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THIRD DIVISION Baler Road Improvement (BBRI) Project.

[7] Respondent was named as the project

manager in the contract's Appendix 3.1.[8]
CONSULTANTS CO., LTD., On February 28, 2000, petitioner Kazuhiro Hasegawa, Nippon's general manager for
Petitioners, Present: its International Division, informed respondent that the company had no more intention
of automatically renewing his ICA. His services would be engaged by the company only
YNARES-SANTIAGO, J., up to the substantial completion of the STAR Project on March 31, 2000, just in time
Chairperson, for the ICA's expiry.[9]
CHICO-NAZARIO, Threatened with impending unemployment, respondent, through his lawyer, requested
NACHURA, and a negotiation conference and demanded that he be assigned to the BBRI
REYES, JJ. project. Nippon insisted that respondents contract was for a fixed term that had already
expired, and refused to negotiate for the renewal of the ICA.[10]
Respondent. As he was not able to generate a positive response from the petitioners, respondent
November 23, 2007 consequently initiated on June 1, 2000 Civil Case No. 00-0264 for specific performance
and damages with the Regional Trial Court of Lipa City.[11]
For their part, petitioners, contending that the ICA had been perfected in Japan and
executed by and between Japanese nationals, moved to dismiss the complaint for lack
DECISION of jurisdiction. They asserted that the claim for improper pre-termination of
respondent's ICA could only be heard and ventilated in the proper courts
NACHURA, J.: of Japanfollowing the principles of lex loci celebrationis and lex contractus.[12]

In the meantime, on June 20, 2000, the DPWH approved Nippon's request for the
replacement of Kitamura by a certain Y. Kotake as project manager of the BBRI
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court
assailing the April 18, 2001 Decision[1] of the Court of Appeals (CA) in CA-G.R. SP No. On June 29, 2000, the RTC, invoking our ruling in Insular Government v. Frank[14] that
60827, and the July 25, 2001 Resolution[2]denying the motion for reconsideration matters connected with the performance of contracts are regulated by the law prevailing
thereof. at the place of performance,[15] denied the motion to dismiss.[16] The trial court
subsequently denied petitioners' motion for reconsideration, [17] prompting them to file
On March 30, 1999, petitioner Nippon Engineering Consultants Co., Ltd. (Nippon), a with the appellate court, on August 14, 2000, their first Petition for Certiorari under
Japanese consultancy firm providing technical and management support in the Rule 65 [docketed as CA-G.R. SP No. 60205].[18] On August 23, 2000, the CA resolved
infrastructure projects of foreign governments,[3] entered into an Independent to dismiss the petition on procedural groundsfor lack of statement of material dates and
Contractor Agreement (ICA) with respondent Minoru Kitamura, a Japanese national for insufficient verification and certification against forum shopping. [19] An Entry of
permanently residing in the Philippines.[4] The agreement provides that respondent was Judgment was later issued by the appellate court on September 20, 2000.[20]
to extend professional services to Nippon for a year starting on April 1,
1999.[5] Nippon then assigned respondent to work as the project manager of the Aggrieved by this development, petitioners filed with the CA, on September 19, 2000,
Southern Tagalog Access Road (STAR) Project in the Philippines, following the still within the reglementary period, a second Petition for Certiorari under Rule 65
company's consultancy contract with the Philippine Government. [6] already stating therein the material dates and attaching thereto the proper verification
and certification. This second petition, which substantially raised the same issues as
When the STAR Project was near completion, the Department of Public Works and those in the first, was docketed as CA-G.R. SP No. 60827.[21]
Highways (DPWH) engaged the consultancy services of Nippon, on January 28, 2000,
this time for the detailed engineering and construction supervision of the Bongabon-
Ruling on the merits of the second petition, the appellate court rendered the prejudice.[27] The same holds true in the CA's dismissal of the said case due to defects
assailed April 18, 2001 Decision[22]finding no grave abuse of discretion in the trial in the formal requirement of verification[28] and in the other requirement in Rule 46 of
court's denial of the motion to dismiss. The CA ruled, among others, that the principle the Rules of Court on the statement of the material dates. [29] The dismissal being
of lex loci celebrationis was not applicable to the case, because nowhere in the without prejudice, petitioners can re-file the petition, or file a second petition attaching
pleadings was the validity of the written agreement put in issue. The CA thus declared thereto the appropriate verification and certificationas they, in fact didand stating therein
that the trial court was correct in applying instead the principle of lex loci solutionis.[23] the material dates, within the prescribed period [30] in Section 4, Rule 65 of the said
Petitioners' motion for reconsideration was subsequently denied by the CA in the
assailed July 25, 2001 Resolution.[24] The dismissal of a case without prejudice signifies the absence of a decision on the
merits and leaves the parties free to litigate the matter in a subsequent action as though
Remaining steadfast in their stance despite the series of denials, petitioners instituted the dismissed action had not been commenced. In other words, the termination of a
the instant Petition for Review on Certiorari[25] imputing the following errors to the case not on the merits does not bar another action involving the same parties, on the
appellate court: same subject matter and theory.[32]

A. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN Necessarily, because the said dismissal is without prejudice and has no res
FINDING THAT THE TRIAL COURT VALIDLY EXERCISED judicata effect, and even if petitioners still indicated in the verification and certification
JURISDICTION OVER THE INSTANT CONTROVERSY, DESPITE of the second certiorari petition that the first had already been dismissed on procedural
THE FACT THAT THE CONTRACT SUBJECT MATTER OF THE grounds,[33] petitioners are no longer required by the Rules to indicate in their
PROCEEDINGS A QUO WAS ENTERED INTO BY AND BETWEEN certification of non-forum shopping in the instant petition for review of the second
TWO JAPANESE NATIONALS, WRITTEN WHOLLY IN THE certiorari petition, the status of the aforesaid first petition before the CA. In any case,
JAPANESE LANGUAGE AND EXECUTED IN TOKYO, JAPAN. an omission in the certificate of non-forum shopping about any event that will not
constitute res judicata and litis pendentia, as in the present case, is not a fatal defect. It
B. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN will not warrant the dismissal and nullification of the entire proceedings, considering
OVERLOOKING THE NEED TO REVIEW OUR ADHERENCE TO that the evils sought to be prevented by the said certificate are no longer present.[34]
RECENT DEVELOPMENT[S] IN PRIVATE INTERNATIONAL The Court also finds no merit in respondent's contention that petitioner Hasegawa is
LAWS.[26] only authorized to verify and certify, on behalf of Nippon, the certiorari petition filed with
the CA and not the instant petition. True, the Authorization[35] dated September 4, 2000,
which is attached to the second certiorari petition and which is also attached to the
The pivotal question that this Court is called upon to resolve is whether the subject instant petition for review, is limited in scopeits wordings indicate that Hasegawa is
matter jurisdiction of Philippine courts in civil cases for specific performance and given the authority to sign for and act on behalf of the company only in the petition filed
damages involving contracts executed outside the country by foreign nationals may be with the appellate court, and that authority cannot extend to the instant petition for
assailed on the principles of lex loci celebrationis, lex contractus, the state of the most review.[36] In a plethora of cases, however, this Court has liberally applied the Rules or
significant relationship rule, or forum non conveniens. even suspended its application whenever a satisfactory explanation and a subsequent
fulfillment of the requirements have been made. [37] Given that petitioners herein
However, before ruling on this issue, we must first dispose of the procedural matters sufficiently explained their misgivings on this point and appended to their Reply [38] an
raised by the respondent. updated Authorization[39] for Hasegawa to act on behalf of the company in the instant
petition, the Court finds the same as sufficient compliance with the Rules.
Kitamura contends that the finality of the appellate court's decision in CA-G.R. SP No.
60205 has already barred the filing of the second petition docketed as CA-G.R. SP No. However, the Court cannot extend the same liberal treatment to the defect in the
60827 (fundamentally raising the same issues as those in the first one) and the instant verification and certification. As respondent pointed out, and to which we agree,
petition for review thereof. Hasegawa is truly not authorized to act on behalf of Nippon in this case. The aforesaid
September 4, 2000 Authorization and even the subsequent August 17, 2001
We do not agree. When the CA dismissed CA-G.R. SP No. 60205 on account of the Authorization were issued only by Nippon's president and chief executive officer, not
petition's defective certification of non-forum shopping, it was a dismissal without by the company's board of directors. In not a few cases, we have ruled that corporate
powers are exercised by the board of directors; thus, no person, not even its officers, To elucidate, in the judicial resolution of conflicts problems, three consecutive phases
can bind the corporation, in the absence of authority from the board. [40] Considering are involved: jurisdiction, choice of law, and recognition and enforcement of judgments.
that Hasegawa verified and certified the petition only on his behalf and not on behalf of Corresponding to these phases are the following questions: (1) Where can or should
the other petitioner, the petition has to be denied pursuant to Loquias v. Office of the litigation be initiated? (2) Which law will the court apply? and (3) Where can the resulting
Ombudsman.[41] Substantial compliance will not suffice in a matter that demands strict judgment be enforced?[53]
observance of the Rules.[42] While technical rules of procedure are designed not to
frustrate the ends of justice, nonetheless, they are intended to effect the proper and Analytically, jurisdiction and choice of law are two distinct concepts. [54] Jurisdiction
orderly disposition of cases and effectively prevent the clogging of court dockets. [43] considers whether it is fair to cause a defendant to travel to this state; choice of law
asks the further question whether the application of a substantive law which will
Further, the Court has observed that petitioners incorrectly filed a Rule 65 petition to determine the merits of the case is fair to both parties. The power to exercise jurisdiction
question the trial court's denial of their motion to dismiss. It is a well-established rule does not automatically give a state constitutional authority to apply forum law. While
that an order denying a motion to dismiss is interlocutory, jurisdiction and the choice of the lex fori will often coincide, the minimum contacts for
and cannot be the subject of the extraordinary petition for certiorari or mandamus. Th one do not always provide the necessary significant contacts for the other. [55] The
e appropriate recourse is to file an answer and to interpose as defenses the objections question of whether the law of a state can be applied to a transaction is different from
raised in the motion, to proceed to trial, and, in case of an adverse decision, to elevate the question of whether the courts of that state have jurisdiction to enter a judgment. [56]
the entire case by appeal in due course.[44] While there are recognized exceptions to
this rule,[45] petitioners' case does not fall among them. In this case, only the first phase is at issuejurisdiction. Jurisdiction, however, has
various aspects. For a court to validly exercise its power to adjudicate a controversy, it
This brings us to the discussion of the substantive issue of the case. must have jurisdiction over the plaintiff or the petitioner, over the defendant or the
respondent, over the subject matter, over the issues of the case and, in cases involving
Asserting that the RTC of Lipa City is an inconvenient forum, petitioners question its property, over the res or the thing which is the subject of the litigation. [57] In assailing
jurisdiction to hear and resolve the civil case for specific performance and damages the trial court's jurisdiction herein, petitioners are actually referring to subject matter
filed by the respondent. The ICA subject of the litigation was entered into and perfected jurisdiction.
in Tokyo, Japan, by Japanese nationals, and written wholly in the Japanese language.
Thus, petitioners posit that local courts have no substantial relationship to the Jurisdiction over the subject matter in a judicial proceeding is conferred by the
parties[46] following the [state of the] most significant relationship rule in Private sovereign authority which establishes and organizes the court. It is given only by law
International Law.[47] and in the manner prescribed by law.[58] It is further determined by the allegations of
the complaint irrespective of whether the plaintiff is entitled to all or some of the claims
The Court notes that petitioners adopted an additional but different theory when they asserted therein.[59] To succeed in its motion for the dismissal of an action for lack of
elevated the case to the appellate court. In the Motion to Dismiss[48] filed with the trial jurisdiction over the subject matter of the claim,[60] the movant must show that the court
court, petitioners never contended that the RTC is an inconvenient forum. They merely or tribunal cannot act on the matter submitted to it because no law grants it the power
argued that the applicable law which will determine the validity or invalidity of to adjudicate the claims.[61]
respondent's claim is that of Japan, following the principles of lex loci
celebrationis and lex contractus.[49]While not abandoning this stance in their petition In the instant case, petitioners, in their motion to dismiss, do not claim that the trial court
before the appellate court, petitioners on certiorari significantly invoked the defense is not properly vested by law with jurisdiction to hear the subject controversy for, indeed,
of forum non conveniens.[50] On petition for review before this Court, petitioners Civil Case No. 00-0264 for specific performance and damages is one not capable of
dropped their other arguments, maintained the forum non conveniens defense, and pecuniary estimation and is properly cognizable by the RTC of Lipa City. [62]What they
introduced their new argument that the applicable principle is the [state of the] most rather raise as grounds to question subject matter jurisdiction are the principles of lex
significant relationship rule.[51] loci celebrationisand lex contractus, and the state of the most significant relationship
Be that as it may, this Court is not inclined to deny this petition merely on the basis of
the change in theory, as explained in Philippine Ports Authority v. City of Iloilo.[52] We The Court finds the invocation of these grounds unsound.
only pointed out petitioners' inconstancy in their arguments to emphasize their incorrect Lex loci celebrationis relates to the law of the place of the ceremony[63] or the law of the
assertion of conflict of laws principles. place where a contract is made.[64] The doctrine of lex contractus or lex loci
contractus means the law of the place where a contract is executed or to be
performed.[65] It controls the nature, construction, and validity of the contract [66] and it factual determination; hence, this conflicts principle is more properly considered a
may pertain to the law voluntarily agreed upon by the parties or the law intended by matter of defense.[79]
them either expressly or implicitly.[67] Under the state of the most significant relationship
rule, to ascertain what state law to apply to a dispute, the court should determine which Accordingly, since the RTC is vested by law with the power to entertain and hear the
state has the most substantial connection to the occurrence and the parties. In a case civil case filed by respondent and the grounds raised by petitioners to assail that
involving a contract, the court should consider where the contract was made, was jurisdiction are inappropriate, the trial and appellate courts correctly denied the
negotiated, was to be performed, and the domicile, place of business, or place of petitioners motion to dismiss.
incorporation of the parties.[68] This rule takes into account several contacts and WHEREFORE, premises considered, the petition for review
evaluates them according to their relative importance with respect to the particular issue on certiorari is DENIED.
to be resolved.[69]

Since these three principles in conflict of laws make reference to the law applicable to
a dispute, they are rules proper for the second phase, the choice of law.[70] They SO ORDERED.
determine which state's law is to be applied in resolving the substantive issues of a
conflicts problem.[71] Necessarily, as the only issue in this case is that of jurisdiction,
choice-of-law rules are not only inapplicable but also not yet called for.

Further, petitioners' premature invocation of choice-of-law rules is exposed by the fact

that they have not yet pointed out any conflict between the laws of Japan and ours.
Before determining which law should apply, first there should exist a conflict of laws
situation requiring the application of the conflict of laws rules.[72] Also, when the law of
a foreign country is invoked to provide the proper rules for the solution of a case, the
existence of such law must be pleaded and proved.[73]

It should be noted that when a conflicts case, one involving a foreign element, is brought
before a court or administrative agency, there are three alternatives open to the latter
in disposing of it: (1) dismiss the case, either because of lack of jurisdiction or refusal
to assume jurisdiction over the case; (2) assume jurisdiction over the case and apply
the internal law of the forum; or (3) assume jurisdiction over the case and take into
account or apply the law of some other State or States. [74] The courts power to hear
cases and controversies is derived from the Constitution and the laws. While it may
choose to recognize laws of foreign nations, the court is not limited by foreign sovereign
law short of treaties or other formal agreements, even in matters regarding rights
provided by foreign sovereigns.[75]

Neither can the other ground raised, forum non conveniens,[76] be used to
deprive the trial court of its jurisdiction herein. First, it is not a proper basis for a motion
to dismiss because Section 1, Rule 16 of the Rules of Court does not include it as a
ground.[77] Second, whether a suit should be entertained or dismissed on the basis of
the said doctrine depends largely upon the facts of the particular case and is addressed
to the sound discretion of the trial court. [78] In this case, the RTC decided to assume
jurisdiction. Third, the propriety of dismissing a case based on this principle requires a
THIRD DIVISION the CA affirmed the petitioners conviction but modified the penalty imposed and the
damages awarded.[8]
Dissatisfied, the petitioner filed the instant petition for review
VENANCIO FIGUEROA y CERVANTES,[1] G.R. No. 147406 on certiorari raising the following issues for our resolution:
a. Does the fact that the petitioner failed to raise the issue
Present: of jurisdiction during the trial of this case, which was initiated and filed
by the public prosecutor before the wrong court, constitute laches in
QUISUMBING, J.,* relation to the doctrine laid down in Tijam v. Sibonghanoy,
YNARES-SANTIAGO, notwithstanding the fact that said issue was immediately raised in
- versus - Chairperson, petitioners appeal to the Honorable Court of Appeals? Conversely,
AUSTRIA-MARTINEZ, does the active participation of the petitioner in the trial of his case,
NACHURA, and which is initiated and filed not by him but by the public prosecutor,
REYES, JJ. amount to estoppel?

b. Does the admission of the petitioner that it is difficult

PEOPLE OF THE PHILIPPINES, Promulgated: to immediately stop a bus while it is running at 40 kilometers per
Respondent. hour for the purpose of avoiding a person who unexpectedly
July 14, 2008 crossed the road, constitute enough incriminating evidence to
x------------------------------------------------------------------------------------x warrant his conviction for the crime charged?

c. Is the Honorable Court of Appeals justified in considering

the place of accident as falling within Item 4 of Section 35 (b) of the
Land Transportation and Traffic Code, and subsequently ruling that
DECISION the speed limit thereto is only 20 kilometers per hour, when no
evidence whatsoever to that effect was ever presented by the
NACHURA, J.: prosecution during the trial of this case?

When is a litigant estopped by laches from assailing the jurisdiction of a d. Is the Honorable Court of Appeals justified in convicting
tribunal? This is the paramount issue raised in this petition for review of the February the petitioner for homicide through reckless imprudence (the legally
28, 2001 Decision[2] of the Court of Appeals (CA) in CA-G.R. CR No. 22697. correct designation is reckless imprudence resulting to
homicide) with violation of the Land Transportation and Traffic
Pertinent are the following antecedent facts and proceedings: Code when the prosecution did not prove this during the trial and,
more importantly, the information filed against the petitioner does not
On July 8, 1994, an information[3] for reckless imprudence resulting in homicide was contain an allegation to that effect?
filed against the petitioner before the Regional Trial Court (RTC) of Bulacan, Branch
18.[4] The case was docketed as Criminal Case No. 2235-M-94.[5] Trial on the merits e. Does the uncontroverted testimony of the defense
ensued and on August 19, 1998, the trial court convicted the petitioner as charged. [6] In witness Leonardo Hernal that the victim unexpectedly crossed the
his appeal before the CA, the petitioner questioned, among others, for the first time, the road resulting in him getting hit by the bus driven by the petitioner not
trial courts jurisdiction.[7] enough evidence to acquit him of the crime charged? [9]

The appellate court, however, in the challenged decision, considered the

petitioner to have actively participated in the trial and to have belatedly attacked the Applied uniformly is the familiar rule that the jurisdiction of the court to hear
jurisdiction of the RTC; thus, he was already estopped by laches from asserting the trial and decide a case is conferred by the law in force at the time of the institution of the
courts lack of jurisdiction. Finding no other ground to reverse the trial courts decision, action, unless such statute provides for a retroactive application thereof.[10] In this case,
at the time the criminal information for reckless imprudence resulting in homicide with As early as 1901, this Court has declared that unless jurisdiction has been conferred
violation of the Automobile Law (now Land Transportation and Traffic Code) was filed, by some legislative act, no court or tribunal can act on a matter submitted to it.[14] We
Section 32(2) of Batas Pambansa (B.P.) Blg. 129[11] had already been amended by went on to state in U.S. v. De La Santa[15] that:
Republic Act No. 7691.[12] The said provision thus reads:
It has been frequently held that a lack of jurisdiction over the subject-
Sec. 32. Jurisdiction of Metropolitan Trial Courts, Municipal matter is fatal, and subject to objection at any stage of the
Trial Courts and Municipal Circuit Trial Courts in Criminal proceedings, either in the court below or on appeal (Ency. of Pl. &
Cases.Except in cases falling within the exclusive original jurisdiction Pr., vol. 12, p. 189, and large array of cases there cited), and
of Regional Trial Courts and the Sandiganbayan, the Metropolitan indeed, where the subject-matter is not within the jurisdiction,
Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial the court may dismiss the proceeding ex mero motu. (4 Ill., 133;
Courts shall exercise: 190 Ind., 79; Chipman vs. Waterbury, 59 Conn., 496.)

xxxx Jurisdiction over the subject-matter in a judicial proceeding

is conferred by the sovereign authority which organizes the court; it
(2) Exclusive original jurisdiction over all offenses is given only by law and in the manner prescribed by law and an
punishable with imprisonment not exceeding six (6) years objection based on the lack of such jurisdiction can not be waived
irrespective of the amount of fine, and regardless of other imposable by the parties. x x x[16]
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 Later, in People v. Casiano,[17] the Court explained:
involving damage to property through criminal negligence, they shall
have exclusive original jurisdiction thereof. 4. The operation of the principle of estoppel on the
question of jurisdiction seemingly depends upon whether the
lower court actually had jurisdiction or not. If it
As the imposable penalty for the crime charged herein is prision had no jurisdiction, but the case was tried and decided upon
correccional in its medium and maximum periods or imprisonment for 2 years, 4 months the theory that it had jurisdiction, the parties are not barred, on
and 1 day to 6 years,[13] jurisdiction to hear and try the same is conferred on the appeal, from assailing such jurisdiction, for the same must
Municipal Trial Courts (MTCs). Clearly, therefore, the RTC of Bulacan does not have exist as a matter of law, and may not be conferred by consent
jurisdiction over Criminal Case No. 2235-M-94. of the parties or by estoppel (5 C.J.S., 861-863). However, if the
lower court had jurisdiction, and the case was heard and decided
While both the appellate court and the Solicitor General acknowledge this fact, upon a given theory, such, for instance, as that the court
they nevertheless are of the position that the principle of estoppel by laches has already had no jurisdiction, the party who induced it to adopt such theory will
precluded the petitioner from questioning the jurisdiction of the RTCthe trial went on for not be permitted, on appeal, to assume an inconsistent positionthat
4 years with the petitioner actively participating therein and without him ever raising the the lower court had jurisdiction. Here, the principle of estoppel
jurisdictional infirmity. The petitioner, for his part, counters that the lack of jurisdiction applies. The rule that jurisdiction is conferred by law, and does not
of a court over the subject matter may be raised at any time even for the first time on depend upon the will of the parties, has no bearing thereon. Thus,
appeal. As undue delay is further absent herein, the principle of laches will not be Corpus Juris Secundum says:
Where accused has secured a decision
To settle once and for all this problem of jurisdiction vis--vis estoppel by laches, which that the indictment is void, or has been granted an
continuously confounds the bench and the bar, we shall analyze the various Court instruction based on its defective character
decisions on the matter. directing the jury to acquit, he is estopped, when
subsequently indicted, to assert that the former
indictment was valid. In such case, there may be
a new prosecution whether the indictment in the
former prosecution was good or cases for decision to the Court of Appeals in
bad. Similarly, where, after the jury was impaneled expectation of favorable judgment, but with intent
and sworn, the court on accused's motion of attacking its jurisdiction should the decision be
quashed the information on the erroneous unfavorable: x x x[20]
assumption that the court had no jurisdiction,
accused cannot successfully plead former
jeopardy to a new information. x x x (22 C.J.S., Then came our ruling in Tijam v. Sibonghanoy[21] that a party may be barred by laches
sec. 252, pp. 388-389; italics ours.) from invoking lack of jurisdiction at a late hour for the purpose of annulling everything
done in the case with the active participation of said party invoking the plea. We
Where accused procured a prior expounded, thus:
conviction to be set aside on the ground that the
court was without jurisdiction, he is A party may be estopped or barred from raising a question in
estopped subsequently to assert, in support of a different ways and for different reasons. Thus, we speak of
defense of previous jeopardy, that such court had estoppel in pais, of estoppel by deed or by record, and of estoppel
jurisdiction. (22 C.J.S. p. 378.)[18] by laches.
Laches, in a general sense, is failure or neglect, for an
unreasonable and unexplained length of time, to do that which, by
But in Pindagan Agricultural Co., Inc. v. Dans,[19] the Court, in not sustaining the plea exercising due diligence, could or should have been done earlier; it
of lack of jurisdiction by the plaintiff-appellee therein, made the following observations: is negligence or omission to assert a right within a reasonable time,
warranting a presumption that the party entitled to assert it either
It is surprising why it is only now, after the decision has has abandoned it or declined to assert it.
been rendered, that the plaintiff-appellee presents the question of The doctrine of laches or of stale demands is based upon
this Courts jurisdiction over the case. Republic Act No. 2613 was grounds of public policy which requires, for the peace of society, the
enacted on August 1, 1959. This case was argued on January 29, discouragement of stale claims and, unlike the statute of limitations,
1960. Notwithstanding this fact, the jurisdiction of this Court was is not a mere question of time but is principally a question of the
never impugned until the adverse decision of this Court was handed inequity or unfairness of permitting a right or claim to be enforced or
down. The conduct of counsel leads us to believe that they must asserted.
have always been of the belief that notwithstanding said enactment
of Republic Act 2613 this Court has jurisdiction of the case, such It has been held that a party cannot invoke the jurisdiction of a court
conduct being born out of a conviction that the actual real value of to secure affirmative relief against his opponent and, after obtaining
the properties in question actually exceeds the jurisdictional amount or failing to obtain such relief, repudiate or question that same
of this Court (over P200,000). Our minute resolution in G.R. No. L- jurisdiction (Dean vs. Dean, 136 Or. 694, 86 A.L.R. 79). In the case
10096, Hyson Tan, et al. vs. Filipinas Compaa de Seguros, et al., just cited, by way of explaining the rule, it was further said that the
of March 23, 1956, a parallel case, is applicable to the conduct of question whether the court had jurisdiction either of the subject
plaintiff-appellee in this case, thus: matter of the action or of the parties was not important in such cases
because the party is barred from such conduct not because the
x x x that an appellant who files his brief and judgment or order of the court is valid and conclusive as an
submits his case to the Court of Appeals for adjudication, but for the reason that such a practice cannot be
decision, without questioning the latters toleratedobviously for reasons of public policy.
jurisdiction until decision is rendered therein,
should be considered as having voluntarily waived Furthermore, it has also been held that after voluntarily submitting a
so much of his claim as would exceed the cause and encountering an adverse decision on the merits, it is too
jurisdiction of said Appellate Court; for the reason late for the loser to question the jurisdiction or power of the court
that a contrary rule would encourage the (Pease vs. Rathbun-Jones etc., 243 U.S. 273, 61 L. Ed. 715, 37
undesirable practice of appellants submitting their S.Ct. 283; St. Louis etc. vs. McBride, 141 U.S. 127, 35 L. Ed.
659). And in Littleton vs. Burgess, 16 Wyo. 58, the Court said that it obviously not contemplated therein. The exceptional circumstance
is not right for a party who has affirmed and invoked the jurisdiction involved in Sibonghanoy which justified the departure from the
of a court in a particular matter to secure an affirmative relief, to accepted concept of non-waivability of objection to jurisdiction has
afterwards deny that same jurisdiction to escape a penalty. been ignored and, instead a blanket doctrine had been repeatedly
upheld that rendered the supposed ruling in Sibonghanoy not as the
Upon this same principle is what We said in the three cases exception, but rather the general rule, virtually overthrowing
mentioned in the resolution of the Court of Appeals of May 20, 1963 altogether the time-honored principle that the issue of jurisdiction is
(supra)to the effect that we frown upon the undesirable practice of a not lost by waiver or by estoppel.
party submitting his case for decision and then accepting the
judgment, only if favorable, and attacking it for lack of jurisdiction, In Sibonghanoy, the defense of lack of jurisdiction of the
when adverseas well as in Pindagan etc. vs. Dans et al., G.R. L- court that rendered the questioned ruling was held to be barred by
14591, September 26, 1962; Montelibano et al. vs. Bacolod-Murcia estoppel by laches. It was ruled that the lack of jurisdiction having
Milling Co., Inc., G.R. L-15092; Young Men Labor Union etc. vs. The been raised for the first time in a motion to dismiss filed almost
Court of Industrial Relations et al., G.R. L-20307, Feb. 26, 1965, and fifteen (15) years after the questioned ruling had been rendered,
Mejia vs. Lucas, 100 Phil. p. 277. such a plea may no longer be raised for being barred by laches. As
defined in said case, laches is failure or neglect, for an unreasonable
The facts of this case show that from the time the Surety became a quasi-party on July and unexplained length of time, to do that which, by exercising due
31, 1948, it could have raised the question of the lack of jurisdiction of the Court of First diligence, could or should have been done earlier; it is negligence
Instance of Cebu to take cognizance of the present action by reason of the sum of or omission to assert a right within a reasonable time, warranting a
money involved which, according to the law then in force, was within the original presumption that the party entitled to assert has abandoned it or
exclusive jurisdiction of inferior courts. It failed to do so. Instead, at several stages of declined to assert it.[24]
the proceedings in the court a quo, as well as in the Court of Appeals, it invoked the
jurisdiction of said courts to obtain affirmative relief and submitted its case for a final In Calimlim, despite the fact that the one who benefited from the plea of lack of
adjudication on the merits. It was only after an adverse decision was rendered by the jurisdiction was the one who invoked the courts jurisdiction, and who later obtained an
Court of Appeals that it finally woke up to raise the question of jurisdiction. Were we to adverse judgment therein, we refused to apply the ruling in Sibonghanoy. The Court
sanction such conduct on its part, We would in effect be declaring as useless all the accorded supremacy to the time-honored principle that the issue of jurisdiction
proceedings had in the present case since it was commenced on July 19, 1948 and is not lost by waiver or by estoppel.
compel the judgment creditors to go up their Calvary once more. The inequity and
unfairness of this is not only patent but revolting.[22] Yet, in subsequent cases decided after Calimlim, which by sheer volume are too
plentiful to mention, the Sibonghanoy doctrine, as foretold in Calimlim, became the rule
For quite a time since we made this pronouncement in Sibonghanoy, courts and rather than the exception. As such, in Soliven v. Fastforms Philippines, Inc.,[25] the
tribunals, in resolving issues that involve the belated invocation of lack of jurisdiction, Court ruled:
have applied the principle of estoppel by laches. Thus, in Calimlim v. Ramirez,[23] we
pointed out that Sibonghanoy was developing into a general rule rather than the While it is true that jurisdiction may be raised at any time, this rule
exception: presupposes that estoppel has not supervened. In the instant case,
respondent actively participated in all stages of the proceedings
A rule that had been settled by unquestioned acceptance before the trial court and invoked its authority by asking for an
and upheld in decisions so numerous to cite is that the jurisdiction affirmative relief. Clearly, respondent is estopped from challenging
of a court over the subject-matter of the action is a matter of law and the trial courts jurisdiction, especially when an adverse judgment
may not be conferred by consent or agreement of the parties. The has been rendered. In PNOC Shipping and Transport Corporation
lack of jurisdiction of a court may be raised at any stage of the vs. Court of Appeals, we held:
proceedings, even on appeal. This doctrine has been qualified by
recent pronouncements which stemmed principally from the ruling Moreover, we note that petitioner did not question
in the cited case of Sibonghanoy. It is to be regretted, however, that at all the jurisdiction of the lower court x x x in its
the holding in said case had been applied to situations which were answers to both the amended complaint and the
second amended complaint. It did so only in its any stage, a litigants participation in all stages of
motion for reconsideration of the decision of the the case before the trial court, including the
lower court after it had received an adverse invocation of its authority in asking for affirmative
decision. As this Court held in Pantranco North relief, bars such party from challenging the courts
Express, Inc. vs. Court of Appeals (G.R. No. jurisdiction (PNOC Shipping and Transport
105180, July 5, 1993, 224 SCRA 477, Corporation vs. Court of Appeals, 297 SCRA 402
491), participation in all stages of the case before [1998]). A party cannot invoke the jurisdiction of a
the trial court, that included invoking its authority in court to secure affirmative relief against his
asking for affirmative relief, effectively barred opponent and after obtaining or failing to obtain
petitioner by estoppel from challenging the courts such relief, repudiate or question that same
jurisdiction. Notably, from the time it filed its jurisdiction (Asset Privatization Trust vs. Court of
answer to the second amended complaint on April Appeals, 300 SCRA 579 [1998]; Province of
16, 1985, petitioner did not question the lower Bulacan vs. Court of Appeals, 299 SCRA 442
courts jurisdiction. It was only on December 29, [1998]). The Court frowns upon the undesirable
1989when it filed its motion for reconsideration of practice of a party participating in the proceedings
the lower courts decision that petitioner raised the and submitting his case for decision and then
question of the lower courts lack of accepting judgment, only if favorable, and
jurisdiction. Petitioner thus foreclosed its right to attacking it for lack of jurisdiction, when
raise the issue of jurisdiction by its own adverse (Producers Bank of the Philippines vs.
inaction. (italics ours) NLRC, 298 SCRA 517 [1998], citing Ilocos Sur
Electric Cooperative, Inc. vs. NLRC, 241 SCRA 36
Similarly, in the subsequent case of Sta. Lucia Realty and [1995]). (italics ours)[26]
Development, Inc. vs. Cabrigas, we ruled:

In the case at bar, it was found by the trial

court in its 30 September 1996 decision in LCR Noteworthy, however, is that, in the 2005 case of Metromedia Times Corporation v.
Case No. Q-60161(93) that private respondents Pastorin,[27] where the issue of lack of jurisdiction was raised only in the National Labor
(who filed the petition for reconstitution of titles) Relations Commission (NLRC) on appeal, we stated, after examining the doctrines of
failed to comply with both sections 12 and 13 of jurisdiction vis--vis estoppel, that the ruling in Sibonghanoy stands as an exception,
RA 26 and therefore, it had no jurisdiction over the rather than the general rule. Metromedia, thus, was not estopped from assailing the
subject matter of the case. However, private jurisdiction of the labor arbiter before the NLRC on appeal.[28]
respondents never questioned the trial courts
jurisdiction over its petition for reconstitution Later, in Francel Realty Corporation v. Sycip,[29] the Court clarified that:
throughout the duration of LCR Case No. Q-
60161(93). On the contrary, private respondents Petitioner argues that the CAs affirmation of the trial courts dismissal
actively participated in the reconstitution of its case was erroneous, considering that a full-blown trial had
proceedings by filing pleadings and presenting its already been conducted. In effect, it contends that lack of
evidence. They invoked the trial courts jurisdiction jurisdiction could no longer be used as a ground for dismissal after
in order to obtain affirmative relief the trial had ensued and ended.
reconstitution of their titles. Private respondents The above argument is anchored on estoppel by laches,
have thus foreclosed their right to raise the issue which has been used quite successfully in a number of cases to
of jurisdiction by their own actions. thwart dismissals based on lack of jurisdiction. Tijam v.
Sibonghanoy, in which this doctrine was espoused, held that a party
The Court has constantly upheld the may be barred from questioning a courts jurisdiction after being
doctrine that while jurisdiction may be assailed at invoked to secure affirmative relief against its opponent. In fine,
laches prevents the issue of lack of jurisdiction from being raised for Indeed, the general rule remains: a courts lack of jurisdiction may
the first time on appeal by a litigant whose purpose is to annul be raised at any stage of the proceedings, even on appeal. The
everything done in a trial in which it has actively participated. reason is that jurisdiction is conferred by law, and lack of it affects
the very authority of the court to take cognizance of and to render
Laches is defined as the failure or neglect for an unreasonable and judgment on the action. Moreover, jurisdiction is determined by the
unexplained length of time, to do that which, by exercising due averments of the complaint, not by the defenses contained in the
diligence, could or should have been done earlier; it is negligence answer.[30]
or omission to assert a right within a reasonable time, warranting a
presumption that the party entitled to assert it either has abandoned
it or declined to assert it. Also, in Mangaliag v. Catubig-Pastoral,[31] even if the pleader of lack of
jurisdiction actively took part in the trial proceedings by presenting a witness to seek
The ruling in Sibonghanoy on the matter of jurisdiction is, however, exoneration, the Court, reiterating the doctrine in Calimlim, said:
the exception rather than the rule. Estoppel by laches may be
invoked to bar the issue of lack of jurisdiction only in cases in which Private respondent argues that the defense of lack of jurisdiction
the factual milieu is analogous to that in the cited case. In such may be waived by estoppel through active participation in the
controversies, laches should be clearly present; that is, lack of trial. Such, however, is not the general rule but an exception, best
jurisdiction must have been raised so belatedly as to warrant the characterized by the peculiar circumstances in Tijam vs.
presumption that the party entitled to assert it had abandoned or Sibonghanoy. In Sibonghanoy, the party invoking lack of jurisdiction
declined to assert it. That Sibonghanoy applies only to exceptional did so only after fifteen years and at a stage when the proceedings
circumstances is clarified in Calimlim v. Ramirez, which we quote: had already been elevated to the CA. Sibonghanoy is an
exceptional case because of the presence of laches, which was
A rule that had been settled by unquestioned defined therein as failure or neglect for an unreasonable and
acceptance and upheld in decisions so numerous unexplained length of time to do that which, by exercising due
to cite is that the jurisdiction of a court over the diligence, could or should have been done earlier; it is the
subject-matter of the action is a matter of law and negligence or omission to assert a right within a reasonable time,
may not be conferred by consent or agreement of warranting a presumption that the party entitled to assert has
the parties. The lack of jurisdiction of a court may abandoned it or declined to assert it.[32]
be raised at any stage of the proceedings, even on
appeal. This doctrine has been qualified by recent And in the more recent Regalado v. Go,[33] the Court again emphasized
pronouncements which stemmed principally from that laches should be clearly present for the Sibonghanoy doctrine to be applicable,
the ruling in the cited case of Sibonghanoy. It is to thus:
be regretted, however, that the holding in said
case had been applied to situations which were Laches is defined as the failure or neglect for an
obviously not contemplated therein. The unreasonable and unexplained length of time, to do that which, by
exceptional circumstance involved exercising due diligence, could or should have been done earlier, it
in Sibonghanoy which justified the departure from is negligence or omission to assert a right within a reasonable length
the accepted concept of non-waivability of of time, warranting a presumption that the party entitled to assert it
objection to jurisdiction has been ignored and, either has abandoned it or declined to assert it.
instead a blanket doctrine had been repeatedly The ruling in People v. Regalario that was based on the
upheld that rendered the supposed ruling landmark doctrine enunciated in Tijam v. Sibonghanoy on the matter
in Sibonghanoynot as the exception, but rather the of jurisdiction by estoppel is the exception rather than the
general rule, virtually overthrowing altogether the rule. Estoppel by laches may be invoked to bar the issue of lack of
time-honored principle that the issue of jurisdiction jurisdiction only in cases in which the factual milieu is analogous to
is not lost by waiver or by estoppel. that in the cited case. In such controversies, laches should have
been clearly present; that is, lack of jurisdiction must have been
raised so belatedly as to warrant the presumption that the party knowing his rights, has not sought to enforce them until the condition of the party
entitled to assert it had abandoned or declined to assert it. pleading laches has in good faith become so changed that he cannot be restored to his
former state, if the rights be then enforced, due to loss of evidence, change of title,
In Sibonghanoy, the defense of lack of jurisdiction was intervention of equities, and other causes.[36] In applying the principle of estoppel by
raised for the first time in a motion to dismiss filed by the Surety laches in the exceptional case of Sibonghanoy, the Court therein considered the patent
almost 15 years after the questioned ruling had been rendered. At and revolting inequity and unfairness of having the judgment creditors go up
several stages of the proceedings, in the court a quo as well as in their Calvary once more after more or less 15 years. [37] The same, however, does not
the Court of Appeals, the Surety invoked the jurisdiction of the said obtain in the instant case.
courts to obtain affirmative relief and submitted its case for final
adjudication on the merits. It was only when the adverse decision We note at this point that estoppel, being in the nature of a forfeiture, is not favored by
was rendered by the Court of Appeals that it finally woke up to raise law. It is to be applied rarelyonly from necessity, and only in extraordinary
the question of jurisdiction. circumstances. The doctrine must be applied with great care and the equity must be
strong in its favor.[38] When misapplied, the doctrine of estoppel may be a most effective
Clearly, the factual settings attendant weapon for the accomplishment of injustice.[39] Moreover, a judgment rendered without
in Sibonghanoy are not present in the case at bar. Petitioner Atty. jurisdiction over the subject matter is void.[40] Hence, the Revised Rules of Court
Regalado, after the receipt of the Court of Appeals resolution finding provides for remedies in attacking judgments rendered by courts or tribunals that have
her guilty of contempt, promptly filed a Motion for Reconsideration no jurisdiction over the concerned cases. No laches will even attach when the judgment
assailing the said courts jurisdiction based on procedural infirmity in is null and void for want of jurisdiction.[41] As we have stated in Heirs of Julian Dela Cruz
initiating the action. Her compliance with the appellate courts and Leonora Talaro v. Heirs of Alberto Cruz,[42]
directive to show cause why she should not be cited for contempt
and filing a single piece of pleading to that effect could not be It is axiomatic that the jurisdiction of a tribunal, including a
considered as an active participation in the judicial proceedings so quasi-judicial officer or government agency, over the nature and
as to take the case within the milieu of Sibonghanoy. Rather, it is the subject matter of a petition or complaint is determined by the material
natural fear to disobey the mandate of the court that could lead to allegations therein and the character of the relief prayed for,
dire consequences that impelled her to comply. [34] irrespective of whether the petitioner or complainant is entitled to any
or all such reliefs. Jurisdiction over the nature and subject matter of
The Court, thus, wavered on when to apply the exceptional circumstance an action is conferred by the Constitution and the law, and not by the
in Sibonghanoy and on when to apply the general rule enunciated as early as in De La consent or waiver of the parties where the court otherwise would
Santa and expounded at length in Calimlim. The general rule should, however, be, as have no jurisdiction over the nature or subject matter of the
it has always been, that the issue of jurisdiction may be raised at any stage of the action. Nor can it be acquired through, or waived by, any act or
proceedings, even on appeal, and is not lost by waiver or by estoppel. Estoppel by omission of the parties. Moreover, estoppel does not apply to confer
laches, to bar a litigant from asserting the courts absence or lack of jurisdiction, only jurisdiction to a tribunal that has none over the cause of action. x x
supervenes in exceptional cases similar to the factual milieu of Tijam v. x
Sibonghanoy. Indeed, the fact that a person attempts to invoke unauthorized
jurisdiction of a court does not estop him from thereafter challenging its jurisdiction over Indeed, the jurisdiction of the court or tribunal is not affected
the subject matter, since such jurisdiction must arise by law and not by mere consent by the defenses or theories set up by the defendant or respondent in
of the parties. This is especially true where the person seeking to invoke unauthorized his answer or motion to dismiss. Jurisdiction should be determined
jurisdiction of the court does not thereby secure any advantage or the adverse party by considering not only the status or the relationship of the parties
does not suffer any harm.[35] but also the nature of the issues or questions that is the subject of
the controversy. x x x x The proceedings before a court or tribunal
Applying the said doctrine to the instant case, the petitioner is in no way estopped by without jurisdiction, including its decision, are null and void, hence,
laches in assailing the jurisdiction of the RTC, considering that he raised the lack susceptible to direct and collateral attacks.[43]
thereof in his appeal before the appellate court. At that time, no considerable period
had yet elapsed for laches to attach. True, delay alone, though unreasonable, will not
sustain the defense of estoppel by laches unless it further appears that the party,
With the above considerations, we find it unnecessary to resolve the other issues raised
in the petition.

WHEREFORE, premises considered, the petition for review

on certiorari is GRANTED. Criminal Case No. 2235-M-94 is
hereby DISMISSED without prejudice.

Petitioner obtained a loan[3] in the total amount of P95,700,620.00 from
respondents Romeo Y. Tan (Tan) and Roberto L. Obiedo (Obiedo), secured by real
THIRD DIVISION estate mortgages over five parcels of land, all located in Triangulo, Naga City, covered
by Transfer Certificates of Title (TCTs) No. 38376, [4] No. 29918,[5] No. 38374,[6]No.
39232,[7] and No. 39225,[8] issued by the Registry of Deeds for Naga City, in the name
RUBY SHELTER BUILDERS AND G.R. No. 175914 of petitioner. When petitioner was unable to pay the loan when it became due and
REALTY DEVELOPMENT demandable, respondents Tan and Obiedo agreed to an extension of the same.
Petitioner, Present: In a Memorandum of Agreement[9] dated 17 March 2005, respondents Tan
and Obiedo granted petitioner until 31 December 2005 to settle its indebtedness, and
YNARES-SANTIAGO, J., condoned the interests, penalties and surcharges accruing thereon from 1 October
- versus- Chairperson, 2004 to 31 December 2005 which amounted to P74,678,647.00. The Memorandum of
AUSTRIA-MARTINEZ, Agreement required, in turn, that petitioner execute simultaneously with the said
CHICO-NAZARIO, Memorandum, by way of dacion en pago, Deeds of Absolute Sale in favor of
HON. PABLO C. FORMARAN III, NACHURA, and respondents Tan and Obiedo, covering the same parcels of land subject of the
Presiding Judge of Regional Trial PERALTA, JJ. mortgages. The Deeds of Absolute Sale would be uniformly dated 2 January 2006, and
Court Branch 21, Naga City, as Pairing state that petitioner sold to respondents Tan and Obiedo the parcels of land for the
Judge for Regional Trial Court Branch following purchase prices:
22, Formerly Presided By HON.
(Retired 01 May 2006), ROMEO Y. Promulgated:
TAN, ROBERTO L. OBIEDO and ATTY. 38376 P 9,340,000.00
TOMAS A. REYES, 29918 P 28,000,000.00
Respondents. 38374 P 12,000,000.00
February 10, 2009 39232 P 1,600,000.00
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x 39225 P 1,600,000.00

Petitioner could choose to pay off its indebtedness with individual or all five
DECISION parcels of land; or it could redeem said properties by paying respondents Tan and
Obiedo the following prices for the same, inclusive of interest and penalties:

CHICO-NAZARIO, J.: TCT No. Redemption Price

38376 P 25,328,939.00
Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of 29918 P 35,660,800.00
Court seeking the reversal of the Decision[1] dated 22 November 2006 of the Court of 38374 P 28,477,600.00
Appeals in CA-G.R. SP No. 94800. The Court of Appeals, in its assailed Decision, 39232 P 6,233,381.00
affirmed the Order[2] dated 24 March 2006 of the Regional Trial Court (RTC), Branch 39225 P 6,233,381.00
22, of Naga City, in Civil Case No. RTC-2006-0030, ordering petitioner Ruby Shelter
Builders and Realty Development Corporation to pay additional docket/filing fees,
computed based on Section 7(a) of Rule 141 of the Rules of Court, as amended. In the event that petitioner is able to redeem any of the afore-mentioned
parcels of land, the Deed of Absolute Sale covering the said property shall be nullified
The present Petition arose from the following facts: and have no force and effect; and respondents Tan and Obiedo shall then return the
owners duplicate of the corresponding TCT to petitioner and also execute a Deed of
Discharge of Mortgage. However, if petitioner is unable to redeem the parcels of land
within the period agreed upon, respondents Tan and Obiedo could already present the dialogues. Unbeknownst to petitioner, despite the ongoing meetings, respondents Tan
Deeds of Absolute Sale covering the same to the Office of the Register of Deeds and Obiedo, in evident bad faith, already had the pre-executed Deeds of Absolute Sale
for Naga City so respondents Tan and Obiedo could acquire TCTs to the said notarized on 3 January 2006 by respondent Atty. Reyes. Atty. Reyes, in connivance
properties in their names. with respondents Tan and Obiedo, falsely made it appear in the Deeds of Absolute Sale
that Mr. Sia had personally acknowledged/ratified the said Deeds before Atty. Reyes.
The Memorandum of Agreement further provided that should petitioner
contest, judicially or otherwise, any act, transaction, or event related to or necessarily Asserting that the Deeds of Absolute Sale over the five parcels of land were
connected with the said Memorandum and the Deeds of Absolute Sale involving the executed merely as security for the payment of its loan to respondents Tan and Obiedo;
five parcels of land, it would pay respondents Tan and Obiedo P10,000,000.00 as that the Deeds of Absolute Sale, executed in accordance with the Memorandum of
liquidated damages inclusive of costs and attorneys fees. Petitioner would likewise pay Agreement, constituted pactum commisorium and as such, were null and void; and that
respondents Tan and Obiedo the condoned interests, surcharges and the acknowledgment in the Deeds of Absolute Sale were falsified, petitioner averred:
penalties.[10] Finally, should a contest arise from the Memorandum of Agreement, Mr.
Ruben Sia (Sia), President of petitioner corporation, personally assumes, jointly and 13. That by reason of the fraudulent actions by the [herein
severally with petitioner, the latters monetary obligation to respondent Tan and Obiedo. respondents], [herein petitioner] is prejudiced and is now in danger
of being deprived, physically and legally, of the mortgaged properties
Respondent Atty. Tomas A. Reyes (Reyes) was the Notary Public who notarized the without benefit of legal processes such as the remedy of foreclosure
Memorandum of Agreement dated 17 March 2005 between respondent Tan and and its attendant procedures, solemnities and remedies available to
Obiedo, on one hand, and petitioner, on the other. a mortgagor, while [petitioner] is desirous and willing to pay its
obligation and have the mortgaged properties released. [13]
Pursuant to the Memorandum of Agreement, petitioner, represented by Mr.
Sia, executed separate Deeds of Absolute Sale,[11] over the five parcels of land, in favor
of respondents Tan and Obiedo. On the blank spaces provided for in the said Deeds, In support of its second cause of action, petitioner narrated in its Complaint
somebody wrote the 3rd of January 2006 as the date of their execution. The Deeds that on 18 January 2006, respondents Tan and Obiedo forcibly took over, with the use
were again notarized by respondent Atty. Reyes also on 3 January 2006. of armed men, possession of the five parcels of land subject of the falsified Deeds of
Absolute Sale and fenced the said properties with barbed wire. Beginning 3 March
Without payment having been made by petitioner on 31 December 2005, 2006, respondents Tan and Obiedo started demolishing some of the commercial
respondents Tan and Obiedo presented the Deeds of Absolute Sale dated 3 January spaces standing on the parcels of land in question which were being rented out by
2006 before the Register of Deeds of Naga City on 8 March 2006, as a result of which, petitioner. Respondents Tan and Obiedo were also about to tear down a principal
they were able to secure TCTs over the five parcels of land in their names. improvement on the properties consisting of a steel-and-concrete structure housing a
motor vehicle terminal operated by petitioner. The actions of respondents Tan and
On 16 March 2006, petitioner filed before the RTC a Complaint[12] against Obiedo were to the damage and prejudice of petitioner and its
respondents Tan, Obiedo, and Atty. Reyes, for declaration of nullity of deeds of sales tenants/lessees. Petitioner, alone, claimed to have suffered at least P300,000.00 in
and damages, with prayer for the issuance of a writ of preliminary injunction and/or actual damages by reason of the physical invasion by respondents Tan and Obiedo
temporary restraining order (TRO). The Complaint was docketed as Civil Case No. and their armed goons of the five parcels of land.
Ultimately, petitioners prayer in its Complaint reads:
On the basis of the facts already recounted above, petitioner raised two
causes of action in its Complaint. WHEREFORE, premises considered, it is most respectfully
prayed of this Honorable Court that upon the filing of this complaint,
As for the first cause of action, petitioner alleged that as early as 27 December a 72-hour temporary restraining order be forthwith issued ex parte:
2005, its President already wrote a letter informing respondents Tan and Obiedo of the
intention of petitioner to pay its loan and requesting a meeting to compute the final (a) Restraining [herein respondents] Tan and Obiedo, their
amount due. The parties held meetings on 3 and 4 January 2006 but they failed to agents, privies or representatives, from committing act/s tending to
arrive at a mutually acceptable computation of the final amount of loan alienate the mortgaged properties from the [herein petitioner]
payable. Respondents Tan and Obiedo then refused the request of petitioner for further
pending the resolution of the case, including but not limited to the representative of petitioner, to thresh out Mr. Sias charge that the computation by
acts complained of in paragraph 14, above; respondents Tan and Obiedo of the interests, surcharges and penalties accruing on
the loan of petitioner was replete with errors and uncertainties. However, Mr. Sia failed
(b) Restraining the Register of Deeds of Naga City from to back up his accusation of errors and uncertainties and to present his own final
entertaining moves by the [respondents] to have [petitioners] computation of the amount due. Disappointed and exasperated, respondents Tan and
certificates of title to the mortgaged properties cancelled and Obiedo informed Mr. Sia that they had already asked respondent Atty. Reyes to come
changed/registered in [respondents] Tans and Obiedos names, over to notarize the Deeds of Absolute Sale. Respondent Atty. Reyes asked Mr. Sia
and/or released to them; whether it was his signature appearing above his printed name on the Deeds of
Absolute Sale, to which Mr. Sia replied yes. On 4 January 2006, Mr. Sia still failed to
(c) After notice and hearing, that a writ of preliminary establish his claim of errors and uncertainties in the computation of the total amount
injunction be issued imposing the same restraints indicated in the which petitioner must pay respondent Tan and Obiedo. Mr. Sia, instead, sought a nine-
next preceding two paragraphs of this prayer; and month extension for paying the loan obligation of petitioner and the reduction of the
interest rate thereon to only one percent (1%) per month.Respondents Tan and Obiedo
(d) After trial, judgment be rendered: rejected both demands.

1. Making the injunction permanent; Respondent Tan maintained that the Deeds of Absolute Sale were not
executed merely as securities for the loan of petitioner. The Deeds of Absolute Sale
2. Declaring the provision in the Memorandum of over the five parcels of land were the consideration for the payment of the total
Agreement requiring the [petitioner] to execute deed of sales (sic) in indebtedness of petitioner to respondents Tan and Obiedo, and the condonation of the
favor of the [respondents Tan and Obiedo] as dacion en pago in the 15-month interest which already accrued on the loan, while providing petitioner with the
event of non-payment of the debt as pactum commissorium; golden opportunity to still redeem all or even portions of the properties covered by said
Deeds. Unfortunately, petitioner failed to exercise its right to redeem any of the said
3. Annulling the Deed[s] of Sale for TCT Nos. 29918, properties.
38374, 38376, 39225 and 39232, all dated January 3, 2006, the
same being in contravention of law; Belying that they forcibly took possession of the five parcels of land,
respondent Tan alleged that it was Mr. Sia who, with the aid of armed men, on board a
4. Ordering the [respondents] jointly and solidarily to pay Sports Utility Vehicle and a truck, rammed into the personnel of respondents Tan and
the [petitioner] actual damages of at least P300,000.00; attorneys Obiedo causing melee and disturbance. Moreover, by the execution of the Deeds of
fees in the amount of P100,000.00 plus P1,000.00 per court Absolute Sale, the properties subject thereof were, ipso jure, delivered to respondents
attendance of counsel as appearance fee; litigation expenses in the Tan and Obiedo. The demolition of the existing structures on the properties was nothing
amount of at least P10,000.00 and exemplary damages in the but an exercise of dominion by respondents Tan and Obiedo.
amount of P300,000.00, plus the costs.
Respondent Tan, thus, sought not just the dismissal of the Complaint of
[Petitioner] further prays for such other reliefs as may be petitioner, but also the grant of his counterclaim. The prayer in his Answer is faithfully
proper, just and equitable under the premises.[14] reproduced below:

Wherefore, premises considered, it is most respectfully

Upon filing its Complaint with the RTC on 16 March 2006, petitioner paid the sum prayed that, after due hearing, judgment be rendered dismissing the
of P13,644.25 for docket and other legal fees, as assessed by the Office of the Clerk complaint, and on the counterclaim, [herein petitioner] and Ruben
of Court. The Clerk of Court initially considered Civil Case No. 2006-0030 as an action Sia, be ordered to indemnify, jointly and severally [herein
incapable of pecuniary estimation and computed the docket and other legal fees due respondents Tan and Obiedo] the amounts of not less
thereon according to Section 7(b)(1), Rule 141 of the Rules of Court. than P10,000,000.00 as liquidated damages and the further sum of
not less than P500,000.00 as attorneys fees. In the alternative, and
Only respondent Tan filed an Answer[15] to the Complaint of should it become necessary, it is hereby prayed that [petitioner] be
petitioner. Respondent Tan did admit that meetings were held with Mr. Sia, as the ordered to pay herein [respondents Tan and Obiedo] the entire
principal loan of P95,700,620.00, plus interests, surcharges and WHEREFORE, premises considered, the [herein petitioner]
penalties computed from March 17, 2005 until the entire sum is fully is hereby ordered to pay additional filing fee and the [herein
paid, including the amount of P74,678,647.00 foregone interest respondent], Romeo Tan is also ordered to pay docket and filing fees
covering the period from October 1, 2004 to December 31, 2005 or on his counterclaim, both computed based on Section 7(a) of the
for a total of fifteen (15) months, plus incidental expenses as may be Supreme Court Amended Administrative Circular No. 35-2004 within
proved in court, in the event that Annexes G to L be nullified. Other fifteen (15) days from receipt of this Order to the Clerk of Court,
relief and remedies as are just and equitable under the premises are Regional Trial Court, Naga City and for the latter to compute and to
hereby prayed for.[16] collect the said fees accordingly.[19]

Thereafter, respondent Tan filed before the RTC an Omnibus Motion in which Petitioner moved[20] for the partial reconsideration of the 24 March 2006 Order
he contended that Civil Case No. 2006-0030 involved real properties, the docket fees of the RTC, arguing that Civil Case No. 2006-0030 was principally for the annulment of
for which should be computed in accordance with Section 7(a), not Section 7(b)(1), of the Deeds of Absolute Sale and, as such, incapable of pecuniary estimation. Petitioner
Rule 141 of the Rules of Court, as amended by A.M. No. 04-2-04-SC which took effect submitted that the RTC erred in applying Section 7(a), Rule 141 of the Rules of Court,
on 16 August 2004. Since petitioner did not pay the appropriate docket fees for Civil as amended, to petitioners first cause of action in its Complaint in Civil Case No. 2006-
Case No. 2006-0030, the RTC did not acquire jurisdiction over the said case. Hence, 0030.
respondent Tan asked the RTC to issue an order requiring petitioner to pay the correct
and accurate docket fees pursuant to Section 7(a), Rule 141 of the Rules of Court, as In its Order[21] dated 29 March 2006, the RTC refused to reconsider its 24
amended; and should petitioner fail to do so, to deny and dismiss the prayer of March 2006 Order, based on the following ratiocination:
petitioner for the annulment of the Deeds of Absolute Sale for having been executed in
contravention of the law or of the Memorandum of Agreement as pactum commisorium. Analyzing, the action herein pertains to real property, for as
admitted by the [herein petitioner], the deeds of sale in question
As required by the RTC, the parties submitted their Position Papers on the pertain to real property x x x. The Deeds of Sale subject of the instant
matter. On 24 March 2006, the RTC issued an Order[17] granting respondent Tans case have already been transferred in the name of the [herein
Omnibus Motion. In holding that both petitioner and respondent Tan must pay docket respondents Tan and Obiedo].
fees in accordance with Section 7(a), Rule 141 of the Rules of Court, as amended, the
RTC reasoned: Compared with Quieting of Title, the latter action is brought
when there is cloud on the title to real property or any interest therein
It must be noted that under paragraph (b) 2. of the said or to prevent a cloud from being cast upon title to the real
Section 7, it is provided that QUIETING OF TITLE which is an action property (Art. 476, Civil Code of the Philippines) and the plaintiff
classified as beyond pecuniary estimation shall be governed by must have legal or equitable title to or interest in the real property
paragraph (a). Hence, the filing fee in an action for Declaration of which is the subject matter of the action (Art. 447, ibid.), and yet
Nullity of Deed which is also classified as beyond pecuniary plaintiff in QUIETING OF TITLE is required to pay the fees in
estimation, must be computed based on the provision of Section 7(A) accordance with paragraph (a) of Section 7 of the said Amended
herein-above, in part, quoted. Administrative Circular No. 35-2004, hence, with more reason that
the [petitioner] who no longer has title to the real properties subject
Since [herein respondent], Romeo Tan in his Answer has a of the instant case must be required to pay the required fees in
counterclaim against the plaintiff, the former must likewise pay the accordance with Section 7(a) of the Amended Administrative
necessary filling (sic) fees as provided for under Section 7 (A) of Circular No. 35-2004 afore-mentioned.
Amended Administrative Circular No. 35-2004 issued by the
Supreme Court.[18] Furthermore, while [petitioner] claims that the action for
declaration of nullity of deed of sale and memorandum of agreement
is one incapable of pecuniary estimation, however, as argued by the
Consequently, the RTC decreed on the matter of docket/filing fees: [respondent Tan], the issue as to how much filing and docket fees
should be paid was never raised as an issue in the case of Russell grave and patent, and it must be shown that the discretion was
vs. Vestil, 304 SCRA 738. exercised arbitrarily and despotically.

xxxx Such a situation does not exist in this particular case. The
evidence is insufficient to prove that the court a quoacted
WHEREFORE, the Motion for Partial Reconsideration is despotically in rendering the assailed orders. It acted properly and in
hereby DENIED.[22] accordance with law. Hence, error cannot be attributed to it.[25]

In a letter dated 19 April 2006, the RTC Clerk of Court computed, upon the Hence, the fallo of the Decision of the appellate court reads:
request of counsel for the petitioner, the additional docket fees petitioner must pay for
in Civil Case No. 2006-0030 as directed in the afore-mentioned RTC Orders. Per the WHEREFORE, the petition for certiorari is DENIED. The
computation of the RTC Clerk of Court, after excluding the amount petitioner previously assailed Orders of the court a quo are AFFIRMED.[26]
paid on 16 March 2006, petitioner must still pay the amount of P720,392.60 as docket
Without seeking reconsideration of the foregoing Decision with the Court of
Petitioner, however, had not yet conceded, and it filed a Petition Appeals, petitioner filed its Petition for Review on Certiorari before this Court, with a
for Certiorari with the Court of Appeals; the petition was docketed as CA-G.R. SP No. lone assignment of error, to wit:
94800. According to petitioner, the RTC[24] acted with grave abuse of discretion,
amounting to lack or excess of jurisdiction, when it issued its Orders dated 24 March 18. The herein petitioner most respectfully submits that the
2006 and 29 March 2006 mandating that the docket/filing fees for Civil Case No. 2006- Court of Appeals committed a grave and serious reversible error in
0030, an action for annulment of deeds of sale, be assessed under Section 7(a), Rule affirming the assailed Orders of the Regional Trial Court which
141 of the Rules of Court, as amended. If the Orders would not be revoked, corrected, are clearly contrary to the pronouncement of this Honorable
or rectified, petitioner would suffer grave injustice and irreparable damage. Court in the case of Spouses De Leon v. Court of Appeals, G.R.
No. 104796, March 6, 1998, not to mention the fact that if the said
On 22 November 2006, the Court of Appeals promulgated its Decision judgment is allowed to stand and not rectified, the same would result
wherein it held that: in grave injustice and irreparable damage to herein petitioner in view
of the prohibitive amount assessed as a consequence of said
Clearly, the petitioners complaint involves not only the Orders.[27]
annulment of the deeds of sale, but also the recovery of the real
properties identified in the said documents. In other words, the In Manchester Development Corporation v. Court of Appeals,[28] the Court
objectives of the petitioner in filing the complaint were to cancel the explicitly pronounced that [t]he court acquires jurisdiction over any case only upon the
deeds of sale and ultimately, to recover possession of the same. It is payment of the prescribed docket fee. Hence, the payment of docket fees is not only
therefore a real action. mandatory, but also jurisdictional.

Consequently, the additional docket fees that must be paid In Sun Insurance Office, Ltd. (SIOL) v. Asuncion,[29] the Court laid down
cannot be assessed in accordance with Section 7(b).As a real action, guidelines for the implementation of its previous pronouncement in Manchester under
Section 7(a) must be applied in the assessment and payment of the particular circumstances, to wit:
proper docket fee.
1. It is not simply the filing of the complaint or appropriate
Resultantly, there is no grave abuse of discretion amounting initiatory pleading, but the payment of the prescribed docket fee, that
to lack or excess of jurisdiction on the part of the court a quo. By vests a trial court with jurisdiction over the subject matter or nature
grave abuse of discretion is meant capricious and whimsical exercise of the action. Where the filing of the initiatory pleading is not
of judgment as is equivalent to lack of jurisdiction, and mere abuse accompanied by payment of the docket fee, the court may allow
of discretion is not enough it must be grave. The abuse must be
payment of the fee within a reasonable time but in no case beyond litigation STATED IN THE CURRENT TAX DECLARATION OR
the applicable prescriptive or reglementary period. CURRENT ZONAL VALUATION OF THE BUREAU OF INTERNAL
2. The same rule applies to permissive counterclaims, third- THE STATED VALUE OF THE PROPERTY IN LITIGATION OR
party claims and similar pleadings, which shall not be considered THE VALUE OF THE PERSONAL PROPERTY IN LITIGATION OR
filed until and unless the filing fee prescribed therefor is paid. The THE VALUE OF THE PERSONAL PROPERTY IN LITIGATION AS
court may also allow payment of said fee within a reasonable time ALLEGED BY THE CLAIMANT, is:
but also in no case beyond its applicable prescriptive or reglementary
period. [Table of fees omitted.]

3. Where the trial court acquires jurisdiction over a claim by If the action involves both a money claim and relief
the filing of the appropriate pleading and payment of the prescribed pertaining to property, then THE fees will be charged on both the
filing fee but, subsequently, the judgment awards a claim not amounts claimed and value of property based on the formula
specified in the pleading, or if specified the same has been left for prescribed in this paragraph a.
determination by the court, the additional filing fee therefor shall
constitute a lien on the judgment. It shall be the responsibility of the (b) For filing:
Clerk of Court or his duly authorized deputy to enforce said lien and
assess and collect the additional fee. 1. Actions where the value of the subject matter cannot be

In the Petition at bar, the RTC found, and the Court of Appeals affirmed, that 2. Special civil actions, except judicial foreclosure of
petitioner did not pay the correct amount of docket fees for Civil Case No. 2006- mortgage, EXPROPRIATION PROCEEDINGS,
0030. According to both the trial and appellate courts, petitioner should pay docket fees PARTITION AND QUIETING OF TITLE which will
in accordance with Section 7(a), Rule 141 of the Rules of Court, as
amended.Consistent with the liberal tenor of Sun Insurance, the RTC, instead of 3. All other actions not involving
dismissing outright petitioners Complaint in Civil Case No. 2006-0030, granted property
petitioner time to pay the additional docket fees. Despite the seeming munificence of
the RTC, petitioner refused to pay the additional docket fees assessed against it, [Table of fees omitted.]
believing that it had already paid the correct amount before, pursuant to Section 7(b)(1),
Rule 141 of the Rules of Court, as amended.
The docket fees under Section 7(a), Rule 141, in cases involving real property
Relevant to the present controversy are the following provisions under Rule depend on the fair market value of the same: the higher the value of the real property,
141 of the Rules of Court, as amended by A.M. No. 04-2-04-SC[30] and Supreme Court the higher the docket fees due. In contrast, Section 7(b)(1), Rule 141 imposes a fixed
Amended Administrative Circular No. 35-2004[31]: or flat rate of docket fees on actions incapable of pecuniary estimation.

SEC. 7. Clerks of Regional Trial Courts. In order to resolve the issue of whether petitioner paid the correct amount of
docket fees, it is necessary to determine the true nature of its
(a) For filing an action or a permissive OR COMPULSORY Complaint. The dictum adhered to in this jurisdiction is that the nature of an action is
counterclaim, CROSS-CLAIM, or money claim against an estate not determined by the allegations in the body of the pleading or Complaint itself, rather than
based on judgment, or for filing a third-party, fourth-party, etc. by its title or heading.[32] However, the Court finds it necessary, in ascertaining the true
complaint, or a complaint-in-intervention, if the total sum claimed, nature of Civil Case No. 2006-0030, to take into account significant facts and
INCLUSIVE OF INTERESTS, PENALTIES, SURCHARGES, circumstances beyond the Complaint of petitioner, facts and circumstances which
DAMAGES OF WHATEVER KIND, AND ATTORNEYS petitioner failed to state in its Complaint but were disclosed in the preliminary
FEES, LITIGATIO NEXPENSES AND COSTS and/or in cases proceedings before the court a quo.
involving property, the FAIR MARKET value of the REAL property in
Petitioner persistently avers that its Complaint in Civil Case No. 2006-0030 is
primarily for the annulment of the Deeds of Absolute Sale. Based on the allegations In a real action, the assessed value of the property, or if
and reliefs in the Complaint alone, one would get the impression that the titles to the there is none, the estimated value thereof shall be alleged by the
subject real properties still rest with petitioner; and that the interest of respondents Tan claimant and shall be the basis in computing the fees.
and Obiedo in the same lies only in the Deeds of Absolute Sale sought to be annulled.

What petitioner failed to mention in its Complaint was that respondents Tan It was in accordance with the afore-quoted provision that the Court, in Gochan
and Obiedo already had the Memorandum of Agreement, which clearly provided for the v. Gochan,[34] held that although the caption of the complaint filed by therein
execution of the Deeds of Absolute Sale, registered on the TCTs over the five parcels respondents Mercedes Gochan, et al. with the RTC was denominated as one for
of land, then still in the name of petitioner. After respondents Tan and Obiedo had the specific performance and damages, the relief sought was the conveyance or transfer
Deeds of Absolute Sale notarized on 3 January 2006 and presented the same to of real property, or ultimately, the execution of deeds of conveyance in their favor of the
Register of Deeds for Naga Cityon 8 March 2006, they were already issued TCTs over real properties enumerated in the provisional memorandum of agreement. Under these
the real properties in question, in their own names.Respondents Tan and Obiedo have circumstances, the case before the RTC was actually a real action, affecting as it did
also acquired possession of the said properties, enabling them, by petitioners own title to or possession of real property. Consequently, the basis for determining the
admission, to demolish the improvements thereon. correct docket fees shall be the assessed value of the property, or the estimated value
thereof as alleged in the complaint.But since Mercedes Gochan failed to allege in their
It is, thus, suspect that petitioner kept mum about the afore-mentioned facts complaint the value of the real properties, the Court found that the RTC did not acquire
and circumstances when they had already taken place before it filed its Complaint jurisdiction over the same for non-payment of the correct docket fees.
before the RTC on 16 March 2006. Petitioner never expressed surprise when such
facts and circumstances were established before the RTC, nor moved to amend its Likewise, in Siapno v. Manalo,[35] the Court disregarded the title/denomination
Complaint accordingly. Even though the Memorandum of Agreement was supposed to of therein plaintiff Manalos amended petition as one for Mandamus with Revocation of
have long been registered on its TCTs over the five parcels of land, petitioner did not Title and Damages; and adjudged the same to be a real action, the filing fees for which
pray for the removal of the same as a cloud on its title. In the same vein, although should have been computed based on the assessed value of the subject property or, if
petitioner alleged that respondents Tan and Obiedo forcibly took physical possession there was none, the estimated value thereof. The Court expounded in Siapno that:
of the subject real properties, petitioner did not seek the restoration of such possession
to itself. And despite learning that respondents Tan and Obiedo already secured TCTs In his amended petition, respondent Manalo prayed that
over the subject properties in their names, petitioner did not ask for the cancellation of NTAs sale of the property in dispute to Standford East Realty
said titles. The only logical and reasonable explanation is that petitioner is reluctant to Corporation and the title issued to the latter on the basis thereof, be
bring to the attention of the Court certain facts and circumstances, keeping its declared null and void. In a very real sense, albeit the amended
Complaint safely worded, so as to institute only an action for annulment of Deeds of petition is styled as one for Mandamus with Revocation of Title and
Absolute Sale. Petitioner deliberately avoided raising issues on the title and possession Damages, it is, at bottom, a suit to recover from Standford the
of the real properties that may lead the Court to classify its case as a real action. realty in question and to vest in respondent the ownership and
possession thereof. In short, the amended petition is in reality an
No matter how fastidiously petitioner attempts to conceal them, the allegations action in res or a real action. Our pronouncement in Fortune Motors
and reliefs it sought in its Complaint in Civil Case No. 2006-0030 appears to be (Phils.), Inc. vs. Court of Appeals is instructive. There, we said:
ultimately a real action, involving as they do the recovery by petitioner of its title to and A prayer for annulment or rescission
possession of the five parcels of land from respondents Tan and Obiedo. of contract does not operate to efface the true
objectives and nature of the action which is to
A real action is one in which the plaintiff seeks the recovery of real property; recover real property. (Inton, et al., v. Quintan,
or, as indicated in what is now Section 1, Rule 4 of the Rules of Court, a real action is 81 Phil. 97, 1948)
an action affecting title to or recovery of possession of real property. [33]
An action for the annulment or
Section 7, Rule 141 of the Rules of Court, prior to its amendment by A.M. No. rescission of a sale of real property is a real
04-2-04-SC, had a specific paragraph governing the assessment of the docket fees for action. Its prime objective is to recover said
real action, to wit:
real property. (Gavieres v. Sanchez, 94 Phil. 760, contracts of sale of the disputed properties be cancelled; that Serrano, et ordered
1954) to pay Delica, jointly and severally, actual, moral and exemplary damages in the amount
of P200,000.00, as well as attorneys fee of P200,000.00 and costs of litigation; that a
An action to annul a real estate mortgage TRO and a writ of preliminary injunction be issued ordering Serrano, et al. to
foreclosure sale is no different from an action to immediately restore him to his possession of the parcels of land in question; and that
annul a private sale of real property. (Muoz v. after trial, the writ of injunction be made permanent. The Court dismissed Delicas
Llamas, 87 Phil. 737, 1950). complaint for the following reasons:
A careful examination of respondents complaint is that it is
While it is true that petitioner does not a real action. In Paderanga vs. Buissan, we held that in a real
directly seek the recovery of title or action, the plaintiff seeks the recovery of real property, or, as stated
possession of the property in question, his in Section 2(a), Rule 4 of the Revised Rules of Court, a real action is
action for annulment of sale and his claim for one affecting title to real property or for the recovery of possession
damages are closely intertwined with the issue of, or for partition or condemnation of, or foreclosure of a mortgage
of ownership of the building which, under the on a real property.
law, is considered immovable property, the
recovery of which is petitioner's primary Obviously, respondents complaint is a real action involving
objective. The prevalent doctrine is that an not only the recovery of real properties, but likewise the cancellation
action for the annulment or rescission of a sale of the titles thereto.
of real property does not operate to efface the
fundamental and prime objective and nature of Considering that respondents complaint is a real action, the
the case, which is to recover said real property. Rule requires that the assessed value of the property, or if there is
It is a real action. none, the estimated value thereof shall be alleged by the claimant and
Unfortunately, and evidently to evade payment of the shall be the basis in computing the fees.
correct amount of filing fee, respondent Manalo never alleged in the
body of his amended petition, much less in the prayer portion thereof, We note, however, that neither the assessed value nor the
the assessed value of the subject res, or, if there is none, the estimated value of the questioned parcels of land were alleged by
estimated value thereof, to serve as basis for the receiving clerk in respondent in both his original and amended complaint. What he
computing and arriving at the proper amount of filing fee due thereon, stated in his amended complaint is that the disputed realties have a
as required under Section 7 of this Courts en banc resolution of 04 BIR zonal valuation of P1,200.00 per square meter. However, the
September 1990 (Re: Proposed Amendments to Rule 141 on Legal alleged BIR zonal valuation is not the kind of valuation required by the
Fees). Rule. It is the assessed value of the realty. Having utterly failed to
comply with the requirement of the Rule that he shall allege in his
Even the amended petition, therefore, should have been complaint the assessed value of his real properties in controversy, the
expunged from the records. correct docket fee cannot be computed. As such, his complaint
should not have been accepted by the trial court. We thus rule that it
In fine, we rule and so hold that the trial court never acquired has not acquired jurisdiction over the present case for failure of herein
jurisdiction over its Civil Case No. Q-95-24791.[36] respondent to pay the required docket fee. On this ground alone,
respondents complaint is vulnerable to dismissal.[38]

It was in Serrano v. Delica,[37] however, that the Court dealt with a complaint
that bore the most similarity to the one at bar. Therein respondent Delica averred that Brushing aside the significance of Serrano, petitioner argues that said
undue influence, coercion, and intimidation were exerted upon him by therein decision, rendered by the Third Division of the Court, and not by the Court en banc,
petitioners Serrano, et al. to effect transfer of his properties. Thus, Delica filed a cannot modify or reverse the doctrine laid down in Spouses De Leon v. Court of
complaint before the RTC against Serrano, et al., praying that the special power of Appeals.[39] Petitioner relies heavily on the declaration of this Court in Spouses De
attorney, the affidavit, the new titles issued in the names of Serrano, et al., and the
Leon that an action for annulment or rescission of a contract of sale of real property is A real action indisputably involves real property. The docket fees for a real
incapable of pecuniary estimation. action would still be determined in accordance with the value of the real property
involved therein; the only difference is in what constitutes the acceptable value. In
The Court, however, does not perceive a contradiction between Serrano and computing the docket fees for cases involving real properties, the courts, instead of
the Spouses De Leon. The Court calls attention to the following statement in Spouses relying on the assessed or estimated value, would now be using the fair market
De Leon: A review of the jurisprudence of this Court indicates that in determining value of the real properties (as stated in the Tax Declaration or the Zonal Valuation of
whether an action is one the subject matter of which is not capable of pecuniary the Bureau of Internal Revenue, whichever is higher) or, in the absence thereof, the
estimation, this Court has adopted the criterion of first ascertaining the nature of the stated value of the same.
principal action or remedy sought. Necessarily, the determination must be done on a
case-to-case basis, depending on the facts and circumstances of each. What petitioner In sum, the Court finds that the true nature of the action instituted by petitioner
conveniently ignores is that in Spouses De Leon, the action therein that private against respondents is the recovery of title to and possession of real property. It is a
respondents instituted before the RTC was solely for annulment or rescission of the real action necessarily involving real property, the docket fees for which must be
contract of sale over a real property.[40] There appeared to be no transfer of title or computed in accordance with Section 7(1), Rule 141 of the Rules of Court, as
possession to the adverse party. Their complaint simply prayed for: amended. The Court of Appeals, therefore, did not commit any error in affirming the
RTC Orders requiring petitioner to pay additional docket fees for its Complaint in Civil
1. Ordering the nullification or rescission of the Contract of Case No. 2006-0030.
Conditional Sale (Supplementary Agreement) for having violated the The Court does not give much credence to the allegation of petitioner that if
rights of plaintiffs (private respondents) guaranteed to them under the judgment of the Court of Appeals is allowed to stand and not rectified, it would result
Article 886 of the Civil Code and/or violation of the terms and in grave injustice and irreparable injury to petitioner in view of the prohibitive amount
conditions of the said contract. assessed against it. It is a sweeping assertion which lacks evidentiary
support.Undeniably, before the Court can conclude that the amount of docket fees is
2. Declaring void ab initio the Deed of Absolute Sale for indeed prohibitive for a party, it would have to look into the financial capacity of said
being absolutely simulated; and party. It baffles this Court that herein petitioner, having the capacity to enter into multi-
million transactions, now stalls at paying P720,392.60 additional docket fees so it could
3. Ordering defendants (petitioners) to pay plaintiffs (private champion before the courts its rights over the disputed real properties. Moreover, even
respondents) attorney's fees in the amount of P100,000.00.[41] though the Court exempts individuals, as indigent or pauper litigants, from paying
docket fees, it has never extended such an exemption to a corporate entity.

As this Court has previously discussed herein, the nature of Civil Case No. WHEREFORE, premises considered, the instant Petition for Review is
2006-0030 instituted by petitioner before the RTC is closer to that of Serrano, rather hereby DENIED. The Decision, dated 22 November 2006, of the Court of Appeals
than of Spouses De Leon, hence, calling for the application of the ruling of the Court in in CA-G.R. SP No. 94800, which affirmed the Orders dated 24 March 2006 and 29
the former, rather than in the latter. March 2006 of the RTC, Branch 22, of Naga City, in Civil Case No. RTC-2006-
It is also important to note that, with the amendments introduced by A.M. No. 0030, ordering petitioner Ruby Shelter Builders and Realty Development
04-2-04-SC, which became effective on 16 August 2004, the paragraph in Section 7, Corporation to pay additional docket/filing fees, computed based on Section 7(a),
Rule 141 of the Rules of Court, pertaining specifically to the basis for computation of Rule 141 of the Rules of Court, as amended, is hereby AFFIRMED. Costs against
docket fees for real actions was deleted. Instead, Section 7(1) of Rule 141, as the petitioner.
amended, provides that in cases involving real property, the FAIR MARKET
value of the REAL property in litigation STATED IN THE CURRENT TAX SO ORDERED.
VALUE OF THE PROPERTY IN LITIGATION x x x shall be the basis for the
computation of the docket fees. Would such an amendment have an impact
on Gochan, Siapno, and Serrano? The Court rules in the negative.
The DAR Regional Director then filed a petition for relief from judgment of the DARAB
G.R. NO. 142628 February 6, 2007 Decision, docketed as DARAB Case No. 0555. In its Decision dated October 5, 1995,
the DARAB granted the petition and gave due course to the Notice of Coverage. It
SPRINGFIELD DEVELOPMENT CORPORATION, INC. and HEIRS OF PETRA also directed the Municipal Agrarian Reform Office to proceed with the
CAPISTRANO PIIT, Petitioners, documentation, acquisition, and distribution of the property to the true and lawful
vs. beneficiaries.8
ORIENTAL, BRANCH 40, CAGAYAN DE ORO CITY, DEPARTMENT OF The DARAB also issued an Order dated May 22, 1997, ordering the heirs of Piit and
AGRARIAN REFORM ADJUDICATION BOARD (DARAB), DAR REGION X Springfield to pay the farmer-beneficiaries the amount of Twelve Million, Three
DIRECTOR, ROSALIO GAMULO, FORTUNATO TELEN, EMERITA OLANGO, Hundred Forty Thousand, Eight Hundred Pesos (₱12,340,800.00), corresponding to
THERESA MONTUERTO, DOMINGO H. CLAPERO, JOEL U. LIM, JENEMAIR U. the value of the property since the property has already been developed into a
CLAPERO, EVELITO CULANGO, VILMA/CRUISINE ALONG, EFREN EMATA, On June 13, 1997, Springfield and the heirs of Piit (petitioners) filed with the RTC of
GREGORIO CABARIBAN, and SABINA CANTORANA, Respondents. Cagayan de Oro City, Branch 40, a petition for annulment of the DARAB Decision
dated October 5, 1995 and all its subsequent proceedings. Petitioners contend that
DECISION the DARAB decision was rendered without affording petitioners any notice and
On motion filed by the farmer-beneficiaries, the RTC issued an Order dated June 25,
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of 1997, dismissing the case for lack of jurisdiction.10
Court. The principal issue presented for resolution is whether the Regional Trial Court
(RTC) has jurisdiction to annul final judgment of the Department of Agrarian Reform On July 2, 1997, petitioners filed with the Court of Appeals (CA) a special civil action
Adjudication Board (DARAB). for certiorari, mandamus, and prohibition with prayer for the issuance of writ of
preliminary injunction and/or temporary restraining order, docketed as CA-G.R. SP
The antecedent facts: No. 44563.11 Petitioners alleged that the RTC committed grave abuse of discretion
when it ruled that the annulment of judgment filed before it is actually an action for
certiorari in a different color. According to petitioners, what it sought before the RTC is
Petra Capistrano Piit previously owned Lot No. 2291 located in Cagayan de Oro City
an annulment of the DARAB Decision and not certiorari, as the DARAB Decision is
which measured 123,408 square meters under Transfer Certificate of Title No. T-
void ab initio for having been rendered without due process of law. 12
62623. Springfield Development Corporation, Inc. (Springfield) bought Lot No. 2291-C
with an area of 68,732 square meters, and Lot No. 2291-D with an area of 49,778
square meters.1 Springfield developed these properties into a subdivision project In the assailed Decision13 dated July 16, 1998, the CA dismissed the petition for lack
called Mega Heights Subdivision.2 of merit, ruling that the RTC does not have jurisdiction to annul the DARAB Decision
because it is a co-equal body.14

On May 4, 1990, the Department of Agrarian Reform (DAR), through its Municipal
Agrarian Reform Officer, issued a Notice of Coverage,3 placing the property under the However, on January 12, 1999, the CA ordered the elevation of the DARAB records
coverage of Republic Act (R.A.) No. 6657 or the Comprehensive Agrarian Reform before it, declaring that it "overlooked the fact that petitioners likewise applied for a
Law of 1988. There being an opposition from the heirs of Petra Piit, the case was writ of prohibition against the enforcement of the DARAB decision which they claim to
docketed as DARAB Case No. X-305. On August 27, 1991, DARAB Provincial be patently void."15 Forwarded to the CA were the records of the original case filed
Adjudicator Abeto A. Salcedo, Jr. rendered a decision declaring the nature of the with the DARAB-Region X, and it appearing that the petition for relief from judgment
property as residential and not suitable for agriculture.4 The Regional Director filed a and its pertinent records were forwarded to the DARAB Central Office, the CA issued
notice of appeal, which the Provincial Adjudicator disallowed for being pro forma and another Resolution on December 20, 1999,16 requiring the DARAB Central Office to
frivolous.5 The decision became final and executory6 and Springfield proceeded to forward the records of the case. But after receipt of the records, the CA simply denied
develop the property.7 petitioners' motion for reconsideration per Resolution 17 dated February 23, 2000
without specifically resolving the issues raised concerning the prayer for a writ of In their Joint-Comments, the farmer-beneficiaries and the DARAB (respondents)
prohibition. refute petitioners' allegation that they were not afforded due process in the DARAB
proceedings, stating that petitioners were impleaded as a party thereto, and in fact,
Hence, the present petition on the following grounds: they attended some of the hearings although their counsel was absent. Respondents
also adopt the CA's ruling that the RTC is not vested with any jurisdiction to annul the
I DARAB decision.

THE COURT OF APPEALS COMMITTED A CLEAR ERROR OF LAW IN As stated at the outset, the main issue in this case is whether the RTC has jurisdiction
JURISDICTION VESTED BY LAW OVER CASES WHERE THE Note must be made that the petition for annulment of the DARAB decision was filed
EXCLUSIVE JURISDICTION WAS NOT EXPRESSLY GRANTED TO ANY with the RTC on June 13, 1997, before the advent of the 1997 Rules of Civil
OTHER COURTS [SIC] OR TRIBUNAL, IN EFFECT, MODIFYING THE Procedure, which took effect on July 1, 1997. Thus, the applicable law is B.P. Blg.
APPLICABLE LAW ON THE MATTER. 129 or the Judiciary Reorganization Act of 1980, enacted on August 10, 1981.

II It is also worthy of note that before the effectivity of B.P. Blg. 129, a court of first
instance has the authority to annul a final and executory judgment rendered by
THE COURT OF APPEALS IRREGULARLY DISMISSED PETITIONERS' another court of first instance or by another branch of the same court. This was the
MOTION FOR RECONSIDERATION AFTER IT HAD RESOLVED TO Court's ruling in Dulap v. Court of Appeals.20 Yet, in subsequent cases,21 the Court
ENTERTAIN PETITIONERS' PETITION FOR PROHIBITION AND TO held that the better policy, as a matter of comity or courteous interaction between
REVIEW THE DARAB PROCEEDINGS, THEREBY DEPARTING FROM courts of first instance and the branches thereof, is for the annulment cases to be
THE USUAL COURSE OF JUDICIAL PROCEEDINGS. tried by the same court or branch which heard the main action.

III The foregoing doctrines were modified in Ngo Bun Tiong v. Sayo,22 where the Court
expressed that pursuant to the policy of judicial stability, the doctrine of non-
interference between concurrent and coordinate courts should be regarded as highly
important in the administration of justice whereby the judgment of a court of
competent jurisdiction may not be opened, modified or vacated by any court of
concurrent jurisdiction.
WAS ORIGINALLY LODGED BEFORE IT.18 With the introduction of B.P. Blg. 129,23 the rule on annulment of judgments was
specifically provided in Section 9(2), which vested in the then Intermediate Appellate
Court (now the CA) the exclusive original jurisdiction over actions for annulment of
Petitioners argue that under Batas Pambansa (B.P.) Blg. 129, there is no provision
judgments of RTCs. Sec. 9(3) of B.P. Blg. 129 also vested the CA with "exclusive
that vests with the CA jurisdiction over actions for annulment of DARAB judgments.
appellate jurisdiction over all final judgments, decisions, resolutions, orders, or awards
Petitioners, however, contend that the RTC may take cognizance of the annulment
of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or
case since Section 19 of B.P. Blg. 129 vests the RTC with general jurisdiction and an
commissions, except those falling within the appellate jurisdiction of the Supreme
action for annulment is covered under such general jurisdiction. According to
Court in accordance with the Constitution, the provisions of this Act, and of sub-
petitioners, "this is but a logical consequence of the fact that no other courts were
paragraph (1) of the third paragraph and subparagraph (4) of the fourth paragraph of
expressly given the jurisdiction over such actions." 19 Petitioners further argue that the
Section 17 of the Judiciary Act of 1948." As provided in paragraph 16 of the Interim
CA was in error when it summarily ignored their application for a writ of prohibition, as
Rules and Guidelines implementing B.P. Blg. 129, the quasi-judicial bodies whose
it was necessary to restrain the DARAB from enforcing its void decision; and even if
decisions are exclusively appealable to the CA are those, which under the law, R.A.
the DARAB decision was valid, the writ of prohibition could have enjoined the
No. 5434,24 or its enabling acts, are specifically appealable to the CA.
execution of the DARAB decision since there have been changes which will make the
execution unjust and inequitable.
Significantly, B.P. Blg. 129 does not specifically provide for any power of the RTC to the RTC's control. The CA was therefore correct in sustaining the RTC's dismissal of
annul judgments of quasi-judicial bodies. However, in BF Northwest Homeowners the petition for annulment of the DARAB Decision dated October 5, 1995, as the RTC
Association, Inc. v. Intermediate Appellate Court,25 the Court ruled that the RTCs does not have any jurisdiction to entertain the same.
have jurisdiction over actions for annulment of the decisions of the National Water
Resources Council, which is a quasi-judicial body ranked with inferior courts, pursuant This brings to fore the issue of whether the petition for annulment of the DARAB
to its original jurisdiction to issue writs of certiorari, prohibition, and mandamus, under judgment could be brought to the CA. As previously noted, Section 9(2) of B.P. Blg.
Sec. 21(1) of B.P. Blg. 129, in relation to acts or omissions of an inferior court. This 129 vested in the CA the exclusive original jurisdiction over actions for annulment of
led to the conclusion that despite the absence of any provision in B.P. Blg. 129, the judgments, but only those rendered by the RTCs. It does not expressly give the CA
RTC had the power to entertain petitions for annulment of judgments of inferior courts the power to annul judgments of quasi-judicial bodies. Thus, in Elcee Farms, Inc. v.
and administrative or quasi-judicial bodies of equal ranking. This is also in Semillano,30 the Court affirmed the ruling of the CA that it has no jurisdiction to
harmony with the "pre-B.P. Blg. 129" rulings of the Court recognizing the power of a entertain a petition for annulment of a final and executory judgment of the NLRC,
trial court (court of first instance) to annul final judgments.26 Hence, while it is true, as citing Section 9 of B.P. Blg. 129, as amended, which only vests in the CA "exclusive
petitioners contend, that the RTC had the authority to annul final judgments, such jurisdiction over actions for annulment of judgments of Regional Trial Courts." This
authority pertained only to final judgments rendered by inferior courts and quasi- was reiterated in Galang v. Court of Appeals,31where the Court ruled that that the CA
judicial bodies of equal ranking with such inferior courts. is without jurisdiction to entertain a petition for annulment of judgment of a final
decision of the Securities and Exchange Commission.
The foregoing statements beg the next question, i.e., whether the DARAB is a quasi-
judicial body with the rank of an inferior court such that the RTC may take Recent rulings on similar cases involving annulments of judgments of quasi-judicial
cognizance of an action for the annulments of its judgments. The answer is no. bodies are also quite instructive on this matter.

The DARAB is a quasi-judicial body created by Executive Order Nos. 229 and 129-A. In Cole v. Court of Appeals,32 involving an annulment of the judgment of the HLURB
R.A. No. 6657 delineated its adjudicatory powers and functions. The DARAB Revised Arbiter and the Office of the President (OP), filed with the CA, the Court stated that,
Rules of Procedure adopted on December 26, 198827specifically provides for the "(U)nder Rule 47 of the Rules of Court, the remedy of annulment of judgment is
manner of judicial review of its decisions, orders, rulings, or awards. Rule XIV, confined to decisions of the Regional Trial Court on the ground of extrinsic fraud and
Section 1 states: lack of jurisdiction x x x." The Court further ruled, viz.:

SECTION 1. Certiorari to the Court of Appeals. Any decision, order, award or ruling Although the grounds set forth in the petition for annulment of judgment are fraud and
by the Board or its Adjudicators on any agrarian dispute or on any matter pertaining to lack of jurisdiction, said petition cannot prosper for the simple reason that the
the application, implementation, enforcement or interpretation of agrarian reform laws decision sought to be annulled was not rendered by the Regional Trial Court
or rules and regulations promulgated thereunder, may be brought within fifteen (15) but by an administrative agency (HLU Arbiter and Office of the President),
days from receipt of a copy thereof, to the Court of Appeals by certiorari, except as hence, not within the jurisdiction of the Court of Appeals. There is no such
provided in the next succeeding section. Notwithstanding an appeal to the Court of remedy as annulment of judgment of the HLURB or the Office of the
Appeals the decision of the Board or Adjudicator appealed from, shall be immediately President. Assuming arguendo that the annulment petition can be treated as a
executory. petition for review under Rule 43 of the 1997 Rules of Civil Procedure, the same
should have been dismissed by the Court of Appeals, because no error of judgment
Further, the prevailing 1997 Rules of Civil Procedure, as amended, expressly was imputed to the HLURB and the Office of the President. Fraud and lack of
provides for an appeal from the DARAB decisions to the CA.28 jurisdiction are beyond the province of petitions under Rule 43 of the Rules of Court,
as it covers only errors of judgment. A petition for annulment of judgment is an
The rule is that where legislation provides for an appeal from decisions of certain initiatory remedy, hence no error of judgment can be the subject thereof. Besides, the
administrative bodies to the CA, it means that such bodies are co-equal with the RTC, Arbiter and the Office of the President indisputably have jurisdiction over the cases
in terms of rank and stature, and logically, beyond the control of the latter. 29 brought before them in line with our ruling in Francisco Sycip, Jr. vs. Court of Appeals,
promulgated on March 17, 2000, where the aggrieved townhouse buyers may seek
Given that DARAB decisions are appealable to the CA, the inevitable conclusion is protection from the HLURB under Presidential Decree No. 957, otherwise known as
that the DARAB is a co-equal body with the RTC and its decisions are beyond "Subdivision and Condominium Buyers' Protective Decree."33 (Emphasis supplied)
In Macalalag v. Ombudsman,34 the Court ruled that Rule 47 of the 1997 Rules of Civil The OP then issued a Decision dated March 29, 1996 reversing the DAR Secretary's
Procedure on annulment of judgments or final orders and resolutions covers decision and approving the application for conversion. Executive Secretary Ruben D.
"annulment by the Court of Appeals of judgments or final orders and resolutions in Torres denied the DAR's motion for reconsideration for having been filed beyond the
civil actions of Regional Trial Courts for which the ordinary remedies of new trial, reglementary period of 15 days, and it was also declared that the OP Decision dated
appeal, petition for relief or other appropriate remedies could no longer be availed of March 29, 1996 had already become final and executory.
through no fault of the petitioner." Thus, the Court concluded that judgments or final
orders and resolutions of the Ombudsman in administrative cases cannot be annulled Because of this, the farmer-beneficiaries staged a hunger strike on October 9, 1997,
by the CA, more so, since The Ombudsman Act specifically deals with the remedy of protesting the OP's decision. In order to resolve the strike, the OP issued a so-called
an aggrieved party from orders, directives and decisions of the Ombudsman in "Win/Win" resolution on November 7, 1997, modifying the decision in that
administrative disciplinary cases only, and the right to appeal is not to be considered NQSRMDC's application for conversion is approved only with respect to the
granted to parties aggrieved by orders and decisions of the Ombudsman in criminal or approximately 44-hectare portion of the land adjacent to the highway, as
non-administrative cases. recommended by the Department of Agriculture, while the remaining approximately
100 hectares traversed by an irrigation canal and found to be suitable for agriculture
While these cases involve annulments of judgments under the 1997 Rules of Civil shall be distributed to qualified
Procedure, as amended, still, they still find application in the present case, as the
provisions of B.P. Blg. 129 and the 1997 Rules of Civil Procedure, as amended, on A petition for certiorari and prohibition under Rule 65 of the Revised Rules of
annulment of judgments are identical. Court36 was then filed with the Court, which was contested by the Office of the
Solicitor General on the ground that the proper remedy should have been to file a
Consequently, the silence of B.P. Blg. 129 on the jurisdiction of the CA to annul petition for review directly with the CA in accordance with Rule 43 of the Revised
judgments or final orders and resolutions of quasi-judicial bodies like the DARAB Rules of Court.
indicates its lack of such authority.
In resolving the issue, the Court recognized the rule that the Supreme Court, CA and
Further, petitioners are also asking the Court to take cognizance of their prayer for the RTC have original concurrent jurisdiction to issue a writ of certiorari, prohibition, and
issuance of a writ of prohibition, which they claim was not acted upon by the CA, mandamus. However, due to compelling reasons and in the interest of speedy justice,
citing the Court's action in Fortich v. Corona35 where the Court took cognizance of the the Court resolved to take primary jurisdiction over the petition in the interest of
petition previously filed with the CA due to compelling reasons. The Court is not speedy justice, after which the Court nullified the act of the OP in re-opening the case
persuaded to do so. and substantially modifying its March 29, 1996 Decision which had already become
final and executory, as it was in gross disregard of the rules and basic legal precept
Fortich involved a 144-hectare land located at San Vicente, Sumilao, Bukidnon, that accord finality to administrative determinations.
owned by the Norberto Quisumbing, Sr. Management and Development Corporation
(NQSRMDC), which was leased as a pineapple plantation to Del Monte Philippines, It must be stressed at this point that the Court, as a rule, will not entertain direct resort
Inc. for a period of 10 years. During the existence of the lease, the DAR placed the to it unless the redress desired cannot be obtained in the appropriate courts, and
entire 144-hectare property under compulsory acquisition and assessed the land exceptional and compelling circumstances, such as cases of national interest and of
value at ₱2.38 million. When the NQSRMDC/BAIDA (Bukidnon Agro-Industrial serious implications, justify the availment of the extraordinary remedy of writ of
Development Association) filed an application for conversion due to the passage of certiorari, prohibition, or mandamus calling for the exercise of its primary
Resolution No. 6 by the Provincial Development Council of Bukidnon and Ordinance jurisdiction.37 The Court finds no compelling circumstances in this case to warrant a
No. 24 by the Sangguniang Bayan of Sumilao, Bukidnon, reclassifying the area from relaxation of the foregoing rule. The Fortich case is not analogous with the present
agricultural to industrial/institutional, the same was disapproved by the DAR Secretary case such that the Court is not bound to abandon all rules, take primary jurisdiction,
and instead, the property was placed under the compulsory coverage of and resolve the merits of petitioners' application for a writ of prohibition.
Comprehensive Agrarian Reform Program for distribution to all qualified beneficiaries.
This prompted Governor Carlos O. Fortich of Bukidnon to file an appeal with the OP, In the present case, the assailed DARAB Decision dated October 5, 1995 granting the
while NQSRMDC filed with the CA a petition for certiorari, and prohibition with petition for relief from judgment and giving due course to the Notice of Coverage was
preliminary injunction. made pursuant to a petition for relief from judgment filed by the DAR, albeit petitioners
are contesting the validity of the proceedings held thereon. On the other hand, in
Fortich, the OP's "Win/Win" resolution dated November 7, 1997 was made motu present case. In this regard, the CA is in a better position to fully adjudicate the case
proprio, as a result of the hunger strike staged by the farmer-beneficiaries. for it can delve into the records to determine the probative value of the evidence
supporting the findings of the Provincial Adjudicator and of the DARAB. In addition,
Further, the OP's "Win/Win" Resolution dated November 7, 1997 in the Fortich case is the CA is empowered by its internal rules to require parties to submit additional
a patently void judgment since it was evident that there was already an existing final documents, as it may find necessary to promote the ends of substantial justice, and
and executory OP Decision dated March 29, 1996. In this case, the assailed DARAB further order the transmittal of the proper records for it to fully adjudicate the case.
Decision dated October 5, 1995 appears to be regular on its face, and for its alleged After all, it is an avowed policy of the courts that cases should be determined on the
nullity to be resolved, the Court must delve into the records of the case in order to merits, after full opportunity to all parties for ventilation of their causes and defenses,
determine the validity of petitioners' argument of lack of due process, absent notice rather than on technicality or some procedural imperfections. In that way, the ends of
and hearing. justice would be served better.44

Moreover, the principle of hierarchy of courts applies generally to cases involving WHEREFORE, the petition is PARTLY GRANTED. This case is REMANDED to the
factual questions. As it is not a trier of facts, the Court cannot entertain cases Court of Appeals which is DIRECTED to resolve petitioners' prayer for the issuance of
involving factual issues.38 The question of whether the DARAB Decision dated the writ of prohibition in their Motion for Reconsideration.
October 5, 1995 is null and void and enforceable against petitioners for having been
rendered without affording petitioners due process is a factual question which Upon finality of this Decision, let the records be remanded forthwith to the Court of
requires a review of the records of this case for it to be judiciously resolved. Appeals.

The Court notes that the CA, indeed, failed to resolve petitioners' prayer for the No pronouncement as to costs.
issuance of the writ of prohibition, which, significantly, focuses on the alleged nullity of
the DARAB Decision dated October 5, 1995. On this score, the CA found that the SO ORDERED.
application for the issuance of the writ of prohibition was actually a collateral attack on
the validity of the DARAB decision. But, a final and executory judgment may be set
aside in three ways;39 and a collateral attack, whereby in an action to obtain a
different relief, an attack on the judgment is nevertheless made as an incident
thereof,40 is one of these. This tenet is based upon a court's inherent authority to
expunge void acts from its records.41 Despite recognizing the need to resolve
petitioners' application for the writ of prohibition in its Resolution dated January 12,
1999, the CA nonetheless summarily denied petitioners' motion for reconsideration in
its Resolution dated February 23, 2000,42 leaving the matter hanging and unresolved.

At first, the Court considered resolving the merits of petitioners' motion for
reconsideration concerning their application for a writ of prohibition against enforcing
the DARAB Decision dated October 5, 1995. Thus, in a Resolution dated June 5,
2006, the Court directed the CA to transmit the records of DARAB Case No. 0555,
which was previously required by the CA to be forwarded to it per Resolution dated
December 20, 1999.43 However, as of even date, the CA has not complied with the
Court's Resolution. Withal, upon re-examination of the issues involved in this case,
the Court deems it more judicious to remand this case to the CA for immediate
resolution of petitioners' motion for reconsideration, re: their application for the writ of

Moreover, the radical conflict in the findings of the Provincial Adjudicator and the
DARAB as regards the nature of the subject property necessitates a review of the
THIRD DIVISION However, on December 29, 1983, Adoracion, by executing a notarized Pinanumpaang
Salaysay[8] with the conformity of Leon, and for a consideration of P72,500.00,
OTILIA STA. ANA, G.R. No. 164340 transferred her rights in favor of petitioner Otilia Sta. Ana [9] (petitioner) who, together
Petitioner, with her husband, Marciano de la Cruz (Marciano), became the new tenants of the
Present: subject land.

YNARES-SANTIAGO, J., At the outset, the parties had a harmonious tenancy relationship. [10] Unfortunately,
- versus - Chairperson, circumstances transpired which abraded the relationship. The Department of Agrarian
AUSTRIA-MARTINEZ, Reform (DAR) mediated in order to amicably settle the controversy, but no settlement
CHICO-NAZARIO, was reached by the parties. Thus, the instant case.
REYES, JJ. In their Complaint for Ejectment due to Non-Payment of Lease
SPOUSES LEON G. CARPO and AURORA CARPO, Rentals[11] dated December 1, 1989, respondents alleged that it was their agreement
Respondents. Promulgated: with petitioner and Marciano to increase the existing rentals from 36 cavans to 45
cavans, and that, if respondents wanted to repossess the property, they only had to
November 28, 2008 pay the petitioner the amount of P72,500.00, the same amount paid by the latter to
Adoracion. Respondents further averred that despite repeated demands, petitioner
x------------------------------------------------------------------------------------x refused to pay the actual rentals from July 1985 to September 1989, in violation of
Presidential Decree (P.D.) No. 817; and that the subject land had been declared, upon
the recommendation of the Human Settlements Committee, suitable for commercial
DECISION and industrial purposes, per Zoning Ordinance of 1981 of the Municipality of Sta. Rosa,
Laguna. Respondents prayed that petitioner be ejected from the subject land and be
NACHURA, J.: directed to pay P75,016.00 as unpaid rentals.
Before this Court is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of
Civil Procedure seeking the reversal of the Court of Appeals (CA) Decision[2] dated In their Answer[12] dated January 26, 1990, petitioner and Marciano denied
March 5, 2004 which reversed and set aside the Decision [3] of the Department of that there was an agreement to increase the existing rental which was already fixed at
Agrarian Reform Adjudication Board (DARAB) dated June 24, 1998 and reinstated the 36 cavans of palay, once or twice a year depending on the availability of irrigation
Decision[4] of the Provincial Agrarian Reform Adjudicator (PARAD) of Laguna dated water; that neither was there an agreement as to the future surrender of the land in
October 12, 1993. favor of the respondents; that they did not refuse to pay the rentals because they even
sent verbal and written notices to therespondents, advising them to accept the same;
and that in view of the latters failure to respond, petitioner and Marciano were
compelled to sell the harvest and to deposit the proceeds thereof in Savings Account
The Facts No. 9166 with the Universal Savings Bank at Sta. Rosa, Laguna under the names of
Leon and Marciano. As their special affirmative defense, petitioner and Marciano
Respondent Leon Carpo[5] (Leon) and his brother Francisco G. Carpo are the claimed that Marciano is a farmer-beneficiary of the subject land pursuant to P.D.
registered co-owners of a parcel of land designated as Lot No. 2175 of the Santa Rosa 27. Petitioner and Marciano prayed for the outright dismissal of the complaint and for
Estate Subdivision, situated at Sta. Rosa, Laguna, covered by Transfer Certificate of the declaration of Marciano as full owner of the subject land.
Title (TCT) No. T-17272[6] of the Register of Deeds of Laguna, with an area of 91,337
square meters, more or less. A portion thereof, consisting of 3.5 hectares, pertained to Thereafter, trial on the merits ensued.
Leon and his wife, respondent Aurora Carpo. It was devoted to rice and corn production The PARADs Ruling
(subject land) and was tenanted by one Domingo Pastolero (Domingo), husband of
Adoracion Pastolero (Adoracion).[7] When Domingo passed away, Adoracion together On October 12, 1993, the PARAD ruled that petitioner and Marciano deliberately
with her son Elpidio Pastolero, assumed the tenancy rights of Domingo over the subject defaulted in the payment of the rentals due the respondents. The PARAD found that
land. the deposit made with Republic Planters Bank was actually in the names of petitioner
and Marciano, hence, personal to them. The PARAD also found that it was only during
the hearing that petitioner and Marciano deposited the amount of P40,000.00 with the Petitioner and Marciano sought relief from the DARAB.[13]
Universal Savings Bank for the unpaid rentals. As such the PARAD considered the
deposits as late payments and as implied admission that indeed petitioner and
Marciano did not pay the past rentals when they fell due. The PARAD further held and The DARABs Ruling
disposed thus:

The intent of the defendant to subject the said area under PD 27 On June 24, 1998, the DARAB held:
should pass the criteria set. Foremost is the determination of the
aggregate riceland of plaintiff. He must have more than seven (7) It is a fundamental rule in this jurisdiction that for non-
hectares of land principally devoted to the planting of palay. Area payment of lease rentals to warrant the dispossession and ejectment
over seven (7) hectares shall be the one to be covered by PD 27 on of a tenant, the same must be made in a willful and deliberate
Operation Land Transfer (OLT). In the case at bar, defendants failed manner (Cabero v. Caturna, et al., CA-G.R. 05886-R, March 10,
to prove that plaintiff has more than the required riceland. In fact the 1977). For a valid ouster or ejectment of a farmer-tenant, the willful
subject 3.5 hectares are jointly owned by two. Hence, coverage for and deliberate intent not to pay lease rentals and/or share can be
OLT is remote. ascertained when there is a determination of will not to do a certain
Defendant claimed that plaintiff is covered by LOI 474, and therefore,
he is zero retention of area. In reference to said law, wherein it Considering the circumstances obtaining in this case, it
provides landowner with other agricultural land of more than 7 cannot be concluded that the defendants-appellants deliberately
hectares, or have other industrial lands from where he and his family failed or refused to pay their lease rentals. It was not the fault of
derived resources, then, the owner cannot retain any riceland. defendants-appellants herein that the rentals did not reach the
However, this is not applicable in the instant case, as the defendant plaintiffs-appellees because the latter choose to lend a deaf ear to
failed to prove that plaintiff has other source of income from where the notices sent to them. Clearly, therefore plaintiffs-appellees failed
they will derive their sustenance. to show by substantial evidence that the defendants-appellants
deliberately failed or refused to pay their lease rentals. It has been
WHEREFORE, in view of the foregoing, Judgment is hereby held that the mere failure of a tenant to pay the landowners share
rendered: does not necessarily give the latter the right to eject the former when
there is lack of deliberate intent on the part of the tenant to pay
a) Ordering the ejectment of defendant from the subject (Roxas y Cia v. Cabatuando, 1 SCRA 1106).
landholding for non-payment of lease rentals;

b) Ordering the defendant Marciano de la Cruz to
surrender the possession and cultivation of the subject
WHEREFORE, finding the appeal interposed by the defendants-
land to herein plaintiffs;
appellants to be meritorious, the Decision appealed from is
hereby SET ASIDE and another judgment issued as follows:
Ordering the defendant to pay as actual damage the
amount of P75,016.00 corresponding to the unpaid
1. Enjoining plaintiffs-appellees to respect the peaceful
rentals from July 18, 1985 up to September 16, 1989[;
possession and cultivation of the land in suit by the
defendants-appellants; and
d) [D]eclaring the subject land not covered by
Presidential Decree No. 27, Republic Act [No.] 6657,
2. Directing the MARO of Sta. Rosa, Laguna to assist the
and Executive Order No. 228.
parties in the proper accounting of lease rentals to be
paid by the defendants-appellants to the plaintiffs-
No costs.
SO ORDERED. Petitioner filed a Motion for Reconsideration [15] assailing the aforementioned Decision
Aggrieved, respondents appealed to the CA. On April 16, 2003, Marciano passed which the CA, however, denied in its Resolution[16] dated June 28, 2004.
Hence, this Petition based on the following grounds:
The CAs Ruling
On March 5, 2004, the CA affirmed the factual findings of the PARAD that petitioner N ARROGATING UPON ITSELF WHAT IS OTHERWISE DARS P
and Marciano failed to pay the rentals and that there was no valid tender of payment. OWER TO DETERMINE WHETHER THE SUBJECT
The CA added that this failure to pay was tainted with bad faith and deliberate intent. AGRICULTURAL LAND HAS
Thus, petitioner and Marciano did not legally comply with their duties as tenants. BECOME RESIDENTIAL/INDUSTRIAL/COMMERCIAL.
Moreover, the CA held that the subject land was not covered by P.D. 27, Republic Act
(R.A.) No. 6657 and Executive Order (E.O.) No. 228, since the same had become a THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED
residential, commercial and industrial land, to wit: WHEN IT EQUATED LAND RECLASSIFICATION WITH LAND
In the case at bar, We opted to give more weight to the petitioners PROPRIETY OF EJECTMENT OF AN AGRICULTURAL LESSEE.
contention that the subject landholding is for residential, commercial,
and industrial purposes as declared by zoning ordinance of 1981 of THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED
the town of Sta. Rosa, Laguna upon recommendation of the Human WHEN IT FAILED TO NOTE THAT AN EJECTMENT SUIT BASED
Settlement Committee xxx. The vicinity map of the subject ON A CLAIM OF NON-PAYMENT OF LEASE RENTAL
landholding shows that it is almost beside Nissan Motors IS DIAMETRICALLY ANTITHETICAL TO THE CLAIM THAT
Technopa[r]k and surrounded by the South Expressway and several THE SUBJECT LAND IS NO LONGER AGRICULTURAL BUT A
companies such as the Coca-Cola Bottlers Philippines, Inc. and RESIDENTIAL, COMMERCIAL AND INDUSTRIAL AREA
Toyota Motors Philippines along the Pulong Santa Cruz, National EXEMPTED FROM THE COVERAGE OF P.D. NO. 27, REPUBLIC
Road. The vicinity map shows therefore that the subject landholding ACT NO. 6657 AND EXECUTIVE ORDER NO. 228.
is a residential, commercial, and industrial area exempted from the
coverage of P.D. No. 27, Republic Act. No. 6657 and Executive THE DECISION DATED MARCH 5, 2004--INSOFAR AS IT
The CA ruled in favor of the respondents in this wise: SEC. 14, ART. VIII OF THE 1987 CONSTITUTION FOR HAVING
WHEREFORE, premises considered and pursuant to applicable law DECISION IS BASED.
and jurisprudence on the matter, the present Petition is
hereby GRANTED. Accordingly, the decision of the Department of THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN
Agrarian Reform Adjudication Board-Central Office, Elliptical Road, RESORTING TO SURMISES AND CONJECTURES WHEN IT
Diliman, Quezon City (promulgated on June 24, 1998) is RULED THAT THE FAILURE OF THE HEREIN PETITIONER AND
entered- REINSTATING the decision of the Department of Agrarian TO HEREIN RESPONDENTS, WAS DONE SO IN BAD FAITH AND
Reform Adjudication Board-Region IV, Office of the Provincial WITH DELIBERATE INTENT TO DEPRIVE THE LAND OWNERS
Adjudicator, Sta. Cruz, Laguna (dated October 12, 1993). No THEREOF.
pronouncement as to costs.
Petitioner asseverates that there is no evidence to support respondents' claim that the deliberate refusal to pay; that this default on the part of the petitioner has been recurring
failure to pay the lease rentals was tainted with malevolence, as the records are replete for several years already, thus depriving the respondents as landowners of their share
with acts indicative of good faith on the part of the petitioner and Marciano and bad faith of the subject land in violation of the principle of social justice; that as raised in
on the part of respondents. respondents Omnibus Supplemental Motion for Reconsideration [22] before the DARAB
and as found by the CA based on its vicinity map, [23] the subject land is of a residential,
Moreover, petitioner claimed that the power to determine whether or not the commercial and industrial character, exempted from agrarian reform coverage; and that
subject land is non-agricultural, hence, exempt from the coverage of the the DARAB erred in not finding the sale of the tenancy rights of Adoracion to petitioner
Comprehensive Agrarian Reform Law (CARL), lies with the DAR, and not with the and Marciano for P72,500.00 violative of P.D. 27 even if the same was with Leon's
courts; that mere reclassification by way of a zoning ordinance does not warrant the consent. The sale, respondents contend was therefore, null and void ab initio, not
dispossession of a tenant but conversion does, and entitles the tenant to payment of susceptible of any ratification.[24]
disturbance compensation; the legal concepts of reclassification and conversion are Our Ruling
separate and distinct from each other; that respondents' complaint before the PARAD
alleged and established the fact that the subject land is a riceland, therefore, Before we resolve this case on the merits, a procedural issue must be
agricultural; that the CA failed to explain why it upheld the findings of the PARAD on disposed of.
the issue of non-payment of lease rentals; and that though the issue of non-payment of
lease rentals is a question of fact, due to the conflict of the factual findings of the PARAD Respondents strongly argue that the instant Petition was filed out of time
and CA with those of the DARAB, petitioner asks that this Court review the evidence because, while petitioner originally claimed to have received her copy of the CA
on record, and pursuant to the CA decision in Cabero v. Caturna, et al.,[17] rule on Resolution[25] dated June 28, 2004, denying her Motion for Reconsideration, [26] on July
whether petitioner willfully and deliberately refused to pay lease rentals as to warrant 12, 2004, petitioner eventually admitted, after respondents showed proof to the
her dispossession from the subject land.[18] contrary, that she actually received the said Resolution on July 7, 2004. [27] Thus,
petitioner had only up to July 22, 2004 to appeal the CA's ruling to this Court. In this
On the other hand, respondents aver that petitioner and her family are case, petitioner filed her Motion[28] for Extension of Time to File Petition for Review
wealthy, as they own numerous properties in Sta. Rosa, Laguna including a luxurious on Certiorari (Motion) on July 23, 2004. As such, there was no more period to extend.
house;[19] that, as such, petitioner cannot be considered as a landless tenant deserving Further, the instant Petition was filed on August 27, 2004, or three (3) days beyond the
the protection of agrarian reform laws; that the DARAB negated the highest degree of thirty-day extended period. Hence, respondents submit that the CA decision had
respect the factual findings of the PARAD deserved; that petitioner's claims that already become final and executory.[29]
Marciano repeatedly made
Petitioner alleges that on July 15, 2004, she met with her counsel to engage
the latter's legal services. During said meeting, counsel asked petitioner about the date
verbal and written notices[20] for Leon to accept their lease rentals were fraudulent of receipt of the assailed CA Resolution. Petitioner replied that she received her copy
designs to disguise the deliberate intent of petitioner not to pay the lease rentals; that on July 12, 2004. On July 20, 2004, counsel filed an Entry of Appearance with the
when Leon went to petitioner's residence, petitioner did not pay the P10,000.00 due as CA.[30] On July 23, 2004, petitioner through counsel filed the Motion for Extension of
lease rentals; that during the hearing before the PARAD, when respondents' counsel Time to File Petition for Review. On August 11, 2004, petitioner received a copy of
requested that they be furnished a bank certificate as to the existence of said bank respondents' Opposition to the Motion. Thereafter, upon verification, petitioner admitted
deposits in Republic Planters Bank as of April 20, 1987 and October 1, 1987, petitioner that she received the copy of the CA Resolution on July 7, 2004. Thus, her Motion was
herself commented, Nagdeposito ho talaga kami sa pangalan namin;[21] that the admittedly filed one day late. Petitioner begs the indulgence of this Court for her
statement of petitioner is an admission that bank deposits, if any, were made, not in the oversight and mistake, attributing the same to her lack of education and old age.
name of Leon as contained in the written notices, but rather in the names of petitioner
and Marciano; that such certificate was not introduced in evidence and that upon Rules of procedure are merely tools designed to facilitate the attainment of
inquiry, said deposits do not actually exist; that per recent inquiry, the bank deposit in justice. If the application of the Rules would tend to frustrate rather than to promote
Universal Savings Bank only contains P1,020.19 due to previous withdrawals made by justice, it is always within our power to suspend the rules or except a particular case
Marciano; that the foregoing circumstances indicate a pattern of fraudulent from their operation. Law and jurisprudence grant to courts the prerogative to relax
misrepresentations by the petitioner to mislead the DARAB into believing that petitioner compliance with the procedural rules, even the most mandatory in character, mindful
and Marciano did not deliberately refuse to pay the lease rentals; that from July 18, of the duty to reconcile the need to put an end to litigation speedily and the parties' right
1985 up to the present, petitioner failed to pay the lease rentals showing again, the to an opportunity to be heard.[31]
for non-payment of lease rentals. It also ruled that the subject land is not covered by
Our recent ruling in Tanenglian v. Lorenzo[32] is instructive: P.D. No. 27, R.A. No. 6657, and E.O. No. 228, not on the basis of the allegation in the
complaint, but on the respondents' right of retention.
We have not been oblivious to or unmindful of the extraordinary
situations that merit liberal application of the Rules, allowing us,
depending on the circumstances, to set aside technical infirmities On appeal, the DARAB concentrated on the issue of petitioners failure to pay
and give due course to the appeal. In cases where we dispense with lease rentals. When the DARAB ruled that petitioner and Marciano did not deliberately
the technicalities, we do not mean to undermine the force and fail to pay said rentals, respondents raised a new issue in their Omnibus Motion that
effectivity of the periods set by law. In those rare cases where we did the transaction between Adoracion and petitioner was void in violation of P.D. No. 27,
not stringently apply the procedural rules, there always existed a despite the conformity of Leon. This issue was not resolved by the DARAB.
clear need to prevent the commission of a grave injustice. Our judicial
system and the courts have always tried to maintain a healthy Finally, when the case reached the CA, the appellate court affirmed the
balance between the strict enforcement of procedural laws and the findings of the PARAD that petitioner and Marciano deliberately and in bad faith did not
guarantee that every litigant be given the full opportunity for the just pay the lease rentals. The CA, however, also held that the subject land had already
and proper disposition of his cause. become a residential, commercial and industrial area based on the vicinity map
showing that the land was surrounded by commercial and industrial establishments.
Without doubt, the PARAD acted without jurisdiction when it held that the
In this case, petitioner was one day late in filing her Motion for Extension. To subject land was no longer covered by our agrarian laws because of the retention rights
deny the Petition on this ground alone is too harsh a penalty for a days delay, taking of the respondents. The CA likewise acted without jurisdiction when it ruled that the
into consideration the time, resources and effort spent by petitioner and even by the land had become non-agricultural based on a zoning ordinance of 1981 on the strength
respondents, in order to pursue this case all the way to this Court. Thus, we dispense of a mere vicinity map. These rulings violated the doctrine of primary jurisdiction.
with the apparent procedural defect and resolve this case on the merits. The ends of
justice are better served when cases are determined on the merits with all parties given The doctrine of primary jurisdiction precludes the courts from resolving a controversy
full opportunity to ventilate their causes and defenses rather than on technicality or over which jurisdiction has initially been lodged in an administrative body of special
some procedural imperfections.[33] competence. For agrarian reform cases, jurisdiction is vested in the Department of
Agrarian Reform (DAR); more specifically, in the Department of Agrarian Reform
The Petition is impressed with merit. Adjudication Board (DARAB). Executive Order 229 vested the DAR with (1) quasi-
judicial powers to determine and adjudicate agrarian reform matters; and (2) jurisdiction
In sum, there are two (2) ultimate issues that require resolution in this case: over all matters involving the implementation of agrarian reform, except those falling
1) Whether the CA erred in ruling that the subject land had already become under the exclusive original jurisdiction of the Department of Agriculture and the
residential, commercial and/or industrial, thus, excluded from the coverage of Department of Environment and Natural Resources.[34]
our laws on agrarian reform; and
In Department of Agrarian Reform v. Abdulwahid,[35] we held:
2) Whether the petitioner, as an agricultural tenant, failed to pay her lease rentals
when the same fell due as to warrant her dispossession of the subject As held by this Court in Centeno v. Centeno [343 SCRA 153], "the
land. DAR is vested with the primary jurisdiction to determine and
adjudicate agrarian reform matters and shall have the exclusive
On the first issue, we rule in the affirmative. jurisdiction over all matters involving the implementation of the
To recapitulate, the instant case sprang from a Complaint for Ejectment based agrarian reform program." The DARAB has primary, original and
on Non-Payment of lease rentals. Though an allegation was made by the respondents appellate jurisdiction "to determine and adjudicate all agrarian
that the land had been declared, upon the recommendation of the Human Settlements disputes, cases, controversies, and matters or incidents involving the
Committee, suitable for commercial and industrial purposes, per Zoning Ordinance of implementation of the Comprehensive Agrarian Reform Program
1981 of the Municipality of Sta. Rosa, no argument was advanced by respondents to under R.A. No. 6657, E.O. Nos. 229, 228 and 129-A, R.A. No. 3844
support such allegation, in the same way that no prayer for the ejectment of the tenants as amended by R.A. No. 6389, P.D. No. 27 and other agrarian laws
was raised based on that allegation. The PARAD held that petitioner should be ejected and their implementing rules and regulations."
including the issuance, recall, or cancellation of
Under Section 3 (d) of R.A. No. 6657 (CARP Law), "agrarian dispute" EPs or CLOAs not yet registered with the Register
is defined to include "(d) . . . any controversy relating to tenurial of Deeds;
arrangements, whether leasehold, tenancy, stewardship or otherwise 3.5 Exercise of the right of retention by the landowner;
over lands devoted to agriculture, including disputes concerning 3.6 Application for exemption from coverage under Section
farmworkers associations or representation of persons in negotiating, 10 of RA 6657;
fixing, maintaining, changing or seeking to arrange terms or 3.7 Application for exemption pursuant to Department of
conditions of such tenurial arrangements. It includes any controversy Justice (DOJ) Opinion No. 44 (1990);
relating to compensation of lands acquired under this Act and other 3.8 Exclusion from CARP coverage of agricultural land
terms and conditions of transfer of ownership from landowners to used for livestock, swine, and poultry raising;
farmworkers, tenants and other agrarian reform beneficiaries, 3.9 Cases of exemption/exclusion of fish pond and prawn
whether the disputants stand in the proximate relation of farm farms from the coverage of CARP pursuant to RA
operator and beneficiary, landowner and tenant, or lessor and 7881;
lessee." 3.10 Issuance of Certificate of Exemption for land subject of
Voluntary Offer to Sell (VOS) and Compulsory
Simply put, agrarian disputes, as defined by law and settled in jurisprudence, Acquisition (CA) found unsuitable for agricultural
are within the primary and exclusive original jurisdiction of the PARAD and the DARAB, purposes;
while issues of retention and non-coverage of a land under agrarian reform, among 3.11 Application for conversion of agricultural land to
others, are within the domain of the DAR Secretary. residential, commercial, industrial, or other non-
agricultural uses and purposes including protests
Thus, Section 3, Rule II of the 2003 DARAB Rules of Procedure provides: or oppositions thereto;
3.12 Determination of the rights of agrarian reform
beneficiaries to homelots;
SECTION 3. Agrarian Law Implementation Cases. The 3.13 Disposition of excess area of the tenants/farmer-
Adjudicator or the Board shall have no jurisdiction over matters beneficiary's landholdings;
involving the administrative implementation of RA No. 6657, 3.14 Increase in area of tillage of a tenant/farmer-
otherwise known as the Comprehensive Agrarian Reform Law beneficiary;
(CARL) of 1988 and other agrarian laws as enunciated by pertinent 3.15 Conflict of claims in landed estates administered by
rules and administrative orders, which shall be under the exclusive DAR and its predecessors; or
prerogative of and cognizable by the Office of the Secretary of the 3.16 Such other agrarian cases, disputes, matters or
DAR in accordance with his issuances, to wit: concerns referred to it by the Secretary of the
3.1 Classification and identification of landholdings for
coverage under the agrarian reform program and
the initial issuance of CLOAs and EPs, including Verily, there is an established tenancy relationship between petitioner and
protests or oppositions thereto and petitions for respondents in this case. An action for Ejectment for Non-Payment of lease rentals is
lifting of such coverage; clearly an agrarian dispute, cognizable at the initial stage by
3.2 Classification, identification, inclusion, exclusion, the PARAD and thereafter by the DARAB.[36] But issues with respect to the retention
qualification, or disqualification of potential/actual rights of the respondents as landowners and the exclusion/exemption of the subject
farmer-beneficiaries; land from the coverage of agrarian reform are issues not cognizable by the PARAD and
3.3 Subdivision surveys of land under CARP; the DARAB, but by the DAR Secretary because, as aforementioned, the same are
3.4 Recall, or cancellation of provisional lease rentals, Agrarian Law Implementation (ALI) Cases.
Certificates of Land Transfers (CLTs) and CARP
Beneficiary Certificates (CBCs) in cases outside It has not escaped our notice that, as this case progressed and reached a
the purview of Presidential Decree (PD) No. 816, higher level in the hierarchy of tribunals, the respondents would, invariably, proffer an
additional theory or defense, in order to effect petitioners eviction from the land. As a Under Section 37 of Republic Act No. 3844,[40] as amended, coupled with the fact that
consequence, the simple issue of ejectment based on non-payment of rentals has been the respondents are the complainants themselves, the burden of proof to
muddled. show the existence of a lawful cause for the ejectment
of the petitioner as an agricultural lessee rests upon the respondents as
Proof necessary for the resolution of the issue of the land being covered by,
or excluded/exempted from, P.D. No. 27, R.A. No. 6657, and other pertinent agrarian
laws, as well as of the issue of the right of retention of the respondents, was not offered agricultural lessors.[41] This proceeds from the principle that a tenancy relationship,
in evidence. Worse, the PARAD resolved the issue of retention even if it was not raised once established, entitles the tenant to security of tenure. Petitioner can only be ejected
by the respondents at that level, and even if the PARAD had no jurisdiction over the from the agricultural landholding on grounds provided by law. [42] Section 36 of the same
same. law pertinently provides:

Likewise, the CA ruled that the land had ceased being agricultural on the basis Sec. 36. Possession of Landholding; Exceptions. Notwithstanding
of a mere vicinity map, in open disregard of the Doctrine of Primary Jurisdiction, since any agreement as to the period or future surrender, of the land, an
the issue was within the province of the Secretary of DAR. agricultural lessee shall continue in the enjoyment and possession
of his landholding except when his dispossession has been
We take this opportunity to remind the PARAD and the CA that courts of authorized by the Court in a judgment that is final and executory if
justice have no power to decide a question not in issue. A judgment that goes beyond after due hearing it is shown that:
the issues, and purports to adjudicate something on which the parties were not heard,
is extra-judicial, irregular and invalid. This norm applies not only to courts of xxxx
justice, but also to quasi-judicial
(6) The agricultural lessee does not pay the lease rental when it falls
due: Provided, That if the non-payment of the rental shall be due to
bodies such as the PARAD. Accordingly, premature and irregular were the PARAD crop failure to the extent of seventy-five per centum as a result of a
ruling on the retention rights of the respondents, and the CA decision on the non- fortuitous event, the non-payment shall not be a ground for
agricultural character of the land subject of this controversy -- these issues not having dispossession, although the obligation to pay the rental due that
passed the scrutiny of the DAR Secretary -- are premature and irregular.[37] particular crop is not thereby extinguished;

Thus, we cannot allow ourselves to fall into the same error as that committed xxxx
by the PARAD and the CA, and resolve the issue of the non-agricultural nature of the
subject land by receiving, at this stage, pieces of evidence and evaluating the same,
without the respondents having first introduced them in the proper forum. The Office of Respondents failed to discharge such burden. The agricultural tenant's failure
the DAR Secretary is in a better position to resolve the issues on retention and to pay the lease rentals must be willful and deliberate in order to warrant his
exclusion/exemption from agrarian reform coverage, being the agency lodged with dispossession of the land that he tills.
such authority inasmuch it possesses the necessary expertise on the matter.[38]
Petitioner's counsel opines that there appears to be no decision by this Court
Likewise, we refrain from entertaining the issue raised by respondents that on the matter; he thus submits that we should use the CA decision in Cabero v.
petitioner and her family are not landless tenants and are therefore not deserving of Caturna. This is not correct. In an En Banc Decision by this Court in Roxas y Cia v.
any protection under our laws on agrarian reform, because fairness and due process Cabatuando, et al.,[43] we held that under our law and jurisprudence, mere failure of a
dictate that issues not raised in the proceedings below should not be raised for the first tenant to pay the landholder's share does not necessarily give the latter the right to
time on appeal.[39] eject the former when there is lack of deliberate intent on the part of the tenant to pay.
This ruling has not been overturned.
On the second issue, we rule in the negative.

The term deliberate is characterized by or results from slow, careful, thorough

calculation and consideration of effects and consequences. [44] The term willful, on the
other hand, is defined as one governed by will without yielding to reason or without
regard to reason.[45]

We agree with the findings of the DARAB that it was not the fault of petitioner
that the lease rentals did not reach the respondents because the latter chose to ignore
the notices sent to them. To note, as early as November 10, 1986, Marciano executed
an Affidavit[46] stating that Leon refused to receive the respective lease rentals
consisting of 37 cavans for November 1985 and July 1986. For 1987, Marciano
wrote Leon two letters[47]informing him of the availability of the lease rentals for April
and October of the same year. On April 27, 1988, Marciano sought DAR intervention
and mediation with respect to the execution of a leasehold contract and the fixing of the
leasehold rentals.[48] Meetings were set but respondents failed to attend.[49] The dispute
was referred to the barangay but the parties failed to amicably settle.[50]

These factual circumstances negate the PARAD findings of Marcianos and

petitioner's deliberate and willful intent not to pay lease rentals. Good faith was clearly
demonstrated by Marciano and petitioner when, because respondents refused to
accept the proffered payment, they even went to the point of seeking government
intervention in order to address their problems with respondents. Absent such
deliberate and willful refusal to pay lease rentals, petitioner's ejectment from the subject
land is not justified.

WHEREFORE, the instant Petition is GRANTED. The assailed Decision of the

Court of Appeals in CA-G.R. SP No. 60640 is hereby REVERSED and SET ASIDE.
The Decision of the Department of Agrarian Reform Adjudication Board (DARAB)
dated June 24, 1998 in DARAB Case No. 2203 is REINSTATED without prejudice to
the rights of respondent-spouses Leon and Aurora Carpo to seek recourse from the
Office of the Department of Agrarian Reform (DAR) Secretary on the other issues they
raised. No costs.