail on 2
August 2006. Said motion was set for hearing by the movant on 18 August 2006 or 16 days after its filing.
The motion fails to impress. Section 5, Rule 15 9 of the 1997 Rules of Civil Procedure as amended is
pertinent thus:
Section 5. Notice of hearing. The notice of hearing shall be addressed to all parties concerned, and shall
specify the time and date of the hearing which must not be later than ten (10) days after the filing of the
motion. (Underscoring and italics supplied)
The aforesaid provision requires [that] every motion shall be addressed to all parties concerned, and shall
specify the time and date of the hearing NOT later than ten (10) days after the filing of the motion. Being
a litigated motion, the aforesaid rule should have been complied [with]. Its noncompliance renders it
defective.
[The] Rule is settled that a motion in violation thereof is pro forma and a mere scrap of paper. It presents
no question which the court could decide [upon]. In fact, the court has NO reason to consider it[;] neither
[does] the clerk of court [have] the right to receive the same. Palpably, the motion is nothing but an empty
formality deserving no judicial cognizance. Hence, the motion deserves a short shrift and peremptory
denial for being procedurally defective.
As such, it does not toll the running of the reglementary period thus making the assailed decision final
and executory. This supervening situation renders the Motion for Execution pending appeal academic but
at the same time it operates and could serve [as] well as a motion for execution of the subject final and
executory decision. Corollarily, it now becomes the ministerial duty of this Court to issue a writ of
execution thereon.
IN LIGHT OF THE FOREGOING, the Omnibus Motion for Reconsideration and New Trial is hereby
DENIED, and the Motion for Execution Pending Appeal (which is treated as a motion for execution of a
final and executory judgment) is also GRANTED as explained above. Accordingly, let A WRIT OF
EXECUTION be issued against herein defendants to enforce the FINAL and EXECUTORY Decision
dated 15 June 2006.
SO ORDERED.10
PDB received a copy of the above August 30, 2006 Order on September 14, 2006. 11
On August 31, 2006, a Writ of Execution 12 was issued. PDB filed an Urgent Motion to Quash Writ of
Execution,13arguing that it was prematurely issued as the June 15, 2006 Decision was not yet final and
executory; that its counsel has not received a copy of the writ; and that no entry of judgment has been
made with respect to the trial courts Decision. Later on, it filed a Supplemental Motion to Quash Writ of
Execution,14 claiming that the writ was addressed to its General Santos branch, which had no authority to
accept the writ.
On September 7, 2006, PDB filed a Notice of Appeal.15
In an October 6, 2006 Order,16 the RTC denied the motion to quash the writ of execution.

On October 9, 2006, the RTC issued a second Writ of Execution. 17


Ruling of the Court of Appeals
On October 11, 2006, PDB filed with the CA an original Petition for Certiorari, which was later
amended,18assailing 1) the trial courts August 30, 2006 Order which denied the omnibus motion for
reconsideration of the RTC Decision and for new trial; 2) its October 6, 2006 Order which denied the
motion to quash the writ of execution; and 3) the August 31, 2006 and October 9, 2006 writs of execution.
On May 31, 2007, the CA issued a Decision 19 dismissing PDBs Petition for lack of merit. It sustained the
trial courts pronouncement, that by setting the hearing of the Omnibus Motion for Reconsideration and
for New Trial on August 18, 2006 or 16 days after its filing on August 2, 2006 PDB violated Section
5, Rule 15 of the Rules of Court which categorically requires that the notice of hearing shall specify the
time and date of the hearing which must not be later than 10 days after the filing of the motion. Citing this
Courts ruling in Bacelonia v. Court of Appeals, 20 the CA declared that the 10-day period prescribed in
Section 5 is mandatory, and a motion that fails to comply therewith is pro forma and presents no question
which merits the attention and consideration of the court.
The appellate court further characterized PDBs actions as indicative of a deliberate attempt to delay the
proceedings, noting that it did not timely move to reconsider the trial courts November 17, 2000
ruling21 allowing petitioners to present their evidence ex parte, nor did it move to be allowed to present
evidence in support of its defense. It was only after the RTC rendered its June 15, 2006 Decision that
PDB moved to be allowed to cross-examine petitioners witnesses and to present its evidence on defense.
The CA likewise held that the RTC did not err in ruling that the omnibus motion for reconsideration did
not toll the running of the prescriptive period, which thus rendered the June 15, 2006 Decision final and
executory. It noted as well that PDBs September 7, 2006 notice of appeal was tardy.
The CA found no irregularity with respect to the writs of execution, which contained the fallo of the June
15, 2006 Decision of the RTC thus itemizing the amount of the judgment obligation. Additionally, it
held that the fact that the judgment debtors are held solidarily liable does not require that the writs should
be served upon all of the defendants; that it is not true that the sheriffs failed to make a demand for the
satisfaction of judgment upon PDB, as the mere presentation of the writ to it operated as a demand to pay;
and that PDB failed to attach the Sheriffs Return to its Petition, which thus prevents the appellate court
from resolving its claim that the writs were not validly served.
PDB filed a Motion for Reconsideration,22 arguing that Rule 15, Section 5 of the Rules of Court should be
relaxed in view of the fact that judgment against it was based on a technicality and not on a trial on the
merits; that there was no deliberate intention on its part to delay the proceedings; that the court acted with
partiality in declaring that the Omnibus Motion for Reconsideration and for New Trial was pro forma;
that its notice of appeal was timely; and that the writs of execution are null and void.
On July 28, 2009, the CA made a complete turnaround and issued the assailed Amended Decision, which
decreed thus:
WHEREFORE, the motion for reconsideration is GRANTED. This Courts May 31, 2007 Decision is
SET ASIDE and a new one is rendered GRANTING the petition for certiorari. The trial courts Order
dated August 30, 2006 is SET ASIDE and the Writ of Execution issued by the trial court is QUASHED.
The trial court is ORDERED to hear and rule on the merits of petitioners "Omnibus Motion for
Reconsideration and New Trial."

SO ORDERED.23
The CA reversed its original finding that the Omnibus Motion for Reconsideration and for New Trial was
pro forma. This time, it held just the opposite, ruling that PDBs "tacit argument" that the "distances
involved in the case at bench call for a relaxation of the application of Section 5, Rule 15 of the Rules of
Court" deserved consideration. It held that Section 5 should be read together with Section 4 24 of the same
Rule, thus:
When a pleading is filed and served personally, there is no question that the requirements in Sections 4
and 5 of Rule 15 of the Revised Rules of Civil Procedure pose no problem to the party pleading. Under
this mode of service and filing of pleadings, the party pleading is able to ensure receipt by the other party
of his pleading at least three days prior to the date of hearing while at the same time setting the hearing on
a date not later than ten days from the filing of the pleading.
When, as in the case at bench, the address of the trial court as well as that of the opposing counsel is too
distant from the office of the counsel of the party pleading to personally effect the filing and service of the
pleading, the latter counsel faces a real predicament. In a perfect world with the best postal service
possible, it would be problematic enough to ensure that both requisites are fully met: that opposing
counsel receives the pleading at least three days before the date of hearing and that the date of hearing is
no more than ten days after the filing (mailing) of the pleading. But, as a matter of fact, given the state of
the postal service today a matter the Court takes judicial notice of the party pleading often finds
himself [locked] between the horns of a dilemma.
The case at bench presents the Court with the novel issue of whether the same rigid application of the
cited Sections-and-Rule is warranted when the filing and service of pleadings is by mail. The Court is of
the opinion that when confronted between [sic] the demands of sufficient notice and due process on the
one hand and the requirement that the date of hearing be set no later than ten days from filing, the
stringent application of the Rules is not warranted and a liberal posture is more in keeping with Section 6,
Rule 1 of the 1997 Rules of Civil Procedure which provides:
SECTION 6. Construction. - These Rules shall be liberally construed in order to promote their objective
of securing a just, speedy, and inexpensive disposition of every action and proceeding. 25
The CA further sustained PDBs argument that since judgment against it was arrived at by mere default or
technicality, it is correspondingly entitled to a relaxation of the Rules, in line with the principles of
substantial justice. It likewise held that PDB counsels act of setting the hearing of the Omnibus Motion
for Reconsideration and for New Trial 16 days after its filing was an excusable lapse; that no scheme to
delay the case is evident from PDBs actions; that more telling is the trial courts "blurring in cavalier
fashion" the distinction between Sections 1 and 2 of Rule 39 of the Rules of Court, 26 as well as its unequal
treatment of the parties from its strict application of Section 5, Rule 15 against respondent, while it bent
backward to accommodate petitioners by converting the latters motion for execution pending appeal into
a motion for execution of a final and executor judgment.
Lastly, the appellate court concluded that the trial court committed grave abuse of discretion, which thus
warrants the grant of PDBs Petition for Certiorari.
Petitioners filed their Urgent Motion for Reconsideration, 27 which the CA denied through its assailed
August 23, 2010 Resolution. Hence, the instant Petition.
Issues

Petitioners frame the issues involved in this Petition, as follows:


Being assailed herein is the refusal of the Court of Appeals, which is a patent error, for not giving
credence to petitioners-appellants arguments that the respondent-appellees special civil action for
certiorari before it is clearly devoid of merit as (i) the Decision dated June 15, 2006 of the RTC, Branch
37, General Santos City had become final and executory before the special civil action for Certiorari was
filed before it which should have been dismissed outright, and which issue of "finality" was never ruled
upon, (ii) granting arguendo that a certiorari proceeding could still be had, the same should be filed under
Rule 45 instead of Rule 65 of the 1997 Rules of Civil Procedure, (iii) the alleged attendant abuse of
discretion on the part of the public respondent judges, even granting arguendo that it exist [sic], were [sic]
not grave but on the contrary were purely errors of judgment and, (iv) the substantial and glaring defects
of the petition in the special civil action for certiorari before the Court of Appeals were consistently and
clearly called to its attention but were unjustifiably ignored by it. 28
Petitioners Arguments
In their Petition and Reply,29 petitioners seek to reverse the assailed CA dispositions and to reinstate the
appellate courts original May 31, 2007 Decision, arguing that the trial courts June 15, 2006 Decision
became final and executor on account of PDBs failure to timely file its Omnibus Motion for
Reconsideration and for New Trial, as it properly filed the same only on August 2, 2006 or beyond the
15-day period allowed by the Rules of Court.
Petitioners argue that PDBs filing of its Omnibus Motion for Reconsideration and for New Trial on July
31, 2006 by courier service through LBC was improper, since there was no LBC courier service in Tupi,
South Cotabato at the time; naturally, they did not receive a copy of the omnibus motion. This is precisely
the reason why PDB re-filed its omnibus motion on August 2, 2006 through registered mail, that is, to
cure the defective service by courier; but by then, the 15-day period within which to move for
reconsideration or new trial, or to file a notice of appeal, had already expired, as the last day thereof fell
on August 1, 2006 counting from PDBs receipt of the trial courts Decision on July 17, 2006.
Petitioners add that PDBs notice of appeal which was filed only on September 7, 2006 was tardy as
well; that PDBs resort to an original Petition for Certiorari to assail the trial courts August 30, 2006
Order denying the Omnibus Motion for Reconsideration and for New Trial was improper, for as provided
under Section 9, Rule 37 of the Rules of Court, 30 an order denying a motion for new trial or
reconsideration is not appealable, the remedy being an appeal from the judgment or final order; that
certiorari was resorted to only to revive PDBs appeal, which was already lost; and that it was merely a
face-saving measure resorted to by PDB to recover from its glaring blunders, as well as to delay the
execution of the RTC Decision. They also assert that certiorari is not an available remedy, since PDB did
not file a motion for reconsideration with respect to the other assailed orders of the trial court.
Petitioners maintain as well that the CA erred in relaxing the application of the Rules of Court as to PDB,
a banking institution with adequate resources to engage counsel within General Santos City and not
relegate Civil Case No. 6474 to its Manila lawyers who are thus constrained by the distance involved.
Respondents Arguments
Seeking the denial of the Petition, PDB in its Comment 31 maintains that the CA did not err in declaring
that its Omnibus Motion for Reconsideration and for New Trial was not pro forma; that there are
justifiable grounds to move for reconsideration and/or new trial; that it had no intention to delay the
proceedings; that it was correct for the appellate court to relax the application of Section 5, Rule 15; and

that the CA is correct in finding that the trial court committed grave abuse of discretion in misapplying
the Rules and in exhibiting partiality.
Our Ruling
The Court grants the Petition.
The proceedings in the instant case would have been greatly abbreviated if the court a quo and the CA did
not overlook the fact that PDBs Omnibus Motion for Reconsideration and for New Trial was filed one
day too late. The bank received a copy of the trial courts June 15, 2006 Decision on July 17, 2006; thus,
it had 15 days or up to August 1, 2006 within which to file a notice of appeal, motion for
reconsideration, or a motion for new trial, pursuant to the Rules of Court. 32 Yet, it filed the omnibus
motion for reconsideration and new trial only on August 2, 2006.
Indeed, its filing or service of a copy thereof to petitioners by courier service cannot be
trivialized.1wphi1 Service and filing of pleadings by courier service is a mode not provided in the
Rules.33 This is not to mention that PDB sent a copy of its omnibus motion to an address or area which
was not covered by LBC courier service at the time. Realizing its mistake, PDB re-filed and re-sent the
omnibus motion by registered mail, which is the proper mode of service under the circumstances. By
then, however, the 15-day period had expired.
PDBs Notice of Appeal, which was filed only on September 7, 2006, was tardy; it had only up to August
1, 2006 within which to file the same. The trial court therefore acted regularly in denying PDBs notice of
appeal.
Since PDBs Omnibus Motion for Reconsideration and for New Trial was filed late and the 15-day period
within which to appeal expired without PDB filing the requisite notice of appeal, it follows that its right to
appeal has been foreclosed; it may no longer question the trial courts Decision in any other manner.
"Settled is the rule that a party is barred from assailing the correctness of a judgment not appealed from
by him."34 The "presumption that a party who did not interject an appeal is satisfied with the adjudication
made by the lower court"35 applies to it. There being no appeal taken by PDB from the adverse judgment
of the trial court, its Decision has become final and can no longer be reviewed, much less reversed, by
this Court. "Finality of a judgment or order becomes a fact upon the lapse of the reglementary period to
appeal if no appeal is perfected, and is conclusive as to the issues actually determined and to every matter
which the parties might have litigated and have x x x decided as incident to or essentially connected with
the subject matter of the litigation, and every matter coming within the legitimate purview of the original
action both in respect to matters of claim and of defense." 36 And "[i]n this jurisdiction, the rule is that
when a judgment becomes final and executory, it is the ministerial duty of the court to issue a writ of
execution to enforce the judgment;"37 "execution will issue as a matter of right x x x (a) when the
judgment has become final and executory; (b) when the judgment debtor has renounced or waived his
right of appeal; [or] (c) when the period for appeal has lapsed without an appeal having been filed x x
x."38
Neither can the Court lend a helping hand to extricate PDB from the effects of its mistake; indeed, PDB
erred more than once during the course of the proceedings. For one, it did not attempt to set right its
failure to appear during pre-trial, which prompted the court to allow petitioners to present evidence ex
parte and obtain a favorable default judgment. Second, assuming for the sake of argument that it timely
filed its Omnibus Motion for Reconsideration and for New Trial, it nonetheless violated the ten-day
requirement on the notice of hearing under Section 5 of Rule 15. Third, even before it could be notified of
the trial courts resolution of its omnibus motion on September 14, 2006 assuming it was timely filed, it

filed a notice of appeal on September 7, 2006 which thus implies that it abandoned its bid for
reconsideration and new trial, and instead opted to have the issues resolved by the CA through the remedy
of appeal. If so, then there is no Omnibus Motion for Reconsideration and for New Trial that the trial
court must rule upon; its August 30, 2006 Order thus became moot and academic and irrelevant. "[W]here
[an action] or issue has become moot and academic, there is no justiciable controversy, so that a
declaration thereon would be of no practical use or value." 39
Fourth, instead of properly pursuing its appeal to free itself from the unfavorable effects of the trial
courts denial of its notice of appeal, PDB chose with disastrous results to gamble on its Omnibus Motion
for Reconsideration and for New Trial by filing an original Petition for Certiorari to assail the trial courts
denial thereof. Time and again, it has been said that certiorari is not a substitute for a lost appeal,
especially if ones own negligence or error in ones choice of remedy occasioned such loss. 40
What remains relevant for this Court to resolve, then, is the issue relative to the trial courts October 6,
2006 Order which denied the motion to quash the writ of execution and the August 31, 2006 and
October 9, 2006 writs of execution. The Court observes that the October 6, 2006 Order and the August 31,
2006 and October 9, 2006 writs of execution were set aside and quashed merely as a necessary
consequence of the CAs directive in the Amended Decision for the trial court to hear and rule on the
merits of PDBs Omnibus Motion for Reconsideration and for New Trial. Other than this singular reason,
the CA would have sustained them, and this is clear from a reading of both its original May 31, 2007
Decision and its subsequent Amended Decision. Now, since the Court has herein declared that PDBs
omnibus motion may not be considered for being tardy and for having been superseded by the banks
filing of a notice of appeal, then the CAs original pronouncement regarding the October 6, 2006 Order
and the August 31, 2006 and October 9, 2006 writs of execution should necessarily be reinstated as well.
In light of the above conclusions, the Court finds no need to further discuss the other issues raised by the
parties. They are rendered irrelevant by the above pronouncements.
WHEREFORE, the Petition is GRANTED. The assailed July 28, 2009 Amended Decision and August 23,
2010 Resolution of the Court of Appeals in CA-G.R. SP No. 01317-MIN are REVERSED and SET
ASIDE. The Regional Trial Court of General Santos City, Branch 37 is ORDERED to proceed with the
execution ofits June 15, 2006 Decision in Civil Case No. 6474.
SO ORDERED.

27. G.R. No. 207443, July 23, 2014


GENATO INVESTMENTS, INC., Petitioner, v. HON. JUDGE OSCAR P. BARRIENTOS, In His
Capacity As The Presiding Judge of The Regional Trial Court, of Caloocan City, Branch 123,
EMILY P. DIZON, In Her Capacity As The Branch Clerk of Court of The Regional Trial Court of
Caloocan City, Branch 123, JIMMY T. SORO, Court Process Server of The Regional Trial Court of
Caloocan, Branch 123, EVELINA M. GARMA, CITY TREASURER OF CALOOCAN CITY,
PHILLIP L. YAM, Officer-In-Charge, Real Property Tax Division of The Caloocan City

Treasurers Office, ANTHONY B. PULMANO, Officer-In-Charge, City Assessor of Caloocan City,


And LAVERNE REALTY & DEVELOPMENT CORPORATION, Respondents.
DECISION
PEREZ, J.:
This is a Petition for Review on Certiorari1 of the Resolution2 of the Court of Appeals (CA) dated 27
February 2013, which denied petitioner Genato Investment, Inc.s (petitioner) Petition 3 for Annulment of
Judgment against the Orders dated 31 August 20114 and 26 April 20125 of the Regional Trial Court of
Caloocan City (RTC Caloocan) in LRC-Case No. C-5748. In the said orders, the RTC Caloocan granted
private respondent Laverne Realty & Development Corporations (private respondent) Petition 6 for the
cancellation of Transfer Certificate of Title (TCT) No. 33341 7 of the Register of Deeds of Caloocan City
in the name of petitioner and the issuance of a new title in the name of private respondent, and directed
the issuance of a Writ of Possession8 over the subject property in favor of private respondent.
Antecedent Facts
TCT No. 33341 is registered under the name of petitioner and covers two (2) adjacent parcels of land,
Lots Nos. 1-A and 13-B-1, situated at Rizal Avenue Extension, Caloocan City, with a combined area of
796.80 sq.m., with Lot No. 1-A having an area of 341.00 sq.m., and Lot No. 13-B-1 having an area of
445.80 sq.m., more or less. Together, both lots have a total assessed value of P8,697,870.00.
On 14 October 2009, due to alleged deficiency in real property taxes due on Lot No. 13-B-1 for the years
1993 to 2008 in the amount of P2,678,439.04, the Office of the City Treasurer of Caloocan City sold at
public auction Lot No. 13-B-1, in which private respondent emerged as the highest bidder.
The Office of the City Treasurer, through the City Treasurer of Caloocan, Evelina M. Garma (respondent
Garma), issued on 15 October 2009, a Certificate of Sale of Delinquent Property to Purchaser 9 and on 21
January 2011, a Final Deed of Conveyance 10 over Lot 13-B-1 in favor of private respondent.
Petitioner was not made aware of any of the proceedings before the Office of the City Treasurer, as the
Notice of Levy11 and Warrant of Levy12 issued by the Office of the City Treasurer, through respondent
Garma, were sent to petitioner at an inexistent office in Tondo, Manila and were, thus, returned
unserved.13cralawred
By virtue of the above-mentioned final deed of conveyance, private respondent on 4 May 2011 filed
LRC-Case No. C-5748 with the RTC Caloocan praying for the consolidation of the ownership of the
property covered by TCT No. 33341, the cancellation of the same TCT in the name of petitioner, and the
issuance of a new title in the name of private respondent, notwithstanding the fact that the delinquency
sale
involved
only
Lot
No.
13-B-1. 14cralawred
The RTC issued an Order on 13 June 2011 setting the initial hearing on the Petition, and directing that
copies of the said order be posted at the subject premises and furnished petitioner. However, the records
of the case, particularly the Certificate of Posting 15 dated 16 July 2011 and the Process Server's Returns
dated 13 and 16 July 201116 executed by respondent Jimmy T. Soro (respondent Soro), the Process Server
of RTC Caloocan, will show that the order was not posted at the subject premises, and that petitioner did
not receive any such copies of the Order, as respondent Soro sought to serve the same at the inexistent
offices.

On 31 August 2011, after private respondent adduced its evidence, the RTC Caloocan issued an
Order17 granting private respondent's petition. Inasmuch as petitioner was unaware of the proceedings,
the same order became final and executory. Thereafter, RTC Caloocan, upon motion 18of private
respondent, issued another Order dated 26 April 2012 directing the issuance of a Writ of Possession in
favor of private respondent. The said writ, 19 signed by the Branch Clerk of the RTC Caloocan, respondent
Emily
P.
Dizon
(respondent
Dizon),
was
issued
on
27
April
2012.
Petitioner learned of the auction sale only after 9 May 2012, when the Sheriff of the RTC Caloocan,
respondent Renebert B. Baloloy (respondent Baloloy), left a Notice to Vacate 20 in the subject premises.
Petitioner claimed that it was very much surprised at the auction sale of Lot 13-B-1 because it had been
religiously paying its real property taxes thereon up to 2012. In fact, it had in its possession a
Certification21 dated 19 September 2011 issued by the Office of the City Treasurer of Caloocan, through
its OIC Land Tax Division, respondent Phillip L. Yam (respondent Yam), stating that the real property
taxes due on Lots 1-A and 13-B-1, with a combined assessed value of P8,697,870.00, up to the 4 th quarter
of
2011,
have
been
duly
paid
by
petitioner.
Notwithstanding the representations made by petitioner with the RTC Caloocan 22 and Office of the City
Treasurer, Baloloy, proceeded to implement the Writ of Possession on 15 May 2012 over both Lots Nos.
1-A and 13-B-1 and their improvements. As a result thereof, private respondent wrested physical
possession of the entire property covered by TCT No. 33341 from petitioner.
Feeling aggrieved, petitioner filed with the CA a Petition for Certiorari23 under Rule 65 of the Rules of
Court, but later withdrew24 the same, reasoning that the withdrawal would enable it to comply with the
rules on forum shopping. The CA granted petitioners prayer to withdraw.25cralawred
On 14 January 2013, petitioner, filed with the CA a Petition for Annulment of Judgment praying, among
others, for the annulment and setting aside of the Orders dated 31 August 2011 and 26 April 2012 and the
Writ of Possession issued by the RTC Caloocan. Petitioner likewise prayed that the CA direct private
respondent to vacate the property and surrender possession thereof to petitioner.
Ruling of the Court of Appeals
On 27 February 2013, the CA issued a Resolution 26 dismissing CA G.R. SP No. 128187 on the ground
that the Petition for Annulment of Judgment that petitioner filed is not the proper remedy, as it had other
available remedies to question the Orders of the RTC Caloocan. Citing Estate of the late Mercedes Jacob
v. Court of Appeals27 the CA, stated that where the land subject of the case was already registered in the
name of the buyer in the auction sale, the proper remedy to annul said transfer was to file an action for
reconveyance on the ground of fraud. The CA added that the Petition for Certiorari petitioner had earlier
filed but later withdrew showed that other remedies were available to petitioner. The CA, likewise,
denied
petitioner's
motion
for
reconsideration. 28cralawred
Hence, this Petition.
Our Ruling
Petitioner questions the dismissal by the CA in CA-G.R. SP No. 128187, and contends
that:chanRoblesvirtualLawlibrary
a. Under the particular factual circumstances surrounding this case, a petition for annulment of judgment
is the only and appropriate remedy of petitioner to question the Orders of the RTC Caloocan, which
allowed private respondent to consolidate ownership and take possession of the property covered by TCT

No.

33341;

andChanRoblesVirtualawlibrary

b. All the requisite elements for the filing of a petition for annulment of judgment on the grounds of
extrinsic fraud, lack of jurisdiction, and want of due process, are present in this case.
We

grant

the

Petition.

We first tackle the procedural issue. Based on the records of this case, it is undisputed that the Order of
the RTC Caloocan dated 31 August 2011 became final and executory on 11 October 2011, when the latter
issued an Entry of Judgment for the same. The general rule is that a final and executory judgment can no
longer be disturbed, altered, or modified in any respect, and that nothing further can be done but to
execute it. A final and executory decision may, however, be invalidated via a Petition for Relief or a
Petition to Annul the same under Rules 38 or 47, respectively, of the Rules of Court. 29cralawred
Under Rule 38, when a judgment or final order is entered, or any other proceeding is thereafter taken
against a party in any court through fraud, accident, mistake, or excusable negligence, he may file a
petition in such court and in the same case praying that the judgment, order or proceeding be set aside.
The verified petition must be filed within sixty (60) days after the petitioner learns of the judgment, final
order, or other proceeding to be set aside, and not more than six (6) months after such judgment or final
order was entered. However, it is uncontested that petitioner learned about the proceedings in LRC-Case
No. C-5748 more than six (6) months after the Order dated 31 August 2011 had become final and
executory on 11 October 2011. Thus, this remedy under Rule 38 of the Rules of Court was clearly
unavailing.
Thus, the only remedy left to petitioner in this case is a petition for annulment of judgment under Rule 47,
which
it,
in
fact,
filed.
The principle we laid down in Estate of the late Mercedes Jacob v. Court of Appeals is not applicable. We
disagree with the reasoning of the CA and respondents that petitioner in this particular case should have
filed either an action for reconveyance or annulment of the auction sale, because to do so would have
required the court hearing the action to modify or interfere with the judgment or order of another co-equal
court, especially in this case where the said judgment or order had attained finality. Well-entrenched in
our jurisdiction is the doctrine that a court has no power to do so, as that action may lead to confusion and
seriously
hinder
the
administration
of
justice. 30cralawred
We have repeatedly ruled that a Petition for Annulment of Judgment under Rule 47 of the Rules of Court
is a remedy granted only under exceptional circumstances where a party, without fault on his part, has
failed to avail of the ordinary remedies of new trial, appeal, petition for relief or other appropriate
remedies. The same petition is not available as a substitute for a remedy which was lost due to the partys
own neglect in promptly availing of the same. 31 There is here no attempted substitution; annulment of
judgment
is
the
only
remedy
available
to
petitioner.
Regarding the previous filing of a Petition for Certiorari under Rule 65 such is of no moment as
petitioner timely withdrew the same before any relief could be afforded by the CA.
We now proceed to the substantive and more pressing issue. We agree with the position of petitioner that
all the requisite elements for the filing of a petition for annulment of judgment on the grounds of extrinsic
fraud, lack of jurisdiction, and want of due process, are present in this case.
It should be stressed that petitioner instituted the case before the CA precisely to seek relief from the
declaration of nullity of TCT No. 33341, which had been issued without first giving petitioner an

opportunity

to

be

heard.

In Castigador v. Nicolas,32 we had the occasion to state that:chanRoblesvirtualLawlibrary


The petition filed with the CA contained the following allegations, among others: (1) the auction sale of
the land is null and void for lack of actual and personal notice to herein petitioner; (2) the RTC did not
comply with the procedure prescribed in Section 71, Presidential Decree No. 1529 requiring notice by the
Register of Deeds to the registered owner as to the issuance of a certificate of sale; and (3) petitioner was
not afforded due process when she was not notified of the proceedings instituted by respondent for the
cancellation of her title. The petition need not categorically state the exact words extrinsic fraud; rather,
the allegations in the petition should be so crafted to easily point out the ground on which it was based.
The allegations in the petition filed with the CA sufficiently identify the ground upon which the petition
was based - extrinsic fraud. Fraud is extrinsic where it prevents a party from having a trial or from
presenting his entire case to the court, or where it operates upon matters pertaining not to the judgment
itself but to the manner in which it is procured. The overriding consideration when extrinsic fraud is
alleged is that the fraudulent scheme of the prevailing litigant prevented a party from having his day in
court. The allegations clearly charged the RTC and respondent with depriving petitioner of the
opportunity to oppose the auction sale and the cancellation of her title and ventilate her side. This
allegation, if true, constitutes extrinsic fraud.chanrobleslaw
Petitioner not only puts in question the complete lack of due process in the conduct of the auction sale and
the proceedings before the RTC Caloocan, but the absolute lack of basis for the declaration by the Office
of the City Treasurer that it had been delinquent in the payment of real property taxes due on its property,
particularly
Lot
13-B-1.
Technicalities aside, we are particularly alarmed by the material allegations and serious charges brought
up by petitioner in its pleadings, which go into the very core of the action for annulment of judgment and,
more
importantly,
which none of
the
respondents
dispute.
Petitioner

fully

paid

its

real

estate

taxes

due

on

Lot

13-B-1.

Petitioner confronts respondents with copies of its Real Property Tax Receipts 33 issued by the Office of
the City Treasurer of the City of Caloocan spanning the period from 2000 to 2012, as well as the Payment
History34 from 1995 to 2011 evidencing full payment of real property taxes due on its land, whose
assessed
value
was
adjusted
in
2005
to
P8,697,870.00.
Petitioner likewise confronts respondents with the Certification 35 dated 19 September 2011 issued by the
Office of the City Treasurer of Caloocan, through its OIC Land Tax Division, respondent Yam, certifying
that the real property taxes due on Lots 1-A and 13-B-1, with an assessed value of P8,697,870.00, up to
the 4th quarter of 2011, and previous years, have been duly paid by petitioner.
We note that respondents, particularly respondents Garma and Yam, the City Treasurer and the OIC Land
Tax Division, have been inexplicably silent as regards all that petitioner presented for our consideration.
Multiple

Tax

Declarations

refer

to

one

and

the

same

property.

Petitioner alleges and brings to our attention the matter that it religiously paid in full its real property
taxes due on its land, Lots Nos. 1-A and 13-B-1, with an assessed value of P8,697,870.00, under a single
tax declaration issued by the Office of the City Assessor of Caloocan, 36 no. D12-109-00012-C under
Property Index No. 113-12-109-01-013, as certified by the OIC City Assessor, respondent Anthony L.
Pulmano
(respondent
Pulmano).37cralawred

The alleged delinquency of petitioner in its real property taxes and the basis for the auction sale stemmed
from the supposed non-payment of real property taxes due on Lot 13-B-1, with an assessed value of
P4,866,350.00 covered by another tax declaration, 38 D12-109-00013-C under Property Index No. 113-12109-01-014.
Shortly before private respondent took over the property of petitioner in 2012, the Office of the City
Assessor, through respondent Pulmano, issued yet another tax declaration, no. 12-109-00153-12-C under
Property Index No. 113-12-109-01-013, this time covering only Lot No. 1-A, with an assessed value of
P3,831,520.00. This new issuance cancelled petitioners original Tax Declaration No. D12-109-00012-C
under Property Index No. 113-12-109-01-013, which previously covered both Lots Nos. 1-A and 13-B-1.
As petitioner duly points out, 39 a simple mathematical application would show that if the assessed values
in the 2nd and 3rd tax declarations were added, P4,866,350.00 and P3,831,520.00, the same would
amount to P8,697,870.00, the assessed value of the property as indicated in the original tax declaration.
Therefore, if all the tax declarations issued by respondent Pulmano refer to one and the same property of
petitioner, and the latter fully paid all its realty taxes due on the same, then it would follow that the
finding
of
delinquency
did
not
have
any
basis.
We note that respondent Pulmano, much like respondents Garma and Yam, has been inexplicably silent as
regards
the
foregoing.
Private

respondent

took

possession

of

both

Lots

Nos.

1-A

and

13-B-1.

Notwithstanding the foregoing serious anomalies attending the delinquency sale, petitioner, again,
confronts respondents, particularly public respondents Judge Oscar P. Barrientos, Dizon and Baloloy, as
well as private respondent, with the charge that the latter, with the assistance of respondent Baloloy,
forcibly ejected petitioner from the whole property, even if it was only Lot 13-B-1 that was the subject of
the
writ
of
possession.
Again,

none

of

the

respondents

contested

this

claim.

It certainly is unallowable that petitioner be deprived of his property, or a portion thereof, without any
lawful court order or process. We take into consideration the previous actions of private respondent,
which as again pointed out by petitioner, appear to indicate that it was the intention of private respondent
all along to gain possession over both lots covered by TCT No. 33341.
We are called upon to read the foregoing act of deprivation in totality with the other actions of
respondents, which none of them deny, despite being given ample opportunity to do so. It would have
been a simple matter for respondents to refute the allegations of petitioner and aver that the evidence
presented by petitioner to prove full payment of real property taxes do not refer to the same property
subject of the auction sale; or that the tax declarations refer to different properties owned by petitioner,
and not those subject of this case; or that respondent Baloloy neither implemented the writ of possession
over, nor did private respondent take possession of Lot No. 1-A. Instead, respondents Garma and Yam, in
their Comment,40 make no factual declarations and curiously limit their allegations to a purely procedural
standpoint that petitioner should have pursued an action for reconveyance of the property, a point we
have already resolved. Respondent Pulmano, for his part, alleged in his Manifestation 41 that he chose not
to file any comment to the Petition, despite our express directive in Our Resolution dated 24 July 2013
requiring all the respondents to comment in the petition. Respondent Pulmano went so far as to impose
his own condition on us, that he shall file his Comment in the event that we give due course to the

petition.
Indeed, it is evident that respondents have chosen, by their complete and palpable silence on the
substantive matter, to merely rely on the presumption of regularity in the performance of official
duties.42cralawred
As a general rule, we have time and again stated that we are not a trier of facts. However, such rule is
subject to several recognized exceptions:43cralawred
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)

When the findings are grounded entirely on speculation, surmises and conjectures;
When the inference made is manifestly mistaken, absurd or impossible;
When there is a grave abuse of discretion;
When the judgment is based on a misapprehension of facts;
When the findings of fact are conflicting;
When in making its findings the Court of Appeals went beyond the issues of the case, or its findings
are contrary to the admissions of both appellant and appellee;
When the findings are contrary to those of the trial court;
When the findings of fact are conclusions without citation of specific evidence on which they are
based;
When the facts set forth in the petition as well as in the petitioners main and reply briefs are
not disputed by the respondents; and
When the findings of fact of the Court of Appeals are premised on the supposed absence of evidence
and contradicted by the evidence on record.
When the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties,
which, if properly considered, would justify a different conclusion. (Emphasis and underscoring
supplied)

In this case, we stress that the factual allegations in the petition, showing that petitioner fully paid its real
property taxes on Lot No. 13-B-1 until 2011, were not refuted by any of the respondents. Further,
petitioner presented more than sufficient evidence to support the said factual allegations. This failure of
respondents to refute such claim affords us the opportunity to go over the factual antecedents to aid us in
the resolution of this case. In the face of overwhelming evidence, respondents reliance on the
presumption of regularity in the performance by public respondents of their official duties must fail. The
presumption of regularity is a disputable presumption under Rule 131 of the Rules of Court, which may
be
rebutted
by
affirmative
evidence. 44cralawred
As mentioned above, the Notice of Levy and Warrant of Levy, were sent to an inexistent office of
petitioner at Tondo, Manila and were, thus, returned unserved. Further, the Order dated 13 June 2011,
setting the initial hearing on the petition, was neither posted nor properly served upon petitioner. Clearly,
petitioner was deprived of its property without due process of law. Inasmuch as it had sufficiently shown
that it fully paid its real estate taxes up to 2011, there was no basis to collect any tax liability, and no
obligation arose on the part of petitioner to pay the amount of real property taxes sought to be collected.
Consequently, petitioner should not have been declared delinquent in the payment of the said taxes to
Caloocan City, and the latter did not acquire any right to sell Lot 13-B-1 in a public auction. Besides, it
appears that private respondent acted hastily in filing LRC-Case No. C-5748 by failing to ascertain the
actual principal office of petitioner to enable the RTC Caloocan to properly acquire jurisdiction over the
person
of
petitioner.
Considering the foregoing, private respondent did not acquire any valid right to petition the RTC
Caloocan for the cancellation of TCT No. 33341 and, more importantly, take possession of Lot 13-B-1,
much less Lot 1-A. We reiterate the principle that strict adherence to the statutes governing tax sales is

imperative, not only for the protection of the taxpayers, but also to allay any possible suspicion of
collusion between the buyer and the public officials called upon to enforce the laws. 45cralawred
WHEREFORE, the petition is GRANTED. The Resolutions of the Court of Appeals dated 27 February
2013 and 30 May 2013 in CA-G.R. SP No. 128187 are SET ASIDE. Necessarily, the Orders dated 31
August 2011, 26 April 2012 and 19 November 2012, and the Writ of Possession dated 27 April 2012 in
LRC
Case
No.
C-5748,
are
all
vacated.
SO ORDERED.

28. G.R. No. 176598

July 9, 2014

PETRONIO CLIDORO, DIONISIO CLIDORO, LOLITA CLIDORO, CALIXTO CARD ANO,


JR., LOURDES CLIDORO-LARIN, MATEO CLIDORO and MARLIZA CLIDORO-DE
UNA, Petitioners,
vs.
AUGUSTO JALMANZAR, GREGORIO CLIDORO, JR., SENECA CLIDORO-CIOCSON,
MONSERAT CLIDORO-QUIDAY, CELESTIAL CLIDORO-BINASA, APOLLO CLIDORO,
ROSALIE CLIDORO-CATOLICO, SOPHIE CLIDORO, and JOSE CLIDORO, JR., Respondents.
DECISION
PERALTA, J.:
This deals with the Petition for Review on Certiorari under Rule 45 of the Rules of Court praying that the
Decision1of the Court of Appeals (CA), dated October 17, 2006, and its Resolution 2 dated February 6,
2007, denying herein petitioner's motion for reconsideration of the Decision, be reversed and set aside.
The antecedent facts, as set forth in the CA Decision, are undisputed, to wit:
The instant appeal stemmed from a complaint, docketed as Civil Case No. T-2275 for revival of judgment
filed by Rizalina Clidoro, et al. against Onofre Clidoro, et al., praying that the Decisiondated November
13, 1995 of the Court of Appeals (CA) in CA-G.R. CV No. 19831, which affirmed with modification the
RTC Decision dated March 10, 1988 in Civil Case No. T-98 for partition, berevived and that the
corresponding writ of execution be issued. The dispositive portion ofthe CA Decision reads:
The estate of the late Mateo Clidoro, excepting that described in paragraph (i) of the Complaint, is hereby
ordered partitioned in the following manner:
1. One-fifth portion to the Plaintiffs-Appellees, by right of representation to the hereditary share of
Gregorio Clidoro, Sr.;
2. One-fifth portion to Defendant-Appellant Antonio Clidoro or his legal heirs;
3. One-fifth portion to Appellant Josaphat Clidoro;

4. One-fifth portion to Appellant Aida Clidoro; 5. One-tenth portion to Gregoria Clidoro, as her legitime
in the hereditary share of Onofre Clidoro; and
6. One-tenth portion to Catalino Morate, as successor-ininterest to the legitime of Consorcia Clidoro.
SO ORDERED.
On September 3, 2003, defendants-appellees except Gregoria Clidoro-Palanca, moved to dismiss the said
complaint on the following grounds: "1.) The petition, not being brought up against the real partiesininterest, is dismissible for lack of cause of action; 2.) The substitution of the parties defendant is improper
and is not in accordance with the rules; 3.) Even if the decision is ordered revived, the same cannot be
executed since the legal requirements of Rule 69, Section 3 of the 1997 Rules of Civil Procedure has not
been complied with; and 4.) The Judgment of the Honorable Court ordering partition is merely
interlocutory as it leaves something more to be done to complete the disposition of the case."
After the filing of plaintiffs-appellants' Comment/Opposition to the Motion to Dismiss, defendantsappellees' Reply, plaintiffs-appellants' Rejoinder and defendants-interestedparties' Sur-Rejoinder, the RTC
issued the assailed Order dated December 8, 2003 dismissing the instant complaint for lack of cause of
action, the pertinent portion of which reads:
"xxx
The complaint shows that most of the parties-plaintiffs, partiesdefendants and interested parties are
already deceased and have no more natural or material existence. This is contrary to the provision of the
Rules (Sec. 1, Rule 3, 1997 Rules of Civil Procedure). They could no longer be considered as the real
parties-in-interest. Besides, pursuant to Sec. 3, Rule 3 (1997 Rules of Civil Procedure), where the action
is allowed to be prosecuted or defended by a representative or someone acting in fiduciary capacity, the
beneficiary shall be included in the title of the case. In the instant case the beneficiaries are already
deceased persons. Also, the Complaint states thatthey were the original parties in Civil Case No. T-98 for
Partition, but this is not so (paragraph 2). Some of the parties are actually not parties to the original case,
but representing the original parties who are indicated as deceased.
From the foregoing, the Court finds the instant complaint to be flawed in form and substance. The suit is
not brought by the real parties-ininterest, thus a motion to dismiss on the ground that the complaint states
no cause of action is proper (Section 1(g), Rule 16).
WHEREFORE, the instant complaint is ordered DISMISSED for lack of cause of action.
SO ORDERED."
Plaintiffs-appellants moved for reconsideration of the foregoing Order with prayer to admit the attached
Amended Complaint impleading the additional heirs of the interested party Josaphat Clidoro and the
original plaintiffs Rizalina Clidoro-Jalmanzar, Cleneo Clidoro and Aristoteles Clidoro. The same
was,however, denied in the second assailed order. x x x3
Respondents then appealed to the CA, and on October 17, 2006, the CA promulgated its Decision
reversing and setting aside the Orders of the RTC, and remanding the case to the RTC for further
proceedings. Petitioners motion for reconsideration of the Decision was denied per Resolution dated
February 6, 2007.

Hence, the present petition where the following issues are raised:
A. THE HONORABLE COURT OF APPEALS FAILED TO CONSIDER THAT THERE WAS NO
PROPER SUBSTITUTION OF PARTIES IN THE INSTANT ACTION FOR REVIVAL OF
JUDGMENT.
B. THE HONORABLE COURT OF APPEALS ERRED IN CONSIDERING THE RESPONDENTS AS
WELL AS THE PETITIONERS AS THE REAL PARTIES-IN-INTEREST.
C. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT AMENDMENT TO
PLEADINGS WAS PROPERLY MADE AND IS APPLICABLE TO THE INSTANT ACTION.
D. THE HONORABLE COURT OFAPPEALS ERRED IN RULING THAT THERE WAS MERE
MISJOINDER OF PARTIES IN THE INSTANT ACTION.4
The petition deserves scant consideration.
Reduced to its essence, the pivotal issue here is whether the complaint for revival of judgment may be
dismissed for lack of cause of action as it was not brought by or against the real parties-in-interest.
First of all, the Court emphasizes that lack of cause of action is not enumerated under Rule 16 of the
Rules of Court as one of the grounds for the dismissal of a complaint. As explained in Vitangcol v. New
Vista Properties, Inc.,5 to wit:
Lack of cause of action is, however, not a ground for a dismissal of the complaint through a motion to
dismiss under Rule 16 of the Rules of Court, for the determination of a lack of cause of action can only be
made during and/or after trial. What is dismissible via that mode is failure of the complaint to state a
cause of action. Sec. 1(g) of Rule 16 of the Rules of Court provides that a motion may be made on the
ground "that the pleading asserting the claim states no cause of action."
The rule is that in a motion to dismiss, a defendant hypothetically admits the truth ofthe material
allegations of the ultimate facts contained in the plaintiff's complaint. When a motion to dismiss is
grounded on the failure tostate a cause of action, a ruling thereon should, as rule, be based only on the
facts alleged in the complaint.x x x
xxxx
In a motion to dismiss for failureto state a cause of action, the focus is on the sufficiency, not the veracity,
of the material allegations. The test of sufficiency of facts alleged in the complaint constituting a cause of
action lies on whether or not the court, admitting the facts alleged, could render a valid verdict in
accordance with the prayer of the complaint.x x x 6
Again, in Manaloto v. Veloso III,7 the Court reiterated as follows:
When the ground for dismissal is that the complaint states no cause of action, such fact can be determined
only from the facts alleged in the complaint and fromno other, and the court cannot consider other matters
aliunde. The test, therefore, is whether, assuming the allegations of fact in the complaint to be true, a valid
judgment could be rendered in accordance withthe prayer stated therein. 8

In this case, it was alleged in the complaint for revival of judgment that the parties therein were also the
parties inthe action for partition. Applying the foregoing test of hypothetically admitting this allegation in
the complaint, and not looking into the veracity of the same, it would then appear that the complaint
sufficiently stated a cause of action as the plaintiffs in the complaint for revival of judgment (hereinafter
respondents), as the prevailing parties in the action for partition, had a right to seek enforcement of the
decision in the partition case.
It should be borne in mind that the action for revival of judgment is a totally separate and distinct case
from the original Civil Case No. T-98 for Partition. As explained in Saligumba v. Palanog, 9 to wit:
An action for revival of judgment is no more than a procedural means of securing the execution of a
previous judgment which has become dormant after the passage of five years without it being executed
upon motion of the prevailing party. It isnot intended to re-open any issue affecting the merits of the
judgment debtor's case nor the propriety or correctness of the first judgment. An action for revival of
judgment is a new and independent action, different and distinct fromeither the recovery of property case
or the reconstitution case [in this case, the original action for partition], wherein the cause of action is the
decision itself and not the merits of the action upon which the judgment sought to be enforced is rendered.
x x x10
With the foregoing in mind, it is understandable that there would be instances where the parties in the
original case and in the subsequent action for revival of judgment would not be exactly the same. The
mere fact that the names appearing as parties in the the complaint for revival of judgment are different
from the names of the parties in the original case would not necessarily mean that theyare not the real
parties-in-interest. What is important is that, as provided in Section 1, Rule 3 of the Rules of Court, they
are "the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the
avails of the suit." Definitely, as the prevailing parties in the previous case for partition, the plaintiffs in
the case for revival of judgment would be benefited by the enforcement of the decision in the partition
case.
Moreover, it would appear that petitioners are mistaken in alleging that respondents are not the real
parties-in-interest. The complaint for revival of judgment impleaded the following parties:
[[reference
file=/jurisprudence/2014/july2014/176598.pdf]]

- http://sc.judiciary.gov.ph/pdf/web/viewer.html?

PLAINTIFFS

DEFENDANTS

1. Rizalina Clidoro (deceased)

1. Onofre Clidoro (deceased) rep.

rep. herein by Augusto Jalmanzar

by Gregoria Clidoro-Palanca
(daughter)

2. Gregorio Clidoro, Jr.

2. Antonio Clidoro (deceased)

herein rep. by Petronio Clidoro,

3. Urbana Costales (deceased)

3. Carmen Clidoro-Cardano, rep.


by Calixto Cardano, Jr. (husband)

4. Cleneo Clidoro (deceased)

4. Dionisio Clidoro

5. Seneca Clidoro Ciocson

5. Lourdes Clidoro-Lari

6. Monserrat Clidoro

6. Lolita Clidoro

7. Celestial Clidoro

7. Mateo Clidoro

8. Aristoteles Clidoro (deceased)

INTERESTED PARTIES

9. Apollo Clidoro

1. AidaClidoro (deceased)

10. Rosalie Clidoro

2. Josaphat Clidoro (deceased),


herein rep. by Marliza Clidoro-De
Una

11. Sophie Clidoro

12. Jose Clidoro, Jr.

On the other hand, the parties to the original case for partition are named as follows:
[[reference
file=/jurisprudence/2014/july2014/176598.pdf]]

- http://sc.judiciary.gov.ph/pdf/web/viewer.html?

PLAINTIFFS

DEFENDANTS

1. Rizalina Clidoro

1. Onofre Clidoro

2. Gregorio Clidoro, Jr.

2. Antonio Clidoro

3. Sofia Cerdena

INTERESTED PARTIES

4. Urbana Costales

1. Aida Clidoro

5. Cleneo Seneca

2. Josaphat Clidoro

6. Monserrat Clidoro

7. Celestial Clidoro

8. Aristoteles Clidoro

9. Apollo Clidoro

10. Rosalie Clidoro

A comparison of the foregoing would show that almost all of the plaintiffs in the original case for
partition, in whose favor the court adjudged certain shares in the estate of deceased Mateo Clidoro, are
also the plaintiffs in the action for revival of judgment. Meanwhile, the defendants impleaded in the
action for revival are allegedly the representatives of the defendants in the original case, and this appears
to hold water, as Gregoria ClidoroPalanca, named as the representative of defendant Onofre Clidoro in the
complaint for revival of judgment, was also mentioned and awarded a portion of the estate in the
judgment in the original partition case. In fact, the trial court itself stated in its Order 11 of dismissal dated
December 8, 2003, that "[s]ome of the parties are actually not parties to the original case, but representing
the original parties who are indicated as deceased."
In Basbas v. Sayson,12 the Court pointed out that even just one of the co-owners, by himself alone, can
bring an action for the recovery of the coowned property, even through an action for revival of judgment,
because the enforcement of the judgment would result in such recovery of property. Thus, as in Basbas, it
is not necessary in this case that all of the parties, in whose favor the case for partition was adjudged, be
made plaintiffs to the action for revival of judgment. Any which one of said prevailing parties, who had
an interest in the enforcement of the decision, may file the complaint for revival of judgment, even just by
himself.
Verily, the trial court erred in dismissing the complaint for revival of judgment on the ground of lack of,
or failure to state a cause of action. The allegations in the complaint, regarding the parties' interest in
having the decision in the partition case executed or implemented, sufficiently state a cause of action. The
question of whether respondents were the real partiesin-interest who had the right to seek execution of the
final and executory judgment in the partition case should have been threshed out in a full-blown trial.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals, dated October 17, 2006,
and its Resolution dated February 6, 2007 in CA-G.R. No. 82209, are hereby AFFIRMED in toto.
SO ORDERED.

29. G.R. No. 194751, November 26, 2014


AURORA
N.
DE
CORPORATION, Respondent.

PEDRO, Petitioner, v. ROMASAN

DEVELOPMENT

DECISION
LEONEN, J.:
Regardless of the type of action whether it is in personam, in rem or quasi in rem the preferred
mode of service of summons is personal service. To avail themselves of substituted service, courts must
rely on a detailed enumeration of the sheriffs actions and a showing that the defendant cannot be served
despite diligent and reasonable efforts. The sheriffs return, which contains these details, is entitled to a
presumption of regularity, and on this basis, the court may allow substituted service. Should the sheriffs

return be wanting of these details, substituted service will be irregular if no other evidence of the efforts
to
serve
summons
was
presented.
Failure to serve summons will mean that the court failed to acquire jurisdiction over the person of the
defendant. However, the filing of a motion for new trial or reconsideration is tantamount to voluntary
appearance.
This Rule 45 petition seeks the review of the Court of Appeals July 7, 2010 decision in CA G.R. SP. No.
96471. The Court of Appeals denied petitioners action for annulment of the Regional Trial Court
decision,
which,
in
turn,
nullified
her
certificate
of
title.
This case originated from separate complaints for nullification of free patent and original certificates of
title, filed against several defendants. 1 One of the defendants is petitioner Aurora De Pedro (De Pedro). 2
The complaints were filed by respondent Romasan Development Corporation before the Regional Trial
Court
of
Antipolo
City
on
July
7,
1998. 3chanRoblesvirtualLawlibrary
Respondent Romasan Development Corporation alleged in its complaints that it was the owner and
possessor of a parcel of land in Antipolo City.4 The land was covered by Transfer Certificate of Title
(TCT)
No.
236044.5chanRoblesvirtualLawlibrary
Based on respondents narrative, its representative, Mr. Rodrigo Ko, discovered sometime in November
1996 that De Pedro put up fences on a portion of its Antipolo property. 6 Mr. Ko confronted De Pedro
regarding her acts, but she was able to show title and documents evidencing her
ownership.7chanRoblesvirtualLawlibrary
Mr. Ko informed respondent about the documents. 8 Upon checking with the Community Environment
and Natural Resources Office-Department of Environment and Natural Resources (CENRO-DENR), it
was discovered that the DENR issued free patents covering portions of respondents property to the
following:chanroblesvirtuallawlibrary
a. Defendant Nora Jocson, married to Carlito Jocson - OCT No. P-723, Free Patent No. 045802-91616;
b. Defendants Heirs of Marcelino Santos[,] represented by Cristino Santos - OCT No. P-727, Free
Patent No. 045802-91-919;
c. Defendant Aurora de Pedro married to Elpidio de Pedro - OCT No. 691, Free Patent No. 04580291-914;
d. Defendant Wilson Dadia - OCT No. P-722, Free Patent No. 045802-91-915; and
e. Defendant Prudencio Marana - OCT No. P-721, Free Patent N[o]. 045802-91-923. 9 (Emphasis
supplied)
Based on these free patents, the Register of Deeds issued titles covering portions of respondents
property.10 Original Certificate of Title (OCT) No. 691, Free Patent No. 045802-91-914 was signed by
the Provincial Environment and Natural Resources Office in favor of De Pedro on December 9,
1991.11chanRoblesvirtualLawlibrary

Respondent further alleged in its separate complaints that the government could not legally issue the free
patents because at the time of their issuance, the land was already released for disposition to private
individuals.12 OCT No. 438, from which respondents TCT No. 236044 originated, was already issued as
early
as
August
30,
1937.13chanRoblesvirtualLawlibrary
Respondent
also
prayed
for
the
damages.14chanRoblesvirtualLawlibrary

payment

of

attorneys

fees

and

exemplary

Attempts to personally serve summons on De Pedro failed. 15 The officers return, dated February 22,
1999 reads in part:chanroblesvirtuallawlibrary
OFFICERS RETURN
I HEREBY CERTIFY that on the 15 th and 18th day of February, 1999, I have served a copy of the
summons with complaint and annexes dated January 29, 1999 issued by Regional Trial Court, Fourth
Judicial Region, Branch 74, Antipolo City upon defendants in the above-entitled case on the following, to
wit;
1. AURORA N. DE PEDRO Unserved for the reason that according to the messenger of Post Office of
Pasig their [sic] is no person in the said given address. 16
Respondent
filed
a
motion
to
publication.17chanRoblesvirtualLawlibrary

serve

summons

and

the

complaint

by

On August 17, 1998, the Regional Trial Court granted the motion. 18 The summons and the complaint
were published in Peoples Balita on its April 24, May 1, and May 8, 1998
issues.19chanRoblesvirtualLawlibrary
On July 15, 1999, respondent moved to declare all defendants in its complaints, including De Pedro, in
default for failure to file their answers. 20 Respondent also moved to be allowed to present evidence ex
parte.21 The Regional Trial Court granted the motions on August 19, 1999. 22chanRoblesvirtualLawlibrary
On January 7, 2000, the Regional Trial Court issued an order declaring as nullity the titles and free
patents issued to all defendants in respondents complaint, including the free patent issued to De Pedro. 23
Thus:chanroblesvirtuallawlibrary
Accordingly the Court declares as a nullity the following titles and Free Patents issued to the Defendants.
a. Defendant Nora Jocson married to Carlito Jocson OCT No. P-723; Free Patent N[o]. 045802-91616;
b. Defendant Heirs of Marcelino Santos represented by Cristino Santos OCT N[o]. P-727; Free
Patent N[o]. 045802-91-919;
c. Defendant Aurora N. de Pedro married to Elpidio de Pedro OCT No. P-691; Free Patent No.
045802-91-914;
d. Defendant Wilson Dadia OCT No. P-722; Free Patent No. 045802-91-915;
e. Defendant Prudencio Marana OCT No. P-721; Free Patent N[o]. 045802-91-923.

There being clear bad faith on the part of the Private defendants in obtaining said Free Patents and titles in
their names covering the portions of the property of the plaintiff, said defendants are each ordered to pay
to the plaintiff the amount of P20,000.00 as attorneys fees, P3,000.00 as appearance fee and also
P50,000.00
as
moral
damages
with
costs
against
said
private
defendants.
Once the Decision becomes final and in order to give full force and effect to the Decision of the Court
nullifying the titles and patents issued to the defendants, the latter are directed to surrender the same
within a period of ten (10) days from the finality of said Decision to the Registry of Deeds of Marikina
City and failure on the part of the defendants to surrender the owners duplicate of the titles in their
possession, defendant Register of Deeds of Marikina City is authorized to cancel the same without the
presentation of said owners duplicate of titles in the possession of the defendants. 24 (Emphasis supplied)
In so ruling, the Regional Trial Court noted that none of the defendants, including De Pedro, filed an
answer to respondents complaints.25 The Regional Trial Court also noted the committee report admitting
CENROs irregularity in the issuance of the free patents to the defendants in the
case.26chanRoblesvirtualLawlibrary
The Regional Trial Court also found that the title and free patent issued to De Pedro were void. 27 As early
as August 30, 1937, or before the free patents were issued to the defendants in the case, OCT No. 438 was
already issued to the propertys original owner.28 Hence, the property was already segregated from the
mass of public domain that can be disposed by the government. 29chanRoblesvirtualLawlibrary
On March 30, 2000, De Pedro, through counsel, filed before the Regional Trial Court a motion for new
trial, alleging that the counsel received notice of the January 7, 2000 decision on March 16,
2000.30chanRoblesvirtualLawlibrary
De Pedro argued that the Regional Trial Court did not acquire jurisdiction over her person because of
improper and defective service of summons. Citing the officers return dated February 22, 1999, De
Pedro pointed out that summons was not personally served upon her for the reason that according to the
messenger of Post Office of Pasig their (sic) is no person in the said given
address.31chanRoblesvirtualLawlibrary
De Pedro also argued that the case should have been dismissed on the ground of litis pendentia. She
alleged that there was a pending civil case filed by her, involving the same property, when respondent
filed
the
complaints
against
her
and
several
others. 32chanRoblesvirtualLawlibrary
On September 30, 2002, the Regional Trial Court issued an order denying De Pedros motion for new
trial.33chanRoblesvirtualLawlibrary
The Regional Trial Court ruled that summons was validly served upon De Pedro through publication, in
accordance with the Rules of Court. 34 Moreover, counting from the date of the summons publication
beginning on March 2, 2000, the motion for new trial was filed beyond the 15-day period within which
the motion may be filed.35 Therefore, the Regional Trial Court decision had become final and
executory.36chanRoblesvirtualLawlibrary
The Regional Trial Court also ruled that the reckoning period for filing the motion for new trial cannot be
De Pedros counsels receipt of the decision. This is because at the time of the issuance of the courts
decision, which had already become final and executory, De Pedros counsel was yet to enter his
appearance
for
De
Pedro.37chanRoblesvirtualLawlibrary
De Pedro filed a petition for certiorari before the Court of Appeals, alleging that the Regional Trial Court

committed
grave
abuse
of
trial.38chanRoblesvirtualLawlibrary

discretion

when

it

denied

her

motion

for

new

On March 30, 2006, the Court of Appeals dismissed the petition for certiorari for lack of merit, and
affirmed the denial of De Pedros motion for new trial. 39chanRoblesvirtualLawlibrary
The Court of Appeals noted De Pedros belated filing of her motion for new trial. The Court of Appeals
also noted De Pedros failure to allege any ground that would justify the grant of a motion for new trial
under Rule 37, Section 1 of the Revised Rules of Civil Procedure. 40chanRoblesvirtualLawlibrary
De Pedros motion for reconsideration was denied in the Court of Appeals resolution dated August 24,
2006.41chanRoblesvirtualLawlibrary
De Pedro elevated the case to this court, but this was likewise denied in the resolution dated October 4,
2006 for failure to pay the Special Allowance for the Judiciary and sheriffs
fees.42chanRoblesvirtualLawlibrary
On October 11, 2006, De Pedro filed before the Court of Appeals a petition for annulment of the January
7, 2000 judgment of the Regional Trial Court43 on grounds of lack of jurisdiction, litis pendentia, and for
having
been
dispossessed
of
her
property
without
due
process.
Citing Pantaleon v. Asuncion,44 De Pedro pointed out that [d]ue process of law requires personal service
to support a personal judgment, and, when the proceeding is strictly in personam brought to determine
the personal rights and obligations of the parties, personal service within the state or a voluntary
appearance in the case is essential to the acquisition of jurisdiction [so] as to constitute compliance with
the
constitutional
requirement
of
due
process.45chanRoblesvirtualLawlibrary
De Pedro also claimed to be the real owner of the property by virtue of OCT No. P-691. 46 She pointed out
that the same Regional Trial Court branch ordered the reconstitution of her title to the property in 1997. 47
The Regional Trial Court also issued a certificate of finality stating that an Entry of Judgment had
already been issued by the Court of Appeals dated January 16, 2006. 48chanRoblesvirtualLawlibrary
On July 7, 2010, the Court of Appeals promulgated its decision denying De Pedros petition for
annulment of judgment.49 The dispositive portion of the Court of Appeals decision
reads:chanroblesvirtuallawlibrary
WHEREFORE, this petition is hereby DENIED.50
The Court of Appeals ruled that since petitioner already availed herself of the remedy of new trial, and
raised the case before the Court of Appeals via petition for certiorari, she can no longer file a petition for
annulment
of
judgment.51chanRoblesvirtualLawlibrary
De Pedros motion for reconsideration was denied on December 3, 2010: 52chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, the motion for reconsideration is DENIED for lack of merit.53
On January 13, 2011, De Pedro filed before this court a Rule 45 petition, seeking the reversal of the July
7, 2010 Court of Appeals decision and the December 3, 2010 Court of Appeals
resolution.54chanRoblesvirtualLawlibrary
The issues in this case are:

I.

Whether the trial court decision was void for failure of the trial court to acquire jurisdiction over
the person of petitioner Aurora N. De Pedro; and

II.

Whether filing a motion for new trial and petition for certiorari is a bar from filing a petition for
annulment of judgment.

Petitioner argues that respondents prayer for attorneys fees, appearance fees, exemplary damages, and
costs of suit sought to establish personal obligations upon petitioner in favor of respondent. 55 Hence, the
case filed by respondent before the Regional Trial Court was an action in personam, which required
personal service upon her for the courts acquisition of jurisdiction over her person. 56 In this case, the
Regional Trial Court allowed service of summons by publication instead of ordering that summons be
served by substituted service.57 Improper service of summons rendered the trial court decision null and
void.58 It means that the court could not acquire jurisdiction over the person of
petitioner.59chanRoblesvirtualLawlibrary
Petitioner also argues that respondents complaints were dismissible on the ground of litis
pendentia,pointing to the alleged pending case between the same parties and involving same subject
matter at the time when respondent filed its complaint before the Regional Trial Court in 1998. 60 The
alleged pending case was filed in 1997 by petitioner and her spouse against respondent, seeking
enforce[ment] of their rights as owners, and claim[ing] damages for the unlawful and illegal acts of
dispossession, terrorism and violence which they, their family and their close relatives were subjected to
by
[respondent].61chanRoblesvirtualLawlibrary
On her ownership of the property, petitioner argues that she was able to obtain OCT No. P-691 in 1991 in
strict and faithful compliance with all the requirements. 62 When the Register of Deeds lost the records
pertaining to the property, the Regional Trial Court ordered the reconstitution of the title on September
23, 1997.63 The same trial court issued the certificate of finality of the order on March 16,
2006.64chanRoblesvirtualLawlibrary
Moreover, petitioner refers to a counter-affidavit issued by a certain Jesus Pampellona, Deputy Public
Land Inspector of CENRO-Antipolo, in the preliminary investigation of a case before the Department of
Justice, docketed as I.S. No. 99-503 and entitled: Rodrigo Sy v. Maximo Pentino, et al. Petitioner
highlights Pampellonas statements that the free patent applicants for the property were found to be in
actual, public, adverse and continuous possession on the specific lots applied for by them with several
improvements like the house of Mrs. Aurora de Pedro and several fruit[-]bearing trees with an average
age of 20-25 years scattered within the twelve (12) hectares area applied for by the above named
applicants;65 Based on the affidavit, Pampellona was unaware, at the time, of any previous title issued
in favor of any person or entity covering the subject lots above mentioned as there was at that time, no
existing record, both in the CENRO, Antipolo, Rizal, or at the Land Management Bureau in Manila,
attesting to the issuance of previous titles on the subject lots. 66chanRoblesvirtualLawlibrary
Lastly, petitioner argues that the trial court decision was null and void, considering that petitioners title
was cancelled in contravention of Section 48 of Presidential Decree No. 1529, which prohibits collateral
attack
upon
certificates
of
title. 67chanRoblesvirtualLawlibrary
In its comment, respondent argues that the process server tried other forms of substituted service,
including
service
by
registered
mail. 68chanRoblesvirtualLawlibrary
Respondent also argues that petitioner was in evident malice and bad faith when she allegedly did not
disclose in her petition other actions taken by her after the Regional Trial Court had denied her motion for

new trial.69 Particularly, petitioner filed a petition for certiorari before the Court of Appeals, pertaining to
the trial courts denial of the motion for new trial. 70 When the petition for certiorari was denied, petitioner
also filed a petition for review before this court, which was also denied. 71 For these reasons, petitioners
petition for review before this court deserves outright dismissal. 72chanRoblesvirtualLawlibrary
I
The sheriffs return must show the details of the efforts exerted to personally serve summons upon
defendants or respondents, before substituted service or service by publication is availed
Courts may exercise their powers validly and with binding effect if they acquire jurisdiction over: (a) the
cause of action or the subject matter of the case; (b) the thing or the res; (c) the parties; and (d) the
remedy.
Jurisdiction over the subject matter refers to the power or authority of courts to hear and decide cases of a
general class.73 It is conferred by the Constitution or by law.74 It is not acquired through administrative
issuances or court orders. It is not acquired by agreement, stipulation, waiver, 75 or silence.76 Any decision
by a court, without a law vesting jurisdiction upon such court, is void.
Jurisdiction over the thing or res is the power of the court over an object or thing being litigated. The
court may acquire jurisdiction over the thing by actually or constructively seizing or placing it under the
courts
custody.77chanRoblesvirtualLawlibrary
Jurisdiction over the parties refers to the power of the court to make decisions that are binding on
persons. The courts acquire jurisdiction over complainants or petitioners as soon as they file their
complaints or petitions. Over the persons of defendants or respondents, courts acquire jurisdiction by a
valid service of summons or through their voluntary submission. 78 Generally, a person voluntarily
submits to the courts jurisdiction when he or she participates in the trial despite improper service of
summons.
Courts79 and litigants must be aware of the limits and the requirements for the acquisition of court
jurisdiction. Decisions or orders issued by courts outside their jurisdiction are void. Complaints or
petitions filed before the wrong court or without acquiring jurisdiction over the parties may be
dismissed.80chanRoblesvirtualLawlibrary
Petitioner argued that the trial court did not acquire jurisdiction over her person because she was not
properly served with summons. After the summons had returned unserved to petitioner because there
[was] no person in the said given address, 81 the trial court allowed the publication of the summons to
petitioner.
Jurisdiction over the parties is required regardless of the type of action whether the action is in
personam,
in
rem, or quasi
in
rem.
In actions in personam, the judgment is for or against a person directly.82 Jurisdiction over the parties is
required in actions in personam because they seek to impose personal responsibility or liability upon a
person.83chanRoblesvirtualLawlibrary
Courts need not acquire jurisdiction over parties on this basis in in rem and quasi in rem actions.
Actions in rem or quasi in rem are not directed against the person based on his or her personal
liability.84chanRoblesvirtualLawlibrary

Actions in rem are actions against the thing itself. They are binding upon the whole world.85 Quasi in
rem actions are actions involving the status of a property over which a party has interest. 86 Quasi in
rem actions are not binding upon the whole world. They affect only the interests of the particular
parties.87chanRoblesvirtualLawlibrary
However, to satisfy the requirements of due process, jurisdiction over the parties in in rem and quasi in
rem actions
is
required.
The phrase, against the thing, to describe in rem actions is a metaphor. It is not the thing that is the
party to an in rem action; only legal or natural persons may be parties even in in rem actions. Against
the thing means that resolution of the case affects interests of others whether direct or indirect. It also
assumes that the interests in the form of rights or duties attach to the thing which is the subject
matter of litigation. In actions in rem, our procedure assumes an active vinculum over those with interests
to
the
thing
subject
of
litigation.
Due process requires that those with interest to the thing in litigation be notified and given an opportunity
to defend those interests. Courts, as guardians of constitutional rights, cannot be expected to deny
persons their due process rights while at the same time be considered as acting within their jurisdiction.
Violation of due process rights is a jurisdictional defect. This court recognized this principle inAducayen
v. Flores.88 In the same case, this court further ruled that this jurisdictional defect is remedied by a
petition
for
certiorari.89chanRoblesvirtualLawlibrary
Similarly in Vda. de Cuaycong v. Vda. de Sengbengco,90 this court held that a decision that was issued in
violation of a persons due process rights suffers a fatal infirmity.91chanRoblesvirtualLawlibrary
The relation of due process to jurisdiction is recognized even in administrative cases wherein the standard
of evidence is relatively lower. Thus, in Montoya v. Varilla:92chanRoblesvirtualLawlibrary
The cardinal precept is that where there is a violation of basic constitutional rights, courts are ousted from
their jurisdiction. The violation of a partys right to due process raises a serious jurisdictional issue which
cannot be glossed over or disregarded at will. Where the denial of the fundamental right of due process is
apparent, a decision rendered in disregard of that right is void for lack of jurisdiction. 93
An action for annulment of certificate of title is quasi in rem. It is not an action against a person on the
basis of his personal liability, 94 but an action that subjects a persons interest over a property to a burden.
The action for annulment of a certificate of title threatens petitioners interest in the property. Petitioner is
entitled to due process with respect to that interest. The court does not have competence or authority to
proceed with an action for annulment of certificate of title without giving the person, in whose name the
certificate
was
issued
all
the
opportunities
to
be
heard.
Hence, regardless of the nature of the action, proper service of summons is imperative. A decision
rendered without proper service of summons suffers a defect in jurisdiction. Respondents institution of a
proceeding for annulment of petitioners certificate of title is sufficient to vest the court with jurisdiction
over the res, but it is not sufficient for the court to proceed with the case with authority and competence.
Personal service of summons is the preferred mode of service of summons. 95 Thus, as a rule, summons
must be served personally upon the defendant or respondent wherever he or she may be found. If the
defendant or respondent refuses to receive the summons, it shall be tendered to him or
her.96chanRoblesvirtualLawlibrary

If the defendant or respondent is a domestic juridical person, personal service of summons shall be
effected upon its president, managing partner, general manager, corporate secretary, treasurer, or in-house
counsel
wherever
he
or
she
may
be
found.97chanRoblesvirtualLawlibrary
Other modes of serving summons may be done when justified. Service of summons through other modes
will not be effective without showing serious attempts to serve summons through personal service. Thus,
the rules allow summons to be served by substituted service only for justifiable causes and if the
defendant or respondent cannot be served within reasonable time. 98 Substituted service is effected (a) by
leaving copies of the summons at the defendants residence with some person of suitable age and
discretion then residing therein, or (b) by leaving the copies at defendants office or regular place of
business with some competent person in charge thereof. 99chanRoblesvirtualLawlibrary
Service of summons by publication in a newspaper of general circulation is allowed when the defendant
or respondent is designated as an unknown owner or if his or her whereabouts are unknown and cannot
be ascertained by diligent inquiry. 100 It may only be effected after unsuccessful attempts to serve the
summons personally, and after diligent inquiry as to the defendants or respondents whereabouts.
Service of summons by extraterritorial service is allowed after leave of court when the defendant or
respondent does not reside or is not found in the country or is temporarily out of the
country.101chanRoblesvirtualLawlibrary
If a defendant or respondent voluntarily appears in trial or participates in the proceedings, it is generally
construed
as
sufficient
service
of
summons. 102chanRoblesvirtualLawlibrary
In

this

case,

summons

was

served

by

publication.

A look into the content of the sheriffs return will determine if the circumstances warranted the deviation
from the rule preferring personal service of summons over other modes of service. The sheriffs return
must contain a narration of the circumstances showing efforts to personally serve summons to the
defendants or respondents and the impossibility of personal service of summons. Citing Hamilton v.
Levy,103 this court said of substituted service in Domagas v. Jensen:104chanRoblesvirtualLawlibrary
The pertinent facts and circumstances attendant to the service of summons must be stated in the proof of
service or Officers Return; otherwise, any substituted service made in lieu of personal service cannot be
upheld. This is necessary because substituted service is in derogation of the usual method of service. It is
a method extraordinary in character and hence may be used only as prescribed and in the circumstances
authorized by statute. Here, no such explanation was made. Failure to faithfully, strictly, and fully
comply with the requirements of substituted service renders said service ineffective. 105
This court also said in Manotoc v. Court of Appeals:chanroblesvirtuallawlibrary
The date and time of the attempts on personal service, the inquiries made to locate the defendant, the
name/s of the occupants of the alleged residence or house of defendant and all other acts done, though
futile, to serve the summons on defendant must be specified in the Return to justify substituted service.
The form on Sheriffs Return of Summons on Substituted Service prescribed in the Handbook for Sheriffs
published by the Philippine Judicial Academy requires a narration of the efforts made to find the
defendant
personally
and
the
fact
of
failure.
.

However, in view of the numerous claims of irregularities in substituted service which have spawned the

filing of a great number of unnecessary special civil actions of certiorari and appeals to higher courts,
resulting in prolonged litigation and wasteful legal expenses, the Court rules in the case at bar that the
narration of the efforts made to find the defendant and the fact of failure written in broad and imprecise
words will not suffice. The facts and circumstances should be stated with more particularity and detail on
the number of attempts made at personal service, dates and times of the attempts, inquiries to locate
defendant, names of occupants of the alleged res