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THIRD DIVISION

[A.M. No. MTJ-99-1184. March 2, 2000]

AMPARO S. FARRALES and ATTY. RAUL S. SISON, complainants, vs.
JUDGE RUBY B. CAMARISTA, respondent.

RESOLUTION

MELO, J.: Jle-xj

Through a verified complaint dated December 15, 1997, complainants, client
and counsel, charged respondent with gross incompetence, gross inefficiency,
and ignorance of the law, with regard to two civil cases, as follows: (a) Civil
Case No. 144411-CV entitled "Amparo Farrales, represented by her Attorney-
in-Fact, Atty. Eldorado T. Lim vs. Mrs. Meny Martin" (also referred to in the
record as Menny Martin) for Ejectment/Unlawful Detainer; and Civil Case No.
144414-CV entitled "Amparo Farrales, represented by her Attorney-in-Fact,
Atty. Eldorado T. Lim vs. Mrs. Mely Rizon" for Ejectment/Unlawful Detainer.

The factual antecedents of the subject complaint are as follows:

On June 10, 1994 and June 13, 1994, both aforestated cases were filed by
complainants and were raffled to Branch I, Metropolitan Trial Court, Manila,
presided over by respondent.

In the first case, therein defendant, on June 22, 1994, filed her responsive
pleading. On January 25, 1995, respondent, motu proprio issued an order
referring the case for conciliation to the barangay chairman of Barangay 676,
Zone 73, Ermita, Manila. From January 25, 1995 to January 25, 1996, the
case was not calendared for hearing, until herein complainant-counsel, Atty.
Raul S. Sison, who took over the case from Atty. Eldorado T. Lim, filed his
formal entry of appearance. On February 2, 1996, the plaintiff (complainant
herein) filed a motion to set aside the order of January 25, 1995, and to set
the case for preliminary conference, which was denied by respondent.
Subsequently, the parties submitted themselves to conciliation but no
settlement was reached. There being no clarificatory hearing set, the case
was deemed submitted for decision as of October, 1996. On February 27,
1997, plaintiff filed a motion for early decision. However, despite repeated
follow-ups, the case remained undecided. Lex-juris
In the second case, the defendant therein, on June 21, 1994, filed a motion for
referral to the proper barangay for arbitration and/or conciliation. Later,
respondent issued two orders dated November 7, 1994 and January 27, 1995,
respectively, directing the parties to conciliate before the Chairman of
Barangay 676, Zone 73, Ermita, Manila. Meanwhile, complainant Sison
entered his appearance as counsel for plaintiff therein. On February 12, 1996,
complainants filed a motion to set aside the order of November 7, 1994, as
well as to render judgment. Respondent denied the same and referred the
case to said barangay for conciliation proceedings under penalty of the case
being dismissed. Subsequently, a certificate to file action was issued by the
barangay chairman following defendants failure to appear during the
scheduled conciliation meeting. On July 12, 1996, after the lapse of two years
and one month from the service of summons, defendant filed her answer.
However, notwithstanding the lapse of time in filing the answer and plaintiffs
opposition thereto, respondent, in an order dated September 3, 1996, directed
the parties to file their respective position papers. After the lapse of thirty days
from submission of position papers and there being no decision rendered by
respondent, plaintiff filed a motion for early decision on February 27, 1997.
When still no decision was rendered, complainant Sison (plaintiffs counsel)
wrote respondent on July 18, 1997 requesting that a decision be rendered in
the case. Still, the case remained unresolved.

Herein complainants contend that the delay in the disposition of the above-
stated cases was a result of respondents lack of basic knowledge of the 1991
Revised Rule on Summary Procedure and/or her ignorance of the law. They
likewise question respondents act of referring the case to the barangay level
for conciliation when the parties actually reside in barangays of different
cities/municipalities.

Thereafter, complainant Sison submitted his manifestation dated January 26,
1998 informing the Court that despite the filing of the instant administrative
complaint, no decision had yet been rendered by respondent in the two civil
cases.

In respondents answer, she alleged that the subject civil cases were two of
those left by then Acting Presiding Judge Alden Cervantes and were originally
pending before Branch 28, Metropolitan Trial Court, Manila before they were
reassigned by raffle to respondents sala. She also contends that although
barangay conciliation is not necessary in Civil Case No. 144414-CV, she
referred the case, motu proprio, to the lupon of the barangay where the realty
subject thereof is located in accordance with the last paragraph of Section 2,
Presidential Decree No. 1508, and the last paragraph of Section 408 of the
Local Government Code of 1991. For failure of the parties to settle the case
before the lupon, the same was deemed submitted for decision.

The subject complaint also cited our decision in Administrative Matter No.
MTJ-97-1123 (initiated by Atty. Joselito Enriquez against herein respondent
on the basis of which the latter was found to be unconscientious and not
prompt in the performance of her duties and was fined P3,000.00 with a
warning that a repetition of the same or similar acts in the future will be dealt
with more severely). Respondent avers that such conclusion was arrived at
since the Court overlooked some facts in her favor in imposing upon her a fine
with warning. Juri-smis

On March 17, 1999, the Court issued a resolution requiring the parties to
manifest if they were submitting the case for resolution on the basis of the
pleadings. Atty. Sison filed his manifestation to the effect that complainants
were withdrawing their complaint. Respondent, on the other hand, submitted a
supplemental answer or explanation. On the basis of the second, the Office of
the Court Administrator recommends that a fine in the amount of P20,000.00
be imposed against respondent with a stern warning that the same or similar
acts in the future be dealt with more severely.

The crux of the matter is respondents violation of the 1991 Revised Rule on
Summary Procedure and her erroneous application of the Katarungang
Pambarangay Law (Presidential Decree No. 1508).

The Rule on Summary Procedure clearly and undoubtedly provides for the
period within which judgment should be rendered. Section 10 thereof
provides:

SEC. 10. Rendition of judgment.Within thirty (30) days after
receipt of the last affidavits and position papers, or the expiration
of the period for filing the same, the court shall render judgment.

However, should the court find it necessary to clarify certain
material facts, it may, during the said period, issue an order
specifying the matters to be clarified, and require the parties to
submit affidavits or other evidence on the said matters within ten
(10) days from receipt of said order. Judgment shall be rendered
within fifteen (15) days after the receipt of the last clarificatory
affidavits, or the expiration of the period for filing the same.
The court shall not resort to the clarificatory procedure to gain
time for the rendition of the judgment.

Section 8 thereof, which provides the contents of the record of the preliminary
conference, includes a statement as to --

c) Whether, on the basis of the pleadings and the stipulations and
admissions made by the parties, judgment may be rendered
without the need of further proceedings, in which event the
judgment shall be rendered within thirty (30) days from issuance
of the order; Jj-juris

It is thus very clear that the period for rendition of judgment in cases falling
under summary procedure is thirty days. This is in keeping with the spirit of
the rule which aims to achieve an expeditious and inexpensive determination
of the cases falling thereunder.

The jurisprudential direction consistently taken by the Court adheres to the
rule that failure to decide a case within the required period is not excusable
and constitutes gross inefficiency Abarquez vs. Rebosura, 285 SCRA 109
[1998]; In re Judge Jose F. Madara, 104 SCRA 245 [1981]; Longboan vs.
Judge Polig, 186 SCRA 557 [1990]; Sabado vs. Cajigal, 219 SCRA 800
[1993]). Delay in disposition of cases erodes the faith and confidence of the
people in the judiciary, lowers its standards, and brings it into disrepute
(Abarquez vs. Rebosura, supra).

Canon 3, Rule 3.05 of the Code of Judicial Conduct admonishes all judges to
dispose of the courts business promptly and decide cases within the period
fixed by law. Rule 3.01 compels them to be faithful to the law and prompts
them to maintain professional competence.

Failure to observe time provisions for the rendition of judgments constitutes a
ground for administrative sanction against the defaulting judge (Alfonso-
Cortes vs. Maglalang, 227 SCRA 482 [1993]; Mappala vs. Nuñez, 240 SCRA
600 [1995]), absent sufficient justification for his non-compliance therewith
(Abarquez vs. Rebosura, supra). Of special import is the requirement under
the Rule on Summary Procedure which was intended precisely for the
expeditious resolution of cases falling thereunder. For this reason,
respondents attempt to excuse herself from such requirement must
necessarily fail.
The last affidavits and position paper in Civil Case No. 144411-CV were filed
on October 25, 1996, whereas the last pleading (defendants position paper) in
Civil Case No. 144414-CV was filed on October 23, 1996. Notwithstanding the
provisions of Section 10 of the Rule, complainant Sison received the decision
in both cases only on February 12, 1998, almost two years from submission of
the last affidavits and position papers therein. Jksm

Respondent submits that she cannot be held administratively liable for gross
inefficiency because both cases were not originally assigned to her but to
Branch 28, Metropolitan Trial Court, Manila, and were only assigned to her on
October 24, 1994. She also claims that her court was transferred in an
untimely and abrupt manner to a makeshift office too small for proper court
operations which left both the court records and court personnel in disarray to
such degree that disallowed the latter to have an effective filing system.
Further, it is argued that at the time of the pendency of the subject cases,
Republic Act No. 7691 which provides for the expanded jurisdiction of the
inferior court, was at its peak. Consequently, the sudden deluge of cases
unloaded by the regional trial court together with those filed by litigants
combined with the deplorable conditions of her court caused the delay.

All the above-stated posturings are lame excuses for a delayed decision,
especially when it falls under the Rule on Summary Procedure. To accept
them as valid will defeat the very purpose of the rule since any judge would be
given the imprimatur of violating the time provisions merely for such frivolous
reasons.

In addition, respondent also erroneously applied the Katarungang
Pambarangay Law. She anchors her act on Section 2 thereof (or Sec. 408,
Republic Act No. 7160) which reads in full:

SEC. 408. Subject Matter for Amicable Settlement; Exception
Thereto.The lupon of each barangay shall have authority to bring
together the parties actually residing in the same city or
municipality for amicable settlement of all disputes except:

(a).....Where the party is the government, or any subdivision or
instrumentality thereof;

(b).....Where one party is a public officer or employee, and the
dispute relates to the performance of his official functions;
(c).....Offenses punishable by imprisonment exceeding one (1)
year or a fine exceeding Five thousand pesos (P5,000.00);

(d).....Offenses where there is no private offended party;

(e).....Where the dispute involves real properties located in
different cities or municipalities unless the parties thereto agree to
submit their differences to amicable settlement by an appropriate
lupon; Chief

(f).....Disputes involving parties who actually reside in barangays
of different cities or municipalities, except where such barangay
units adjoin each other and the parties thereto agree to submit
their differences to amicable settlement by an appropriate lupon;

(g).....Such other classes of disputes which the President may
determine in the interest of justice or upon the recommendation of
the Secretary of Justice.

The court in which non-criminal cases not falling within the authority of the
lupon under this Code are filed may, at any time before trial, motu
proprio refer the case to the lupon concerned for amicable settlement.

The last paragraph of the aforecited provision apparently gives the Court
discretion to refer the case to the lupon for amicable settlement although it
may not fall within the authority of the lupon (such as the civil cases subject of
this administrative proceeding). However, referring the subject civil cases to
the lupon is saliently an unsound exercise of discretion considering that the
matter falls under the Rule on Summary Procedure. As aptly explained in
Gachon vs. Devera, Jr. (274 SCRA 540 [1997]), the Rule on Summary
Procedure was promulgated for the purpose of achieving "an expeditious and
inexpensive determination of cases." The fact that unlawful detainer cases fall
under summary procedure, speedy resolution thereof is thus deemed a matter
of public policy. Thus, the Rule frowns upon delays.

Manifestly, respondents act of referring the subject cases to the lupon
subverts the very nature of the Rule and defeats its objective of expediting the
adjudication thereof. Besides, as correctly explained by the Court
Administrator, the preliminary conference under Sections 7 and 8 serves the
purpose of a possible amicable settlement, viz:
SEC. 7. Preliminary conference; appearance of parties.Not later
than thirty (30) days after the last answer is filed, a preliminary
conference shall be held. The rules on pre-trial in ordinary cases
shall be applicable to the preliminary conference unless
inconsistent with the provisions of this Rule.

The failure of the plaintiff to appear in the preliminary conference
shall be a cause for the dismissal of his complaint. The defendant
who appears in the absence of the plaintiff shall be entitled to
judgment on his counterclaim in accordance with Section 6
hereof. All cross-claims shall be dismissed. Esm

If a sole defendant shall fail to appear, the plaintiff shall be entitled
to judgment in accordance with Section 6 hereof. This Rule shall
not apply where one of two or more defendants sued under a
common cause of action who had pleaded a common defense
shall appear at the preliminary conference.

Section 8 of said Rule reads in full:

SEC. 8. Record of preliminary conference.Within five (5) days
after the termination of the preliminary conference, the court shall
issue an order stating the matters taken up therein, including but
not limited to:

a).....Whether the parties have arrived at an amicable settlement,
and if so, the terms thereof;

b).....The stipulations or admissions entered into by the parties;

c).....Whether, on the basis of the pleadings and the stipulations
and admissions made by the parties, judgment may be rendered
without the need of further proceedings, in which event the
judgment shall be rendered within thirty (30) days from issuance
of the order;

d).....A clear specification of material facts which remain
controverted; and

e).....Such other matters intended to expedite the disposition of
the case.
The last issue that we have to pass upon is the effect of the affidavit of
desistance on respondents administrative liability. In Rogue vs. Grimaldo (260
SCRA 1 [1996]), the complainants, who filed a complaint against a court
stenographer for illegal exaction of money, later executed an affidavit of
desistance which prompted therein respondent to move for the dismissal of
the complaint. We pronounced that the affidavit of desistance by the
complainant cannot divest this Court of its jurisdiction to investigate and
ascertain the truth of the matter alleged in the complaints against respondent.
We cited Caña vs. Santos (234 SCRA 17 [1994]) where we held that "[t]he
Court has an interest in the conduct of the officials and employees of the
judiciary and in improving the delivery of justice to the people and its efforts in
that direction cannot be frustrated by any private arrangement of the
parties." Esmsc

All the more in the instant case, which involves a judge, must we apply the
above-stated rule for a judge should always be the embodiment of
competence, integrity and independence and should administer justice
impartially and without delay (Bolalin vs. Occiano, 266 SCRA 203 [1997]).
Judges, who are called upon to administer the law and apply it to the facts,
should be studious of the principles of law and diligent in endeavoring to
ascertain the facts. They should exhibit more than just a cursory acquaintance
with the statutes and procedural rules (Del Callar vs. Salvador, 268 SCRA 320
[1997]). They must always strive to live up to their responsibility of assisting
parties litigants in obtaining a just, speedy, and inexpensive determination of
their cases and proceedings (Perez vs. Andaya, 286 SCRA 40 [1998]).

Considering that this is not respondents first administrative case of the same
nature, we take cognizance of the Court Administrators reasons for
recommending a fine of P20,000.00. Nevertheless, we deem the amount of
P10,000.00 as a reasonable fine under the circumstances.

ACCORDINGLY, respondent Judge Ruby B. Camarista, presiding judge of
Branch I, Metropolitan Trial Court of Manila, is hereby declared GUILTY of
gross incompetence, gross inefficiency, and ignorance of the law, and is
hereby ordered to pay a FINE of Ten Thousand Pesos (P10,000.00). She is
also WARNED that the commission of the same or similar acts in the future
will be dealt with more severely.

SO ORDERED.

Vitug, Panganiban, Purisima, and Gonzaga-Reyes, JJ., concur.
G.R. No. L-38685 March31, 1977

LIANGA LUMBER COMPANY and NORTH ZAMBALES LUMBER COMPANY, petitioners,
vs.
LIANGA TIMBER CO., INC. and HONORABLE COURT OF APPEALS, respondents.

Tañada, Sanchez, Tañada & Tañada, Manuel O. Chan and Emiliano S. Samson & R. Balderama-
Samson for petitioners.

Arturo M. Tolentino and Arturo C. Mojica for private respondent.

ANTONIO, J.: t êñ.£îhq wâ£

Petitioners filed the present appeal by certiorari from the Resolutions of the Court of Appeals dated
February 19, 1974 and May 9, 1974 in case CA-G.R. No. 37365-R, 1 under Rule 45 of the Revised
Rules of Court, and at the same time as a special civil action of certiorari under Rule 65, assailing the
validity of the same Resolutions.

The antecedent proceedings are summarized briefly as follows:

Petitioner Lianga Lumber Company is the licensee of a timber concession in Agusan; while private
respondent Lianga Timber Co., Inc., is the licensee of another timber concession in Lianga, Surigao.

On October 13, 1959, the petitioners filed a complaint against the private respondent alleging,
among others, that:

3. That the Lianga Lumber Company is the owner and possessor of an Ordinary
Timber License, No. 1468-'54, originally issued on January, 28, 1954, a photostat
copy of which is hereto attached as Annex "A". The license has been extended from
time to time up to the present, the latest extension being O.T. License No. 864-'59.
The area included in the concession contains a total forested area of about 10,000
hectares in the province of Agusan, Municipal Districts of Azpitia, Los Arcos, and
Prosperidad. The northeast corner of the concession is point "3", which is the
junction of the interprovincial road and the boundary between the provinces of
Agusan and Surigao, and the eastern boundary is the Surigao-Agusan inter-
provincial road;

xxx xxx xxx

6. That on or about September 13, 1959, defendant corporation, thru its agents,
entered into the above-described concession of plaintiff, more particularly the place
known as Sitio Tagabaca, Los Arcos, at a place located south of the seat of actual
logging operations of the plaintiff, and outside the limits of defendant's concession
and began marking trees therein, and on or about September 18, 1959 defendant
posted armed men on the said sitio and thru force, intimidation and threats,
prevented the laborers of plaintiff from entering said place and logging therein. These
acts of defendant were committed with the peaceful objection of the plaintiff and its
agents;

7. That said sitio of Tagabaca is in the Province of Agusan, west of the Surigao-
Agusan boundary, outside of defendant's concession, and within that of plaintiff's;

8. That on September 22, 1959, the plaintiff Lianga Lumber Company and the
defendant, thru their respective authorized agents, entered into an agreement
whereby both parties agreed to desist from logging within the disputed area pending
the settlement of the boundaries of the adjoining claims by the proper authorities, a
copy of which agreement is attached hereto and made an integral part hereof and
marked as Annex "B";

9. That notwithstanding the above-mentioned agreement, the defendant, thru force,
threats and intimidation, entered into the disputed area on October 8, 1959, and
started building a road towards the same with a view to logging therein, in violation of
the abovementioned agreement;

10. That the only way and manner in which plaintiffs can be protected in their right to
log over the area, is for this Honorable Court to issue a writ of preliminary injunction
commanding the officers, agents and laborers of the defendant to leave the said
place especially the place known as Sitio Tagabaca, Los Arcos, Agusan, and allow
plaintiffs and their laborers to peacefully continue logging operations therein; 2

and praying, inter alia:

(a) That the place invaded and illegally occupied by the defendant and its agents be
declared part of the timber concession of the plaintiffs, and upon the fixing and
approval of the proper bond, a writ of preliminary injunction be issued by this Court
ordering the defendant's officers, agents and laborers to leave the abovementioned
sitio of Tagabaca, Los Arcos, Agusan, to desist from interfering with, and preventing
by force, intimidation and threats, the logging operations of the plaintiffs, their agents
and laborers, and be prohibited from logging therein; 3

xxx xxx xxx

Private respondent filed an Amended Answer with Counterclaims alleging, among others, that:

5. Defendant denies the allegations contained in paragraph 7 of plaintiffs' complaint,
the truth being that subject-area is within defendant's concession and is a territorial
part of the Province of Surigao;

xxx xxx xxx

AND BY WAY OF COUNTERCLAIMS, defendant alleges that:

1. Defendant adopts, repleads and reproduces the foregoing allegations material and
pertinent to the instant counterclaims;

2. By reason of plaintiffs' repeated unlawful, surreptitious and stealthy logging
operation in defendant's concession area, defendant suffered losses in the form of:
(a) logs, warded and taken out from defendant's concession area and
loaded in the ship of plaintiffs' customers totalling an estimated
400,000 board feet which could be reasonably assessed and valued
at P40,000.00;

(b) 180,000 board feet of logs "fall and back" that is, logs already, cut
and topped by plaintiffs, already for yarding but still within the
defendant's concession area which could be reasonably assessed
and valued at P18,000.00;

3. By reason of plaintiffs' aforesaid acts and conduct:

(a) defendant's logging operations were disrupted as a result of which
defendant shall suffer monthly losses during the pendency of the
instant case in the amount of P15,000.00 until the defendant can
resume operations;

(b) defendant shall incur losses in the amount of P60,000.00 for
failure to keep up with defendant's November 15, 1959 commitment
to ship to its buyers 650,000 board feet of logs and shall incur the
same amount of losses every month thereafter until defendant can
resume operations and fulfill its pending commitments with its
buyers. 4

and praying that judgment be rendered in its favor by dismissing plaintiffs' complaint and ordering said
party to pay defendant the sum of:

a) P40,000.00 as payment for logs cut and yarded by plaintiffs and loaded in their
customers' ship;

b) P18,000.00 for logs cut and yarded by plaintiffs but still not loaded in their
customers' ship;

c) P15,000.00 a month for disruption of defendant's logging operations in the subject-
area from October, 1959 until defendant can resume operations;

d) P60,000.00 a month starting in November, 1959 until defendant can resume
operations and fulfill its commitment with its customers;

e) P3,000.00 as attorney's fees;

f) Moral and exemplary damages;

g) Costs. 5

After due hearing on the application of petitioners for the issuance of a writ of preliminary injunction, the
trial court issued an Order, dated November 12, 1959, granting said application, which Order reads as
follows:

The plaintiffs came to this Court asking for a writ of preliminary injunction against the
defendant corporation which illegally entered a portion of the area covered by their
ordinary timber license, particularly, the place called Tagabaca of Los Arcos,
Agusan. The concessions covered by the timber licenses of both parties are adjacent
to each other, and their common boundary is the provincial boundary line of Agusan
and Surigao, West of this line is the forest concession of the plaintiffs, located in the
Province of Agusan, while east thereof is the concession of the defendant which lies
within the province of Surigao.

The boundary between Agusan and Surigao is fixed by law, specifically by Sec. 1 of
Act 1693 of the Philippine Commission which reads as follows:

Section 1. There is hereby established a province which shall be
known as the Province of Agusan. It shall be composed of two
subprovinces which shall be known as Butuan and Bukidnon,
respectively. The boundary line of the subprovince of Butuan shall be
äüsl•älFº

a line beginning at the northern point of the present boundary line
between the provinces of Surigao and Misamis and extending in a
general southerly direction along this line to the eighth parallel of
north latitude; thence due east along said parallel of latitude to the
crest of the watershed between the Agusan River Valley and the
Pacific Ocean; thence in a northerly direction along the crest of this
watershed to the northern extremity of the Island of Mindanao; thence
along the sea coast to its point of origin; the general purpose in
establishing this boundary line being to include within it all
municipalities and settlements in the Agusan River Valley and all
settlements west of the crest of the watershed in the northern
peninsula of the province of Surigao.

From the above quoted legal provision, the crest of the watershed between the
Agusan River Valley and the Pacific Ocean is the boundary between the two
provinces of Surigao and Agusan, and this crest which is the highest ridge of the
Diwata Mountain, was located by Mr. Justice Labrador who personally went to the
place to lay the corner of the northeastern boundary of the plaintiffs' concession. This
ridge was recently located by the District Forester of Agusan and actually measured
as 8.501 kilometers from the Lianga beach (Exhs. A-1 and A-2). Plaintiffs
constructed a logging camp west of this ridge when the plaintiffs began their logging
operations in 1956 and their possession and logging operation were continuous and
peaceful until the month of September, 1959, when the defendants unlawfully
entered a portion of the area on the side, west of the logging camp and began cutting
trees thereon from hauling. In order to avert trouble, the parties thru their respective
representatives entered into an agreement, Annex B to the petition, whereby they
agreed not to touch the contested area until after the same is finally adjudicated. But,
before steps could be taken for the settlement of the dispute, the defendant in
violation of the agreement reentered the area on October 8, 1959, thereby forcing the
plaintiffs to seek injunctive relief against defendant.

The evidence clearly established the following: that the contested area known as
Tagabaca is part of the province of Agusan being on the west of the crest of the
watershed between the Agusan River Valle and the Pacific Ocean; that this area
forms part of the timber concession of the plaintiffs and that on October 8, 1959 the
defendant in violation of the agreement, Annex B to the complaint, through the use of
force and by taking the law into its own hands, entered the place Tagabaca which
had been in the possession of the plaintiffs since 1956; that there is necessity of
stopping the illegal acts of intrusion, invasion and usurpation of the defendant in
order to prevent irreparable damages to the plaintiffs because of their commitments
to supply timber to foreign buyers. Injunction is the only remedy here available to the
plaintiffs to restrain the acts of trespass and illegal interference of possession. The
claim of the defendant that the contested area is part of its lumber concession is not
supported by evidence. In fact, its witness admitted that they do not know the
provincial boundary of Agusan and Surigao.

WHEREFORE, it is hereby ordered that upon the filing of the bond in the sum of
P10,000.00, with sufficient sureties approved by the Court, a writ of preliminary
injunction shall issue commanding the defendant corporation, its agents, officers and
laborers to leave the contested area of Tagabaca, Los Arcos, Agusan and to restrain
them from logging therein, and ordering them to desist from interferring with and
preventing by force, intimidation and threats the logging operations of the plaintiffs. 6

Likewise, after due trial on the merits, the trial court rendered a Decision, dated June 1, 1965,
declaring the contested area or the place invaded by the private respondent as part of the timber
concession of the petitioners and awarded damages in favor of the petitioners amounting to
P47,578.75. Said Decision reads:

Plaintiff Lianga Lumber Co., is the owner and possessor of an O. T. License No. 864-
'59 issued for the year 1959, covering a forest concession which is situated in the
province of Agusan while adjoining it, is another forest concession which belongs to
the defendant Lianga Lumber Co., located in the province of Surigao and covered by
O.T. license No. 804- '59, likewise issued for the year 1959. The common boundary
of the two concessions is the interprovincial boundary line of Agusan and Surigao.
West of this line is the forest area of the plaintiff Lianga Lumber Co., comprised
within the province of Agusan, while east thereof, is the area of the defendant Lianga
Timber Co., which lies in the province of Surigao.

By agreement between the Lianga Lumber Co. and the North Zambales Lumber Co.,
the latter has been authorized to conduct logging operations in the concession of the
former without protest from any adjoining concessionaire and said operations
continued in he year 1959 on the area in the northeast corner of the concession,
west of the Agusan-Surigao boundary.

On September 13, 1959, the defendant corporation thru its agents entered the
concession of the plaintiffs at Sitio Tagabaca, Los Arcos Agusan, and, on September
18, 1959, the defendant posted armed men in said sitio and, thru force, threats and
intimidation, prevented the laborers of the plaintiffs from entering and logging therein.
Against these acts of trespass, the plaintiffs vigorously objected and protested.

Efforts were exerted to settle amicably the dispute in order to avert bloodshed
between the parties and, on September 22, 1959, the plaintiff Lianga Lumber Co.,
and the defendant Lianga Timber Co., thru their respective resident managers,
entered into an agreement whereby both parties agreed in writing to desist from
logging within the disputed area, pending the final settlement of the conflicting
claims, by proper authorities. (Annex B to the complaint; Exhibit 7 of the defendant).

By virtue of the above agreement, there was cessation of logging operations by the
contracting parties in the disputed area but two weeks later or to be exact on October
8, 1959, the defendant corporation by force and intimidation, again entered the said
area and started building a road for the purpose of logging therein, in gross violation
of the conditions of the agreement, thereby forcing the plaintiff to file this complaint to
stop the unlawful acts of trespass committed by the said defendant.

The defendant answered the complaint, with general denial and set up the defense
that its logging operations had always been confined within its concession area
covered by its Ordinary Timber License No. 864-'59 and that the area in question is
definitely found in said concession area. It further stated that on October 8, 1959,
defendant built a road not for the purpose of logging but in order to gain access to
the other points of its concession, the same being conveniently accessible thru a
road traversing the area in question; that the plaintiffs are instead the ones guilty of
invading and encroaching upon the concession area of the defendant, thereby
causing enormous damages to the latter.

After an exhaustive hearing of the petition for preliminary injunction, it was found out
that the contested area especially that place known as Tagabaca is part of the
province of Agusan and west of the Agusan-Surigao boundary line, the same being
west of the highest mountain ridge or crest, between the two provinces which divides
the watershed flowing west into the Agusan River Valley and that flowing east into
the Pacific Ocean, as defined by section I of Act 1693 Of the Philippine Commission;
that the crest of the watershed crosses the Lianga, Surigao-Los Arcos, Agusan
interprovincial road at kilometer 8.501 from Lianga. This point of crossing and a line
drawn therefrom southward is the dividing line between the concession of the
plaintiffs and the concession of the defendant. Plaintiffs constructed a logging camp
west of this ridge and began their logging operation in that place since 1956, and
their operation was continuous and peaceful until the month of September 1959,
when the defendant and its men unlawfully entered a portion of the area on the side
west of the logging camp and began cutting trees thereon.

xxx xxx xxx

Before the issuance of the injunction, the plaintiffs already suffered damages
because when the defendant corporation entered the contested area in October
1959, it cut illegally 63 trees which were subsequently scaled by the Bureau of
Forestry. The total volume of the timber cut is 454.50 cubic meters equivalent to
191,805 bd. ft. At the price of $58.00 per thousand board feet, the price of lumber in
1959, the value of the 63 trees cut, in pesos would amount to P21,982.60 (Exh. D-1,
auxiliary invoice covering 454.50 cubic meters of timber).

When the defendant entered the concession of the plaintiff in the month of October,
1959, the plaintiffs have already cut 100 trees more or less, which when scaled by
the Bureau of Forestry were found to have a total volume of 707.31 cubic meters of
timber (Invoice Exh. D), equivalent to 299,889 board feet and valued at P33,538.74.
Because the defendant corporation did not allow the plaintiffs to haul these cut trees
they got rotten and became a total loss. This damage however cannot be charged to
the defendant because by virtue of the agreement of September 22, 1959, the
plaintiffs were not prevented from removing these logs. The loss must be borne by
äüsl• älFº

them and not by the defendant.

Because of the injunction, the defendant was restrained from logging in the disputed
area but in December 1960, the defendant surreptitiously entered the eastern portion
of the plaintiffs' area and cut 135 trees. These were scaled by the Bureau of Forestry
to be 789.61 cubic meters in volume equivalent to 335,558.24 board feet and valued
at P49,295.53. The damage caused by this illegal cutting should be charged to the
defendant (Invoice, Exh. D-2).

xxx xxx xxx

WHEREFORE, judgment is hereby rendered for the plaintiffs and against the
defendant:

(a) declaring the contested area or the place invaded by the defendant as part of the
timber concession of the plaintiffs;

(b) making the injunction herein issued final and permanent by perpetually restraining
the defendant from logging in the area covered by the concession of the plaintiffs and
from interfering with the possession and logging operations of the plaintiff;

(c) ordering the defendant to pay the plaintiffs by virtue of an amended complaint and
supplemental complaint, the sum of P47,578.75 as actual damages; and

(d) sentencing the defendant to pay the costs. 7

Private respondent appealed to the Court of Appeals. 8 This case was submitted for decision on
September 4, 1967, 9and on February 19, 1971, a Decision of the Appellate Court (penned by then
Presiding Justice Salvador V. Esguerra and concurred in by Justices Edilberto Soriano and Lourdes P.
San Diego), affirming en toto the appealed Decision, was promulgated. The Court of Appeals said:

The jugular vein of the controversy in this case is the boundary line which separates
the forest concessions of the two timber corporations. Plaintiff-appellee Lianga
Lumber Company contends that the disputed area situated in Sitio Tagabaca, Los
Arcos, is embraced within its timber license, while defendant-appellant claims that it
is a part of its concession. As proof of its assertion that the disputed area is within the
area granted it by the Director of Forestry, the plaintiff-appellee, Lianga Lumber
Company, invites attention to the fact that the sitio of Tagabaca where the logging
controversy arose, is a part of the Province of Agusan, and its timber license covers
a forest concession "situated in the province of Agusan."

Defendant Lianga Timber Company, Inc. counters by alleging that the area in dispute
is within its logging permit. In spite of the fact that its timber license states that the
forest concession where it is allowed to operate is "in the province of Surigao",
defendant points out that its ordinary timber license established as its corner "No. 6"
the intersections of the e Agusan-Surigao boundary line and the Los Arcos-Lianga
Road which is about 10 kilometers to the town of Lianga. Defendant further claims
that as indicated in the official concession maps, the aforesaid intersection is exactly
9.7 kilometers by a straight line from Lianga town. Inasmuch as its license states 10
kilometers the town of Lianga its logging area extends west of the interprovincial
boundaryline.

There is abundantproof to show that the boundary line between the two forest
concession is theinterprovincial boundary line of Agusan and Surigao. The timber
license of plaintiff-appellee Lianga Lumber Company states that the forest
concession awarded to it is in the province of Agusan, while that of the defendant,
Lianga Timber Company, Inc., indicates that its forest concession is situated in the
province of Surigao.
The boundary between Agusan and Surigao is fixed by law. Section 1 of Act 1693 of
the Philippine Commission provides as follows:

xxx xxx xxx

It is clear from the afore-quoted legal provision that the crest of the watershed
between the Agusan River Valley and the Pacific Ocean is the boundary between the
two provinces of Surigao and Agusan.

Furthermore, the contested area known as Tagabaca is part of the province of
Agusan from being west of the crest of the watershed between the Agusan River
Valley and the Pacific Ocean. Defendant-appellant apparently overlooks the fact that
the western boundary of its concession is the physical ridge separating the province
of Surigao from the province of Agusan and their boundary ridge is 8.5 kilometers
along the Los Arcos-Lianga road from Lianga town. It is not 10 kilometers as stated
in defendant-appellant's license. This distance was merely calculated. The full
distance of 10 kilometers from Lianga town would run into, and encroach on, the
province of Agusan. This is shown in the timber license of the defendant-appellant
itself.

... to Corner 5, a point on the Agusan-Surigao boundary line in a
general northerly direction about 3,500 meters to Corner 6, the
intersection of same Agusan-Surigao boundary line and Los Arcos-
Lianga Road.

In other words, the limit of the forest concession of defendant-appellant Lianga
Timber Company, Inc. on the west begins from Corner 5 which is a point on the
Agusan-Surigao boundary line and passes northward over a span of about 3,500
meters to Corner 6 which is the intersection of same Agusan-Surigao boundary line
and Arcos-Lianga Road. This definitely shows that the boundary limit of the
defendant-appellant's forest concession on the west is the Agusan-Surigao boundary
line. In view of this, this Court is constrained to recognize the interprovincial
boundary of Agusan and Surigao beginning from Corner 5 to Corner 6 of defendant-
appellant's timber license as the common boundary of the two contending logging
corporations, despite the distance of "about 10,000 meters from Corner 6 to Corner
1, the point of beginning in Lianga" as stated in the timber license of defendant-
appellant.

The insistence of Lianga Timber Company, Inc. that it owns the area up to Kilometer
No. 10 on the Los Arcos-Lianga Road from Lianga town proper made defendant-
appellant encroach on a forest area west of the boundary line belonging to the
plaintiff-appellee situated in the province of Agusan. The area encroached upon by it
is encompassed by the lines connecting Corner 5 of the timber license of Lianga
Timber Company, Inc. to Kilometer No. 10 of the Los Arcos-Lianga Road, to Corner
6, then back to Corner 5 of the defendant appellant's timber license along the
Surigao-Agusan boundary line. It is not denied that it cut down trees in said place.
The Lianga Timber Company, Inc. must therefore account for the trees taken from
the disputed area.

As to the amount of damages awarded in favor of the plaintiff-appellee, we fully
concur with the observation of the lower court on the matter, ... .
The above observation of the lower court is well-supported by the evidence on
record. The same should not be disturbed.

Anent the issue raised by the defendant-appellant that the plaintiffs-appellees have
not exhausted their administrative remedies before bringing this action, the same
does not deserve serious consideration. The record shows that there was an
agreement between the parties to suspend operations on September 2, 1959, but on
October 8, 1959, defendant-appellant's agents entered the forest area in question
with the intention of logging therein, thus preventing the plaintiffs-appellees from
conducting logging operation. To have appealed first to the Director of Forestry
would have been too late a move because before the matter could be brought to his
attention, the defendant-appellant shall have already started its own logging
operations. Appeal from administrative action would have been too late and
inadequate, not prompt, adequate and speedy. The trespass to be prevented had
already started and was continuing. It could not be promptly stopped without court
intervention. One of the exceptions to the principle of exhaustion of administrative
remedies is when its application will cause great and irreparable damage like in the
case at bar. (De Lara, et al. vs. Cloribel, et al., G. R. No. L-21763, May 31, 1965).
Precisely, the remedy of injunction was availed of to abate defendant-appellant's
illegal actual entry into plaintiffs-appellees' concession. That was the only way to stop
the intrusion and prevent further felling of trees therein. 10

On March 9, 1971, private respondent filed a motion for reconsideration of said Decision of February
19, 1971, 11and the Court of Appeals (thru the same Presiding Justice [Esguerra] and Justices [Soriano
and San Diego]), denied the same in its Minute Resolution of March 22, 1971 (Quoted on p. 23 of
Petition).

On April 10, 1971, with leave of court, the private respondent filed a second motion for
reconsideration on substantially the same grounds as its first motion for reconsideration, namely:

1. That, apart from being contrary to the concession grant itself, the conclusion of this
Honorable Court to the effect that the interprovincial boundary line of Agusan and
Surigao, as established on the ground by Justice Alejo Labrador delimits to the West
the concession area of defendant-appellant in spite of its technical descriptions is
contrary to the facts established during the trial.

2. That this Honorable Court obviously failed to appreciate the fact that the lower
court had not yet acquired jurisdiction over the person of the defendant-appellant as
to the amendment to the complaint and supplemental complaint and, therefore, acted
without jurisdiction in rendering judgment and awarding damages in favor of
plaintiffs-appellees on the bases thereof.

3. That this Honorable Court obviously failed to consider the fact that the lower court
acted with grave abuse of discretion, equal to want of jurisdiction, in enjoining only
the defendant-appellant from logging in the timber concession area in dispute.

4. That the facts admitted and established at the trial of this case, which were
ignored by the lower court, clearly showed that it was the plaintiffs-appellees who
disregarded the agreement between them and appellant; that it was they who defied
the orders of the Bureau of Forestry. Upon the other hand, the defendant-appellant
went out of its way to honor and respect them, and that the appellant gave no cause
to justify non-exhaustion of administrative remedies by appellees.
5. That, considering the facts established during the trial, the defendant- appellant
ought to have been awarded the damages and the appellees denied any. 12

On September 8, 1971, the petitioners filed their opposition to the second motion for reconsideration
alleging, among others: (1) that said motion was filed on April 12, 1971, two (2) days beyond the
period granted by the court, the due date being April 10, 1971, for private respondent received on
March 31, 1971 the respondent Court's Resolution, dated March 30, 1971, giving said private
respondent ten (10) days from notice thereof within which to file said second motion for
reconsideration; and (2) the grounds of said motion are, in substance, a rehash of what private
respondent had already raised in its brief. 13

After oral arguments were heard from, and memoranda were filed by, the parties, the respondent
Court of Appeals issued a Resolution on June 15, 1972, 14 reversing its decision of February 19, 1971,
the dispositive portion of which reads:

WHEREFORE, the second motion for reconsideration is granted. Our decision, dated
February 19, 1971, affirming the judgment appealed from is hereby vacated and a
new one-entered dismissing the complaint, and declaring:

1. That the forest area in question is a part of the forest concession of the defendant-
appellant; and

2. That plaintiffs-appellees be ordered to pay the defendant-appellant the sum of
$1,218,000.00 representing the value of logs cut down and appropriated by plaintiffs-
appellees from the area in dispute. The amount is to be computed at the prevailing
rate of exchange of the Philippine pesos. (Art. 1250, New Civil Code.)

The plaintiffs-appellees are ordered to pay to the defendant-appellant as attorney's
fees the amount of P3,000.00 and the costs of the suit. 15

This Resolution of June 15, 1972, is referred to by the private respondent as the Esguerra
Resolution.

On June 27, 1972, the petitioners filed a motion for rehearing or reconsideration of the Esguerra
Resolution, on the grounds that the interprovincial line delimiting the Agusan-Surigao boundary must
prevail over the technical description; and that the award of $1,218,000.00 in favor of defendant-
appellant is not supported by competent evidence and not pleaded in the court a quo. 16

By Resolution of August 16, 1972, the respondent Court of Appeals required the private respondent
to comment on the aforesaid motion within fifteen (15) days from notice. Private respondent filed a
motion for an extension of time to file comment, which was granted. However, respondent did not file
any comment, but instead filed a manifestation on February 7, 1973 that, in lieu of a written
opposition, it will sum up its arguments in opposition to the motion during the oral argument on
February 9, 1973. After the oral arguments, both parties were required to submit their respective
memoranda, which they did.

On April 30, 1973, the respondent Court of Appeals issued a Resolution (penned by Acting Presiding
Justice Juan P. Enriquez and concurred in by Justices Manuel P. Barcelona and Emilio A.
Gancayco), reversing the Esguerra Resolution of June 15, 1972 and declaring, as in its original
decision of February 19, 1971, that the forest area in dispute is part of the concession of the
petitioners and awarding the amount of P32,863.62 as actual damages. The dispositive portion of
this Resolution reads:
WHEREFORE, the motion for rehearing/reconsideration is granted. Our resolution
dated June 15, 1972 reversing the decision of February 19, 1971 which affirmed that
of the court below is hereby set aside and a new one entered, declaring:

1. That the forest area in dispute is part of the concession of plaintiffs-appellees;

2. Ordering defendant-appellant to pay plaintiffs-appellees the sum of P32,863.62 as
actual damages;

3. And the further sum of P3,000.00 as atttorney's fees and the costs of the suit. 17

This Resolution of April 30, 1973 is referred to by the private respondent as the Enriquez Resolution.

On May 21, 1973, private respondent filed a "Motion for Reconsideration of 30 April 1973 Resolution
and Motion to Assign Subject Motion for Reconsideration to Special Division of Five Members" on
the grounds that: (1) the alleged August 1964 agreement between parties — basis of Enriquez
Resolution April 30, 1973 — is spurious because no such agreement was introduced or offered or
admitted in evidence during the entire trial court proceedings; (2) the genuine agreement,
undisputed on record, is the February 1959 accord of parties whereby their common forestry
boundary was established by them on the ground pursuant to Forestry-Control Map (Exhibit "1") and
timber licenses (Exhibit "3") by forestry officials and the parties-litigants' respective duly authorized
representatives; (3) the findings of fact of the Enriquez Resolution are patent distortions of
evidentiary facts on record; and (4) the official interpretation by issuing administrative agency — the
Bureau of Forestry — as to the meaning of the term "Agusan-Surigao Provincial Boundary" as
mentioned in Parties' Timber Licenses should prevail andcontrol.18

On June 27, 1973, petitioners filed their opposition to the foregoing motion for
reconsideration. 19 Both parties submitted their respective memoranda. Thereafter, or on February 19,
1974, the respondent Court of Appeals promulgated its appealed Resolution (penned by Justice Emilio A.
Gancayco and concurred in by Justices Mateo Canonoy and Guillermo S. Santos) setting aside the
Enriquez Resolution of April 30, 1973 and ordering the remand of the records of the case to the trial court
further proceedings, the dispositive portion of which reads:

WHEREFORE, the resolution of this Court of April 30, 1973 is set aside, the record
of this case is remanded to the lower court for further proceedings, with the
instruction that a resurvey of the disputed area, of the Agusan-Surigao boundary as
provided for by law, as well as of the area covered by the respective licenses of the
parties must be conducted by the District Engineers and District Foresters of Surigao
and Agusan or their representatives, in the presence of the parties, or their
representatives, the expenses to be shouldered by the parties equally, and thereafter
further proceedings should be held to enable the parties to adduce additional
evidence if they so desire. Thereafter, the trial court should render a new decision
based on the evidence on the record, and such additional evidence and facts as may
be adduced. The writ of preliminary injunction issued by the lower court enjoining the
appellant from logging in the contested area is maintained until these proceedings
are terminated. No pronouncement as to costs. 20

This Resolution of February 19, 1974 is referred to by private respondent as the Gancayco Resolution.

On March 14, 1974, the petitioners filed their Motion for Rehearing or Reconsideration of the
aforesaid Gancayco Resolution of February 19, 1974, praying that this Resolution be set aside and
vacated, and that the Decision dated February 19, 1971 or the Enriquez Resolution of April 30,
1973 be revived. 21 Private respondent filed its opposition thereto. 22 On May 9, 1974, respondent Court
of Appeals promulgated the other appealed Resolution denying petitioners' motion for rehearing or
reconsideration by Minute Resolution (Quoted on p. 28 of Petition, par. 15). Hence, the present appeal.

This case is unique in the sense that the decisions/resolutions of the respondent Court of Appeals,
during a period of four (4) years, had swayed from one side to the other, finally ending in an order for
the remand of the case to the trial court for a rehearing.

We deplore such judicial vacillation. This Court has emphasized that:

... Public policy and sound practice demand that, at the risk of occasional errors,
judgments of courts should become final at some definite date fixed by law. The very
object for which courts were instituted was to put an end to controversies. To fulfill
this purpose and to do so speedily, certain time limits, more or less arbitrary, have to
be set up to spur on the slothful. "If a vacillating, irresolute judge were allowed to thus
keep causes ever within his power, to determine and redetermine them term after
term, to bandy his judgments about from one party to the other, and to change his
conclusions as freely and as capriciously as a chameleon may change its hues, then
litigation might become more intolerable than the wrongs it is intended to redress."
(See Arnedo vs. Llorente and Liongson [1911], 18 Phil, 257.) 23

While there are several issues raised by both parties, nevertheless, the same can be reduced into
two (2), namely:

1. Is there necessity for remanding the case to the trial court for further proceedings
as declared in the Court of Appeals' Resolution of February 19, 1974?

2. In the negative, is there sufficient evidence to affirm the decision of the trial court?

In the appealed Resolution of the respondent Court of Appeals of February 19, 1974, 24 the records of
this case are ordered remanded to the trial court for further proceedings with instruction that a resurvey
of: a) the disputed area; b) the Agusan-Surigao boundary as provided for by law; and c) the area covered
by the respective licenses of the parties be conducted by the District Foresters of Surigao and Agusan
and, thereafter, further proceedings should be held to enable the parties to adduce additional evidence if
they so desire.

This case has been litigated by the parties since 1959, or for almost eighteen (18) years now. Public
interest demands its early disposition.

I

We find that there is no necessity for the remand of the case to the trial court for further proceedings.
It must be noted that the trial court, in its Order of November 12, 1959, granting the application for
the issuance of a preliminary injunctive writ, already, found as clearly established by the evidence
that the contested area known as Tagabaca is part of the Province of Agusan, and that the claim of
the defendant that the contested area is part of its lumber concession is not supported by the
evidence. Again, the trial court, in its decision on the merits of June 1, 1965, found as established by
the evidence that "on September 13, 1959, the defendant corporation, thru its agents, entered the
concession of the plaintiffs at Sitio Tagabaca, Los Arcos, Agusan, and, on September 18, 1959, the
defendant posted armed men in said sitio and thru force, threats and intimidation, prevented the
laborers of the plaintiff from entering and logging therein", and that "after an exhaustive hearing of
the petition for preliminary injunction, it was found out that the contested area, especially that place
known as Tagabaca, is part of the Province of Agusan ..." 25 and "the evidence further established that
the contested area is an integral part of the lumber concession of the plaintiff, which the latter has
possessed since 1956 and the defendant corporation merely intruded therein thru the use of force on
October 8, 1959 ...". The decision of the Court of Appeals of February 19, 1971, affirming en toto the
appealed decision of the trial court of June 1, 1965, also stated "that there is abundant proof to show that
the common boundary lines between the two forest concessions is that provincial boundary line of
Agusan and Surigao ..." and that "the contested area known as Tagabaca is part of the province of
Agusan ...", which conclusion of the lower court "is well supported by the evidence on record."

The decision of the Court of Appeals of April 30, 1973, 26 likewise found as sufficiently established by
the evidence that:

... the boundary line delimiting the two adjacent concessions is the Agusan-Surigao
Provincial Boundary Line located at the highest ridge 8.5 km. along the Los Arcos-
Lianga Road (Exhibits "A- l"; "A-2"). The result therefore is that the disputed area
which is 9.7 km. along the road is within the plaintiffs-appellees' concession and
within the province of Agusan.

The foregoing conclusion finds support in the technical description of the parties'
concessions which shows that plaintiffs' concession is in Agusan while that of
defendant is in Surigao. Moreover, the disputed area is in Los Arcos, Agusan, as is
provided for in Section 40 of the Revised Administrative Code showing that Los
Arcos is one of the municipalities within the territorial jurisdiction of Agusan Province.
Furthermore, there is the admission of Senator Tolentino that Tagabaca where the
disputed area is, is located in Los Arcos, Agusan (tsn, pp. 225, 229, June 25, 1962).
Even the findings of Forester Macabeo of the Bureau of Forestry fixed the highest
point of ridge marking the boundary between the two provinces at 8.501 kms.
(Exhibit "A-2") Finally, if the plaintiffs had really encroached on 420 hectares of
valuable timber land in April 1959, defendant would not have sought the dismissal of
the case (pp. 68-82, Rec. on Ap.), instead of having the case tried and decided on
the merits without any delay and thus soon recover damages therefor, unmasking
thereby Justice Labrador as trespasser and intruder. Indeed, it is incomprehensible
why defendant did not initiate the present case or another action for redress. Finally,
there is the strong presumption as to the correctness the decision appealed from,
especially after it was affirmed and the first motion for reconsideration thereof had
been denied by this Court. (at pp. 6-7)

Even the Gangayco Resolution 27 stated that:

We have carefully reviewed the entire records of this case including the transcript of
stenographic notes and exhibits, and We find that there is no dispute as to the
following —

1. The appellees concession is covered by an ordinary timber license with a total
forested area of about 10,000 hectares in the province of Agusan (Exh. C), while the
license of the appellant covers a total forested area of about 5,800 hectares in the
province of Surigao (Exhibit 2).

xxx xxx xxx

3. The disputed area as referred to in the compliant as the Sitio Tagabaca, Los
Arcos, is in the province of Agusan, in the accordance with the provisions of Section
38 & 40 of the Revised Penal Administrative Code (Resolution, pp. 20-21, Emphasis
supplied.)

It is likewise significant to note that even private respondent agrees in its answer (p. 20) that to
remand the case is unnecessary, since what is being sought by the Resolution of February 19, 1974
had already been accomplished. It is true that the Court of Appeals, in its Resolution of February 19,
1974 (Gancayco Resolution), sought to remand the case to the lower court, in order to ascertain
where the Agusan-Surigao provincial boundary line is located. There is no question, however, that
the Agusan-Surigao provincial boundary line has already been specifically fixed and described by
law. As correctly found by the Court of Appeals in its Resolution of April 30, 1973 (Enriquez
Resolution), the Surigao-Agusan provincial boundary line as described in Section 1 of Act 1693 of
the Philippine Commission is "the crest of the watershed between Agusan River Valley and the
Pacific Ocean." There appears, therefore, to be no justification of remanding the case only for the
purpose of locating the political boundary between the two provinces. Besides, appellants claim now
that they do not rely on the political boundary between the two provinces but on the boundary as
fixed by the control map (Exhibit "1") of the Bureau of Forestry which should prevail over the
provincial boundary line established by Act No. 1693.

Indeed, it is not disputed that the trial court had received all the evidence presented by both parties.
As a matter of fact, the afore-mentioned trial court, as well as the Appellate Court, were able to pass
upon the said evidence and decide the case on its merits. To remand the case to the trial court for
further proceedings, therefore, will only prolong the termination of a case that has been pending in
the courts for almost two decades, and thus subvert the very interests of justice.

II

Private respondent now claims that it has been its theory even before the trial court that the
boundary between the two concessions is not the political boundary between the provinces of
Agusan and Surigao but the forestry boundary indicated in the control map of the Bureau of
Forestry, which may not actually coincide with the political boundary mentioned by law. Private
respondent's position, in effect, is that the location of the political boundary of the two provinces is
not relevant to the issue since the area of its concession may extend beyond such political
boundary. This is, however, not fully supported by the records. Except for its statement in its Motion
to Dismiss Proceedings which it filed on February 19, 1960, private respondent has always insisted
in the court a quo that its timber concession was entirely located in the Province of Surigao, while
that of petitioner is situated within the Province of Agusan. It cannot be denied that private
respondent never alleged in their answer that its timber concession extended to the province of
Agusan, since its forestry boundary is not necessarily delimited by the political boundary of the two
provinces. Thus, in paragraph 5 of its amended answer, private respondent specifically alleged
that "the subject area is within defendant's concession and is a territorial part of the Province of
Surigao." 28That the principal issue litigated by the parties before the court a quo is whether or not the
disputed area falls within the province of Surigao is further shown by the recitals contained in the orders
issued by the court a quo. Thus, in its Order of November 12, 1959, the trial court specifically stated that
the concessions covered by the timber licenses of both parties "are adjacent to each other, and their
common boundary is the provincial boundary line of Agusan and Surigao. West of this line is the forestry
concession of the plaintiffs located in the Province of Agusan, while east thereof is the concession of the
defendants which lies within the Province of Surigao." Private respondent did not question the
correctness of this statement of the issue of the case. As a matter of fact, private respondent conceded
that such was the issue when it insisted in its Motion for Reconsideration, filed on December 4, 1959, that
"the contested area is a territorial part of Surgao province." 29This theory of private respondent was
continued in the brief which it filed with the Court of Appeals. Thus, it stated that "the lower court actually
had no jurisdiction over the subject matter as the area in dispute is beyond its territorial jurisdiction"
considering that on the basis of the technical description of its concession the disputed area is within the
municipality of Lianga, Surigao. 30

As correctly contended by the petitioners, the circumstance that the counsel for private respondent
invoked "the theory of forestry boundary" in its Motion to Dismiss Proceedings and to Dissolve the
Writ of Preliminary Injunction on February 19, 1960 does not necessarily imply that such was the
issue of the case when it was being tried before the trial court. The issues in each case are limited to
those presented in the pleadings.31 Generally speaking, issues are raised by affirmative allegations in
the pleadings of one party which are denied by the pleadings of the adversary. Since the object of the
pleadings is "to draw the lines of battle between the litigants and to indicate fairly the nature of the claims
or defenses of both parties ..." and "a party cannot subsequently take a position contrary to, or
inconsistent with, his pleadings ...", 32the rule requires that every pleading "shall contain in a methodical
and logical form, a plain concise and direct statement of the ultimate facts on which the party pleading
relies for his claim or defense, as the case may be ... ." 33

The complaint filed by petitioners before the Court of First Instance of Agusan on October 13, 1959
specifically alleged, among others, that "on or about September 13, 1959, defendant corporation,
thru its agents, entered into the above-described concession of plaintiff, more particularly the place
known as Sitio Tagabaca, Los Arcos, ... outside the limits of defendant's concession ..." which "sitio
of Tagabaca is in the Province of Agusan, west of the Surigao-Agusan boundary, outside of
defendant's concession, and within that of plaintiff's." As stated heretofore, private respondent
directly traversed this, by insisting in its answer of October 24, 1959, as well as its afore-quoted
amended answer, that the disputed area is withindefendant's concession and i a territorial part of the
Province of Surigao.

Since the issue raised in the court a quo, on the basis of the evidence presented and upon which the
court rendered its judgments is whether or not the contested area is located within the province of
Surigao, such question could not now be changed by private respondent on appeal. Well-settled is
the rule that questions which were not raised in the lower court cannot be raised for the first time on
appeal. In order that the question may be raised on appeal, it is essential that it be within the issue
made by the parties in their pleadings. Consequently, when a party deliberately adopts a certain
theory and the case is tried and decided upon that theory in the lower court, he will not be permitted
to change his theory on appeal because to permit him to do so will be unfair to the adverse
party. 34 Indeed, the petitioners would have no more opportunity to present further evidence, material to
the new theory, which they could have done had they been aware earlier of the new theory at the time of
the hearing before the trial court, since a reopening for that purpose would be out of the question after the
appeal. In other words, in the interest of justice and within the sound discretion of the appellate court, a
party may change his legal theory on appeal only when the factual bases thereof would not require
presentation of any further evidence by the adverse party in order to enable it to properly meet the issue
raised in the new theory.

III

Having found no justification, on the basis of the evidence of record, for the remand of the case for
further proceedings with the lower court as held by the Court of Appeals in its Resolution of February
19, 1974, the next question to be resolved is: Did the Appellate Court err in affirming the decision of
the trial court?

There is no question that the Court of Appeals in its Resolution of February 19, 1974, found as
an undisputed factthat: (a) petitioners' concession, with a total forested area of about ten thousand
(10,000) hectares, is situated in the province of Agusan, while private respondent's concession, with
a total forested area of about five thousand eight hundred (5,800) hectares, is located in the province
of Surigao; (b) that both licenses of the parties specify the "Agusan-Surigao Boundary line" as the
dividing line between the two concessions; and (c) that the disputed area as referred to in the
complaint as the Sitio Tagabaca, Los Arcos, is in the province of Agusan in accordance with the
provisions of Sections 38 and 40 of the Revised Administrative Code. It is also important to note
thatthe Court of Appeals in the same Resolution found that "By and large, the evidence ... tends to
support the claim of the appellees ..." and at the same time refused to give credence to the Forestry
Control Map (Exhibit "1") which was submitted in support of private respondent's claim that their
forestry boundary is different from the political or statutory boundary of the two provinces,
considering that said document was obviously prepared only in the year 1959, or some years after
the issuance of the timber licenses to the parties, "since appearing and reflected thereon are the
areas covered by licenses issued as late as 1959, as O.T.-181-59 of Butuan Lumber Manufacturing
and O.T.-864-59 of the Lianga Lumber Company, Ltd." and "no evidence has been adduced to show
that the same control map was the basis of the issuance of the ordinary timber license of the
appellees (Exhibit "C") of January 28, 1954 or of the ordinary timber license of the appellant issued
on September 3, 1956 (Exhibit "2"). 35 The same Court of Appeals also declared the opinion of the
Acting Director of Forestry, Tiburcio Serevo, 36 upon which appellant also relies for support, as a mere
opinion of one "who had nothing to do with issuance of said licenses, and who had not demonstrated in
court the technical basis of his opinion", apart from the fact that the same official had "advanced an earlier
and inconsistent opinion upholding the political boundary." These findings may be deemed as accepted
by private respondent, considering that said party did not file any motion for the reconsideration of the
afore-mentioned Resolution, much less appeal therefrom. The net result is that private respondent cannot
äüsl•älFº

now impugn the correctness of the findings of fact contained in the afore-mentioned judgment. Settled is
the rule that an appellee cannot impugn the correctness of a judgment not appealed from by him, and
while he may make counterassignment of errors, he can do so only to sustain the judgment on other
grounds but not to seek modification or reversal thereof. 37

The afore-mentioned findings of the Court of Appeals support and buttress, rather than detract from,
the Appellate Court's decisions of February 19, 1971 and of April 30, 1973 (Enriquez
Resolution). Thus, the Decision of the Court of Appeals of April 30, 1973, which was a re-affirmance
of the original decision of the Court of Appeals of February 19, 1971, summarized the factual basis
of the conclusion that the "common boundary line between the two forest concessions is the
interprovincial boundary line of Agusan and Surigao, as found by the trial court — which was
sustained by our resolution of March 22, 1971, denying appellant's first motion for reconsideration",
thus —

The boundary of defendant's timber concession upon which defendant-appellant
rests its case started at Corner 1, a point in the town of Lianga where Los Arcos-
Lianga road begins and proceeds to Corner 6, the intersection of the Agusan-Surigao
boundary line and to Los Arcos-Lianga Road .... about 10,000 meters and Corner 1
(Exhibit "2").

But this Corner 6 is Identical to Corner 3 of appellee's timber concession, which is
the crossing of the Los Arcos-Lianga Road and Surigao-Agusan Provincial boundary,
3,700 meters to point 6 (Exh. "A").

The meeting point between the two concession is clearly the Surigao-Agusan
boundary line.

Our inquiry is thus shifted to this. Where is the Surigao-Agusan provincial boundary
line? Section 1, of Act 1693 of the Philippine Commission described this line to be
the crest of the watershed between Agusan River Valley and the Pacific Ocean. The
parties recognized organize this line established by the foregoing Act. For it must be
stressed that the parties have stipulated and/or agreed during the survey made in the
presence of representatives of both plaintiffs-appellees and defendant-appellant, that
this point is situated at the highest crest of Agusan-Surigao — Surigao-Agusan
Provincial Boundary (See Annexes A and B to Motion for Rehearing or
Reconsideration, pp. 181-182, Rollo). It is the duty of the Court to abide by that
stipulation even if in its opinion it may appear atvariance with the previous
agreements ... (Martinez vs. Villanueva, L-7256, August 17, 1954). We are of the
opinion that the Court erred in holding that the boundary line for the simple reason
that the same is a deviation from what was agreed upon by the parties.

Appellant's claim that the boundary line delimited in the technical description
contained in the timber license should prevail over the provincial boundary line
established by Act 1693, relying mainly on the letter of the Bureau of Forestry (
Exhibit '11') and we quote:

... this office considers the technical description contained in the
timber license it issues to appellant for timber concessions as
controlling in the delimitation of the area within which a particular
license may legally operate ... natural or political landmarks are
merely descriptive and incidental (Exh. "11").

We cannot however close our eyes to the fact that the boundary line established by
Act 1693 is a natural landmark — a ridge. There is no evidence that this mark has
been changed by the interplay of natural forces; that there has been any alteration in
the course of the Agusan River, considering the character of the monument and the
practical impossibility of secretly removing them or changing their position. The
technical description appearing in Exhibits "A" and "2" can hardly be relied upon for
determination of the boundary line as the result of the survey of the concessions
were not accurate. In fact the sketch, guide map Exhibit "1", has not been presented
and approved by the Bureau of Forestry's authorities. And even granting that it was
so approved, the survey was made on the basis of courses and distances. Courses
and distances will yield to known, visible and definite object (Sayoc vs. Alarcon, CA-
G.R. No. 3735-R, June 19, 1950); monuments control courses and distances as well
as the calculated area (Scot vs. Abad, 47 Phil. 573; 8 Adm. Jur. 780-781; Columbian
Rope Co. vs. Bangoy, CA-G.R. 16543-R, July 31, 1958; 56 O.G. 452; Heguera vs.
U.S., 18 Law Ed. [US] 469; Connelson vs. Hammon, 224 N.C. 757, 235 F 2d
326; Cotobato Timberland Co., Inc. vs. Plaridel Lumber Co., Inc., L-19432, Feb. 26,
1965, 13 SCRA 235).

Where the calls for the location of boundaries to land are
inconsistent, other things being equal, resort is to be
had first to natural objects of landmarks, next to artificial monument,
then to adjacent boundaries and thereafter the course and distances.

The reason for the rule is that mistakes in courses and distances are
not probable and frequent than in marked trees, mountains, rivers
and other objects capable of being clearly designated and accurately
described; course and distances are usually descriptive of the
designated monument and depend for their accuracy upon the skill
and experience of the surveyor (8 Am. Jur. 781-782). (Emphasis our)

All things considered, we are satisfied that the boundary line delimiting the two
adjacent concessions is the Agusan-Surigao Provincial Boundary Line located at the
highest ridge, 8.5 km. along the Los Arcos-Lianga Road (Exhs. "A-1"; "A-2"). The
result therefore is that the disputed area which is 9.7 km. along the road is within the
plaintiffs-appellees' concession and within the province of Agusan.

The foregoing conclusion finds support in the technical description of the parties'
concessions which shows that plaintiffs' concession is in Agusan while that of
defendant is in Surigao. Moreover the disputed area is in Los Arcos, Agusan, as is
provided for in Section 40 of the Revised Administrative Code showing that Las
Arcos is one of the municipalities within the territorial jurisdiction of Agusan province.
Furthermore, there is the admission of Senator Tolentino that Tagabaca where the
disputed area is, is located in Los Arcos, Agusan (tsn., pp. 225, 229, June 25, 1962).
Even the findings of Forester Macabeo of the Bureau of Forestry fixed the highest
point or ridge marking the boundary between the two provinces at 8.501 kms.
(Exhibit "A-2"). Finally, if the plaintiffs had really encroached on 420 hectares of
valuable timberland in April 1959, defendant would not have sought the dismissal of
the case (pp. 68-82, Rec. on Ap.), instead of having the case tried and decided on
the merits without any delay and thus soon recover damages therefor, unmasking
thereby Justice Labrador as trespasser and intruder. Indeed, it is incomprehensible
why defendant did not initiate the present case or another action for redress. Finally,
there is the strong presumption as to the correctness of the decision appealed from
especially after it was affirmed and the first motion for reconsideration thereof had
been denied by this Court. (Enriquez Resolution, pp. 3-7).

Private respondent assails this Resolution of the Court of appeals, contending that Annexes "A" and
"B", which were adverted to in said Resolution, are "spurious", as said documents were not
presented at the trial of the case before the Court of Firstly Instance of Agusan which ended
sometime in February, 1964 and the purported authority of the alleged representatives of private
respondent to sign said documents were repudiated by the President and Chairman of the Board
and Treasurer-Director of private respondent as shown by their affidavits of May 18, 1973. As
explained by petitioners, these documents were submitted as annexes to their Motion for Rehearing
or Reconsideration in CA-G.R. No. 37365-R, and were intended to show that pursuant to a directive
of the Bureau of Forestry to "fix the boundaries" of both concessions a survey was made for that
purpose sometime in August, 1964. Thiswas after the trial of the case before the court a quo was
terminated. According to petitioners, these documents were never questioned by private respondent
during the oral argument nor in its memorandum at the time of the consideration of said motion
Annexes "A" and "B" are xerox-copies of affidavits executed before Forester and Officer-in-Charge
Melecio S. Agra by Delfin Alamban, on behalf of Lianga Lumber Company, and Coleto G. Campos
and Gorgonio Alegre, as representatives of Lianga Timber Company, dated August 4 and 9, 1964,
respectively. Annex "B" is attested to by Wenceslao Ortiz of the Bureau of Forestry. The afore-cited
documents certified to the correctness of the "fact-finding survey of the Bureau of Forestry officials
and representatives of the adjacent licensees concerned" of the boundary of the two licensees
"starting from the junction of Los Arcos-Lianga Road and the highest ridge thence following the
highest ridge in a general southeasterly and southwesterly direction that divides the watersheds of
the province of Agusan and Surigao del Sur."

While it is true that private respondent submitted evidence repudiating the authority of Coleto G.
Campos to enter into any agreement on behalf of Lianga Timber Co., Inc., it has not been shown
that the allegation that a fact-finding survey to locate the boundary of the two concessions was made
by the Bureau of Forestry officials and the persons mentioned therein is not true. Be that as it may,
the findings of the aforesaid survey as to the location of the boundary between the two concessions
is merely confirmatory of the findings of the trial court in the appealed decision and the holding of the
Court of Appeals in its Decision of February 19, 1971, which was affirmed by the same Appellate
Court in its Resolution of March 22, 1971, denying private respondent's first Motion for
Reconsideration.
Upon the other hand, this Court cannot place much reliance on the so-called "Forestry Control Map"
(Exhibit "1") which is one of the principal props of the case of private respondent. In the first place,
the Ordinary Timber License of Lianga Lumber Company (Exhibit "C") clearly and specifically
referred to a grant to said licensee of a forested area within the district of Azpitia, Los Arcos and
Prosperidad, in the Province of Agusan, while the license of private respondent (Exhibit "2") likewise
specifically referred to a forested area in the Municipality of Lianga, Province of Surigao. Pursuant to
Section 40 of the Revised Administrative Code, Azpitia, Los Arcos, and Prosperidad are municipal
districts within the Province of Agusan, while under Section 38 of the same Code, the municipality of
Lianga is part of the Province of Surigao. If the purpose of the forestry officials was to include a part
of a forested area in Agusan in the timber license granted to private respondent, no logical
explanation had been given why such matter was not clearly and specifically stated therein.
Consider also the fact that both licenses were subsequently renewed and yet no correction or
amendment in the description of the timber area granted to either party to conform to the forestry
control map was ever made. Thus, Exhibit "C" was renewed on June 28, 1954 (Exhibit "C-1"),
August 26, 1955 (Exhibit "C-2"), August 24, 1956 (Exhibit "C-3"), September 24, 1958 (Exhibit "C-4")
and August 17, 1959 (Exhibit "C-5") without any changes or alterations of the description of the
forested area in the two timber concessions. Secondly, no less than private respondent's counsel,
Atty. Arturo C. Mojica, admitted that the Forestry Control Map (Exhibit "1") was not yet prepared
when the boundary of the concessions of both parties were laid allegedly on the ground. 38 Thirdly, it
was found as an established fact by both the trial court and the Court of Appeals that Exhibit "1" was not
prepared earlier than 1959 and, consequently, could not have been the basis of the technical descriptions
appearing in the timber licenses originally issued to Lianga Lumber Company on January 28, 1954
(Exhibit "C") or of the timber license issued to Lianga Timber Company, Inc. on August 28, 1956 (Exhibit
"2"). Neither are We persuaded that the phrase "Agusan-Surigao Provincial Boundary" in the timber
licenses (Exhibits "C" and "2") was not intended to mean the Agusan-Surigao provincial boundary line as
provided by law but an artificial or imaginary line fixed by the forestry officials. It must be noted that both
timber licenses mentioned existing natural or other well known monuments as landmarks to indicate the
respective limits of each concession. Thus, the Ordinary Timber License of petitioners (Exhibit "C") refers
to the Sibung River, the Los Arcos-Lianga Road and Tinanguanan Creek, while the license of private
respondent refers also to the Los Arcos-Lianga Road and the mouth of the Wakat River to indicate the
boundaries of each concession. Considering that the "Agusan-Surigao boundary line" has already been
fixed by law and is of public knowledge to all concerned, since everyone is presumed to know the law, is
it not more logical to assume that when the Director of Forestry stated as the common boundary of each
concession the "Agusan-Surigao boundary line" he was referring to the boundary line fixed by law, and
not to an imaginary line, the location of which is not known to the parties or to the public" Certainly, the
Director of Forestry, at the time he issued the license, could not have been referring to the technical
boundary in the Forestry Control Map considering that said document was not yet then in existence. It
must be presumed that official duty has been regularly performed. 39There is also the report of Forester
Marcelino Macabeo (Exhibit "A-1") to the District Forester of Butuan City. In his report, said official stated
that in order to determine on the ground the approximate boundary line dividing the two provinces of
Agusan and Surigao, conducted a survey and found that the boundary line between the two provinces is
located at Km. 8.501 from the beach of Lianga, Surigao, "which is the highest point of the ridge or divide
wherein the drainage is divided between the two provinces ...". This report was forwarded to the Director
of Forestry by the District Forester of Butuan City on August 6, 1959 (Exhibit "A-2"), informing the Director
of Forestry that according to said findings the highest point is located at 8,501 km. of the Los Arcos-
Lianga Road, and this should be the point through which the Agusan-Surigao boundary should pass.
These findings corroborate those of witness Esmeraldo Osin, Forest Guard of the Bureau of Forestry who
was front Chairman of the survey team which found that the highest ridge is at Km 8.501. 40 These are
written statements in the performance of duty by public officers, with official knowledge of the facts stated
therein, and should be prima facie evidence of the facts thus stated. 41

The boundary line provided by law specifically referred to the crest of the watershed or the highest
ridge between the Agusan River Valley and the Pacific Ocean. Having been in existence in the
statute books since 1907, it could be assumed that this highest ridge adverted to is known to the
public as a clearly Identifiable natural landmark to indicate the boundary of the two provinces. As
correctly stated by the Court of Appeals, natural objects will ordinarily, in case of conflict in the
description of boundaries to land, control all other calls. Thus, it is settled that "calls for courses and
distances, ... will, in case of conflict, be controlled by and will yield to, one for a natural object or
landmark or permanent artificial monument. The reason for the rule is that mistakes in courses and
distances are more probable and frequent than in marked trees, mountains, rivers, and other objects
capable of being clearly designated and accurately described ..." 42

We are, therefore, satisfied that the afore-mentioned Resolutions of the Court of Appeals affirming the
trial court's judgment are supported by substantial evidence. 43

On the contention of private respondent that this Court has no power to revive the original decision of the
Court of Appeals affirming the trial court's judgment, suffice it to state that such power is necessarily
implied from the authority conferred upon this Court by the Constitution and by the law to revive, revise,
reverse, modify or affirm the final judgment or a decision of inferior courts. 44 Moreover, the Court need
not actually revive the original decision of the Court of Appeals of February 19, 1971. By reversing the
Resolution of February 19, 1974 (the Gancayco Resolution), the Court can just as well merely affirm the
decision of the trial court and virtually treat the Esguerra Resolution and the Enriquez Resolution as non-
existing, the same having been superseded in contemplation of law by the Gancayco Resolution. Stated
otherwise, what is before Us for review only are the Gancayco Resolutions of February 19, 1974 and May
9, 1974, and since it is Our conclusion that the same are erroneous, the necessary consequence is that
We must as We do affirm the decision of the trial court, just like in any other ordinary case where We
reverse the Court of Appeals in favor of the trial court's judgment.

In view of the foregoing conclusions and the final result favorable to petitioners, We consider it
superfluous to discuss the issue raised by them that the second motion for reconsideration of private
respondent which gave rise to the Esguerra Resolution was pro forma and unauthorized and,
therefore, could not have suspended the period for the finality of the Decision of February 19, 1971.

We prefer to treat the present action as an appeal thru petition for review, rather than as an original
action for certiorari.

WHEREFORE, the resolution-decision of the Court of Appeals of February 19, 1974, 45 and its
Resolution of May 9, 1974 46 denying reconsideration thereof are REVERSED, and, instead, the judgment
of the trial court is hereby AFFIRMED, with the sole modification that private respondent shall pay
petitioners the sum of P32,863.62 as actual damages, instead of P47,578.75, plus P3,000.00 as
attorney's fees, and private respondent to pay the costs.

Fernando (Chairman), Barredo, Aquino , and Martin, JJ., concur.

Concepcion Jr., J., took no part.

Martin, Jr., was designated to sit in the Second Division.

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DIVISION

[ GR No. 83545, Aug 11, 1989 ]

ADELFO MACEDA v. CA +

DECISION
257 Phil. 453

GRIÑO-AQUINO, J.:
The issue raised in this case is the jurisdiction of the metropolitan trial
court, in an ejectment case, over the lessee's counterclaim for the value of
improvements exceeding the court's jurisdictional limit of P20,000. The
Court of Appeals dismissed the counterclaim for lack of jurisdiction, hence,
this petition for review by the lessee, Adelfo Maceda.
The leased property originally belonged to the spouses Arturo Victoria and
Maxima Monserrat, a maternal aunt of the petitioner. After the spouses
emigrated to the U.S. in 1970, they leased their house and lot in San Juan,
Metro Manila, to the petitioner for P200 per month in 1970. As the house
was old and run down, petitioner proposed to have it repaired and
renovated subject to reimbursement of his expenses. The lessors allowed
him to do so (Exh. 3) and requested him to send them pictures of the work
accomplished (Exh. 3-a). He made extensive repairs, tearing down rotten
parts of the house, rebuilding and extending it up to the garage which he
converted into a dining room. He also moved the bathrooms around. The
remodeling job cost P40,000. His aunt and uncle were pleased with the
pictures of the remodelled house and made plans to reimburse him for his
expenditures. But Maceda did not stop there. In what appears to be an
orgy of building, he introduced more improvements. He constructed a new
driveway, a basketball court and raised the ground level near the creek,
elevated the fence, remodelled the gate, and landscaped the lawn.
In 1972, Arturo Victoria passed away in the United States. In 1973, his
aunt's attorney-in-fact, Atty. Rustico Zapata, Sr., promised to sell the
property to him for P125,000 after the title should have been transferred to
his widowed aunt. On February 12, 1974, Atty. Zapata and a Mr. Gomez
visited the place and informed him that his aunt had sold the property to
Mrs. Gomez so he should vacate it. He refused to leave. As a result, Atty.
Zapata filed an ejectment case against him on April 4, 1974, in the
Municipal Court of San Juan, Rizal (Civil Case No. 3773). It was dismissed
on the plaintiff's own motion.
In November 1974, Atty. Zapata informed the petitioner that the property
had been sold to Pablo Zubiri for P145,000. He was asked to vacate
it. Again, he refused. Zubiri filed an ejectment case against him (Civil Case
No. 37781) in the Municipal Court of San Juan, Rizal. Petitioner insisted
that he was entitled to retain possession of the premises until his expenses
were duly reimbursed to him. The complaint was dismissed for failure to
prosecute.
In 1978 Maxima Monserrat died in the United States.
On December 4, 1981, the property was sold by Zubiri to Cement Center,
Inc. which obtained TCT Nos. 30844 and 30845 for the property. The
president of the company inspected the premises. Maceda was asked to
vacate the property because the company would build a housing project on
it for its employees. Maceda insisted on being reimbursed for his
improvements as the original owners had promised to do. Formal demands
to vacate and for payment of P4,000 monthly rental from April 15, 1982
were sent to him by the company. On January 17, 1984,
another ejectment suit was filed against him in the Metropolitan Trial
Court of San Juan, Metro Manila.
In his answer to the complaint, Maceda set up a counterclaim for
P240,000, the alleged value of his improvements.
In its decision, the Metropolitan Trial Court ordered him to vacate the
premises and pay the plaintiff P2,000 per month as reasonable
compensation for his use of the premises until he actually vacates, and
P5,000 as attorney's fees. It ordered the plaintiff to pay the defendant
P158,000 as the value of his improvements and repairs, less his accrued
rentals of P64,000 as of December 1985 and the sum of P12,000 which he
had earlier received as partial reimbursement.
Both parties appealed to the Regional Trial Court. The Regional Trial Court
set aside the inferior court's decision. On May 19, 1987, it dismissed
the ejectment complaint, and ordered Cement Center to
pay Maceda P182,000 for his necessary and useful improvements (pp. 31-
49, Rollo of CA-G.R. No. 12536).
Cement Center filed a petition for review in the Court of Appeals (CA-G.R.
SP No. 12536). On February 17, 1988, the Court of Appeals rendered a
decision, modifying the appealed decision, the dispositive part of which
reads thus:
"PREMISES CONSIDERED, the decision appealed from is hereby
AFFIRMED insofar as it dismissed the complaint for ejectmentfiled by
petitioner against private respondent. However, the portions of the
decision declaring petitioner (plaintiff) under obligation to pay private
respondent the sum of P182,200.00 corresponding to the value of the
supposed necessary and useful improvements, as well as the
pronouncement therein regarding private respondent's right of retention,
are hereby SET ASIDE. With costs against petitioner." (p. 35, Rollo.)
The reason for the Court of Appeals' denial of Maceda's claim for
reimbursement of the cost of his improvements was that the MTC lacked
jurisdiction over the claim which exceeds P20,000. The Court of Appeals
said:
"The Regional Trial Court, however, erred in declaring that petitioner is
under obligation to pay private respondents the sum of P182,200.00
supposedly corresponding to the value of the necessary and useful
improvements he had introduced on the leased premises, with the right of
retention until he shall have been fully reimbursed therefor. The claim for
reimbursement in the total amount of P240,000.00 was alleged by private
respondent by way of counterclaim in his answer (pp. 40-41, Records). It
is clearthat the amount of counterclaim, is beyond the jurisdiction of the
Metropolitan Trial Court. Under Section 33, B.P. Blg. 129, the
Metropolitan Trial Court shall have exclusive original jurisdiction over
civil actions where the amount of the demand does not exceed P20,000.00
exclusive of interest and costs but inclusive of damages of whatever
kind. It goes without saying that the Regional Trial Court has no
authority to entertain the counterclaim because it took cognizance of the
case by virtue of its appellate jurisdiction.
"Considering that the Metropolitan Trial Court did not have jurisdiction to
adjudicate the counterclaim, the decision of the Regional Trial Court on
appeal giving private respondent the right of retention is without legal
basis. Besides, the right of retention applies only to a possessor in good
faith under Article 546 of the Civil Code. In lease, the lessee knows that his
occupancy of the premises continues only during the lifetime of the lease
contract. If he introduces improvements thereon, he does so at his own
risk (Imperial Insurance vs. Simon, 14 SCRA 855). The rights of a lessee in
good faith, which do not include the right of retention, are defined in
Article 1678, x x x." (pp. 34-35, Rollo.)
In his petition for review of that decision in this Court, Maceda assails the
setting aside of the money judgment or award for his improvements in the
sum of P182,200, and the rejection of his claim to a right of retention over
the leased premises.
Maceda's petition for review (G.R. No. 83545) has no merit. The Court of
Appeals correctly ruled that the municipal trial court did not have original
jurisdiction over his counterclaim as it exceeds P20,000. Correspondingly,
the regional trial court did not have appellate jurisdiction over the
claim. The decision of the Municipal Trial Court of San Juan awarding him
P158,000 on his counterclaim, and that of the Regional Trial Court raising
the award to P182,200, were invalid for lack of jurisdiction. The
jurisdiction of the Metropolitan Trial Court in a civil action for sum of
money (Maceda's counterclaim for the value of his improvements is one
such action) is limited to a demand that "does not exceed twenty thousand
pesos exclusive of interest and costs but inclusive of damages of whatever
kind." (Sec. 33,subpar. 1, B.P. Blg. 129.) A counterclaim in the municipal or
city court beyond that jurisdictional limit may be pleaded only by way of
defense to weaken the plaintiff's claim, but not to obtain affirmative relief
(Agustin vs. Bacalan, 135 SCRA 340).
Maceda was not a possessor in good faith, i.e., one who possesses in
concept of an owner, hence, he had no right to retain possession of the
leased premises pending reimbursement of his improvements thereon. No
mere lessee can claim to be a possessor in good faith. (Art. 546, Civil
Code; Eusebio vs. IAC, 144 SCRA 154; Laureano vs. Adil, 72 SCRA 148.)
The promise of the now deceased spouses Arturo Victoria and
Maxima Monserrat, to reimburse Maceda for his improvements was limited
only to the initial remodelling job which cost P40,000, pictures of which he
sent to the Victorias and which they approved and promised to
reimburse. No similar promise to pay may be implied with regard to the
additional improvements which he made without their approval and which
were evidently intended to improve them out of their property.
In any event, since the undertaking of the Victorias to
reimburse Maceda for the P40,000 worth of improvements which he
introduced on their property was not recorded on their title, that promise
did not encumber the property nor bind the purchaser thereof or the
successor-in-interest of the Victorias (Mun. of Victorias vs. CA, 149 SCRA
32).
While it is true that under B.P. Blg. 877 a lessee may not be ejected on
account of the sale or mortgage of the leased premises, the new owner's
need of the premises for the construction of dwellings for its employees,
coupled with the lessee's failure to pay the rentals since December 1981,
are, to our mind, a legitimate ground for the judicial ejectment of the lessee.
Maceda's original rental of P200 per month could not be increased by
the new owner, Cement Center, when it acquired the property on December
5, 1981 until B.P. Blg. 25 allowed a cumulative and compounded 10% yearly
increase effective April 15, 1982, and a 20% increase effective April 15,
1985, pursuant to B.P. Blg. 867 and 887 and R.A. 6643. Based on those
guidelines, the rentals due from Maceda from December 4, 1981 were as
follows:
Per
Total
Month
December 4, 1981 to April 14, 1982 P200.00 P 900.00
+ 10% - April 15, 1982 to April 14, 1983 220.00 2, 640.00
April 15, 1983 to April 14, 1984 242.00 2, 904.00
April 15, 1984 to April 14, 1985 266.20 3, 194.40
+ 20% - April 15, 1985 to April 14, 1986 319.44 3, 833.28
April 15, 1986 to April 14, 1987 383.32 4, 599.84
April 15, 1987 to April 14, 1988 459.98 5, 519.75
April 15, 1988 to April 14, 1989 551.97 6, 623.64
April 15, 1989 to August 14, 1989 662.36 2, 649.44
P32, 864.36
WHEREFORE, the petition for review is granted with respect to the
computation of the rentals due from the petitioner. He is ordered to pay
the unpaid rentals of P32,864.36 for his occupancy of the private
respondent's property from December 1981 to August 14, 1989 plus
P662.36 monthly thereafter until he vacates the premises. The dismissal of
his counterclaim for the value of his improvements is affirmed. No
pronouncement as to costs.
SO ORDERED.
Narvasa, (Chairman), Cruz, Gancayco, and Medialdea, JJ., concur.

G.R. No. L-10031 December 6, 1915

LA CORPORACION DE PADRES AGUSTINOS RECOLETOS, plaintiff-appellant,
vs.
PEDRO CRISOSTOMO, ET AL., defendants-appellants.

C.W. O'Brien for appellant.
Ramon Fernandez and Felipe Agoncillo for appellees.

FACTS: Plaintiff alleges ownership over a number of small parcels of land. Hence the corporation filed an action to
recover said lands. The judgment was held in favor of the plaintiff as to some of the parcels of land and against it
as to the others. As to these latter, the plaintiff has appealed. The defendant appellees claim title to their
respective parcels by prescription of ownership or adverse possession.

Some of the appellees pleaded title by adverse possession in their answers while other merely entered a general
denial. As to these latter, the point is made that evidence of adverse possession was not admissible under a
general denial but that such a defense must specially pleaded.

ISSUE: Does the plaintiff fail to alleged necessary contents in the pleading?

HELD: No. Under our system of pleading a defendant may answer (1) by a general or special denial of the material
allegations of the complaint, or (2) by nay new matter constituting a defense or counterclaim. (Code Civ. Proc., sec.
94.)

The first method puts in issue all the material allegations of the complaint if the denial be general, or one or more
of them if the denial be specific. By material allegations are meant those without which the plaintiff would have no
cause of action. Only those allegations of the complaint which are thus put in issue require proof. Pleas under the
second method are usually in the nature of pleas in confession and avoidance. They import that, admitting the
allegations of the complaint to be true, yet the matters set out in the answer deny or take away the plaintiff's right
of action. Such are pleas of infancy or other incapacity, fraud, duress, self-defense, etc.
In this connection, where the model form for pleading the statute of limitations is made up in this manner. Plaintiff
is required to meet a plea of new matter by amendment to his complaint, but his failure to do so within the period
fixed by rules of court is taken to mean that he controverts or denies each material statement made in such new
matter. So that, whether the answer be a denial of one or more of the material allegations of the complaint or a
defense of a new matter, the pleadings have theoretically formed issues of fact or law or both to which the trial
must be confined.

A general denial of the material allegations in the complaint requires that plaintiff come to the trial prepared to
prove each of his material allegations of fact. Conversely, the defendant must produce his evidence tending to
show the non-existence of plaintiff's allegations.

In the action to recover possession of land as owner, the plaintiff is required to allege a disseisin and its
continuance by the defendant and the amount of his damages. This is all that was done in the present case.
Plaintiff was not required and did not allege the source and kind of title under which it claimed, and, under the
complaint, it was at liberty to introduce proof of any legal title which it possessed. Conversely, the defendants
were at liberty to introduce all legally admissible evidence tending to show that title was not in the plaintiff.
Hence, they had the right to show that the legal title was in themselves. For, if legal title to the property were
shown to be in the defendants, the evidence of the plaintiff that title belonged to it would certainly be met.

From the evidence submitted by them the trial court sustained their defense, and, after a careful review of the
record, the Supreme Court held that it cannot say that the trial court’s decision is ought to be disturbed.

G.R. No. 70909

QUIASON, J.:
This is an appeal by certiorari under Rule 45 of the Revised Rules of Court
from the decision of the Court of Appeals in AC-G.R. CV No. 67692 entitled
"Conchita Vda. de Chua, et al. v. Hermenigilda Herrera, et al.," affirming
with modification the decision of the Court of First Instance of Cebu in Civil
Case No. R-16589.

The facts as found by the Court of Appeals, are summarized as follows:

"Sometime in 1950, defendant Herminigilda Herrera executed a Contract of
Lease (Exh. "A") in favor of Tian On (sic) (or Sy Tian On) whereby the
former leased to the latter Lots Nos. 620 and 7549 containing an area of 151
square meters, located at Manalili Street (now V. Gullas Street) Cebu City,
for a term of ten (10) years, renewable for another five (5) years. The
contract of lease (Exh. "A") contains a stipulation giving the lessee an
option to buy the leased property (Exh. A-2) and that the lessor guarantees
to leave the possession of said property to the lessee for a period of ten (10)
years or as long as the lessee faithfully fulfills the terms and conditions of
their contract (Exh. A-5).

In accordance with the said contract of lease, the lessee, Tian On, erected a
residential house on the leased premises.

On February 2, 1954, or within four (4) years from the execution of the said
contract of lease (Exh. "A"), the lessee, Sy Tian On, executed a Deed of
Absolute Sale of Building (Exh. "B") in favor of Chua Bok, the predecessor-
in-interest of the plaintiffs herein, whereby the former sold to the latter the
aforesaid residential house for and in consideration of the sum of
P8,000.00. Pertinent provisions of this deed of sale (Exh. "B") read as
follows:

'x x x. That with the sale of the said house and as a legal consequence, I
hereby assign all my rights and privileges as a lessee of the lot on which the
said building is constructed together with its corresponding obligations as
contained and expressly stipulated in the Contract of Lease executed in
1950 between myself and the lot owner, Herminigilda Herrera, to the said
vendee, Chua Bok who hereby accepts the said assignment of the said lease
and hereby promises and bind himself to abide by all the terms and
conditions thereof, a copy of the Lease Contract is hereby attached as
Appendix "A" and made a part hereof.

'That the present sale is made with the knowledge and express consent of
the lot-owner and lessor, Herminigilda Herrera who is represented herein
by her attorney-in-fact, Vicenta R. de Reynes who hereby also honors the
annulment of the lease made by Sy Tian On in favor of Chua Bok, and
hereby promises and binds herself to respect and abide by all the terms and
conditions of the lease contract which is now assigned to the said Chua Bok.

IN WITNESS WHEREOF, the parties have hereunto affixed their
signatures on this 2nd day of February 1954, in the City of Cebu,
Philippines.

(Sgd.) CHUA BOK
Vendee-Lessee-Assignee

(Sgd.) SY TIAN ON
Vendor-Lessor-Assignor
HERMINIGILDA HERRERA

By:

(Sgd.) VICENTA R. DE REYNES
Attorney-in-fact
Lot-owner-Lessor

SIGNED IN THE PRESENCE OF:

(Sgd.) ILLEGIBLE

AND

(Sgd.) ILLEGIBLE
After the said sale transaction, Chua Bok and his family (plaintiffs herein)
resided in the said residential building and they faithfully and religiously
paid the rentals thereof.

When the original Contract of Lease expired in 1960, Chua Bok and
defendant Herminigilda Herrera, through her alleged attorney-in-fact
executed the following ?

CONTRACT OF LEASE
THIS CONTRACT OF LEASE made and entered into this ___ day of
August, 1960, in the City of Cebu, Philippines, by and between:

HERMINIGILDA HERRERA, of legal age, single, Filipino and a resident of
Cebu City, Philippines, hereinafter known as Party of the First Part;

and

CHUA BOK of legal age, married and resident of Cebu City, Philippines,
hereinafter known as the Party of the Second Part.

W I T N E S S E T H:

That the Party of the First Part who is the owner of a parcel of land located
at Manalili Street, Cebu City containing an area of about 151 (One Hundred
Fifty-One) square meters, more or less, known as Lot No. ___ of the
Cadastral Survey of Cebu, hereby lets and leases unto the Party of the
Second Part who hereby accepts in lease the above mentioned lot under the
following terms and conditions:

1. That the term of this contract shall be for a period of FIVE (5) years from
August 1, 1960 to August 1, 1965, at a monthly rental of SIXTY PESOS
(P60.00) Philippine Currency;

2. That the rental of P60.00 will be paid within the first 10 days of every
month, to the Party of the First Part without express demand and in
advance;

xxx xxx xxx

4. That the Party of the Second Part is given an option to buy the said leased
premises if he is qualified and when the Party of the First Part decides to
sell the same and that the Party of the Second Part is also given the option
to renew the Contract of Lease upon terms and conditions to be agreed by
both parties;

xxx xxx xxx

6. That it is hereby expressly reserved that should the property leased be
sold by the Party of the First Part to any other party, the terms and
conditions of this Contract shall be valid and will continue for the duration
of this contract. The Third Party shall be expressed (sic) bound to respect
the terms of this Contract of Lease;

xxx xxx xxx

That the parties herein, do hereby mutually and reciprocally stipulate that
they will comply with the terms and conditions herein before set forth. That
the Party of the First Part hereby (sic) these presents guarantees that she
will leave the property in the possession of the Party of the Second Part for
five (5) years or as long as the Party of the Second Part faithfully fulfills
with the terms and conditions herein set forth.

IN WITNESS WHEREOF, we have hereunto affixed our signatures on this
9th day of September, 1960, in the City of Cebu, Philippines.

(Sgd.) CHUA BOK
Party of the Second Part

HERMINIGILDA HERRERA

By: Party of the First Part

(Sgd.) VICENTA R. DE REYNES
Attorney-in-Fact

SIGNED IN THE PRESENCE OF:

(Sgd.) ILLEGIBLE

(Sgd.) B. E. SUN'
After the expiration of the contract of lease in question (Exh. "C") the
plaintiffs herein, who are the successors-in-interest of Chua Bok (who had
meanwhile died) continued possession of the premises up to April 1978,
with adjusted rental rate of P1,000.00 (Exh. "D"); later readjusted to
P2,000.00.

On July 26, 1977, defendant Herrera through her attorney-in-fact, Mrs. Luz
M. Tormis, who was authorized with a special power of attorney, sold the
lots in question to defendants-spouses, Vicente and Victoria Go. The
defendants-spouses were able to have aforesaid sale registered with the
Register of Deeds of the City of Cebu and the titles to the two parcels of land
were transferred in their names (Exhs. "5-Herrera", or "5-Go" and "6-
Herrera" or "6-Go").

Thereafter, or on November 18, 1977, plaintiffs filed the instant case
seeking the annulment of the said sale between Herminigilda Herrera and
spouses Vicente and Victoria Go, alleging that the conveyance was in
violation of the plaintiffs' right of option to buy the leased premises as
provided in the Contract of Lease (Exh. "C") and that the defendants-
spouses acted in bad faith in purchasing the said lots knowing fully well
that the said plaintiffs have the option to buy those lots.

After due trial, the lower court rendered judgment, the dispositive portion
of which reads as follows:

WHEREFORE, in view of the foregoing, this Court ORDERS:

1) The DISMISSAL of plaintiffs' complaint, as against defendant spouses
GO;

2) The plaintiffs to VACATE Lot No. 620 and Lot No. 7549, ownership over
which by defendants Vicente and Victoria T. Go being found valid and
legitimate, and to peacefully turn over the same to said spouses, and to
REMOVE the building thereon at plaintiffs' own expense, or such removal
may be done by the declared land-owners, likewise at plaintiffs' expense.

3) Defendant Herrera to pay the spouses Go, the sum of P15,000.00 as
reimbursement to them for what they already paid to their lawyer;

4) Defendant Herrera to pay plaintiffs the sum of P50,000.00 (later
reduced to P20,000.00, on motion of defendant Herrera, which the court a
quo granted) in concept of moral damages suffered by the latter; and

5) Defendant Herrera to pay the costs of the proceedings (Record on
Appeal, pp. 229-230)" (Rollo, pp. 63-68).
Plaintiffs and defendant Herrera appealed from the decision of the trial
court to the Court of Appeals.

In said court, plaintiffs-appellants claimed that the trial court erred: (a) in
dismissing their complaint as against defendants-spouses Go, (b) in
ordering them to vacate the lots in question and to remove the
improvements they had introduced in the premises, and (c) in ordering the
execution of the judgment pending appeal. Defendant-appellant Herrera,
on her part, claimed that the trial court erred in ordering her to pay
P15,000.00 as attorney's fees to defendants-spouses Go and P50,000.00 as
moral damages to plaintiffs-appellants.

The Court of Appeals affirmed with modification the decision of the trial
court, thus:

"WHEREFORE, premises considered the appealed decision is hereby
MODIFIED by eliminating the award of P20,000.00 moral damages in
favor of the plaintiffs-appellants, the award of P15,000.00 attorney's fees in
favor of defendants-appellees (Go spouses) and the costs of the
proceedings. In all other respects the appealed decision is hereby
AFFIRMED" (Rollo, p. 78).
In their petition filed with us, petitioners (plaintiffs-appellants in AC-G.R.
CV No. 67692) gave up their demand for the nullification of the sale of the
lots in question to respondent-spouses Go and limited their appeal to
questioning the affirmance by the Court of Appeals of the decision of the
trial court, ordering their ejectment from the premises in question and the
demolition of the improvements introduced thereon.

In support of their right to possess the premises in question, petitioners
rely on the contract of lease (Exh. "C") entered into by and between Chua
Bok and Vicenta R. de Reynes, as attorney-in-fact of respondent Herrera, as
well as on the tacit renewal thereof by respondent Herrera (Rollo, pp. 35-
48).

In declaring the contract of lease (Exh. "C") void, the Court of Appeals
noted that Vicenta R. de Reynes was not armed with a special power of
attorney to enter into a lease contract for a period of more than one year.

We agree with the Court of Appeals.

The lease contract (Exh. "C"), the linchpin of petitioners' cause of action,
involves the lease of real property for a period of more than one year. The
contract was entered into by the agent of the lessor and not the lessor
herself. In such a case, the law requires that the agent be armed with a
special power of attorney to lease the premises.

Article 1878 of the New Civil Code, in pertinent part, provides:

"Special Powers of Attorney are necessary in the following cases:

xxx xxx xxx

(8) To lease any real property to another person for more than one year."
It is true that respondent Herrera allowed petitioners to occupy the leased
premises after the expiration of the lease contract (Exh. "C") and under
Article 1670 of the Civil Code of the Philippines, a tacit renewal of the lease
(tacita reconduccion) is deemed to have taken place. However as held
in Bernardo M. Dizon v. Ambrosio Magsaysay, 57 SCRA 250 (1974), a tacit
renewal is limited only to the terms of the contract which are germane to
the lessee's right of continued enjoyment of the property and does not
extend to alien matters, like the option to buy the leased premises.

In said case, Magsaysay leased to Dizon a parcel of land for a term of two
years, expiring on April 1, 1951. Under the lease contract, Dizon was given
the preferential right to purchase the land under the same conditions as
those offered to other buyers. After the lease contract expired, Dizon
continued to occupy the leased premises and to pay the monthly rentals,
which Magsaysay accepted. On March 24, 1953, Dizon learned that
Magsaysay had sold the property to a third party without giving him the
opportunity to exercise the preferential right to purchase given him under
the lease contract. Dizon then filed an action against Magsaysay and the
buyer to annul the sale of the property or in the alternative, to recover
damages from Magsaysay. The trial court dismissed the action and the
Court of Appeals affirmed the dismissal. In the Supreme Court, Dizon
claimed that a new lease contract was impliedly created when Magsaysay
had allowed him to continue to occupy the premises after the expiration of
the original lease contract and that the other terms of the said contract,
including the lessee's preferential right to purchase, were deemed revived.
Dizon invoked Article 1670 of the Civil Code of the Philippines, which
provides:

"Art. 1670. If at the end of the contract the lessee should continue enjoying
the thing leased for fifteen days with the acquiescence of the lessor, and
unless a notice to the contrary by either party has previously been given, it
is understood that there is an implied new lease, not for the period of the
original contract, but for the time established in Articles 1682 and
1687. The other terms of the original contract shall be revived (Underlining
supplied).
We dismissed Dizon's appeal and sustained the interpretation of the Court
of Appeals that "the other terms of the original contract" mentioned in
Article 1670, are only those terms which are germane to the lessee's right of
continued enjoyment of the property leased. We held:

"This is a reasonable construction of the provision, which is based on the
presumption that when the lessor allows the lessee to continue enjoying
possession of the property for fifteen days after the expiration of the
contract he is willing that such enjoyment shall be for the entire period
corresponding to the rent which is customarily paid - in this case up to the
end of the month because the rent was paid monthly. Necessarily, if the
presumed will of the parties refers to the enjoyment of possession, the
presumption covers the other terms of the contract related to such
possession, such as the amount of rental, the date when it must be paid, the
care of the property, the responsibility for repairs, etc. But no such
presumption may be indulged in with respect to special agreements which
by nature are foreign to the right of occupancy or enjoyment inherent in a
contract of lease."
Petitioners also question the jurisdiction of the trial court in Civil Case No.
R-16589 in ordering their ejectment from the leased premises and the
removal of the improvements introduced thereon by them. They claim that
the action in Civil Case No. R-16589 was for the annulment of the sale of
the property by defendant Herrera to defendants-spouses Go, and not an
appropriate case for an ejectment. The right of possession of petitioners of
the leased premises was squarely put in issue by defendants-spouses Go in
their counterclaim to petitioner's complaint, where they asked that "xxx the
plaintiffs should vacate their premises as soon as feasible or as the
Honorable Court may direct" (Record on Appeal, CA-G.R. No. 67692-R; p.
45).

The said counterclaim in effect was an accion publiciana for the recovery of
the possession of the leased premises.

Clearly the Court of First Instance had jurisdiction over actions which
involve the possession of real property or any interest therein, except
forcible entry and detainer actions (Section 44[b], Judiciary Act of 1948;
Concepcion v. Presiding Judge, Br. V, CFI Bulacan, 119 SCRA 222 [1982]).

A counterclaim is considered a complaint, only this time, it is the original
defendant who becomes the plaintiff (Valisno v. Plan, 143 SCRA 502
[1986]). It stands on the same footing and is to be tested by the same rules
as if it were an independent action. Hence, the same rules on jurisdiction in
an independent action apply to a counterclaim (Vivar v. Vivar, 8 SCRA 847
[1963]; Calo v. Ajax International, Inc. v. 22 SCRA 996 [1968]; Javier v.
Intermediate Appellate Court, 171 SCRA 605 [1989]; Quiason, Philippine
Courts and Their Jurisdictions, 1993 ed., p. 203).

Finally, petitioners claim that the Court of Appeals erred in eliminating the
award of moral damages in the amount of P20,000.00 given to them by the
trial court (Rollo, pp. 48-52). The elimination of said award is a logical
consequence of the finding that petitioners had no right of option to
purchase the leased premises that can be enforced against respondent
Herrera.

WHEREFORE, the petition is DENIED.

SO ORDERED.

Cruz, (Chairman), Davide, Jr., and Bellosillo, JJ., concur.

G.R. No. 166393

CRISTINA F. REILLO, LEONOR F.
PUSO, ADELIA F. ROCAMORA,
SOFRONIO S.J. FERNANDO,
EFREN S.J. FERNANDO, ZOSIMO Present:
S.J. FERNANDO, JR., and MA.
TERESA F. PION,
Petitioners,

YNARES-SANTIAGO, J.,

- versus - Chairperson,
CHICO-NAZARIO,
VELASCO, JR.,
GALICANO E.S. SAN JOSE,
represented by his Attorneys-in-Fact, NACHURA, and
ANNALISA S.J. RUIZ and
RODELIO S. SAN JOSE, VICTORIA PERALTA, JJ.
S.J. REDONGO, CATALINA S.J.
DEL ROSARIO and MARIBETH
S.J. CORTEZ, collectively known as
the HEIRS OF QUITERIO SAN
JOSE and ANTONINA ESPIRITU
SANTO,
Respondents.
Promulgated:

June 18, 2009

x---------------------------------------------------x

DECISION

PERALTA, J.:
Assailed in this petition for review on certiorari is the Decision[1] dated
August 31, 2004 of the Court of Appeals (CA) in CA-G.R. CV No. 69261 which
affirmed the Order dated May 9, 2000 of the Regional Trial Court (RTC) of Morong,
Rizal, Branch 78, granting the motion for judgment on the pleadings and the motion
to dismiss counter petition for partition filed by respondents in Civil Case No. 99-
1148-M. Also questioned is the CA Resolution[2] dated December 14, 2004 denying
petitioners motion for reconsideration.
Spouses Quiterio San Jose (Quiterio) and Antonina Espiritu Santo (Antonina)
were the original registered owners of a parcel of land located in E. Rodriguez Sr.
Avenue, Teresa, Rizal covered by Transfer Certificate of Title (TCT) No. 458396 of
the Register of Deeds of Rizal. The said parcel of land is now registered in the name
of Ma. Teresa F. Pion (Teresa) under TCT No. M-94400.
Quiterio and Antonina had five children, namely, Virginia, Virgilio, Galicano,
Victoria and Catalina. Antonina died on July 1, 1970, while Quiterio died on October
19, 1976. Virginia and Virgilio are also now deceased. Virginia was survived by her
husband Zosimo Fernando, Sr. (Zosimo Sr.) and their seven children, while Virgilio
was survived by his wife Julita Gonzales and children, among whom is Maribeth S.J.
Cortez (Maribeth).

On October 26, 1999, Galicano, represented by his children and attorneys-in-fact,
Annalisa S.J. Ruiz and Rodegelio San Jose, Victoria, Catalina, and Maribeth
(respondents) filed with the RTC a Complaint[3] for annulment of title, annulment
of deed of extra-judicial settlement, partition and damages against Zosimo Sr. and
his children Cristina F. Reillo, Leonor F. Puso, Adelia F. Rocamora, Sofronio S.J.
Fernando, Efren S.J. Fernando, Zosimo S.J. Fernando, Jr. and Ma. Teresa
(petitioners) and the Register of Deeds of Morong, Rizal. The complaint alleged
among other things:
6. Under date of January 23, 1998, defendants FERNANDO et al, without the knowledge
and consent of all the other surviving heirs of the deceased spouses QUITERIO SAN JOSE
and ANTONINA ESPIRITU SANTO, including herein plaintiffs, executed a Deed of
Extrajudicial Settlement of Estate Among Heirs with Waiver of Rights making it appear
therein that they are the legitimate descendants and sole heirs of QUITERIO SAN JOSE
and ANTONINA ESPIRITU SANTO; and adjudicating among themselves, the subject parcel
of land.

6.1 In the same document, defendants ZOSIMO SR., CRISTINA, LEONOR, ADELIA,
SOFRONIO, EFREN and ZOSIMO JR., waived all their rights, participation and interests over
the subject parcel of land in favor of their co-defendant MA. TERESA F. PION (a.k.a MA.
TERESA S.J. FERNANDO).

xxxx

7. On the strength of the said falsified Deed of Extrajudicial Settlement of Estate,
defendant MA. TERESA PION (a.k.a MA. TERESA S.J. FERNANDO) succeeded in causing the
cancellation of TCT No. 458396 in the name of SPS. QUITERIO SAN JOSE and ANTONINA
ESPIRITU SANTO and the issuance of a new Transfer Certificate of Title in her name only,
to the extreme prejudice of all the other heirs of the deceased SPS. QUITERIO SAN JOSE
and ANTONINA ESPIRITU SANTO, specifically, the herein plaintiffs who were deprived of
their lawful participation over the subject parcel of land.

7.1 Thus, on July 6, 1999, Transfer Certificate of Title No. M-94400 was issued in the name
of defendant MA. TERESA S.J. FERNANDO.

xxxx

8. As a result, the herein plaintiffs and the other surviving heirs of the deceased spouses
QUITERIO SAN JOSE and ANTONINA ESPIRITU SANTO, who are legally entitled to inherit
from the latters respective estates, in accordance with the laws of intestate succession,
have been duly deprived of their respective rights, interests and participation over the
subject parcel of land.

8.1 Thus, there is sufficient ground to annul the subject Deed of Extrajudicial Settlement
of Estate Among Heirs with Waiver of Rights dated January 23, 1998, and all other
documents issued on the strength thereof, particularly Transfer Certificate of Title No. M-
94400.[4]

It was also alleged that respondents filed a complaint before the Lupong
Tagapamayapa of their Barangay which issued the required certification to file
action for failure of the parties to settle the matter amicably.
Petitioners filed their Answer with Counter-Petition and with Compulsory
Counterclaim[5] denying that the Deed of Extrajudicial Settlement of Estate Among
Heirs with Waiver of Rights which was the basis of the issuance of TCT No. M-
94400, was falsified and that the settlement was made and implemented in
accordance with law. They admitted that the deceased spouses Quiterio and
Antonina had five children; that the subject property was not the only property of
spouses Quiterio and Antonina and submitted in their counter-petition for partition
the list of the other 12 parcels of land of the deceased spouses Quiterio and
Antonina that petitioners alleged are in respondents possession and control.
On January 18, 2000, respondents filed a Motion for Judgment on the
Pleadings[6] alleging that: (1) the denials made by petitioners in their answer were
in the form of negative pregnant; (2) petitioners failed to state the basis that the
questioned document was not falsified; (3) they failed to specifically deny the
allegations in the complaint that petitioners committed misrepresentations by
stating that they are the sole heirs and legitimate descendants of Quiterio and
Antonina; and (4) by making reference to their allegations in their counter-petition
for partition to support their denials, petitioners impliedly admitted that they are
not the sole heirs of Quiterio and Antonina.

Respondents filed a Reply to Answer with Compulsory Counterclaim[7] with a
motion to dismiss the counter-petition for partition on the ground that petitioners
failed to pay the required docket fees for their counter-petition for
partition. Petitioners filed their Rejoinder[8] without tackling the issue of non-
payment of docket fees.

On February 4, 2000, petitioners filed their Comment[9] to respondents
motion for judgment on the pleading and prayed that the instant action be decided
on the basis of the pleadings with the exception of respondents unverified
Reply. Petitioners also filed an Opposition to the motion to dismiss the counter-
petition for partition.

On May 9, 2000, the RTC rendered its Order,[10] the dispositive portion of which
reads:

1. The Extrajudicial Settlement of Estate Among Heirs with Waiver of Rights,
dated January 23, 1998 and Transfer Certificate of Title No. M-94400 in the name of Ma.
Teresa S.J. Fernando are declared null and void;

2. The Register of Deeds of Rizal, Morong Branch, is directed to cancel TCT
No. 94400; and
3. The Heirs of Quiterio San Jose and Antonina Espiritu Santo is (sic) directed
to partition the subject parcel of land covered by TCT No. M-458396 in accordance with
the law of intestate succession.[11]

SO ORDERED.

The RTC found that, based on the allegations contained in the pleadings filed
by the parties, petitioners misrepresented themselves when they alleged in the
Deed of Extrajudicial Settlement of Estate Among Heirs with Waiver of Rights that
they are the sole heirs of the deceased spouses Quiterio and Antonina; that
petitioners prayed for a counter-petition for partition involving several parcels of
land left by the deceased spouses Quiterio and Antonina which bolstered
respondents claim that petitioners falsified the Extrajudicial Settlement which
became the basis for the issuance of TCT No. M-94400 in Ma. Teresas name; thus,
a ground to annul the Deed of Extrajudicial Settlement and the title. The RTC did
not consider as filed petitioners Counter-Petition for Partition since they did not
pay the corresponding docket fees.
Petitioners filed their Motion for Reconsideration, which the RTC denied in an
Order[12] dated August 29, 2000.

Dissatisfied, petitioners filed an appeal with the CA. After the parties filed their
respective briefs, the case was submitted for decision.

On August 31, 2004, the CA rendered its assailed Decision affirming the May 9,
2000 Order of the RTC.
The CA found that, while the subject matter of respondents complaint was
the nullity of the Deed of Extrajudicial Settlement of Estate among Heirs with
Waiver of Rights that resulted in the issuance of TCT No. M-94400 in Ma. Teresas
name, petitioners included in their Answer a Counter-Petition for Partition
involving 12 other parcels of land of spouses Quiterio and Antonina which was in
the nature of a permissive counterclaim; that petitioners, being the plaintiffs in the
counter-petition for partition, must pay the docket fees otherwise the court will
not acquire jurisdiction over the case. The CA ruled that petitioners cannot pass the
blame to the RTC for their omission to pay the docket fees.

The CA affirmed the RTCs judgment on the pleadings since petitioners
admitted that the deceased spouses Quiterio and Antonina had five children which
included herein plaintiffs; thus, petitioners misrepresented themselves when they
stated in the Deed of Extrajudicial Settlement that they are the legitimate
descendants and sole heirs of the deceased spouses Quiterio and Antonina; that
the deed is null and void on such ground since respondents were deprived of their
rightful share in the subject property and petitioners cannot transfer the property
in favor of Ma. Teresa without respondents consent; that TCT No. M-94400 must
be cancelled for lack of basis. The CA affirmed the RTCs Order of partition of the
subject property in accordance with the rules on intestate succession in the
absence of a will.

Petitioners filed the instant petition for review on certiorari raising the
following assignment of errors, to wit:

THE COURT OF APPEALS ERRED IN NOT GIVING DUE COURSE TO THE APPEAL OF
THE DEFENDANTS (HEREIN PETITIONERS) AND IN EVENTUALLY UPHOLDING THE
DECISION OF THE COURT OF ORIGIN, CONSIDERING THAT SUCH RULING WILL RESULT TO
MULTIPLICITY OF SUITS BETWEEN THE SAME PARTIES AND IN VIOLATION OF THE
CONSTITUTIONAL GUARANTY OF DUE PROCESS OF LAW & PROPERTY AND PROPERTY
RIGHTS.

THE COURT OF APPEALS ERRED IN NOT VACATING THE ORDER OF THE TRIAL
COURT IN PARTITIONING THE ESTATE WITHOUT PUBLICATION AS REQUIRED BY RULE 74
AND 76 OF THE 1997 RULES OF CIVIL PROCEDURE. [13]

Petitioners contend that in their Comment to respondents motion for judgment on
the pleadings, they stated that they will not oppose the same provided that their
Answer with Counter-Petition for Partition and Rejoinder will be taken into
consideration in deciding the case; however, the RTC decided the case on the basis
alone of respondents complaint; that the Answer stated that the deed was not a
falsified document and was made and implemented in accordance with law, thus,
it was sufficient enough to tender an issue and was very far from admitting the
material allegations of respondents complaint.

Petitioners also fault the RTC for disregarding their claim for partition of the other
parcels of land owned by the deceased spouses Quiterio and Antonina for their
failure to pay the court docket fees when the RTC could have simply directed
petitioners to pay the same; and that this error if not corrected will result to
multiplicity of suits.
Petitioners argue that the RTC erred in ordering the partition of the subject
property as it violates the basic law on intestate succession that the heirs should
be named and qualified through a formal petition for intestate succession whereby
blood relationship should be established first by the claiming heirs before they shall
be entitled to receive from the estate of the deceased; that the order of partition
was rendered without jurisdiction for lack of publication as required under Rules
74 and 76 of the Rules of Civil Procedure for testate or intestate succession.
We find no merit in the petition.

The CA committed no reversible error in affirming the judgment on the
pleadings rendered by the RTC.

Section 1, Rule 34 of the Rules of Court, states:

SECTION 1. Judgment on the pleadings. Where an answer fails to tender an issue,
or otherwise admits the material allegations of the adverse partys pleading, the court
may, on motion of that party, direct judgment on such pleading. x x x.
Where a motion for judgment on the pleadings is filed, the essential question
is whether there are issues generated by the pleadings. In a proper case for
judgment on the pleadings, there is no ostensible issue at all because of the failure
of the defending partys answer to raise an issue.[14] The answer would fail to tender
an issue, of course, if it does not deny the material allegations in the complaint or
admits said material allegations of the adverse partys pleadings by confessing the
truthfulness thereof and/or omitting to deal with them at all.[15]

In this case, respondents principal action was for the annulment of the Deed
of Extrajudicial Settlement of Estate Among Heirs with Waiver of Rights executed
by petitioners and annulment of title on the ground that petitioners stated in the
said Deed that they are the legitimate descendants and sole heirs of the spouses
Quiterio and Antonina. Although petitioners denied in their Answer that the Deed
was falsified, they, however, admitted respondents allegation that spouses
Quiterio and Antonina had 5 children, thus, supporting respondents claim that
petitioners are not the sole heirs of the deceased spouses. Petitioners
denial/admission in his Answer to the complaint should be considered in its entirety
and not truncated parts. Considering that petitioners already admitted that
respondents Galicano, Victoria, Catalina and Maribeth are the children and
grandchild, respectively, of the spouses Quiterio and Antonina, who were the
original registered owners of the subject property, and thus excluding respondents
from the deed of settlement of the subject property, there is no more genuine issue
between the parties generated by the pleadings, thus, the RTC committed no
reversible error in rendering the judgment on the pleadings.

A deed of extrajudicial partition executed without including some of the
heirs, who had no knowledge of and consent to the same, is fraudulent and
vicious.[16] The deed of settlement made by petitioners was invalid because it
excluded respondents who were entitled to equal shares in the subject
property. Under the rule, no extrajudicial settlement shall be binding upon any
person who has not participated therein or had no notice thereof.[17] Thus, the RTC
correctly annulled the Deed of Extrajudicial Settlement of Estate Among Heirs with
Waiver of Rights dated January 23, 1998 and TCT No. M-94400 in the name of Ma.
Teresa S.J. Fernando issued pursuant to such deed.
Petitioners claim that had there been a trial, they could have presented
testamentary and documentary evidence that the subject land is the inheritance of
their deceased mother from her deceased parents, deserves scant consideration.
A perusal of petitioners Answer, as well as their Rejoinder, never raised such a
defense. In fact, nowhere in the Deed of Extrajudicial Settlement Among Heirs with
Waiver of Rights executed by petitioners was there a statement that the subject
property was inherited by petitioners mother Virginia from her deceased parents
Quiterio and Antonina. Notably, petitioners never opposed respondents motion for
judgment on the pleadings.

We also find no merit in petitioners contention that the Counter-Petition for
Partition in their Answer was in the nature of a compulsory counterclaim which
does not require the payment of docket fees.

A counterclaim is any claim which a defending party may have against an
opposing party.[18] It may either be permissive or compulsory. It is permissive if it
does not arise out of or is not necessarily connected with the subject matter of the
opposing partys claim.[19] A permissive counterclaim is essentially an independent
claim that may be filed separately in another case.

A counterclaim is compulsory when its object arises out of or is necessarily
connected with the transaction or occurrence constituting the subject matter of
the opposing partys claim and does not require for its adjudication the presence of
third parties of whom the court cannot acquire jurisdiction.[20] Unlike permissive
counterclaims, compulsory counterclaims should be set up in the same action;
otherwise, they would be barred forever.

Respondents action was for the annulment of the Deed of Extrajudicial
Settlement, title and partition of the property subject of the Deed. On the other
hand, in the Counter-Petition filed by petitioners in their Answer to respondents
complaint, they were asking for the partition and accounting of the other 12 parcels
of land of the deceased spouses Quiterio and Antonina, which are entirely different
from the subject matter of the respondents action. Petitioners claim does not
arise out of or is necessarily connected with the action for the Annulment of the
Deed of Extrajudicial Settlement of the property covered by TCT No.
458396. Thus, payment of docket fees is necessary before the RTC could acquire
jurisdiction over petitioners petition for partition.

Petitioners, however, argue that the RTC could have simply issued a directive
ordering them to pay the docket fees, for its non-payment should not result in the
automatic dismissal of the case.

We find apropos the disquisition of the CA on this matter, thus:
The rule regarding the payment of docket fees upon the filing of the initiatory
pleading is not without exception. It has been held that if the filing of the initiatory
pleading is not accompanied by payment of docket fees, the court may allow payment of
the fee within reasonable time but in no case beyond the applicable prescriptive or
reglementary period.

It is apparent from the arguments of the defendants-appellants that they are
blaming the trial court for their omission to pay the docket fees. It is, however, our opinion
that the defendants-appellants cannot pass on to the trial court the performance of a
positive duty imposed upon them by the law. It should be noted that their omission to file
the docket fees was raised as one of the grounds to dismiss the counter petition for
partition. The defendants-appellants opposed the said motion without, however, offering
an answer to the said ground raised by the plaintiffs-appellees. In fact, during the period
the motion was being heard by the trial court, the defendantsappellants never paid the
docket fees for their petition so that it could have at least brought to the attention of the
trial court their payment of the docket fees although belatedly done. They did not even
ask the trial court for time within which to pay the docket fees for their petition. When
the trial court ruled to dismiss the petition of the defendants-appellants, the latter did
not, in their motion for reconsideration, ask the trial court to reconsider the dismissal of
their petition by paying the required docket fees, neither did they ask for time within
which to pay their docket fees. In other words, the trial court could have issued an order
allowing the defendants-appellants a period to pay the docket fees for their petition if the
defendants-appellants made such manifestation. What is apparent from the factual
circumstances of the case is that the defendants-appellants have been neglectful in
complying with this positive duty imposed upon them by law as plaintiffs of the counter
petition for partition. Because of their omission to comply with their duty, no grave error
was committed by the trial court in dismissing the defendants-appellants counter petition
for partition. [21]

Petitioners argue that with the dismissal of their Counter-Petition for
Partition, the partition of the other parcels of land owned by the deceased spouses
Quiterio and Antonina will result to multiplicity of suits.

We are not persuaded.
Significantly, in petitioners Answer with Counter-Petition for Partition, they
enumerated 12 other parcels of land owned by the deceased spouses Quiterio and
Antonina. They alleged that some of these properties had already been disposed
of by respondents and some are still generating income under the control and
administration of respondents, and these properties should be collated back by
respondents to be partitioned by all the heirs of the deceased spouses. It bears
stressing that the action filed by respondents in the RTC was an ordinary civil action
for annulment of title, annulment of the deed of extrajudicial settlement and
partition of a parcel of land now covered by TCT No. M-94400; hence, the authority
of the court is limited to the property described in the pleading. The RTC cannot
order the collation and partition of the other properties which were not included
in the partition that was the subject matter of the respondents action for
annulment. Thus, a separate proceeding is indeed proper for the partition of the
estate of the deceased spouses Quiterio and Antonina.

Finally, petitioners contend that the RTC erred when it ordered the heirs of
Quiterio and Antonina to partition the subject parcel of land covered by TCT No.
458396 in accordance with the laws of intestate succession; that the RTC violated
the requirement of publication under Sections 1 and 2 of Rule 74 and Section 3 of
Rule 76 of the Rules of Court.

We do not agree.
We find the ruling of the CA on the matter of the RTCs order of partition of
land subject of the annulled deed of extrajudicial settlement worth quoting, thus:

Considering that the subject document and the corresponding title were
canceled, the logical consequence is that the property in dispute, which was the subject
of the extrajudicial settlement, reverted back to the estate of its original owners, the
deceased spouses Quiterio and Antonina San Jose. Since, it was admitted that all the
parties to the instant suit are legal heirs of the deceased spouses, they owned the subject
property in common. It is a basic rule that any act which is intended to put an end to
indivision among co-heirs or co-owners is deemed to be a partition. Therefore, there was
no reversible error committed by the trial court in ordering the partition of the subject
property. We find nothing wrong with such ruling considering that the trial court ordered
the partition of the subject property in accordance with the rules on intestate succession.
The trial court found the property to be originally owned by the deceased spouses
Quiterio and Antonina San Jose and, in the absence of a will left by the deceased spouses,
it must be partitioned in accordance with the rules on intestate succession.[22]

As the RTC nullified the Deed of Extrajudicial Settlement of Estate Among
Heirs with Waiver of Rights executed by petitioners and the title issued in
accordance therewith, the order of partition of the land subject of the settlement
in accordance with the laws on intestate succession is proper as respondents action
filed in the RTC and respondents prayer in their complaint asked for the partition
of the subject property in accordance with intestate succession. The applicable law
is Section 1, Rule 69 of the Rules of Court, which deals with action for partition, to
wit:

SECTION 1. Complaint in action for partition of real estate. A person having the
right to compel the partition of real estate may do so as provided in this Rule, setting forth
in his complaint the nature and extent of his title and an adequate description of the real
estate of which partition is demanded and joining as defendants all other persons
interested in the property.

And, under this law, there is no requirement for publication.
G.R. No. 75379 March 31, 1989

Spouses REYNALDO and ESTELITA JAVIER, petitioners,
vs.
INTERMEDIATE APPELLATE COURT and LEON S. GUTIERREZ, JR., respondents.

Antonio E. Rodriguez for petitioners.

Sisenando Manuel, Jr, for respondents.

CRUZ, J.:

It is not disputed that the private respondent issued to the petitioners a check that was subsequently
dishonored and not made good despite the required notice of dishonor. For this he has been
charged with estafa under B.P. Blg. 22 in the Regional Trial Court of Makati. His reason for issuing
the check is not before us now. The question we are asked to resolve is whether or not he can raise
that reason in another court, in a separate civil action for damages filed by him against the
petitioners.

The information against Leon S. Gutierrez, Jr. was filed on April 1, 1985, and docketed as Criminal
Case No. 15581 in the Regional Trial Court of Makati. 1 The civil case was not reserved. On September 5, 1985,
Gutierrez filed a complaint for damages against the petitioners in the Regional Trial Court of Catarman, Northern Samar. This was docketed
as Civil Case No. C-355. In this complaint, the defendants were charged with having inveigled Gutierrez into signing the very check subject
of the criminal case in the Makati court. 2 The complaint in effect explains why he issued the check for which he is now facing prosecution.

On September 17, 1985, the petitioners filed a motion to dismiss Civil Case No. C-355 on the
grounds of lack of a cause of action and litis pendentia. 3 The motion was denied on September 24,1985. On the other
hand, the private respondent moved to suspend proceedings in Criminal Case No. 15581 pending the resolution of what was claimed to be
the prejudicial question raised in the civil case. The petitioners filed an opposition. The motion was also to be denied later.

Petitioners not having submitted their answer in the civil case, the private respondent moved to
declare them in default and that he be allowed to present his evidence ex parte. 4 Pending resolution of this
motion, the petitioners moved for reconsideration of the order denying their motion to dismiss. 5 This was denied on November
27,1985. 6 On January 3, 1986, the petitioners filed a second motion for reconsideration based on the original two grounds and alleging the
additional ground of improper venue. 7 The record does not show if this second motion for reconsideration was acted upon, but on January
17, 1986, the respondent judged declared the petitioners in default and set the civil case for trial. 8 Three days later, the motion to suspend
proceedings in the Regional Trial Court of Makati was denied and the criminal case was set for hearing on the merits. 9

The petitioners went to the Intermediate Appellate Court to question the orders of Judge Cesar R.
Cinco of the Regional Trial Court of Catarman, Northern Samar, denying their motion to dismiss and
their motion for reconsideration of the denial. Failing to obtain relief there, 10 they are now before us in this
petition for review on certiorari under Rule 45 of the Rules of Court. Challenged are the decision of the respondent court dated May 29, 1986,
and its resolution dated July 16, 1986, denying reconsideration.11

We shall reverse. The respondent court erred in sustaining the trial judge.

As the civil action was not reserved by the petitioners, it was deemed impliedly instituted with the
criminal case in the Regional Trial Court of Makati. The applicable provision is Rule 111, Section 1,
of the Rules of Court, reading in full as follows:

Section 1. Institution of criminal and civil actions.- When a criminal action is
instituted, the civil action for the recovery of civil liability arising from the offense
charged is impliedly instituted with the criminal action, unless the offended party
expressly waives the civil action or reserves his right to institute it separately.
However, after the criminal action has been commenced, the civil action cannot be
instituted until final judgment has been rendered in the criminal action.

When the offended party seeks to enforce civil liability against the accused by way of
actual, moral, nominal, temperate or exemplary damages, the filing fees for such civil
action as provided in these Rules shall first be paid to the Clerk of Court of the court
where the criminal case is filed. In all other cases, the filing fees corresponding to the
civil liability awarded by the court shall constitute a first lien on the judgment award
and no payment by execution or otherwise may be made to the offended party
without his first paying the amount of such filing fees to the Clerk of Court.

It was before the Makati court that the private respondent, as defendant in the criminal charge of
violation of B.P. Blg. 22, could explain why he had issued the bouncing check. As the civil action
based on the same act was also deemed filed there, it was also before that same court that he could
offer evidence to refute the claim for damages made by the petitioners. This he should have done in
the form of a counterclaim for damages for his alleged deception by the petitioners. In fact, the
counterclaim was compulsory and should have been filed by the private respondent upon the implied
institution of the civil action for damages in the criminal action.

A counterclaim is compulsory and is considered barred if not set up where the following
circumstances are present: (1) that it arises out of, or is necessarily connected with the transaction
or occurrence that is the subject matter of the opposing party's claim; (2) that it does not require for
its adjudication the presense of third parties of whom the court cannot acquire jurisdiction, and (3)
that the court has jurisdiction to entertain the claim.12

All these circumstances are present in the case before the Regional Trial Court of Makati.

This being so, it was improper for the private respondent to file his civil complaint in the Regional
Trial Court of Northern Samar alleging the very defense he should be making in the Regional Trial
Court of Makati. It is, of course, not possible for him now to invoke a different defense there because
he would be contradicting his own verified complaint in the Regional Trial Court in Northern Samar.
In effect, therefore, he is arguing that both courts have jurisdiction to consider the same claim of
deception he is making in connection with the same transaction and involving the same parties.

The Court suspects that not having set it up against the civil claim for damages in the Regional Trial
Court of Makati, the private respondent is now seeking to make amends by filing a separate civil
action based on the same matter in the Regional Trial Court of Northern Samar. That is bad enough.
But what could be worse is that he may have filed the civil complaint in the second court for the more
censurable purpose of deliberately delaying the trial of the criminal case, which has been deferred
long enough as it is. That should not be permitted.

The principal reason of the respondent court in sustaining the trial judge is that Civil Case No. C-355
is not barred because it was filed not by the petitioners but by the private respondent. That
reasoning is hardly worthy of the Court of Appeals. If such logic were accepted, every accused could
file his own civil complaint against the offended party based on the same transaction involved in the
prosecution, but in another court. The effect would not only be multiplicity of suits but delay and
frustration of the criminal case.

What the Court finds especially questionable here is the choice of the venue for the civil action.
Although both parties appear to be residents and running their affairs in Metro Manila, the private
respondent filed his complaint in Catarman, Northern Samar in an obvious attempt to inconvenience
the petitioners. The lower courts should have taken this matter into consideration if only for reasons
of equity. Legally, of course, the lack of proper venue was deemed waived by the petitioners when
they failed to invoke it in their original motion to dismiss.13 Even so, the motivation of the private respondent should
have been taken into account by both the trial judge and the respondent court in arriving at their decisions.

As Chief Justice Concepcion said in Aytona v. Castillo: 14

Good faith, morality and propriety form the basic foundation of claims to equitable
reliefs . . . Needless to say, there are instances wherein not only strict, legality, but
also fairness, justice and righteousness should be taken into account.

Courts should not allow themselves to be used as instruments for harassment and the circumvention
of the law through cunning manipulations of the procedural rules by counsel who may be too clever
for their own good. Rules of procedure are intended to expedite rather than complicate, and much
less to obstruct, the administration of justice. There is no excuse why the bench and the bar should
not know this principle by now.

WHEREFORE, the decision of the respondent court dated May 29, 1986, and its resolution dated
July 16, 1986, are SET ASIDE and Civil Case No. C-355 in the Regional Trial Court of Catarman,
Northern Samar is DISMISSED, with costs against the private respondent. It is so ordered.

Narvasa, Gancayco, Griño-Aquino and Medialdea, JJ., concur.